G.R. No. 181974 - Lynvil Fishing Enterprises, Inc. vs. Ariola

Lynvil Fishing Enterprises, Inc. (Lynvil) is engaged in deep-sea fishing along the shores of Palawan and other islands, and is managed by Rosendo S. de Borja.
The private respondents are employees and crew members of the company’s vessel Analyn VIII, employed on a “por viaje” (per trip) basis, with managerial personnel (Ariola, Alcovendas, Calinao) and non-managerial crew (Nubla, BaAez, Sebullen).

On 31 July 1998, a report was received from an employee, Romanito Clarido, alleging that while onboard the vessel, certain employees (Ariola, Alcovendas, Calinao, Nubla, BaAez, and Sebullen) conspired to steal eight tubs of “pampano” and “tangigue” fish and delivered them to another vessel, to the detriment of Lynvil.
Following the report and an initial investigation, General Manager De Borja summoned the respondents and required them, within five days, to explain why they should not be dismissed. With the exception of Alcovendas and BaAez, the respondents either refused or failed to respond to the notice.

Due to their failure or refusal to explain, the employees’ services were terminated.
Lynvil, via De Borja, filed a criminal complaint against the dismissed employees for violation of P.D. 532 (Anti-Piracy and Anti-Highway Robbery Law) before the Office of the City Prosecutor of Malabon City.
On 12 November 1998, the prosecutor found probable cause for the indictment of the employees for the crime of qualified theft under the Revised Penal Code.

The dismissed employees filed a complaint for illegal dismissal before the NLRC, seeking various monetary claims (backwages, salary differential, reinstatement, service incentive leave, holiday pay and premium, 13th month pay) and damages (moral, exemplary, and attorney’s fees).
The Labor Arbiter ruled in their favor on 5 June 2002, finding that:

Their dismissal was illegal due to procedural lapses (failure to give an “ample opportunity” to be heard).
There was no evidence supporting claims that the quantity of fish missing was accurately established as alleged by De Borja.
The contractual “por viaje” term did not justify the dismissal, given the inherent imbalance between employer and employees.

The NLRC later reversed the Labor Arbiter’s decision on 31 March 2004, dismissing the illegal dismissal claims but awarding a nominal administrative fine per employee.
Respondents then petitioned for Certiorari before the Court of Appeals alleging grave abuse of discretion. The Court of Appeals reinstated the Labor Arbiter’s decision on most issues except the award for attorney’s fees.

Lynvil (petitioners) presented several assignments of error before the Supreme Court, notably contending:

That the filing of a criminal case by the prosecutor should suffice as a basis for valid dismissal due to serious misconduct and loss of trust.
That the dismissal was supported by substantial evidence.
That the employees were merely contractual by nature because they were engaged on a per-voyage basis, implying their employment naturally terminated after each trip.
That the respondents were accorded procedural due process.
That respondents were entitled to recover the payment of their money claims.
That Rosendo S. de Borja should be held jointly and severally liable only if bad faith were established, which Lynvil contends was not found.

Multiple testimonies (from Jonathan Distajo, Romanito Clarido, and Elorde BaAez via affidavits) corroborated the occurrence of the alleged theft:

Witnesses testified on the roles of each respondent during the incident, including maneuvers (e.g., Alcovendas entering the stockroom, Sebullen pushing tubs, Ariola acting as lookout and negotiator).
Monetary exchanges (e.g., a share received by Distajo) and orders to maintain silence further solidified the narrative of a deliberate breach of trust.

Lynvil argued that the respondents were fixed-term or “por viaje” employees whose engagements expired after each trip, thus implying no regular employment status.
Conversely, the respondents contended that their continuous engagement for over a decade, performing functions integral to the business, de facto rendered them regular employees with security of tenure.

Whether the filing of a criminal case and the finding of probable cause by the prosecutor is sufficient basis for a valid dismissal on grounds of serious misconduct and loss of trust and confidence.

Whether the termination of the respondents was supported by substantial evidence, particularly given the conflicting findings regarding the presence and quantity of stolen fish.

Whether the respondents, engaged on a “por viaje” basis, were in fact contractual employees or de facto regular employees, considering the continuous nature of their work and tasks necessary to the business.

Whether the respondents were accorded their right to procedural due process, specifically the mandated two-notice rule (initial explanation notice and subsequent termination notice) before dismissal.

Whether the respondents are entitled to receive monetary claims such as backwages, separation pay, 13th month pay, salary differential, and other benefits given the circumstances of their dismissal.

Whether petitioner Rosendo S. de Borja should be held jointly and severally liable with Lynvil for the dismissal, particularly in the absence of evidence of bad faith.