ENBANC

JENNYM.AGABONandG.R.No.158693
VIRGILIOC.AGABON,
Petitioners,Present:

Davide,Jr.,C.J.,
Puno,
Panganiban,
Quisumbing,
YnaresSantiago,
SandovalGutierrez,
versusCarpio,
AustriaMartinez,
Corona,
CarpioMorales,
Callejo,Sr.,
Azcuna,
Tinga,
ChicoNazario,and
Garcia,JJ.
NATIONALLABORRELATIONS
COMMISSION(NLRC),RIVIERA
HOMEIMPROVEMENTS,INC.Promulgated:
andVICENTEANGELES,
Respondents.November17,2004
xx

DECISION

YNARESSANTIAGO,J.:

[1]
This petition for review seeks to reverse the decision of the Court of Appeals dated January 23,
2003, in CAG.R. SP No. 63017, modifying the decision of National Labor Relations Commission
(NLRC)inNLRCNCRCaseNo.02344200.


Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and
installingornamentalandconstructionmaterials.ItemployedpetitionersVirgilioAgabonandJenny
[2]
AgabonasgypsumboardandcorniceinstallersonJanuary2,1992 untilFebruary23,1999when
theyweredismissedforabandonmentofwork.

[3]
Petitionersthenfiledacomplaintforillegaldismissalandpaymentofmoneyclaims andon
December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals illegal and
orderedprivaterespondenttopaythemonetaryclaims.Thedispositiveportionofthedecisionstates:

WHEREFORE,premisesconsidered,Wefindtheterminationofthecomplainantsillegal.Accordingly,
respondentisherebyorderedtopaythemtheirbackwagesuptoNovember29,1999inthesumof:

1.JennyM.AgabonP56,231.93
2.VirgilioC.Agabon56,231.93

and,inlieuofreinstatementtopaythemtheirseparationpayofone(1)monthforeveryyearofservice
fromdateofhiringuptoNovember29,1999.

Respondentisfurtherorderedtopaythecomplainantstheirholidaypayandserviceincentiveleavepay
fortheyears1996,1997and1998aswellastheirpremiumpayforholidaysandrestdaysandVirgilio
Agabons 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,
ResearchandComputationUnit,NCR.

[4]
SOORDERED.

Onappeal,theNLRCreversedtheLaborArbiterbecauseitfoundthatthepetitionershadabandoned
theirwork,andwerenotentitledtobackwagesandseparationpay.Theothermoneyclaimsawarded
[5]
bytheLaborArbiterwerealsodeniedforlackofevidence.
Upon denial of their motion for reconsideration, petitioners filed a petition for certiorari with the
CourtofAppeals.

TheCourtofAppealsinturnruledthatthedismissalofthepetitionerswasnotillegalbecausethey
hadabandonedtheiremploymentbutorderedthepaymentofmoneyclaims.Thedispositiveportion
ofthedecisionreads:
WHEREFORE,thedecisionoftheNationalLaborRelationsCommissionisREVERSEDonlyinsofar
asitdismissedpetitionersmoneyclaims.Privaterespondentsareorderedtopaypetitionersholidaypay
forfour(4)regularholidaysin1996,1997,and1998,aswellastheirserviceincentiveleavepayfor

saidyears,andtopaythebalanceofpetitionerVirgilioAgabons13thmonthpayfor1998intheamount
ofP2,150.00.

[6]
SOORDERED.

[7]
Hence,thispetitionforreviewonthesoleissueofwhetherpetitionerswereillegallydismissed.

Petitionersassertthattheyweredismissedbecausetheprivaterespondentrefusedtogivethem
assignmentsunlesstheyagreedtoworkonapakyawbasiswhentheyreportedfordutyonFebruary
23, 1999.They did not agree on this arrangement because it would mean losing benefits as Social
SecuritySystem(SSS)members.Petitionersalsoclaimthatprivaterespondentdidnotcomplywith
[8]
thetwinrequirementsofnoticeandhearing.

Private respondent, on the other hand, maintained that petitioners were not dismissed but had
[9]
abandonedtheirwork. Infact,privaterespondentsenttwoletterstothelastknownaddressesof
the petitioners advising them to report for work. Private respondents manager even talked to
petitionerVirgilioAgabonbytelephonesometimeinJune1999totellhimaboutthenewassignment
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
anothercompany.PetitionersalsodemandedforanincreaseintheirwagetoP280.00perday.When
[10]
thiswasnotgranted,petitionersstoppedreportingforworkandfiledtheillegaldismissalcase.
ItiswellsettledthatfindingsoffactofquasijudicialagenciesliketheNLRCareaccordednotonly
respect but even finality if the findings are supported by substantial evidence. This is especially so
[11]
whensuchfindingswereaffirmedbytheCourtofAppeals.
However,ifthefactualfindingsof
theNLRCandtheLaborArbiterareconflicting,asinthiscase,thereviewingcourtmaydelveinto
[12]
therecordsandexamineforitselfthequestionedfindings.

Accordingly, the Court of Appeals, after a careful review of the facts, ruled that petitioners
dismissalwasforajustcause.Theyhadabandonedtheiremploymentandwerealreadyworkingfor
anotheremployer.
To dismiss an employee, the law requires not only the existence of a just and valid cause but also
[13]
enjoins the employer to give the employee the opportunity to be heard and to defend himself.
Article282oftheLaborCodeenumeratesthejustcausesforterminationbytheemployer:(a)serious

misconductorwillfuldisobediencebytheemployeeofthelawfulordersofhisemployerorthelatters
representativeinconnectionwiththeemployeeswork(b)grossandhabitualneglectbytheemployee
ofhisduties(c)fraudorwillfulbreachbytheemployeeofthetrustreposedinhimbyhisemployer
orhisdulyauthorizedrepresentative(d)commissionofacrimeoroffensebytheemployeeagainst
the person of his employer or any immediate member of his family or his duly authorized
representativeand(e)othercausesanalogoustotheforegoing.
[14]
Abandonmentisthedeliberateandunjustifiedrefusalofanemployeetoresumehisemployment.
[15]
Itisaformofneglectofduty,hence,ajustcauseforterminationofemploymentbytheemployer.
Foravalidfindingofabandonment,thesetwofactorsshouldbepresent:(1)thefailuretoreportfor
work or absence without valid or justifiable reason and (2) a clear intention to sever employer
employeerelationship,withthesecondasthemoredeterminativefactorwhichismanifestedbyovert
actsfromwhichitmaybededucedthattheemployeeshasnomoreintentiontowork.Theintentto
[16]
discontinuetheemploymentmustbeshownbyclearproofthatitwasdeliberateandunjustified.
InFebruary1999,petitionerswerefrequentlyabsenthavingsubcontractedforaninstallationworkfor
another company. Subcontracting for another company clearly showed the intention to sever the
employeremployeerelationshipwithprivaterespondent.Thiswasnotthefirsttimetheydidthis.In
January1996,theydidnotreportforworkbecausetheywereworkingforanothercompany.Private
respondent at that time warned petitioners that they would be dismissed if this happened again.
Petitionersdisregardedthewarningandexhibitedaclearintentiontosevertheiremployeremployee
relationship. The record of an employee is a relevant consideration in determining the penalty that
[17]
shouldbemetedouttohim.

[18]
InSandovalShipyardv.Clave,
weheldthatanemployeewhodeliberatelyabsentedfromwork
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
petitionerswereabsentbecausetheywerealreadyworkinginanothercompany.
Thelawimposesmanyobligationsontheemployersuchasprovidingjustcompensationtoworkers,
observanceoftheproceduralrequirementsofnoticeandhearingintheterminationofemployment.
Ontheotherhand,thelawalsorecognizestherightoftheemployertoexpectfromitsworkersnot
[19]
only good performance, adequate work and diligence, but also good conduct
and loyalty. The
employermaynotbecompelledtocontinuetoemploysuchpersonswhosecontinuanceintheservice
[20]
willpatentlybeinimicaltohisinterests.

After establishing that the terminations were for a just and valid cause, we now determine if the
proceduresfordismissalwereobserved.

The procedure for terminating an employee is found in BookVI, Rule I, Section 2(d) of the
OmnibusRulesImplementingtheLaborCode:

Standardsofdueprocess:requirementsofnotice.Inallcasesofterminationofemployment,the
followingstandardsofdueprocessshallbesubstantiallyobserved:

I.ForterminationofemploymentbasedonjustcausesasdefinedinArticle282oftheCode:

(a)Awrittennoticeservedontheemployeespecifyingthegroundorgroundsfortermination,
andgivingtosaidemployeereasonableopportunitywithinwhichtoexplainhisside

(b) A hearing or conference during which the employee concerned, with the assistance of
counseliftheemployeesodesires,isgivenopportunitytorespondtothecharge,presenthisevidence
orrebuttheevidencepresentedagainsthimand

(c) A written notice of termination served on the employee indicating that upon due
considerationofallthecircumstances,groundshavebeenestablishedtojustifyhistermination.

Incaseoftermination,theforegoingnoticesshallbeservedontheemployeeslastknownaddress.

Dismissals based on just causes contemplate acts or omissions attributable to the employee
whiledismissalsbasedonauthorizedcausesinvolvegroundsundertheLaborCodewhichallowthe
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
backwagesaremandatedunderArticle279.Ifreinstatementisnolongerpossiblewherethedismissal
wasunjust,separationpaymaybegranted.

Procedurally,(1)ifthedismissalisbasedonajustcauseunderArticle282,theemployermust
givetheemployeetwowrittennoticesandahearingoropportunitytobeheardifrequestedbythe
employeebeforeterminatingtheemployment:anoticespecifyingthegroundsforwhichdismissalis
soughtahearingoranopportunitytobeheardandafterhearingoropportunitytobeheard,anotice
ofthedecisiontodismissand(2)ifthedismissalisbasedonauthorizedcausesunderArticles283
and284,theemployermustgivetheemployeeandtheDepartmentofLaborandEmploymentwritten
notices30dayspriortotheeffectivityofhisseparation.

Fromtheforegoingrulesfourpossiblesituationsmaybederived:(1)thedismissalisforajustcause
underArticle282oftheLaborCode,foranauthorizedcauseunderArticle283,orforhealthreasons
underArticle284,anddueprocesswasobserved(2)thedismissaliswithoutjustorauthorizedcause

butdueprocesswasobserved(3)thedismissaliswithoutjustorauthorizedcauseandtherewasno
dueprocessand(4)thedismissalisforjustorauthorizedcausebutdueprocesswasnotobserved.

Inthefirstsituation,thedismissalisundoubtedlyvalidandtheemployerwillnotsufferanyliability.

Inthesecondandthirdsituationswherethedismissalsareillegal,Article279mandatesthatthe
employee is entitled to reinstatement without loss of seniority rights and other privileges and full
backwages,inclusiveofallowances,andotherbenefitsortheirmonetaryequivalentcomputedfrom
thetimethecompensationwasnotpaiduptothetimeofactualreinstatement.

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 liablefornon
compliancewiththeproceduralrequirementsofdueprocess.

Thepresentcasesquarelyfallsunderthefourthsituation.Thedismissalshouldbeupheldbecauseit
was established that the petitioners abandoned their jobs to work for another company. Private
respondent,however,didnotfollowthenoticerequirementsandinsteadarguedthatsendingnotices
to the last known addresses would have been useless because they did not reside there anymore.
Unfortunatelyfortheprivaterespondent,thisisnotavalidexcusebecausethelawmandatesthetwin
[21]
noticerequirementstotheemployeeslastknownaddress.
Thus,itshouldbeheldliablefornon
compliancewiththeproceduralrequirementsofdueprocess.

Areviewandreexaminationoftherelevantlegalprinciplesisappropriateandtimelytoclarifythe
various rulings on employment termination in the light of Serrano v. National Labor Relations
[22]
Commission.

Priorto1989,therulewasthatadismissalorterminationisillegaliftheemployeewasnotgivenany
[23]
notice.Inthe1989caseofWenphilCorp.v.NationalLaborRelationsCommission,
wereversed
this longstanding 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
misconductandinsubordination,ajustgroundforterminationunderArticle282.Theemployeehada
violenttemperandcausedtroubleduringofficehours,defyingsuperiorswhotriedtopacifyhim.We
concluded that reinstating the employee and awarding backwages may encourage him to do even
[24]
worseandwillrenderamockeryoftherulesofdisciplinethatemployeesarerequiredtoobserve.
Wefurtherheldthat:


Underthecircumstances,thedismissaloftheprivaterespondentforjustcauseshouldbemaintained.
Hehasnorighttoreturntohisformeremployment.

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.Thedismissalofanemployeemustbefor just or authorized cause and after due process.
Petitionercommittedaninfractionofthesecondrequirement.Thus,itmustbeimposedasanctionfor
its failure to give a formal notice and conduct an investigation as required by law before dismissing
petitionerfromemployment.Consideringthecircumstancesofthiscasepetitionermustindemnifythe
privaterespondenttheamountofP1,000.00.Themeasureofthisawarddependsonthefactsofeach
[25]
caseandthegravityoftheomissioncommittedbytheemployer.

Therulethusevolved:wheretheemployerhadavalidreasontodismissanemployeebutdid
not follow the due process requirement, the dismissal may be upheld but the employer will be
penalizedtopayanindemnitytotheemployee.ThisbecameknownastheWenphilorBelatedDue
ProcessRule.

OnJanuary27,2000,inSerrano,theruleontheextentofthesanctionwaschanged.Weheld
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
judiciallydeclaredthatthedismissalwasforajustorauthorizedcause.

The rationale for the reexamination of the Wenphil doctrine in Serrano was the significant
numberofcasesinvolvingdismissalswithoutrequisitenotices.Weconcludedthattheimpositionof
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
Courtfindsthedismissalwasforajustorauthorizedcause.

Serranowasconfrontingthepracticeofemployerstodismissnowandpaylaterbyimposing
fullbackwages.

Webelieve,however,thattherulinginSerranodidnotconsiderthefullmeaningofArticle279
oftheLaborCodewhichstates:

ART. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the
servicesofanemployeeexceptforajustcauseorwhenauthorizedbythisTitle.Anemployeewhois
unjustlydismissedfromworkshallbeentitledtoreinstatementwithoutlossofseniorityrightsandother
privilegesandtohisfullbackwages,inclusiveofallowances,andtohisotherbenefitsortheirmonetary
equivalent computed from the time his compensation was withheld from him up to the time of his
actualreinstatement.

Thismeansthattheterminationisillegalonlyifitisnotforanyofthejustifiedorauthorized
causes provided by law. Payment of backwages and other benefits, including reinstatement, is
justifiedonlyiftheemployeewasunjustlydismissed.

ThefactthattheSerranorulingcancauseunfairnessandinjusticewhichelicitedstrongdissent
haspromptedustorevisitthedoctrine.

Tobesure,theDueProcessClauseinArticleIII,Section1oftheConstitutionembodiesasystemof
rightsbasedonmoralprinciplessodeeplyimbeddedinthetraditionsandfeelingsofourpeopleasto
bedeemedfundamentaltoacivilizedsocietyasconceivedbyourentirehistory.Dueprocessisthat
[26]
whichcomportswiththedeepestnotionsofwhatisfairandrightandjust.
Itisaconstitutional
restraintonthelegislativeaswellasontheexecutiveandjudicialpowersofthegovernmentprovided
bytheBillofRights.

Due process under the Labor Code, like Constitutional due process, has two aspects:
substantive,i.e.,thevalidandauthorizedcausesofemploymentterminationundertheLaborCode
andprocedural,i.e.,themannerofdismissal.Proceduraldueprocessrequirementsfordismissalare
foundintheImplementingRulesofP.D.442,asamended,otherwiseknownastheLaborCodeofthe
[27]
PhilippinesinBookVI,RuleI,Sec.2,asamendedbyDepartmentOrderNos.9and10.
Breaches
ofthesedueprocessrequirementsviolatetheLaborCode.Thereforestatutorydueprocessshouldbe
differentiatedfromfailuretocomplywithconstitutionaldueprocess.

Constitutionaldueprocessprotectstheindividualfromthegovernmentandassureshimofhis
rightsincriminal,civiloradministrativeproceedingswhilestatutorydueprocessfoundintheLabor
CodeandImplementingRulesprotectsemployeesfrombeingunjustlyterminatedwithoutjustcause
afternoticeandhearing.

[28]
In Sebuguero v. National Labor Relations Commission,
the dismissal was for a just and
validcausebuttheemployeewasnotaccordeddueprocess.ThedismissalwasupheldbytheCourt
buttheemployerwassanctioned.Thesanctionshouldbeinthenatureofindemnificationorpenalty,
anddependsonthefactsofeachcaseandthegravityoftheomissioncommittedbytheemployer.

[29]
In Nath v. National Labor Relations Commission,
it was ruled that even if the employee
wasnotgivendueprocess,thefailuredidnotoperatetoeradicatethejustcausesfordismissal.The

dismissal being for just cause, albeit without due process, did not entitle the employee to
reinstatement,backwages,damagesandattorneysfees.

Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services, Inc. v. National
[30]
LaborRelationsCommission,
whichopinionhereiteratedinSerrano,stated:

C.Wherethereisjustcausefordismissalbutdueprocesshasnotbeenproperlyobservedbyan
employer, it would not be right to order either the reinstatement of the dismissed employee or the
paymentofbackwagestohim.Infailing,however,tocomplywiththeprocedureprescribedbylawin
terminatingtheservicesoftheemployee,theemployermustbedeemedtohaveoptedor,inanycase,
shouldbemadeliable,forthepaymentofseparationpay.Itmightbepointedoutthatthenoticetobe
givenandthehearingtobeconductedgenerallyconstitutethetwopartdueprocessrequirementoflaw
tobeaccordedtotheemployeebytheemployer.Nevertheless,peculiarcircumstancesmightobtainin
certain situations where to undertake the above steps would be no more than a useless formality and
where,accordingly,itwouldnotbeimprudenttoapplytheresipsaloquiturruleandaward,inlieuof
[31]
separationpay,nominaldamagestotheemployee.xxx.

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
observanceofthetwinrequirementsofnoticeandhearing,thebetterruleistoabandontheSerrano
doctrine and to follow Wenphil by holding that the dismissal was for just cause but imposing
sanctionsontheemployer.Suchsanctions,however,mustbestifferthanthatimposedinWenphil.By
doingso,thisCourtwouldbeabletoachieveafairresultbydispensingjusticenotjusttoemployees,
buttoemployersaswell.

The unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but not
complyingwithstatutorydueprocessmayhavefarreachingconsequences.

Thiswouldencouragefrivoloussuits,whereeventhemostnotoriousviolatorsofcompanypolicyare
rewarded by invoking due process. This also creates absurd situations where there is a just or
authorizedcausefordismissalbutaproceduralinfirmityinvalidatesthetermination.Letustakefor
exampleacasewheretheemployeeiscaughtstealingorthreatensthelivesofhiscoemployeesor
hasbecomeacriminal,whohasfledandcannotbefound,orwhereseriousbusinesslossesdemand
that operations be ceased in less than a month. Invalidating the dismissal would not serve public
interest.Itcouldalsodiscourageinvestmentsthatcangenerateemploymentinthelocaleconomy.

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

[32]
sustainingtheemployerwhenitisintheright,asinthiscase.
Certainly,anemployershouldnot
becompelledtopayemployeesforworknotactuallyperformedandinfactabandoned.

Theemployershouldnotbecompelledtocontinueemployingapersonwhoisadmittedlyguiltyof
misfeasanceormalfeasanceandwhosecontinuedemploymentispatentlyinimicaltotheemployer.
Thelawprotectingtherightsofthelaborerauthorizesneitheroppressionnorselfdestructionofthe
[33]
employer.

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
resultinavaliddismissal.

AnemployeewhoisclearlyguiltyofconductviolativeofArticle282shouldnotbeprotectedbythe
SocialJusticeClauseoftheConstitution.Socialjustice,asthetermsuggests,shouldbeusedonlyto
correctaninjustice.AstheeminentJusticeJoseP.Laurelobserved,socialjusticemustbefoundedon
therecognitionofthenecessityofinterdependenceamongdiverseunitsofasocietyandofthe
protectionthatshouldbeequallyandevenlyextendedtoallgroupsasacombinedforceinour
social and economic life, consistent with the fundamental and paramount objective of the state of
promotingthehealth,comfort,andquietofallpersons,andofbringingaboutthegreatestgoodtothe
[34]
greatestnumber.

ThisisnottosaythattheCourtwaswrongwhenitruledthewayitdidinWenphil,Serranoand
related cases. Social justice is not based on rigid formulas set in stone. It has to allow for
changingtimesandcircumstances.

Justice Isagani Cruz strongly asserts the need to apply a balanced approach to labor
managementrelationsanddispensejusticewithanevenhandineverycase:

We have repeatedly stressed that social justice or any justice for that matter is for the deserving,
whetherhebeamillionaireinhismansionorapauperinhishovel.Itistruethat,incaseofreasonable
doubt, we are to tilt the balance in favor of the poor to whom the Constitution fittingly extends its
sympathyandcompassion.Butneverisitjustifiedtogivepreferencetothepoorsimplybecausethey
arepoor,orrejecttherichsimplybecausetheyarerich,forjusticemustalwaysbeservedforthepoor
[35]
andtherichalike,accordingtothemandateofthelaw.

Justiceineverycaseshouldonlybeforthedeservingparty.Itshouldnotbepresumedthateverycase
ofillegaldismissalwouldautomaticallybedecidedinfavoroflabor,asmanagementhasrightsthat

shouldbefullyrespectedandenforcedbythisCourt.Asinterdependentandindispensablepartnersin
nationbuilding,laborandmanagementneedeachothertofosterproductivityandeconomicgrowth
hence,theneedtoweighandbalancetherightsandwelfareofboththeemployeeandemployer.

Wherethedismissalisforajustcause,asintheinstantcase,thelackofstatutorydueprocess
should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should
indemnifytheemployeefortheviolationofhisstatutoryrights,asruledinReta v. National Labor
[36]
RelationsCommission.
Theindemnitytobeimposedshouldbestiffertodiscouragetheabhorrent
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,
takingintospecialconsiderationthegravityofthedueprocessviolationoftheemployer.

UndertheCivilCode,nominaldamagesisadjudicatedinorderthatarightoftheplaintiff,whichhas
beenviolatedorinvadedbythedefendant,maybevindicatedorrecognized,andnotforthepurpose
[37]
ofindemnifyingtheplaintiffforanylosssufferedbyhim.

[38]
AsenunciatedbythisCourtinViernesv.NationalLaborRelationsCommissions,
anemployeris
liabletopayindemnityintheformofnominaldamagestoanemployeewhohasbeendismissedif,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 employees one month salary. This indemnity is intended not to penalize the
employer but to vindicate or recognize the employees right to statutory due process which was
[39]
violatedbytheemployer.

Theviolationofthepetitionersrighttostatutorydueprocessbytheprivaterespondentwarrantsthe
paymentofindemnityintheformofnominaldamages.Theamountofsuchdamagesisaddressedto
[40]
the sound discretion of the court, taking into account the relevant circumstances.
Considering
the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We
believethisformofdamageswouldservetodeteremployersfromfutureviolationsofthestatutory
due process rights of employees. At the very least, it provides a vindication or recognition of this
fundamentalrightgrantedtothelatterundertheLaborCodeanditsImplementingRules.

PrivaterespondentclaimsthattheCourtofAppealserredinholdingthatitfailedtopaypetitioners
holidaypay,serviceincentiveleavepayand13thmonthpay.


Wearenotpersuaded.

Weaffirmtherulingoftheappellatecourtonpetitionersmoneyclaims.Privaterespondentis
liableforpetitionersholidaypay,serviceincentiveleavepayand13thmonthpaywithoutdeductions.

Asageneralrule,onewhopleadspaymenthastheburdenofprovingit.Evenwheretheemployee
mustallegenonpayment,thegeneralruleisthattheburdenrestsontheemployertoprovepayment,
rather than on the employee to prove nonpayment. The reason for the rule is that the pertinent
personnel files, payrolls, records, remittances and other similar documents which will show that
overtime,differentials,serviceincentiveleaveandotherclaimsofworkershavebeenpaidarenotin
[41]
thepossessionoftheworkerbutinthecustodyandabsolutecontroloftheemployer.

Inthecaseatbar,ifprivaterespondentindeedpaidpetitionersholidaypayandserviceincentiveleave
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
[42]
presented cash vouchers showing payments of the benefit in the years disputed.
Allegations by
privaterespondentthatitdoesnotoperateduringholidaysandthatitallowsitsemployees10days
leave with pay, other than being selfserving, do not constitute proof of payment. Consequently, it
failedtodischargetheonusprobanditherebymakingitliableforsuchclaimstothepetitioners.
Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio Agabons 13th
monthpay,wefindthesametobeunauthorized.TheevidentintentionofPresidentialDecreeNo.851
istograntanadditionalincomeintheformofthe13thmonthpaytoemployeesnotalreadyreceiving
[43]
thesame
soastofurtherprotectthelevelofrealwagesfromtheravagesofworldwideinflation.
[44]
Clearly, as additional income, the 13th month pay is included in the definition of wage under
Article97(f)oftheLaborCode,towit:

(f)Wagepaidtoanyemployeeshallmeantheremunerationorearnings,howeverdesignated,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
SecretaryofLabor,ofboard,lodging,orotherfacilitiescustomarilyfurnishedbytheemployertothe
employee

[45]
from which an employer is prohibited under Article 113
of the same Code from making any
deductions without the employees knowledge and consent. In the instant case, private respondent
failedtoshowthatthedeductionoftheSSSloanandthevalueoftheshoesfrompetitionerVirgilio
Agabons 13th month pay was authorized by the latter. The lack of authority to deduct is further
bolstered by the fact that petitioner VirgilioAgabon included the same as one of his money claims
againstprivaterespondent.

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
from1996to1998,intheamountofP6,520.00,serviceincentiveleavepayforthesameperiodinthe
amount of P3,255.00 and the balance of Virgilio Agabons thirteenth month pay for 1998 in the
amountofP2,150.00.

WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of
Appeals dated January 23, 2003, in CAG.R. SP No. 63017, finding that petitioners Jenny and
VirgilioAgabonabandonedtheirwork,andorderingprivaterespondenttopayeachofthepetitioners
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
Agabons thirteenth month pay for 1998 in the amount of P2,150.00 is AFFIRMED with the
MODIFICATIONthatprivaterespondentRivieraHomeImprovements,Inc.isfurtherORDERED
topayeachofthepetitionerstheamountofP30,000.00asnominaldamagesfornoncompliancewith
statutorydueprocess.

Nocosts.

SOORDERED.

CONSUELOYNARESSANTIAGO
AssociateJustice

WECONCUR:

HILARIOG.DAVIDE,JR.
ChiefJustice

REYNATOS.PUNOARTEMIOV.PANGANIBAN
AssociateJusticeAssociateJustice

LEONARDOA.QUISUMBINGANGELINASANDOVALGUTIERREZ
AssociateJusticeAssociateJustice

ANTONIOT.CARPIOMA.ALICIAAUSTRIAMARTINEZ
AssociateJusticeAssociateJustice

RENATOC.CORONACONCHITACARPIOMORALES
AssociateJusticeAssociateJustice

ROMEOJ.CALLEJO,SR.ADOLFOS.AZCUNA
AssociateJusticeAssociateJustice

DANTEO.TINGAMINITAV.CHICONAZARIO
AssociateJusticeAssociateJustice

CANCIOC.GARCIA
AssociateJustice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the
conclusionsintheaboveDecisionwerereachedinconsultationbeforethecasewasassignedtothe

writeroftheopinionoftheCourt.

HILARIOG.DAVIDE,JR.
ChiefJustice

[1]

PennedbyAssociateJusticeMarinaL.BuzonandconcurredinbyAssociateJusticesJosefinaGuevaraSalonga
andDaniloB.Pine.
[2]
Rollo,p.41.
[3]
Id.,pp.1314.
[4]
Id.,p.92.
[5]
Id.,p.131.
[6]
Id.,p.173.
[7]
Id.,p.20.
[8]
Id.,pp.2123.
[9]
Id.,p.45.
[10]
Id.,pp.4243.
[11]
Rosariov.VictoryRicemill,G.R.No.147572,19February2003,397SCRA760,767.
[12]
Reyesv.MaximsTeaHouse,G.R.No.140853,27February2003,398SCRA288,298.
[13]
Santosv.SanMiguelCorporation,G.R.No.149416,14March2003,399SCRA172,182.
[14]
ColumbusPhilippineBusCorporationv.NLRC,417Phil.81,100(2001).
[15]
DePaul/KingPhilipCustomsTailorv.NLRC,364Phil.91,102(1999).
[16]
Sta.CatalinaCollegev.NLRC,G.R.No.144483,19November2003.
[17]
CosmosBottlingCorporationv.NLRC,G.R.No.111155,23October1997,281SCRA146,153154.
[18]
G.R.No.L49875,21November1979,94SCRA472,478.
[19]
JudyPhilippines,Inc.v.NLRC,352Phil.593,606(1998).
[20]
PhilippineSingaporeTransportServices,Inc.v.NLRC,343Phil.284,291(1997).
[21]
SeeStoltNielsenMarineServices,Inc.v.NLRC,G.R.No.128395,29December1998,300SCRA713,720.
[22]
G.R.No.117040,27January2000,323SCRA445.
[23]
G.R.No.80587,8February1989,170SCRA69.
[24]
Id.at76.
[25]
Id.
[26]
Solesbeev.Balkcom,339U.S.9,16(1950)(Frankfurter,J.,dissenting).Dueprocessisviolatedifapracticeor
rule offends some principle of justice so rooted in the traditions and conscience of our people as to be ranked as
fundamentalSnyderv.Massachusetts,291U.S.97,105(1934).
[27]
DepartmentOrderNo.9tookeffecton21June1997.DepartmentOrderNo.10tookeffecton22June1997.
[28]
G.R.No.115394,27September1995,248SCRA535.

[29]
[30]
[31]
[32]
[33]
[34]
[35]
[36]
[37]
[38]

G.R.No.122666,19June1997,274SCRA386.
G.R.No.114313,29July1996,259SCRA699,700.
Serrano,supra,Vitug,J.,Separate(ConcurringandDissenting)Opinion,323SCRA524,529530(2000).
Capiliv.NLRC,G.R.No.117378,26March1997,270SCRA488,495.
Filipro,Inc.v.NLRC,G.R.No.L70546,16October1986,145SCRA123.
Calalangv.Williams,70Phil.726,735(1940).
Gelosv.CourtofAppeals,G.R.No.86186,8May1992,208SCRA608,616.
G.R.No.112100,27May1994,232SCRA613,618.
Art.2221,CivilCode.

G.R.No.108405.April4,2003citingKwikwayEngineeringWorksv.NLRC,G.R.No.85014,22March1991,
195 SCRA 526, 532 Aurelio v. NLRC, G.R. No. 99034, 12 April 1993, 221 SCRA 432, 443 and Sampaguita
GarmentsCorporationv.NLRC,G.R.No.102406,17June1994,233SCRA260,265.
[39]
Id.citing Better Buildings, Inc. v. NLRC, G.R. No. 109714, 15 December 1997, 283 SCRA 242, 251 Iran v.
NLRC,G.R.No.121927,22April1998,289SCRA433,442.
[40]
Savellanov.NorthwestAirlines,G.R.No.151783,8July2003.
[41]
Villarv.NLRC,G.R.No.130935,11May2000.
[42]
Rollo,pp.6071.
[43]
USTFacultyUnionv.NLRC,G.R.No.90445,2October1990.
[44]
Whereasclauses,P.D.No.851.
[45]
Art.113.Wagededuction.Noemployer,inhisownbehalforinbehalfofanyperson,shallmakeany
deductionfromthewagesofhisemployeesexcept:
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to
recompensetheemployerfortheamountpaidbyhimaspremiumontheinsurance
(b)Foruniondues,incaseswheretherightoftheworkerorhisuniontocheckoffhasbeenrecognized
bytheemployerorauthorizedinwritingbytheindividualworkerconcernedand
(c)IncaseswheretheemployerisauthorizedbylaworregulationsissuedbytheSecretaryofLabor
andEmployment.