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PAUL V. SANTIAGO v. CF SHARP CREW MANAGEMENT

FACTS:

Paul V. Santiago (petitioner) had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about five (5) years. On 3 February 1998, petitioner signed a new contract of employment with respondent, which was approved by the Philippine Overseas Employment Administration (POEA) the following day. Petitioner was scheduled to be deployed on board the "MSV Seaspread" on 13 February 1998. However, a week before the scheduled departure, respondent informed petitioner that he would not be leaving for Canada and may be considered for deployment at a future date. Petitioner filed a complaint for illegal dismissal and damages against respondent and its foreign principal. The Labor Arbiter ruled in favor of petitioner and ordered respondent to pay actual damages. On appeal, the NLRC ruled that there was no employer-employee relationship between petitioner and respondent because the employment contract had not commenced and that respondent's decision not to deploy petitioner was a valid exercise of its management prerogative. The Court of Appeals affirmed the NLRC's ruling. Petitioner filed a petition for review before the Supreme Court.

ISSUES:

  1. Whether the non-deployment of the seafarer by the manning agent without his departure from the port of Manila constitutes a breach of the employment contract.

  2. Whether the Labor Arbiter and the NLRC have jurisdiction over the monetary claims despite the absence of an employer-employee relationship due to non-deployment.

RULING:

  1. Yes. The act of preventing the seafarer from departing the port of Manila constitutes a breach of the employment contract. The manning agent unilaterally and unreasonably failed to deploy the seafarer, and must answer for the actual damages suffered by the seafarer.

  2. Yes. The labor arbiter and the NLRC have jurisdiction over the monetary claims under Section 10 of R.A. No. 8042, which covers claims arising out of an employment contract involving Filipino workers for overseas deployment.

PRINCIPLES:

  • Perfection of Employment Contract vs. Commencement of Employer-Employee Relationship The perfection of the contract occurs upon agreement on terms by both parties, while the employer-employee relationship commences upon the actual deployment of the seafarer.

  • Jurisdiction of Labor Arbiters under R.A. No. 8042 Labor arbiters have original and exclusive jurisdiction over claims arising from an employment contract involving Filipino workers for overseas deployment.

  • Right to Damages for Non-deployment Even if POEA Rules are silent on damages for non-deployment, aggrieved seafarers are not precluded from claiming damages under the employment contract.

  • Attorney’s Fees Recoverable when the act or omission of the defendant forces the plaintiff to incur expenses to protect his interest.

  • Compensatory Damages The seafarer is entitled to actual damages equivalent to the salary stipulated in the contract for the intended period of employment.

  • Employment Status of Seafarers Seafarers are considered contractual employees, not regular employees, regardless of repeated contracts with the same employer.