Loadstar Shipping Co., Inc. and Teodoro G. Bernardino vs. Romeo Mesano

A dismissal is illegal where the employer fails to furnish the employee the mandatory first written notice apprising him of the particular acts or omissions for which his dismissal is sought and conducts no investigation or hearing, even if the employee has voluntarily submitted a written explanation of his side. The twin requirements of substantive and procedural due process must concur for a dismissal to be valid, and the procedure prescribed for the two written notices is mandatory, its non-observance rendering the dismissal illegal and void.

Loadstar Shipping Co., Inc. is a domestic corporation engaged in the operation of shipping vessels, including the M/V Beaver. Romeo R. Mesano was employed by the company on November 4, 1980 as a seaman and subsequently occupied the position of bosun/boatswin, in charge of the care and custody of the entire vessel as well as its accessories and cargo. The employment relationship, and the degree of trust and responsibility attaching to Mesano's position, supply the backdrop against which the company's termination of his services was measured against the statutory requirements of due process.

Loadstar Shipping Co., Inc., a domestic corporation engaged in the operation of shipping vessels, employed Romeo R. Mesano on November 4, 1980 as a seaman. Mesano subsequently occupied the position of bosun/boatswin, in charge of the care and custody of the entire vessel as well as its accessories and cargo. The vessel involved was the M/V Beaver.

On January 22, 1995, Mesano brought out from the M/V Beaver a colored television set and a telescope. The incident prompted the company to conduct an investigation. Mesano immediately and voluntarily submitted his written explanation asking for forgiveness, stating that he had intended to have the television repaired and that, when this could not be done, he returned the unit to the vessel.

On February 24, 1995, Mesano asked the company for a disembarking clearance from his accountabilities. What was handed to him instead was a disembarkation order dated March 1, 1995 terminating his services effective February 28, 1995.

Feeling aggrieved, Mesano filed with the Labor Arbiter a complaint for illegal dismissal against Loadstar and Teodoro G. Bernardino, its president and/or general manager. The Labor Arbiter dismissed the complaint for lack of merit on April 23, 1996, and the National Labor Relations Commission affirmed on appeal. The Court of Appeals, whose decision the Supreme Court reviewed, found that no written charge had ever been furnished Mesano prior to his dismissal; that no hearing had been conducted between the submission of his handwritten explanation and the issuance of the disembarkation order; and that a cursory reading of his letter showed he was merely explaining his actions and did not categorically admit having stolen the item.

• Due Process — Written Explanation as Opportunity to Be Heard: Petitioner argued that respondent was not deprived of his right to due process considering that he was given the opportunity to present his side through his written explanation, wherein he admitted his guilt and pleaded for forgiveness.
• Just Cause — Breach of Trust and Gross Misconduct: Petitioner claimed that respondent failed to live up to the standard of responsibility and honesty called for by his position, so that, gauged by any moral standard, his dismissal was not tainted with illegality.

• Procedural Due Process — Mandatory First Notice: Whether the dismissal was illegal for failure to furnish the employee the first written notice apprising him of the particular acts or omissions for which his dismissal was sought.
• Opportunity to Be Heard: Whether the employee's voluntary written explanation, submitted without any prior notice of the charge and without any hearing, satisfied the requirement of an opportunity to be heard and to defend himself.

• Procedural Due Process — Mandatory First Notice: Yes, the dismissal was illegal. The first written notice is mandatory, and its non-observance renders the dismissal of an employee illegal and void.
• Opportunity to Be Heard: No. The written explanation did not amount to an express acknowledgment of any offense and did not dispense with the required investigation or hearing, no opportunity to defend himself having been accorded.

• Procedural Due Process — Mandatory First Notice: A valid dismissal requires the concurrence of two requisites: the dismissal must be for any of the causes expressed in Article 282 of the Labor Code, and the employee must be accorded due process, the basic of which is the opportunity to be heard and to defend himself. The twin requirements of substantive and procedural due process must therefore be complied with. The law requires that an employee sought to be dismissed be served two written notices before termination of employment can be legally effected: the first to apprise him of the particular acts or omissions by reason of which his dismissal has been decided upon, and the second to inform him of the employer's decision to dismiss him. Failure to comply with the requirement of two notices makes the dismissal illegal; the procedure is mandatory, and non-observance renders the dismissal illegal and void. In this case, the mandatory first notice was undeniably absent. Prior to respondent's termination from the service, he was neither apprised of the particular acts for which his dismissal was sought nor directed to explain why he should not be dismissed for taking out company property from the vessel.

• Opportunity to Be Heard: While respondent voluntarily submitted his written explanation, he did not expressly acknowledge that he committed any offense. Being in charge of the company's vessel and its accessories and cargo, his intention in taking out the television set was to have it repaired. Even granting that by submitting his written explanation he was considered to have been notified of the charge, there was still no investigation or hearing conducted wherein he could have presented evidence and adequately defended himself. The Court of Appeals thus correctly ruled that respondent was deprived of his right to due process and that his termination from the service was illegal.

• Twin Requirements of Due Process in Dismissal — In order to constitute a valid dismissal, two requisites must concur: (a) the dismissal must be for any of the causes expressed in Article 282 of the Labor Code; and (b) the employee must be accorded due process, the basic of which is the opportunity to be heard and to defend himself. Substantive and procedural due process must both be satisfied; the presence of a just cause does not cure a failure to observe the procedural requirements, and vice versa. In this case, the Court found the procedural limb wanting because no first notice was served and no hearing was held.

• Two-Notice Rule — The law requires that an employee sought to be dismissed be served two written notices before termination of employment can be legally effected: (1) the first notice apprises the employee of the particular acts or omissions by reason of which his dismissal is sought; and (2) the second notice informs the employee of the employer's decision to dismiss him. The procedure is mandatory; failure to comply with the requirement of two notices makes the dismissal illegal, and non-observance renders the dismissal illegal and void. The Court found the mandatory first notice undeniably absent, as respondent was neither apprised of the particular acts charged nor directed to explain why he should not be dismissed.

• Written Explanation Does Not Substitute for Notice and Hearing — A voluntarily submitted written explanation by the employee does not cure the employer's failure to observe the two-notice rule or to conduct an investigation or hearing. Even assuming the explanation is treated as notice of the charge, the employer must still conduct an investigation or hearing wherein the employee may present evidence and adequately defend himself. The Court held that respondent's letter merely explained his actions and did not categorically admit having stolen the item, so that no express acknowledgment of an offense could be read into it.

• "In order to constitute a valid dismissal, two requisites must concur: (a) the dismissal must be for any of the causes expressed in Art. 282 of the Labor Code; and (b) the employee must be accorded due process, basic of which is the opportunity to be heard and to defend himself." — This is the Court's canonical statement of the twin requirements of a valid dismissal, framing the entire analysis and identifying the procedural limb that petitioner failed to satisfy.

• "The law requires that an employee sought to be dismissed must be served two written notices before termination of his employment. The first notice is to apprise the employee of the particular acts or omissions by reason of which his dismissal has been decided upon; and the second notice is to inform the employee of the employer's decision to dismiss him. Failure to comply with the requirement of two notices makes the dismissal illegal. The procedure is mandatory. Non-observance thereof renders the dismissal of an employee illegal and void." — Quoted from Cruz vs. NLRC and adopted by the Court as the controlling formulation of the two-notice rule, including its mandatory character and the consequence of non-compliance.

• "The mandatory first notice is undeniably absent in the case at bar. Prior to respondent's termination from the service, he was neither apprised of the particular acts for which his dismissal is sought, nor was he directed to explain why he should not be dismissed for taking out from the vessel company property." — This passage applies the two-notice rule to the facts and constitutes the Court's principal factual finding on the procedural defect.

• "Even granting that by submitting his written explanation, he was considered to have been notified of the charge, still there was no investigation or hearing conducted wherein he could have presented evidence and adequately defended himself." — This states the Court's alternative holding that a written explanation, even if treated as notice, cannot substitute for the hearing component of procedural due process.

• Cruz vs. NLRC, G.R. No. 116384, February 7, 2000, 324 SCRA 770 — Quoted at length and adopted by the Court as the controlling statement of the two-notice rule; the Court relied on it for the propositions that the procedure is mandatory and that non-observance renders the dismissal illegal and void.
• Ala Mode Garments, Inc. vs. NLRC, G.R. No. 122165, February 17, 1997, 268 SCRA 497 — Cited for the two requisites of a valid dismissal: a just cause under Article 282 of the Labor Code and the observance of due process, the basic of which is the opportunity to be heard and to defend oneself.
• Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMG-UWP) et al. vs. Ramos, G.R. No. 113907, February 28, 2000, 326 SCRA 428 — Cited for the principle that employers should respect and protect the rights of their employees, which include the right to labor, and that due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood.
• Century Textile Mills, Inc. et al. vs. NLRC, G.R. No. 77859, May 25, 1988 — Cited in the Court of Appeals' decision, quoted in the text, for the rule that the twin requirements of notice and hearing constitute essential elements of due process in cases of employee dismissal.
• Gold City Integrated Port Services, Inc. vs. NLRC, G.R. No. 86000, September 21, 1990 — Cited in the Court of Appeals' decision, quoted in the text, for the rule that there must be reasonable proportionality between the offense and the penalty imposed therefor.

• Article 282, Labor Code — Enumerates the just causes for termination of employment by the employer. The Court identified it as the source of the first requisite of a valid dismissal, namely, that the dismissal must be for any of the causes expressed therein.
• Section 13, BP 130, and Section 2, Rule XIV, Book V, Rules and Regulations of the Labor Code, as amended — Require the employer to furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected: the first apprising him of the particular acts or omissions for which his dismissal is sought, and the second informing him of the employer's decision to dismiss him. The Court found the mandatory first notice absent, thereby tainting the dismissal with illegality.
• Section 1, Rule XIV of the Implementing Regulations — Provides that no worker shall be dismissed except for a just or authorized cause provided by law and after due process. The Court of Appeals, in the portion quoted by the Court, treated this provision as establishing the two facets of the requirement: the legality of the act of dismissal and the legality of the manner of dismissal.

Puno (Chairman), Panganiban, Corona, and Carpio-Morales, JJ., concur.