The Supreme Court, in Rolito Calang and Philtranco Service Enterprises, Inc. v. People of the Philippines, clarified the extent of an employer’s liability in cases where an employee’s criminal negligence results in damages. The Court ruled that while an employee can be held directly liable for their negligent acts, the employer’s liability arising from the same incident is only subsidiary and not joint and several, especially in criminal cases where the employer was not a direct party. This means the employer only becomes liable if the employee is unable to pay for the damages.

Navigating Negligence: When Does an Employer Pay for an Employee’s Mistakes?

This case arose from a vehicular accident involving a Philtranco bus driven by Rolito Calang, which resulted in multiple fatalities and injuries. Calang was found guilty of reckless imprudence resulting in multiple homicide, multiple physical injuries, and damage to property. The trial court initially held Calang and Philtranco jointly and severally liable for damages. However, the Supreme Court modified this ruling, focusing specifically on the nature and extent of Philtranco’s responsibility.

The core issue before the Supreme Court was whether Philtranco, as Calang’s employer, could be held jointly and severally liable for damages arising from Calang’s criminal negligence. The petitioners argued that since Philtranco was not a direct party to the criminal case, it could not be held jointly and severally liable. The Court agreed, clarifying the application of vicarious and subsidiary liability under Philippine law. The Supreme Court reiterated the principle that in criminal cases, an employer’s liability for the crime committed by its employee is generally subsidiary.

The Court differentiated between liabilities arising from delict (crime) and quasi-delict (negligence). In the case of delict, as governed by the Revised Penal Code, the employer’s liability is subsidiary, meaning it arises only when the employee is insolvent and unable to satisfy the civil indemnity. This contrasts with quasi-delict, under Articles 2176 and 2180 of the Civil Code, where an employer may be held directly and solidarily liable for the negligent acts of its employees, provided the employer failed to exercise the diligence of a good father of a family in the selection and supervision of its employees. The Court emphasized that Articles 2176 and 2180 of the Civil Code, pertaining to vicarious liability for quasi-delicts, do not apply to civil liability arising from delict.

The Supreme Court referred to Article 103 of the Revised Penal Code, which explicitly establishes the subsidiary liability of employers for felonies committed by their employees in the discharge of their duties. Article 103 states:

The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties.

This provision is deemed written into judgments in applicable cases, even if not expressly stated by the trial court. Therefore, the court clarified that Philtranco’s liability, if any, would only be subsidiary. The Supreme Court emphasized the conditions for enforcing an employer’s subsidiary liability, stating that:

adequate evidence must exist establishing that (1) they are indeed the employers of the convicted employees; (2) they are engaged in some kind of industry; (3) the crime was committed by the employees in the discharge of their duties; and (4) the execution against the latter has not been satisfied due to insolvency.

To further clarify, the determination of these conditions can be done within the same criminal action, through a hearing with due notice to the employer. In such a hearing, the court can determine whether the employee is indeed insolvent and whether the employer should be held subsidiarily liable. This process ensures that employers are given an opportunity to present evidence and defend themselves before being held liable for their employees’ actions.

The ruling in Calang v. People underscores the importance of distinguishing between different sources of obligations under Philippine law. An employer’s liability for an employee’s actions can stem from a variety of legal grounds, each with its own set of rules and requirements. The liability could arise from contract (culpa contractual), criminal law (delict), or tort (quasi-delict). Therefore, understanding the source of the obligation is critical in determining the nature and extent of the employer’s responsibility.

In instances of criminal negligence, the Revised Penal Code provides for subsidiary liability, protecting employers from bearing the full brunt of an employee’s criminal act unless the employee is unable to fulfill their civil obligations. This promotes a balance between ensuring victims receive compensation and protecting employers from undue financial burden. Understanding these nuances is crucial for both employers and employees in navigating their legal responsibilities and rights. It also underscores the need for companies to implement stringent hiring and training processes, as well as to exercise due diligence in the supervision of their employees to mitigate potential liabilities.

The ruling clarifies the subsidiary nature of an employer’s liability, providing a framework for determining when and how employers can be held responsible for their employees’ criminal acts. This distinction is crucial for ensuring fairness and preventing the imposition of excessive burdens on employers. This aligns with the principle that liability should be proportionate to fault and that employers should not be automatically held liable for the full extent of damages caused by their employees’ criminal negligence.

FAQs

What was the key issue in this case?	The key issue was whether an employer could be held jointly and severally liable for the criminal negligence of its employee, specifically in a case of reckless imprudence resulting in homicide and injuries.
What is the difference between joint and several liability and subsidiary liability?	Joint and several liability means each party is independently liable for the full amount of the damages. Subsidiary liability means that the employer is only liable if the employee cannot pay.
Under what circumstances is an employer subsidiarily liable for the acts of an employee?	An employer is subsidiarily liable if (1) they are the employer, (2) they are engaged in industry, (3) the crime was committed in the discharge of duties, and (4) the employee is insolvent.
What law governs the subsidiary liability of employers in the Philippines?	Articles 102 and 103 of the Revised Penal Code govern the subsidiary liability of employers for felonies committed by their employees.
What is the legal basis for holding an employee liable for reckless imprudence?	The legal basis is Article 365 of the Revised Penal Code, which defines and penalizes crimes committed due to reckless imprudence or negligence.
How does this ruling affect employers in the transportation industry?	It clarifies that their liability for their employees’ criminal acts is subsidiary, not direct, providing some protection against immediate, full liability, provided they meet due diligence requirements.
Can an employer be held liable for damages caused by an employee’s negligence outside the scope of their employment?	Generally, no. The act must be committed by the employee in the discharge of their assigned duties for the employer to be held subsidiarily liable.
What steps can employers take to mitigate their potential liabilities for employee negligence?	Employers should implement thorough hiring processes, provide adequate training, and exercise due diligence in supervising their employees to prevent negligent acts.

The Supreme Court’s resolution in Rolito Calang v. People provides essential clarity on the scope of an employer’s liability for the criminal acts of its employees. This ruling serves as a reminder of the importance of understanding the nuances of Philippine law and the different sources of obligations. Employers should always prioritize due diligence and implement comprehensive risk management strategies to minimize potential liabilities.

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: Rolito Calang and Philtranco Service Enterprises, Inc., vs. People of the Philippines, G.R. No. 190696, August 03, 2010