LYNVIL FISHING ENTERPRISES, INC. and/or ROSENDO S.

DE BORJA, vs. ANDRES G. ARIOLA, JESSIE D. ALCOVENDAS,

JIMMY B. CALINAO and LEOPOLDO G. SEBULLEN,
February 1, 2012| Perez, J. | fixed-term employees
Santiago, Senando Angelo
SUMMARY: The respondents were working on the company
vessel Analyn VIII on a por viaje basis, as stipulated in their
contract. However, were terminated because witnesses saw them
steal pampano and tangigue fish which resulted to their willful
breach of trust, which is a valid ground for termination. In here,
the Court made a determination as to whether the respondents
were regular or fixed-term employees, despite the language in the
contract which seemingly implies a fixed-term arrangement. The
Court holds that the respondents were regular employees, being
hired for more than 10 years in total.
DOCTRINE: Although employment as stipulated in the contract
may be on a fixed-term basis, a perusal and careful consideration
of the facts may be indicative of the employment being regular,
and not as purported in the contract.
FACTS:
Several Lynvil employees1 are working onboard the company
vessel Analyn VIII on a per trip basis (por viaje) which
terminates at the end of each trip.
However, the employer terminated their services.
There are two versions of the facts:
Petitioners Lynvil Fishing Enterprises2 and Rosendo De Borja
1998. August 1: Lynvil receives a report from one of its
employees that while on board Analyn VIII, on July 31 1998,
the above employees conspire with each other and steal eight
tubs of pampano and tangigue fish and delivered
them to another vessel, to Lynvils prejudice.

1 Managerial field personnel: Andres G. Ariola (Ariola), the captain;

Jessie D. Alcovendas (Alcovendas), Chief Mate; Jimmy B. Calinao
(Calinao), Chief Engineer;Field personnel: Ismael G. Nubla (Nubla),
cook; Elorde Baez (Baez), oiler; and Leopoldo D. Sebullen
(Sebullen), bodegero,

2 A company engaged in deep-sea fishing, operating along the

shores of Palawan and other outlying islands of the Philippines. It is
operated and managed by Rosendo S. de Borja.

Because of the report, Lynvils general manager petitioner

Rosendo De Borja summoned respondents to explain why they
should not be dismissed from service.
However, the respondents employment was terminated, failing
to explain as the management required.
Lynvil, through De Borja, files criminal complaint for violation
of PD 532 (Anti-Piracy and Ani-Highway Robbery) against the
employees with the Office of the City Prosecutor of Malabon
City.
Nov. 12: the ACP found probable cause for the indictment of
the dismissed employees for qualified theft.

Respondents Andres G. ARIOLA, Jessie D. ALCOVENDAS, Jimmy B.

CALINAO, and Leopoldo SEBULLEN
1998. July 31: Respondents, crew members of Lynvils Analyn
VIII, arrived at the Navotas Fishport on board the same vessel
loaded with 1,241 baeras of different kinds of fishes.
The next day, private respondents reported back to Lynvil
office to inqure about their new job assignment.
o They were told to wait for further advice.
o They were also not allowed to board any vessel.
August 5: Only Alcovendas and Baez received a memorandum
from De Borja ordering them to explain the incident
o Learning of this, Ariola, Calina, Nubla, and Sebullen
went to the Lynvil office but were told that their
employments were already terminated.
Labor Arbiter
Employees filed a complaint for illegal dismissal with claims for
backwages and other benefits, as well as moral and exemplary
damages.
o They claim that the unwarranted accusation of theft
stemmed from their oral demand of increase of
salaries three months earlier.
They also requested not to be required to
sign a blank payroll and vouchers.
LA rules in favor of the complainants and order[s]
respondents to jointly and severally pay complainants (a)
separation pay at one half month pay for every year of service;
(b) backwages; (c) salary differential; (d) 13th month pay; and
(e) attorneys fees.
The LA disregarded the Resolution of the Malabon ACP on the
theft case.

The Labor Office is governed by different rules for

the determination of the validity of the dismissal of
employees.
LA findings:
o No evidence that respondents received the 41
baeras of pampano as alleged by De Borja in his
reply-affidavit;
o No proof was presented that the 8 baeras of
pampano and tangigue were missing at the place of
destination
o The contractual provision that the employment
terminates upon each trip does not make the
respondents dismissal legal.
Both parties did not negotiate on equal
terms because of the moral dominance of
the employer.
o Procedural due process was not complied with.
The mere notice given to the private
respondents fell short of the requirement of
ample opportunity to present the
employees side.
NLRC Appeal: NLRC reverses and sets aside LA Decision.
o

CA Appeal
Respondents, except Elorde Baez files a petition for Certiorari
alleging grave abuse of discretion.
CA reinstates LA decision, except as to the award of attorneys
fees.
CA held:
o the allegation of theft did not warrant the dismissal
of the employees since there was no evidence to
prove the actual quantities of the missing kinds of
fish loaded to Analyn VIII.
o The employees were regular employees performing
activities which are usually necessary or desirable in
the business and trade of Lynvil.
o The two-note rule provided by law is mandatory;
non-compliance renders the dismissal of the
employees illegal.
RULING: Petition PARTIALLY GRANTED, CA Decision MODIFIED.
Employees dismissed for just cause.

(skip to next part) Whether the CA erred in failing to

consider the Nasipit Doctrine in that the filing of a criminal
case before the prosecutors office constitutes sufficient
basis for a valid termination of employment on the grounds
of serious misconduct and/or loss of trust and confidence.
YES.
Nasipit Lumber Company v. NLRC: It is about a security guard
who was charged with qualified theft which charge was
dismissed by the Office of the Prosecutor. However, despite the
dismissal of the complaint, he was still terminated from his
employment on the ground of loss of confidence.
o Proof beyond reasonable doubt of an employees
misconduct is not required when loss of confidence is
the ground for dismissal.
o It is sufficient if the employer has some basis to lose
confidence or that the employer has reasonable ground
to believe or to entertain the moral conviction that the
employee concerned is responsible for the misconduct
and that the nature of his participation therein rendered
him absolutely unworthy of the trust and confidence
demanded by his position.
o It added that the dropping of the qualified theft
charges against the respondent is not binding
upon a labor tribunal.
Nicolas v. NLRC: a criminal conviction is not necessary to find
just cause for employment termination.
In other words, whichever way the public prosecutor
disposes of a complaint, the finding does not bind the
labor tribunal.
o Lynvil cannot argue that since the Office of the
Prosecutor found probable cause for theft the Labor
Arbiter must follow the finding as a valid reason for the
termination of respondents employment.
o The proof required for purposes that differ from one and
the other are likewise different.
There was authorized cause for dismissal: willful breach of
trust of employer (Art. 282, LC).
o Three witnesses narrated the commission of qualified
theft.
One account tells that while the vessel was
traversing San Nicolas, Cavite, Alcovendas went
inside the stockroom while Sebullen pushed
about 4 tubs away from it. Ariola served as the
lookout and negotiator of the transaction. Baez

and Calinao helped put the tubs in the small

boat.
The other narrations more or less corroborate
each other.

(Topic in class)
Whether the employees were regular or fixed-term
employees, their contracts clearly stipulating that they were
hired on a por viaje basisRegular.
Lynvil contends that the contracts under which the private
respondents were employed expired at the end of the voyage.
o The pertinent provisions are:
xxxx1. NA ako ay sumasan-ayon na maglingkod at
gumawa ng mga
gawain sang-ayon sa patakarang por viaje na
magmumula sa pag[-]alis sa Navotas papunta sa
pangisdaan at pagbabalik sa pondohan ng lantsa sa
Navotas, Metro Manila;
xxxx1. NA ako ay nakipagkasundo na babayaran ang
aking paglilingkod
sa paraang por viaje sa halagang P_______ isang
biyahe ng kabuuang araw xxxx.40
On the part of the petitioners, they claimed to be regular
employees because they were continuously hired and they
performed tasks necessary and desirable in the usual trade in
business of Lynvil.
Though the language of the contract are indicative of fixedterm employment, the facts narrate otherwise:
1. the respondents were doing tasks necessarily to Lynvils
fishing business with positions ranging from captain of
the vessel to bodegero;
2. after the end of a trip, they will again be hired for
another trip with new contracts; and
3. this arrangement continued for more than ten years,

Clearly, these facts make them regular employees by virtue of

Par. 2 of Art. 280.
Citing the rules enunciated in Brent, the Court mentioned that
it was the need for a continued source of income that forced
the employees acceptance of the por viaje provision.

i.e. the requirement that the employer and the

employee[deal] with each other on more or less equal
terms with no moral dominance exercised by the former
or the latter is not satisfactorily met.

Whether the employees were accorded procedural process

NO.
In termination for cause, Section 2, Rule XXIII, Book V of the
Rules Implementing the Labor Code requires the employer
furnish the employee with two written notices:
1. a written notice served on the employee specifying the
ground or grounds for termination, and giving to
said employee reasonable opportunity within
which to explain his side; and
2. a written notice of termination served on the employee
indicating that upon due consideration of all the
circumstances, grounds have been established to
justify his termination.
Though the version of both Lynvil and the employees differ as
regards the first requirement, it is undoubted that there was no
compliance with the second notice.
Whether De Borja is jointly and severally liable with Lynvil
NO.
In labor cases, the corporate directors and officers are
solidarily liable with the corporation for the termination of
employment of employees done with malice or in bad faith.
We agree with the ruling of both the NLRC and the Court of
Appeals when they pronounced that there was no evidence on
record that indicates commission of bad faith on the part of De
Borja.
o He is the general manager of Lynvil, the one tasked
with the supervision by the employees and the operation
of the business. However, there is no proof that he
imposed on the respondents the por viaje provision
for purpose of effecting their summary dismissal.