G.R. No. 166471 - Tawang Multi-purpose Cooperative vs. La Trinidad Water District

Sulpecio Madequillo, Jr. (respondent) was employed by Stolt-Nielsen Marine Services, Inc. on behalf of its principal, Chung Gai Ship Management of Panama (petitioners), as Third Assistant Engineer aboard the vessel MV Stolt Aspiration under a first contract dated 6 November 1991, for a nine-month period, with specified salary and overtime pay.
Respondent joined the vessel on 8 November 1991 and served for nearly three months. In February 1992, while the vessel was at Batangas, he was ordered by the ship’s master to disembark and was repatriated to Manila without any explanation.
Upon return, respondent was transferred to another vessel, MV Stolt Pride, under the same terms via a second contract approved by the POEA on 23 April 1992.
The POEA certified the second contract on 18 September 1992 without knowledge that respondent was not deployed with the second vessel. Petitioners failed to deploy him despite commencement of the second contract on 21 April 1992.
Respondent followed up on deployment but was refused by petitioners. On 22 December 1994, respondent demanded his passport, seaman’s book, and other documents and was allowed to claim these only after signing a document under duress.

Respondent filed a complaint before the POEA Adjudication Office on 6 March 1995 alleging illegal dismissal under the first contract and failure to deploy under the second contract, praying for actual, moral, exemplary damages, and attorney’s fees.
Case transferred to the Labor Arbiter of DOLE under the Migrant Workers and Overseas Filipinos Act of 1995; both parties required to submit position papers but petitioners defaulted.
On 21 July 2000, Labor Arbiter rendered a decision finding constructive dismissal based on failure to honor the second contract, ordering petitioners to pay $12,537.00 or its peso equivalent. The first contract was found novated by the second contract; no award for moral and exemplary damages was granted.
Petitioners appealed to the NLRC claiming denial of due process, absence of deployment negating dismissal, and excessive monetary award.
On 28 February 2003, NLRC modified Labor Arbiter’s decision by deleting the overtime pay award but affirmed the rest, denying petitioners' claim that monetary award should be limited to three months per unexpired contract year, as applicable law (Republic Act No. 8042) was not yet effective at the time of events.
Petitioners filed Partial Motion for Reconsideration, denied on 27 July 2005.
Petitioners filed a Petition for Certiorari with the Court of Appeals alleging grave abuse of discretion but the CA affirmed NLRC's decision on 31 January 2007.

Whether the second employment contract novated the first contract, thereby extinguishing the first contract.
Whether the respondent was constructively dismissed under the second contract despite non-deployment.
Whether petitioners can be penalized beyond the POEA Rule’s prescribed reprimand for failure to deploy the seafarer.
Whether the monetary award granted was proper and within the bounds of law considering applicable statutes and rules.