Moral Damages in Labor Cases

Moral Damages in Labor Cases

Moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy. [Torreda vs. Investment and Capital Corporation of the Philippines, G.R. No. 229881, September 5, 2018]

In the case of Aldovino vs. Gold and Green Manpower Management and Development Services, Inc. [G.R. No. 200811, June 19, 2019], the instances when moral damages are recoverable in the case of employee dismissal can be enumerated, as follows:

  1. Bad faith
  2. Fraud
  3. Act oppressive to labor
  4. Contrary to morals, good customs, or public policy

The nature of moral damages is defined under our Civil Code. Article 2220 states that willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.

In Primero vs. Intermediate Appellate Court, the Supreme Court states that damages, as defined in the Civil Code, is recoverable in labor cases. It cannot be justified solely upon the premise (otherwise sufficient for redress under the Labor Code) that the employer fired his employee without just cause or due process.

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According to the Supreme Court, additional facts must be pleaded and proven to warrant the grant of moral damages under the Civil Code, these being, to repeat, that the act of dismissal was attended by bad faith or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy; and, of course, that social humiliation, wounded feelings, grave anxiety, etc., resulted therefrom.

What is bad faith?

Bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity. [Laureano Investments and Development Corp. v. Court of Appeals, 338 Phil. 759, 771 (1997)]

How to prove bad faith?

In Cathay Pacific Airways vs. Spouses Vazquez the SC established that bad faith must be proven through clear and convincing evidence.

Clear and convincing evidence is a standard of proof that is derived from American common law. It is less than proof beyond reasonable doubt (for criminal cases) but greater than preponderance of evidence (for civil cases).

The degree of believability is higher than that of an ordinary civil case. Civil cases only require a preponderance of evidence to meet the required burden of proof.

However, when bad faith is alleged an entirely different standard of proof needs to be satisfied. This is because bad faith is a serious accusation that can be so conveniently and casually invoked, and that is why they are never presumed. They amount to mere slogans or mudslinging unless convincingly substantiated by whoever is alleging them.

The imputation of bad faith requires the presentation of clear and convincing evidence. Mere allegations will not suffice to sustain the existence of bad faith. The burden of evidence rests on the part of the complainant or the party alleging it. The quantum of evidence is such that bad faith must be clearly and convincingly shown.

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