A.M. No. MTJ-00-1320 - Bangayan vs. Butacan

Case Summary (A.M. No. MTJ-00-1320)

Petitioner, Respondent, and Roles

Petitioners employed Rusel through a contract for the vessel MV Cemtex General; Rusel served as an able-bodied seaman (GP/AB). The dispute arose after Rusel suffered an ankle injury aboard ship, allegedly jumped to shore to seek medical attention, and was repatriated. Petitioners alleged desertion; Rusel claimed illegal dismissal and sought recovery of wages and benefits.

Key Dates (operative timeline; decision date omitted per instructions)

Contract executed: April 10, 1996 (12-month term; wage and allowances specified).
Deployment aboard MV Cemtex: June 25, 1996.
Injury occurred: July 16, 1996.
Rusel left vessel and sought medical attention: August 13–22, 1996 (repatriated August 22).
Complaint filed with NLRC arbitration branch: September 26, 1996.
Labor Arbiter decision: July 21, 1998.
NLRC decision: March 22, 2000.
Court of Appeals decision: December 18, 2001.
Supreme Court final disposition: petition partly granted with modification.

Applicable Law and Governing Legal Principles

1987 Philippine Constitution (applicable given the decision date).
Labor Code and implementing regulations (principle that labor protections apply to Filipino workers, including those employed abroad when contract made in the Philippines).
POEA Memorandum Circular No. 41, Series of 1989 (governs the contract in effect at the time of execution).
POEA Memorandum Circular No. 055-96 (effective Jan 1, 1997) — discussed but not applicable to Rusel’s contract executed in April 1996.
Republic Act No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995), Sec. 10 (money claims for overseas workers).
Article 111 of the Labor Code (attorney’s fees in wage recovery cases) and relevant Civil Code provisions invoked in precedent (e.g., Article 1702 on interpretation in favor of labor).
Procedural rule: under Rule 45 of the Rules of Court, only questions of law may be raised before the Supreme Court; factual findings of labor tribunals are accorded high respect.

Procedural History

Rusel filed complaints before the NLRC arbitration branch for illegal dismissal and money claims. Labor Arbiter found unlawful repatriation and awarded monetary relief, including attorney’s fees (10% of total award). NLRC affirmed findings but reduced the three-month salary award and deleted sick wage benefits. The Court of Appeals dismissed petitioners’ certiorari petition, affirming NLRC. Petitioners elevated the case to the Supreme Court via Rule 45 petition.

Issues Presented to the Court

Whether Rusel’s act of jumping off the vessel constituted desertion justifying dismissal.
Whether petitioners could validly invoke a pre-termination/repatriation provision in their seafarer contract (POEA rules) as an alternative ground for termination.
Whether Rusel was entitled to various money claims (wages, allowances, overtime, vacation pay, special allowance), and whether attorney’s fees were properly awarded.
Whether repatriation costs could be offset against Rusel’s wages for August 11–22, 1996.

Standard of Review and Factual Findings

The Supreme Court reiterated its limited role under Rule 45: it cannot reweigh evidence or substitute its factual findings for those of the Labor Arbiter, NLRC, and Court of Appeals. Factual issues — including whether Rusel intended to desert — were resolved unanimously by the lower tribunals in favor of Rusel, and the Court found no compelling reason to depart from those findings.

Desertion — Legal Test and Application

Desertion requires proof of animo non revertendi (intention not to return). Mere unauthorized absence is insufficient; the employer must demonstrate clear intention to abandon service.
Petitioners relied on ship logbook entries and a Marine Note Protest indicating Rusel was missing, and on the physical act of jumping overboard. The Court found these insufficient to establish intent to desert: (a) the logbook/Marine Note Protest were presented belatedly and lacked authentication/notarization, impugning their probative value; (b) the mere act of leaving the vessel and swimming to shore to obtain medical attention is not conclusive evidence of abandonment of employment.
The employer bears the burden of proving just cause for dismissal. Petitioners failed to meet that burden; thus Rusel’s dismissal was illegal.

Admissibility and Weight of Documentary Evidence

Documents submitted belatedly and without proper authentication (logbook entries, Marine Note Protest) were deemed uncorroborated and unreliable. The Court emphasized the necessity of clear, convincing proof to sustain a desertion finding, which petitioners did not provide.

Medical Evidence and Credibility of Injury Claim

Although some hospital documentation presented earlier was unsigned and of limited probative value, an X‑ray result obtained after repatriation showed soft-tissue swelling around Rusel’s ankle, consistent with his claim of injury. The Court accepted that Rusel, an able-bodied seaman using a life jacket, could have swum ashore despite injury; this supported the conclusion that his leaving the ship was to seek urgent medical attention rather than to abandon employment.

Notice and Hearing — Due Process in Seafarer Termination

The Court reiterated that Filipino labor protections, including the twin requirements of written notice of charges and opportunity for hearing, apply regardless of the situs of employment. Contracts executed in the Philippines are governed by Philippine labor law (lex loci contractus).
Prior jurisprudence requires that before a seaman is dismissed, he must be given written notice and be afforded a formal investigation to defend himself. Petitioners admitted they failed to give written notice or conduct a formal investigation; thus procedural due process requirements were unmet.

Applicability of POEA Circulars and Contractual Pre-termination Provision

Petitioners attempted to invoke Section 19(C) of POEA Memorandum Circular No. 055-96 (pre-termination/repatriation within three months of contract expiry). The Court held this provision inapplicable because the circular took effect January 1, 1997, after Rusel’s contract (April 1996); the controlling instrument was POEA Memorandum Circular No. 41, Series of 1989.
Even under the 1989 Circular’s comparable provision (Section H(6), Part I), conditions for its exercise were not met: the repatriation was not within three months of contract expiration (Rusel’s contract was for 12 months; he was repatriated much earlier), and petitioners did not pay the mandatory earned wages, leave pay for the entire contract period, and termination pay required by the provision.
The Court also observed an inconsistency in petitioners’ defenses: they cannot simultaneously contend dismissal was for cause (desertion) and alternatively claim unilateral pre-termination without cause under contract. The record showed the pre-termination defense was raised late (on appeal), and under procedural rules defenses not timely pleaded are deemed waived.

Repatriation Costs and Right of Setoff

The POEA circular provisions permitting employers to recover repatriation costs from a seaman’s wages apply only when the seaman is validly discharged for disciplinary reasons. Because petitioners failed to prove a valid disciplinary dismissal, they could not lawfully set off repatriation costs against Rusel’s wages for August 11–22, 1996.

Computation of Monetary Awards — Salaries, Allowances, Overtime, and RA 8042

RA 8042 Sec. 10 provides that in overseas employment termination without just cause the worker is entitled to salaries for the unexpired portion or three months for every year of the unexpired term, whichever is less; the statutory computation refers to “salaries” and does not include allowances.
The Court modified the NLRC’s computation: the award for three months’ salary was reduced to US$1,200.00 (based solely on the basic monthly salary of US$400.00), rejecting inclusion of allowances in the three-month salary computation under RA 8042.
Separately, contractually stipulated allowances are recoverable as owed benefits. Rusel’s contract provided living allowance (US$140/month), vacation leave with pay (US$40/month), special allowance (US$175/month), and an overtime rate (US$120/month). The Court:
- Deleted the NLRC’s inclusion of overtime in the aggregate award because Rusel failed to prove actual rendering of overtime work beyond regular eight-hour workdays. The correct test for seafarers’ entitlement to overtime is actual performance of overtime, not mere confinement aboard.
- Awarded living allowance, special allowance, and vacation leave for two months (the period Rusel rendered service) totaling US$710.00 (US$140 + US$175 + US$40, doubled for two months). The NLRC’s earlier award of US$550.00 (which had included overtime) was deleted and replaced by US$710.00.

Attorney’s Fees — Basis and Affirmation

Labor Arbiter had awarded attorney’s fees equivale

Case Syllabus (A.M. No. MTJ-00-1320)

Court and Case Reference

Decided by the Supreme Court, First Division, G.R. No. 153031, dated December 14, 2006; reported at 540 Phil. 65.
Petition for review on certiorari under Rule 45 of the Rules of Court, assailing:
- Court of Appeals (CA) Decision dated December 18, 2001 in CA-G.R. SP No. 59976 (authored by Justice Oswaldo D. Agcaoili, concurred by Justices Jose L. Sabio, Jr. and Mariano C. Del Castillo).
- CA Resolution dated April 10, 2002 denying motion for reconsideration.
Case concerns employment termination, alleged desertion, monetary claims, admissibility of evidentiary documents, and entitlement to attorney’s fees.

Parties

Petitioners: PCL Shipping Philippines, Inc. (a manning agency) and U-Ming Marine Transport Corporation (foreign principal/employer).
Private respondent / appellee: Steve Rusel (seaman / GP/AB).
Respondent: National Labor Relations Commission (NLRC) (administrative respondent in petition).

Procedural History

Employment: Rusel employed April 1996 as GP/AB by PCL Shipping for and on behalf of U-Ming Marine; contract executed April 10, 1996; deployed June 25, 1996 on MV Cemtex General for a 12-month contract.
Incident: July 16, 1996 injury occurred aboard ship; August 13, 1996 Rusel jumped off vessel and was hospitalized in Japan and later repatriated on August 22, 1996.
Administrative claim filed: September 26, 1996 — complaint for illegal dismissal, non-payment of wages, overtime pay, medical benefits, sick leave pay and damages filed before the arbitration branch of the NLRC.
Labor Arbiter Decision (July 21, 1998): Found respondent illegally repatriated; awarded monetary amounts including three months salary (US$2,625 or equivalent), sick wage benefits (US$1,600), living allowance/overtime/special allowance for two months (US$550), unpaid wages (US$641.66), attorney’s fees (10% of monetary award); dismissed residual claims.
NLRC Decision (March 22, 2000): Affirmed Labor Arbiter’s findings but modified: reduced three months salary award to US$1,620 and deleted sick wage benefit; otherwise affirmed. Motion for reconsideration denied (May 3, 2000).
CA Review: Petitioners filed certiorari with CA; CA Decision dated December 18, 2001 dismissed petition and affirmed NLRC; motion for reconsideration denied April 10, 2002.
Supreme Court Review: Petitioners sought review under Rule 45; assignment of errors raised to the Supreme Court.

Facts as Found by Lower Tribunals and Record

Contractual compensation: Basic monthly salary US$400; living allowance US$140; fixed overtime rate US$120/month; vacation leave with pay US$40/month; special allowance US$175/month.
July 16, 1996: While cleaning the ship’s kitchen, Rusel slipped and suffered a broken and/or sprained left ankle.
Request for medical examination denied by the vessel’s captain.
August 13, 1996: Due to unbearable pain, Rusel jumped off the vessel using a life jacket and swam to shore; he was brought to a hospital and confined for eight days.
August 22, 1996: Vessel’s agent fetched Rusel from hospital and required him to board a plane bound for the Philippines (repatriation).
Petitioners alleged desertion, relying on logbook entries and a Marine Note Protest submitted belatedly during NLRC reconsideration.
Evidence post-repatriation: X-ray conducted August 26, 1996 by LLN Medical Services, Inc. showed soft-tissue swelling around the ankle joint (Annex "C" of the record). A letter marked Annex "B" was unsigned and of doubtful authorship.

Issues Presented (as assigned by petitioners)

Whether the CA erred in ruling that private respondent was illegally dismissed (i.e., whether Rusel committed desertion).
Whether petitioners validly exercised a contractual prerogative to pre-terminate private respondent’s employment (invoking Section 19(C) of POEA Memorandum Circular No. 055-96 or its counterpart in Memorandum Circular No. 41).
Whether private respondent is entitled to the monetary awards granted, specifically (a) living allowance, overtime pay, vacation pay and special allowance for two months, (b) unpaid wages from August 11–22, 1996, (c) attorney’s fees, and whether repatriation costs may be offset against wages.

Petitioners’ Main Arguments

Rusel’s jumping off the vessel and swimming to shore is evidence of his intention to abandon his employment; the act itself demonstrates desertion.
It is improbable that an injured seaman in unbearable pain could swim two nautical miles; such physical feat indicates lack of injury and intent to desert.
Logbook entries and Marine Note Protest corroborate desertion and should be admitted despite late submission because additional evidence may be admitted on appeal in labor cases.
Desertion is a grave offense and, given the nature of maritime employment and nationality of employer, requirements of notice and hearing may be dispensed with.
Alternatively, petitioners claimed prerogative to pre-terminate employment under Section 19(C) of POEA Memorandum Circular No. 055-96 incorporated in Rusel’s contract.
Argue deletion of awards such as living allowance, overtime, vacation and special allowance for two months due to lack of substantial proof; claimed such benefits are earned for services rendered and should not be awarded when employment was ended for cause.
Assert unpaid wages from Aug 11–22, 1996 should be applied to repatriation costs under Section 19(E) of Memorandum Circular No. 055-96 (and counterpart provisions), when discharge is for just cause.
Object to attorney’s fees award, asserting lack of stated legal basis in Labor Arbiter’s and NLRC’s decisions.

Private Respondent’s (Rusel) Main Arguments

Petitioners’ issues are factual and were decided against them by the Labor Arbiter, NLRC and CA; Rule 45 limits Supreme Court review to questions of law.
Petitioners failed to prove desertion; logbook and Marine Note Protest were dubious, late, not notarized or authenticated.
Right to due process, including notice and hearing, applies to overseas workers as much as local workers; constitutional and statutory labor protections support this.
Petitioners’ invocation of Section 19(C) as alternative defense is inconsistent with their primary defense of dismissal for cause (desertion); it was pleaded belatedly and amounts to afterthought.
Attorney’s fees warranted because petitioners compelled respondent to incur expenses to enforce lawful claims, and petitioners acted in gross and evident bad faith by refusing to satisfy claims.

Legal Standards and Doctrines Applied by the Supreme Court

Rule 45 jurisprudence: Only questions of law may be raised before the Supreme Court in a Rule 45 petition; re-evaluation of sufficiency of evidence is generally not permitted. (Cites Lopez Sugar v. Franco; Gerlach v. Reuters; Cosmos Bottling Corp. v. NLRC.)
Quasi-judicial expertise: Arbitration Board and NLRC have specialized expertise in labor matters; factual findings by these tribunals are accorded high deference.
Desertion in maritime law defined as unauthorized absence with an intention not to return (animo non revertendi); mere unauthorized absence is insufficient.
Burden of proof in termination cases rests on employer to show dismissal is for just and valid cause.
Principle of lex loci contractus applies; labor protections applicable where contract was made in the Philippines and approved by POEA.
Requirements of notice and formal investigation