Maersk-Filipinas Crewing, Inc. v. Avestruz

An employer dismissing a seafarer for insubordination must prove with substantial evidence that the conduct was willful and characterized by a wrongful and perverse attitude and that the order violated was reasonable, lawful, made known to the employee, and pertained to his duties; uncorroborated, self-serving master’s e-mails and the absence of logbook entries do not suffice. Dismissal without the Section 17 POEA-SEC two-notice rule also violates procedural due process.

Maersk, acting for its foreign principal A.P. Moller, engaged Avestruz as Chief Cook on board M/V Nedlloyd Drake under a six-month contract with a basic monthly salary of US$698.00; Agbayani was Maersk’s Crewing Manager. The employment was governed by the POEA-SEC, whose Section 17 prescribes disciplinary procedures for erring seafarers, and by RA 8042 as amended by RA 10022 on money claims of illegally dismissed overseas workers.

On April 28, 2011, Maersk, on behalf of its foreign principal A.P. Moller, hired Avestruz as Chief Cook on board M/V Nedlloyd Drake for six months at a basic monthly salary of US$698.00, and Avestruz boarded the vessel on May 4, 2011.

On June 22, 2011, during the weekly inspection of the vessel’s galley, Captain Woodward noticed that the cover of the garbage bin in the kitchen near the washing area was oily. Because part of Avestruz’s job was to ensure the galley’s cleanliness, Captain Woodward called Avestruz and asked him to stand near the garbage bin; the captain then took Avestruz’s right hand and swiped it on the oily cover, telling him to feel it. Shocked, Avestruz remarked, “Sir if you are looking for [dirt], you can find it[;] the ship is big. Tell us if you want to clean and we will clean it.” Captain Woodward replied by shoving Avestruz’s chest; Avestruz complained and said, “Don’t touch me,” and an argument ensued.

Later that afternoon, Captain Woodward summoned Avestruz and required him to state in writing what transpired in the galley that morning; Avestruz complied and submitted his written statement that same day. Captain Woodward also asked Messman Jomilyn P. Kong to submit his own written statement about the incident, and Kong immediately complied. On that same day, Captain Woodward informed Avestruz that he would be dismissed from service and disembarked in India. On July 3, 2011, Avestruz was disembarked in Colombo, Sri Lanka, and he arrived in the Philippines on July 4, 2011.

Avestruz then filed a complaint for illegal dismissal, payment for the unexpired portion of his contract, damages, and attorney’s fees against Maersk, A.P. Moller, and Agbayani. He alleged that no investigation or hearing was conducted and that he was not given the chance to defend himself before dismissal; that Captain Woodward failed to observe Section 17 of the POEA-SEC on disciplinary procedures; and that he was not given any notice stating the ground for dismissal. He also claimed that the cost of his airfare, US$606.15, was deducted from his wages, and prayed for US$5,372.00 representing basic wages, guaranteed overtime, and vacation leave; US$1,936.00 on board allowance; US$292.00 ship maintenance bonus; US$8,760.00 hardship allowance; 300,000.00 as moral damages; 200,000.00 as exemplary damages; and attorney’s fees of ten percent (10%) of the total monetary award.

In their defense, Maersk, A.P. Moller, and Agbayani claimed that during his stint on the vessel, Avestruz failed to attend to his tasks, specifically maintaining the cleanliness of the galley, which prompted Captain Woodward to issue weekly reminders; despite the reminders, Avestruz still failed to perform his duties properly. They claimed that on June 22, 2011, when again asked to comply, Avestruz became angry and snapped, retorting that he did not have time to do all the tasks required of him. According to petitioners, Captain Woodward then initiated disciplinary proceedings and informed Avestruz during the hearing of the offenses he committed—his repeated failure to follow directives on maintaining galley cleanliness and his act of insulting an officer—and thereafter informed him of dismissal due to insubordination. Captain Woodward sent two e-mails dated June 22, 2011 to Maersk explaining the termination and requesting Avestruz’s replacement. Petitioners maintained that Avestruz was dismissed for a just and valid cause, that he was not entitled to salary for the unexpired portion, that the airfare deduction was justified, and that he was not entitled to moral and exemplary damages and attorney’s fees.

The LA found that Avestruz failed to perform his duty of maintaining cleanliness in the galley and repeatedly failed to obey his superior’s directives, which the LA considered tantamount to insubordination, citing the CBA between the parties which considers insulting a superior officer by words or deed as insubordination. The NLRC found that petitioners failed to observe the procedures in Section 17 of the POEA-SEC because the records lacked evidence of compliance. The CA found no factual basis for the charge of insubordination, no evidence that Avestruz willfully failed to comply with his duties or displayed a perverse and wrongful attitude, and gave more credence to Avestruz’s account, partly supported by Kong’s statement, while treating Captain Woodward’s e-mails as uncorroborated and noting the absence of logbook entries. The CA also found no compliance with Section 17 of the POEA-SEC or the two-notice rule, as Captain Woodward’s statement neither contained the grounds nor the date, time, and place for a formal investigation, and no written notice of penalty with copies to the Philippine agent was given.

• Just Cause — Insubordination: Petitioners argued that Avestruz was dismissed for a just and valid cause, insubordination, consisting of his repeated failure to obey Captain Woodward’s order to maintain cleanliness in the galley and his act of insulting a superior officer by words or deeds.
• Evidence — Captain Woodward’s E-mails: Petitioners relied on Captain Woodward’s two e-mails dated June 22, 2011, time-stamped 10:07 a.m. and 11:40 a.m., as chronicling the circumstances that led to Avestruz’s dismissal.
• Procedural Due Process: Petitioners claimed that Captain Woodward initiated disciplinary proceedings and informed Avestruz during the hearing of the offenses he committed before informing him of dismissal due to insubordination.
• Monetary Claims and Deductions: Petitioners maintained that because the dismissal was for a just and valid cause, Avestruz was not entitled to salary for the unexpired portion of his contract; that they were justified in deducting his airfare from his salary; and that he was not entitled to moral and exemplary damages and attorney’s fees.

• Procedural Due Process: Avestruz alleged that no investigation or hearing was conducted, that he was not given the chance to defend himself before dismissal, that Captain Woodward failed to observe Section 17 of the POEA-SEC on disciplinary procedures, and that he was not given any notice stating the ground for dismissal.
• Illegal Dismissal and Monetary Claims: Avestruz claimed illegal dismissal and sought payment for the unexpired portion of his contract, damages, and attorney’s fees; he also claimed that the cost of his airfare in the amount of US$606.15 was deducted from his wages.
• Specific Awards Prayed For: Avestruz prayed for US$5,372.00 representing basic wages, guaranteed overtime, and vacation leave; US$1,936.00 on board allowance; US$292.00 ship maintenance bonus; US$8,760.00 hardship allowance; 300,000.00 as moral damages; 200,000.00 as exemplary damages; and attorney’s fees of ten percent (10%) of the total monetary award.

• Just Cause — Insubordination: Whether the CA erred in finding that Avestruz was illegally dismissed because petitioners failed to prove by substantial evidence that he committed insubordination.
• Procedural Due Process: Whether Avestruz was accorded the disciplinary procedures under Section 17 of the POEA-SEC, particularly the two-notice rule.
• Monetary Awards: Whether the CA correctly awarded Avestruz the full reimbursement of his placement fee and deductions with 12% interest, salaries for the unexpired portion of his contract, and attorney’s fees of ten percent (10%) of the total award.

• Just Cause — Insubordination: No. The SC found no substantial evidence of insubordination; Captain Woodward’s e-mails were uncorroborated and self-serving, and no logbook entries or other evidence supported the charge.
• Procedural Due Process: No. Petitioners failed to comply with Section 17 of the POEA-SEC’s two-notice rule; the statement requiring Avestruz to explain was not a written notice of charge, and no written notice of penalty was given.
• Monetary Awards: Yes. The awards were in consonance with Section 10 of RA 8042 as amended by RA 10022 and Article 111 of the Labor Code; all other monetary awards were denied for lack of merit.

• Just Cause — Insubordination: The SC first noted that although a Rule 45 petition generally raises only questions of law, it may review evidence when the factual findings of the LA and NLRC conflict with those of the CA. The employer bears the burden of proving that termination was for a just or authorized cause by substantial evidence—that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion—not mere surmises or conjectures. Insubordination requires at least two requisites: (1) the employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. Petitioners relied on Captain Woodward’s two June 22, 2011 e-mails, but the SC found them uncorroborated and self-serving; they did not establish that Avestruz’s conduct was willful or characterized by a wrongful and perverse attitude. Avestruz’s account was corroborated by Kong, a messman who witnessed the incident. Apart from the e-mails, petitioners presented no other evidence; at the least, they could have offered entries in the ship’s official logbook, which is the official repository of the day-to-day transactions and occurrences on board the vessel. Citing Ranises vs. NLRC, Skippers United Pacific, Inc. vs. NLRC, and Pacific Maritime Services, Inc. vs. Ranay, the SC held that lone, uncorroborated reports from a vessel master did not suffice to discharge the employer’s burden. Thus, no just cause for dismissal was proven.
• Procedural Due Process: Section 17 of the POEA-SEC requires the Master to furnish the seafarer a written notice containing the grounds for the charges and the date, time, and place for a formal investigation; to conduct the investigation or hearing giving the seafarer the opportunity to explain or defend himself, with the procedures documented in the ship’s logbook; and, if a penalty is justified, to issue a written notice of penalty and the reasons for it with copies furnished to the Philippine agent. Dismissal without the notices is allowed only in the exceptional case of clear and existing danger to the safety of the crew or vessel, with a complete report to the manning agency. The SC found no evidence that Avestruz was given a written notice of the charge against him or an opportunity to explain or defend himself. Captain Woodward’s statement requiring Avestruz to explain in writing what happened in the galley hardly qualified as a written notice of the charge, nor was it an opportunity to defend himself. Captain Woodward claimed in his e-mail that he conducted a “disciplinary hearing,” but no evidence supported that claim. Neither was Avestruz given a written notice of penalty and the reasons for its imposition; instead, Captain Woodward verbally informed him of dismissal and disembarkation. The records were bereft of evidence showing the exceptional situation of clear and existing danger. Quoting Skippers Pacific, Inc. vs. Mira, the SC held that the two-notice rule was not complied with.
• Monetary Awards: The SC found the CA’s monetary awards in consonance with Section 10 of RA 8042 as amended by RA 10022, which entitles an illegally dismissed overseas worker to the full reimbursement of his placement fee and the deductions made with interest at 12% per annum, plus his salaries for the unexpired portion of his employment contract. The SC likewise affirmed the grant of attorney’s fees of ten percent (10%) of the total award under Article 111 of the Labor Code. All other monetary awards were denied for lack of merit.

• Substantial Evidence in Illegal Dismissal Cases — The employer bears the burden of proving that termination was for a just or authorized cause by substantial evidence, which is that amount of relevant evidence a reasonable mind might accept as adequate to justify a conclusion, not mere surmises or conjectures. The SC applied this against petitioners because their evidence consisted only of Captain Woodward’s uncorroborated and self-serving e-mails.
• Insubordination as Just Cause — Insubordination requires at least two requisites: (1) the employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. The SC found neither established because the e-mails did not show willfulness or perverse attitude and no other evidence corroborated the charge.
• Two-Notice Rule under Section 17 of the POEA-SEC — The Master must furnish the seafarer a written notice containing the grounds for the charges and the date, time, and place for a formal investigation; conduct the investigation or hearing giving the seafarer an opportunity to explain or defend himself, with the procedures documented in the ship’s logbook; and, if a penalty is justified, issue a written notice of penalty and the reasons for it with copies furnished to the Philippine agent. Dismissal without the notices is allowed only in the exceptional case of clear and existing danger to the safety of the crew or vessel, with a complete report to the manning agency. The SC found no compliance and no proof of the exception.
• Ship’s Logbook as Official Repository — The ship’s logbook is the official repository of the day-to-day transactions and occurrences on board the vessel. The SC noted that petitioners could have offered logbook entries showing Avestruz’s alleged infractions, and their failure to do so weakened their claim of lawful dismissal.
• Money Claims of Illegally Dismissed Overseas Workers — Under Section 10 of RA 8042 as amended by RA 10022, a worker terminated without just, valid, or authorized cause is entitled to full reimbursement of his placement fee and deductions made with interest at 12% per annum, plus salaries for the unexpired portion of his employment contract. The SC affirmed the CA’s monetary awards under this provision and the 10% attorney’s fees under Article 111 of the Labor Code.

• “Insubordination, as a just cause for the dismissal of an employee, necessitates the concurrence of at least two requisites: (1) the employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge.” — The SC used this formulation to test whether Avestruz’s alleged disobedience could justify dismissal.
• “The Court, however, finds these e-mails to be uncorroborated and self-serving, and therefore, do not satisfy the requirement of substantial evidence as would sufficiently discharge the burden of proving that Avestruz was legally dismissed.” — This is the SC’s evidentiary core: the master’s e-mails alone could not prove a just cause for dismissal.
• “In this case, there is dearth of evidence to show that Avestruz had been given a written notice of the charge against him, or that he was given the opportunity to explain or defend himself.” — The SC applied the two-notice rule and found the first notice and hearing absent.
• “An erring seaman is given a written notice of the charge against him and is afforded an opportunity to explain or defend himself. Should sanctions be imposed, then a written notice of penalty and the reasons for it shall be furnished the erring seafarer. It is only in the exceptional case of clear and existing danger to the safety of the crew or vessel that the required notices are dispensed with; but just the same, a complete report should be sent to the manning agency, supported by substantial evidence of the findings.” — Quoting Skippers Pacific, Inc. vs. Mira, the SC summarized the POEA-SEC disciplinary procedure that petitioners failed to follow.

• Grandteq Industrial Steel Products, Inc. vs. Estrella, G.R. No. 192416, March 23, 2011, 646 SCRA 391 — Cited for the two requisites of insubordination as a just cause for dismissal.
• Ranises vs. NLRC, 330 Phil. 936 (1996) — Cited to reject reliance on an uncorroborated telex report from a vessel master; the SC impugned the credence given to the telex because the employer did not verify or corroborate its allegations.
• Skippers United Pacific, Inc. vs. NLRC, 527 Phil. 248 (2006) — Cited for the rule that a lone telexed Chief Engineer’s Report did not suffice to discharge the employer’s burden, and for the definition of substantial evidence.
• Pacific Maritime Services, Inc. vs. Ranay, 341 Phil. 716 (1997) — Cited for the insufficiency of an uncorroborated telefax transmission signed by a person on board the vessel to prove dismissal grounds.
• Skippers Pacific, Inc. vs. Mira, 440 Phil. 906 (2002) — Cited for the POEA-SEC two-notice rule and the exception for clear and existing danger to the crew or vessel.
• ALPS Transportation vs. Rodriguez, G.R. No. 186732, June 13, 2013, 698 SCRA 423 — Cited for the rule that the employer bears the burden of proving a just or authorized cause of dismissal and must do so with substantial evidence.
• Fil-Pride Shipping Co., Inc. vs. NLRC, G.R. No. 97068, March 5, 1993, 219 SCRA 576 — Cited for the ship’s logbook as the official repository of day-to-day transactions and occurrences on board the vessel.

• Section 17, POEA-SEC — Sets out disciplinary procedures: written notice of charges and investigation schedule, hearing with opportunity to explain or defend, documented proceedings, written notice of penalty with copies to the Philippine agent, and exception for clear and existing danger. Applied: no written notice of charge, no hearing, no written notice of penalty; exception not shown.
• Section 10, RA 8042 as amended by RA 10022 — Money claims for illegally dismissed overseas workers: full reimbursement of placement fee and deductions with 12% interest per annum plus salaries for the unexpired portion. Applied: the SC affirmed the CA’s monetary awards.
• Article 111, Labor Code — Attorney’s fees equivalent to 10% of wages recovered in cases of unlawful withholding. Applied: the SC affirmed the 10% attorney’s fees.
• Rule 45, Rules of Court — Petition for review on certiorari generally limited to questions of law; exception where factual findings conflict. Applied: the SC reviewed the evidence because the LA/NLRC and CA findings were contradictory.