Moral damages in cases of illegal

dismissal
DIRECT FROM THE LABOR FRONT By Atty Josephus B Jimenez (The Freeman) | Updated April 9, 2013 - 12:00am
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The management prerogative to hire and fire ends where the workers' right to security of tenure and due
process begins. While employers have the basic and inherent freedom to discipline employees, and, if
warranted, to terminate their employment, no less than the Constitution and the Labor Code have laid down
strict rules on the just and authorized causes for exercising such an extreme option, as well as established
stringent procedures for the manner of dismissing people. For what is involved in such situations is not just
work or occupation, but livelihood, the source of living of the worker involved, and his family.

The state is mandated to afford full protection to labor so that company owners do not trifle with the worker's
constitutional rights. Not only would the labor tribunals order reinstatement with full backwages, in cases of
illegal dismissal. The Supreme Court and the Court of Appeals, and even the NLRC and labor arbiters have the
power to award moral and exemplary damages in case of high-handed dismissals exacerbated by bad faith.
Last January 30, the Supreme Court ordered a Cebu-based multi-million company to pay damages to a simple
rank-and-file worker who was found to have been illegally dismissed and whose dismissal was tainted with
absence of good faith (GR 181738 ).

We will not name the company for it is not our intention to put a blot on its name. It is enough that we learn from
its monumental mistake. It appears that the lady worker, along with 12 others, were “singled out” from among
thousands of personnel to be included in the so-called redundancy program. But the Court found no evidence
that management conducted an organizational study before making the conclusion that the 13 workers'
positions were superfluous. There was no valid criteria used to determine who to let go and who to retain. The
choice of the “sacrificial lambs” was therefore subjective, if not whimsical.

The company did not present any audited financial statement to support its allegations of financial losses. What
is worse, after terminating the unlucky 13, management started to hire more people, thereby belying its own
claim of excess manpower. That was hardly a manifestation of good faith. The 13 workers were allegedly
instructed to sign a prepared application for retirement benefits. The truth is they were not interested to have
such an untimely retirement. And then (this was the “unkindest cut of them all”) they were suddenly barred from
entering the company premises, without explaining to them why. After so many years of faithfully serving the
company, they felt they were “dumped like garbage.” This is no way to treat the company's most important
assets - the people.

The High Court therefore ordered the management to reinstate the 13 workers, with full backwages and all
benefits, without loss of seniority rights and to pay them MORAL DAMAGES and EXEMPLARY DAMAGES.
Moral damages for their mental anguish, serious anxiety, wounded feelings and sleepless nights, and
exemplary damages so as to discourage other employers from doing the same thing. The backwages here
could run to millions since all the 10 years from dismissal to finality of decision, (10 years times 13 months) or
130 months of salaries. Assuming each of them had a basic salary plus benefits of P30,000, that is a whopping
3.9 million for each one and a total of 50.7 million for the 13 of them, in backwages alone.

But this is not just about money. This is about how to treat people in a company. The People Managers
Association of the Philippines (PMAP) Cebu Chapter should be able to remind its members on the implications
of this case. Under article 19 of the Civil Code, every person (employers included) in the exercise of his rights
and in the performance of his duties, must act with justice, give everyone his due and observe honesty and
good faith. You may have the right to fire, but you cannot fire indiscriminately. I love to remind my law students
in UST and UE: Your right to swing your arms ends where my nose begins. That is as simple as that.