ON Sept. 26, 2008, respondent Salvador B. Bautista was hired as a project manager for Shorncliffe (PNG) Limited in Papua New Guinea through Job Asia Management Services, owned by petitioner Dionella A. Gopio.
Bautista’s contract was for 31 months with a net monthly salary of P40,000. Article 4.3 of the contract he signed provided that the employer or employee may terminate the contract on other grounds. The employer should give one month’s written notice of his intention to terminate or, in lieu thereof, pay the employee a sum equivalent to one month’s salary.
On July 6, 2009, or just nine months after his deployment, Bautista was served a notice of termination effective July 10, 2009 for unsatisfactory performance and failure to meet the standards of the company. Pursuant to said Article 4.3, petitioner paid Bautista the equivalent of one month’s pay in lieu of a written notice.
Is Bautista’s dismissal justified?
The due process requirement is not a mere formality that may be dispensed with at will. Its disregard is a matter of serious concern, since it constitutes a safeguard of the highest order in response to man’s innate sense of justice.
To meet the requirements of due process, the employer must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected, i.e.: a notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and the subsequent notice after due hearing which informs the employee of the employer’s decision to dismiss him.
x x x
The CA aptly observed that Article 4.3 deprives the employee of his right to due process of law as it gives the employer the option to do away with the notice requirement provided that it grants one-month salary to the employee in lieu thereof. It denies the employee of the right to be apprised of the grounds for the termination of his employment without giving him an opportunity to defend himself and refute the charges against him. Moreover, the term “other grounds” is all-encompassing. It makes the employee susceptible to arbitrary dismissal. The employee may be terminated not only for just or authorized causes but also for anything under the sun that may suit his employer. Thus, the employee is left unprotected and at the mercy of his employer, subjected to the latter’s whims.
We cannot sustain the validity of Article 4.3 of the employment contract as it contravenes the constitutionally-protected right of every worker to security of tenure.
Bautista’s employment was for a fixed period of 31 months. Article 4.3 took back this period from him by rendering it in effect a facultative one at the option of Shorncliffe, which may shorten that term at any time and for any cause satisfactory to itself, to a one-month period or even less, by simply paying Bautista a month’s salary. The net effect of Article 4.3 is to render Bautista’s employment basically employment at the pleasure of Shorncliffe. The Court considers that the provision is intended to prevent any security of tenure from accruing in favor of Bautista even during the limited period of 31 months.
x x x
Time and again, we have held that a contract of employment is imbued with public interest. The parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. Also, while a contract is the law between the parties, the provisions of positive law that regulate such contracts are deemed included and shall limit and govern the relations between the parties.
In sum, there being no showing of any clear, valid, and legal cause for the termination of Bautista’s employment and that he was not afforded due process, the law considers the matter a case of illegal dismissal, for which Bautista is entitled to indemnity. We uphold the Labor Arbiter’s award of indemnity equivalent to Bautista’s salaries for the unexpired term of his employment contract, and damages. (Dionella A. Gopio, et.al. vs. Salvador B. Bautista, G.R. No. 205953, June 6, 2018).