PHILIPPINE PASAY CHUNG HUA ACADEMY AND EMILIO CHING, ETITIONERS, VS. SERVANDO L. EDPAN, RESPONDENT.

Philippine Pasay Chung Hua Academy versus Edpan

The Case

This is a labor case about the twin requirements of notice and hearing in the dismissal of an employee. The Philippine Pasay Chung Hua Academy, through its school directress, dismissed Servando Edpan, a high school teacher, after the parents of a minor student accused him of lascivious acts. Edpan filed a complaint for illegal dismissal. The case matters because two divisions of the Court of Appeals reached opposite conclusions on the same set of facts, and the Supreme Court had to settle what procedural due process in dismissal actually requires. The answer is a rule every Bar candidate must carry into the examination room: the essence of due process is the opportunity to be heard, not an actual hearing always and indispensably held.

Procedural History

Edpan filed a complaint for illegal dismissal before the Labor Arbiter. The Labor Arbiter dismissed the complaint for lack of merit, but directed the school to pay Edpan his unpaid salaries for services rendered during the summer class and his proportionate thirteenth month pay. Edpan appealed to the National Labor Relations Commission, which modified the Labor Arbiter's decision by directing the school to indemnify Edpan ten thousand pesos for failure to strictly comply with due process prior to termination. Both parties moved for reconsideration, and both motions were denied.

The parties then filed separate special civil actions for certiorari before the Court of Appeals. The Special Seventeenth Division, in one petition, ruled that the school did not observe procedural due process, and affirmed the National Labor Relations Commission with modification, ordering full backwages from the time of dismissal until the decision becomes final, plus the unpaid summer salaries and proportionate thirteenth month pay. The Sixteenth Division, in the other petition, found that procedural due process was complied with, and modified the same National Labor Relations Commission decision by deleting the ten thousand peso indemnity. Faced with conflicting rulings, both parties elevated the matter to the Supreme Court, which consolidated the petitions and resolved the basic issue of whether the school observed procedural due process when it dismissed Edpan.

Facts

Servando Edpan was a high school teacher at the Philippine Pasay Chung Hua Academy, where a minor student, referred to in the decision as AAA, was enrolled. On April 10, 2002, the school received a letter-complaint from AAA's parents alleging that Edpan had committed lascivious acts against their daughter on April 5, 2002. The parents attached AAA's sworn statement in support of the complaint.

The next day, the school directress sent Edpan two letters. One notified him of the complaint; the other placed him under preventive suspension for thirty days without pay pending investigation. He was told that the investigation committee would notify him to attend a preliminary investigation, that failure to attend would be construed as a waiver to defend himself, and that he had twenty-four hours to submit a written explanation. Edpan submitted a letter vehemently denying the allegations. He later asked for five days advance notice of the investigation and copies of the sworn statement, the parents' letter-complaint, and the other evidence against him. The school required him to report and submit his reply, and he informed the school that he would do so on May 2, 2002, bringing his counsel. On that date he submitted his reply-affidavit, attaching letters from several students and alumni attesting to his good character and integrity.

On May 9, 2002, Edpan received a notice of termination of his employment as a teacher on the ground of serious misconduct and loss of trust and confidence, effective May 11, 2002. He promptly filed his illegal dismissal complaint.

Issues

• Whether or not the school observed procedural due process when it dismissed Edpan, considering that no hearing or conference was actually conducted during the investigation.
• Whether or not the dismissal of Edpan was valid, and whether or not the ten thousand peso indemnity awarded by the National Labor Relations Commission for failure to strictly comply with due process should stand.

Applicable Provisions

Article 277, paragraph b, of the Labor Code provides:

Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker 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 to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment.

This is the statutory source of the twin requirements of notice and hearing that the Court measures the school's conduct against.

Section 2 of Rule Twenty-Three, Book Five of the Rules Implementing the Labor Code provides:

Standards of due process: requirements of notice. In all cases of termination of employment, the following standards of due process shall be substantially observed. A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side. 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.

This spells out the two written notices the employer must furnish, which the Court finds were both given in this case.

Ruling

On the first issue, the Court ruled in favor of the school. It held that the twin requirements of notice and hearing are essential elements of due process in dismissal, and that the employer must furnish two written notices: a notice specifying the grounds for termination and giving a reasonable opportunity to explain, and a notice of termination indicating that the grounds have been established. The first notice serves as the proper charge, apprising the employee of the acts or omissions complained of; the second informs him of the employer's decision to dismiss.

On the requirement of hearing, the Court stressed that the essence of due process lies simply in an opportunity to be heard, and not that an actual hearing should always and indispensably be held. Applying this to the facts, the Court found that the school sent Edpan a letter informing him of the complaint and requiring a written explanation within twenty-four hours; that he submitted his explanation denying the allegations; that he was later furnished copies of the sworn statement and the parents' letter-complaint and again required to reply; and that he submitted a reply-affidavit with supporting letters. Only after giving him these opportunities did the school furnish the notice of dismissal. Even without a hearing or conference, due process was met because he was accorded a chance to explain his side.

On the second issue, the Court affirmed that the employee was validly dismissed, and that the ten thousand peso indemnity awarded by the National Labor Relations Commission was properly deleted, since the school had complied with the procedural requirements.

Doctrine

In the dismissal of employees, the twin requirements of notice and hearing are essential elements of due process under Article 277, paragraph b, of the Labor Code and Section 2 of Rule Twenty-Three, Book Five of its Implementing Rules. The employer must furnish two written notices: the first specifying the grounds for termination and giving a reasonable opportunity to explain, and the second indicating that upon due consideration the grounds to justify termination have been established. The first notice is the proper charge; the second conveys the decision to dismiss.

The hearing requirement is satisfied by the opportunity to be heard. What the law demands is not that an actual hearing or conference always and indispensably be held, but that the employee be given a genuine chance to explain his side, present evidence, and rebut the evidence against him. Where the employer furnishes the charge, receives the employee's explanation, supplies him the evidence against him, and accepts his reply before issuing the notice of termination, procedural due process has been observed even without a formal hearing. Correlatively, where due process has been complied with, no indemnity for procedural lapse may be awarded.

Disposition

The school won. The Supreme Court set aside the decision and resolution of the Court of Appeals that had ordered backwages, affirmed the decision and resolution of the Court of Appeals that had deleted the indemnity, and held that Edpan was validly dismissed.

Remember This

Memorize the line: the essence of due process is the opportunity to be heard, not an actual hearing always and indispensably held. Examiners use this case to test the twin notice rule in dismissal and to trap candidates into equating due process with a formal hearing, so always ask whether the employee was given a real chance to explain, not whether a conference was convened.