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Grand Asian Shipping Lines v.

Galvez
G.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 Petrons refinery in
Bataan to Pasig and Cavite.
Respondents are crewmembers of one of GASLIs vessels, M/T Dorothy Uno.
On January 2000, Richard Abis (vessels oiler) reported to GASLI an alleged
illegal activity being committed by respondent who would misdeclare the
consume fuel in the Engineers 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 attorneys 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 petitioners motion to reduce bond and directed an
additional bond.
Despite petitioners 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
NLRCs decision had jurisdictional error since petitioner did not comply with the
additional bond.
LABOR LAW
Issue:
I. WON the CA erred in holding that respondents were illegally dismissed
II. WON the CA erred when it concluded petitioner were not able to perfect the appeal of
the Labor Arbitrers decision
Held/Ratio:
I. No, the CA did not commit any error in finding that respondents 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.
Respondents 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 employers confidenceregarding 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
vessels 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 Arbiters Authority to impose the penalty
of double indemnity for violations of the Minimum Wage Law. Petitioners 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 restdayaccording 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 paidin 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
sensethe 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.

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