The latest Supreme Court decisions on illegal dismissal

The dockets of the  highest court of the land, even with its fifteen justices, is clogged with thousands of cases that require careful analysis and deliberations before each one is resolved with finality. The cases include criminal, civil, tax, immigration, administrative and the most numerous are the labor disputes, earlier decided by the labor arbiters, the NLRC (National Labor Relations Commission), and the Court of Appeals. The Supreme Court is divided into three divisions with five Justices each. An ordinary case is resolved by a division but those that are precedent-setting and landmark cases are decided by all the Justices, or the Court En Banc. It is important for all of us to be updated on the latest rulings by the High Tribunal.

As a Law Professor and Bar Reviewer, this writer is going on a lecture caravan in twelve universities all over the land, in preparation for the 2014 Bar examinations in October. Lately, the High Court has come up with important decisions that need to be discussed and analyzed for the guidance of all concerned, including students, employers, unions and employees. One of these rulings was promulgated on 29 January 2014, in the case of Grand Asian Shipping Lines (GR 178184). In this case the Supreme Court has come up with many important pronouncements that we should all be aware of. This involves a ship captain, a chief engineer, and many crew members who were dismissed due to pilferage of fuel and anomalies involving a big sum of money.

In this case, the court approved the dismissal of the ship captain and the chief engineer based on loss of trust and confidence but disapproved the termination of employment of the crew members for lack of substantial evidence. The court stressed the well-settled principle in labor law that the employer bears the burden of proof in cases of termination of employment. The degree of proof required to justify dismissal is only substantial evidence. There is no need to have proof beyond reasonable doubt, which is required in criminal cases, nor preponderance of evidence which is needed in civil cases. Substantial evidence is that quantum of proof which a reasonable mind might accept as enough to support a logical conclusion. These are principles that are cast in stone in labor jurisprudence.

What is new in this case is that the Supreme Court held that, in loss of trust and confidence, a distinction should be made between managerial employees, where the law is more strict, and rank-and-file, where the law is rather more lenient. In the case of rank-and-file, loss of trust and confidence, as a just cause for valid dismissal, requires proof of actual involvement in the acts or series of acts that led to such breach of trust. With respect to managerial personnel, the mere existence of some basis for believing  that such personnel has exceeded the bounds of confidence of his employer would suffice for his dismissal. For this reason, the Court held as valid the dismissal of the Captain and the Chief Engineer (their positions were deemed managerial)  but exonerated the mere crew members.

As to the money claims, the High Tribunal ruled that managerial employees are not entitled, under Article 82 of the Labor Code, to holiday pay, service incentive leave with pay, or of premium pay for work done on holidays and rest days. Field personnel (those who perform duties outside the company premises and whose actual working hours in the field cannot be determined with reasonable certainty) are also not entitled to such benefits. Whilst the ship's crew members are not deemed field personnel, because their working hours are, in fact, closely monitored by the captain and the chief engineer, nonetheless, in this case, they are not entitled to such benefits. The reason is simple. Management is using 365 as divisor in paying their monthly salary. Thus, all the 365 days in the whole year are deemed fully paid.

Violations of the Minimum Wage Law is subject to criminal prosecution, under the Labor Code, as amended by RA 6727 and RA 8188. In addition, the erring employers are liable to pay double indemnity or twice as much as the amount unpaid to the workers. Moreover, the court also affirmed the award of attorney's fees at ten per cent of the total monetary award. This is because the employees were compelled to spend money in order to recover what were denied to them by the employer. Actual and compensatory damages were not allowed for lack of factual basis. Neither was there any basis for an award of moral damages because there was no evidence of bad faith. Finally, exemplary damages could not be granted either because there was no proof that the dismissal was done in a wanton, oppressive or malevolent manner.

Indeed, The High Court, beset as it is with thousands of cases, involving all sorts of conflicts, from the most earth-shaking to the most trivial and mundane, involving the rich and most powerful, as well as the humblest and marginalized, from senators to janitors, ship captains and the lowest-ranking crew, continues to rule on cases that reflect the daily struggles of men and conglomerates. It is important that we, however humble we are, should know what the High Court says on such cases. And knowing, we shall, in our own daily struggles, decide with wisdom and reason.