Exemplary Damages in Labor Cases
Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. [Article 2229, Civil Code]
Further, the Civil Code provides for the rules concerning the award of exemplary damages. In Article 2229 it states that exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.
While in Article 2232 it provides that in contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.
However, exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should be adjudicated. [Art. 2233]
As to proof required, Article 2234 provides that while the amount of the exemplary damages need not be proved, the plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. In case liquidated damages have been agreed upon, although no proof of loss is necessary in order that such
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liquidated damages may be recovered, nevertheless, before the court may consider the question of granting exemplary in addition to the liquidated damages, the plaintiff must show that he would be entitled to moral, temperate or compensatory damages were it not for the stipulation for liquidated damages.
Thus, before exemplary damages can be awarded, there must first be an award for Moral Damages.
The Court has the discretion to award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. Indeed, exemplary damages cannot be recovered as a matter of right, and it is left to the court to decide whether or not to award them. [Sulpicio Lines, Inc. vs. Karaan, G.R. No. 208590. October 03, 2018]
In a labor case, exemplary damages are recoverable when the dismissal was done in a wanton, oppressive, or malevolent manner. [Torreda vs. Investment and Capital Corporation of the Philippines, G.R. No. 229881, September 5, 2018]. The award of exemplary damages is necessary to deter future employers from committing the same acts.
As held in De Guzman vs. NLRC, (211 SCRA 723 [1992]), when moral damages are awarded, exemplary damages may also be decreed. Exemplary damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages. According to the Code Commission, “exemplary damages are required by public policy, for wanton acts must be suppressed. They are an antidote so that the poison of wickedness may not run through the body politic.” These damages are legally assessible against him.
Exemplary damages did not have to be specifically pleaded or proved, because the courts had the discretion to award them for as long as the evidence so warranted.
In Marchan vs. Mendoza, the Court has relevantly discoursed that exemplary damages are designed by our civil law to permit the courts to reshape behavior that is socially deleterious in its consequence by creating negative incentives or deterrents against such behavior.
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