G.R. No. 165268 November 8, 2005
Challenge Socks Corporation, Petitioner, vs. Court of Appeals, National Labor Relations Commission, Hon. Antonio R. Macam, and Elvie Buguat, Respondents.

FACTS

Respondent Elvie Buguat was hired by petitioner Challenge Socks Corporation as a knitting operator. During her employment, she incurred numerous infractions, including habitual absenteeism, tardiness, and neglect of duties. Specifically, on May 25, 1998, she was suspended for five days for causing damage due to her failure to check her work. She received another warning for a similar infraction on February 2, 1999. Despite these sanctions, Buguat committed another error in counting bundles of socks on March 1, 1999. Consequently, her employment was terminated on March 2, 1999, on grounds of habitual absenteeism and neglect of work.
Buguat filed a complaint for illegal dismissal. The Labor Arbiter ruled in her favor, finding the penalty of dismissal too harsh for the infraction of miscounting socks, and ordered reinstatement without backwages. The NLRC affirmed this decision. The Court of Appeals reversed, finding just cause for termination due to Buguat’s repeated infractions. However, it ruled the dismissal ineffectual due to the company’s failure to comply with the twin-notice procedural requirement, ordering the payment of full backwages from dismissal until the finality of its decision.

ISSUE

Whether the termination of Elvie Buguat was valid.

RULING

The Supreme Court affirmed the Court of Appeals with modification. On substantive grounds, the termination was for a just cause under Article 282 of the Labor Code. Buguat’s repeated acts of negligence, absenteeism, and tardiness, despite previous warnings and suspension, constituted gross and habitual neglect of duties. The totality of her infractions demonstrated a pattern of misconduct justifying dismissal. The penalty was appropriate, as an employer’s right to dismiss an employee for gross negligence is derived from its right to select and engage competent workers.
Procedurally, however, the petitioner failed to observe the twin-notice requirement, rendering the dismissal ineffectual. Following the doctrine established in Agabon v. NLRC, when dismissal is for a just cause but procedural due process is not observed, the employer is liable only for nominal damages, not for backwages. Consequently, the award of backwages was deleted. Petitioner was ordered to pay Buguat nominal damages in the amount of Thirty Thousand Pesos (P30,000.00).