Facts:

The case involves Abosta Ship Management Corporation and Artemio Corbilla as the petitioners against Wilhil M. Hilario, the respondent. The events leading to the case began on October 24, 2002, when an employment contract was signed between the petitioner, representing its foreign principal Panstar Shipping Co., Ltd., and the respondent, wherein the latter was hired as a bosun (boatswain) for a term of nine months with a monthly salary of USD 566. The Philippine Overseas Employment Agency (POEA) officially approved this contract on October 25, 2002. However, upon arriving at the office of the petitioner on November 27, 2002, the respondent was informed that his deployment was postponed due to the demands of the foreign principal and that they had decided to promote another able seaman instead of hiring the respondent. The petitioner requested the respondent to wait two to three months for a potential vacancy. During this wait, the respondent was given cash advances as financial

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Facts:

Employment Contract Formation and Approval

• On 24 October 2002, petitioner Abosta Ship Management Corporation, on behalf of its foreign principal Panstar Shipping Co., Ltd., executed an employment contract with respondent.
• The contract hired respondent as a bosun (boatswain) for a period of nine months at a monthly salary of USD566.
• The contract was duly approved by the Philippine Overseas Employment Agency (POEA) on 25 October 2002.

Deployment Postponement and Subsequent Developments

• On 27 November 2002, upon reporting for duty, respondent was informed that his deployment had been postponed due to shifting demands of the foreign principal.
• Reports indicate that the foreign principal opted to promote an able seaman instead of deploying respondent, leading the petitioner to advise respondent to wait two to three months for another possible vacancy.
• During the delay, respondent was allowed to access cash advances as financial assistance.

Filing of Complaints and Initial Adjudications

• On 28 January 2003, respondent filed a Complaint with the POEA alleging a violation of Section 2(r), Rule I, Part VI of the 2002 POEA Rules for failure to deploy him within the prescribed period.
• Subsequently, on 6 February 2003, respondent filed a Complaint with the Labor Arbiter seeking actual, moral, and exemplary damages along with attorney’s fees.
• Petitioner moved to dismiss the Complaint on the basis of lack of jurisdiction, contending that the POEA, not the Labor Arbiter, had jurisdiction over pre-employment administrative matters; however, the Labor Arbiter denied the motion.

Procedural History and the Role of the NLRC

• On 13 February 2004, the National Labor Relations Commission (NLRC) granted petitioner’s appeal and reversed the Labor Arbiter’s order, holding that no employer-employee relationship existed and that the non-deployment issue was administrative in nature subject to POEA jurisdiction.
• Dissatisfied, respondent sought relief by filing a Petition for Certiorari with the Court of Appeals (CA), which on 17 March 2006 reinstated the Labor Arbiter’s jurisdiction-based decision.
• The Labor Arbiter, in a subsequent ruling, directed petitioner to pay respondent his nine-month salary amounting to USD10,071, finding that the contract entitled respondent to full deployment benefits, though without awarding moral damages.

Further Developments in the CA and NLRC

• On 11 March 2009, NLRC ruled that respondent’s non-deployment was attributable to the valid exercise of the foreign principal’s management prerogative and dismissed the Complaint while ordering petitioner to deploy respondent promptly.
• In response, respondent refiled a Petition for Certiorari with the CA. On 3 December 2010, the CA reversed the NLRC decision, holding that the promotion of an able seaman after the contract’s execution meant there was no longer a valid vacancy for respondent and that petitioner was jointly and solidarily liable under the POEA Rules.

Petitioner’s Arguments on Reversible Errors

• Petitioner argued that the award of actual damages was erroneously based on precedent (Paul v. Santiago) and that the CA’s reliance on actual damages was without factual and legal basis.
• It also contended that the CA improperly disregarded the NLRC’s findings regarding management prerogative and misapplied the Datuman case.

Issue:

Whether the failure to deploy respondent, following the promotion of another candidate, amounted to a breach of the POEA-approved employment contract.

• Does the non-deployment entitle respondent to claim actual damages equivalent to nine months' salary?

• Whether the exercise of the foreign principal’s management prerogative in promoting another candidate can justify petitioner’s failure to deploy respondent.

• Whether the NLRC committed grave abuse of discretion in attributing non-deployment solely to the exercise of management prerogative and dismissing the claim for actual damages.

• Whether petitioner, as the party responsible for the execution and enforcement of the employment contract, is jointly and solidarily liable with its foreign principal under the POEA Rules.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)