Procedural Due Process is Not Complied with if the Employer Fails to Observe its Internal Rules
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Procedural due process is one of the two aspects of due process that must be complied with by the employer.
Due process under the Labor Code involves two aspects: first, substantive––the valid and authorized causes of termination of employment under the Labor Code; and second, procedural––the manner of dismissal. In the present case, the CA affirmed the findings of the labor arbiter and the NLRC that the termination of employment of respondent was based on a “just cause.” This ruling is not at issue in this case. The question to be determined is whether the procedural requirements were complied with. (King of Kings Transport, Inc. vs. Mamac, G.R. No. 166208, June 29, 2007)
In the case of Del Monte Fresh Produce (Phil.), Inc. vs. Betonio (G.R. No. 223485, December 4, 2019), Del Monte Fresh Produce (PHIL.), Inc. (DMFPPI)subjected its Senior Manager for Port Operations Reynaldo P. Betonio (Betonio) for inefficiencies in the operation of the port. The reports/complaints came from the managers and directors of different departments of DMFPPI, the market of Del Monte International in Japan, and the local growers of DMFPPI.
Through a Show Cause Memo, Betonio was charged with gross and habitual neglect of duties, and breach of trust and confidence. In his response, he explained point by point the infractions leveled against him, and denied having failed to execute his duties with utmost diligence. A meeting was conducted by the Administrative Committee wherein he was made to explain the charges against him.
In the Minutes of the Meeting, it was stated that the Administrative Committee will come up with a recommendatory report that if the top management disagrees with the recommendation they will reconvene 
to discuss the decision to be adopted.
While the Administrative Committee found Betonio inefficient in the management and operation of the port, it opined that his lapses were not enough for his dismissal. As such, the committee recommended that the charges against him be dismissed. Despite the recommendation, a Notice of Disciplinary Action was issued by the top management, terminating Betonio’s employment on the ground of gross and habitual neglect of duties and breach of trust and confidence.
Thus, Betonio filed before the Labor Arbiter (LA) a Complaint for illegal dismissal with money claims.
While the Supreme Court (SC) found the dismissal of Betonio as valid, there was a violation of the procedural due process. Under the internal rules of DMFPPI, the administrative committee will first come up with a recommendatory report on his case; that if the top management disagrees with the committee’s recommendation, they will reconvene to discuss the decision to be adopted.
While the administrative committee found Betonio to be inefficient and ineffectual in the operation of the port, it opined that his lapses were not enough for his dismissal. Consequently, the top management disagreed with the administrative committee’s recommendation. However, instead of reconvening with the administrative committee to discuss the final decision to be adopted on Betonio’s case, DMFPPI unilaterally proceeded to terminate his employment. This deprived him of his last chance to be heard by DMFPPI.
The SC held further that if the dismissal is based on a just cause, then the noncompliance with the procedural due process should not render the termination from employment illegal or ineffectual. Instead, the employer must indemnify the employee in the form of nominal damages.
The decision in this case emphasizes the importance of observance of the company’s own internal rules in conducting administrative investigation.
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