Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 78085 October 16, 1989

ROYAL CROWN INTERNATIONALE, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSI0N and VIRGILIO P. NACIONALES, respondents.

Ceferino Padua Law Office for petitioner.

Acosta & Rico Law Offices for private respondent.

CORTES, J.:

Petitioner Royal Crown Internationale seeks the nullification of a resolution of the National Labor
Relations Commission (NLRC) which affirmed a decision of the Philippine Overseas Employment
Administration (POEA) holding it liable to pay, jointly and severally with Zamel-Turbag Engineering
and Architectural Consultant (ZAMEL), private respondent Virgilio P. Nacionales' salary and vacation
pay corresponding to the unexpired portion of his employment contract with ZAMEL.

In 1983, petitioner, a duly licensed private employment agency, recruited and deployed private
respondent for employment with ZAMEL as an architectural draftsman in Saudi Arabia. On May 25,
1983, a service agreement was executed by private respondent and ZAMEL whereby the former
was to receive per month a salary of US$500.00 plus US$100.00 as allowance for a period of one
(1) year commencing from the date of his arrival in Saudi Arabia. Private respondent departed for
Saudi Arabia on June 28,1983.

On February 13, 1984, ZAMEL terminated the employment of private respondent on the ground that
his performance was below par. For three (3) successive days thereafter, he was detained at his
quarters and was not allowed to report to work until his exit papers were ready. On February 16,
1984, he was made to board a plane bound for the Philippines.

Private respondent then filed on April 23, 1984 a complaint for illegal termination against petitioner
and ZAMEL with the POEA, docketed as POEA Case No. (L) 84-04-401.

Based on a finding that petitioner and ZAMEL failed to establish that private respondent was
terminated for just and valid cause, the Workers' Assistance and Adjudication Office of the POEA
issued a decision dated June 23, 1986 signed by Deputy Administrator and Officer-in-Charge
Crescencio M. Siddayao, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the complainant and against

respondents, ordering the latter to pay, jointly and severally, to complainant the
following amounts:
 1. TWO THOUSAND SIX HUNDRED FORTY US DOLLARS (US$2,640.00) or its
equivalent in Philippine currency at the time of payment, representing the salaries
corresponding to the unexpired portion of complainant's contract;

2. SIX HUNDRED US DOLLARS (US$ 600.00) less partial payment of FIVE

HUNDRED FIFTY-EIGHT SAUDI RIYALS (SR558), or its equivalent in Philippine
currency at the time of actual payment, representing the unpaid balance of
complainant's vacation pay;

3. THREE HUNDRED FIFTY US DOLLARS (US$350.00) or its equivalent in

Philippine currency at the time of actual payment representing reimbursement of
salary deductions for return travel fund;

4. Ten percent (10%) of the above-stated amounts, as and for attorney's fees.

Complainant's claim for legal and transportation expenses are hereby DISMISSED
for lack of merit.

SO ORDERED.

[POEA Decision, p. 5; Rollo, p. 34.]

On July 18, 1986, petitioner filed thru its new counsel a motion for reconsideration which was treated
as an appeal to the NLRC by the POEA. Petitioner alleged that the POEA erred in holding it
solidarity liable for ZAMEL's violation of private respondent's service agreement even if it was not a
party to the agreement.

In a resolution promulgated on December 11, 1986, the NLRC affirmed the POEA decision, holding
that, as a duly licensed private employment agency, petitioner is jointly and severally liable with its
foreign principal ZAMEL for all claims and liabilities which may arise in connection with the
implementation of the employment contract or service agreement [NLRC Decision, pp. 3-4; Rollo,
pp. 26-27].

On March 30, 1987, the NLRC denied for lack of merit petitioner's motion for reconsideration.

Hence, petitioner filed the present petition captioned as "Petition for Review".

At this point, it is not amiss to note that the filing of a "Petition for Review" under Rule 45 of the Rules
of Court is not the proper means by which NLRC decisions are appealed to the Supreme Court. It is
only through a petition for certiorari under Rule 65 that NLRC decisions may be reviewed and
nullified on the grounds of lack of jurisdiction or grave abuse of discretion amounting to lack or
excess of jurisdiction. Nevertheless, in the interest of justice, this Court opted to treat the instant
petition as if it were a petition for certiorari. Thus, after the filing of respondents' comments,
petitioner's joint reply thereto, and respondents' rejoinders, the Court resolved to consider the issues
joined and the case submitted for decision.

The case at bar involves two principal issues, to wit:

I. Whether or not petitioner as a private employment agency may be held jointly and
severally liable with the foreign-based employer for any claim which may arise in
 connection with the implementation of the employment contracts of the employees
recruited and deployed abroad;

II. Whether or not sufficient evidence was presented by petitioner to establish the
termination of private respondent's employment for just and valid cause.

I.

Petitioner contends that there is no provision in the Labor Code, or the omnibus rules implementing
the same, which either provides for the "third-party liability" of an employment agency or recruiting
entity for violations of an employment agreement performed abroad, or designates it as the agent of
the foreign-based employer for purposes of enforcing against the latter claims arising out of an
employment agreement. Therefore, petitioner concludes, it cannot be held jointly and severally liable
with ZAMEL for violations, if any, of private respondent's service agreement.

Petitioner's conclusion is erroneous. Petitioner conveniently overlooks the fact that it had voluntarily
assumed solidary liability under the various contractual undertakings it submitted to the Bureau of
Employment Services. In applying for its license to operate a private employment agency for
overseas recruitment and placement, petitioner was required to submit, among others, a document
or verified undertaking whereby it assumed all responsibilities for the proper use of its license
and the implementation of the contracts of employment with the workers it recruited and deployed for
overseas employment [Section 2(e), Rule V, Book 1, Rules to Implement the Labor Code (1976)]. It
was also required to file with the Bureau a formal appointment or agency contract executed by the
foreign-based employer in its favor to recruit and hire personnel for the former, which contained a
provision empowering it to sue and be sued jointly and solidarily with the foreign principal for any of
the violations of the recruitment agreement and the contracts of employment [Section 10 (a) (2),
Rule V, Book I of the Rules to Implement the Labor Code (1976)]. Petitioner was required as well to
post such cash and surety bonds as determined by the Secretary of Labor to guarantee compliance
with prescribed recruitment procedures, rules and regulations, and terms and conditions of
employment as appropriate [Section 1 of Pres. Dec. 1412 (1978) amending Article 31 of the Labor
Code].

These contractual undertakings constitute the legal basis for holding petitioner, and other private
employment or recruitment agencies, liable jointly and severally with its principal, the foreign-based
employer, for all claims filed by recruited workers which may arise in connection with the
implementation of the service agreements or employment contracts [See Ambraque International
Placement and Services v. NLRC, G.R. No. 77970, January 28, 1988, 157 SCRA 431; Catan v.
NLRC, G.R. No. 77279, April 15, 1988, 160 SCRA 691; Alga Moher International Placement
Services v. Atienza, G.R. No. 74610, September 30, 1988].

In a belated attempt to bolster its position, petitioner contends in its joint reply that the omnibus rules
implementing the Labor Code are invalid for not having been published in the Official Gazette
pursuant to the Court's pronouncements in the cases of Tanada v. Tuvera [G.R. No. 63915, April 25,
1985, 136 SCRA 27; December 29, 1986, 146 SCRA 446]. Petitioner further contends that the 1985
POEA Rules and Regulations, in particular Section 1, Rule I of Book VII** quoted in the NLRC decision, should
not have been retroactively applied to the case at bar.

But these contentions are irrelevant to the issues at bar. They proceed from a misapprehension of
the legal basis of petitioner's liabilities as a duly licensed private employment agency. It bears
repeating that the basis for holding petitioner jointly and severally liable with the foreign-based
employer ZAMEL is the contractual undertakings described above which it had submitted to the
Bureau of Employment Services. The sections of the omnibus rules implementing the Labor Code
cited by this Court merely enumerate the various documents or undertakings which were submitted
by petitioner as applicant for the license to operate a private employment agency for overseas
recruitment and placement. These sections do not create the obligations and liabilities of a private
employment agency to an employee it had recruited and deployed for work overseas. It must be
emphasized again that petitioner assumed the obligations and liabilities of a private employment
agency by contract. Thus, whether or not the omnibus rules are effective in accordance with Tanada
v. Tuvera is an issue the resolution of which does not at all render nugatory the binding effect upon
petitioner of its own contractual undertakings.

The Court, consequently, finds it unnecessary to pass upon both the implications of Tanada v.
Tuvera on the omnibus rules implementing the Labor Code as well as the applicability of the 1985
POEA Rules and Regulations.

Petitioner further argues that it cannot be held solidarily liable with ZAMEL since public respondent
had not acquired jurisdiction over ZAMEL through extra-territorial service of summons as mandated
by Section 17, Rule 14 of the Rules of Court.

This argument is untenable. It is well-settled that service upon any agent of a foreign corporation,
whether or not engaged in business in the Philippines, constitutes personal service upon that
corporation, and accordingly, judgment may be rendered against said foreign corporation [Facilities
Management Corporation v. De la Osa, G.R. No. L-38649, March 26, 1979, 89 SCRA 131]. In the
case at bar, it cannot be denied that petitioner is an agent of ZAMEL. The service agreement was
executed in the Philippines between private respondent and Milagros G. Fausto, the General
Manager of petitioner, for and in behalf of ZAMEL [Annex "D" of Petition, p. 3; Rollo, p. 37].
Moreover, one of the documents presented by petitioner as evidence, i.e., the counter-affidavit of its
General Manager Ms. Fausto, contains an admission that it is the representative and agent of
ZAMEL [See Paragraph No. 1 of Annex "H" of Petition; Rollo. p. 43].

Considering the foregoing, the Court holds that the NLRC committed no grave abuse of discretion
amounting to lack or excess of jurisdiction in declaring petitioner jointly and severally liable with its
foreign principal ZAMEL for all claims which have arisen in connection with the implementation of
private respondent's employment contract.

II.

Petitioner asserts that the NLRC failed to consider the overwhelming evidence it had presented
before the POEA which establishes the fact that private respondent was terminated for just and valid
cause in accordance with his service agreement with ZAMEL.

This assertion is without merit. The NLRC upheld the POEA finding that petitioner's evidence was
insufficient to prove termination from employment for just and valid cause. And a careful study of the
evidence thus far presented by petitioner reveals to this Court that there is legal basis for public
respondent's conclusion.

It must be borne in mind that the basic principle in termination cases is that the burden of proof rests
upon the employer to show that the dismissal is for just and valid cause, and failure to do so would
necessarily mean that the dismissal was not justified and, therefore, was illegal [Polymedic General
Hospital v. NLRC, G.R. No. 64190, January 31, 1985,134 SCRA 420; and also Article 277 of the
Labor Code]. And where the termination cases involve a Filipino worker recruited and deployed for
overseas employment, the burden naturally devolves upon both the foreign-based employer and the
employment agency or recruitment entity which recruited the worker, for the latter is not only the
agent of the former, but is also solidarily liable with its foreign principal for any claims or liabilities
arising from the dismissal of the worker.

In the case at bar, petitioner had indeed failed to discharge the burden of proving that private
respondent was terminated from employment for just and valid cause. Petitioner's evidence
consisted only of the following documents:

(1) A letter dated May l5, 1984 allegedly written by an official of ZAMEL, stating that
a periodic evaluation of the entire staff was conducted; that the personnel concerned
were given a chance to improve; that complainant's performance was found below
par; and that on February 13,1984, at about 8:30 AM, complainant was caught on the
way out of the office to look for another job during office hours without the permission
of his supervisor;

(2) A telex message allegedly sent by employees of ZAMEL, stating that they have
not experienced maltreatment, and that the working conditions (in ZAMEL) are good;

(3) The signatures of fifteen (15) persons who allegedly sent the telex message;

(4) A receipt dated February 16, 1984 signed by complainant, stating that he was
paid SR915 representing his salary and SR558, representing vacation pay for the
month of February 1984;

(5) The counter-affidavit of Milagros G. Fausto, the General Manager of Royal

Crown, stating that complainant was dismissed because of poor performance, acts of
dishonesty and misconduct, and denying complainant's claim that his salary and
leave pay were not paid, and that he was maltreated [See POEA Decision, p. 3;
Rollo, p. 32, See also Annexes "E", "F", "F-1 ", "G" and "H" of Petition; Rollo, pp. 38-
43].

Certainly, the telex message supposedly sent by the employees of ZAMEL is not relevant in the
determination of the legality of private respondent's dismissal. On the other hand, the receipt signed
by private respondent does not prove payment to him of the salary and vacation pay corresponding
to the unexpired portion of his contract.

More importantly, except for its allegation that private respondent was caught on February 13,1984
on his way out of the office compound without permission, petitioner had failed to allege and to prove
with particularity its charges against private respondent. The letter dated May 15, 1984 allegedly
written by the Actg. Project Architect and the counter-affidavit of petitoner's General Manager merely
stated that the grounds for the employee's dismissal were his unsatisfactory performance and
various acts of dishonesty, insubordination and misconduct. But the particular acts which would
indicate private respondent's incompetence or constitute the above infractions were neither specified
nor described therein. In the absence of any other evidence to substantiate the general charges
hurled against private respondent, these documents, which comprise petitioner's evidence in chief,
contain empty and self-serving statements insufficient to establish just and valid cause for the
dismissal of private respondent [See Euro-Lines, Phils., Inc. v. NLRC, G.R. No. 75782, December 1,
1987,156 SCRA 78; Ambraque International Placement and Services v. NLRC, supra].

The Court is aware of the document attached in petitioner's manifestation and joint reply which is
purportedly a xerox copy of a statement executed on December 13, 1987 in Saudi Arabia by private
respondent claiming that the latter had settled the case with ZAMEL and had "received all [his]
benefits that is salary, vacation pay, severance pay and all other bonuses before [he] left the
kingdom of Saudi Arabia on 13 Feb. 1984 and hereby indemnify [ZAMEL] from any claims or
liabilities, [he] raised in the Philippine Courts" [Annex "A" of petitioner's Manifestation with Motion to
hold in Abeyance; Rollo, p. 82. And also Annex "A" of petitioner's Joint Reply; Rollo, p. 111].

But the veracity of the contents of the document is precisely disputed by private respondent. He
claims that he was made to sign the above statement against his will and under threat of deportation
[See Telex of private respondent received by the Supreme Court of the Philippines on January
14,1988; Rollo, p. 83. And also private respondent's Rejoinder, pp. 1-3; Rollo, pp. 139-141].

Petitioner finally contends that inasmuch as clause no. 13 of the service agreement provided that the
law under which the agreement shall be regulated was the laws of Saudi Arabia [Annex "D" of
Petition, p. 2; Rollo, p. 36], public respondent should have taken into account the laws of Saudi
Arabia and the stricter concept of morality availing in that jurisdiction for the determination of the
legality of private respondent's dismissal.

This contention is patently erroneous. The provisions of the Labor Code of the Philippines, its
implementing rules and regulations, and doctrines laid down in jurisprudence dealing with the
principle of due process and the basic right of all Filipino workers to security of tenure, provide the
standard by which the legality of the exercise by management of its prerogative to dismiss
incompetent, dishonest or recalcitrant employees, is to be determined. Whether employed locally or
overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation,
contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the
basic public policy of the State to afford protection to labor, promote full employment, ensure equal
work opportunities regardless of sex, race or creed, and regulate the relations between workers and
employers. For the State assures the basic rights of all workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work [Article 3 of the Labor Code
of the Philippines; See also Section 18, Article II and Section 3, Article XIII, 1987 Constitution]. This
ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws "which
have for their object public order, public policy and good customs shall not be rendered ineffective by
laws or judgments promulgated, or by determination or conventions agreed upon in a foreign
country."

Needless to say, the laws of Saudi Arabia which were, incidentally, neither pleaded nor proved by
petitioner, have absolutely no bearing whatsoever to the case at bar.

The Court holds, therefore, that the NLRC committed no grave abuse of discretion amounting to lack
or excess of jurisdiction in upholding the POEA's finding of insufficiency of evidence to prove
termination for just and valid cause.

WHEREFORE, the Court Resolved to DISMISS the instant petition.

SO ORDERED.

Fernan, C.J., Feliciano and Bidin, JJ., concur

Gutierrez, Jr., J., is on leave.

ROYAL CROWN INTERNATIONALE VS NLRC

GR NO. 78085
OCTOBER 16, 1989
FACTS: Petitioner, a duly licensed private employment agency, recruited and deployed private
respondent Virgilio for employment with ZAMEL as an architectural draftsman in Saudi Arabia. Service
agreement was executed by private respondent and ZAMEL whereby the former was to receive per
month a salary of US$500.00 plus US$100.00 as allowance for a period of one year commencing from
the date of his arrival in Saudi Arabia. However, ZAMEL terminated the employment of private
respondent on the ground that his performance was below par. For three successive days thereafter, he
was detained at his quarters and was not allowed to report to work until his exit papers were ready. On
February 16, 1984, he was made to board a plane bound for the Philippines. Private respondent then filed
a complaint for illegal termination against Petitioner Royal Crown Internationale and ZAMEL with the
POEA.

Petitioner contends that there is no provision in the Labor Code, or the omnibus rules implementing the
same, which either provides for the "third-party liability" of an employment agency or recruiting entity for
violations of an employment agreement performed abroad, or designates it as the agent of the foreign-
based employer for purposes of enforcing against the latter claims arising out of an employment
agreement. Therefore, petitioner concludes, it cannot be held jointly and severally liable with ZAMEL for
violations, if any, of private respondent's service agreement.

ISSUE: WON petitioner as a private employment agency may be held jointly and severally liable with the
foreign-based employer for any claim which may arise in connection with the implementation of the
employment contracts of the employees recruited and deployed abroad.

HELD: Yes, Petitioner conveniently overlooks the fact that it had voluntarily assumed solidary liability
under the various contractual undertakings it submitted to the Bureau of Employment Services. In
applying for its license to operate a private employment agency for overseas recruitment and placement,
petitioner was required to submit, among others, a document or verified undertaking whereby it assumed
all responsibilities for the proper use of its license and the implementation of the contracts of employment
with the workers it recruited and deployed for overseas employment. It was also required to file with the
Bureau a formal appointment or agency contract executed by the foreign-based employer in its favor to
recruit and hire personnel for the former, which contained a provision empowering it to sue and be
sued jointly and solidarily with the foreign principal for any of the violations of the recruitment
agreement and the contracts of employment. Petitioner was required as well to post such cash and surety
bonds as determined by the Secretary of Labor to guarantee compliance with prescribed recruitment
procedures, rules and regulations, and terms and conditions of employment as appropriate. These
contractual undertakings constitute the legal basis for holding petitioner, and other private employment or
recruitment agencies, liable jointly and severally with its principal, the foreign-based employer, for all
claims filed by recruited workers which may arise in connection with the implementation of the service
agreements or employment contracts.

OSM SHIPPING PHILIPPINES, INC. VS. NLRC1

(Panganiban, 2003)

Petition for review on certiorari of the decisions of the CA

1
Farina Salvador
Facts:

 A complaint for illegal dismissal and non-payment of salaries, overtime pay and vacation pay was filed
by Fermin Guerrero against OSM Shipping Phils. Guerrero was hired by petitioner, in behalf of its principal
Phil. Carrier Shipping Agency (PS-SLC) to board its vessel MV Princess Hoa as Master Mariner for a
contract of 10 months.
 He boarded the ship on July 21, 1994. Almost 7 months later, he was forced to disembark the ship
because he was never paid any compensation for his work since he boarded the ship and as such, he
could not even buy his basic necessities.
 OSM story:
o Concorde Pacific, the American company which owns the MV Princess Hoa, appointed
Phil. Carrier Shipping Agency Services Co. (PC-SASCO) as ship manager, one of whose
responsibilities was the selection or determination of qualifications of Filipino Seamen.
o On the same date, OSM entered into a Crew Agreement with PC -SASCO for the purpose
of processing the documents of crew members of the vessel.
o The initial plan was to use the vessel for overseas trade. But Concorde changed its plans
for the vessel and decided to use it instead for coastwide trade, thus the vessel never left
the Philippines. It had the vessel converted to Philippine registry by way of bareboat
chartering it out to another entity named PS-SLC.
o To do this, Concorde, through its representative had to terminate is crew agreement with
PS-SASCO. Consequently, the latter terminated its crew agreement with OSM.
o PS-SLC, the bareboat charterer, is now the disponent owner/employer of the crew and is
thus responsible for the payment of the complainant’s wages.
 Labor Arbiter rendered its decision in favor of Guerrero, ordering OSM and PS-SASCO to jointly and
severally pay Guerrero’s claims. NLRC affirmed with modification.
 OSM filed with the CA a petition to set aside the NLRC judgment. This was dismissed because petitioner
did not comply with the requirements of Sec. 3 Rule 46 of the ROC by failing to attach a duplicate
original or certified true copy of the LA’s decision. They only attached a mere machine copy.
 Hence this petition.

Issue:

1) Procedural – WON CA was correct in dismissing the petition for failure to comply with the said
requirement? – NO
2) Substantive – WON OSM is jointly liable with PC-SASCO, as its agent. - YES
Held:

1) Sec. 3 rule 46 of the ROC requires that a duplicate original or certified true copy of only the
questioned decision should be attached to the petition and not all supporting papers. Since the
LA’s decision was not questioned ruling, a machine copy of it would suffice. The duplicate original
of the questioned decision of the NLRC should be attached, and this was complied with. However,
even if petitioner’s procedural contention was correct, this Court still ruled for Guerrero on the
merits. To remand this case to the CA would further delay the recovery of wages.
2) On behalf of its principal, OSM does not deny hiring Guerrero as master mariner. Petitioner was the
legitimate manning agent of PS-SASCO and it was allowed to recruit, hire and deploy seamen on
board the vessel.
a. It argues that since Guerrero was never deployed overseas, his employment contract
became ineffective because its object was allegedly absent. – Employment contract like
any contract is perfected upon the concurrence of essential elements such as consent of
the parties, object certain (subject matter of the contract) and the cause of the
obligation. Contrary to petitioner’s contention, the object of the contract was the rendition
of service by Guerrero on board the vessel. The non-deployment overseas of the ship did
not affect the validity of the perfected employment contract.
b. OSM also contends that there was a novation of the contract when Concorde decided to
use the ship for coastwide trade. – A contract cannot be novated solely by the will of one
party.
 3) Joint and solidary liability is meant to assure aggrieved workers of immediate and sufficient
payment of what is due them.

Decision of NLRC affirmed.

Santiago vs. CF Sharp Crew Management, Inc., 527 SCRA 165 , July 10, 2007
Labor Law; Employer-Employee Relationships; Seafarers; Considering that petitioner
was not able to depart from the airport or seaport in the point of hire, the employment
contract did not commence and no employer-employee relationship was created
between the parties.—There is no question that the parties entered into an employment
contract on 3 February 1998, whereby petitioner was contracted by respondent to
render services on board “MSV Seaspread” for the consideration of US$515.00 per
month for nine (9) months, plus overtime pay. However, respondent failed to deploy
petitioner from the port of Manila to Canada. Considering that petitioner was not able to
depart from the airport or seaport in the point of hire, the employment contract did not
commence, and no employer-employee relationship was created between the parties.
Same; Same; Distinction must be made between the perfection of the employment
contract and the commencement of the employer employee relationship; Even before
the start of any employer-employee relationship, contemporaneous with the perfection
of the employment contract was the birth of certain rights and obligations, the breach of
which may give rise to a cause of action against the erring party.—A distinction must be
made between the perfection of the employment contract and the commencement of
the employer-employee relationship. The perfection of the contract, which in this case
coincided with the date of execution thereof, occurred when petitioner and respondent
agreed on the object and the cause, as well as the rest of the terms and conditions
therein. The commencement of the employer employee relationship, as earlier
discussed, would have taken place had petitioner been actually deployed from the point
of hire. Thus, even before the start of any employer-employee relationship,
contemporaneous with the perfection of the employment contract was the birth of
certain rights and obligations, the breach of which may give rise to a cause of action
against the erring party. Thus, if the reverse had happened, that is the seafarer failed or
refused to be deployed as agreed upon, he would be liable for damages.
Same; Same; Seafarers; Neither the manning agent nor the employer can simply
prevent a seafarer from being deployed without a valid reason; Respondent unilaterally
and unreasonably reneged on its obligation to deploy petitioner and must therefore
answer for the actual damages he suffered.—While the POEA Standard Contract must
be recognized and respected, neither the manning agent nor the employer can simply
prevent a seafarer from being deployed without a valid reason. Respondent’s act of
preventing petitioner from departing the port of Manila and boarding “MSV Seaspread”
constitutes a breach of contract, giving rise to petitioner’s cause of action. Respondent
unilaterally and unreasonably reneged on its obligation to deploy petitioner and must
therefore answer for the actual damages he suffered.

Same; Same; Same; The fact that the Philippine Overseas Employment Administration
(POEA) Rules are silent as to the payment of damages to the affected seafarer does
not mean that the seafarer is precluded from claiming the same.—We take exception to
the Court of Appeals’ conclusion that damages are not recoverable by a worker who
was not deployed by his agency. The fact that the POEA Rules are silent as to the
payment of damages to the affected seafarer does not mean that the seafarer is
precluded from claiming the same. The sanctions provided for non-deployment do not
end with the suspension or cancellation of license or fine and the return of all
documents at no cost to the worker. They do not forfend a seafarer from instituting an
action for damages against the employer or agency which has failed to deploy him.

Same; Same; Despite the absence of an employer-employee relationship between

petitioner and respondent, the Court rules that the National Labor Relations
Commission (NLRC) has jurisdiction over petitioner’s complaint.—Despite the absence
of an employer employee relationship between petitioner and respondent, the Court
rules that the NLRC has jurisdiction over petitioner’s complaint. The jurisdiction of labor
arbiters is not limited to claims arising from employer-employee relationships. Section
10 of R.A. No. 8042 (Migrant Workers Act), provides that: Sec.10.Money Claims.—
Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the complaint, the
claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages. x x x [Emphasis supplied] Since the
present petition involves the employment contract entered into by petitioner for
overseas employment, his claims are cognizable by the labor arbiters of the NLRC.
Same; Same; Seafarers; Respondent liable to pay petitioner actual damages in the form
of the loss of nine (9) months’ worth of salary as provided in the contract, petitioner is
not entitled to overtime pay.—Respondent is thus liable to pay petitioner actual
damages in the form of the loss of nine (9) months’ worth of salary as provided in the
contract. He is not, however, entitled to overtime pay. While the contract indicated a
fixed overtime pay, it is not a guarantee that he would receive said amount regardless of
whether or not he rendered overtime work. Even though petitioner was “prevented
without valid reason from rendering regular much less overtime service,” the fact
remains that there is no certainty that petitioner will perform overtime work had he been
allowed to board the vessel. The amount of US$286.00 stipulated in the contract will be
paid only if and when the employee rendered overtime work. This has been the tenor of
our rulings in the case of Stolt-Nielsen Marine Services (Phils.), Inc. v. National Labor
Relations Commission, 258 SCRA 643 (1996), where we discussed the matter in this
light: The contract provision means that the fixed overtime pay of 30% would be the
basis for computing the overtime pay if and when overtime work would be rendered.
Simply stated, the rendition of overtime. work and the submission of sufficient proof that
said work was actually performed are conditions to be satisfied before a seaman could
be entitled to overtime pay which should be computed on the basis of 30% of the basic
monthly salary. In short, the contract provision guarantees the right to overtime pay but
the entitlement to such benefit must first be established. Realistically speaking, a
seaman, by the very nature of his job, stays on board a ship or vessel beyond the
regular eight-hour work schedule. For the employer to give him overtime pay for the
extra hours when he might be sleeping or attending to his personal chores or even just
lulling away his time would be extremely unfair and unreasonable.

Same; Same; Attorney’s Fees; Respondent’s failure to deploy petitioner is unfounded

and unreasonable, forcing petitioner to institute the suit below; Award of attorney’s fees
is thus warranted.—The Court also holds that petitioner is entitled to attorney’s fees in
the concept of damages and expenses of litigation. Attorney’s fees are recoverable
when the defendant’s act or omission has compelled the plaintiff to incur expenses to
protect his interest. We note that respondent’s basis for not deploying petitioner is the
belief that he will jump ship just like his brother, a mere suspicion that is based on
alleged phone calls of several persons whose identities were not even confirmed. Time
and again, this Court has upheld management prerogatives so long as they are
exercised in good faith for the advancement of the employer’s interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or
under valid agreements. Respondent’s failure to deploy petitioner is unfounded and
unreasonable, forcing petitioner to institute the suit below. The award of attorney’s fees
is thus warranted.
Same; Same; Seafarers; Nature of Employment; Seafarers are considered contractual
employees and cannot be considered as regular employees under the Labor Code.—
We likewise do not see respondent’s failure to deploy petitioner as an act designed to
prevent the latter from attaining the status of a regular employee. Even if petitioner was
able to depart the port of Manila, he still cannot be considered a regular employee,
regardless of his previous contracts of employment with respondent. In Millares v.
National Labor Relations Commission, 385 SCRA 306 (2002), the Court ruled that
seafarers are considered contractual employees and cannot be considered as regular
employees under the Labor Code. Their employment is governed by the contracts they
sign every time they are rehired and their employment is terminated when the contract
expires. The exigencies of their work necessitates that they be employed on a
contractual basis.