Matt Joshua T.

Juan
JD – 2B

AGABON DOCTRINE JAKA DOCTRINE

If dismissal is for just cause but notice If dismissal is for authorized cause but notice
requirement not followed – dismissal valid requirement not followed – dismissal valid
but Er must pay nominal damages in the Er must pay nominal damages in the amount
amount of P30,000 of P50,000

AGABON v. NLRC (G.R. NO. 158693 | November 17, 2004)

FACTS: Riviera Home Improvements, Inc., a corporation engaged in the business of selling
and installing ornamental and construction materials, employed Jenny and Virgilio (the Agabons)
as gypsum board and cornice installers. In February 1999, the Agabons were frequently absent
having subcontracted for an installation work for another company. Riviera Home Improvements,
Inc. dismissed the Agabons for abandonment of work without sending notices to them.

ISSUES:

1.) Whether or not the dismissal was for a cause

2.) Whether or not the employer may be held liable for procedural lapses***
3.) Nature and amount of damages***

RULING:

1.) Yes. The dismissal was for a just cause. Abandonment is the deliberate and
unjustified refusal of an employee to resume his employment. For a valid finding of
abandonment, these two factors should be present: (1) the failure to report for work or absence
without valid or justifiable reason; and (2) a clear intention to sever employer-employee
relationship. In this case, subcontracting for another company clearly showed the intention to
sever the employer-employee relationship with Riviera Home Improvements, Inc.

2.) Yes. In cases involving dismissals for cause but without observance of the twin
requirements of notice and hearing, the dismissal must be upheld but the employer should be
held liable for non-compliance with the procedural requirements of due process. In this case, the
dismissal should be upheld because it was established that the Agabons abandoned their jobs to
work for another company. Riviera Home Improvements, Inc., however, did not follow the notice
requirements and instead argued that sending notices to the last known addresses would have
been useless because they did not reside there anymore. Unfortunately for Riviera Home
Improvements, Inc., this is not a valid excuse because the law mandates the twin notice
requirements to the employee's last known address.

3.) The violation of the Agabons’ right to statutory due process by Riviera Home
Improvements, Inc. warrants the payment of indemnity in the form of nominal damages to
vindicate the violation of their said right. Considering the prevailing circumstances in the case at
bar, the Court deems it proper to fix it at P30,000.00.
Matt Joshua T. Juan
JD – 2B

JAKA FOOD PROCESSING CORPORATION v. PACOT et al. (G.R. NO. 151378 | March 28, 2005)

FACTS: Pacot et al. were earlier hired by JAKA Foods Processing Corporation until the
latter terminated their employment because the corporation was suffering business losses. The
termination was effected without JAKA complying with the requirement under Labor Code
regarding the service of a written notice upon the employees and the DOLE at least one (1) month
before the intended date of termination.

ISSUES:

1.) Whether or not the dismissal was for cause

2.) Whether or not the employer may be held liable for procedural lapses
3.) Nature and amount of damages***
4.) Whether or not separation pay should be given

RULING:

1.) Yes. The dismissal was for an authorized cause. Retrenchment is one of the
authorized causes for the dismissal of an employee. Here, Pacot et al. were dismissed from work
due to retrenchment by JAKA as the latter was experiencing business losses.

2.) Yes. See Agabon v NLRC. Only difference is dismissal in this case was based on an
authorized cause – retrenchment.

3.) P50,000 representing nominal damages to vindicate Pacot et al.’s right to due
process. Reason for the higher amount than that imposed in Agabon v NLRC: (a) if the dismissal
is based on a just cause but the employer failed to comply with the notice requirement, the
sanction to be imposed upon him should be tempered because the dismissal process was, in
effect, initiated by an act imputable to the employee; and (b) if the dismissal is based on an
authorized cause but the employer failed to comply with the notice requirement, the sanction
should be stiffer because the dismissal process was initiated by the employer's exercise of his
management prerogative.

4.) No. As a rule, in all cases of business closure or cessation of operation or

undertaking of the employer, the affected employee is entitled to separation pay. The exception
is, as in this case, when the closure of business or cessation of operations is due to serious
business losses or financial reverses; duly proved, in which case, the right of affected employees
to separation pay is lost for obvious reasons.