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Republic of the Philippines

FIRST DIVISION

G.R. No. 84082 March 13, 1991

HELLENIC PHILIPPINE SHIPPING, INC., petitioner,

Prudencio Cruz for petitioner.

CRUZ, J.:

Challenged in this petition is the decision of the respondent NLRC holding Hellenic Philippine Shipping Company
liable for the illegal dismissal of Capt. Epifanio Siete, herein private respondent, and awarding him salaries and
other benefits corresponding to the unexpired portion of his employment contract. Enforcement of this decision has
meanwhile been held in abeyance pursuant to our temporary restraining order dated August 3, 1988.

Siete was employed on May 22, 1985, as Master of M/V Houda G by Sultan Shipping Co., Ltd., through its crewing
agent, herein petitioner. He boarded the vessel on May 24, 1985, at Cyprus. From there, it sailed on June 1, 1985,
to El Ferrol, Spain, where it loaded cargo that it subsequently discharged at Tripoli, Lebanon, from June 25-29,
1985. It then proceeded back to Cyprus, arriving there on June 30, 1985.

On July 8, 1985, Capt. Wilfredo Lim boarded the vessel and advised Siete that he had instructions from the owners
to take over its command. These instructions were confirmed by a telex sent by Sultan Shipping to Siete on July 10,
1985. Neither Lim nor the telex indicated the reason for his relief. The private respondent claims this information
was also withheld from him by the petitioner upon his repatriation to Manila.

On July 12, 1985, Siete filed a complaint against the petitioner for illegal dismissal and non-payment of his salary
and other benefits under their employment contract. On September 6, 1985, the petitioner alleged in its answer that
the complainant had been dismissed because of his failure to complete with the instruction of Sultan Shipping to
erase the timber load line on the vessel and for his negligence in the discharge of the cargo at Tripoli that
endangered the vessel and stevedores. Siete denied these averments in his reply dated September 23, 1985, and
reiterated that he had not earlier been informed of the cause of his dismissal and repatriation, either in Cyprus or
later in Manila.

After considering the position papers and documentary evidence of the parties, Administrator Tomas D. Achacoso of
the Philippine Overseas Employment Administration (POEA) dismissed the complaint, holding that there was valid
cause for Siete's removal.2 The decision placed much value on the various communications presented by the
petitioner to show that Siete was indeed guilty of the charges that justified his separation.

On January 4, 1988, the private respondent appealed to the NLRC, contending that the records presented by the
petitioner were prepared long after his dismissal and were especially suspect because they came from persons in
the employ of Sultan Shipping. He insisted that he was dismissed without even being informed of the charges
against him or given an opportunity to refute them. He added that, even assuming he was negligent in the unloading
of the cargo at Tripoli, this shortcoming did not warrant such a severe penalty as his dismissal.

In its decision dated June 27, 1988,3 the public respondent reversed the POEA Administrator, holding that the
dismissal violated due process and that the documents submitted by the petitioner were hearsay, self-serving, and
not verified. Accordingly, it disposed as follows:

A new decision is entered finding the dismissal of complainant as illegal. Respondent is hereby ordered to
pay to the complainant his salaries, wages and other benefits corresponding to the unexpired portion of his
employment contract with Sultan Shipping Company, Ltd., dated May 22, 1985.

The petitioner now faults this decision as having been reached with grave abuse of discretion. It contends that the
private respondent had been instructed to erase the timber load line on the vessel; that he had indeed been
negligent in supervising the unloading of the cargo at Tripoli, resulting in the replacement of certain damaged
equipment; and that he had not been denied due process, considering the summary nature of the proceedings that
had to be taken in view of the nature of his position. Moreover, assuming the awards were justified, there was a
mistake in their computation because the amount of $400.90 previously collected by Siete had not been deducted.

Certiorari is denied.

The findings of fact of public respondent are conclusive on this Court, there being no showing that they were
reached arbitrarily. Substantial evidence has established that the private respondent was indeed not notified of the
charges against him and that no investigation was conducted to justify his dismissal. Moreover, the petitioner has
failed to prove that Siete had been instructed to erase the timber load lines and that he had been negligent in the
cargo unloading at Tripoli.

The Court notes that the reports submitted by the petitioner to prove its charges were all prepared after the fact of
Siete's dismissal and were signed by its own employees.4

Their motives are necessarily suspect. The mere fact that they have made such reports does not itself prove the
charges, which were investigated ex parte, if at all. It is not denied that Siete was not informed of the charges
beforehand or that he was given an opportunity to refute them. Even after his arrival in Manila, he was kept in the

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dark about the reason for his dismissal. The excuse of the petitioner that it itself did not know why he was
dismissed, being only a crewing agent of Sultan Shipping, deserves no comment.

The Labor Code provides as follows:

Sec. 1. Security of tenure and due process. — No worker shall be dismissed except for a just or authorized
cause provided by law and after due process.

Sec. 2. Notice of dismissal. — Any employer who seeks to dismiss a worker shall furnish him a written notice
stating the particular acts or omission constituting the grounds for his dismissal. In cases of abandonment of
work, the notice shall be served at the worker's last known address.

xxx xxx xxx

Sec. 5. Answer and hearing. — The worker may answer the allegations stated against him in the notice of
dismissal within a reasonable period from receipt of such notice. The employer shall afford the worker ample
opportunity to be heard and to defend himself with the assistance of his representative, if he so desires.

Sec. 6. Decision to dismiss. — The employer shall immediately notify a worker in writing of a decision to
dismiss him stating clearly the reasons therefor.

The petitioner argues that whatever defects might have tainted the private respondent's dismissal were
subsequently cured when the charges against him were specified and sufficiently discussed in the position papers
submitted by the parties to the POEA. That argument is unacceptable. The issue before the POEA was in fact the
lack of due process in Siete's dismissal. The law requires that the investigation be conducted before the dismissal,
not after. That omission cannot be corrected by the investigation later conducted by the POEA. As the Solicitor
General correctly maintained, the due process requirement in the dismissal process is different from the due
process requirement in the POEA proceeding. Both requirements must be separately observed.

While it is true that in Wenphil Corp. v. NLRC5 and Rubberworld (Phils.) v. NLRC6 the lack of due process before the
dismissal of the employee was deemed corrected by the subsequent administrative proceedings where the
dismissed employee was given a chance to be heard, those cases involved dismissals that were later proved to be
for a valid cause. The doctrine in those cases is not applicable to the case at bar because our findings here is that
the dismissal was not justified.

The argument that the afore-quoted provisions are not applicable to the private respondent because he was a
managerial employee must also be rejected. It is not correct to say that managerial employees may be arbitrarily
dismissed, at any time and without cause as established in an appropriate investigation. Managerial employees, no
less than rank-and-file laborers, are entitled to due process. Loss of confidence, which is the usual ground for the
removal of the managerial employee, must be established like any other lawful cause.7 Even if it be assumed that
Siete was a managerial employee — an issue which, incidentally, was not earlier raised or resolved — the petitioner
has not satisfactorily proved the reason for its supposed loss of confidence in him.

It is not true that the vessel would be left unattended if the captain were to be placed under investigation because he
would not have a ready replacement. The petitioner forgets that under Article 627 of the Code of Commerce:

Art. 627. The sailing mate, as the second chief of the vessel and unless the ship agent does not order
otherwise, shall take the place of the captain in case of absence, sickness or death and shall then assume all
Ins powers, obligations and liabilities.

let alone the fact that in the particular case of Siete, there was actually a ready replacement for him. This was Capt.
1âwphi1

Lim who, on instruction of Sultan Shipping, boarded the vessel on July 8, 1985, purposely to take over its command
from Capt. Siete.

The Court reiterates the ruling that private employment agencies are jointly and severally liable with the foreign-
based employer for any violation of the recruitment agreement or the contract of employment.8 As a requirement for
the issuance to it of a license to operate a private recruiting agency, a verified undertaking was made by the
petitioner that it would "assume joint and solidary liability with the employer for all claims and liabilities which (might)
arise in connection with the implementation of the contract of employment." It cannot now contend that as a mere
crewing agent it cannot be made to answer for the liabilities of Sultan Shipping.

The reason for the above-mentioned requirement is obvious. Were the rule otherwise, employees with legitimate
demands against the employer would be helpless to enforce them because the latter has no office or properties in
this jurisdiction. Violation of the employment contract would remain unredressed. It was precisely to correct this
difficulty that the recruiting agent is now required, as a condition for the issuance to it of a license to operate, to
assure the employee that he has remedies available in this country even if the culpable employer is beyond the
reach of our courts.

It need only be noted that there was a slight error in the computation of the award due the private respondent which
he himself acknowledges. This was the failure to deduct from his total award the amount of $400.90 he admitted
having earlier collected in Cyprus. As corrected, the computation of the total award should be as follows:

Monthly Basic Pay US$1,200.00

Total Monthly Compensation US$1,700.00

US$22,100.00
Less: Cash Advances:
Manila US$600.00
Spain 64.70

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Lebanon 500.00

1,164.70
Slapchest 28.36
Bal. of ship
cash fund 400.90
Total Deductions
1,593.96
Total Amount Due US$20,506.04

We are not persuaded that the NLRC committed grave abuse of discretion in reversing the findings of the POEA
sustaining the petitioner and dismissing the private respondent's complaint. On the contrary, we agree that the
private respondent was illegally dismissed because, first, he was not accorded a fair investigation as required by
law, and second, because the grounds invoked for his separation have not been proved by the petitioner.

WHEREFORE, the challenged decision as above modified is AFFIRMED and the petition DISMISSED, with costs
against the petitioner. The temporary restraining order dated August 3,1988, is LIFTED.

SO ORDERED.

Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Footnotes
1
Annex B, Original Records, p. 19.
2
Rollo, pp. 24-30.
3
Ibid., pp. 47-57.
4
Correspondence sent by Panos Sideris of the Sultan Lines on July 26, 1985, affirming Siete's omission to
change the load line and to observe proper discharging procedures while unloading their cargoes in Tripoli;
letter from Mr. S.Y. Caramondanis Surveyor, Cyprus District, dated October 3, 1985, stating that he advised
the master of M/V Houda G to delete the timber load lines on the vessel since they were already canceled
from the Load Line Certificate; communication sent by Bilmer C. Buenconsejo, Chief Officer of the M/V Houda
G, on September 16, 1985, who claimed that he was never instructed by Capt. Siete to paint out the timber
load line marks; counter-affidavit executed on November 11, 1985, by Ioamis Filippou, attesting that Siete
failed to delete the timber load line marks despite the advice given by Mr. Caramondanis and that during the
discharging operation at Tripoli, the derricks were overloaded; dispatch sent by Capt. Padelis Arthemis on
November 25, 1985, alleging Siete's failure to delete the load line marks and correct the improper discharge
of the cargoes in Tripoli.
5
170 SCRA 69.
6
183 SCRA 421.
7
Batongbacal v. Associated Bank, 168 SCRA 600.
8
Ambraque International Placement & Services v. NLRC, 157 SCRA 430; Alga Moher International
Placement Services v. Hon. Atienza, 174 SCRA 166.

The Lawphil Project - Arellano Law Foundation

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