PRELIMINARY CLARIFICATORY STATEMENT ON DUE PROCESS

At the outset, there is a need to point out the following distinction:

(1) Due process required to be complied with by the employer in terminating the employee’s employment (COMPANY-LEVEL DUE PROCESS); and

Fuji Television Network, Inc. v. Arlene S. Espiritu, G.R. Nos. 204944-45, Dec. 03, 2014.

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(2) Due process required to be observed by the labor authorities/tribunals/courts (Labor Arbiter/NLRC/CA) in hearing and deciding labor cases brought before them for adjudication and decision (COURT-LEVEL DUE PROCESS).

No. 1 above requires compliance with both the statutory and contractual due process as discussed below;

while No. 2 above requires observance of the constitutional due process.

It is No. 1 above that is prescribed in the Syllabus, hence, discussion herein will focus thereon.

▪ What is the latest rule on due process?

Due process means compliance with BOTH STATUTORY DUE PROCESS and CONTRACTUAL DUE PROCESS.

CONSTITUTIONAL DUE PROCESS is not applicable (Per Agabon doctrine).

Statutory due process refers to the one prescribed in the Labor Code (Article 292[b] 277[b]); while contractual due process refers to the one prescribed in the Company Rules and Regulations (Per Abbott Laboratories doctrine).

Contractual due process was enunciated in the 2013 en banc ruling in Abbott Laboratories, Philippines v. Pearlie Ann F. Alcaraz. Thus, it is now required that in addition to compliance with the statutory due process, ¹ the employer should still comply with the due process procedure prescribed in its own company rules. The employer’s failure to observe its own company-prescribed due process will make it liable to pay an indemnity in the form of nominal damages, the amount of which is equivalent to the P30,000.00 awarded under the Agabon doctrine.

▪ Are the twin-notice requirement and hearing required in all cases of termination?

No. The two-notice requirement and hearing are required only in case of just cause termination in the following order:

1. Service of first written notice;

2. Conduct of hearing; and

3. Service of second written notice.

▪ What is the King of Kings Transport doctrine on just cause procedural due process?

Based on this doctrine which was enunciated in the 2007 case of King of Kings Transport, Inc. v.

Mamac, the following requirements should be complied with in just cause termination: ² (1) First written notice.

The first written notice to be served on the employee should:

a) Contain the specific causes or grounds for termination against him;

b) Contain a directive that the employee is given the opportunity to submit his written explanation within the reasonable period of FIVE (5) CALENDAR DAYS from receipt of the notice:

1) to enable him to prepare adequately for his defense;

2) to study the accusation against him;

3) to consult a union official or lawyer;

4) to gather data and evidence; and

5) to decide on the defenses he will raise against the complaint.

c) Contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employee. This is required in order to enable him to intelligently prepare his explanation and defenses. A general description of the charge will not suffice.

d) Specifically mention which company rules, if any, are violated and/or which among the grounds under Article 282 is being charged against the employee.

(2) Hearing required,

After serving the first notice, the employer should schedule and conduct a hearing or conference wherein the employee will be given the opportunity to:

1) explain and clarify his defenses to the charge/s against him;

2) present evidence in support of his defenses; and

3) rebut the evidence presented against him by the management.

G.R. No. 192571, July 23, 2013.

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G.R. No. 166208, June 29, 2007.

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During the hearing or conference, the employee is given the chance to defend himself personally, with the assistance of a representative or counsel of his choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.

NOTE: As earlier discussed, per the 2011 Lopez doctrine, which is the prevailing rule, the right to counsel is neither indispensable nor mandatory. It becomes mandatory only in two (2) situations:

(1) When the employee himself requests for counsel; or

(2) When he manifests that he wants a formal hearing on the charges against him, in which case, he should be assisted by counsel. (See Lopez v. Alturas Group of Companies).

(3) Second written notice.

After determining that termination of employment is justified, the employer shall serve the employees a written notice of termination indicating that:

1) all circumstances involving the charge/s against the employee have been considered; and 2) grounds have been established to justify the severance of his employment.

▪ What is the PEREZ doctrine on hearing?

The 2009 Perez doctrine enunciates the new guiding principle on the hearing requirement. It has interpreted the term “ample opportunity to be heard” as follows:

(a) “Ample opportunity to be heard” means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way.

(b) A formal hearing or conference is no longer mandatory. It becomes mandatory only under any of the following circumstances:

(1) When requested by the employee in writing; or (2) When substantial evidentiary disputes exist; or (3) When a company rule or practice requires it; or (4) When similar circumstances justify it.

(c) the “ample opportunity to be heard” standard in the Labor Code prevails over the “hearing or conference” requirement in its Implementing Rules and Regulations. This is how the Supreme Court resolved the conflict in the following provisions of the Labor Code and its implementing rules:

The Perez doctrine is now the prevailing rule as shown by a catena of cases which cited it after its promulgation.

▪ Are the twin-notice requirement and hearing applicable to authorized cause termination?

No. Due process in authorized cause termination is deemed complied with upon the separate and simultaneous service of a written notice of the intended termination to both:

(1) the employee to be terminated; and

(2) the appropriate DOLE Regional Office, at least one (1) month before the intended date of the termination specifying the ground/s therefor and the undertaking to pay the separation pay required under Article 283 of the Labor Code.

For obvious reason, hearing is not required.

However, as earlier discussed above, the foregoing due process is not applicable to the authorized cause of disease as held in Deoferio and Fuji which held that just cause due process is the one that should be followed.

▪ Are the twin-notice requirement and hearing applicable to an abandonment case which is a just cause to terminate employment?

No. Although considered as a just cause to terminate employment, the due process requirement is different.

No hearing is required (since the employee has already abandoned his job) but the following notices should be complied with:

1) First notice asking the employee to explain why he should not be declared as having abandoned his job;

and

2) Second notice informing him of the employer’s decision to dismiss him on the ground of abandonment.

▪ What are some notable principles on the hearing requirement?

▪ If employee does not answer, hearing should still proceed.

▪ Outright termination violates due process.

▪ Investigation still required even if incident was witnessed by many.

▪ Meeting, dialogue, consultation or interview is not the hearing required by law. It may not be a substitute for the actual holding of a hearing.

▪ Prior consultation with union is not part of the due process requirement.

▪ Cross-examination or confrontation of witnesses is not necessary in company investigations.

▪ Co-conspirator’s confession is not sufficient to merit dismissal.

• What are the instances where hearing is not required?

Hearing is not required in the following cases:

1. Termination of project, seasonal, casual or fixed-term employment.

2. Termination of probationary employment on the ground of failure of the probationary employee to qualify as a regular employee in accordance with reasonable standards made known to him at the start of the employment.

3. Termination due to abandonment of work.

4. Termination due to authorized causes under Article 283 (installation of labor-saving device, redundancy, retrenchment or closure of business or cessation of operations). In such cases, there are no allegations which the employees should refute and defend themselves from.

5. Termination due to disease under Article 284.

6. Termination by the employee (resignation) under Article 285.

7. Termination after 6 months of bona-fide suspension of operation under Article 286. For purposes of satisfying due process, what is required is simply that the notices provided under Article 283 be served to both the affected employees and the DOLE at least one (1) month before the termination becomes effective.

8. Termination due to retirement under Article 287.

9. Termination due to closure or stoppage of work by government authorities when non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace.

10. Termination of employee who has admitted his guilt for the offense charged.

• What are the seven (7) standard situations in termination cases?

The rules on termination of employment in the Labor Code and pertinent jurisprudence are applicable to seven (7) different situations, namely:

1. The dismissal was for a just cause under Article 282, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed – This termination is LEGAL.

2. The dismissal was without a just or authorized cause but due process was observed – This termination is ILLEGAL.

3. The dismissal was without a just or authorized cause and due process was not observed – This termination is ILLEGAL.

4. The dismissal was for a just or authorized cause but due process was not observed – This termination is LEGAL.

5. The dismissal was for a non-existent cause – This termination is ILLEGAL.

6. The dismissal was not supported by any evidence of termination – This termination is NEITHER LEGAL NOR ILLEGAL as there is no dismissal to speak of. Reinstatement is ordered not as a relief for illegal dismissal but on equitable ground.

7. The dismissal was brought about by the implementation of a law – This termination is LEGAL.

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