Illegal move for a legal reason

An employee may have been dismissed for just causes but his dismissal may still be illegal because of violation of his rights to due process. In such as a case, what is he entitled to? This is answered in this case of Tino.

Tino was hired sometime in June 1989 by a company engaged in fishing business (MTSI) as fish hauler (batilyo) and subsequently as the filler of fish in fish tubs of fish traders (tagapuno).

On two occasions in August 1999, formal incident reports were submitted to the company by a fish broker that Tino had received money from a fish trader in exchange for putting more fish on the fish trader’s tubs.

On September 11, 1999, Tino did not report for work anymore at the fish port. Instead on February 7, 2001 after almost two years, he filed a complaint for illegal dismissal, underpayment of wages and non-payment of holiday pay, 13th month pay, overtime pay, service incentive, leave pay and night shift differential pay. Tino alleged that he did not show up at the fish port on September 11, 1999 because the company payroll master barred him from reporting for work.

MTSI on the other hand contended that Tino was not dismissed because he was only a seasonal employee and his employment was terminated at the end of the fishing season in 1999. Besides the company said that Tino actually abandoned his work when he was about to be investigated for the two incident reports.

On August 26, 2002, the Labor Arbiter (LA) ruled that Tino was illegally dismissed. The LA said that Tino was a regular employee because his work as tagapuno was continuous and necessary or desirable in the usual business or trade of the company and so even if he abandoned his work, there must still be notice to him at his last known address before he could be validly dismissed. Thus the LA awarded him back-wages, separation pay, salary differentials, 13th month pay and holiday pay all totaling P124,032.

The NLRC modified the LA decision and held that while Tino is indeed a regular employee, he was not illegally dismissed because what appears here is that he heeded the order of the company payroll master without ascertaining the latter’s authority to issue such order. It thus directed Tino to report back to work and MTSI to accept him and to pay his salary differentials, 13th month pay and holiday pay totaling P31,328.

The Court of Appeals (CA) on the other hand agreed with the LA and the NLRC that Tino was a regular employee but ruled that he really abandoned his work as it was only almost two years after his alleged dismissal that he asked for reinstatement. The CA found a causal connection between the charges that Tino received money from a fish trader and his failure to go back to work or seek immediate reinstatement. But the CA still ruled that MTSI committed illegal dismissal because it failed to comply with the requirement of due process in terminating Tino, So the CA reinstated the ruling of the LA. Was the CA correct?

Yes. To effect a valid dismissal, the law requires that (a) there be just and valid cause as provided in Article 282 of the Labor Code; and (b) the employee be afforded the opportunity to be heard and to defend himself. The two notice requirement must be complied with to wit: (a) a written notice containing a statement of the cause for the termination to afford the employee ample opportunity to be heard and defend himself with the assistance of his representative if he so desires; and (b) if the employer decides to dismiss the employee, the employer must notify him in writing of said decision stating clearly the reasons for the dismissal.

In this case, there is just and valid cause but there was lack of two notice requirement or due process. So even if the dismissal is effective, the employer should indemnify the employee for the violation of his right to due process in the form of nominal damages.

The amount of nominal damages depends on whether the dismissal process was initiated by an act imputable to the employee who has committed some serious misconduct, fraud or neglect of duty against the employer as set forth in Article 282 of the Labor Code, or by the employer’s exercise of its management prerogative to install labor savings device under Article 283. The sanction against the employer for failure to comply with due process should be tempered if the dismissal process is initiated by the employee and stiffer if the dismissal process is initiated by the employer’s exercise of its management prerogative. So in this case, it is equitable to order MTSI to pay P30,000 nominal damages. The company should also pay the salary differentials, 13th month pay and holiday pay ordered by the Labor Arbiter because even if MTSI had cause to terminate Tino, this has no bearing on the monetary claims. Only the back-wages and separation pay are disallowed. All told Tino should be paid P61,328 only, not P124,032 (Mantle Trading etc vs. NLRC and Madriaga, G.R. 166705, July 28, 2009). –Jose C. Sison (The Philippine Star)

Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call tel. 7249445.

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E-mail: jcson@pldtdsl.net.