Grand Asian Shipping Lines v. GalvezG.R. No. 178184; January 29, 2014

Facts: Petitioner Grand Asian Shipping Lines, Inc (GASLI) is a domestic corporation

engaged in transporting liquified petroleum gas (LPG) from Petron’s refinery in Bataan to Pasig and Cavite.

Respondents are crewmembers of one of GASLI’s vessels, M/T Dorothy Uno. On January 2000, Richard Abis (vessel’s oiler) reported to GASLI an alleged

illegal activity being committed by respondent who would misdeclare the consume fuel in the Engineer’s Voyage Reports and the save fuel oil were sold to other vessel out at sea (at nighttime). Profits would be divided amongst themselves.

After investigation, from the period of June 30, 1999 to Feb 15, 2000 the fuel it consumption was overrate by 6,954.3 liters amounting to 74,737.86.

Acting upon the anomaly, GASLI placed respondents under preventive suspension and after conducting administrative hearings decided to terminate them for breach of trust, commission of crime against employer.

Respondents filed with the NLRC separate complaint for illegal suspension and dismissal, underpayment/nonpayment of salaries/wages, overtime pay, premium pay for holiday and rest day, service incentive pay, tax refunds and indemnities for damages and attorney’s fees against petitioner.

On August 30, 2001, the Labor Arbiter rendered decision finding the dismissal of 21 complainants to be illegal.

Petitioner then filed a Notice of Appeal with Motion to Reduce Bond before the NLRC citing economic depression, legality of termination, and compliance with labor standards. NLRC denied petitioner’s motion to reduce bond and directed an additional bond.

Despite petitioner’s failure the pay the bond, NLRC found the appeal meritorious and ruled for petitioners. Stating that the dismissal was valid with the exception of Sales.

NLRC struck down the monetary awards given by the Labor Arbiter as they were based on computations made by respondents.

On appeal to the CA, the court ruled in favor of respondent stating that the NLRC’s decision had jurisdictional error since petitioner did not comply with the additional bond.

LABOR LAWIssue: I. WON the CA erred in holding that respondents were illegally dismissedII. WON the CA erred when it concluded petitioner were not able to perfect the appeal of the Labor Arbitrer’s decision

Held/Ratio: I. No, the CA did not commit any error in finding that respondent’s were illegally dismissed. According to the termination notice, respondents were dismissed based on

the grounds of (a) serious misconduct (b) engaging in pilferage wile navigating at sea (c) willful breach of the trust reposed by the company (d) commission of a crime against their employer. After examination of the evidence, the court finds that petitioners failed to substantiate the charges of pilferage against respondents. The quantum of proof that should be presented is substantial evidence. Mere filing of formal charge does not automatically make dismissal valid. The affidavit executed simply contained accusations while allegations remained uncorroborated. Also there is no sufficient evidence to show respondents participation in the commission of the crime.

Respondent’s termination due to loss of trust and confidence should have a distinction between managerial and rank and file employees. Rank-and-file employees require proof of involvement while managerial employees mere existence of a basis for belief is sufficient. Given that Galvez and Gruta have managerial positions there is some basis for the loss of employer’s confidence—regarding the overstatement of fuel consumption without any evidence to the contrary. While the others, who are ordinary rank and file employees, were not proven to have any involvement in the loss of the vessel’s fuel. Rendering their dismissals illegal. The employer bears the burden of proof in illegal dismissal cases thus the employer must first establish by substantial evidence the fact of dismissal.

With regard to the contention of the Labor Arbiter’s Authority to impose the penalty of double indemnity for violations of the Minimum Wage Law. Petitioner’s contention is untenable since there is no provision in RA 6727 or RA 8188 that precludes that labor from imposing the penalty of double indemnity against employers. Article 217 of the Labor Code gives the labor arbiter jurisdiction over cases of termination disputes and those cases accompanied with a claim of reinstatement.

The Labor arbiter erred in awarding damages by lumping, moral, actual, and exemplary damages. These should rest on different jural foundations and must independently identified and justified.

Glaze and Gruta, as managerial employees, are not entitled to claims for holiday pay, service incentive leave pay and premium pay for holiday and restday—according to Art. 82 of the Labor Code. The same way the other rank-and-file employees cannot be classified as field personnel under Article 82 of the Labor Code. According to Article 82, “non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.” Here, respondents remain inside a vessel and were constantly supervised under effective control of a ship captain. Also they cannot claim to be entitled of these because they have already been paid all the days of the month, which include benefits. As for the overtime pay and premium pay for holiday and rest day, no evidence was presented to prove that they worked in excess of the regular working hours. For their claim of service incentive leave pay, respondents did not specify what year they were not paid—in accordance with Art. 95.

II. Yes, the CA erred in holding that there was no compliance on the part of petitioner regarding the appeal bonds. According to Art. 223 of the Labor Code, the posting of a bond, either in cash or surety, must be in the amount equivalent to them entry award.Nonetheless, the court held that rules should not be applied in a very rigid and strict sense—the same in labor cases were substantial merits serve the interest of justice. In this case, the petitioner appeals from the awarding of 7,104,483.84 to respondents and only complied with the posting of 500,000 PHP. We find this to be in substantial compliance with the Labor Code.