I'm using Red Hat Linux, and recently I'm experience files missing issue. All the files missing from one of the sub-folder in home directory. My IS admin told me the files missing could be due to bad sector, is this possible? Are we able to determine whether there is any bad sector in the hard disk?

What is the name of the folder, and what kind of files are we talking about?

I have never seen a bad sector result in files missing form one folder, ONLY from one folder, and not causing far greater problems. I HAVE seen files with certain names deleted by 'clean-up' software that was designed to reduce wasted space, and did a little more than intended.

Its most likely to be a mistaken delete/clean-up, as above.
There's a very small possibility that there is a bad disk block containing the dir file itself.

First of all; stop using the disk or the disk blocks may get overwritten by other processes.
You can now try to recover using eg Photorec or Testdisk.
Of course, you SHOULD have backups.
Also, you could try a fsck on the disk; it would have to be unmounted first. This will put any 'lost' blocks into the /lost+found dir on the same disk for you.
It will also mark the bad blocks not to be used in future
This (fsck) may happen anyway if you reboot.

Actually the folders contains all types of files, and all owned by different user. So can I say that unless it is being intentionally deleted, otherwise all the files and folder will not suddenly missing due to bad sector?

Hi Chris, thanks for the info. Do we need root password to perform all the task above?

It's certainly going to make things easier, but I haven't used those tools; it may in fact be reqd.
Certainly a fsck will require root access....