G.R. No. 88795 October 4, 1994
Seaborne Carriers Corporation and Jerry Ronaldo Gatan, petitioners, vs. National Labor Relations Commission and Armando A. Ternida, respondents.

FACTS

Private respondent Armando Ternida was employed by Seaborne Carriers Corporation as a Tug Master. Following an accident involving the tugboat he was operating, the company required him to shoulder half of the repair costs, deducting an initial amount of P250.00 from his salary. When Ternida sought permission for a leave of absence to inquire with the Department of Labor and Employment about the legality of the deduction, petitioner Jerry Ronaldo Gatan, the company’s president and manager, instead asked him to resign. Upon Ternida’s refusal, as he had not received any separation pay, he was dismissed. Ternida subsequently filed a complaint for illegal dismissal, illegal deduction, and various monetary claims.
The Labor Arbiter declared the dismissal illegal, ordering reinstatement without backwages but with reimbursement of the illegally deducted amount. On appeal, the National Labor Relations Commission (NLRC) modified the decision, ordering reinstatement with full backwages, payment of holiday pay, 13th month pay, service incentive leave benefits, the illegally deducted sum, and attorney’s fees. The NLRC held both the corporation and Gatan personally liable for the monetary awards.

ISSUE

The issues are: (1) whether the NLRC correctly awarded service incentive leave, holiday pay, and 13th month pay; and (2) whether petitioner Jerry Ronaldo Gatan should be held personally liable for the monetary awards.

RULING

The Supreme Court affirmed the NLRC’s award of monetary benefits but absolved Gatan from personal liability. On the first issue, the Court ruled that the claims for service incentive leave, holiday pay, and 13th month pay were incidental to the main action for illegal dismissal. Ternida’s allegation of non-payment was a negative allegation; the burden of proof to show that these statutory benefits had been paid rested upon the employer, Seaborne. The petitioners failed to discharge this burden, making the award proper.
On the second issue, the Court held that corporate officers may be held personally liable for employees’ claims only if they acted with malice or bad faith. The evidence merely showed that Gatan ordered Ternida to resign and dismissed him upon refusal. There was no sufficient proof that Gatan acted with evident malice or bad faith in the termination, or that he personally sanctioned the illegal deduction or denial of leave. Therefore, only the corporation, Seaborne Carriers, was held liable for the monetary awards. The petition was dismissed with modification regarding Gatan’s personal liability.