Title
Lavador vs. "J" Marketing Corp.
Case
G.R. No. 157757
Decision Date
Jun 28, 2005
Employee dismissed for dishonesty; employer violated due process by denying formal investigation, ordered to pay P20,000 nominal damages.

Case Summary (G.R. No. 157757)

Factual Background

On January 7, 1991, Lavador began her employment with aJa Marketing Corporation in Butuan City, where she received a monthly salary of P3,834. On June 9 and August 23, 1999, the company issued inter-office memoranda accusing Lavador of misappropriation of funds involving two clients. Following these charges, Lavador was reassigned to a receptionist role, and by September 1, 1999, her employment was terminated based on loss of trust and confidence.

Legal Proceedings and Initial Rulings

Lavador filed a complaint for illegal dismissal against both aJa Marketing Corporation and Soyao. The Labor Arbiter ruled on December 31, 1999, finding that Lavador was not illegally dismissed but ordered the respondents to pay her outstanding salary differentials and attorney’s fees. This decision was challenged, and the National Labor Relations Commission (NLRC) subsequently modified the Arbiter’s ruling on April 17, 2001, deleting the awards for salary differentials and attorney's fees.

Court of Appeals Decision

Upon further appeal, the Court of Appeals rendered a decision on November 26, 2001, which upheld the termination of Lavador’s employment but ordered the respondents to pay her P10,000 for violating her right to due process. The appellate court stated that Lavador had requested a formal administrative investigation to defend herself against the allegations but was ignored, emphasizing a denial of her right to a fair hearing.

Issues of Due Process

The primary legal issue revolves around whether Lavador’s right to due process was violated. In accordance with Section 2, Rule XXIII, Book V of the Labor Code's Implementing Rules, an employer must provide two written notices and an opportunity for the employee to be heard if dismissal is based on just cause. The Labor Arbiter’s ruling and subsequent decisions cited that procedural due process was inadequately observed, particularly as Lavador was not provided the opportunity to properly defend herself.

Supreme Court Findings

The Supreme Court affirmed the earlier decisions with modification by increasing the nominal damages to P20,000 due to the procedural violation. It reiterated that while the termination was based on just cause, the

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