Illegal DismissalConsequences for No Due Process

29 October 2016

Concept of Illegal DismissalIllegal dismissal is the employee termination without observance of substantive due process.

While due process is composed of substantive and procedural, so long as there is just cause or authorized cause, the dismissal is valid even if procedural due process is not observed.

Case Law: “Since [the employee] had been dismissed in violation of his right to procedural due process but for a just cause [substantive due process being present], [the employer] should pay him nominal damages of P30,000.00, in accordance with Agabon v. NLRC.”

Citation: Sang-An v. Equator Knights Detective and Security, Agency, Inc., G.R. No. 173189, 13 February 2013

Full Backwages“… Under Article 279 of the Labor Code, as amended, employees who have been illegally terminated from employment are entitled to the twin reliefs of reinstatement without loss of seniority rights and to the payment of full backwages corresponding to the period from their illegal dismissal up to actual reinstatement…”

Citation: Tan Brothers Corporation of Basilan City v. Escudero, G.R. No. 188711, 08 July 2013

Reinstatement“Reinstatement is a restoration to the state from which one has been removed or separated, while the payment of backwages is a form of relief that restores the income that was lost by reason of the unlawful dismissal.”

Citation: Tan Brothers Corporation of Basilan City v. Escudero, G.R. No. 188711, 08 July 2013

Separation Payin lieu of Reinstatement

“… where reinstatement is not advisable or feasible as when antagonism already caused a severe strain in the relationship between the employer and the employee, separation pay may also be awarded where… reinstatement is no longer practical or in the best interest of the parties or when the employee decides not to be reinstated anymore.”

Citation: Tan Brothers Corporation of Basilan City v. Escudero, G.R. No. 188711, 08 July 2013

Moral Damages“The employee is entitled to moral damages when the employer acted a) in bad faith or fraud; b) in a manner oppressive to labor; or c) in a manner contrary to morals, good customs, or public policy.”

Bad faith "implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity.“ Cathay Pacific Airways v. Spouses Vazquez established that bad faith must be proven through clear and convincing evidence. This is because "[b]adfaith and fraud… are serious accusations that can be so conveniently and casually invoked, and that is why they are never presumed. They amount to mere slogans or mudslinging unless convincingly substantiated by whoever is alleging them…"

Citation: Montinola v. Philippine Airlines, G.R. No. 198656, 08 September 2014

Exemplary Damages“… Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is socially deleterious in its consequence by creating negative incentives or deterrents against such behaviour.“

“… in labor cases, the court may award exemplary damages ‘if the dismissal was effected in a wanton, oppressive or malevolent manner.’”

Citation: Montinola v. Philippine Airlines, G.R. No. 198656, 08 September 2014, citing Mecenas v. Santisteban, G.R. No. 88052, 14 December 1989

Nominal Damages“The law and jurisprudence allow the award of nominal damages in favor of an employee in a case where a valid cause for dismissal exists but the employer fails to observe due process in dismissing the employee...”

“… nominal damages ‘may be awarded to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, and not for indemnifying the plaintiff for any loss suffered by him. Its award is thus not for the purpose of indemnification for a loss but for the recognition and vindication of a right.’ The amount of nominal damages to be awarded the employee is addressed to the sound discretion of the court, taking into consideration the relevant circumstances. Nevertheless, while the amount of damages is left to the discretion of the court…”

Citation: LIBCAP Marketing Corp., v. Baquial, G.R. No. 192011, 30 June 2014

Attorney’s FeesArticle 111 of the Labor Code:

Art. 111. Attorney’s fees. – (a) In cases of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered.(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s fees which exceed ten percent of the amount of wages recovered.

Section 8, Rule VIII, Book III of its Implementing Rules:Section 8. Attorney’s fees. – Attorney’s fees in any judicial or administrative proceedings for the recovery of wages shall not exceed 10% of the amount awarded. The fees may be deducted from the total amount due the winning party.’

Article 2208 of the Civil Code:(1) When exemplary damages are awarded;(2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;

Citation: See above.

Joint and Solidary Liability“In labor cases, for instance, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith.”

Citation: MAM Realty Development Corporation v. Balbastro, G.R. No. 114787, 02 June 1995

For more information:

Labor Law ComplianceBest Practices for Human Resource

www.laborlaw.ph

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