2 things you need to know about Due Process.

2 things you need to know about Due Process.

Whenever penalties are concerned, due process is a basic requirement you have to deal with. At its simplest form, due process means having a valid ground and giving the employee a right to defend themselves before you decide on giving a penalty.

That’s it.

But what trips people up is interpreting how Due Process plays out in real life. It’s a pretty slippery concept for non-lawyers because not a lot of people know that it is composed of 2 aspects, both of which form an all-or-nothing package. You have to get both of them right. Otherwise, you lose as you’ll see later in the post.

These 2 aspects are known as the substantive and the procedural aspects. Let’s get to know them better:

1. The Substantive Aspect or the “Right Reason” to penalize.

The “Substantive Aspect” means that you have have the right reasons for imposing the penalty. You can’t just impose a penalty just because you feel like it or you are angry at an employee. You have to have the right reason which justifies why you have the right to impose the penalty.

Let me give you some examples of right reasons recognized by the law to make this clearer: the employee shouted at his supervisor (insubordination), the employee stole some items off the warehouse (serious misconduct), or the employee failed to close the refrigerator in the kitchen and let all the meat spoil (negligence).

This is the right starting point for your disciplinary process. This gives you the legal right. Where do you find these reasons? They’re in the labor code under Just Causes (Article 282). You can also find these reasons in your Company Policies and Guidelines. I’ll give more examples of these in future posts.

2. The Procedural Aspect or the “Right Way” to penalize.

The procedural aspect deals with the right way of imposing the penalty. There are certain steps you need to comply with before you can impose the right penalty. Some examples of these are the Notice to Explain, the hearing, and the Notice of Termination. In short, you need to have the right reason for imposing a disciplinary procedure, you have to apply it in the right way. We’ll discuss that further in future posts.

Questions and Answers

Let’s do a quick rundown of the most common questions I get from students on this.

“Attorney, I had the right reasons but I didn’t follow procedure. What happens then?”

Well, you’re in for the most awkward experience of your life. The Supreme Court stated that not following the right procedure violates the employee’s right to procedural process. You have to pay erring employee a sum of not more than 30,000 pesos. Pretty hard to swallow in case the employee stole from you. Moral of the story: be mindful of both aspects of this.

“Attorney, what if had no reason and no procedure? I got mad. I just shouted “You’re Fired!” What happens then?”

Well, this is a worse case to be in. This, ladies and gentlemen, is what is known as a textbook case of Illegal Dismissal. Trust me, you do not want to be in this position. Here’s a list of what you have to look forward to if you don’t heed this warning:

  1. Reinstatement of the employee without loss of seniority rights;
  2. In lieu of reinstatement, an employee may be given separation pay of one month pay for every year of service (Golden Ace Builders, et. al vs. Jose Talde, May 5, 2010, GR No. 187200);
  3. Full backwages, inclusive of allowances and other benefits or their monetary equivalent from the time compensation was withheld up to the time of reinstatement;
  4. Damages if the dismissal was done in bad faith (Aurora Land Project Corp. vs NLRC, 266 SCRA 48).

“Attorney, what if the employee was not terminated? If he was just suspended. Do these concepts apply?”

Strictly speaking, the law only imposes these strictly when it comes to termination cases. However, as a best practice, I recommend that you apply the same procedure for any penalty. Even for lighter penalties such as suspension or written reprimands.

There are 2 reasons for this:

  1. You get used to applying the process; and
  2. You can use the opportunity for the explanation and the hearing (optional) to coach your employees.

In disciplinary cases, more is better. The more chances you give your employee to present their side, the safer for you.

So to recap

If you fail to understand how the 2 aspects of Due Process work, your discipline system will not be sustainable. You will lose credibility with your team because you won’t have an idea of what’s going on. Worse, you may find yourself in the awkward position of having to pay erring employees.

So take the time to familiarize yourself with these procedures.

P.S. I hold regular workshops on Employee Discipline and Labor Law thru Businessmaker Academy. Feel free to check the links and join in.

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