Title
Transglobal Maritime Agency, Inc. vs. Chua, Jr.
Case
G.R. No. 222430
Decision Date
Aug 30, 2017
Seaman dismissed for refusing to sign reprimand; CA ruled dismissal disproportionate, illegal due to lack of due process, awarding damages with 6% interest.
seafarer
illegal dismissal
unpaid wages

Case Summary (G.R. No. 222430)

Employment Contract and Events Aboard the Vessel

On September 29, 2011, Chua received an appointment letter reflecting a nine-month duty with the first three months as probation at the owner’s option to continue his service for a further six months, subject to satisfactory performance. On January 14, 2012, Chua was re-hired as an Able Seaman for six months, with specified terms including basic monthly salary of USD 603.00, overtime USD 3.95/hour, vacation leave with pay USD 221.00/month, ship maintenance bonus USD 77.00/month, and service incentive bonus USD 7.50/month, with the point of hire in Manila, Philippines.

While the vessel was at Mailiao, Taiwan on January 26, 2012, Chua and four companions left the vessel for shore leave from 7:00 p.m. to 10:00 p.m. When they returned at about 11:40 p.m., the ship captain became infuriated. On January 30, 2012, the captain served Chua and the others with a written reprimand relating to their allegedly late return and their conduct thereafter. The reprimand stated that Chua had returned only near pilot boarding time after midnight, that on being questioned he started misbehaving and arguing with the Chief Officer in the Master’s presence, and that his behavior could not be tolerated aboard, warning that if he did not comply with shipboard discipline standards he might be dismissed.

Chua and his companions refused to sign and acknowledge receipt of the written reprimand and also refused to sign the vessel logbook entry regarding the incident. Thereafter, they disembarked and returned to the Philippines on February 3, 2012.

Chua’s Complaint and the Petitioners’ Defense

On March 20, 2012, Chua filed a complaint for illegal dismissal, nonpayment of salaries, withholding of documents, moral and exemplary damages, and attorney’s fees. He alleged that their late return from shore leave was due to a problem with their contracted vehicle, and that they went immediately to the ship’s office to return their passports and documents. He further asserted that they declined to sign the written reprimand because it contained falsehoods. He also claimed that they were repatriated on February 2, 2012 without authorized and justifiable reason and without notice of termination.

Petitioners denied illegal dismissal. They maintained that Chua was dismissed for a just cause, specifically for refusing to sign the written reprimand, which petitioners treated as insubordination and disrespect toward superior officers. Petitioners likewise relied on a General Report entered in the vessel logbook, which Chua also refused to sign. They asserted that Chua and the others agreed to be dismissed in the presence of the vessel’s Master, Chief Officer, and Chief Engineer.

Ruling of the Labor Arbiter

In a Decision dated May 31, 2013, the Labor Arbiter found that Chua was dismissed for just cause, but also found that he was not served the required notice of termination because he allegedly agreed to be dismissed. The Labor Arbiter treated Chua’s failure to return on time as an offense under Section 33-C, No. 9(h) of the 2010 Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC), which provides for reprimand for a first offense. It also held that Chua’s refusal to sign his written reprimand and the vessel’s logbook, despite being instructed by the Master or superior officers, constituted insubordination, punishable by dismissal and by payment of the cost of repatriation and replacement.

With respect to money claims, the Labor Arbiter awarded unpaid wages, vacation leave, and other benefits, noting that petitioners did not deny or respond adequately to the claims. The complaint for illegal dismissal and other non-monetary claims was dismissed for lack of merit, subject to the monetary awards to Chua.

Ruling of the NLRC

On September 30, 2013, the NLRC affirmed the Labor Arbiter’s finding of legal dismissal but awarded nominal damages because Chua was dismissed without due process. The NLRC ruled that Chua’s refusal to receive the written reprimand was substantiated by the vessel logbook. It considered Chua’s “arguing and misbehaving” after returning late from shore leave as insubordination punishable by dismissal under the POEA-SEC.

Accordingly, the NLRC affirmed the dismissal while ordering additional nominal damages of P50,000.00.

CA Reversal in CA-G.R. SP No. 133683

Chua then sought relief through a petition for certiorari, and in a Decision dated July 20, 2015, the CA granted the petition and reversed the NLRC. The CA held that although an order to sign a receipt of a written reprimand may be lawful or reasonable, the instruction did not pertain to Chua’s duty as a seaman. It further ruled that the dismissal was disproportionate to the act complained of—Chua’s refusal to sign the receipt of the reprimand. The CA declared that Chua was illegally dismissed and ordered the payment of wages and benefits corresponding to the unexpired portion of the contract, unpaid allotments and vacation leave, moral damages of P50,000.00, exemplary damages of P30,000.00, attorney’s fees of ten percent, and legal interest at the rate of twelve percent (12%) per annum as computed in the CA decision, with instructions for computation of total monetary benefits by the Labor Arbiter.

Issues Raised in the Petition to the Supreme Court

After the denial of their motion for reconsideration, petitioners elevated the matter, arguing that factual findings of the Labor Arbiter and NLRC were binding on the CA absent jurisprudential exceptions, and that the dismissal should be upheld as supported by substantial evidence. Petitioners invoked the governing effect of the POEA-SEC, contending that Chua was validly dismissed under the offenses corresponding to the POEA-SEC, including insubordination. They also argued that even assuming procedural due process was not observed, the consequence would be limited to nominal damages, not illegality of dismissal.

Supreme Court’s Review of Factual Findings Under Rule 65

The Court found the petition partly meritorious. It addressed petitioners’ insistence that CA review was limited to jurisdictional errors and not errors of judgment. The Court clarified that while respect is ordinarily accorded to factual findings of specialized agencies, such deference is not absolute. In labor cases brought to the CA through Rule 65, the CA may issue certiorari when factual findings are not supported by evidence on record, among other recognized situations.

The Court further held that it could review factual issues when there were conflicting findings among the Labor Arbiter, NLRC, and the CA. In this case, the Court observed that the Labor Arbiter and NLRC based insubordination on different acts: the Labor Arbiter grounded insubordination primarily on Chua’s refusal to sign the written reprimand, while the NLRC treated Chua’s “arguing and misbehavior” after his late return as insubordination.

Burden of Proof in Termination Cases

The Court reiterated that in termination cases, the employer bears the burden of proving that the dismissal is for a just or an authorized cause. Failure to discharge that burden means the dismissal is not lawful. The Court held that petitioners failed to establish, through substantial evidence, that Chua’s acts warranted dismissal for insubordination.

Assessment of the Evidence on Insubordination

Petitioners relied on the written reprimand, the General Reporting entry in the ship’s logbook, and Statements of Witnesses. The Court noted, however, that the Labor Arbiter itself did not establish that Chua was guilty of arguing and misbehaving upon his late return from shore leave. The CA, in turn, had reasoned that Chua’s refusal to sign the documents did not constitute insubordination or willful disobedience because the instruction did not relate to Chua’s duty as a seaman. The Court accepted the CA’s framing, emphasizing that Chua’s alleged disobedience must be tied to a duty-related, reasonable and lawful order that the employee willfully and intentionally violated.

The Court analyzed the General Reporting entry and found it reflected that Chua and his companions were warned of immediate dismissal if they refused to sign the log entry, and that their refusal to sign the written reprimand and the logbook entry prompted the dismissal. It thus concluded that the dismissal was contemplated after their refusal to sign the logbook entry. The Court then examined the Statements of Witnesses and found them deficient as corroboration of any particular act of “arguing and misbehaving” on the night of the incident. It held that any execution timing and content of the undated witness statement showed it was executed after Chua’s dismissal and, therefore, could not corroborate the charge as proof of the asserted incident contemporaneous with service of the reprimand.

Proportionality and the Requisites for Insubordination

The Court rejected petitioners’ reliance on Singa Ship Management Phils., Inc. v. NLRC because the evidence in this case did not sufficiently prove the conduct comparable to the gross disrespect and insubordination found in that precedent. The Court also restated controlling requisites for insubordination as a just cause: the conduct must be willful in the sense of a wrongful and perverse attitude; and the violated order must be reasonable, lawful, made known to the employee, and connected with the duties the employee had been engaged to discharge. The Court further explained that while the POEA-SEC binds a seafarer to obey the lawful commands of the captain, that obligation applies only when the commands pertain to the seafarer’s duties.

The Court found that petitioners’ evidence did not show that Chua’s refusal was characterized by a wrongful and perverse mental attitude. The Court took note that Chua explained his refusal, stating that he refused to sign the written reprimand because he believed it contained falsehoods and because he had an explanatio

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