G.R. No. 181974, 1 February 2012


Lynvil Fishing Enterprises, Inc. (Lynvil) is a company engaged in deep-sea fishing. Lynvil received a report from Romanito Clarido, one of its employees that he witnessed that while on board the company vessel Analyn VIII, Lynvil employees conspired with one another and stole eight (8) tubs of “pampano” and “tangigue” fish and delivered them to another vessel, to the prejudice of Lynvil.

By reason of the report and after initial investigation, Lynvils General Manager Rosendo S. De Borja (De Borja) summoned respondents to explain within five (5) days why they should not be dismissed from service. Failing to explain as required, respondents’ employment was terminated.Lynvil, through De Borja, filed a criminal complaint against the dismissed employees for violation of P.D. 532, or the Anti-Piracy and Anti-Highway Robbery Law of 1974 . First Assistant City Prosecutor Rosauro Silverio found probable cause for the indictment of the dismissed employees for the crime of qualified theft.

Upon being informed about this, Ariola, Calinao, Nubla and Sebullen went to the Lynvil office. However, they were told that their employments were already terminated. Aggrieved, the employees filed with the NLRC a complaint for illegal dismissal with claims for backwages, salary differential reinstatement, service incentive leave, holiday pay and its premium and 13th month pay from 1996 to1998. They also claimed for moral, exemplary damages and attorneys fees for their dismissal with bad faith.Labor Arbiter Ramon Valentin C. Reyes found merit in complainants charge of illegal dismissal and rendered a finding that complainants were illegally dismissed, ordering respondents to jointly and severally pay complainants (a) separation pay at one half month pay for every year of service; (b) backwages; (c) salary differential; (d) 13th month pay; and (e) attorney’s fees


Won petitioner Rosendo S. De Borja is jointly and severally liable for the judgment when there was no finding of bad faith.


As to this issue, this Court has ruled that in labor cases, the corporate directors and officers are solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith. Indeed, moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy.

The term “bad faith” contemplates a “state of mind affirmatively operating with furtive design or with some motive of self-interest or will or for ulterior purpose.” We agree with the ruling of both the NLRC and the Court of Appeals when they pronounced that there was no evidence on record that indicates commission of bad faith on the part of De Borja. He is the general manager of Lynvil, the one tasked with the supervision by the employees and the operation of the business. However, there is no proof that he imposed on the respondents the “por viaje” provision for purpose of effecting their summary dismissal.

*Case Digest by Stephanie C. Castillo, JD-IV, Andres Bonifacio College, SY: 2019-2020