G.R. No. 109717 ; February 9, 1996
WESTERN SHIPPING AGENCY, INC., YEH SHIPPING CO. LTD., and PHIL. BRITISH ASSURANCE CO., INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ALEXANDER, respondents.

FACTS

Petitioner Western Shipping Agency, Inc., the manning agent for vessel owner YEH Shipping Co. Ltd., hired private respondent Alexander as Master of the M/V Sea Wealth under a one-year contract commencing April 21, 1988. On January 14, 1989, Alexander was notified of his discharge. The disembarkation order cited loss of trust and confidence, alleging he failed to notify the agency of the vessel’s arrival in Manila and, more seriously, that he allowed fifteen unauthorized passengers to board the vessel from Davao to Manila without securing approval and without regard to safety regulations.
Alexander filed a complaint for illegal dismissal and monetary claims. Petitioners maintained the dismissal was valid due to Alexander’s actions constituting a breach of trust. Alexander countered that the passengers were family members of the crew, that the ship’s agent in Davao secured a customs permit, and that the Coast Guard issued a sailing clearance. He also asserted he had sent a telex message regarding the Expected Time of Arrival (ETA), which petitioners acknowledged.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the finding that Alexander was illegally dismissed.

RULING

The Supreme Court dismissed the petition, upholding the NLRC’s decision. The legal logic centers on the burden of proof required for dismissal based on loss of confidence, especially for a managerial employee like a ship captain. While loss of confidence is a valid ground, it must be substantiated by clear and convincing evidence. The employer bears this burden.
The Court found petitioners failed to discharge this burden. On the charge of failing to notify about the Manila arrival, the record showed Alexander had communicated the ETA via telex, which petitioners acknowledged. The vessel’s arrival on a Sunday did not conclusively prove malicious concealment. On the charge concerning unauthorized passengers, Alexander presented evidence of coordination with the local agent and clearance from the Coast Guard, negating any clandestine or reckless operation. The POEA and NLRC, as triers of fact, found these explanations credible. Consequently, the dismissal was deemed illegal, entitling Alexander to salaries for the unexpired portion of his contract. The NLRC committed no grave abuse of discretion as its findings were supported by substantial evidence.