Title: De Jesus vs Hon.

Aquino

Reference: G.R. No. 164662 February 18, 2013

Facts:

On February 20, 2002, petitioner, Ma. Lourdes De Jesus filed with the Labor Arbiter a complaint
for illegal dismissal against private respondents Supersonic Services Inc. Pakistan Airlines, Gil
Puyat, Jr. and Divina Abad Santos, praying for the payment of separation pay, full backwages,
moral and exemplary damages, etc. She was employed by Supersonic from Feb. 1976 to March
2001. From 1992 to March 15, 2001 she held the position of sales Promotion Officer, a highly
confidential and highly sensitive position in the company.

On Jan 24, 2001 a memorandum was issued to her informing her of the official endorsement of
collectibles from clients under account. On March 2001, another memorandum was issued to
her reminding her to collect payments of accounts guaranteed by her and which has been past
due since the year 2000. When discovered by respondent that the outstanding balance under
petitioner’s name was already paid, another memorandum was issued to her directing her to
explain in writing why she should not be dismissed for cause for failure to account and was
informed that her failure to explain in writing shall be construed that she misappropriated said
amount for her own use and benefit to the damage of the company. When she supposedly
came back to work on June 1, 2001 after her 3-month leave after hysterectomy operation, she
was forced to execute a promissory note for her failure to remit collections since 2000
amounting to US$ 36,168.39 and dismissed her.

On October 30, 2002, the Labor Arbiter ruled against De Jesus, declaring her dismissal to be for
just cause and finding that she had been accorded due process of law. Aggrieved, De Jesus
appealed to the National Labor Relations Commission (NLRC), which affirmed the Labor
Arbiter’s Decision and dismissing De Jesus’ appeal for its lack of merit. The Court of Appeals
modified the decision, in that while the dismissal is hereby held to be valid, the same must
declared ineffectual. As a consequence thereof, Supersonic is hereby required to pay petitioner
Maria Lourdes De Jesus full backwages from the time her employment was terminated up to the
finality of this decision. Hence, both appealed and the cases were consolidated.

Issues:

1. Whether or not Supersonic was justified in terminating De Jesus’ employment

Ruling:

1. Yes. Article 282 of the Labor Code enumerates the causes by which the employer may
validly terminate the employment of the employee, viz: Xxx (c) Fraud or willful breach by
the employee of the trust reposed in him by his employer or duly authorized
representative; xxx

De Jesus had not disputed her failure to remit and account for some of her collections, for, in
fact, she herself had expressly admitted her failure to do so through her letters sent to
Supersonic’s general manager. Thereby, the CA concluded, she defrauded her employer or
willfully violated the trust reposed in her by Supersonic. In that regard, the CA rightly observed
that proof beyond reasonable doubt of her violation of the trust was not required, for it was
sufficient that the employer had "reasonable grounds to believe that the employee concerned is
responsible for the misconduct as to be unworthy of the trust and confidence demanded by [her]
position.

2. No. Supersonic did not comply with the two-written notice rule. The requirement of two
written notices is enunciated in Article 277of the Labor Code, as amended, which
relevantly states:
(b) Subject to the constitutional right of workers to security of tenure and their right to be
protected against dismissal except for a just and authorized cause and without prejudice to the
requirement of notice under Article 283 of this Code, the employer shall furnish the worker
whose employment is sought to be terminated a written notice containing a statement of
the causes for termination and shall afford the latter ample opportunity to be heard and to
defend himself with the assistance of his representative if he so desires in accordance
with company rules and regulations promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision taken by the employer shall be without
prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a
complaint with the regional branch of the National Labor Relations Commission. The burden of
proving that the termination was for a valid or authorized cause shall rest on the employer. The
Secretary of the Department of Labor and Employment may suspend the effects of the
termination pending resolution of the dispute in the event of a prima facie finding by the
appropriate official of the Department of Labor and Employment before whom such dispute is
pending that the termination may cause a serious labor dispute or is in implementation of a mass
lay-off.

xxxx

and in Section 2 and Section 7, Rule I, Book VI of the Implementing Rules of the Labor Code.
The first written notice would inform her of the particular acts or omissions for which her dismissal
was being sought. The second written notice would notify her of the employer’s decision to
dismiss her. But the second written notice must not be made until after she was given a
reasonable period after receiving the first written notice within which to answer the charge, and
after she was given the ample opportunity to be heard and to defend herself with the assistance
of her representative, if she so desired. The requirement was mandatory.

The March 26, 2001 memorandum did not specify the grounds for which her dismissal
would be sought, and for that reason was at best a mere reminder to De Jesus to submit her
report on the status of her accounts. The May 12, 2001 memorandum did not provide the notice
of dismissal under the law because it only directed her to explain why she should not be
dismissed for cause. The latter memorandum was apparently only the first written notice under
the requirement. Assuming for the sake of argument that the memoranda furnished to De Jesus
may have satisfied the minimum requirements of due process, still, the same did not satisfy the
notice requirement under the Labor Code because the intention to sever the employee’s
services must be made clear in the notice. Such was not apparent from the memoranda. As the
Supreme Court held in Serrano, the violation of the notice requirement is not strictly a denial of
due process. This is because such notice is precisely intended to enable the employee not only
to prepare himself for the legal battle to protect his tenure of employment, but also to find other
means of employment and ease the impact of the loss of his job and, necessarily, his income.
Conformably with the doctrine laid down in Serrano vs. NLRC, the dismissal of De Jesus should
therefore be struck down as ineffectual.
 3. De Jesus is entitled only to nominal damages for the purpose of indemnifying her for the
violation of her right to due process.

The CA did not err in ruling the dismissal of De Jesus as ineffectual. Relying on Serrano, the
CA precisely ruled that the violation by Supersonic of the two-written notice requirement
rendered ineffectual the dismissal of De Jesus for just cause under Article 282 of the Labor
Code, and entitled her to be paid full backwages from the time of her dismissal until the finality
of its decision. The Court cannot ignore that the applicable case law when the CA promulgated
its decision on July 23, 2004, and when it denied Supersonic’s motion for reconsideration on
October 21, 2004 was still Serrano. Considering that the Court determines in this appeal by
petition for review on certiorari only whether or not the CA committed an error of law in
promulgating its assailed decision of July 23, 2004,the CA cannot be declared to have erred on
the basis of Serrano being meanwhile abandoned through Agabon if all that the CA did was to
fully apply the law and jurisprudence applicable at the time of its rendition of the judgment. As a
rule, a judicial interpretation becomes a part of the law as of the date that the law was
originally passed, subject only to the qualification that when a doctrine of the Court is
overruled and the Court adoptsa different view, and more so when there is a reversal
ofthe doctrine, the new doctrine should be applied prospectively and should not apply to
parties who relied on the old doctrine and acted in good faith. To hold otherwise would be
to deprive the law of its quality of fairness and justice, for, then, there is no recognition of what
had transpired prior to such adjudication

Although Agabon,being promulgatedonly on November 17, 2004, ought to be

Under Agabon, the new doctrine is that the failure of the employer to observe the
requirements of due process in favor of the dismissed employee (that is, the two-written
notices rule) should not invalidate or render ineffectual the dismissal for just or
authorized cause. The Agabon Court plainly saw the likelihood of Serrano producing unfair but
far-reaching consequences, such as, but not limited to, encouraging frivolous suits where even
the most notorious violators of company policies would be rewarded by invoking due process; to
having the constitutional policy of providing protection to labor be used as a sword to oppress
the employers; and to compelling the employers to continue employing persons who were
admittedly guilty of misfeasance or malfeasance and whose continued employment would be
patently inimical to the interest of employers.

Even so, the Agabon Court still deplored the employer's violation of the employee's right
to statutory due process by directing the payment of indemnity in the form of nominal damages,
the amount of which would be addressed to the sound discretion of the labor tribunal upon
taking into account the relevant circumstances. Thus, the Agabon Court designed such form
of damages as a deterrent to employers from committing in the future violations of the
statutory due process rights of employees, and, at the same time, as at the very least a
vindication or recognition of the fundamental right granted to the employees under the
Labor Code and its implementing rules. Accordingly, consistent with precedent the amount of
₱50,000.00 as nominal damages is hereby fixed for the purpose of indemnifying De Jesus for
the violation of her right to due process.