Beneficiaries of seafarer’s death compensation

The legal battle for death compensation of the deceased seafarer, in some instances, becomes a  “telenovela” case due to confusion as to the rightful recipients of the death benefits.

Under an employment contract duly approved by the Philippine Overseas Employment Administration (POEA), in the case of work-related death of the seafarer, during the term of his contract,  the employer shall pay his beneficiaries the Philippine Currency equivalent to the amount of Fifty Thousand US dollars (US$50,000) and an additional amount of Seven Thousand US dollars (US$7,000) to each child under the age of twenty-one (21) but not exceeding four (4) children, at the exchange rate prevailing during the time of payment. The amount usually is higher if the death is covered by a Collective Bargaining Agreement (CBA).

The confusion arise since the terms 'allottee' and 'beneficiary' were  undefined in the previous POEA employment contracts.

Under the current contract, the 'allottee' is the person designated by the seafarer as the recipient of his or her salary allotment.

On the other hand, the beneficiary is the person(s) to whom the death compensation and other benefits are paid and is based on the Philippine law on succession. Thus, not all allottees are automatically considered as beneficiaries.

Simply stated, the right of the allottee, as the terms suggest, is limited to the allotment of the seafarer which is equivalent to at least 80% of his or her monthly basic salary.

Legal or intestate succession takes place if a person dies without a will. And in the absence of heirs instituted in a will, the law vests the inheritance, in the legitimate and illegitimate relatives of the deceased, in the surviving spouse, and in the State in accordance with the rules set forth in the New Civil Code (NCC), Articles 960 and 961.

The law on rules on legal or intestate succession provides that in every inheritance, the relative nearest in degree excludes the more distant ones and that the succession to property by heirs pertains first to the direct descending line (Articles 962 and 978). 

Thus, if a seafarer's mother is his allottee and he dies survived by his wife and one child, the death compensation is paid to the wife and child and not to the mother, in accordance with the Philippine law on succession.

If a widow/ widower  and legitimate children are left, the surviving spouse  is entitled to the same share as that of each of the children.

When the widow/ widower  survives with legitimate parents, the surviving spouse shall be entitled to one-half of the death benefits, and the legitimate parents to the other half. 

If a widow/widower survives with illegitimate children, she/he  shall be entitled to one-half of the death  benefits, and the illegitimate children  to the other half. 

            An illegitimate child shall receive a share equivalent to half of the legitimate child's share. 

If legitimate parents, the surviving spouse, and illegitimate children are left, the parents  shall be entitled to one-half of the death benefits, and the other half shall be divided between the surviving spouse and the illegitimate children so that such widow  shall have one-fourth of the death benefits, and the illegitimate children the other fourth. 

An adopted child is entitled   in the same manner as a legitimate child.

In case of a legal separation, if the surviving spouse gave cause for the separation, he or she shall not have any of the rights granted by law.

As long as the marriage was not annulled at the time of death, the surviving legitimate  spouse will enjoy the rights regardless of their years of physical separation.

The basis of the rules on intestate succession was explained by the Supreme Court in this manner: “The law of intestacy is founded on the presumed will of the deceased. Love, it is said, first descends, then ascends, and finally, spreads sideways. Thus, the law first calls the descendants, then the ascendants and, finally, the collaterals, always preferring those closer in degree to those of remoter degrees, on the assumption that the deceased would have done so had he manifested his last will. Lastly, in default of anyone called to succession or bound to the decedent by ties of blood or affection, it is in accordance with his presumed will that his property be given to charitable or educational institutions, and thus contribute to the welfare of humanity.” (In the Matter of the Intestate Estate of Cristina Aguinaldo-Suntay vs. Isabel Cojuangco-Suntay (GR No. 183053; June 16, 2010)

 (Atty. Gorecho heads the seafarers’ division of the  Sapalo Velez Bundang Bulilan  law offices. For comments, email info@sapalovelez.com, or call 09175025808 or 09088665786)

Escrow deposit in seafarers' cases

In terms of labor litigation,  “escrow deposit ” plays a significant role in  a seafarer's  favorable decision on his monetary claims.

Every labor dispute involves two opposing parties:  the worker on one side and the management on the other, involving monetary claims  like disability and death benefits, illegal dismissal awards as well as unpaid or underpayment of salaries and wages. 

A manning agency is required under   POEA Rules to  deposit in escrow with  a bank  the amount of ONE MILLION PESOS (Php1 ,000,000.00) to answer for all valid and legal claims arising from violations of the conditions for the grant and use of the license, and/or accreditation and contracts of employment. These include recruitment violations, or claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino seafarers under the joint and solidary liability of the manning agency.

Labor litigation takes years before its finality. In most cases, the elevation of the records alone from the NLRC/NCMB to the Court of Appeals or Supreme Court will take several years. The proceedings in the appellate court will entail further delay.  In cases of seafarers with medical conditions, some incur huge debts to sustain their medication. Others die before the decision by the Supreme Court is released. 

The prevailing party might  be unable to enjoy  the judgment award  after the lapse of time, considering the tactics of the adverse party who may have no recourse but to delay. Due to the longer years that they have to wait, without any leverage in prosecuting his monetary claims, chances are, the  seafarer bows to the demand of his employer to either drop his claim or accept a small settlement amount. 

To protect the seafarers, the escrow deposit  must  remain intact during the validity of license for a period of four (4) years and an additional of four ( 4) years if not renewed upon its expiration or should the license be revoked or otherwise cancelled for whatever legal grounds. In case the deposit in escrow is reduced, the Manning agency  shall replenish the same within fifteen (15) calendar days from notice by the POEA. The Bank  shall at all times advise the POEA whenever the escrow deposit is reduced or same is no longer intact. Failure to replenish  shall result in the suspension of license of the Manning agency without further notice.

The escrow deposit shall not be  released except upon proper authorization by the POEA .  The bank   shall pay the claims on a "first come-first served" basis and the Order of Garnishment that is first served upon the bank  shall be satisfied, irrespective of the date of the issuance of the writ of execution. If several claims are simultaneously presented on the same day, and the escrow deposit is not sufficient to pay the claims, the bank shall pay the claims on a pro-rata basis.

The bank  shall not be liable beyond whatever balance of the deposit in escrow.

Incompetence and Inefficiency as grounds for dismissal

It is settled that the employer has the burden to prove that the dismissal of a seafarer  is based on a valid cause. To discharge this burden, the employer must present substantial evidence - or such amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion - that the cause of the seafarer's dismissal was valid.Specifically, the employer must comply with the following requisites: (1) the dismissal must be for a just or authorized cause, and (2) the employee to be dismissed must have been afforded due process of law.

As a general concept, poor performance is tantamount to inefficiency and incompetence in the performance of official duties. An unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. Poor or unsatisfactory performance of an employee does not necessarily mean that he is guilty of gross and habitual neglect of duties 

To ascribe gross neglect, there must be lack of or failure to exercise slight care or diligence, or the total absence of care in the performance of duties. In other words, there is gross neglect when the employee exhibits thoughtless disregard of consequences without exerting effort to avoid them. On the other hand, habitual neglect involves repeated failure to perform duties for a certain period of time, depending upon the circumstances, and not mere failure to perform duties in a single or isolated instance.  

 

The dismissal report against the seafarer did not describe the specific acts that would establish his alleged poor performance, or his want of even slight care in the performance of his official tasks as chief cook for a certain period of time; hence, even assuming that seafarer’s performance was unsatisfactory, the company failed to show that his poor performance amounted to gross and habitual neglect of duties.  (INC SHIPMANAGEMENT, INC., v. RANULFO CAMPOREDONDO, G.R. No. 199931, September 07, 2015)

 Accordingly, the following factors should be considered in relation to  incompetence:

(1) the workload of the seafarer  should be consistent with the position agreed upon in the labor contract or with the workload of similar other seafarers; 

(2) the reasons an seafarer  is identified as incompetent should be based on his personal performance, rather than objective factors beyond his control;

 (3) methods for assessing competence must be lawful; 

(4) whether the seafarer  is deemed competent or not should be measured against specific standards, and cannot be judged by qualifications or rank; 

(5) when declaring a seafarer to be incompetent, corresponding evidence should be obtained in addition to legal and applicable standards.

Even when an employee is found to have transgressed the employer’s rules, in the actual imposition of penalties upon the erring employee, due consideration must still be given to his length of service and the number of violations committed during his employ. Where a penalty less punitive would suffice,  whatever missteps may have been committed by the worker ought not to be visited with a consequence so severe such as dismissal from employment (PLDT vs. NLRC , 303 SCRA 9). 

When a seafarer commits such violations,  he may be penalized by the master of the vessel with dismissal and be made to pay the cost of repatriation and his replacement. Additionally, an administrative complaint or disciplinary action against the seafarer may be filed before the POEA, who,  after due investigation, may  impose penalties ranging from suspension  to  delisting, depending on the frequency of the violation(s).

Under the "two-notice rule", an erring seafarer is given a written notice of the charge against him and is afforded an opportunity to explain or defend himself. Should sanctions be imposed, then a written notice of penalty and the reasons for it shall be furnished the erring seafarer. It is only in the exceptional case of clear and existing danger to the safety of the crew or vessel that the required notices are dispensed with; but just the same, a complete report should be sent to the manning agency, supported by substantial evidence of the findings (Skippers Pacific, Inc. v. Mira 440 Phil. 906 (2002)
In case of an  illegal dismissal,  a seafarer is  entitled to receive from his employers His salaries for the unexpired portion of his employment contract not merely  his salaries for three (3) months for every year of the unexpired term.

Assumption of liability not a defense

The  original manning agency cannot  claim that it will  be exempted from liability because it is no longer the manning agency responsible to the dismissed seafarers since  the new manning agencies  had executed Affidavits of Assumption of Responsibility.

In Section 1 of Rule II of the POEA Rules and Regulations, it states that:

Section 1. Requirements for Issuance of License. Every applicant for license to operate a private employment agency or manning agency shall submit a written application together with the following requirements:

x x x

             f. A verified undertaking stating that the applicant:

x x x

(3) Shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract; including but not limited to payment of wages, death and disability compensation and repatriation.

Accordingly, despite the execution of the Affidavits of Assumption of Responsibility by other manning agencies, the original manning agency  cannot exempt itself from all the claims and liabilities arising from the implementation of the contract executed between the said original manning agency  and the seafarers. It is very clear from the above-cited provisions of the Rules and Regulations of the POEA that the manning agency shall assume joint and solidary liability with the employer.Joint and solidary liability is meant to assure aggrieved workers of immediate and sufficient payment of what is due them. The reason for this ruling was given by this Court in the 1988 case of Catan v. National Labor Relations Commission ( 160 SCRA 691, 695)  which is reproduced in part below:

This must be so, because the obligations covenanted in the recruitment [manning] agreement entered into by and between the local agent and its foreign principal are not coterminus with the term of such agreement so that if either or both of the parties decide to end the agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Otherwise, this will render nugatory the very purpose for which the law governing the employment of workers for foreign jobs abroad was enacted.

Also, according to Section 10, paragraph 2 of Republic Act No. 8042, the agency which deployed the employees whose employment contract were adjudged illegally terminated, shall be jointly and solidarily liable with the principal for the money claims awarded to the aforesaid employees. 

The Affidavits of Assumption of Responsibility, though valid as between  the original manning agency and the other two manning agencies, are not enforceable as against the respondents because the latter were not parties to those agreements. The provisions of the POEA Rules and Regulations are clear enough that the manning agreement extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Hence, despite the execution of the aforementioned affidavits,  the original manning agency  cannot exempt itself from the liabilities and responsibilities towards the seafarers.

( SKIPPERS UNITED PACIFIC, INC., and J.P. SAMARTZSISMARITIME ENTERPRISES CO., S.A., vs. JERRY MAGUAD and PORFERIO CEUDADANO,  G.R. No. 166363,  August 15, 2006) 

Blame-shifting in Seafarer’s labor cases

Pinoy Seafarers’ Rights

Atty. Dennis R. Gorecho

“Aanhin pa ang damo kung patay na ang kabayo.”  Never mind if the seafarer dies before he receives compensation. A popular Filipino saying that applies directly to the possible  legal effect of ANGKLA’s  bill (House Bill No.  5430) that seeks to delay the execution of  the favorable judgment from the National Labor Relations Commission (NLRC) and the National Conciliation and Mediation Board (NCMB).

 In most cases for disability compensation, some incur huge debts to sustain their medication while others die before the decision by the Supreme Court is released. And yet ANGKLA insists that the aim of the bill is “to balance the interest” of  the seafarer and the employer as  “there is little hope of recovering anything through restitution.” In reality,  employers  have the legal remedies to recover the amount, but one cannot reclaim the life of the deceased seafarer.

Worse, ANGKLA has employed the art of deception in sanitizing the real picture  that the seafarers are victims of the employers’ abuses  when it authored the  Republic Act 10706 , or the  Seafarers’ Protection Act. Call it the game of “blameshifting”, ANGKLA has diverted  attention on labor cases   by discrediting the lawyers who ANGKLA   accused of having considerable interest in the seafarer’s  monetary benefits.

Lest we   forget, seafarers are forced to go to court because the employers  violated their legal rights first. Every  labor dispute is a David and Goliath battle as  it  involves two opposing parties:  the worker on one side and the management on the other, for  monetary claims for  disability and death benefits, illegal dismissal as well as unpaid or underpayment of salaries and wages

In illegal dismissal cases,  the POEA contract requires compliance with  two basic requirements for a lawful dismissal: a just or authorized case as prescribed by law (substantive requirement), and observance of due process. Many are sent home due to unfounded accusations and without the proper notices given.

Away from his family and working on board vessels sailing non-stop for weeks or months the world’s oceans, he is mentally and emotionally stressed. Constantly exposed to fluctuating temperatures caused by variant weather changes of extreme hot and cold as the ships cross ocean boundaries, not to mention harsh weather conditions, the risks of his getting killed, injured or ill are high.

As if working under these difficult conditions are not enough, when he sustains injury, illness or lose his life, seldom does he receive full compensation provided under the law due to company’s  legal maneuverings by  using  the POEA  contract  that contains terms and conditions formulated more favorable to his employer and is littered with ambiguous provisions, generalizations, technicalities that he does not understand.

In many instances, he signs Receipt and Quitclaim documents thereby  releasing his employers from all claims, demands and causes of action without even understanding their contents. Oftentimes, he is misled into accepting an ex-gratia, miniscule amount, in the guise that his condition is either not work-connected, or for any other reason for which he does not comprehend. Compensation claims are either denied or downgraded   due to the biased medical opinion of the company designated  physician.

More often than not, he knows that he is being cheated of his rights, but how can he question his employer in these instances, without the assistance of competent lawyer of his own choosing?

Instead of addressing the above issues by giving seafarers more access in compensation benefits, R.A. No. 10706 will   restricts  his option of an avenue to avail of legal services of competent lawyers, which he can voluntarily enter into, are therefore,  antagonistic to his interests, rendering him defenseless against the abuses of his employers.  They will, in effect, obstruct the effective and efficient administration of justice.

Seafarers should not be deceived by the misleading projection of the  law which employed the “scare tactic” to discourage seafarers from engaging the legal services of lawyers by depicting the latter as vultures. By charging even eleven percent (11%) of the amount recoverable, or one percent higher than the ten percent (10%) limit,  is not “abusive” per legal practice standard. Yet, ANGKLA used as “papogi” points its deceptive concern towards the seafarers. In the end, the legislative act intends to protect business interest from the cases filed by seafarers deprived of their rights under contract and the law rather than give more access to the seafarers for rightful compensation.

When a seafarer is forced to go to engage the services of a lawyer, employers   do not hesitate to harness its immense resources to  escape from  or limit its liability. However, when he wins, the employer, in order give a semblance of sympathy, will use the Seafarer’s Protection Act to say “I care for you. Your lawyer should get only ten percent.”  Ironically,  ANGKLA’s escrow bill  is anti-seafarer since it is a  dilatory tactic wherein he  will not immediately get what is rightfully due to him. Never mind if the seafarer dies before the decision, as long as the employer’s interest is also protected by ANGKLA’s  escrow bill.

Without any leverage in prosecuting his monetary claims, chances are, he bows to the demand of his employer to either drop his claim or accept a small settlement.  If he has enough pride and heart, and there are only a few who fall in this category, his only recourse is the exercise of his right, guaranteed by the due process clause of our Constitution, to engage the legal services of attorneys of his choice.  With good, experienced, professional lawyers, he will be able to prosecute his monetary claim in a level playing field.

It is election time again. Be critical of the real colors. 

             

Atty. Dennis R. Gorecho  is a graduate of UP College of Law (1998)  and  is currently a junior partner of Sapalo Velez Bundang Bulilan (SVBB) law offices  who heads the seafarers’ division. He is a  speaker on  nationwide paralegal seminars on  seafarers rights.  He is presently the executive vice president of the Maritime Law Association of the Philippines (MARLAW),  and an active  member of the Maritime Forum Inc. , the National Seafarers Day (NSD) committee and International Pro Bono Network. The SVBB law works hand in hand with various seafarers welfare  organizations such as the Apostleship of the Seas (AOS) Philippines, Luneta Seafarers Welfare Foundation (LUSWELF) and United Filipino Seafarers (UFS) . He is a legal commentator on maritime issues on print, radio and TV. A co-anchor of the radio program Bantay OCW Usapang Marino aired over Radio Inquirer/ DZIQ every Wednesday 10:30am to 12noon. For comments, please send  email  at info@sapalovelez.com or call  09175025808/ 09088665786. 

The Filipino seafarers' legal issues

THE Philippines is considered a major supplier of maritime labor globally. It is estimated that there is one Filipino seafarer for every four complements  on board a vessel at any time.

Philippine Overseas Employment Administration (POEA) data showed that there are 367,166 Filipino seafarers with POEA-approved contracts deployed in 2013. In 2014, the deployed seafarers brought in US$5,575,722,000 as dollar remittances. The sea-based sector’s remittance comprises at least 22 percent of the total dollar remittances of overseas Filipino workers (OFWs).

The seafarer, like other OFWs, is often looked up to as one of today’s heroes who, through the huge remittances in billions of dollars they earn, have propped up our economy. These remittances help spur domestic consumption in the Philippines and a key ingredient in the country’s drive to achieve higher but sustainable growth.

Given the vast Philippine coast line (twice that of the United States and nearly three times more than China’s), Filipinos have natural maritime instincts that place them at an advantage over other nationalities. Foreign shipowners are known to prefer Filipino seafarers for equally important qualities: dedication and discipline, industry, flexibility, loyalty, English language fluency, adaptability, positive work attitude, law-abiding, and problem-solving capability.

Despite the glorification of his economic contribution, he is not given the benefits he deserves. In fact, he is especially economically vulnerable because of the nature of his employment which is periodic, i.e., a short term of not more than one-year per contract. He does not have security of tenure, nor entitled to retirement benefits and usually pays for his own training.

Away from his family and working on board vessels sailing non-stop for weeks or months the world’s oceans, he is mentally and emotionally stressed. Constantly exposed to fluctuating temperatures caused by variant weather changes of extreme hot and cold as the ships cross ocean boundaries, not to mention harsh weather conditions, the risks of his getting killed, injured or ill are high.

As if working under these difficult conditions are not enough, when he sustains injury, illness or lose his life, seldom does he receive full compensation provided under the law and contract because his employer does not hesitate to harness its immense resources to limit its liability.

When he or his heirs claim for compensation for death, disability or illness, in the determination of whether or not the cause of death is work-connected, or the gravity or grading of the injury, the decision makers more often than not relies on the biased medical opinion of the company designated physician over that of his personal physician.

In many instances, he signs Receipt and Quitclaim documents thereby releasing his employers from all claims, demands and causes of action without even understanding their contents. Oftentimes, he is misled into accepting an ex-gratia, miniscule amount, in the guise that his condition is either not work-connected, or for any other reason for which he does not comprehend.

More often than not, he knows that he is being cheated of his rights, but how can he question his employer in these instances, without putting at risk his chances of getting employed again?

He has no choice but sign his employment contract, a contract of adhesion, that contains terms and conditions formulated more favorable to his employer and even though it is littered with ambiguous provisions, generalizations, technicalities that he does not understand.

In sum, the basic seafarers’ issues, among others, include (a) illegal recruitment; (b) illegal dismissal; (c) non-payment or underpayment of salaries and wages; (d) disability benefits due to injury or illness and (e) death benefits.

Basically, his legal rights emanate from the following sources: (a) the Philippine Constitution; (b) the Labor Code; (c) Civil Code of the Philippines; (d) international maritime conventions, and (e) the standard employment contract.

The welfare of every seafarer is best safeguarded when the seafarer himself is fully aware of his rights and prerogatives that need to be expounded. Former Supreme Court Chief Justice Renato Puno emphatically stressed in the case of Chavez vs. Bonto-Perez (242 SCRA 73), the need for our OFWs, including the seafarers, for legal protection:

“Our overseas workers constitute an exploited class. Most of them come from the poorest sector of out society. They are thoroughly disadvantaged. Their profile shows they live in suffocating slums, trapped in an environment of crime. Hardly literate and ill health, their hope lies in jobs they can hardly find in our country. Their unfortunate circumstance makes them easy prey to avaricious employers. They will climb mountains, cross the seas, endure slave treatment in foreign lands just to survive. Out of despondence, they will work under subhuman conditions and accept salaries below the minimum. The least we can do is to protect them with our laws in our land”

Illegal Dismissal Benefits

In case of illegal dismissal, how much is a seafarer entitled to receive from his employers? His salaries for the unexpired portion of his employment contract or his salaries for three (3) months for every year of the unexpired term, whichever is less?

The r ruling of the Supreme Court in the case of Antonio M. Serrano vs. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc. (G.R. No. 167614, March 24, 2009) has brought clarity and definitiveness to the issue of entitlement to benefits of a seafarer in case he is illegallydismissed. It made certain that the seafarer should receive his salaries for the entire unexpired portion of his contract, and not just for three months.

In the said Serrano case, the petitioner-seafarer was hired as Chief Officer for a period of 12 months. On the date of his departure however, he accepted the downgraded post of Second Officer upon the assurance of his employers that he would be made Chief Officer in less than two months. His employers however, reneged on their commitment, resulting to petitioner-seafarer’s refusal to stay on as Second Officer. He was then repatriated to the Philippines after less than three months of work. Formally complaining to the Labor Arbiter, the latter, among others, declared his dismissal as illegal but only awarded petitioner-seafarer a lump sum amount based on his salary for three months of the unexpired portion of his contract.

On appeal, the petitioner-seafarer eventually questioned the constitutionality of the 5th paragraph of Section 10, Republic Act No. 8042 (otherwise known as the “Migrant Workers and Overseas Filipinos Act of 1995”) which took effect on July 15, 1995. It reads: “Sec.10. Money Claims.-xxx In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or FOR THREE (3) MONTHS FOR EVERY YEAR OF THE UNEXPIRED TERM, WHICHEVER IS LESS” (underscoring supplied)The National Labor Relations Commission (NLRC) sustained in principle the Labor Arbiter’s decision although it modified the computation of the award.

The Court of Appeals likewise affirmed the NLRC decision. The Supreme Court took the side of the petitioner-seafarer by affirming the illegality of his dismissal and awarded him his salaries for the entire unexpired portion of his employment contract covering nine months and 23 days.

Moreover, in an unparalleled initiative, exercising its power of judicial review of the acts of Congress, the Supreme Court declared the 5th paragraph of Section 10 of RA 8042 as violative of Section 1, Article III (right to due process and equal protection), Section 18, Article II and Section 3, Article XIII (protection of rights of all Filipino workers, whether deployed locally or overseas) of the Constitution. The High Court observed that the questioned clause has a discriminatory intent against overseas Filipino workers (OFWs) at two levels, i.e., OFWs with employment contracts of LESS THAN 1 YEAR vis-à-vis OFWs with contracts of ONE YEAR OR MORE, and OFWs vis-a-vis local workers with fixed-period employment. The clause only limits the monetary awards of OFWs, whose contracts have an unexpired portion of one year or more, to their salaries for three months or for the unexpired portion thereof, whichever is less, but does not bother OFWs with unexpired contracts short of one year.

The Court concluded “….the subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixed-term employees who are illegally dismissed, it imposes a three-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage” (underscoring supplied). The Court likewise added that the clause violates the petitioner-seafarer’s right to substantive due process for it deprives him of property, consisting of monetary benefits without any existing valid governmental purpose. With the above ruling, the Supreme Court has reverted to the old, simple, and logical manner by which claims of illegally dismissed OFWs are computed, i.e., their basic salaries multiplied by the entire unexpired portions of their contracts, and accordingly disregarded any distinction relating to the OFWs’ contract periods or the unexpired portions thereof.

Article of Atty. Augusto R. Bundang originally published in the May-June 2009 issue of Tinig ng Marino