G.R. No. 244144 & G.R. No. 244210. January 27, 2020.
HERMA SHIPPING AND TRANSPORT CORPORATION AND HERMINIO S. ESGUERRA, PETITIONERS, V. CALVIN JABALLA CORDERO, RESPONDENT. ( G.R. No. 244144 )

CALVIN JABALLA CORDERO, PETITIONER, V. HERMA SHIPPING AND TRANSPORT CORPORATION AND HERMINIO S. ESGUERRA, RESPONDENTS. (G.R. No. 244210)

FACTS

Calvin Jaballa Cordero was employed as an Able Seaman by Herma Shipping and Transport Corporation (HSTC) on March 31, 1992. His duties on board M/Tkr Angat included being a Helmsman and duty look-out. In 2015, HSTC discovered significant losses of oil and petroleum products during the vessel’s past twelve voyages. An investigation was conducted, and on January 28, 2016, Cordero and four other crew members were served a Notice to Explain/Show Cause Memo for alleged violation of the company’s Code of Discipline, Serious Misconduct, and Willful Breach of Trust and Confidence. They were placed on preventive suspension. Cordero denied the allegations, claiming he saw nothing unusual due to poor eyesight. HSTC found his explanation insufficient and dismissed him via a Notice of Termination dated March 8, 2016. Cordero filed a complaint for illegal dismissal and monetary claims before the National Labor Relations Commission (NLRC). HSTC contended the losses were confirmed using an industry-accepted formula and presented CCTV footage showing suspicious activities, including an unknown boat approaching the vessel and the camera being blocked. They argued Cordero, as Helmsman/Watchman, must have been aware of the pilferage but failed to report it. The Labor Arbiter and the NLRC upheld the dismissal as valid for Serious Misconduct and Willful Breach of Trust and Confidence. The Court of Appeals affirmed the validity of the dismissal but modified the ruling by awarding Cordero separation pay equivalent to one month salary for every year of service, finding the penalty of dismissal too harsh considering his 24 years of service, first offense, clean record, and preventive suspension. Both parties filed motions for reconsideration, which were denied, leading to these consolidated petitions.

ISSUE

Whether the Court of Appeals erred in awarding separation pay to Calvin Jaballa Cordero despite finding that he was validly dismissed for just causes (Serious Misconduct and Willful Breach of Trust and Confidence).

RULING

The Supreme Court GRANTED the petition in G.R. No. 244144 (filed by HSTC and Esguerra) and DENIED the petition in G.R. No. 244210 (filed by Cordero). The Court held that the factual findings of the labor tribunals, as affirmed by the CA, that Cordero participated in or was complicit in the oil pilferage, constituting Serious Misconduct and Willful Breach of Trust and Confidence, are final and conclusive. Consequently, his dismissal was valid. On the issue of separation pay, the Court ruled that the CA erred in awarding it. Citing Manila Water Company v. Del Rosario and other jurisprudence, the Court reiterated the general rule that an employee dismissed for a just cause under the Labor Code is not entitled to separation pay. Separation pay may be granted on equitable grounds or as a measure of social justice only in exceptional cases where the dismissal (1) was not for serious misconduct, and (2) did not reflect on the moral character of the employee. Since Cordero was dismissed for Serious Misconduct and Willful Breach of Trust and Confidence—offenses that involve moral turpitude and reflect on his moral character—the award of separation pay has no legal basis. The compassionate circumstances cited by the CA (long service, first offense, etc.) cannot override the legal principle that separation pay is not warranted for dismissals due to serious misconduct or causes reflecting on moral character. The CA’s award was therefore deleted.