Case Summary (G.R. No. 162419)
Labor Arbiter’s Decision
Labor Arbiter Teresita D. Castillon-Lora held that the contract remained valid despite non-commencement of employment. Respondent’s failure to deploy constituted violation of POEA rules. Petitioner was awarded actual damages of US$7,209.00 (nine months’ salary plus fixed overtime) and 10% attorney’s fees.
NLRC’s Resolution
On appeal, the NLRC found no employer-employee relationship because employment commences only upon actual departure under the POEA Standard Contract. It held non-deployment a valid exercise of management prerogative. The award of damages and attorney’s fees was vacated and other claims affirmed as dismissed.
Court of Appeals Ruling
The Court of Appeals affirmed the NLRC’s conclusion that no employer-employee relationship arose. It ruled non-deployment within POEA rules precludes recovery of damages and held management prerogative valid. Subsequent motion for reconsideration was denied.
Issues on Review
- Whether respondent’s failure to deploy petitioner within 30 days without valid reason breached the POEA-approved contract and justified damages.
- Whether the NLRC and labor arbiter had jurisdiction over petitioner’s money claims despite non-commencement of the employment relationship.
Decision on Contract Commencement
The Supreme Court distinguished the perfection of the employment contract (upon execution and POEA approval) from the commencement of the employer-employee relationship (upon actual departure). Perfected contracts give rise to reciprocal rights and obligations enforceable by action for breach even before employment commencement.
Breach of Contract and Right to Damages
Respondent’s arbitrary non-deployment without valid reason constituted a breach of contract. The Court rejected the notion that POEA rules preclude recovery of damages by a non-deployed seafarer. POEA sanctions are not exhaustive remedies; aggrieved seafarers may sue for damages before the NLRC.
Jurisdiction of NLRC
Under Section 10 of RA 8042, labor arbiters have original and exclusive jurisdiction over money claims arising from contracts for overseas Filipino workers. Petitioner’s claim for actual damages falls within this jurisdiction despite absence of an employer-employee relationship at deployment.
Computation of Damages
Actual damages were confined to nine months’ salary (US$4,635.00), excluding fixed overtime pay because overtime entitlement requires pro
...continue readingCase Syllabus (G.R. No. 162419)
Facts
- Paul V. Santiago, a seafarer, had served five years with Smith Bell Management, Inc. (now CF Sharp Crew Management, Inc.)
- On 3 February 1998, petitioner signed a nine-month, POEA-approved contract to serve on board the MSV Seaspread at US$515.00 per month plus overtime and other benefits
- Departure was scheduled from Manila to Canada on 13 February 1998
- Respondent’s Vice-President, Pacifico Fernandez, received anonymous calls (including one purportedly from petitioner’s wife) warning that petitioner might “jump ship” like his brother, leading respondent to instruct the MSV Seaspread’s captain to cancel petitioner’s deployment
- On 9 February 1998, petitioner was informed he would not depart but might be considered for future deployment
- Petitioner filed a complaint for illegal dismissal, actual damages (lost salary and overtime), and attorney’s fees
Procedural History
- Labor Arbiter (29 January 1999)
- Held the employment contract valid but not commenced (no actual departure)
- Awarded US$7,209.00 actual damages (nine months’ salary and fixed overtime) plus 10% attorney’s fees
- NLRC (date unspecified)
- Affirmed the absence of an employer-employee relationship (contract commences upon actual departure under POEA Standard Contract)
- Vacated award of damages and attorney’s fees; upheld respondent’s non-deployment as valid management prerogative
- NLRC denied petitioner’s motion for reconsideration
- Court of Appeals (16 October 2003)
- Noted ambiguity in NLRC’s “affirm with modification”
- Agreed damages are not recoverable for non-deployment