Republic of the Philippines who approved the same on January 10, 1966.
Petitioner thereafter
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-30324 November 29, 1973
RODULFO C. NIERE, petitioner,
vs.
HON. COURT OF FIRST INSTANCE OF NEGROS OCCIDENTAL,
BRANCH II, JOSE K. QUIAMBAO, and JAIME PARROCO, City
Treasurer of La Carlota City, respondents.
Medalla-Nava and Associates and Dominador Laberinto and Associates
for petitioner.
Acting City Fiscal (La Carlota) Fortunato E. Singson, Jr. for respondents.
MAKASIAR, J.:
Petitioner Rodulfo C. Niere filed this petition for review
on certiorari seeking the reversal of the decision dated December 28,
1968 of the respondent Court.
It is undisputed that La Carlota City was created by Republic Act No.
4585 enacted on June 19, 1965. Petitioner Rodulfo C. Niere is a Civil
Service eligible, having passed the Board Examinations for Civil
Engineers in August, 1960 with a rating of 71.98%. He entered the
government service on October 3, 1960 as a civil engineer aide in the
District Engineer's Office at Bacolod City at P4.00 a day until he was
given a permanent appointment as such on December 1, 1961 at
P2544.00 per annum. He was promoted on November 16, 1962 as junior
civil engineer; on September 9, 1963, as associate civil engineer; and on
October 28, 1964 as civil engineer. On January 3, 1966, he was
appointed city engineer of La Carlota City by then City Mayor Jaime
Marino pursuant to the provisions of Section 21 of Republic Act No. 4585,
which appointment was endorsed to the Commissioner of Civil Service,
assumed office as such city engineer of La Carlota City.
After the enactment on July 17, 1967 of the Decentralization Act,
otherwise known as Republic Act No. 5185, private respondent Jose K.
Quiambao was appointed on May 14, 1968 by the President of the
Philippines as city engineer of La Carlota City, upon recommendation of
the Commissioner of Public Highways, who, on June 17, 1968, officially
informed herein petitioner of said appointment of private respondent
Quiambao, which appointment was duly confirmed by the Commission on
Appointments, and directed petitioner to turn over the office to
respondent Quiambao, who likewise on the same day June 17, 1968,
advised petitioner that he was assuming as city engineer of La Carlota
City.
In reply to petitioner's motion for reconsideration of the confirmation of
respondent Quiambao, the Secretary of the Commission on
Appointments, in a letter dated June 21, 1968, informed the petitioner
that his said motion was filed beyond the reglementary period and that
his sole remedy is to file quo warranto proceedings in court.
Private respondent Quiambao graduated cum laude from the Silliman
University in 1957 with a degree of Bachelor of Science in Civil
Engineering and passed the Board Examinations the same year with a
rating of 82.4%. He entered the government service in 1957 while he was
not yet a registered engineer in the City Engineer's Office of Dumaguete
City, then as associate engineer in 1965 in the same office, from which
he was promoted upon recommendation of the Commissioner of Public
Highways as heretofore intimated, to the position of City Engineer of La
Carlota City effective May 14, 1968.
Petitioner claims that he was legally appointed by the City Mayor of La
Carlota City under Section 21 of Republic Act No. 4585.
On the other hand, respondents maintain that the position of city
engineer, created in the Charter of La Carlota City (Secs. 19 & 29, R.A.
No. 4585) which was enacted on June 19, 1965 and therefore already
existing at the time of the appointment of petitioner on January 3, 1966,
can be filled up only by appointment of the President of the Philippines
with the confirmation of the Commission on Appointments under Section
4 of Republic Act No. 5185, which expressly excepts the city, engineer
from the appointing authority of the city mayor.
Section 21 of Republic Act No. 4585 provides thus:
Appointment and removal of officials and employees. — The
mayor shall appoint the city treasurer, the city health officer, the
chief of police and fire department, and other heads and other
employees of such city department as may be created. Said
office shall not be suspended nor removed except in the manner
and for causes provided by law: Provided, That appointments of
heads and other employees of the city shall be limited to civil
service eligibles as may from time to time be certified as such by
the Commissioner of Civil Service.
Section 4 of Republic Act No. 5185 reads thus:
The City Assesssor, City Agriculturist, City Chief of Police and
City Chief of Fire Department and other heads of offices entirely
paid out of city funds and their respective assistants or deputies
shall, subject to civil service law, rules and regulations, be
appointed by the City Mayor; Provided, however, that this section
shall not apply to Judges, Auditors, Fiscals, City Superintendents
of Schools, Supervisors, Principals, City Treasurers, City Health
officers and City Engineers.
Section 10(3) of Article VII of the 1935 Constitution states:
The President shall nominate and with the consent of the
Commission on Appointments, shall appoint the heads of the
executive departments and bureaus, officers of the Army from the
rank of colonel, of the Navy and Air Forces from the rank of
captain or commander, and all other officers of the Government
whose appointments are not herein otherwise provided for, and
those whom he maybe authorized by law to appoint; but the
Congress may by law vest the appointment of inferior officers, in
the President alone, in the courts, or in the heads of departments.
The petition should be dismissed and the decision of the court a
quo must be affirmed.
I of the City Charter to that effect. That this is a material modification is
House Bill No. 9711, which became Republic Act No. 4585, originally
expressly included the city engineer as one of those whom the city mayor
can appoint under Section 21 of Republic Act No. 4585, but during the
period of amendment in the Senate, the position of said engineer was
deleted in the final draft of Section 21. This fact clearly indicates that the
intention of the Legislature was to exclude from the appointing power of
the mayor the position of the city engineer. This is not an amendment
purely on a matter of form; because nothing could be more substantial
than the vesting of a power to appoint such an important city official as
the city engineer. Petitioner's assertion that Senator Tolentino stated that
this amendment is merely one of form is not accurate; because the
records of the Senate session during the period of amendments, as
quoted by petitioner himself, show that:
THE PRESIDENT PRO TEMPORE. We are in the period of
amendments.
SENATOR TOLENTINO. There are committed amendments, Mr.
President, embodied in the committee Report. Some of them are
matters of form. The other refers to the allotment of collection of
taxes. I move that these committee amendments be approved.
THE PRESIDENT PRO TEMPORE. Is there any objection?
(Silence) The Chair hears none. The motion is approved. (P. 20
of Petition; p. 30, rec.; p. 42, petitioner's brief).
The Committee amendments included:
3. Page 33, line 6 .
Delete the following:
"the city engineer,
the city attorney.
"(P. 21 of Petition; p. 31, rec.; p. 43, petitioner's brief).
As aforequoted, Senator Tolentino was careful or deliberate in stating
that some, not all, of the amendments were matters of form. Neither did
he refer expressly to the deletion of the words city engineer from Section
21 of the Charter of La Carlota City as purely a formal amendment. If
Congress wanted to authorize the city mayor to appoint all heads and
employees of city department, it could have easily re-phrased Section 21
underscored by the fact that the City Charters of Toledo, Cotabato,
Kanlaon, Dapitan, San Carlos, Gingoog, Davao, Tacloban, Silahis, Bago,
Bacolod, Cebu, Legaspi and Roxas or Republic Acts Nos. 2688, 2364,
3445, 3811, 2643, 2668, 3028, 3068, 4382, 3857, 2234 and 603
expresslly vest the power to appoint the city department heads, including from the residual power of appointment vested in the President by
the city engineer, in the President of the Philippines, who is the repository Section 10(3) of Article VII of the 1935 Constitution.
of the appointing power by express constitutional conferment (Sec. 10(3),
Art. VII, 1935 Constitution; see also Sec. 13, Art. IX, 1973 Constitution). Hence, the appointment of petitioner as city engineer by then city mayor
of La Carlota City is illegal and therefore null and void. However, as
II conceded by respondents, petitioner was a de facto city engineer during
the period of time that he performed the functions of the position until he
The clear legislative intendment in excepting the engineer from the was displaced by respondent Quiambao who was validly nominated by
appointing authority of the city mayor under Section 21 of the Charter of the President of the Philippines and confirmed by the Commission on
La Carlota City is evident from the phraseology of the same. Said section Appointments (Cordilla vs. Martinez, 110 Phil. 24, 25; Rodriguez vs. Tan,
expressly limits the appointing authority of the mayor to "the city 91 Phil. 724, 728; Luna vs. Rodriguez, 37 Phil. 866).
treasurer, the city health officer, the chief of police and fire department,
..." among the heads of the then duly created and existing departments, WHEREFORE, THE APPEALED DECISION IS HEREBY AFFIRMED,
like the city engineer, of the city government of La Carlota City. The WITH COSTS AGAINST PETITIONER.
following phrase in said Section 21 "and other heads and other
employees of the city departments as may be created," whom the mayor Makalintal, C.J., Castro, Teehankee, Esguerra and Muñoz Palma, JJ.,
can appoint, refers to heads of city departments that may be created after concur.
the enactment of Republic Act No. 4585. Otherwise, as emphasized by
respondents, the first conjunction "and" before "fire department" in the
preceding clause of that same sentence of Section 21 would be a
superfluity, and would have no meaning at all. As evident from the
construction of the first sentence in said Section 21, the terminal
phrase "as may be created" modifies the last clause "and other heads
and other employees of such department," by all the principles of logic
and syntax.

III

Since the city mayor under Section 21 is without authority to appoint the
city engineer, this prerogative can only be exercised by the President of
the Philippines, who, under Section 10(3) of Article VII of the 1935
Constitution, shall nominate with the consent of the Commission on
Appointments "all other officers of the government whose appointments
are not herein otherwise provided for"; because We ruled in Ramos vs.
Alvarez (97 Phil. 844, 849) that when a statute does not specify how an
officer is to be appointed, the appointment must be made by the
President with the consent of the Commission on Appointments.

The appointing power is essentially the exclusive prerogative of the

President. Consequently, any diminution in its scope must be clear and
unequivocal. This test is not met by Section 21 of Republic Act No. 4585
so as to remove the power to appoint the city engineer of La Carlota City
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 131012 April 21, 1999
HON. RICARDO T. GLORIA, in his capacity as Secretary of the
Department of Education, Culture, and Sports, petitioner,
vs.
COURT OF APPEALS, AMPARO A. ABAD, VIRGILIA M. BANDIGAS,
ELIZABETH A. SOMEBANG and NICANOR MARGALLO, respondents.
MENDOZA, J
This case arose out of the unfortunate strikes and walk-outs staged by
public school teachers on different dates in September and October
1990. The illegality of the strikes was declared in our 1991 decision
in Manila Public School Teachers Association v. Laguio, Jr., 1 but many
incidents of those strikes are still to be resolved. At issue in this case is
the right to back salaries of teachers who were either dismissed or
suspended because they did not report for work but who were eventually
ordered reinstated because they had not been shown to have taken part
in the strike, although reprimanded for being absent without leave.
The facts are as follows:
Private respondents are public school teachers. On various dates in
September and October 1990, during the teachers' strikes, they did not
report for work. For this reason, they were administratively charged with
(1) grave misconduct, (2) gross neglect of duty, (3) gross violation of Civil
Service Law Rules and Regulations and reasonable office regulations. (4)
refusal to perform official duty, (5) gross insubordination, (6) conduct
prejudicial to the best interest of the service, and (7) absence without
leave (AWOL), and placed under preventive suspension. The
investigation was concluded before the lapse of 90-day suspension and
private respondents were found guilty as charged. Respondent Nicanor
Margallo was ordered dismissed from the service effective October 29,
1990, while respondents Amparo Abad, Virgilia Bandigas, and Elizabeth
Somebang were ordered suspended for six months effective December
4, 1990. 2
Respondent Margallo appealed to the Merit Systems and Protection
Board (MSPB) which found him guilty of conduct prejudicial to the best
interest of the service and imposed on him a six-month suspension. 3 The
other respondents also appealed to the MSPB, but their appeal was
dismissed because of their failure to file their appeal memorandum on
time. 4
On appeal, the Civil Service Commission (CSC) affirmed the decision of
the MSPB with respect to Margallo, but found the other three (Abad,
Bandigas, and Somebang) guilty only of violation of reasonable office
rules and regulation, by filing to file applications for leave of absence and,
therefore, reduced the penalty imposed on them to reprimand and
ordered them reinstated to their former positions.
Respondents filed a petition for certiorari under Rule 65 in this Court.
Pursuant to Revised Administrative Circular No. 1-95, the case referred
to the Court of Appeals which, on September 3, 1996, rendered a
decision (1) affirming the decision of the CSC with respect to Amparo
Abad, Virgilia Bandigas, and Elizabeth Somebang but (2) reversing it
insofar as the CSC ordered the suspension of Nicanor Margallo. The
appellate court found him guilty of violation of reasonable office rules and
regulations only and imposed on him the penalty of reprimand.
Private respondents moved for a reconsideration, contending that they
should be exonerated of all charges against them and that they be paid
salaries during their suspension. In its resolution, dated July 15, 1997, the
Court of Appeals, while maintaining its finding that private respondents
were guilty of violation of reasonable office rules and regulations for
which they should be reprimanded, ruled that private respondents were
entitled to the payment of salaries during their suspension "beyond ninety
(90) days." Accordingly, the appellate court amended the dispositive
portion of its decision to read as follows:
WHEREFORE, IN VIEW OF THE FOREGOING, petition is
hereby DENIED. CSC Resolution Nos., 93-2302 dated June 24,
1993 and 93-3124 dated August 10, 1993 (In re: Amparo Abad),
CSC Resolution Nos. 93-2304 dated June 24, 1993 and 93-3227
dated August 17, 1993 (In re: Virgilia Bandigas) and CSC
Resolution Nos. 93-2301 undated and 93-3125 dated August 10,
 1993 (In re: Elizabeth Somebang) are hereby AFFIRMED while
CSC Resolution Nos. 93-2211 dated June 21, l993 are hereby
MODIFIED finding petitioner Nicanor Margallo guilty of a lesser
offense of violation of reasonable office rules and regulations and
meting upon him the penalty of reprimand. Respondent DECS is
ordered to pay petitioners Amparo Abad, Virgilia Bandigas,
Elizabeth Somebang and Nicanor Margallo their salaries,
allowances and other benefits during the period of their
suspension/dismissal beyond the ninety (90) day preventive
suspension. No pronouncement as to costs. 6
Petitioner Ricardo T. Gloria, then Secretary of Education, Culture, and
Sports, moved for a reconsideration insofar as the resolution of the Court
of Appeals ordered the payment of private respondents' salaries during
the period of their appeal. 7 His motion was, however denied by the
appellate court in its resolution of October 6, 1997. 8 Hence, this petition
for review on certiorari.
Petitioner contends that the administrative investigation of respondents
was concluded within the 90-day period of preventive suspension,
implying that the continued suspension of private respondents is due to
their appeal, hence, the government of their salaries. Moreover, petitioner
lays so much store by the fact that, under the law, private respondents
are considered under preventive suspension during the period of their
appeal and, for this reason, are not entitled to the payment of their
salaries during their suspension. 9
Petitioner's contentions have no merit.
I. PREVENTIVE SUSPENSION AND THE RIGHT TO
COMPENSATION IN CASE OF EXONERATION
The present Civil Service Law is found in Book V, Title I, Subtitle A of the
Administrative Code of 1987 (E.O. 292). So far as pertinent to the
questions in this case, the law provides:
Sec. 47. Disciplinary Jurisdiction
(2) The Secretaries and heads of agencies and instrumetalities,
province, cities and municipalities shall have jurisdiction to
investigate and decide matters involving disciplinary action
against officers and employees under their jurisdiction. The
decision shall be final in case the penalty imposed is suspension
for not more than thirty days or fine in an amount not exceeding
thirty days salary. In case the decision rendered by a bureau or
office head is appealable to the Commission, the same may be
initially appealed to the department and finally to the Commission
and pending appeal, the same shall be executory except when
the penalty removal, in which case the same shall be executory
only after confirmation by the Secretary concerned.
(4) An appeal shall not stop the decision from being executory,
and in case the penalty is suspension or removal, the respondent
shall be considered shall be considered having been under
preventive suspension during the pendency of the appeal in the
event he wins an appeal.
Sec. 51. Preventive Suspension. — The proper disciplining
authority may preventively suspend any subordinate officer or
employee under his authority pending as investigation, if the
charge against such officers or employee involves dishonesty,
oppression or grave misconduct, or neglect in the performance of
duty, or if there are reasons to believe that the respondent is
guilty of charges which would warrant his removal from the
service.
Sec. 52. Lifting of Preventive Suspension, Pending Administrative
Investigation. — When the administrative case against the
officers or employee under preventive suspension is not finally
decided by the disciplining authority within the period of ninety
(90) days after the date of suspension of the respondent who is
not a presidential appointee, the respondent shall be
automatically reinstated in the service: Provided, That when the
delay in the disposition of the case is due to the fault, negligence
or petition of the respondents, the period of delay shall not be
counted in computing the period of suspension herein provided.
There are thus two kinds of preventive suspension of civil service
employees who are charged with offenses punishable by removal or
suspension: (1) preventive suspension pending investigations (§51) and
(2) preventive suspension pending appeal if the penalty imposed by the
disciplining authority is suspension or dismissal and, after review, the
respondent is exonerated (§ 47(4)).
Preventive suspension pending investigation is not a penalty. 10 It is a
measure intended to enable to enable the disciplining authority to
investigate charges against respondent by preventing the latter from
intimidating or any way influencing witnesses against him. If the
investigation is not finished and a decision is not rendered within that
period, the suspension will be lifted and the respondent will automatically
be reinstated. If after investigation respondent is found innocent of the
charges and is exonerated, he should be reinstated.
A. No Right to Compensation for Preventive Suspension Pending
Investigation Even if Employee is Exonerated
Is he entitled to the payment of salaries during the period of suspension?
As already stated, the Court of Appeals ordered the DECS to pay private
respondents their salaries, allowances, and other benefits "beyond the
ninety (90) day suspension." In other words, no compensation was due
for the period of the preventive suspension pending investigation but only
for the period of preventive suspension pending appeal in the event the
employee is exonerated.
The separate opinion of Justice Panganiban argues that the employee
concerned be paid his salaries after his suspension.
The Civil Service Act of 1959 (R.A. No. 2260) provided for the payment of
such salaries in case of exoneration. Sec. 35 read:
Sec. 35. Lifting of Preventive Suspension Pending Administrative
Investigation. — When the administrative case against the officer
or employee under preventive suspension is not finally decided
by the Commissioner of Civil Service within the period of sixty
(60) days after the date of suspension of the respondent, the
respondent shall be reinstated in the service. If the respondent
officers or employee is exonerated, he shall be restored to his
position with pay for the period of suspension. 11
However, the law was revised in 1975 and the provision on the payment
salaries during suspension was deleted. Sec. 42 of the Civil Service
Decree (P.D. No. 807) read:
Sec. 42. Lifting of Preventive Suspension Pending Administrative
Investigation. — When the administrative case against the
officers or employee under preventive suspension is not finally
decided by the disciplining authority within the period of ninety
(90) days after the date of suspension of the respondent who is
not a presidential appointee, the respondent shall be
automatically reinstated in the service; Provided, That when the
delay in the disposition of the case is due to the fault, negligence
or petition of the respondent, the period of delay shall not be
counted in computing the period of suspension herein provided.
This provision was reproduced in §52 of the present Civil Service Law. It
is noteworthy that the Ombudsman Act of 1989 (R.A. No. 6770)
categorically provides that preventive suspension shall be "without pay."
Sec. 24 reads:
Sec. 24. Preventive Suspension. — The Ombudsman or his
Deputy may preventively suspend any officer or employee under
his authority pending an investigation, if in his judgment the
evidence of guilt is strong, and (a) the charge against such officer
or employee involves dishonesty, oppression or grave
misconduct or neglect in the performance of duty; (b) the charges
would warrant removal from the service; or (c) the respondents
continued stay in office may prejudice the case filed against him.
The preventive suspension shall continue until the case is
terminated by the Office of the Ombudsman but not more than six
months, without pay, except when the delay in the disposition of
the case by the Office of the Ombudsman is due to the fault,
negligence or petition of the respondent, in which case the period
of such delay shall not be counted in computing the period of
suspension herein provided.
It is clear that the purpose of the amendment is to disallow the payment
of salaries for the period of suspension. This conclusion is in accord with
the rule of statutory construction that —
As a rule, the amendment by deletion of certain words or phrases
in a statute indicates that the legislature intended to change the
meaning of the statute, for the presumption is that the legislature
would not have made the deletion had the intention been not in
effect a change in its meaning. The amended statute should
accordingly be given a construction different from that previous to
its amendment. 12
The separate opinion of Justice Panganiban pays no heed to the evident
legislative intent to deny payment of salaries for the preventive
suspension pending investigation.
First, it says that to deny compensation for the period of preventive
suspension would he to reverse the course of decisions ordering the
payment of salaries for such period. However, the cases 13 cited are
based either on the former rule which expressly provided that "if the
respondent officer or employee is exonerated, he shall be restored to his
position with full pay for the period of suspension" 14 or that "upon
subsequent reinstatement of the suspended person or upon his
exoneration, if death should render reinstatement impossible, any salary
so withheld shall be paid, 15 or on cases which do not really support the
proposition advanced.
Second, it is contended that the exoneration of employees who have
been preventively suspended is proof that there was no reason at all to
suspend them and thus makes their preventive suspension a penalty.
The principle governing entitlement to salary during suspension is
cogently stated in Floyd R. Mechem's A Treatise on the Law of Public
Offices and Officers as follows:
§864. Officer not entitled to Salary during Suspension from
Office. — An officer who has been lawfully suspended from his
office is not entitled to compensation for the period during which
he was so suspended, even through it be subsequently
determined that the cause for which he was suspended was
insufficient. The reason given is "that salary and perquisites are
the reward of express or implied services, and therefore cannot
belong to one who could not lawfully perform such services." 16
Thus, it is not enough that an employee is exonerated of the charges
against him. In addition, his suspension must be unjustified. The case
of Bangalisan v. Court of Appeals itself similarly states that "payment of
salaries corresponding to the period [1] when an employee is not allowed
to work may be decreed if he is found innocent of the charges which
caused his suspension and [2] when the suspension is unjustified. 17
The preventive suspension of civil service employees charged with
dishonesty, oppression or grave misconduct, or neglect of duty is
authorized by the Civil Service Law. It cannot, therefore, be considered
"unjustified," even if later the charges are dismissed so as to justify the
payment of salaries to the employee concerned. It is one of those
sacrifices which holding a public office requires for the public good. For
this reason, it is limited to ninety (90) days unless the delay in the
conclusion of the investigation is due to the employee concerned. After
that period, even if the investigation is not finished, the law provides that
the employee shall be automatically reinstated.
Third, it is argued in the separate opinion that to deny employees salaries
on the "frivolous" ground that the law does not provide for their payment
would be to provide a "tool for the oppression of civil servants who,
though innocent, may be falsely "charged of grave or less grave
administrative offenses." Indeed, the possibility of abuse is not an
argument against recognition of the existence of power. As Justice Story
aptly it, "It is always a doubtful course, to argue against the use or
existence of a power, from the possibility of its abuse. . . . [For] from the
very nature of things, the absolute right of decision, in the last resort,
must rest somewhere — wherever it may be vested it is susceptible of
abuse." 18 It may be added that if and when such abuse occurs, that
would be the time for the courts to exercise their nay-saying function.
Until then, however, the public interest in an upright civil service must be
upheld.
Finally, it is argued that even in the private sector, the law provides that
employees who are unjustly dismissed are entitled to reinstatement with
full pay. But that is because R.A. No. 6715 expressly provides for the
payment to such employees of "full backwages, inclusive of allowances,
and . . . other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual
reinstatement." 19 In the case of the public sector, as has been noted, the
provision for payment of salaries during the preventive suspension
pending investigation has been deleted.
B. Right to Compensation for Preventive Suspension
Pending Appeal if Employee is Exonerated
But although we hold that employees who are preventively
suspended pending investigation are not entitled to the payment of their
salaries if they are exonerated, we do not agree with the government that
they are not entitled to compensation for the period of their
suspension pending appeal if eventually they are found innocent.
Preventive suspension pending investigation, as already discussed, is not
a penalty but only means of enabling the disciplining authority to conduct
an unhampered investigation. On the other hand, preventive suspension
pending appeal is actually punitive although it is in effect subsequently
considered illegal if respondent is exonerated and the administrative
decision finding him guilty is reversed. Hence, he should be reinstated
with full pay for the period of the suspension. Thus, §47(4) states that
respondent "shall be considered as under preventive suspension during
the pendency of the appeal in the event he wins." On the other hand, if
his conviction is affirmed, i.e., if he is not exonerated, the period of his
suspension becomes part of the final penalty of suspension or dismissal.
It is precisely because respondent is penalized before his sentence is
confirmed that he should be paid his salaries in the event he is
exonerated. It would be unjust to deprive him of his pay as a result of the
immediate execution of the decision against him and continue to do so
even after it is shown that he is innocent of the charges for which he was
suspended. Indeed, to sustain the government's theory would be to make
the administrative decision not only executory but final and executory.
The fact is that §47(2) and (4) are similar to the execution of judgment
pending appeal under Rule 39, §2 of the Rules of Court. Rule 39, §5
provides that in the event the executed judgment is reversed, there shall
be restitution or reparation of damages as equity and justice may require.
Sec. 47 of the present law providing that an administrative decision
meting out the penalty of suspension or dismissal shall be immediately
executory and that if the respondent appeals he shall be considered as
being merely under preventive suspension if eventually he prevails is
taken from §37 of the Civil Service Decree of 1975 (P.D No. 807). There
was no similar provision in the Civil Service Act of 1959 (R.A. No. 2260),
although under it the Commissioner of Civil Service could order the
immediate execution of an administrative decision in the interest of the
public service. 20 Nor was there provision for immediate execution of
administrative decisions ordering dismissal or suspension in §695 of the
Administrative Code of 1917, as amended by C.A. No. 598,
§1. 21 Nonetheless, under R.A. No. 2260 the payment of salaries was
ordered in cases in which employees were found to be innocent of the
charges 22 or their suspension was held to be unjustified, because the
penalty of suspension or dismissal was executed without a finding by the
Civil Service Commissioner that it was necessary "in the interest of the
public service." 23 On the other hand, payment of back salaries was
denied where it was shown that the employee concerned was guilty as
charged and the immediate execution of the decision was ordered by the
Civil Service Commissioner "in the interest of the public service." 24
Nothing in what has thus far been said is inconsistent with the reason for
denying salaries for the period of preventive suspension. We have said
that an employee who is exonerated is not entitled to the payment of his
salaries because his suspension, being authorized by law, cannot but
unjustified. To be entitled to such compensation, the employee must not
only be found innocent of the charges but his suspension must likewise
be unjustified. But through an employee is considered under preventive
suspension during the pendency of his appeal in the event he wins, his
suspension is unjustified because what the law authorizes is preventive
suspension for a period not exceeding 90 days. Beyond that period the
suspension is illegal. Hence, the employee concerned is entitled to
reinstated with full pay. Under existing jurisprudence, such award should
not exceed the equivalent of five years pay at the rate last received
before the suspension was imposed. 25
II. PRIVATE RESPONDENTS ENTITLED TO BACK SALARIES
ALTHOUGH FOUND GUILTY OF VIOLATION OF OFFICE
RULES AND REGULATIONS AND REPRIMANDED
Private respondents were exonerated of all charges against them for acts
connected with the teachers' strikes of September and October 1990.
Although they were absent from work, it was not because of the strike.
For being absent without leave, they were held liable for violation of
reasonable offices rules and regulations for which the penalty is a
reprimand. Their case thus falls squarely within ruling in Bangalisan,
which likewise involved a teacher found guilty of having violated
reasonable office rules and regulations. Explaining the grant of salaries
during their suspension despite the fact that they were meted out
reprimand, this Court stated:
With respect to petitioner Rodolfo Mariano, payment of his
backwages is in order. A reading of the resolution of the Civil
Service Commission will show that he was exonerated of the
charges which formed the basis for his suspension. The
Secretary of the DECS charged him with and he was later found
guilty of grave misconduct, gross neglect of duty, gross violation
of the Civil Service Law, rules and regulations and reasonable
office regulations, refusal to perform official duty, gross
insubordination, conduct prejudicial to the best interest of the
service, and absence without official leave, for his participation in
the mass actions on September 18, 20 and 21, 1990. It was his
alleged participation in the mass actions that was the basis of his
preventive suspension and, later, his dismissal from the service.
 However, the Civil Service Commission, in the questioned
resolution, made a finding that Mariano was involved in the "mass
actions" but was absent because he was in Ilocos Sur to attend
the wake and interment of his grandmother. Although the CSC
imposed upon him the penalty of reprimand, the same was for his
violation of reasonable office rules and regulations because he
failed to inform the school of his intended absence and neither did
he file an application for leave covering such absences.

Under Section 23 of the Rule Implementing Book V of Executive

Order No. 292 and other pertinent civil service laws, in violations
of reasonable office rules and regulations, the first offense is
punishable by reprimand. To deny petitioner Mariano his back
wages during his suspension would be tantamount to punishing
him after his exoneration from the charges which caused his
dismissal from the service. 26

In Jacinto v. Court of Appeals, 27 a public school who was found guilty of

violation of reasonable office rules and regulations for having been
absent without leave and reprimanded was given back salaries after she
was exonerated of the charge of having taken part in the strikes.

Petitioner Secretary of Education contends, however, that respondent

Abad, Bandigas, and Somebang signed a letter in which they admitted
having taken part in the mass action. This question cannot be raised now.
The Civil Service Commission gave no weight to this letter in view of
individual letters written by three citing reasons for their absences, to wit:
Abad, because he decided to stay home to correct students papers;
Bandigas, because she had to accompany her brother to the Commission
on Immigration, and Somebang because of "economic reasons."
Petitioner did not appeal from this ruling. Hence, he is bound by the
fanctual findings of the CSC and the appellate court.

WHEREFORE, the decision, dated September 3, 1996, as amended by

the resolutions, dated July 15, 1997 and October 6, 1997, of the Court of
Appeals, is hereby AFFIRMED with the MODIFICATION that the award
of salaries to private respondents shall be computed from the time of their
dismissal/suspension by the Department of Education, Culture, and
Sports until their actual reinstatement, for a period not exceeding five
years.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 80587 February 8, 1989
WENPHIL CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION AND ROBERTO
MALLARE, respondents.
Renato B. Valdecantos & Associates for petitioner.
The Solicitor General for public respondent.
Diego O. Untalan for private respondent.
GANCAYCO, J.:
Once again the dismissal of an employee without affording him due
process is brought to the attention of this Court by this petition.
Private respondent was hired by petitioner on January 18, 1984 as a
crew member at its Cubao Branch. He thereafter became the assistant
head of the Backroom department of the same branch. At about 2:30
P.M. on May 20, 1985 private respondent had an altercation with a co-
employee, Job Barrameda, as a result of which he and Barrameda were
suspended on the following morning and in the afternoon of the same day
a memorandum was issued by the Operations Manager advising private
respondent of his dismissal from the service in accordance with their
Personnel Manual. The notice of dismissal was served on private
respondent on May 25, 1985.
Thus private respondent filed a complaint against petitioner for unfair
labor practice, illegal suspension and illegal dismissal. After submitting
their respective position papers to the Labor Arbiter and as the hearing
could not be conducted due to repeated absence of counsel for
respondent, the case was submitted for resolution. Thereafter a decision
was rendered by the Labor Arbiter on December 3, 1986 dismissing the
complaint for lack of merit.
Private respondent appealed to the National Labor Relations Commission
(NLRC) wherein in due course a decision was rendered on October 16,
1987 setting aside the appealed decision and ordering the reinstatement
of private respondent to his former position without loss of seniority and
other related benefits and one (1) year backwages without qualification
and deduction.
Hence the herein petition for certiorari with preliminary injunction and/or
restraining order wherein petitioner alleges that the public respondent
NLRC committed a grave abuse of discretion in rendering its decision
contrary to the evidence on record.
On December 2, 1987, the court issued a restraining order as prayed for
in the petition enjoining the enforcement of the decision dated October
16, 1987 of public respondent NLRC upon petitioner posting a bond of
P20,000.00.
The theory of the petitioner is that on the aforesaid date, May 20, 1985,
when private respondent and Barrameda had a misunderstanding about
tending the Salad Bar, private respondent slapped Barrameda's cap,
stepped on his foot and picked up the ice scooper and brandished it
against the latter. Marijo B. Kolimlim who was a management trainee
tried to pacify private respondent but he defied her so Kolimlim reported
the incident to the assistant manager, Delilah C. Hermosura, who
immediately asked private respondent to see her. Private respondent
refused to see Hermosura and it took the security guard to bring him to
her. Private respondent then shouted and uttered profane words instead
of making an explanation before her. He stated the matter should be
settled only by him and Barrameda. The following day Kolimlim and
Hermosura submitted a report on the incident and recommended the
imposition of the appropriate penalties on both. It was the store manager
who issued a report meting out the penalty of suspension on the two until
further notice in the following morning. Later that day the Operations
Manager issued a memorandum advising Barrameda of one (1) week
suspension and the dismissal of private respondent from the service.
The main thrust of the petition is that under the Personnel Manual of
petitioner which had been read and understood by private respondent,
private respondent waived his right to the investigation. It is provided
therein that -
 INVESTIGATION hence null and void. The security of tenure of a laborer or employee is
enshrined in the Constitution, the Labor Code and other related laws. 1
If the offense is punishable with a penalty higher than suspension
for fifteen (15) days, upon the request of the erring Under Section 1, Rule XIV of the Implementing Regulations of the Labor
employee, there shall be convened an investigation board Code, it is provided that "No worker shall be dismissed except for just or
composed of the following authorized cause provided by law and after due process." Sections 2, 5,
6, and 7 of the same rules require that before an employer may dismiss
1. The Parlor Manager or Supervisor on duty when the incident an employee the latter must be given a written notice stating the
occurred. particular act or omission constituting the grounds thereof; that the
employee may answer the allegations within a reasonable period; that the
2. The General Manager or the Assistant Manager. employer shall afford him ample opportunity to be heard and to defend
himself with the assistance of his representative, if he so desires; and
that it is only then that the employer may dismiss the employee by
The investigation board shall discuss the merits of the case and
notifying him of the decision in writing stating clearly the reasons therefor.
shall issue a ruling, which shall be final and conclusive. (p. 3,
Such dismissal is without prejudice to the right of the employee to contest
Personnel Manual: Emphasis supplied).
its validity in the Regional Branch of the NLRC.
From the foregoing it appears that an investigation shall only be
Petitioner insists that private respondent was afforded due process but he
conducted if the offense committed by the employee is punishable with
refused to avail of his right to the same; that when the matter was brought
the penalty higher than suspension of fifteen (15) days and the erring
to the labor arbiter he was able to submit his position papers although the
employee requests for an investigation of the incident. Petitioner alleges
hearing cannot proceed due to the non-appearance of his counsel; and
that private respondent not having asked for an investigation he is thus
that the private respondent is guilty of serious misconduct in threatening
deemed to have waived his right to the same. Petitioner avers that
or coercing a co-employee which is a ground for dismissal under Article
immediately after the incident when private respondent was asked to see
283 of the Labor Code.
Hermosura, he was defiant and showed that he was not interested to
avail of an investigation.
The failure of petitioner to give private respondent the benefit of a hearing
before he was dismissed constitutes an infringement of his constitutional
The contention of petitioner is untenable. The incident happened on May
right to due process of law and equal protection of the laws. 2 The
20, 1985 and right then and there as afore repeated on the following day
standards of due process in judicial as well as administrative proceedings
private respondent was suspended in the morning and was dismissed
have long been established. In its bare minimum due process of law
from the service in the afternoon. He received an official notice of his
simply means giving notice and opportunity to be heard before judgment
termination four (4) days later.
is rendered. 3
The defiant attitude of private respondent immediately after the incident
The claim of petitioner that a formal investigation was not necessary
amounted to insubordination. Nevertheless his refusal to explain his side
because the incident which gave rise to the termination of private
under the circumstances cannot be considered as a waiver of his right to
respondent was witnessed by his co- employees and supervisors is
an investigation.
without merit. The basic requirement of due process is that which hears
before it condemns, which proceeds upon inquiry and renders judgment
Although in the Personnel Manual of the petitioner, it states that an erring only after trial. 4
employee must request for an investigation it does not thereby mean that
petitioner is thereby relieved of the duty to conduct an investigation
However, it is a matter of fact that when the private respondent filed a
before dismissing private respondent. Indeed said provision of the
complaint against petitioner he was afforded the right to an investigation
Personnel Manual of petitioner which may effectively deprive its
by the labor arbiter. He presented his position paper as did the petitioner.
employees of the right to due process is clearly against the law and
If no hearing was had, it was the fault of private respondent as his
counsel failed to appear at the scheduled hearings. The labor arbiter
concluded that the dismissal of private respondent was for just cause. He
was found guilty of grave misconduct and insubordination. This is borne
by the sworn statements of witnesses. The Court is bound by this finding
of the labor arbiter.
requirement. Thus, it must be imposed a sanction for its failure to give a
formal notice and conduct an investigation as required by law before
dismissing petitioner from employment. Considering the circumstances of
this case petitioner must indemnify the private respondent the amount of
P1,000.00. The measure of this award depends on the facts of each case
and the gravity of the omission committed by the employer.

By the same token, the conclusion of the public respondent NLRC on
appeal that private respondent was not afforded due process before he
was dismissed is binding on this Court. Indeed, it is well taken and
supported by the records. However, it can not justify a ruling that private
respondent should be reinstated with back wages as the public
respondent NLRC so decreed. Although belatedly, private respondent
was afforded due process before the labor arbiter wherein the just cause
of his dismissal bad been established. With such finding, it would be
arbitrary and unfair to order his reinstatement with back wages.
WHEREFORE, the petition is GRANTED. The questioned decision of the
public respondent NLRC dated October 16, 1987 for the reinstatement
with back wages of private respondent is REVERSED AND SET ASIDE,
and the decision of the labor arbiter dated December 3, 1986 dismissing
the complaint is revived and affirmed, but with the modification that
petitioner is ordered to indemnify private respondent in the amount of
P1,000.00. The restraining order issued by this Court on December 2,
1987 is hereby made permanent and the bond posted by petitioner is
cancelled. This decision is immediately executory.

The Court holds that the policy of ordering the reinstatement to the SO ORDERED.
service of an employee without loss of seniority and the payment of his
wages during the period of his separation until his actual reinstatement
but not exceeding three (3) years without qualification or deduction, when
it appears he was not afforded due process, although his dismissal was
found to be for just and authorized cause in an appropriate proceeding in
the Ministry of Labor and Employment, should be re-examined. It will be
highly prejudicial to the interests of the employer to impose on him the
services of an employee who has been shown to be guilty of the charges
that warranted his dismissal from employment. Indeed, it will demoralize
the rank and file if the undeserving, if not undesirable, remains in the
service.

Thus in the present case, where the private respondent, who appears to
be of violent temper, caused trouble during office hours and even defied
his superiors as they tried to pacify him, should not be rewarded with re-
employment and back wages. It may encourage him to do even worse
and will render a mockery of the rules of discipline that employees are
required to observe. Under the circumstances the dismissal of the private
respondent for just cause should be maintained. He has no right to return
to his former employer.

However, the petitioner must nevertheless be held to account for failure

to extend to private respondent his right to an investigation before
causing his dismissal. The rule is explicit as above discussed. The
dismissal of an employee must be for just or authorized cause and after
due process. 5 Petitioner committed an infraction of the second

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 158693 November 17, 2004
JENNY M. AGABON and VIRGILIO C. AGABON, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), RIVIERA
HOME IMPROVEMENTS, INC. and VICENTE ANGELES, respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review seeks to reverse the decision1 of the Court of
Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, modifying
the decision of National Labor Relations Commission (NLRC) in NLRC-
NCR Case No. 023442-00.
Private respondent Riviera Home Improvements, Inc. is engaged in the
business of selling and installing ornamental and construction materials.
It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum
board and cornice installers on January 2, 19922 until February 23, 1999
when they were dismissed for abandonment of work.
Petitioners then filed a complaint for illegal dismissal and payment of
money claims3 and on December 28, 1999, the Labor Arbiter rendered a
decision declaring the dismissals illegal and ordered private respondent
to pay the monetary claims. The dispositive portion of the decision states:
WHEREFORE, premises considered, We find the termination of
the complainants illegal. Accordingly, respondent is hereby
ordered to pay them their backwages up to November 29, 1999 in
the sum of:
1. Jenny M. Agabon - P56, 231.93
2. Virgilio C. Agabon - 56, 231.93
and, in lieu of reinstatement to pay them their separation pay of
one (1) month for every year of service from date of hiring up to
November 29, 1999.
Respondent is further ordered to pay the complainants their
holiday pay and service incentive leave pay for the years 1996,
1997 and 1998 as well as their premium pay for holidays and rest
days and Virgilio Agabon's 13th month pay differential amounting
to TWO THOUSAND ONE HUNDRED FIFTY (P2,150.00) Pesos,
or the aggregate amount of ONE HUNDRED TWENTY ONE
THOUSAND SIX HUNDRED SEVENTY EIGHT & 93/100
(P121,678.93) Pesos for Jenny Agabon, and ONE HUNDRED
TWENTY THREE THOUSAND EIGHT HUNDRED TWENTY
EIGHT & 93/100 (P123,828.93) Pesos for Virgilio Agabon, as per
attached computation of Julieta C. Nicolas, OIC, Research and
Computation Unit, NCR.
SO ORDERED.4
On appeal, the NLRC reversed the Labor Arbiter because it found that
the petitioners had abandoned their work, and were not entitled to
backwages and separation pay. The other money claims awarded by the
Labor Arbiter were also denied for lack of evidence.5
Upon denial of their motion for reconsideration, petitioners filed a petition
for certiorari with the Court of Appeals.
The Court of Appeals in turn ruled that the dismissal of the petitioners
was not illegal because they had abandoned their employment but
ordered the payment of money claims. The dispositive portion of the
decision reads:
WHEREFORE, the decision of the National Labor Relations
Commission is REVERSED only insofar as it dismissed
petitioner's money claims. Private respondents are ordered to pay
petitioners holiday pay for four (4) regular holidays in 1996, 1997,
and 1998, as well as their service incentive leave pay for said
years, and to pay the balance of petitioner Virgilio Agabon's 13th
month pay for 1998 in the amount of P2,150.00.
SO ORDERED.6
Hence, this petition for review on the sole issue of whether petitioners
were illegally dismissed.7
Petitioners assert that they were dismissed because the private
respondent refused to give them assignments unless they agreed to work
on a "pakyaw" basis when they reported for duty on February 23, 1999.
They did not agree on this arrangement because it would mean losing
benefits as Social Security System (SSS) members. Petitioners also
claim that private respondent did not comply with the twin requirements of
notice and hearing.8
Private respondent, on the other hand, maintained that petitioners were
not dismissed but had abandoned their work.9 In fact, private respondent
sent two letters to the last known addresses of the petitioners advising
them to report for work. Private respondent's manager even talked to
petitioner Virgilio Agabon by telephone sometime in June 1999 to tell him
about the new assignment at Pacific Plaza Towers involving 40,000
square meters of cornice installation work. However, petitioners did not
report for work because they had subcontracted to perform installation
work for another company. Petitioners also demanded for an increase in
their wage to P280.00 per day. When this was not granted, petitioners
stopped reporting for work and filed the illegal dismissal case.10
It is well-settled that findings of fact of quasi-judicial agencies like the
NLRC are accorded not only respect but even finality if the findings are
supported by substantial evidence. This is especially so when such
findings were affirmed by the Court of Appeals.11 However, if the factual
findings of the NLRC and the Labor Arbiter are conflicting, as in this case,
the reviewing court may delve into the records and examine for itself the
questioned findings.12
Accordingly, the Court of Appeals, after a careful review of the facts,
ruled that petitioners' dismissal was for a just cause. They had
abandoned their employment and were already working for another
employer.
To dismiss an employee, the law requires not only the existence of a just
and valid cause but also enjoins the employer to give the employee the
opportunity to be heard and to defend himself.13 Article 282 of the Labor
Code enumerates the just causes for termination by the employer: (a)
serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or the latter's representative in connection with the
employee's work; (b) gross and habitual neglect by the employee of his
duties; (c) fraud or willful breach by the employee of the trust reposed in
him by his employer or his duly authorized representative; (d)
commission of a crime or offense by the employee against the person of
his employer or any immediate member of his family or his duly
authorized representative; and (e) other causes analogous to the
foregoing.
Abandonment is the deliberate and unjustified refusal of an employee to
resume his employment.14 It is a form of neglect of duty, hence, a just
cause for termination of employment by the employer.15 For a valid finding
of abandonment, these two factors should be present: (1) the failure to
report for work or absence without valid or justifiable reason; and (2) a
clear intention to sever employer-employee relationship, with the second
as the more determinative factor which is manifested by overt acts from
which it may be deduced that the employees has no more intention to
work. The intent to discontinue the employment must be shown by clear
proof that it was deliberate and unjustified.16
In February 1999, petitioners were frequently absent having
subcontracted for an installation work for another company.
Subcontracting for another company clearly showed the intention to sever
the employer-employee relationship with private respondent. This was
not the first time they did this. In January 1996, they did not report for
work because they were working for another company. Private
respondent at that time warned petitioners that they would be dismissed if
this happened again. Petitioners disregarded the warning and exhibited a
clear intention to sever their employer-employee relationship. The record
of an employee is a relevant consideration in determining the penalty that
should be meted out to him.17
In Sandoval Shipyard v. Clave,18 we held that an employee who
deliberately absented from work without leave or permission from his
employer, for the purpose of looking for a job elsewhere, is considered to
have abandoned his job. We should apply that rule with more reason
here where petitioners were absent because they were already working
in another company.
The law imposes many obligations on the employer such as providing
just compensation to workers, observance of the procedural requirements
of notice and hearing in the termination of employment. On the other
hand, the law also recognizes the right of the employer to expect from its
workers not only good performance, adequate work and diligence, but
also good conduct19 and loyalty. The employer may not be compelled to
continue to employ such persons whose continuance in the service will
patently be inimical to his interests.20
After establishing that the terminations were for a just and valid cause,
we now determine if the procedures for dismissal were observed.
The procedure for terminating an employee is found in Book VI, Rule I,
Section 2(d) of the Omnibus Rules Implementing the Labor Code:
Standards of due process: requirements of notice. – In all cases
of termination of employment, the following standards of due
process shall be substantially observed:
I. For termination of employment based on just causes as defined
in Article 282 of the Code:
(a) A written notice served on the employee specifying the ground
or grounds for termination, and giving to said employee
reasonable opportunity within which to explain his side;
(b) A hearing or conference during which the employee
concerned, with the assistance of counsel if the employee so
desires, is given opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him; and
(c) A written notice of termination served on the employee
indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination.
In case of termination, the foregoing notices shall be served on
the employee's last known address.
Dismissals based on just causes contemplate acts or omissions
attributable to the employee while dismissals based on authorized causes
involve grounds under the Labor Code which allow the employer to
terminate employees. A termination for an authorized cause requires
payment of separation pay. When the termination of employment is
declared illegal, reinstatement and full backwages are mandated under
Article 279. If reinstatement is no longer possible where the dismissal
was unjust, separation pay may be granted.
Procedurally, (1) if the dismissal is based on a just cause under Article
282, the employer must give the employee two written notices and a
hearing or opportunity to be heard if requested by the employee before
terminating the employment: a notice specifying the grounds for which
dismissal is sought a hearing or an opportunity to be heard and after
hearing or opportunity to be heard, a notice of the decision to dismiss;
and (2) if the dismissal is based on authorized causes under Articles 283
and 284, the employer must give the employee and the Department of
Labor and Employment written notices 30 days prior to the effectivity of
his separation.
From the foregoing rules four possible situations may be derived: (1) the
dismissal is for a just cause under Article 282 of the Labor Code, for an
authorized cause under Article 283, or for health reasons under Article
284, and due process was observed; (2) the dismissal is without just or
authorized cause but due process was observed; (3) the dismissal is
without just or authorized cause and there was no due process; and (4)
the dismissal is for just or authorized cause but due process was not
observed.
In the first situation, the dismissal is undoubtedly valid and the employer
will not suffer any liability.
In the second and third situations where the dismissals are illegal, Article
279 mandates that the employee is entitled to reinstatement without loss
of seniority rights and other privileges and full backwages, inclusive of
allowances, and other benefits or their monetary equivalent computed
from the time the compensation was not paid up to the time of actual
reinstatement.
In the fourth situation, the dismissal should be upheld. While the
procedural infirmity cannot be cured, it should not invalidate the
dismissal. However, the employer should be held liable for non-
compliance with the procedural requirements of due process.
The present case squarely falls under the fourth situation. The dismissal
should be upheld because it was established that the petitioners
abandoned their jobs to work for another company. Private respondent,
however, did not follow the notice requirements and instead argued that
sending notices to the last known addresses would have been useless
because they did not reside there anymore. Unfortunately for the private
respondent, this is not a valid excuse because the law mandates the twin
notice requirements to the employee's last known address.21 Thus, it
should be held liable for non-compliance with the procedural
requirements of due process.
A review and re-examination of the relevant legal principles is appropriate
and timely to clarify the various rulings on employment termination in the
light of Serrano v. National Labor Relations Commission.22
Prior to 1989, the rule was that a dismissal or termination is illegal if the
employee was not given any notice. In the 1989 case of Wenphil Corp. v.
National Labor Relations Commission,23 we reversed this long-standing
rule and held that the dismissed employee, although not given any notice
and hearing, was not entitled to reinstatement and backwages because
the dismissal was for grave misconduct and insubordination, a just
ground for termination under Article 282. The employee had a violent
temper and caused trouble during office hours, defying superiors who
tried to pacify him. We concluded that reinstating the employee and
awarding backwages "may encourage him to do even worse and will
render a mockery of the rules of discipline that employees are required to
observe."24 We further held that:
Under the circumstances, the dismissal of the private respondent
for just cause should be maintained. He has no right to return to
his former employment.
However, the petitioner must nevertheless be held to account for
failure to extend to private respondent his right to an investigation
before causing his dismissal. The rule is explicit as above
discussed. The dismissal of an employee must be for just or
authorized cause and after due process. Petitioner committed an
infraction of the second requirement. Thus, it must be imposed a
sanction for its failure to give a formal notice and conduct an
investigation as required by law before dismissing petitioner from
employment. Considering the circumstances of this case
petitioner must indemnify the private respondent the amount of
P1,000.00. The measure of this award depends on the facts of
each case and the gravity of the omission committed by the
employer.25
The rule thus evolved: where the employer had a valid reason to dismiss
an employee but did not follow the due process requirement, the
dismissal may be upheld but the employer will be penalized to pay an
indemnity to the employee. This became known as the Wenphil or
Belated Due Process Rule.
On January 27, 2000, in Serrano, the rule on the extent of the sanction
was changed. We held that the violation by the employer of the notice
requirement in termination for just or authorized causes was not a denial
of due process that will nullify the termination. However, the dismissal is
ineffectual and the employer must pay full backwages from the time of
termination until it is judicially declared that the dismissal was for a just or
authorized cause.
The rationale for the re-examination of the Wenphil doctrine
in Serrano was the significant number of cases involving dismissals
without requisite notices. We concluded that the imposition of penalty by
way of damages for violation of the notice requirement was not serving as
a deterrent. Hence, we now required payment of full backwages from the
time of dismissal until the time the Court finds the dismissal was for a just
or authorized cause.
Serrano was confronting the practice of employers to "dismiss now and
pay later" by imposing full backwages.
We believe, however, that the ruling in Serrano did not consider the full
meaning of Article 279 of the Labor Code which states:
ART. 279. Security of Tenure. – In cases of regular employment,
the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his
actual reinstatement.
This means that the termination is illegal only if it is not for any of the
justified or authorized causes provided by law. Payment of backwages
and other benefits, including reinstatement, is justified only if the
employee was unjustly dismissed.
The fact that the Serrano ruling can cause unfairness and injustice which
elicited strong dissent has prompted us to revisit the doctrine.
To be sure, the Due Process Clause in Article III, Section 1 of the
Constitution embodies a system of rights based on moral principles so
deeply imbedded in the traditions and feelings of our people as to be
deemed fundamental to a civilized society as conceived by our entire
history. Due process is that which comports with the deepest notions of
what is fair and right and just.26 It is a constitutional restraint on the
legislative as well as on the executive and judicial powers of the
government provided by the Bill of Rights.
Due process under the Labor Code, like Constitutional due process, has
two aspects: substantive, i.e., the valid and authorized causes of
employment termination under the Labor Code; and procedural, i.e., the
manner of dismissal. Procedural due process requirements for dismissal
are found in the Implementing Rules of P.D. 442, as amended, otherwise
known as the Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as
amended by Department Order Nos. 9 and 10.27 Breaches of these due
process requirements violate the Labor Code. Therefore statutory due
process should be differentiated from failure to comply with constitutional
due process.
Constitutional due process protects the individual from the government
and assures him of his rights in criminal, civil or administrative
proceedings; while statutory due process found in the Labor Code and
Implementing Rules protects employees from being unjustly terminated
without just cause after notice and hearing.
In Sebuguero v. National Labor Relations Commission,28 the dismissal
was for a just and valid cause but the employee was not accorded due
process. The dismissal was upheld by the Court but the employer was
sanctioned. The sanction should be in the nature of indemnification or
penalty, and depends on the facts of each case and the gravity of the
omission committed by the employer.
In Nath v. National Labor Relations Commission,29 it was ruled that even if
the employee was not given due process, the failure did not operate to
eradicate the just causes for dismissal. The dismissal being for just
cause, albeitwithout due process, did not entitle the employee to
reinstatement, backwages, damages and attorney's fees.
Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine
Services, Inc. v. National Labor Relations Commission,30 which opinion he
reiterated in Serrano, stated:
C. Where there is just cause for dismissal but due process has
not been properly observed by an employer, it would not be right
to order either the reinstatement of the dismissed employee or
the payment of backwages to him. In failing, however, to comply
with the procedure prescribed by law in terminating the services
of the employee, the employer must be deemed to have opted or,
in any case, should be made liable, for the payment of separation
pay. It might be pointed out that the notice to be given and the
hearing to be conducted generally constitute the two-part due
process requirement of law to be accorded to the employee by
the employer. Nevertheless, peculiar circumstances might obtain
in certain situations where to undertake the above steps would be
no more than a useless formality and where, accordingly, it would
not be imprudent to apply the res ipsa loquitur rule and award, in
lieu of separation pay, nominal damages to the employee. x x x.31
After carefully analyzing the consequences of the divergent doctrines in
the law on employment termination, we believe that in cases involving
dismissals for cause but without observance of the twin requirements of
notice and hearing, the better rule is to abandon the Serrano doctrine and
to follow Wenphil by holding that the dismissal was for just cause but
imposing sanctions on the employer. Such sanctions, however, must be
stiffer than that imposed in Wenphil. By doing so, this Court would be
able to achieve a fair result by dispensing justice not just to employees,
but to employers as well.
The unfairness of declaring illegal or ineffectual dismissals for valid or
authorized causes but not complying with statutory due process may
have far-reaching consequences.
This would encourage frivolous suits, where even the most notorious
violators of company policy are rewarded by invoking due process. This
also creates absurd situations where there is a just or authorized cause
for dismissal but a procedural infirmity invalidates the termination. Let us
take for example a case where the employee is caught stealing or
threatens the lives of his co-employees or has become a criminal, who
has fled and cannot be found, or where serious business losses demand
that operations be ceased in less than a month. Invalidating the dismissal
would not serve public interest. It could also discourage investments that
can generate employment in the local economy.
The constitutional policy to provide full protection to labor is not meant to
be a sword to oppress employers. The commitment of this Court to the
cause of labor does not prevent us from sustaining the employer when it
is in the right, as in this case.32 Certainly, an employer should not be
compelled to pay employees for work not actually performed and in fact
abandoned.
The employer should not be compelled to continue employing a person
who is admittedly guilty of misfeasance or malfeasance and whose
continued employment is patently inimical to the employer. The law
protecting the rights of the laborer authorizes neither oppression nor self-
destruction of the employer.33
It must be stressed that in the present case, the petitioners committed a
grave offense, i.e., abandonment, which, if the requirements of due
process were complied with, would undoubtedly result in a valid
dismissal.
An employee who is clearly guilty of conduct violative of Article 282
should not be protected by the Social Justice Clause of the Constitution.
Social justice, as the term suggests, should be used only to correct an
injustice. As the eminent Justice Jose P. Laurel observed, social justice
must be founded on the recognition of the necessity of interdependence
among diverse units of a society and of the protection that should be
equally and evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental and paramount
objective of the state of promoting the health, comfort, and quiet of all
persons, and of bringing about "the greatest good to the greatest
number."34
This is not to say that the Court was wrong when it ruled the way it did
in Wenphil, Serrano and related cases. Social justice is not based on rigid
formulas set in stone. It has to allow for changing times and
circumstances.
Justice Isagani Cruz strongly asserts the need to apply a balanced
approach to labor-management relations and dispense justice with an
even hand in every case:
We have repeatedly stressed that social justice – or any justice
for that matter – is for the deserving, whether he be a millionaire
in his mansion or a pauper in his hovel. It is true that, in case of
reasonable doubt, we are to tilt the balance in favor of the poor to
whom the Constitution fittingly extends its sympathy and
compassion. But never is it justified to give preference to the poor
simply because they are poor, or reject the rich simply because
they are rich, for justice must always be served for the poor and
the rich alike, according to the mandate of the law.35
Justice in every case should only be for the deserving party. It should not
be presumed that every case of illegal dismissal would automatically be
decided in favor of labor, as management has rights that should be fully
respected and enforced by this Court. As interdependent and
indispensable partners in nation-building, labor and management need
each other to foster productivity and economic growth; hence, the need to
weigh and balance the rights and welfare of both the employee and
employer.
Where the dismissal is for a just cause, as in the instant case, the lack of
statutory due process should not nullify the dismissal, or render it illegal,
or ineffectual. However, the employer should indemnify the employee for
the violation of his statutory rights, as ruled in Reta v. National Labor
Relations Commission.36 The indemnity to be imposed should be stiffer to
discourage the abhorrent practice of "dismiss now, pay later," which we
sought to deter in the Serrano ruling. The sanction should be in the
nature of indemnification or penalty and should depend on the facts of
each case, taking into special consideration the gravity of the due
process violation of the employer.
Under the Civil Code, nominal damages is adjudicated in order that a
right of the plaintiff, which has been violated or invaded by the defendant,
may be vindicated or recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered by him.37
As enunciated by this Court in Viernes v. National Labor Relations
Commissions,38 an employer is liable to pay indemnity in the form of
nominal damages to an employee who has been dismissed if, in effecting
such dismissal, the employer fails to comply with the requirements of due
process. The Court, after considering the circumstances therein, fixed the
indemnity at P2,590.50, which was equivalent to the employee's one
month salary. This indemnity is intended not to penalize the employer but
to vindicate or recognize the employee's right to statutory due process
which was violated by the employer.39
The violation of the petitioners' right to statutory due process by the
private respondent warrants the payment of indemnity in the form of
nominal damages. The amount of such damages is addressed to the
sound discretion of the court, taking into account the relevant
circumstances.40 Considering the prevailing circumstances in the case at
bar, we deem it proper to fix it at P30,000.00. We believe this form of
damages would serve to deter employers from future violations of the
statutory due process rights of employees. At the very least, it provides a
vindication or recognition of this fundamental right granted to the latter
under the Labor Code and its Implementing Rules.
Private respondent claims that the Court of Appeals erred in holding that
it failed to pay petitioners' holiday pay, service incentive leave pay and
13th month pay.
We are not persuaded.
We affirm the ruling of the appellate court on petitioners' money claims.
Private respondent is liable for petitioners' holiday pay, service incentive
leave pay and 13th month pay without deductions.
As a general rule, one who pleads payment has the burden of proving it.
Even where the employee must allege non-payment, the general rule is
that the burden rests on the employer to prove payment, rather than on
the employee to prove non-payment. The reason for the rule is that the
pertinent personnel files, payrolls, records, remittances and other similar
documents – which will show that overtime, differentials, service incentive
leave and other claims of workers have been paid – are not in the
possession of the worker but in the custody and absolute control of the
employer.41
In the case at bar, if private respondent indeed paid petitioners' holiday
pay and service incentive leave pay, it could have easily presented
documentary proofs of such monetary benefits to disprove the claims of
the petitioners. But it did not, except with respect to the 13th month pay
wherein it presented cash vouchers showing payments of the benefit in
the years disputed.42 Allegations by private respondent that it does not
operate during holidays and that it allows its employees 10 days leave
with pay, other than being self-serving, do not constitute proof of
payment. Consequently, it failed to discharge the onus probandi thereby
making it liable for such claims to the petitioners.
Anent the deduction of SSS loan and the value of the shoes from
petitioner Virgilio Agabon's 13th month pay, we find the same to be
unauthorized. The evident intention of Presidential Decree No. 851 is to
grant an additional income in the form of the 13th month pay to
employees not already receiving the same43 so as "to further protect the
level of real wages from the ravages of world-wide inflation."44 Clearly, as
additional income, the 13th month pay is included in the definition of
wage under Article 97(f) of the Labor Code, to wit:
(f) "Wage" paid to any employee shall mean the remuneration or
earnings, however designated, capable of being expressed in
terms of money whether fixed or ascertained on a time, task,
piece , or commission basis, or other method of calculating the
same, which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or to be
done, or for services rendered or to be rendered and includes the
fair and reasonable value, as determined by the Secretary of
Labor, of board, lodging, or other facilities customarily furnished
by the employer to the employee…"
from which an employer is prohibited under Article 11345 of the same
Code from making any deductions without the employee's knowledge and
consent. In the instant case, private respondent failed to show that the
deduction of the SSS loan and the value of the shoes from petitioner
Virgilio Agabon's 13th month pay was authorized by the latter. The lack of
authority to deduct is further bolstered by the fact that petitioner Virgilio
Agabon included the same as one of his money claims against private
respondent.
The Court of Appeals properly reinstated the monetary claims awarded
by the Labor Arbiter ordering the private respondent to pay each of the
petitioners holiday pay for four regular holidays from 1996 to 1998, in the
amount of P6,520.00, service incentive leave pay for the same period in
the amount of P3,255.00 and the balance of Virgilio Agabon's thirteenth
month pay for 1998 in the amount of P2,150.00.
WHEREFORE, in view of the foregoing, the petition is DENIED. The
decision of the Court of Appeals dated January 23, 2003, in CA-G.R. SP
No. 63017, finding that petitioners' Jenny and Virgilio Agabon abandoned
their work, and ordering private respondent to pay each of the petitioners
holiday pay for four regular holidays from 1996 to 1998, in the amount of
P6,520.00, service incentive leave pay for the same period in the amount
of P3,255.00 and the balance of Virgilio Agabon's thirteenth month pay
for 1998 in the amount of P2,150.00 is AFFIRMED with
the MODIFICATION that private respondent Riviera Home
Improvements, Inc. is further ORDERED to pay each of the petitioners
the amount of P30,000.00 as nominal damages for non-compliance with
statutory due process.
No costs.
SO ORDERED.