Shopping, surety and sickness

Ruben T Del Rosario, senior partner at Del Rosario & Del Rosario Law Offices, discusses three recent legal developments affecting the employment of Filipino seafarers

THREE significant developments in maritime law involving Filipino seafarers have occurred within the first half of this year. They include the passage of the amended Philippine Overseas Employment Administration (POEA) contract, which came into full effect on June 5, 2002, the enactment of the new rules of the National Labour Relations Commission on March 18, 2002, and the Supreme Court decision of July 29, 2002 which ruled that Filipino seafarers are contractual employees.

Amended POEA Standard Employment Contract

Following challenges before the Philippine Supreme Court on its validity, the amended Philippines Overseas Employment Administration (POEA) contract was finally implemented in full by the POEA on June 5, 2002. There are a number of significant changes, which include;

Work-Related Death, Injury and Illness (Section 20)

Unlike the old contract, death, injury or illness must now be work-related in order to be compensated. Two conditions must be satisfied for compensation to be payable for a work-related death - the death must result from a work-related injury or illness, and it must have occurred during the term of employment. However, if the seafarer dies after his term of employment but his death was the result of a work-related injury or illness suffered during the term of employment, compensation is still payable under Section 20.

The basic requirements for compensation are that the injury arose "out of and in the course of employment" and that it occurred during the term of the contract. However, an exception to the "injury at the workplace" doctrine is the "coming-going" rule which states that an employee proceeding to and from his place of employment and an employee charged with a duty or special errand outside the workplace will still be compensated if injured.

Work-related illness is "any sickness resulting in disability or death as a result of an occupational disease listed under Section 32-A of this contract with the conditions set therein satisfied." For compensation to be payable, not only must the illness be listed under Section 32-A, it must also occur during the term of the contract. Furthermore, each of the 21 illnesses listed under Section 32-A enumerate certain conditions for the illnesses to be work-related. It is, therefore, important to review these conditions to determine whether the illness is work-related.

Those illnesses not listed under Section 32-A are "disputably presumed work-related." This means that it is presumed that compensation will be payable for illnesses suffered by a seafarer during the term of his contract unless "substantial evidence" is presented by the employer to prove that the illness is not work-related.

Coverage of Payment of Benefits (includes Tort) (Section 20)

"The seafarer or his successor in interest acknowledges that payment for injury, illness, incapacity, disability, or death of the seafarer under this contract shall cover all claims arising from or in relation to or in the course of the seafarer's employment, including but not limited to damages arising from the contract, tort, fault or negligence under the laws of the Philippines or any other country."

This strengthens the employer's defence that payment of benefits under the contract releases the employer from any and all claims whether arising from "contract, tort, fault or negligence under the laws of the Philippines or any other country."

Dispute Settlement Procedures (Section 29)

According to Section 29, the parties with a collective bargaining agreement (CBA), in addition to the amended POEA Standard Contract, shall submit to the jurisdiction of a voluntary arbitrator or panel of voluntary arbitrators. If no arbitrators are listed in the CBA, the parties shall choose from the list of voluntary arbitrators of the National Conciliation and Mediation Board (NCMB) of the Department of Labour and Employment.

The decision of the voluntary arbitrator(s) is considered final and binding, although in practice it may be appealed to the Court of Appeals and the Supreme Court. For seafarers without a CBA and only covered by the POEA contract, there is the option to choose between voluntary arbitration and compulsory arbitration before the Labour Arbiters of the National Labour Relations Commission (NLRC).

Other changes

Where there is a dispute over the disability grading (Section 20), a third doctor may be chosen by the parties. In addition, knowingly concealing a past medical condition during the pre-medical examination is grounds for disallowing compensation and benefits (Section 20). The prescriptive period for claims has been increased from one year to three years (Section 30).

Revised NLRC Rules of Procedure

The National Labour Relations Commission (NLRC) hears claims of Filipino seafarers. On March 18, 2002, it amended some of its rules of procedure, including;

Jurisdiction of labour arbiters

The old rules of the NLRC stated that labour arbiters have jurisdiction to hear and decide claims of "all workers". The new rules, however, now clearly state that labour arbiters also have original and exclusive jurisdiction to decide claims of "overseas Filipino workers provided for by law", which includes seafarers.

The NLRC amended this provision to conform with the Migrant Workers Act of 1995, which gave the NLRC original and exclusive jurisdiction to hear claims of "overseas Filipino workers". This leaves no doubt as to the labour arbiter's jurisdiction to hear claims of Filipino seafarers.

Declaration of non-forum shopping

A complaint must now include a "declaration of non-forum shopping". This is taken from the Revised Rules of Court of the Philippines, which prohibits the filing of two or more suits in different fora. Forum shopping consists of filing multiple suits involving the same parties for the same cause of action, either simultaneously or successively for the purpose of obtaining a favourable judgment. If a seafarer has filed suit in the NLRC, he is prohibited from filing a similar suit in another forum. This rule has been extended to a respondent or defendant who for some reason commences a new action against a complainant or plaintiff.

Surety bond

The surety bond, to be filed together with the appeal, should include a joint declaration under oath by the employer, its counsel, and the bonding company attesting that the bond posted is genuine, and shall be in effect until final disposition of the case. It should also include a copy of the indemnity agreement between the employer-appellant and bonding company and a copy of the security deposit or collateral securing the bond. The requirement for a copy of the security deposit or collateral is something new.

Another new provision is the recognition by the NLRC rules of a motion to reduce bond provided that a "bond in a reasonable amount" is posted.

Proceedings

Whereas under the old rules execution of the judgment may issue after the decision of the NLRC Commission has become final, under the new rules a pre-execution conference is required to be held within two working days from the receipt of the motion for the issuance of a writ of execution. There will, therefore, be no surprises for respondents as to the execution of a decision.

Another rule change deals with the filing of a petition for certiorari, with a higher court assailing the decision of the NLRC Commission. Even if such a petition is filed before the Court of Appeals or the Supreme Court, execution proceedings will still proceed unless the aforesaid courts issue a temporary restraining order.

Filipino seafarers are contractual employees

A regular employee in the Philippines who is illegally dismissed is entitled to reinstatement with back wages. If reinstatement is not possible, the employee is entitled to separation pay amounting to one month for every year of service. On March 14, 2000, the Supreme Court ruled that Filipino seafarers are regular employees and ordered a shipowner to reinstate two Filipino seafarers who had rendered twenty years of service on successive one-year contracts.

The Filipino Association of Mariners Employment (FAME), citing possible adverse effects on the Philippine manning industry, filed a motion in intervention and asked the court to reconsider its ruling. On July 29, 2002, the Philippine Supreme Court reversed its earlier ruling and ruled that Filipino seafarers are contractual, not regular, employees. The court reasoned that Filipino seafarers are governed by the POEA standard employment contract which provides for a fixed term of employment. Furthermore, it is an accepted maritime industry practice that employment is for a fixed term only. Filipino seafarers are, therefore, an exception to the provisions of the Philippine Labour Code on regular employment.