GR 161976; (August, 2005) (Digest)
G.R. No. 161976. August 12, 2005
CENTRAL LUZON CONFERENCE CORPORATION OF SEVENTH-DAY ADVENTIST CHURCH, INC., et al., vs. HONORABLE COURT OF APPEALS and FEDERICO CABANIT
FACTS
Respondent Federico Cabanit was a long-time employee of petitioner Central Luzon Conference Corporation, having served in various capacities including branch manager and auditor. On October 16, 1997, he was placed under preventive suspension and required to explain within 15 days why he should not be dismissed for alleged irregularities. Cabanit requested copies of pertinent documents to prepare his defense, but the petitioner corporation allegedly did not provide them. Subsequently, on November 18, 1997, the corporation’s Executive Committee adopted a resolution terminating his employment effective October 16, 1997.
Cabanit filed a complaint for illegal dismissal. The Labor Arbiter and the National Labor Relations Commission (NLRC) dismissed the complaint, finding the dismissal was for a just cause. On appeal, the Court of Appeals affirmed the existence of a just cause for termination but ruled that the employer failed to comply with the second notice requirement of procedural due process by not giving Cabanit a real opportunity to explain his side. The CA thus ordered the payment of backwages from the date of termination until the decision’s finality and remanded the case for computation.
ISSUE
Whether the employer’s failure to comply with statutory due process in effecting a dismissal for a just cause warrants the award of backwages.
RULING
No. The Supreme Court, applying its ruling in Agabon v. NLRC, held that while the dismissal was for a just or authorized cause, the employer violated the employee’s right to procedural due process. In such a scenario, where the dismissal is substantively valid but procedurally defective, the sanction is not reinstatement or payment of backwages. Instead, the employer is liable to pay nominal damages as indemnity for the violation of the employee’s statutory right. The Court fixed the amount at ₱30,000.00, considering the circumstances, to deter employers from future violations and to vindicate the fundamental due process rights of employees under the Labor Code. Consequently, the Court modified the CA decision by deleting the award of backwages and ordering the payment of ₱30,000.00 in nominal damages.