This Supreme Court decision emphasizes that employers in the Philippines must adhere strictly to both procedural and substantive due process when terminating an employee. The Court ruled that Biomedica Health Care, Inc. illegally dismissed its employees by failing to provide adequate notice and a fair hearing, and by not substantiating the claim of an illegal strike. This case underscores the importance of security of tenure and the protection afforded to employees against arbitrary dismissal.

When Absence Isn’t Mutiny: Unpacking Illegal Dismissal in Biomedica Health Care

The case of Alex Q. Naranjo, et al. vs. Biomedica Health Care, Inc. and Carina “Karen” J. Motol (G.R. No. 193789, September 19, 2012) revolves around several employees of Biomedica Health Care, Inc. who were dismissed after being absent on the company president’s birthday. The employees had previously filed a complaint against Biomedica for various labor violations. Subsequently, upon reporting to work after their absences, they were denied entry and later issued notices of preventive suspension and termination. The central legal question is whether these employees were illegally dismissed, considering the circumstances of their absence and the manner in which Biomedica carried out the termination process.

The Supreme Court anchored its decision on the constitutional guarantee of security of tenure, stating that the State shall afford full protection to labor, and employees shall be entitled to security of tenure, humane conditions of work, and a living wage. This principle is mirrored in Article 279 of the Labor Code, which protects employees against dismissal except for just cause or when authorized by law. The court emphasized that dismissing an employee requires adherence to both procedural and substantive due process. Procedural due process necessitates that the employee be given written notice of the charges and an opportunity to be heard, while substantive due process requires that the dismissal be based on a just or authorized cause.

In analyzing the procedural aspect, the Supreme Court found Biomedica’s actions deficient. Article 277(b) of the Labor Code stipulates the requirements for procedural due process, and Rule XIII, Book V, Sec. 2 I (a) of the Implementing Rules further details these requirements. The Court referenced the case of King of Kings Transport, Inc. v. Mamac, which elaborated that a mere general description of charges is insufficient; the notice should contain a detailed narration of facts and circumstances serving as the basis for the charge.

In this case, the notice issued to the employees charged them with conducting an illegal strike without specifying the exact acts constituting the strike or violating company policies. Furthermore, while Biomedica cited company policy provisions, it did not include these provisions in the notice. The Supreme Court noted that it was incumbent upon Biomedica to show that the employees were duly informed of these policies and given copies, which they failed to do. The Court cited the CA’s observation that the company policy was not presented, making it impossible to verify its existence or the veracity of its violation. Additionally, the 24-hour period given to the employees to respond was deemed insufficient, violating the implementing rules that require a “reasonable opportunity,” which is construed as at least five calendar days.

Beyond the procedural lapses, the Supreme Court also found that Biomedica failed to provide substantive due process. The just causes for dismissing an employee are exclusively found in Article 282(a) of the Labor Code, which pertains to serious misconduct or willful disobedience. Aliviado v. Procter & Gamble, Phils., Inc. defines misconduct as improper or wrong conduct that transgresses established rules, implying wrongful intent. The misconduct must be grave, relate to the employee’s duties, and render the employee unfit to continue working.

Misconduct has been defined as improper or wrong conduct; the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, unlawful in character implying wrongful intent and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. To be a just cause for dismissal, such misconduct (a) must be serious; (b) must relate to the performance of the employee’s duties; and (c) must show that the employee has become unfit to continue working for the employer.

Biomedica failed to establish that the employees violated any company rules or were guilty of wrongdoing punishable by termination. The company argued that the employees staged a mass leave tantamount to an illegal strike. The Supreme Court clarified that a “mass leave” refers to a simultaneous availment of authorized leave benefits by a large number of employees. Given that Biomedica did not provide evidence of any CBA or company memorandum detailing the authorized leaves or the procedure for availing them, the Court presumed that the employees’ leaves were authorized and valid. The Court also pointed out that for a leave to be considered a “mass leave,” it must involve a large number of employees. Biomedica failed to demonstrate that the five employees absent on that day constituted a substantial number of their workforce.

The Supreme Court also addressed the claim that the employees went on strike, referencing Article 212(o) of the Labor Code, which defines a strike as any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. The Court found that the employees went on leave for various personal reasons, and there was no evidence of concerted action or intent to strike. To demonstrate their good faith, they reported for work in the afternoon after receiving text messages. The Court emphasized that it is the employer’s burden to prove that the employees were dismissed for just causes.

The Supreme Court also dismissed the CA’s reliance on explanation letters from other employees, stating that these unsworn letters cannot be accepted as direct testimony. As such, the letters could not be used as the sole basis for finding that the employees conducted a strike. The Court highlighted that unsubstantiated suspicions and accusations do not justify dismissing employees, and in cases of doubt, the benefit should be given to labor. Since Biomedica failed to provide substantial evidence to prove the employees’ dismissal was for a just or authorized cause, the Court concluded that the employees were illegally dismissed. Even if the employees had engaged in an illegal strike, dismissal is not the proper penalty for ordinary striking workers unless they committed illegal acts during the strike, which Biomedica did not allege or prove.

As a result of the illegal dismissal, the employees were entitled to reinstatement and backwages. However, given the strained relations between the parties, the Court ordered the payment of separation pay in lieu of reinstatement, along with backwages. The Court also awarded nominal damages of PhP 30,000 each for the violation of procedural due process. The ruling reinforces the necessity for employers to adhere strictly to due process requirements and to substantiate claims of misconduct or illegal activities before terminating employment.

FAQs

What was the key issue in this case?	The key issue was whether the employees of Biomedica Health Care, Inc. were illegally dismissed from their employment. The Supreme Court examined whether the company followed proper procedure and had just cause for terminating the employees.
What is meant by ‘security of tenure’?	Security of tenure is the right of an employee to continue in their job unless there is a just or authorized cause for termination. This right is protected by the Constitution and the Labor Code, ensuring employees are not arbitrarily dismissed.
What constitutes procedural due process in employment termination?	Procedural due process requires that an employer provide a written notice to the employee specifying the grounds for termination and giving them a reasonable opportunity to explain their side. It also involves conducting a hearing or conference to allow the employee to respond to the charges and present evidence.
What is considered a ‘just cause’ for dismissal?	A just cause for dismissal includes serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud or willful breach of trust, and commission of a crime or offense against the employer or their family. These causes are outlined in Article 282 of the Labor Code.
What is the difference between a ‘mass leave’ and a ‘strike’?	A ‘mass leave’ refers to a simultaneous availment of authorized leave benefits by a large number of employees. A ‘strike,’ as defined in the Labor Code, is a temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.
Why was the company’s notice of termination deemed insufficient?	The company’s notice of termination was deemed insufficient because it did not provide a detailed narration of the facts and circumstances supporting the charge of illegal strike. Additionally, it failed to include the specific provisions of the company policy that were allegedly violated.
What remedies are available to an illegally dismissed employee?	An illegally dismissed employee is entitled to reinstatement without loss of seniority rights, full backwages, and other benefits. If reinstatement is not feasible due to strained relations, the employee may be awarded separation pay in addition to backwages.
What are nominal damages, and why were they awarded in this case?	Nominal damages are a small sum awarded when a right has been violated, but no actual damages have been proven. In this case, nominal damages were awarded to the employees because the company violated their right to procedural due process, even if actual damages could not be precisely quantified.

This case serves as a crucial reminder to employers of the stringent requirements for lawful employee dismissal in the Philippines. Employers must ensure that they not only have a valid and just cause but also that they meticulously follow procedural due process, providing employees with adequate notice, a fair hearing, and an opportunity to defend themselves. Failure to comply with these requirements can lead to significant legal repercussions, including orders for reinstatement, backwages, separation pay, and damages.

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: Alex Q. Naranjo, et al. vs. Biomedica Health Care, Inc. and Carina “Karen” J. Motol, G.R. No. 193789, September 19, 2012