G.R. No.

148130 June 16, 2006

PETROLEUM SHIPPING LIMITED (fo!e"# ESSO INTERN$TION$L SHIPPING
(%$H$M$S& 'O., LTD.& (n) TR$NS*GLO%$L M$RITIME $GEN'+, IN'., Petitioners,
vs.
N$TION$L L$%OR REL$TIONS 'OMMISSION (n) ,LORELLO -. T$N'HI'O,
Respondents.
D E ' I S I O N
'$RPIO, J.:
T.e '(/e
Before the Court is a petition for review
1
assailing the 25 January 2001 Deision
2
and ! "ay
2001 Resolution
#
of the Court of $ppeals in C$%&.R. 'P (o. 5)!5*.
T.e $n0e1e)en0 ,(10/
+n * "arh 1,!-, .sso /nternational 'hipping 0Baha1as2 Co., 3td., 04.sso42 through 5rans%
&lo6al "ariti1e $geny, /n. 045rans%&lo6al42 hired 7lorello 8. 5anhio 045anhio42 as 7irst
$ssistant .ngineer. /n 1,-1, 5anhio 6ea1e Chief .ngineer. +n 1# +to6er 1,,2, 5anhio
returned to the Philippines for a two%1onth vaation after o1pleting his eight%1onth
deploy1ent.
+n - Dee16er 1,,2, 5anhio underwent the re9uired standard 1edial e:a1ination prior to
6oarding the vessel. 5he 1edial e:a1ination revealed that 5anhio was suffering fro1
4/she1i ;eart Disease, ;ypertensive Cardio%"usular Disease and Dia6etes "ellitus.4
5anhio too< 1ediations for two 1onths and a su6se9uent stress test showed a negative result.
;owever, .sso no longer deployed 5anhio. /nstead, .sso offered to pay hi1 6enefits under the
Career .1ploy1ent /nentive Plan. 5anhio aepted the offer.
+n 2* $pril 1,,#, 5anhio filed a o1plaint against .sso, 5rans%&lo6al and "alayan /nsurane
Co., /n. 04"alayan42 6efore the Philippine +verseas .1ploy1ent $d1inistration 0P+.$2 for
illegal dis1issal with lai1s for 6a<wages, separation pay, disa6ility and 1edial 6enefits and
1#th 1onth pay. /n view of the enat1ent of Repu6li $t (o. -0)2 04R$ -0)242
)
transferring to
the (ational 3a6or Relations Co11ission 0(3RC2 the =urisdition over 1oney lai1s of
overseas wor<ers, the ase was indorsed to the $r6itration Branh of the (ational Capital
Region. /n a Deision
5
dated 1* +to6er 1,,*, 3a6or $r6iter Jose &. De >era 043a6or $r6iter De
>era42 dis1issed the o1plaint for la< of 1erit. 5anhio appealed to the (3RC.
T.e Ru"2n3 of 0.e NLR'
/n its Resolution
*
of # 'epte16er 1,,-, the (3RC affir1ed the Deision of 3a6or $r6iter De
>era. 5anhio filed a 1otion for reonsideration. /n a Resolution
!
pro1ulgated on 2, "arh
1,,,, the (3RC reonsidered its # 'epte16er 1,,- Resolution, as follows?
+n the lai1 of illegal dis1issal, the sa1e is unavailing as o1plainant had 6een delared as one
with partial per1anent disa6ility. 5hus, he should 6e entitled to disa6ility 6enefit of 1- days for
every year of redited servie of fourteen 01)2 years less the a1ount he already reeived under
the Co1pany@s Disa6ility Plan.
+n the lai1 of 1#th 1onth pay, the respondent $geny not falling under the enu1erated
e:e1pted e1ployers under P.D. -51 and in the a6sene of any proof that respondent is already
paying its e1ployees a 1#th 1onth pay or 1ore in a alendar year, perfore, respondent ageny
should pay o1plainant his 1onthly pay o1puted at AsiB the atual 1onth AsiB wor<ed, whih
is - 1onths.
'ine o1plainant was fored to litigate his ase, he is here6y awarded 10C of the total award as
attorney@s fees.
'+ +RD.R.D.
-

.sso and 5rans%&lo6al 1oved for the reonsideration of the 2, "arh 1,,, Resolution.
,
/n its 2!
July 1,,, Resolution,
10
the (3RC denied their 1otion.
.sso, now using the na1e Petroleu1 'hipping 3i1ited 04Petroleu1 'hipping42, and 5rans%
&lo6al 0olletively referred to as 4petitioners42 filed a petition for ertiorari 6efore the Court of
$ppeals assailing the 2, "arh 1,,, and 2! July 1,,, Resolutions of the (3RC.
T.e Ru"2n3 of 0.e 'ou0 of $44e("/
/n its Deision pro1ulgated on 25 January 2001, the Court of $ppeals affir1ed in toto the 2,
"arh 1,,, Resolution of the (3RC.
5he Court of $ppeals ruled that 5anhio was a regular e1ployee of Petroleu1 'hipping. 5he
Court of $ppeals held that petitioners are not e:e1pt fro1 the overage of Presidential Deree
(o. -51, as a1ended 04PD -5142
11
whih 1andates the pay1ent of 1#th 1onth pay to all
e1ployees. 5he Court of $ppeals further ruled that 5anhio is entitled to disa6ility 6enefits
6ased on his 1) years of tenure with petitioners. 5he Court of $ppeals stated that the e1ployer%
e1ployee relationship su6sisted even during the period of 5anhio@s vaation. 5he Court of
$ppeals noted that petitioners were aware of 5anhio@s 1edial history yet they still deployed
hi1 for 1) years. 7inally, the Court of $ppeals sustained the award of attorney@s fees.
Petitioners 1oved for the reonsideration of the Deision. /n its ! "ay 2001 Resolution, the
Court of $ppeals 1odified its Deision 6y deduting 5anhio@s vaation fro1 his length of
servie. 5hus?
8;.R.7+R., our deision is here6y "+D/7/.D. 5he petitioners are ordered to pay to the
private respondent the following? 012 disa6ility wages e9uivalent to 1- days per year 1ultiplied
6y 10 years less any a1ount already reeived under the o1pany@s disa6ility planD prorated 1#th
1onth pay orresponding to eight 0-2 1onths of atual wor<D and attorney@s fee e9uivalent to
10C of the total award.
'+ +RD.R.D.
12

Petitioners went to this Court for relief on the following grounds?
/. 5he Court of $ppeals deided a 9uestion of su6stane not in aord with law,
applia6le deision of this Court and /nternational "ariti1e 3aw when it ruled that
private respondent, a seafarer, was a regular e1ployeeD
//. 5he Court of $ppeals deided a 9uestion of su6stane not in aord with law when it
held that the private respondent was entitled to greater disa6ility 6enefit than he was AsiBD
///. 5he Court of $ppeals deided a 9uestion of su6stane not heretofore deter1ined 6y
this Court when it ruled that private respondent was entitled to 1#th 1onth pay although
it was not provided for in the ontrat of e1ploy1ent 6etween petitioners and private
respondentD and
/>. 5he Court of $ppeals deided a 9uestion of su6stane not in aord with law when it
awarded private respondent attorney@s fees despite the 3a6or $r6iter@s and the pu6li
respondent@s, al6eit initially, dis1issal of the o1plaint.
1#

T.e I//ue/
5he issues are as follows?
1. 8hether 5anhio is a regular e1ployee of petitionersD and
2. 8hether 5anhio is entitled to 1#th 1onth pay, disa6ility 6enefits and attorney@s fees.
T.e Ru"2n3 of T.2/ 'ou0
5he petition is partly 1eritorious.
Seafarers are Contractual Employees
5he issue on whether seafarers are regular e1ployees is already a settled 1atter.
/n Ravago v. Esso Eastern Marine, Ltd.,
1)
the Court traed its ruling in a nu16er of ases that
seafarers are ontratual, not regular, e1ployees. 5hus, in Brent School, nc. v. !amora,
15
the
Court ited overseas e1ploy1ent ontrat as an e:a1ple of ontrats where the onept of
regular e1ploy1ent does not apply, whatever the nature of the engage1ent and despite the
provisions of $rtile 2-0 of the 3a6or Code. /n Coyoca v. "LRC,
1*
the Court held that the
ageny is lia6le for pay1ent of a sea1an@s 1edial and disa6ility 6enefits in the event that the
prinipal fails or refuses to pay the 6enefits or wages due the sea1an although the sea1an 1ay
not 6e a regular e1ployee of the ageny.
5he Court s9uarely passed upon the issue in Millares v. "LRC
1!
where one of the issues raised
was whether seafarers are regular or ontratual e1ployees whose e1ploy1ent are ter1inated
everyti1e their ontrats of e1ploy1ent e:pire. 5he Court e:plained?
A/Bt is lear that seafarers are onsidered ontratual e1ployees. 5hey an not 6e onsidered as
regular e1ployees under $rtile 2-0 of the 3a6or Code. 5heir e1ploy1ent is governed 6y the
ontrats they sign everyti1e they are rehired and their e1ploy1ent is ter1inated when the
ontrat e:pires. 5heir e1ploy1ent is ontratually fi:ed for a ertain period of ti1e. 5hey fall
under the e:eption of $rtile 2-0 whose e1ploy1ent has 6een fi:ed for a speifi pro=et or
underta<ing the o1pletion or ter1ination of whih has 6een deter1ined at the ti1e of
engage1ent of the e1ployee or where the wor< or servies to 6e perfor1ed is seasonal in nature
and the e1ploy1ent is for the duration of the season. 8e need not depart fro1 the rulings of the
Court in the two afore1entioned ases whih indeed onstitute stare decisis with respet to the
e1ploy1ent status of seafarers.
Petitioners insist that they should 6e onsidered regular e1ployees, sine they have rendered
servies whih are usually neessary and desira6le to the 6usiness of their e1ployer, and that
they have rendered 1ore than twenty 0202 years of servie. 8hile this 1ay 6e true, the Brent
ase has, however, held that there are ertain for1s of e1ploy1ent whih also re9uire the
perfor1ane of usual and desira6le funtions and whih e:eed one year 6ut do not neessarily
attain regular e1ploy1ent status under $rtile 2-0. +verseas wor<ers inluding seafarers fall
under this type of e1ploy1ent whih are governed 6y the 1utual agree1ents of the parties.
/n this =urisdition and as learly stated in the Coyoca ase, 7ilipino sea1en are governed 6y the
Rules and Regulations of the P+.$. 5he 'tandard .1ploy1ent Contrat governing the
e1ploy1ent of $ll 7ilipino 'ea1en on Board +ean%&oing >essels of the P+.$, partiularly in
Part /, 'e. C speifially provides that the ontrat of sea1en shall 6e for a fi:ed period. $nd in
no ase should the ontrat of sea1en 6e longer than 12 1onths. /t reads?
'etion C. Duration of Contrat
5he period of e1ploy1ent shall 6e for a fi:ed period but in no case to exceed 12 months and
shall 6e stated in the Crew Contrat. $ny e:tension of the Contrat period shall 6e su6=et to the
1utual onsent of the parties.
"oreover, it is an aepted 1ariti1e industry pratie that e1ploy1ent of seafarers are for a
fi:ed period only. Constrained 6y the nature of their e1ploy1ent whih is 9uite peuliar and
uni9ue in itself, it is for the 1utual interest of 6oth the seafarer and the e1ployer why the
e1ploy1ent status 1ust 6e ontratual only or for a ertain period of ti1e. 'eafarers spend 1ost
of their ti1e at sea and understanda6ly, they an not stay for a long and an indefinite period of
ti1e at sea. 3i1ited aess to shore soiety during the e1ploy1ent will have an adverse i1pat
on the seafarer. 5he national, ultural and lingual diversity a1ong the rew during the C+. is a
reality that neessitates the li1itation of its period.
Petitioners 1a<e 1uh of the fat that they have 6een ontinually re%hired or their ontrats
renewed 6efore the ontrats e:pired 0whih has ad1ittedly 6een going on for twenty 0202
years2. By suh iru1stane they lai1 to have a9uired regular status with all the rights and
6enefits appurtenant to it.
'uh ontention is untena6le. Endenia6ly, this iru1stane of ontinuous re%hiring was ditated
6y pratial onsiderations that e:periened rew 1e16ers are 1ore preferred. Petitioners were
only given priority or preferene 6eause of their e:periene and 9ualifiations 6ut this does not
detrat the fat that herein petitioners are ontratual e1ployees. 5hey an not 6e onsidered
regular e1ployees. : : :
1-

5he Court reiterated the Millares ruling in #u$Miro v. %dora&le
1,
where it held that a radio
offier on 6oard a vessel annot 6e onsidered as a regular e1ployee notwithstanding that the
wor< he perfor1s is neessary and desira6le in the 6usiness of the o1pany.
5hus, in the present ase, the Court of $ppeals erred in ruling that 5anhio was a regular
e1ployee of Petroleu1 'hipping.
'n ()th Month *ay
5he Court of $ppeals pre1ised its grant of 1#th 1onth pay on its ruling that 5anhio was a
regular e1ployee. 5he Court of $ppeals also ruled that petitioners are not e:e1pt fro1 the
overage of PD -51 whih re9uires all e1ployers to pay their e1ployees a 1#th 1onth pay.
8e do not agree with the Court of $ppeals. $gain, 5anhio was a ontratual, not a regular,
e1ployee. 7urther, PD -51 does not apply to seafarers. 5he 8;.R.$' lauses of PD -51
provides?
8;.R.$', it is neessary to further protet the level of real wages fro1 ravages of world%wide
inflationD
8;.R.$', there has 6een no inrease in the legal 1ini1u1 wage rates sine 1,!0D
8;.R.$', the Christ1as season is an opportune ti1e for soiety to show its onern for the
plight of the wor<ing 1asses so they 1ay properly ele6rate Christ1as and (ew Fear.
PD -51 onte1plates the situation of land%6ased wor<ers, and not of seafarers who generally
earn 1ore than do1esti land%6ased wor<ers.
5anhio@s e1ploy1ent is governed 6y his Contrat of .nlist1ent 04Contrat42.
20
5he Contrat
has 6een approved 6y the P+.$ in aordane with 5itle /, Boo< +ne of the 3a6or Code and the
P+.$ Rules &overning .1ploy1ent.
21
5he overage of the Contrat inludes Co1pensation,
+verti1e, 'undays and ;olidays, >aations, 3iving $llowane, 'i<ness, /n=ury and Death,
5ransportation and 5ravel .:pense, 'u6sistene and 3iving Guarters. /t does not provide for the
pay1ent of 1#th 1onth pay. 5he Contrat of .1ploy1ent,
22
whih is the standard e1ploy1ent
ontrat of the P+.$, li<ewise does not provide for the pay1ent of 1#th 1onth pay.
/n Coyoca v. "LRC whih involves a lai1 for separation pay, this Court held?
7urther1ore, petitioner@s ontrat did not provide for separation 6enefits. /n this onnetion, it is
i1portant to note that neither does P+.$ standard e1ploy1ent ontrat for 7ilipino sea1en
provide for suh 6enefits.
$s a 7ilipino sea1an, petitioner is governed 6y the Rules and Regulations &overning +verseas
.1ploy1ent and the said Rules do not provide for separation or ter1ination pay. : : :
2#

;ene, in the a6sene of any provision in his Contrat governing the pay1ent of 1#th 1onth pay,
5anhio is not entitled to the 6enefit.
'n +isa&ility Benefits
Petitioners allege that 5anhio@s Contrat ended on 1# +to6er 1,,2 when he returned to
"anila. 5hey allege that the vaation period is not part of the period of e1ploy1ent.
8e annot aept petitioners@ ontention.
5he duration of the Contrat was for eight 1onths. 5he Contrat also provides?
$rtile >
>$C$5/+('
>aation days shall 6e earned at the rate of seven and one%half days 0!.52 days for eah thirty
0#02 days of ontinuous servie, alulated fro1 date of departure fro1 "anila and until date of
return to "anila. >aation 6egins on the day following arrival in "anila.
.very effort will 6e 1ade to grant earned vaations pro1ptly after eight 0-2 1onths of servieD
however, the C+"P$(F shall have the right to advane or delay vaations to oinide with
vessel repairs, for operational reasons or due to personal re9uire1ents. '.$7$R.R shall reeive
vaation o1pensation for eah thirty 0#02 days of ontinuous servie in aordane with the
rates listed in $ddendu1 (o. 1, Colu1n 0122, to 6e paid in "anila. $1ounts shall 6e pro%rated
aording to the ran<sHratings and period of ti1e in whih the '.$7$R.R served. 7or period of
less than thirty 0#02 days servie, vaations and o1pensation shall 6e redued proportionately.
5i1e off for illness, in=ury, vaation, leave of a6sene or stand%6y shall not 6e onsidered servie
under the provisions of this $rtile.
/t is the C+"P$(F@s intention that eah '.$7$R.R en=oy his full vaation period. Beause of
urgent fleet needs, however, it oasionally 1ay 6e neessary to reall a '.$7$R.R early fro1
vaation.
2)

'ine 5anhio reeived o1pensation during his vaation, the Contrat did not ter1inate on the
day he returned to "anila. 5he Contrat re1ained in fore during 5anhio@s vaation period.
;owever, the Court of $ppeals erred when it ruled that 5anhio is entitled to disa6ility 6enefits
of 1- days for every year of servie. 5he Court of $ppeals ruled that 5anhio@s e1ploy1ent was
ontinuous and that his tenure with petitioners was for 1) years. $gain, the Court of $ppeals
assu1ed that 5anhio was a regular e1ployee. 5he Court of $ppeals failed to onsider that
5anhio@s e1ploy1ent ter1inated with the end of eah ontrat.
5he Contrat provides?
$rtile >///
'/CI(.''%/(JERFHD.$5;
$. 5he C+"P$(F shall provide, during the period of the Contrat, /nsurane overage
for the '.$7$R.R against loss of life, per1anent disa6ility, te1porary disa6ility, in=ury,
oupational illness, hospital and 1edial e:pense in suh a1ounts as the C+"P$(F
shall deter1ine 6ut not lower than what the C+"P$(F would have to pay under the
Philippine +verseas .1ploy1ent $d1inistration@s re9uire1ents or the vessel@s flag state
re9uire1ents 0whihever is higher2.
B. /f '.$7$R.R is re1oved fro1 a vessel for 1edial treat1ent he shall 6e entitled to
reeive a disa6ility 6enefit e9ual to his 1onthly wage rate 0or pro%rata thereof2 fro1 date
of dise16ar<ation until date of re=oining his vessel, assign1ent to another vessel or until
date of repatriation to "anila if still disa6led. "edial, surgial, hospital, or linial
treat1ent shall 6e reo11ended 6y a dotor approved 6y the C+"P$(F and
'.$7$R.R 1ust follow all 1edial advies. '.$7$R.R will not 6e entitled to
disa6ility 6enefit pay1ents for disa6ility resulting fro1 his own 1isondut, negligene,
unlawful ats, alterations, vie, et.
C. $fter dise16ar<ation fro1 a vessel, the '.$7$R.R is entitled to one hundred perent
0100C2 of his wages until he is delared fit or the degree of per1anent disa6ility has 6een
assessed 6y the C+"P$(F@s physiian for a 1a:i1u1 period of 120 days o11ening
on date of suh dise16ar<ation. Epon the e:piration of suh 120 days and if the
'.$7$R.R is still disa6led, the '.$7$R.R shall 6e paid his wages e9uivalent to 1-
days for every year of redited servie.
/n speial instanes and at the disretion of the C+"P$(F, the 1a:i1u1 nu16er of
days of C+"P$(F 6enefits 1ay 6e e:tended 6eyond 120 days for a '.$7$R.R with
over -0 1onths redited C+"P$(F servie, or in suh other ase as 1ay 6e deter1ined
6y the C+"P$(F.
Epon e:piration of C+"P$(F 6enefits and if still disa6led, the following a1ounts shall
6e paid up to 1a:i1u1 of #*5 days, inlusive of the period of the a6ove 6enefits.
$ll Ran<s ................................................ E' J10 per day
D. If )2/(52"20# /.ou") o11u 6.2"e SE$,$RER 2/ on 7(1(02on, .e !u/0, 620.2n 3
)(#/ fo! )(0e 0.eeof, no02f# 0.e 'OMP$N+8/ $3en0 2n 0.e P.2"2442ne/ 2n o)e
0.(0 0.e "(00e /.("" 5e (5"e 0o 1e02f# (/ 0o .2/ 1on)202on. 'e02f21(02on of )2/(52"20#
e9u2e) fo 4(#!en0 of (n# )2/(52"20# 5enef20/ !u/0 5e (44o7e) 5# ( )o10o
(44o2n0e) 5# 0.e 'OMP$N+ (n) SE$,$RER !u/0 5e )2/(5"e) /e7en (:& )(#/ o
!oe 0o 5e e"2325"e 0o 5enef20/ (n) /21; "e(7e /0(0u/, 'OMP$N+ 5enef20/ /.("" 5e
"2!20e) 0o ( !(<2!u! of 18 )(#/.
Benefits under the C+"P$(F Disa6ility Plan shall 6e 1ade only to the e:tent and in
suh a1ounts as are e9ual to the differential 6etween any pay1ents whih 1ay 6e due
'.$7$R.R under C+"P$(F@s o6ligation as set forth in the 1st paragraph of this
$rtile >/// and ,0 perent of '.$7$R.R@s last wage rate.
.. /n ase of death at sea or at a foreign port, the tradition of the sea and re9uire1ents of
the laws of suh foreign port will 6e o6served. /f pratial, every effort will 6e 1ade on
the part of the C+"P$(F to return the re1ains of a deeased '.$7$R.R to "anila at
C+"P$(F e:pense.
7. 5he '.$7$R.R a<nowledges that even without signed reeipts, any wage pay1ents
1ade to hi1 for a period during whih he is entitled to 6enefits under any law 6y reason
of death, te1porary or per1anent disa6ility, shall 6e dee1ed an advane pay1ent of
o1pensation 6enefits due to hi1 under suh law, 6ut only to the e:tent of 6enefits due
for the period of disa6ility during whih wages are paid.
8ages, as set forth in $ddendu1 (o. 1, Colu1n 012, shall 6e the 6asis for any alulation of
6enefits due '.$7$R.R under this $rtile >///.
25
0.1phasis supplied2
/ndiations that 5anhio was suffering fro1 ishe1ia were deteted on - Dee16er 1,,2 during
5anhio@s vaation period. 5hus, petitioners paid hi1 disa6ility 6enefits for 1- days in
aordane with the Contrat. 5anhio annot lai1 that he only a9uired the illness during his
last deploy1ent sine the "edial Report
2*
he su61itted to the (3RC showed that he has 6een
hypertensive sine 1,-# and dia6eti sine 1,-!. /n the a6sene of onrete proof that 5anhio
a9uired his disa6ility during
his last deploy1ent and not during his vaation, he is only entitled to disa6ility 6enefits for 1-
days.
Petitioners lai1 that they already paid 5anhio his disa6ility 6enefits for 1- days 6ut he refused
to sign the reeipt.
2!
5anhio alleged that he was only paid under the Career .1ploy1ent
/nentive Plan.
2-
5his is a fatual 1atter whih this Court annot resolve. 5his 1atter has to 6e
re1anded to the 3a6or $r6iter for resolution.
-HERE,ORE, we GR$NT the petition. 8e RE=ERSE and SET $SIDE the 25 January
2001 Deision and ! "ay 2001 Resolution of the Court of $ppeals in C$%&.R. 'P (o. 5)!5*.
8e REINST$TE the 1* +to6er 1,,* Deision of 3a6or $r6iter Jose &. De >era dis1issing the
o1plaint for illegal dis1issal and the lai1s for 6a<wages, separation pay and 1#th 1onth pay.
8e REM$ND the ase to the 3a6or $r6iter to deter1ine if 7lorello 5anhio has 6een paid his
disa6ility 6enefits for 1- days in aordane with his Contrat of .nlist1ent. /f no pay1ent has
6een 1ade, the 3a6or $r6iter is DIRE'TED to deter1ine the a1ount 5anhio is entitled.
SO ORDERED.