Dear PAO,

My co-employees and I were removed from our work at a construction contracting firm after we had filed a labor case against it. We only wanted our labor standard benefits, so we filed a case for underpayment of wages and overtime pay. However, no Notice to Explain or Notice of Termination was ever issued to us. During our hearing at the Labor Arbiter level, our company repeatedly insisted that we were project employees and that our employment was not terminated but rather that our respective projects were already terminated. We never signed any document stating that we were project employees. Can we claim damages in light of the evident bad faith of our employer?

Mio

Dear Mio,

Please be informed of the Supreme Court’s ruling in the case of Square Meter Trading Construction and Lito Pascual v. Court of Appeals, Ricardo Gallano, Felimon Francisco, Oscar Borja, et al. (GR 225914, Jan. 26, 2021, Ponente: Associate Justice Rosmari Carandang), where the Supreme Court elucidated when moral damages may be recovered. According to the Supreme Court, citing several other cases:

“In Montinola v. Philippine Airlines, citing Garcia v. NLRC, the court said that exemplary damages may be awarded if the dismissal was effected in a wanton, oppressive or malevolent manner. Furthermore, we said the employee is entitled to moral damages when the employer acted (a) in bad faith or fraud; (b) in a manner oppressive to labor; or (c) in a manner contrary to morals, good customs, or public policy. In Our view, the petitioners had gone about the dismissal of the private respondents with ill will. They were whimsically complacent in their baseless assertion that private respondents were project employees. This is confirmed by the fact that they could not muster an ounce of evidence to prove that respondents were employed on a project basis. To the eyes of the court, the abject denial of substantive and procedural due process, especially in light of the fact that petitioners began to dismiss the private respondents one day after the filing of the first case, is also an indication that the dismissals were done in bad faith. Accordingly, the private respondents, except for Borja, are entitled to moral and exemplary damages.”

The Supreme Court clearly discussed that the abject denial of substantive and procedural due process amounts to bad faith. These were proven by surrounding circumstances, such as the dismissal of the employees one day after they filed a labor case and the fact that they could not present any form of evidence to prove their assertion that the subject employees were project employees.

Thus, as in your case, the fact that you were dismissed a day after the filing of your labor case and the absence of any evidence to prove your project employment may be considered bad faith. These, coupled with the fact that no procedural due process was observed, prove bad faith on the part of your employer, which may be the basis for awarding moral damages.

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated on.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]