Grand Asian Shipping Lines v. Galvez

DEL CASTILLO, J.:

The employer has broader discretion in dismissing managerial employees on the ground of loss of trust and confidence than those occupying ordinary ranks. While plain accusations are not sufficient to justify the dismissal of rank and file employees, the mere existence of a basis for believing that managerial employees have breached the trust reposed on them by their employer would suffice to justify their dismissal.1 Before us is a Petition for Review on Certiorari2 assailing the September 12, 2006 Decision3 of the Court of Appeals (CA) in CA-G.R. SP No. 82379, which annulled the September 10, 2003 Decision4 and January 14, 2004 Resolution5 of the National Labor Relations Commission (NLRC), thereby reinstating the August 30, 2001 Decision6 of the Labor Arbiter for having attained finality as a result of petitioners' failure to post the correct amount of bond in their appeal before the NLRC.

Likewise assailed is the May 23, 2007 Resolution7 of the CA which denied petitioners' Motion for Reconsideration.8 Factual Antecedents Petitioner Grand Asian Shipping Lines, Inc. (GASLI) is a domestic corporation engaged in transporting liquified petroleum gas (LPG) from Petron Corporation's refinery in Limay, Bataan to Petron's Plant in Ugong, Pasig and Petron's Depot in Rosario, Cavite. Petitioners William How and Eduardo Francisco are its President and General Manager, respectively. Respondents, on the other hand, are crewmembers of one of GASLI's vessels, M/T Dorothy Uno, with the following designations: Wilfredo Galvez (Galvez) as Captain; Joel Sales (Sales) as Chief Mate; Cristito Gruta (Gruta) as Chief Engineer; Danilo Arguelles (Arguelles) as Radio Operator; Renato Batayola (Batayola), Patricio Fresmillo (Fresmillo) and Jovy Noble (Noble) as Able Seamen; Emilio Dominico (Dominico) and Benny Nilmao (Nilmao) as Oilers; and Jose Austral (Austral) as 2nd Engineer.

Sometime in January 2000, one of the vessel's Oilers, Richard Abis (Abis), reported to GASLI's Office and Crewing Manager, Elsa Montegrico (Montegrico), an alleged illegal activity being committed by respondents aboard the vessel. Abis revealed that after about four to five voyages a week, a substantial volume of fuel oil is unconsumed and stored in the vessel's fuel tanks. However, Gruta would misdeclare it as consumed fuel in the Engineer's Voyage Reports.

Then, the saved fuel oil is siphoned and sold to other vessels out at sea usually at nighttime. Respondents would then divide among themselves the proceeds of the sale. Abis added that he was hesitant at first to report respondents' illegal activities for fear for his life.

An investigation on the alleged pilferage was conducted. After audit and examination of the Engineer's Voyage Reports, GASLI's Internal Auditor, Roger de la Rama (De la Rama), issued a Certification of Overstatement of Fuel Oil Consumption9 for M/T Dorothy Uno stating that for the period June 30, 1999 to February 15, 2000 fuel oil consumption was overstated by 6,954.3 liters amounting to ₱74,737.86.10 On February 11, 2000, a formal complaint11 for qualified theft was filed with the Criminal Investigation and Detection Group (CIDG) at Camp Crame against respondents, with Montegrico's Complaint-Affidavit12 attached. On February 14, 2000, Abis submitted his Sinumpaang Salaysay,13 attesting to the facts surrounding respondents' pilferage of fuel oil while on board the vessel, which he alleged started in August of 1999.

On March 22, 2000, GASLI's Port Captain, Genaro Bernabe (Bernabe), and De la Rama submitted a Complaint-Joint Affidavit,14 stating that in Gruta's Engineer's Voyage Reports, particularly for the period June 30, 1999 to February 15, 2000, he overstated the number of hours the vessel's main and auxiliary engines, as well as its generators, were used resulting in the exaggerated fuel consumption. They also stated that according to independent surveyor Jade Sea-Land Inspection Services, the normal diesel fuel consumption of M/T Dorothy Uno for Petron Ugong-Bataan Refinery-Petron Ugong route averaged 1,021 liters only. Thus, comparing this with the declared amount of fuel consumed by the vessel when manned by the respondents, Bernabe and De la Rama concluded that the pilferage was considerable.15 In her Supplementary Complaint Affidavit,16 Montegrico implicated respondents except Sales, in the illegal activity.

Bernabe, in his Reply-Affidavit,17 further detailed their analysis of the voyage reports vis-a-vis the report of Jade Sea-Land Inspection Services to strengthen the accusations. In their Joint Counter-Affidavit18 and Joint Rejoinder-Affidavit,19 respondents denied the charge. They alleged that the complaint was based on conflicting and erroneous computation/estimates of fuel consumption; that the complaint was fabricated as borne out by its failure to specify the exact time the alleged pilferage took place; that the allegations that the pilferage has been going on since August 1999 and that Austral and Sales acted as lookouts are not true because both embarked on the vessel only on December 28, 1999 and January of 2000, respectively; that four other officers who were on board the vessel much longer than Austral and Sales were not included in the charge; and, that the complaint was intended as a mere leverage.

In a letter20 dated April 14, 2000, the CIDG referred the case to the Office of the City Prosecutor of Manila, which, after finding a prima facie case, filed the corresponding Information for Qualified Theft21 dated August 18, 2000 with the Regional Trial Court (RTC) of Manila. Meanwhile, GASLI placed respondents under preventive suspension. After conducting administrative hearings, petitioners decided to terminate respondents from employment.

Respondents (except Sales) were thus served with notices22 informing them of their termination for serious misconduct, willful breach of trust, and commission of a crime or offense against their employer. It appears that several other employees and crewmembers of GASLI's two other vessels were likewise suspended and terminated from employment. Nine seafarers of M/T Deborah Uno were charged and terminated for insubordination, defying orders and refusal to take responsibility of cargo products/fuel.23 For vessel M/T Coral Song, two crewmembers were dismissed for serious act of sabotage and grave insubordination.24 Proceedings before the Labor Arbiter Respondents and the other dismissed crewmembers of M/T Deborah Uno and M/T Coral Song (complainants) filed with the NLRC separate complaints25 for illegal suspension and dismissal, underpayment/non-payment of salaries/wages, overtime pay, premium pay for holiday and rest day, holiday pay, service incentive leave pay, hazard pay, tax refunds and indemnities for damages and attorney's fees against petitioners.

The complaints, docketed as NLRC NCR Case Nos. 00-04-02026-00, 00-04-02062-00, 00-05-02620-00 and 00-07-03769-00, were consolidated.1âwphi1 On August 30, 2001, the Labor Arbiter rendered a Decision26 finding the dismissal of all 21 complainants illegal. As regards the dismissal of herein respondents, the Labor Arbiter ruled that the filing of a criminal case for qualified theft against them did not justify their termination from employment.

The Labor Arbiter found it abstruse that the specific date and time the alleged pilferage took place were not specified and that some crewmembers who boarded the vessel during the same period the alleged pilferage transpired were not included in the charge. With regard to the other complainants, petitioners likewise failed to prove the legality of their dismissal. The Labor Arbiter ordered petitioners to reinstate complainants with full backwages and to pay their money claims for unpaid salary, overtime pay, premium pay for holidays and rest days, holiday and service incentive leave pay, as indicated in the Computation of Money Claims.

Complainants were likewise awarded damages due to the attending bad faith in effecting their termination, double indemnity prescribed by Republic Act (RA) No. 818827 in view of violation of the Minimum Wage Law, as well as 10% attorney's fee. With respect to the claim for tax refund, the same was referred to the Bureau of Internal Revenue, while the claim for hazard pay was dismissed for lack of basis. The Labor Arbiter modified and recomputed the money claims of respondents, as follows: 1.

WILFREDO GALVEZ - (Dismissed in Mar. 2000) Backwages from Mar. 2000 to May 2001 (₱8,658.74 x 14 mos.) - - - - - - - - - - P 121,225.16 13th Month Pay for the period - - - - - - - - - - 8,658.94 Unpaid Salary from Feb 16 to 29, 2000 - - - - - - - - - - 3,985.38 Non-payment of Premium Pay for Holiday; Restday and Non-payment of Holiday Pay; (limited to 3 years' only = ₱7,372.90 x 3 yrs.) - - - - - - - - - - 22,188.70 Non-payment of (5 days) Service Incentive Leave Pay (for every year of service, but Limited to 3 years only): = ₱1,423.35 x 3 yrs.) - - - - - - - - - - P 4,270.05 Actual Moral Exemplary & Compensatory Damages - - - - - - - - - - P 100,000.00 (₱260,258.23) Ten (10%) Percent Attorney's Fees P 26,025.82 TOTAL P 286,284.05 2.

JOEL SALES - (Dismissed in Mar. 2000) Backwages from Mar. 2000 to May 2001 (₱8,274.14 x 14 mos.) - - - - - - - - - - - P 115,840.76 13th Month Pay for the period& - - - - - - - - - - 8,274.34 Actual, Moral, Exemplary & Compensatory Damages - - - - - - - - - - P 100,000.00 (₱224,115.10) Ten (10%) Percent Attorney's Fees P 22,411.51 TOTAL P 246,526.61 3.

CRISTITO G. GRUTA - (Dismissed in Mar. 2000) Backwages from Mar. 200 to May 2001 (₱8,274.14 x 14 mos.) - - - - - - - - - - P 115,840.76 13th Month Pay for the period - - - - - - - - - - 8,274.34 Non-payment of Premium Pay for Holiday; Restday and Non-payment of Holiday Pay: (₱7,045.57 x 2 yrs.) 14,091.51 Non-payment of (5 days) Service Incentive Leave Pay (for every year of service = ₱1,360.15 x 2 yrs.) - - - - - - - - - - 2,720.30 Actual, Moral, Exemplary & Compensatory Damages - - - - - - - - - - P 100,000.00 (₱240,926.91) Ten (10%) Percent Attorney's Fees - - - - - - - - - - P 24,092.69 TOTAL P 265,019.60 4.

DANILO ARGUELLES - (Dismissed in Feb. 2000) Backwages from Mar. 2000 to May 2001 (₱7,340.62 x 15 mos.) - - - - - - - - - - [P]110,109.30 13th Month Pay for the period - - - - - - - - - - 7,340.62 Unpaid Salary from Feb.

16 to 29, 2000 (₱225.00 x 14 days) - - - - - - - - - - 3,150.00 Underpayment/Non-payment of Salary/Wages: A. From April 98 to Nov. 98 (7 mos.) Minimum Wage - ₱198 x 391.5 [/] 12 = P 6,459.75 Actual Basic Wage for the period 4,320.00 Difference P 2,139.75 x 7 mos.