G.R. No. 110524 Case Digest

G.R. No. 110524, July 29, 2002

Douglas Millares and Rogelio Lagda, petitioners

vs NLRC, Trans-global MAritime Agency, Inc., and Esso International Shipping Co.,LTD., respondents

Ponente: Kapunan

Facts:

On March 14, 2000, the court promulgated its decision ruling in favor of the petitioners setting aside and reversing the decision of NLRC over the case of the case between parties.

A motion for reconsideration was filed by the private respondents to which petitioners filed an opposition.

Court resolve to deny the motion for reconsideration with finality. Subsequently, FAME filed a motion for leave to intervene and to admit a motion for reconsideration in intervention. Private respondents also filed a motion for leave to file a second motion for reconsideration of our decision.

In both petitions of respondent and FAME pray to reconsider the court's ruling that"Filipino seafarers are considered regular employees within the context of Article 280 of the Labor Code." They claim that the decision may establish a precedent that will adversely affect the maritime industry.

Millares was employed by ESSO through its local manning agency, Trans-global on November 1968 as a machinist, in 1975 he was promoted as chief engineer until he retired in 1989.

On June 1989, Millares applied for leave of absence for one month which was approved byt trans-globa. Then Millares wrote to the operations managerinforming hijm of his intention to avail the optional retirement considering that he rendered more than 20 years of service to the company. But ESSO denied the  retirement for the following grounds: (1) he was employed on a contractual basis (2) his contract of enlistment did not provide for retirement before age of 60 and (3) he did not comply with requirement for claiming benefits under CEIP.

On August 1989 Millares requested for an extension of his leave of absence and the crewing manager then wrote to Millares advising him that respondent ESSO "has corrected the deficiency in its manpower requirement specifically in the Chief Engineer rank by promoting a First Assistant Engineer to this position as a result of (his) previous leave of absence which expired last August 8, 1989. The adjustment in said rank was required in order to meet manpower schedules as a result of (his) inability."

On September 26, 1989, ESSO advised MIllares that in view of his absence without leave, which is equivalent to abandonment of his position, he had been dropped from the roster of crew members effective September 1, 1989.

On the other hand. Lagda was employed by ESSO as wiper in June 1969, promoted as Chief engineer in 1980 until his last COE expired on April 10, 1989. On May 1989, Lagda applied for a leave of absence which was approved by Trans-global and advised him to report for re-assignment on July 21, 1989.

On June 26, 1989 Lagda wrote to ESSO through Trans-global oresident informing him of his intention to avail of the optional retirement plan in vies of his 20 years of service. It was denied by Trans-global on the same grounds as with Millares. He requested to extend his leave of absence and was approved but later informed by ESSO that in view of his "unavailability for contractual sea service" he had been droppped from the roster of crew memebers effective September 1, 1989.

On October 5, 1989, Millares and LAgda filed a complaint-affidavit before POEA for illegal dismissal and non-payment of employee benefits against ESSO and Trans-global.POEA dismissed the complaint for lack of merit, which was affirmed by NLRC. So petitioners elevated their case to this court and obtained favorable action.

Issues: (1) are the petitioners regular or contractual employees? (2) assuming that they are regular employees, were they dismissed without just cause? (3) does provision of POEA standard contract for sea farers on board foreign vessels preclude the attainment by seamen of the status of regular employees? (4) does the decision to contravene international maritime las, allegedly part of the land?

Ruling:

(1) Petitioners contends that they performed activities which are usually necessary to the usual business or trade of the company and the fact that they served for 20 years already is an express acknowledgment that they are regular employees by the private respondents.Respondents invoke that under the POEA rules and regulation governing overseas employment seafarers are not regular employees based on international maritime practice. While intervenor FAME avers that our decision of not reconsidered will have negative consequence of the manning industry in the Philippines.

From the foregoing cases, it is clear that seafarers are considered contractual employees. They can not be considered as regular employees under Article 280 of the Labor Code. Their employment is governed by the contracts they sign everytime they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. They fall under the exception of Article 280 whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.19 We need not depart from the rulings of the Court in the two aforementioned cases which indeed constitute stare decisis with respect to the employment status of seafarers.

From all the foregoing, we hereby state that petitioners are not considered regular or permanent employees under Article 280 of the Labor Code. Petitioners' employment have automatically ceased upon the expiration of their contracts of enlistment (COE). Since there was no dismissal to speak of, it follows that petitioners are not entitled to reinstatement or payment of separation pay or backwages, as provided by law.

With respect to the benefits under the Consecutive Enlistment Incentive Plan (CEIP), we hold that the petitioners are still entitled to receive 100% of the total amount credited to him under the CEIP. Considering that we have declared that petitioners are contractual employees, their compensation and benefits are covered by the contracts they signed and the CEIP is part and parcel of the contract.

In our March 14, 2000 Decision, we, however, found that petitioners Millares and Lagda were not guilty of "abandonment" or "unavailability for contractual sea service," as we have stated:

The absence of petitioners was justified by the fact that they secured the approval of private respondents to take a leave of absence after the termination of their last contracts of enlistment. Subsequently, petitioners sought for extensions of their respective leaves of absence. Granting arguendo that their subsequent requests for extensions were not approved, it cannot be said that petitioners were unavailable or had abandoned their work when they failed to report back for assignment as they were still questioning the denial of private respondents of their desire to avail of the optional early retirement policy, which they believed in good faith to exist.26

Neither can we consider petitioners guilty of poor performance or misconduct since they were recipients of Merit Pay Awards for their exemplary performances in the company.

Partial grant. Petitioners reinstated with modification.