Library of PH Labor Law

C – Moral damages

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Summary

▪ Moral damages may be awarded in certain cases.

▪ Bad faith must be clearly proven.

1. Concept

Moral damages are awarded in illegal termination cases when the employer acted:

1) In bad faith or fraud;

2) In a manner oppressive to labor; or,

3) In a manner contrary to morals, good customs, or public policy. (Daguinod v. Southgate Foods, Inc., G.R. No. 227795, 20 February 2019)

The nature of moral damages is defined under our Civil Code. Article 2220 states that “[w]illful 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.” (Montinola v. PAL, G.R. No. 198656, 08 September 2014)

a. Bad faith

Bad faith “implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity.” (Ibid.)

Bad faith must be proven through clear and convincing evidence. This is because “[b]adfaith and fraud… are serious accusations 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.” (Ibid.)

2. Illegal dismissal

Moral damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. (Cosue v. Ferritz Integrated Development Corporation, G.R. No. 230664, 24 July 2017)

3. Illegal suspension

Moral damages are appropriate also in illegal suspension. Unemployment “brings untold hardships and sorrows on those dependent on the wage-earner.” This is also true for the case of suspension. Suspension is temporary unemployment. The deprivation of economic compensation causes the employee mental anguish, fright, serious anxiety, besmirched reputation, and wounded feelings. All these are grounds for an award of moral damages under the Civil Code. (Montinola v. PAL, supra.)

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References

Republic Act No. 386, a.k.a. Civil Code of the Philippines

Presidential Decree No. 442, a.k.a. Labor Code of the Philippines

DOLE Department Order No. 147, Series of 2015

▪ Jurisprudence or Supreme Court Decisions

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