In Augorio A. Dela Rosa v. ABS-CBN Corporation, the Supreme Court addressed the critical balance between an employer’s right to dismiss an employee for just cause and the employee’s right to due process. The Court ruled that while serious misconduct justified Dela Rosa’s dismissal, ABS-CBN failed to follow proper procedure, specifically regarding the second notice requirement. This failure to fully inform Dela Rosa of the final decision and its grounds, despite the validity of the cause for termination, constituted a violation of his procedural due process rights, entitling him to nominal damages.

When Workplace Misconduct Meets Due Process: Navigating Termination Rights

Augorio A. Dela Rosa, a video editor at ABS-CBN, faced dismissal after an incident involving intoxication and misconduct towards a female co-worker. While ABS-CBN cited this incident as a just cause for termination, they also pointed to the expiration of Dela Rosa’s fixed-term contract. This dual justification raised questions about the real reason for his dismissal and whether proper procedures were followed. The central legal question became: Can an employer bypass due process requirements when a valid cause for termination exists alongside a fixed-term contract?

The case began with Dela Rosa filing a complaint for illegal dismissal, arguing he was a regular employee and his termination was unlawful. ABS-CBN countered that Dela Rosa was a fixed-term employee whose contract had simply expired. They also argued that his misconduct warranted dismissal. The Labor Arbiter (LA) initially sided with Dela Rosa, declaring his dismissal illegal and awarding backwages, separation pay, and damages. However, the National Labor Relations Commission (NLRC) affirmed the LA’s decision with a modification, deleting the award for moral and exemplary damages.

The Court of Appeals (CA) reversed the NLRC’s ruling, finding Dela Rosa to be a regular employee who was validly dismissed for just cause. The CA emphasized the serious nature of Dela Rosa’s misconduct and the company’s compliance with notice and hearing requirements. This led Dela Rosa to petition the Supreme Court, questioning whether the CA erred in its assessment of his dismissal.

In its analysis, the Supreme Court first addressed the nature of Dela Rosa’s employment. The Court emphasized that for a fixed-term employment contract to be valid, both parties must have knowingly and voluntarily agreed to the fixed period. Importantly, this agreement must occur on relatively equal terms, with no employer dominance. Furthermore, the fixed term cannot be imposed to prevent the employee from gaining security of tenure.

x x x if it is apparent that the period has been imposed to preclude acquisition of tenurial security by the employee, then such period must be struck down for being contrary to law, morals, good customs, public order, and public policy.

Applying these principles, the Court determined that Dela Rosa was a regular employee, not a fixed-term employee. The continuous renewals and extensions of his contracts over several years indicated the necessity of his work to ABS-CBN’s business. These renewals also suggested that the fixed terms were designed to prevent him from attaining regular employment status.

Having established Dela Rosa’s status as a regular employee, the Court then assessed whether there was just cause for his dismissal. Article 297 of the Labor Code (formerly Article 282) outlines the just causes for terminating an employee. This includes serious misconduct. The Court agreed with the CA that Dela Rosa’s actions constituted serious misconduct, as he violated company policies and ethics through his behavior towards a female co-worker.

Misconduct, in the context of labor law, involves improper or wrongful conduct that transgresses established rules. To justify dismissal, the misconduct must be grave and aggravated, not merely trivial. In Dela Rosa’s case, the Court found that his intoxication at work and his actions towards his co-worker met the threshold for serious misconduct. This misconduct not only violated company rules but also reflected negatively on the company’s values.

However, the Court found that ABS-CBN failed to adhere to the procedural requirements for terminating Dela Rosa’s employment. As a matter of due process, an employer must provide two written notices to the employee. The first notice informs the employee of the specific acts or omissions that could lead to dismissal. The second notice informs the employee of the employer’s decision to dismiss them, along with the grounds for the decision.

In this case, while Dela Rosa received the first notice (the show cause memorandum), he did not receive a valid second notice. The memorandum from September 1, 2015, indicated that management had decided to impose the penalty of dismissal, but that penalty was not actually enforced. The company stated that Dela Rosa’s contract had already expired and his subsequent program contract no longer covered the incident. This meant that Dela Rosa was not properly informed of his termination and the reasons behind it.

The lack of a proper second notice constituted a violation of Dela Rosa’s right to procedural due process. The Supreme Court has consistently held that even when a just cause for dismissal exists, failure to comply with procedural requirements warrants an indemnity for the employee. The rationale is that while an employer should not be forced to continue employing someone guilty of serious misconduct, the employee’s right to due process must still be respected.

The Court, therefore, upheld the validity of Dela Rosa’s dismissal but ordered ABS-CBN to pay him nominal damages for violating his procedural due process rights. This ruling underscores the importance of following proper procedures in termination cases, even when just cause exists. The amount of nominal damages was set at P30,000.00, in line with established jurisprudence on similar cases.

The table below presents a comparison of the arguments made by Dela Rosa and ABS-CBN regarding the reason for termination:

Dela Rosa’s Argument	ABS-CBN’s Argument
Illegal dismissal due to being a regular employee and termination not being for just or authorized cause.	Termination due to the expiration of a fixed-term contract and, alternatively, for just cause (serious misconduct).

The Supreme Court’s decision emphasizes that employers must adhere to the two-notice rule when terminating employees, regardless of whether there is a valid cause for dismissal. Failure to do so can result in liability for nominal damages, even if the dismissal itself is upheld.

FAQs

What was the key issue in this case?	The key issue was whether ABS-CBN legally dismissed Augorio Dela Rosa, considering his status as a regular employee, the alleged just cause for dismissal, and the procedural requirements for termination.
Was Dela Rosa considered a fixed-term or regular employee?	The Supreme Court determined that Dela Rosa was a regular employee, as his contracts were repeatedly renewed, and the fixed terms appeared designed to prevent him from gaining tenure.
What constituted the just cause for Dela Rosa’s dismissal?	Dela Rosa’s dismissal was based on serious misconduct, stemming from his intoxication at work and his inappropriate behavior towards a female co-worker.
What procedural requirements did ABS-CBN fail to meet?	ABS-CBN failed to provide a valid second notice informing Dela Rosa of his termination and the specific grounds for the decision, violating his right to procedural due process.
What is the two-notice rule in termination cases?	The two-notice rule requires employers to provide a first notice informing the employee of the grounds for potential dismissal and a second notice informing the employee of the decision to terminate and its justification.
What were the consequences of ABS-CBN’s failure to follow proper procedure?	Although the dismissal was upheld, ABS-CBN was ordered to pay Dela Rosa nominal damages for violating his right to procedural due process.
What is the significance of nominal damages in this context?	Nominal damages serve to acknowledge the violation of an employee’s rights, even when the dismissal itself is justified, reinforcing the importance of due process.
Can an employer bypass due process if there is just cause for termination?	No, an employer cannot bypass due process, even if there is just cause. Procedural requirements must still be followed to ensure fairness and protect employee rights.
What happens if the employee is in serious misconduct but terminated without following proper procedure?	If the dismissal is for just cause but procedurally infirm, the lack of statutory due process should not nullify the dismissal. However, the employer should indemnify the employee for violation of his statutory rights.

This case serves as a crucial reminder for employers to prioritize due process when terminating employees, regardless of the perceived validity of the cause. Adhering to procedural requirements protects employee rights and minimizes potential legal repercussions. Proper documentation and adherence to the two-notice rule are essential for ensuring a fair and legally sound termination process.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Dela Rosa v. ABS-CBN Corporation, G.R. No. 242875, August 28, 2019