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G.R. No. 244210 | 27 January 2020


Cordero was employed on March 31, 1992 as Able Seaman by HSTC, a corporation engaged in the business of hauling, shipping and/or transporting oil and petroleum products in Philippine waters. During his employment, Cordero was part of the complement of M/Tkr Angat, where one of his primary duties entailed being a Helmsman or a duty look-out during vessel navigation.

Sometime in 2015, HSTC discovered significant losses of the oil and petroleum products transported by M/Tkr Angat during its past twelve (12) voyages. Consequently, HSTC conducted an investigation and sent a Notice to Explain/Show Cause Memo on January 28, 2016 to five (5) crew members, including Cordero, requiring them to submit a written explanation for allegedly committing: (a) violation of HSTC’s Code of Discipline; (b) Serious Misconduct; and (c) Willful Breach of Trust and Confidence. Pending the investigation, the five (5) crew members were placed on preventive suspension.

In his defense, Cordero denied the allegations against him and claimed that he did not see anything unusual or suspicious during the voyages, and that if there were any such case, he did not see them due to his poor eyesight. After HSTC found Cordero’s explanation insufficient, he was dismissed from employment through a Notice of Termination dated March 8, 2016.This prompted Cordero to file a complaint for illegal dismissal before the NLRC.

For their part, HSTC and Esguerra contended that the significant losses in the oil and petroleum products were confirmed after using a Four Point Analysis, an accepted formula adopted in the oil shipping industry to determine oil/petroleum loss during a sea voyage. Moreover, a suspicious event was captured and recorded by M/Tkr Angat‘ s CCTV camera, showing an unknown boat navigating its way at the side of the vessel, crew members coming out of their quarters, examining/investigating, and waving off the boat, and the blocking/covering of the CCTV camera for three (3) hours between December 26 and 27, 2015.

They maintained that Cordero, as M/Tkr Angat‘s Helmsman/Watchman, was undoubtedly aware of the oil pilferage; having had a vantage point from the bridge of the vessel, he would not have missed any boat or vessel that will approach M/Tkr Angat from the side. Likewise, Cordero would have seen who removed the cover of the CCTV camera that was blocked. However, despite the incident, Cordero did not report any irregularity to HSTC.

The Labor Arbiter Ruling:

In a Decision dated November 21, 2016, the Labor Arbiter (LA) found Cordero’s employment to have been validly terminated and thus, dismissed the complaint for lack of merit.

The NLRC Ruling:

In a Decision dated February 28, 2017, the NLRC affirmed the LA’s dismissal of the complaint upon a finding that Cordero was validly dismissed for a just cause.

The Court of Appeals Ruling:

The CA affirmed the NLRC Decision with a modification directing HSTC and Esguerra to pay Cordero separation pay equivalent to one (1)-month salary for every year of service from March 1992 until finality of judgment.

 While the CA concurred with the labor tribunals’ finding that Cordero’s employment was validly terminated for a just cause, it found that the penalty of dismissal was too harsh under the following circumstances:

(a) Cordero worked for HSTC for twenty-four (24) years;
(b) the incident while he was on duty was his first offense;
(c) he had no derogatory record; and
(d) he was already preventively suspended for the infractions he committed.

 Accordingly, the CA remanded the case to the LA for the proper computation of separation pay.


Did the CA correctly awarded separation pay in favor of Cordero “as a measure of compassionate justice” in the exercise of its “equity jurisdiction?


As a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to a separation pay.

In exceptional cases, however, the Court has granted separation pay to a legally dismissed employee as an act of “social justice” or on “equitable grounds.” In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) did not reflect on the moral character of the employee.

Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. 

A contrary rule would, as the petitioner correctly argues, have the effect of rewarding rather than punishing the erring employee for his offense. And we do not agree that the punishment is his dismissal only and that the separation pay has nothing to do with the wrong he has committed. Of course it has.

The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best, it may mitigate the penalty, but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character.

That Cordero had been employed with HSTC for twenty-four (24) years does not serve to mitigate his offense nor should it be considered in meting out the appropriate penalty therefor. In fact, it may be reasonably argued that the infraction that he committed against HSTC, i.e., theft of invaluable company property, demonstrates the highest degree of ingratitude to an institution that has been the source of his livelihood for twenty-four (24) years, constitutive of disloyalty and betrayal of the trust and confidence reposed upon him. Indeed, HSTC’s full trust and confidence in him, coupled with the fact that he occupied a position that allowed him full access to HSTC’s property, aggravated the offense.

The fact that private respondent served petitioner for more than twenty years with no negative record prior to his dismissal, in our view of this case, does not call for such award of benefits, since his violation reflects a regrettable lack of loyalty and worse, betrayal of the company. If an employee’s length of service is to be regarded as a justification for moderating the penalty of dismissal, such gesture will actually become a prize for disloyalty, distorting the meaning of social justice and undermining the efforts of labor to cleanse its ranks of undesirables.

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