In bad faith

When the dismissal or suspension 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 morals, good customs or public policy, said employee is entitled to moral and exemplary damages. This is the ruling in this case of Susan.

Susan has been working as a flight attendant in the international flights of a local airline company for almost 12 years already. In one of the flights to the USA, she was subjected to a custom search together with six other flight crew members in Honolulu Hawaii, USA by the US Customs and Border Protection Supervisor who subsequently emailed to the airline company the lists of the crew members that were checked and the assorted food items supposedly removed from the aircraft and taken by the said crew members. The customs official however did not know which items were attributable to each of the seven crew members as there were no individual inventories.

Since Susan was mentioned in the email, the airline’s Cabin Services Sub-Department required her to comment on the incident. Susan complied and gave a handwritten explanation stating that she did not take anything from the aircraft. She also committed to fully cooperate to the inquiries on the matter.

Three weeks later, the airline’s International Cabin Crew Division Manager furnished Susan the emails from the Honolulu Customs Official followed by a notice of administrative charge which was sent to her after one month. Then a clarificatory hearing was conducted by the airline’s Administrative Personnel.

During the hearing Susan’s counsel asked the Panel to specify her participation in the alleged pilferage but instead of doing so, the Senior Labor Counsel of the company threatened Susan that her request for such clarification would result in a waiver of the clarificatory hearing. And despite her counsel’s objection, Susan allowed the hearings to proceed because she wanted to extend her full cooperation in the investigation. She then admitted that the US Customs personnel searched her person and found in her possession a cooked camote, 3-in-1 coffee packs and Cadbury hot chocolate which were not among those in the listed items.

After the investigation, the airline company found Susan guilty of 11 violations of the company’s Code of Discipline and Government Regulations which “call for the imposition of the penalty of termination, however, we are imposing upon you the reduced penalty of one year suspension.” There was no legal explanation of how she violated the long list of rules and why termination would be the proper penalty to impose but was downgraded to suspension.

Hence Susan brought the matter before the Labor Arbiter (LA) who subsequently found her suspension illegal since the company never presented evidence showing that Susan is responsible for any of the illegally taken airline items. The LA ordered Susan’s reinstatement with back-wages inclusive of allowances and benefits totaling P378,630 plus moral damages of P100,000 and exemplary damages of P100,000 since the circumstances leading to Susan’s suspension are characterized by arbitrariness and bad faith on the part of the company. The LA also awarded attorney’s fees to Susan because she was forced to litigate and incur expenses to protect her rights. Was the LA correct?

Yes. While the airline company issued written notice of the administrative charge, conducted an investigation and rendered a written decision, it failed to clarify the contents of the notice of the administrative charge. So there were irregularities in the procedural due process. The company also denied Susan substantial due process since it merely relied on the lists that do not show the participation of any of the flight crew members. The evidence presented does not show that the customs officials confiscated any of the listed items from Susan. Thus the evidence by itself does not show that Susan pilfered airline items. And considering further that Susan was prevented from asking clarificatory questions of the charges against her, the absence of substantial evidence is so apparent that disciplining employees only on theses bases constitutes bad faith. The company’s actions of implicating Susan and penalizing her for no clear reason show bad faith. The company should not have haphazardly implicated her and denied her livelihood even for a moment.

The airline’s act of depriving Susan of wages she would have earned during her year of suspension even if there was no substantial evidence that she was involved in the pilferage is also contrary to morals, good customs and public policy. Moral damages are thus appropriate.

It is also socially deleterious for the company to suspend Susan without just cause in the manner suffered by her. Hence exemplary damages are necessary to deter employers from committing the same acts. And since exemplary damages have been awarded, attorney’s fees can likewise be awarded (Article 2208 [1]). Besides, the Company’s acts and omissions compelled Susan to incur expenses to protect her rights through four tribunals which would have been unnecessary if it had sufficient basis to discipline her. So she should really be awarded attorney’s fees (Montinola vs. Philippine Airlines, G.R. 198656, September 8, 2014)

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