G.R. No. 152048 - FELIX B. PEREZ and AMANTE G. DORIA, petitioners, versus PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY and JOSE LUIS SANTIAGO, respondents.   

 

 

 

                                                                   Promulgated: April 7, 2009

                              

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 C O N C U R R I N G   O P I N I O N

 

BRION, J.

 

I fully concur with the ponencia of my esteemed colleague, Associate Justice Renato C. Corona.  I add these views on the specific issue of whether actual hearing is a mandatory requirement in a termination of employment situation.   

 

The petitioners’ position that a formal hearing should be an absolute requirement whose absence signifies the non-observance of procedural due process is an unduly strict view and is not at all what procedural due process requires. This is not the intent behind the Labor Code whose pertinent provision reads:

 

            ART. 277.

 

            x          x          x

 

            (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just or authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the workers whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to the guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer.

 

The Secretary of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass layoff. (as amended by Republic Act No. 6715)

         

Historical Roots

At its most basic, procedural due process is about fairness in the mode of procedure to be followed.  It is not a novel concept, but one that traces its roots in the common law principle of natural justice. 

Natural justice connotes the requirement that administrative tribunals, when reaching a decision, must do so with procedural fairness. If they err, the superior courts will step in to quash the decision by certiorari or prevent the error by a writ of prohibition.[1] The requirement was initially applied in a purely judicial context, but was subsequently extended to executive regulatory fact-finding, as the administrative powers of the English justices of the peace were transferred to administrative bodies that were required to adopt some of the procedures reminiscent of those used in a courtroom. Natural justice was comprised of two main sub-rules: audi alteram partem[2] – that a person must know the case against him and be given an opportunity to answer it; and nemo judex in sua cause debe esse[3] - the rule against bias. Still much later, the natural justice principle gave rise to the duty to be fair to cover governmental decisions which cannot be characterized as judicial or quasi-judicial in nature.[4]

While the audi alteram partem rule provided for the right to be notified of the case against him, the right to bring evidence, and to make argument – whether in the traditional judicial or the administrative setting – common law maintained a distinction between the two settings. “An administrative tribunal had a duty to act in good faith and to listen fairly to both sides, but not to treat the question as if it were a trial. There would be no need to examine under oath, nor even to examine witnesses at all.  Any other procedure could be utilized which would obtain the information required, as long as the parties had an opportunity to know and to contradict anything which might be prejudicial to their case.”[5] 

          In the U.S., the due process clause of the U.S. Constitution[6] provides the guarantee for procedural due process, and has used a general balancing formula to identify the procedural guarantees appropriate to a particular context.[7]  In Mathews v. Eldridge,[8] Justice Powell articulated this approach when he said:

          In recent years this Court increasingly has had occasion to consider the extent to which due process requires an evidentiary hearing prior to the deprivation of some type of property interest even if such hearing is provided thereafter.  In only one case, Goldberg v. Kelly, has the Court ruled that a hearing closely approximating a judicial trial is necessary.  In other cases requiring some type of pretermination hearing as a matter of constitutional right, the Court has spoken sparingly about the requisite procedures. [Our] decisions underscore the truism that “[d]ue process, unlike some legal rules, is not a technical conception with a fixed content, unrelated to time, place and circumstances. [Due process] is flexible and calls for such procedural protections as the particular situation demands.”  Accordingly, the resolution of the issue whether the administrative procedures provided here are constitutionally sufficient requires analysis of the governmental and private interests that are affected.  More precisely, our prior decisions indicate that identification of the specific dictates of due process generally requires consideration of three distinct factors: first, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.   

 

Thus, the U.S. approach is to calibrate the procedural processes to be observed in administrative cases based on specifically defined parameters. 

 

Significantly in the U.S., the same common law root that gave rise to the concept of natural justice and the duty to be fair, branched out into the doctrine of fair procedure applicable to specific private sector actors due to their overwhelming economic power within certain fields (e.g., professional associations, unions, hospitals, and insurance companies).  The doctrine requires notice and hearing,[9] but to an extent slightly less than procedural due process; thus, when an association has clearly given a person the benefit of far more procedural protections than he would have been entitled to from a government entity, he has received the benefit of fair procedure and has no cause of action for the mildly adverse action that resulted.[10]

 

Philippine Due Process Requirement

 

Article III, Section 1 of the Philippine Constitution contains the constitutional guarantee against denial of due process,[11] and is a direct transplant from an American root – the Bill of Rights of the American Constitution.[12]  As in the U.S., our jurisprudence has distinguished between the constitutional guarantee of due process that applies to state action, and the statutory due process guarantee under the Labor Code that applies to private employers.[13]  The Labor Code provision, quoted above, is implemented under the Rules Implementing the Labor Code which provides that –

(d) In all cases of termination of employment, the following standards of due process shall be substantially observed:

 

For termination of employment based on just causes as defined in Article 282 of the Labor Code:

 

(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side.

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel, if he so desires, is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him.

(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

 

For termination of employment as defined in Article 283 of the Labor Code, the requirement of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least thirty days before effectivity of the termination, specifying the ground or grounds for termination.

If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination.[14]

 

Jurisprudence has expounded on the guarantee and its implementation by reiterating that the employer must furnish the worker to be dismissed with two written notices before termination of employment can be effected: a first written notice that informs the worker of the particular acts or omissions for which his or her dismissal is sought, and a second written notice which informs the worker of the employer’s decision to dismiss him.[15]  Between these two notices, the worker must be afforded ample opportunity to be heard in the manner the ponencia has very ably discussed.

 

The Confusion and Submission

 

Apparently, confusion has resulted in construing what “ample opportunity to be heard” requires because the implementing rules of the Labor Code themselves require that there be an actual hearing despite the clear text of the Labor Code that only requires ample opportunity to be heard.   

 

I submit that in the absence of a clear legislative intent that what is intended is an actual hearing, the Court cannot construe the statutory procedural due process guaranty as an absolute requirement for an actual hearing in the way that at least two cases, namely King of Kings of Transport, Inc. v. Mamac[16] and R.B. Michael Press v. Galit[17] now require.   

 

a.     Historical Reason.

 

Procedural due process cannot be read completely dissociated from its roots.  While the concept of procedural fairness that it embodies originated as a requirement in judicial proceedings, the concept has been extended to procedures that were not strictly judicial as regulatory factfinding was devolved and delegated to administrative tribunals.  The devolution was driven by need; it was beyond the capability of the courts to attend to the ever-increasing demands of regulation as society became increasingly complex.  As discussed above, a trial-type procedure is not an absolute necessity in administrative due process.  In fact, in the U.S., not every administrative decision-making requires a hearing.[18] As the U.S. Supreme Court stated in the Mathews ruling we quoted above: “[d]ue process, unlike some legal rules, is not a technical conception with a fixed content unrelated to time, place and circumstances. [Due process] is flexible and calls for such procedural protections as the particular situation demands.”[19] [Italics supplied]  

 

b. Philippine Procedural Due Process Developments.

 

Our Constitution does not expressly define the principles that embody due process, as it is a concept intended to counterbalance a flexible power of state – police power.  Early on, jurisprudence has recognized distinctions between procedural due process in judicial proceedings and in administrative proceedings. 

 

In a long line of cases starting with Banco Espanol v. Palanca,[20] the requirements of procedural due process in judicial proceedings have been defined.[21] In these proceedings, the quantum of evidence that the prosecution must meet in criminal cases is proof beyond reasonable doubt,[22] while in civil cases the standard has been described as “preponderance of evidence.”[23]  The requirements of procedural due process in administrative proceedings have been similarly defined in the early case of Ang Tibay v. CIR.[24]  The proof required in these proceedings is the lower standard of “substantial evidence.”[25]

 

The quantum of evidence required in these proceedings impacts on their hearing requirements.  While both judicial and administrative proceedings require a hearing and the opportunity to be heard, they differ with respect to the hearing required before a decision can be made. In criminal cases where a constitutional presumption of innocence exists, procedural judicial due process requires that judgment be rendered upon lawful hearing where factual issues are tested through direct and cross-examination of witnesses to arrive at proof beyond reasonable doubt.  In civil cases, evidentiary hearings are likewise a must to establish the required preponderance of evidence.[26]  Administrative due process, on the other hand, requires that the decision be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties concerned.[27]  Thus, substantial reasons justify the variance in the hearing requirements for these proceedings.

 

c. Due Process in the Private Employment Setting.

 

Separately from the requirement of due process when State action is involved, the Constitution also guarantees security of tenure to labor,[28] which the Labor Code implements by requiring that there be a just or authorized cause before an employer can terminate the services of a worker.[29]  This is the equivalent of and what would have satisfied substantive due process had a State action been involved.  The equivalent of procedural due process is detailed under Article 277 of the Labor Code, heretofore quoted, which requires notice and ample opportunity to be heard, both of which are fleshed out in the Implementing Rules of Book VI and in Rule XXIII of Department Order No. 9, Series of 1997, of the Department of Labor. 

 

Thus, from the concept of due process being a limitation on state action, the concept has been applied by statute in implementing the guarantee of security of tenure in the private sector. In Serrano v. NLRC,[30] we had the occasion to draw the fine distinction between constitutional due process that applies to governmental action, and the due process requirement imposed by a statute as a limitation on the exercise of private power.  Noting the distinctions between constitutional due process and the statutory duty imposed by the Labor Code, the Court thus decided in Agabon v. NLRC[31] to treat the effects of failure to comply differently. 

 

d.  No Actual Hearing Requirement in the Labor Code.

 

That an actual hearing in every case is not intended by the Labor Code in dismissal situations is supported by its express wording that only requires an “ample opportunity to be heard,” not the “hearing or conference” that its implementing rules require. 

 

The “ample opportunity” required to be provided by the employer is similar in character to the process required in administrative proceedings where, as explained above, an actual hearing is not an absolute necessity. To be sure, it cannot refer to, or be compared with, the requirements of a judicial proceeding whose strict demands necessarily require a formal hearing. 

 

“Judicial declarations are rich to the effect that the essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side.  A formal or trial type hearing is not at all times and in all circumstances essential to due process, the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side in the controversy.”[32]  In Arboleda v. NLRC,[33] we held that:

 

The requirement of notice and hearing in termination cases does not connote full adversarial proceedings as elucidated in numerous cases decided by this Court.  Actual adversarial proceedings become necessary only for clarification or when there is a need to propound searching questions to witnesses who give vague testimonies.  This is a procedural right that the employee must ask for since it is not an inherent right, and summary proceedings may be conducted thereon.

 

To the same effect is the following statement of Mr. Chief Justice Reynato S. Puno, albeit in a dissenting opinion, in Agabon: “[t]his is not to hold that a trial-type proceeding is required to be conducted by employers.  Hearings before the employers prior to the dismissal are in the nature of and akin to administrative due process which is free from the rigidity of certain procedural requirements,” citing Mr. Justice Laurel’s dictum in the landmark Ang Tibay v. Court of Industrial Relations. We have even held in China Banking Corporation v. Borromeo[34] that no formal administrative investigation is necessary in the process of dismissing an employee where the employee expressly admitted his infraction.  All that is needed is to inform the employee of the findings of management.    

 

The identity of the actor should not also be lost on us in considering the “ample opportunity” requirement.  Judicial and quasi-judicial processes are undertaken by the state, while the dismissal action the Labor Code regulates is undertaken by a private sector employer. A distinction between these actors ought to be recognized and given a proper valuation in considering the processes required from each.  Due process in the private realm does not address an all-powerful State clothed with police power and the powers of taxation and eminent domain; it merely addresses a private sector-employer who, constitutionally, shares the same responsibility with the worker for industrial peace, and who is also entitled to reasonable returns on investments and to expansion and growth.[35] Proportionality with the power sought to be limited dictates that due process in its flexible signification be applied to a private sector dismissal situation, ensuring only that there is fairness at all times so that the constitutional guarantee of security of tenure is not defeated. Thus, the required processes in a private sector dismissal situation should, at the most, be equivalent to those required in administrative proceedings; whether an actual hearing would be required should depend on the circumstances of each case. 

 

Last but not the least, reasonableness and practicality dictate against an actual hearing requirement in every case of dismissal. There are simply too many variables to consider in the private sector dismissal situation – ranging from the circumstances of the employer, those of the employee, the presence of a union, and the attendant circumstances of the dismissal itself – so that a hard and fast actual hearing requirement may already be unreasonable for being way beyond what the statutory procedural due process requirement demands. Such a requirement can also substantially tie-up management operations and defeat the efficiency, growth and the profits that management and employees mutually need.

 

To recapitulate, the “ample opportunity to be heard” the Labor Code expressly requires does not mean an actual hearing in every dismissal action by the employer; whether an actual hearing would be required depends on the circumstances of each case as each particular situation demands. Thus, the identical rulings in King of Kings of Transport, Inc. vs. Mamac[36] and R.B. Michael Press vs. Galit[37] that an actual hearing is a mandatory requirement in employee dismissal should now be read with our present ruling in mind.  The Department of Labor and Employment should as well be on notice that this ruling is the legally correct interpretation of Rule I, Section (2)(d)(ii) of Book VI of the Rules to Implement the Labor Code.

 

                                                         

                                                          ARTURO D. BRION

                                                                        Associate Justice

 


[1]  See: Jones, D.P. and De Villars A., Principles of Administrative Law (1985 ed.), pp. 148-149.

[2]  Literally, “let the other side be heard.”

[3]  “No one can be the judge in his own cause.”

[4]  Supra note 1, pp. 157-160, citing Ridge v. Baldwin, [1963] 2 All E.R. 66 (H.L.)

[5]  Supra note 1, p. 200.

[6]  UNITED STATES Constitution, 14th Amendment.

[7]  See: Gunther, Constitutional Law, (11th ed.), pp. 583-585.

[8]  425 U.S. 319 (1976).

[9]   See: Potvin v. Metropolitan Life Insurance Co., 22 Cal. 4th 1060 (2000).

[10]  Dougherty v. Haag, 165 Cal. App. 4th 315 (2008).

[11]  No person shall be denied the right to life, liberty or property without due process of law, nor shall any person be denied the equal protection of the laws.

[12]  Supra note 6.

[13] Serrano v. NLRC, G.R. No. 117040, January 27, 2000, 323 SCRA 44; Agabon v. NLRC, G.R. No. 158693, Nov. 17, 2004, 442 SCRA 573.

[14]  Implementing Rules of Book VI of the Labor Code, Rule 1, Section 2, as amended by Department Order No. 10, series of 1997.

[15]  Tiu v. NLRC, G.R. No. 83433, November 12, 1992, 215 SCRA 540; see also: Serrano and Agabon cases, supra note 13.

[16]  G.R. No. 166208, June 29, 2007, 526 SCRA 116.

[17]  G.R. No. 153510, February 13, 2008, 545 SCRA 23.

[18]   Supra  note 7.

[19]   Supra note 8.

[20]  37 Phil. 921 (1918).

[21] The requirements of due process in judicial proceedings are as follows: 1) an impartial court or tribunal clothed with judicial power to hear and determine the matter before it; 2) jurisdiction lawfully acquired over the person of the defendant and over the property which is the subject matter of the proceeding; 3) an opportunity to be heard afforded to the defendant; and 4) judgment rendered upon lawful hearing.

[22]  People v. Berroya, G.R. No. 122487, December 12, 1997, 283 SCRA 111.

[24]  69 Phil. 635 (1940); the observance of due process in administrative proceedings requires the following: (1) the right to a hearing, which includes the right of the party interested to present his own case and submit evidence in support thereof; (2) the tribunal must consider the evidence presented; (3) the decision must be supported by evidence; (4) the evidence must be substantial; (5) the decision must be rendered on the evidence present at the hearing, or at least contained in the record and disclosed to the parties affected; (6) the administrative body or any of its judges must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate; and (7) the administrative body should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered.

[25]  Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See Domasig v. National Labor Relations Commission, G.R. No. 118101, September 16, 1996, 261 SCRA 779.

[26]  See People v. Dapitan, G.R. No. 90625, May 23, 1991, 197 SCRA 378, citing People v. Castillo, 76 Phil. 72 (1946); Banco Español de Filipino v. Palanca, supra at note 20; Macabingkil v. Yatco, 21 SCRA 150 (1967); Apurillo v. Garciano, 28 SCRA 1054 (1969); Shell Company of the Philippines, Ltd. v. Enage, 49 SCRA 416 (1973); Lorenzana v. Cayetano, 68 SCRA 485 (1975).

[27]  Cuenca v. Atas, G.R. No. 146214, October 5, 2007, 535 SCRA 48; Alliance of Democratic Free Labor Organization v. Laguesma, G.R. No. 108625, March 11, 1996, 254 SCRA 565.

[28]  CONSTITUTION, Article XIII, Section 3, par. 2.

[29]  LABOR CODE, Article 279.

[30]  Supra note 13.

[31]  G.R. No. 158693, November 17, 2004, 442 SCRA 573.

[32]  Neeco III v. NLRC, G.R. No. 157603, June 23, 2005, 461 SCRA 169.

[33]  G.R. No. 119503, February 11, 1999, 303 SCRA 38.

[34] G.R. No. 156515, October 19, 2004, 440 SCRA 621.

[35]   CONSTITUTION, Article XIII, Section 3, pars. 3 and 4.

[36]  Supra note 16.

[37]  Supra note 17.