G.R. No. 110524 - Millares vs. National Labor Relations Commission

Petitioner Douglas Millares was employed by Esso International Shipping Company, Ltd. through its local agent Trans-Global Maritime Agency, Inc. since November 16, 1968 as a machinist. He was promoted Chief Engineer in 1975 and continued until opting to retire in 1989. His monthly salary was US$1,939.00 at retirement.
Millares applied for a leave of absence from July 9 to August 7, 1989, approved by Trans-Global’s President on June 14, 1989. He also wrote to Esso International on June 21, 1989, expressing intention to avail of the Consecutive Enlistment Incentive Plan (CEIP) optional retirement since he had rendered more than 20 years of continuous service.
Esso International denied Millares’s request on July 13, 1989 citing contractual employment, non-provision for retirement before age 60 in his contract of enlistment (COE), and failure to submit a written notice within 30 days after last disembarkation as required under CEIP.
Millares requested for extension of leave from August 9 to 24, 1989. He was informed that the Chief Engineer position was filled due to his absence effective August 8, 1989. He was dropped from the crew roster effective September 1, 1989, on the basis of absence without leave/abandonment.

Lagda was employed by Esso International as wiper/oiler in June 1969 and promoted to Chief Engineer in 1980, maintained until his last COE expired April 10, 1989, with a salary of US$1,939.00 monthly.
Lagda applied for leave from June 19 to August 1989; leave from June 22 to July 20 was approved; he was to report on July 21. Lagda declared intention to avail of early retirement plan on June 26, 1989 similarly to Millares.
Trans-Global denied Lagda’s retirement request on July 13, 1989 for same reasons. Lagda’s leave extension until August 26, 1989 was approved.
Lagda was dropped from the crew roster effective September 1, 1989, allegedly for unavailability for contractual sea service.

Petitioners filed complaint with Philippine Overseas Employment Administration (POEA) on October 5, 1989, alleging illegal dismissal and non-payment of benefits.
POEA dismissed complaint for lack of merit on July 17, 1991.
National Labor Relations Commission (NLRC) affirmed POEA ruling on June 1, 1993, reasoning that petitioners, being seamen hired on fixed-term contracts under POEA rules and international maritime practice, were contractual and not regular employees under Article 280 of the Labor Code.
Petitioners elevated case to the Supreme Court (G.R. No. 110524), which on March 14, 2000, reversed the NLRC and ruled in favor of petitioners, declaring them regular employees entitled to reinstatement, backwages, separation pay if not reinstated, and 100% of CEIP contributions.

Private respondents filed motion for reconsideration, denied by the Supreme Court on June 28, 2000.
Filipino Association for Mariners Employment, Inc. (FAME) moved to intervene, filing motion for reconsideration. Private respondents also filed a second motion for reconsideration targeting the Court’s holding that Filipino seafarers are regular employees under Article 280.
Motions argued that the ruling contradicts POEA rules, international maritime law, and prior Supreme Court precedent (Coyoca v. NLRC), and threatens the viability of the Philippine manning industry and welfare of Filipino seafarers.
The Court set the case for oral arguments to address issues raised.

Petitioners argued entitlement to regular employee status due to performance of usual and desirable functions, length of service (over 20 years), receipt of Merit Pay (acknowledgment of regularity), and SSS registration. Coyoca ruling is inapplicable.
Private respondents and FAME argued seafarers’ employment governed by POEA’s fixed-term contracts not exceeding 12 months, consistent with international maritime practice; applying Article 280 for regular employment is improper; ruling endangers manning industry stability and economy, affecting thousands of Filipino seafarers and families.
Office of the Solicitor General, reversing prior position, expressed apprehension sustaining the ruling and supported re-examination.

Whether petitioners are regular or contractual employees whose employment terminates upon expiration of their contracts.
Assuming petitioners are regular employees, whether their dismissal was without just cause entitling them to reinstatement, backwages, and full CEIP benefits.
Whether the POEA Standard Contract for Seafarers precludes seafarers from attaining regular employee status under Article 280 of the Labor Code.
Whether the Supreme Court’s ruling conflicts with international maritime law as declared part of Philippine law under Article II, Section 2 of the Constitution.
Whether the Supreme Court’s ruling departs from its previous decision in Coyoca v. NLRC.