In a landmark decision regarding employer liability, the Supreme Court ruled that OMC Carriers, Inc. was liable for damages caused by its employee’s negligence. The court emphasized that employers must demonstrate they exercised due diligence not only in selecting their employees but also in supervising them. This means companies need to provide concrete evidence of their supervisory policies, not just general statements, to avoid liability for their employees’ negligent actions. Failure to prove both due selection and due supervision results in the employer being held responsible for the damages.

Trucking Tragedy: How Far Does Employer Oversight Extend?

This case revolves around a tragic vehicular accident where an Isuzu tanker, owned by OMC Carriers, Inc. and driven by Jerry Aסalucas, collided with an Isuzu Gemini, resulting in the death of the Gemini’s driver, Reggie Nabua. The central legal question is whether OMC Carriers, Inc. exercised sufficient diligence in the selection and supervision of its employee, Aסalucas, to absolve itself from liability for the damages caused by the accident. The spouses Nabua, parents of the deceased, sought damages from OMC Carriers, Inc., arguing the company was negligent in its responsibility as an employer. This case highlights the importance of establishing clear supervisory policies and maintaining thorough records to demonstrate an employer’s commitment to safety and due diligence.

The heart of the matter rests on Article 2180 of the Civil Code, which establishes employer liability for the negligent acts of their employees. The Civil Code clearly states:

x x x x

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

x x x x

The responsibility treated in this article shall cease when the persons herein mentioned prove they observed all the diligence of a good father of a family to prevent damage.

This article creates a presumption of negligence on the part of the employer when an employee causes injury. To overcome this presumption, the employer must provide convincing evidence that they exercised the diligence of a good father of a family, both in the selection and in the supervision of the employee. This is a dual burden, requiring demonstration of care at the hiring stage and ongoing oversight thereafter. The Supreme Court has consistently held that general statements about company policy are insufficient; concrete evidence is required.

In this case, the court found that while OMC Carriers, Inc. may have demonstrated due diligence in the selection of Aסalucas, it failed to provide sufficient evidence of due diligence in his supervision. The company presented documents like a “reminder memo on offenses punishable by dismissal” and circulars from Petron. However, the court determined these documents did not adequately address safety procedures or demonstrate active supervision to prevent accidents. The court emphasized that:

The existence of supervisory policies cannot be casually invoked to overturn the presumption of negligence on the part of the employer.

Furthermore, the company’s claims of daily inspections and safety seminars lacked supporting documentation. The court noted the absence of records showing that Aסalucas attended safety seminars or that the daily inspections were consistently conducted and documented. The Supreme Court in Metro Manila Transit Corporation v. Court of Appeals reiterated the importance of presenting documentary evidence to support claims of due diligence.

In making proof in its or his case, it is paramount that the best and most complete evidence is formally entered.

The Court underscored the necessity of maintaining comprehensive records, including employee qualifications, work experience, training, evaluations, and disciplinary actions. The absence of such records significantly weakened OMC Carriers’ defense. Building on this, the court also addressed the issue of damages awarded by the lower courts. While the Court of Appeals (CA) affirmed the Regional Trial Court’s (RTC) decision with some modifications, the Supreme Court further adjusted the amounts awarded.

The death indemnity was reduced to P50,000.00, aligning with prevailing jurisprudence. Similarly, the award for moral damages was reduced to P50,000.00. The court emphasized that moral damages should be proportional to the suffering inflicted and are not intended to enrich the plaintiff. Furthermore, the award of attorney’s fees was deleted due to the lack of justification in the CA’s decision. The court found no factual or legal basis for awarding attorney’s fees, especially since the CA had already removed the exemplary damages initially granted by the RTC. The Court also re-evaluated the actual damages awarded by the RTC, which were based on receipts and certifications presented by the respondents.

Upon review, the Supreme Court found that the RTC erred in awarding P110,000.00 as actual damages, as this amount was not fully supported by receipts. The court only considered the substantiated amount of P59,173.50, which was based on the receipts provided for funeral expenses, interment fees, and emergency medical treatment. The court also affirmed the CA’s decision to delete the award of P2,000,000.00 as compensatory damages for loss of earning capacity. The Court reasoned that the respondents failed to provide sufficient evidence to demonstrate the victim’s potential future earnings.

To reiterate, the court stated:

Evidence must be presented that the victim, if not yet employed at the time of death, was reasonably certain to complete training for a specific profession.

The Court referenced People v. Teehankee, where no compensation for loss of earning capacity was granted because there was insufficient evidence to show the victim would become a professional pilot. In contrast, the Court noted that cases where loss of earning capacity was awarded involved presentation of evidence showcasing the victim’s good academic record and potential for success. Since the respondents only presented evidence that the victim was a freshman taking up Industrial Engineering, the CA’s decision to delete the award was deemed appropriate.

FAQs

What was the key issue in this case?	The key issue was whether the employer, OMC Carriers, Inc., exercised due diligence in the selection and supervision of its employee, Jerry Aסalucas, who caused the accident. The court needed to determine if the company could be held liable for the employee’s negligence.
What is the significance of Article 2180 of the Civil Code?	Article 2180 establishes the principle of employer liability for damages caused by their employees acting within the scope of their assigned tasks. It also provides an exception if the employer can prove they exercised the diligence of a good father of a family to prevent the damage.
What does “diligence of a good father of a family” mean in this context?	It refers to the standard of care that a reasonable and prudent person would exercise in selecting and supervising their employees to prevent harm to others. This includes both careful selection procedures and ongoing oversight of employee conduct.
What kind of evidence is needed to prove due diligence in supervision?	Employers need to present concrete evidence of their supervisory policies, such as documented training programs, regular performance evaluations, and consistent enforcement of safety protocols. General statements about company policy are insufficient.
Why was OMC Carriers, Inc. found liable in this case?	OMC Carriers, Inc. failed to provide sufficient evidence of due diligence in the supervision of its employee, Aסalucas. While they may have shown due diligence in selection, they lacked concrete evidence of ongoing supervision and safety measures.
How were the damages awarded in this case modified by the Supreme Court?	The Supreme Court reduced the death indemnity to P50,000.00, reduced actual damages to P59,173.50 (based on substantiated receipts), reduced moral damages to P50,000.00, and deleted the award of attorney’s fees. The initial compensatory damages were already deleted by the Court of Appeals.
Why was the award for loss of earning capacity (compensatory damages) deleted?	The award was deleted because the respondents failed to provide sufficient evidence to demonstrate the victim’s potential future earnings. They only showed that the victim was a freshman in college, without proving a specific professional path.
What is the main takeaway for employers from this case?	Employers must maintain comprehensive records of their employee selection process, training programs, and ongoing supervision to demonstrate due diligence. Failure to do so can result in liability for the negligent acts of their employees.

The OMC Carriers, Inc. v. Spouses Nabua case serves as a critical reminder of the extent of employer responsibility. By understanding the court’s expectations for due diligence, businesses can implement more effective policies, protect themselves from liability, and, most importantly, foster a safer environment for everyone.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: OMC Carriers, Inc. v. Spouses Nabua, G.R. No. 148974, July 2, 2010