Petitioner

Douglas Millares and Rogelio Lagda

Respondent

National Labor Relations Commission, Trans-Global Maritime Agency, Inc. and Esso International Shipping Co., Ltd.

Ponente

Kapunan, J.

Docket Number and Date of Decision

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

Significance of the Case

In this landmark case, the Supreme Court, citing Brent case and Coyoca case, ruled 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.

Facts

Douglas Millares was employed by ESSO International through its local manning agency, Trans-Global, in 1968 as a machinist. In 1975, he was promoted as Chief Engineer which position he occupied until he opted to retire in 1989.

In 1989, petitioner Millares filed a leave of absence and applied for optional retirement plan under the Consecutive Enlistment Incentive Plan (CEIP) considering that he had already rendered more than twenty years of continuous service.

Esso International denied Millares’ request for optional retirement on the following grounds, to wit: (1) he was employed on a contractual basis; (2) his contract of enlistment (COE) did not provide for retirement before the age of sixty years; and (3) he did not comply with the requirement for claiming benefits under the CEIP, i.e., to submit a written advice to the company of his intention to terminate his employment within thirty days from his last disembarkation date.

Subsequently, after failing to return to work after the expiration of his leave of absence, Millares was dropped from the roster of crew members effective September 1, 1989.

On the other hand, petitioner Lagda was employed by Esso International as wiper/oiler in 1969. He was promoted as Chief Engineer in 1980, a position he continued to occupy until his last COE expired in 1989.

In 1989, Lagda likewise filed a leave of absence and applied to avail of the optional early retirement plan in view of his twenty years continuous service in the company.

Trans-global similarly denied Lagda’s request for availment of the optional early retirement scheme on the same grounds upon which Millares request was denied.

Unable to return for contractual sea service after his leave of absence expire, Lagda was also dropped from the roster of crew members effective September 1, 1989.

Millares and Lagda filed a complaint-affidavit for illegal dismissal and non-payment of employee benefits against private respondents Esso International and Trans-Global before the POEA.

The POEA rendered a decision dismissing the complaint for lack of merit. On appeal, NLRC affirmed the decision of the POEA dismissing the complaint.

NLRC rationcinated that Millares and Lagda, as seamen and overseas contract workers are not covered by the term “regular employment” as defined under Article 280 of the Labor Code. The POEA, which is tasked with protecting the rights of the Filipino workers for overseas employment to fair and equitable recruitment and employment practices and to ensure their welfare, prescribes a standard employment contract for seamen on board ocean-going vessels for a fixed period but in no case to exceed twelve months.

Issue

Whether or not seafarers are considered regular employees under Article 280 of the Labor Code.

Ruling

It is for the mutual interest of both the seafarer and the employer why the employment status must be contractual only or for a certain period of time.
Quoting Brent School Inc. v. Zamora, 1990, and Pablo Coyoca v. NLRC, 1995, the Supreme Court ruled 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.

As ruled in Brent case, there are certain forms of employment which also require the performance of usual and desirable functions and which exceed one year but do not necessarily attain regular employment status under Article 280. Overseas workers including seafarers fall under this type of employment which are governed by the mutual agreements of the parties.

And as stated in the Coyoca case, Filipino seamen are governed by the Rules and Regulations of the POEA. The Standard Employment Contract governing the employment of All Filipino seamen on Board Ocean-Going Vessels of the POEA, particularly in Part I, Sec. C specifically provides that the contract of seamen shall be for a fixed period. And in no case should the contract of seamen be longer than 12 months.

Moreover, the Court held that it is an accepted maritime industry practice that employment of seafarers are for a fixed period only. Constrained by the nature of their employment which is quite peculiar and unique in itself, it is for the mutual interest of both the seafarer and the employer why the employment status must be contractual only or for a certain period of time. Seafarers spend most of their time at sea and understandably, they can not stay for a long and an indefinite period of time at sea. Limited access to shore society during the employment will have an adverse impact on the seafarer. The national, cultural and lingual diversity among the crew during the COE is a reality that necessitates the limitation of its period.

Last Edited: Sunday, March 20, 2011

Caveat: Subsequent court and administrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.
Trackback

2 comments

  1. brilliance Comment:
    June 22nd, 2010 at 10:52 pm

    1. I am currently working in a private educational institution as an office secretary / office clerk under the administrative department. During the hiring period, my employer knew that I was about to finish my bachelor degree. But because of a certain reasons I decided not to finish my degree, so I asked my superior if they would still absorb me even if I cannot finish my degree. Eventually, they hired me . As of now ,this is my 4th year in service and in our employees manual, when you reach your 4th year in service ,you’ll be in a regular/permanent status. Because of that, I was expecting to receive the basic salary of being a regular employee same as the basic of my fellow colleagues. But unfortunately, my employer told me that they cannot give the basic pay same as the office personnel’s because I didn’t finish a degree. They even insisted that if they will give me the basic of being a regular employee, my salary will become bigger than our teachers…I told them that being an office personnel is different from being a teacher. We even have different tasks and qualifications.. I asked my superior if I’m not qualified or am I not doing well in my job and she said that I am qualified and actually improved a lot. The only problem is that I didn’t finish my degree. Sir, do i have a right to demand the basic salary payment same as the regular office personnel?…They keep on insisting that it will be unfair to those who finished their courses if we will receive the same basic salary…please advise me..Please give me a reference from the labor code regarding my case. Thank you.

    [Reply]

    Ted Ferrolino Reply:

    “[E]mployees should be given equal pay for work of equal value. That is a principle long honored in this jurisdiction. That is a principle that rests on fundamental notions of justice.” (International School Alliance of Educators vs. Quisumbing)

    [Reply]

Add your comment now