G.R. No. 85919 . March 23, 1990.
JOSE A. TAN, JR., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and CARNATION PHILS., INC., respondents.

FACTS

Petitioner Jose A. Tan, Jr. was a territory salesman for Carnation Philippines, Inc. On April 26, 1984, he was preventively suspended for 30 days pending an investigation. After the suspension period ended, the company refused to reinstate him. On June 23, 1984, Carnation sent Tan a letter requiring him to explain why he should not be terminated for cause, citing alleged irregularities such as falsifying sales orders, diverting stocks to unauthorized warehouses, and failing to account for returned goods. Tan repeatedly requested a copy of the audit report detailing these charges to prepare his defense, but the company refused to furnish it. He submitted an explanation on September 19, 1984, but had already received a termination letter dated August 20, 1984.
The Labor Arbiter found the dismissal illegal due to lack of due process and ordered reinstatement with full backwages. The National Labor Relations Commission (NLRC) modified this decision, acknowledging the existence of just cause for dismissal but also finding a denial of due process. The NLRC sustained the dismissal but awarded Tan separation pay as a penalty against the employer for the procedural lapse.

ISSUE

Whether the dismissal of petitioner Jose A. Tan, Jr. was valid, considering the alleged existence of just cause but a conceded denial of due process.

RULING

The Supreme Court granted the petition, setting aside the NLRC decision and reinstating the Labor Arbiter’s ruling with modifications. The Court held that the dismissal was illegal due to a clear denial of due process. While the employer may have had a just cause for termination, the procedural requirements under the Labor Code and its Implementing Rules are mandatory. Specifically, Sections 2 and 5 of the Implementing Rules of Batas Pambansa Blg. 130 require the employer to furnish the worker a written notice stating the particular acts constituting the grounds for dismissal and to afford the worker ample opportunity to be heard and defend himself.
The Court found that Tan was denied adequate notice. Carnation’s refusal to provide him with a copy of the audit report, which contained the specific details of the charges, deprived him of the opportunity to prepare an intelligent and meaningful defense. Furthermore, the company dismissed him without waiting for his submitted explanation. This constituted a gross violation of procedural due process. Consequently, Tan was entitled to reinstatement without loss of seniority rights and to backwages. However, due to the evident loss of confidence and the strained relationship, reinstatement was deemed impracticable. The Court thus modified the award, granting Tan backwages limited to three years and, in lieu of reinstatement, separation pay equivalent to one month’s salary for every year of service.