How To’s of Due Process

What is due process?

On August 29, 2007, the core of HR Philippines composed of Jing Ureta, Edwin Ebreo, Ricky Gumaru, Jet Nera, Migs Hipolito and myself, plus volunteers who share our advocacy, successfully held the 1st HR Philippines National Conference. And on this day, several firsts also happened– HR Philippines, a Yahoo group without formal structure and budget, held a learning event of this magnitude. If I am not mistaken, this event was also the first conference managed by ARIVA. And guess what, hehe, this event is my baptism of fire in public speaking, my first gig, yay!

Due process is a mechanism meant to balance the rights of employees vis-a-vis management rights and prerogatives.

 
Employee discipline is a prerogative given to management to address value negating employee behavior.
 

“Success of industries is the foundation upon which just wages may be paid. There can be no success without efficiency. There can not be efficiency without discipline…” Batangas Transportation Co., et al vs. Bagong Pagkakaisa ng mga employees and Laborers of BTCo., GR No. L-1706 March 10, 1949

 
However, this prerogative is not absolute because management must also respect employees’ rights.
 

“The state affords the constitutional blanket of rendering protection to labor but it also protects the right of employers to exercise what are clearly management prerogatives, so long as the exercise is without abuse of discretion.” Pantranco North Express vs. NLRC GR No. 106516, Sept. 21, 1999.

 
Management rights and prerogatives oftentimes collide with employee rights. To ensure the interest of both sides are taken into account, due process must be observed. Due process have two elements:
 

1. Substantive and
2. Procedural

 
Substantive Due Process provides the basis or grounds to proceed. For just causes, it’s the basis for corrective or retributive discipline. For authorized causes, it’s the basis for closure, retrenchment, or redundancy.
 
Procedural Due Process, on the other hand, provides the steps and requirements on how to go about a certain termination.
 
For just causes, it’s hearing the side of the employee and evaluating all facts and pieces of evidence vis-a-vis the allegations. This involves the twin notice rule:
 

1. Notice to explain and
2. Notice of decision

An admin hearing is an optional process, but I highly suggest to hold this in cases involving termination.

For authorized causes, it’s the notices that needs to be sent to DOLE and employees 30 days before the effectivity of the termination. A public doctor’s certification is also needed for health reasons. Plus the corresponding separation pay if any, for each case.
 
Non observance of due process have resulted to unnecessary embarrassment to some companies in the past. Plus cost of litigation and settlement. When due process is not followed, it can result to either illegal dismissal or illegal suspension
 

1. Illegal dismissal will result to reinstatement and payment of back wages.
2. Illegal suspension, on the other hand will result to payment of lost wages.

 
Aside from the basic framework we have just discussed, it’s prudent to take into account Supreme Court doctrines relevant to employer and employee relations. Some of which are:
 

1. 1. Pre Wenphil Doctrine (before 1989) — The non-observance of substantive and procedural due process will result in illegal dismissal.
   2. Wenphil Doctrine (Feb 1989)– This doctrine was brought about by the dismissal of employees. SC ruled that company had a basis to dismiss the employee but since the procedural due process was not observed, the company paid damages but the dismissal was upheld.
   3. Serrano Doctrine (Jan 2000)– Because the Wenphil doctrine led to abuse where the practice “terminate now pay later” by some companies became prevalent. The Supreme Court, then, modified Wenphil resulting in this new doctrine. Though dismissal of an employee will still be upheld, if there are sufficient grounds, the monetary damages, shall now be computed from the time the Supreme Court ruled the case with finality and backward.
   4. Agabon Doctrine (Nov 2004)– The Supreme Court again went back to Wenphil because the Serrano Doctrine resulted in abuse by terminated employees- enriching themselves by questioning the legality of their dismissal.

 
The application of the due process is also a two-way street. Business owners must observe this whenever they will exercise its prerogative and rights. Here are examples:

• Preventive suspension
• Progressive Employee Discipline
• Termination: Just Causes
• Termination: Authorized Causes
• Termination: Health Reasons
  

 
Likewise, employees must also observe due process if and when they decide to leave the company.
 
 

This is rather a complex topic, if you have an interesting experience on this regard, feel to share.