Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=49816:gr-162419-2007&amp;catid=1494&amp;Itemid=566
Timestamp: 2019-04-19 18:14:45+00:00

Document:
G.R. No. 162419 - PAUL V. SANTIAGO v. CF SHARP CREW MANAGEMENT, INC.
PAUL V. SANTIAGO, Petitioner, v. CF SHARP CREW MANAGEMENT, INC., Respondent.
Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for about five (5) years.2 On 3 February 1998, petitioner signed a new contract of employment with respondent, with the duration of nine (9) months. He was assured of a monthly salary of US$515.00, overtime pay and other benefits. The following day or on 4 February 1998, the contract was approved by the Philippine Overseas Employment Administration (POEA). Petitioner was to be deployed on board the "MSV Seaspread" which was scheduled to leave the port of Manila for Canada on 13 February 1998.
I received a phone call today from the wife of Paul Santiago in Masbate asking me not to send her husband to MSV Seaspread anymore. Other callers who did not reveal their identity gave me some feedbacks that Paul Santiago this time if allowed to depart will jump ship in Canada like his brother Christopher Santiago, O/S who jumped ship from the C.S. Nexus in Kita-kyushu, Japan last December, 1997.
We do not want this to happen again and have the vessel penalized like the C.S. Nexus in Japan.
Forewarned is forearmed like his brother when his brother when he was applying he behaved like a Saint but in his heart he was a serpent. If you agree with me then we will send his replacement.
On 9 February 1998, petitioner was thus told that he would not be leaving for Canada anymore, but he was reassured that he might be considered for deployment at some future date.
Petitioner filed a complaint for illegal dismissal, damages, and attorney's fees against respondent and its foreign principal, Cable and Wireless (Marine) Ltd.5 The case was raffled to Labor Arbiter Teresita Castillon-Lora, who ruled that the employment contract remained valid but had not commenced since petitioner was not deployed. According to her, respondent violated the rules and regulations governing overseas employment when it did not deploy petitioner, causing petitioner to suffer actual damages representing lost salary income for nine (9) months and fixed overtime fee, all amounting to US$7, 209.00.
WHEREFORE, premises considered, respondent is hereby Ordered to pay complainant actual damages in the amount of US$7,209.00 plus 10% attorney's fees, payable in Philippine peso at the rate of exchange prevailing at the time of payment.
All the other claims are hereby DISMISSED for lack of merit.
WHEREFORE, in the light of the foregoing, the assailed Decision dated January 29, 1999 is hereby AFFIRMED in so far as other claims are concerned and with MODIFICATION by VACATING the award of actual damages and attorney's fees as well as excluding Pacifico Fernandez as party respondent.
Petitioner moved for the reconsideration of the NLRC's Decision but his motion was denied for lack of merit.10 He elevated the case to the Court of Appeals through a petition for certiorari .
A. The Honorable Court of Appeals committed a serious error of law when it ignored [S]ection 10 of Republic Act [R.A.] No. 8042 otherwise known as the Migrant Worker's Act of 1995 as well as Section 29 of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going Vessels (which is deemed incorporated under the petitioner's POEA approved Employment Contract) that the claims or disputes of the Overseas Filipino Worker by virtue of a contract fall within the jurisdiction of the Labor Arbiter of the NLRC.
There is some merit in the petition.
However, a distinction must be made between the perfection of the employment contract and the commencement of the employer-employee relationship. The perfection of the contract, which in this case coincided with the date of execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as well as the rest of the terms and conditions therein. The commencement of the employer-employee relationship, as earlier discussed, would have taken place had petitioner been actually deployed from the point of hire. Thus, even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party. Thus, if the reverse had happened, that is the seafarer failed or refused to be deployed as agreed upon, he would be liable for damages.
Moreover, while the POEA Standard Contract must be recognized and respected, neither the manning agent nor the employer can simply prevent a seafarer from being deployed without a valid reason.
Respondent's act of preventing petitioner from departing the port of Manila and boarding "MSV Seaspread" constitutes a breach of contract, giving rise to petitioner's cause of action. Respondent unilaterally and unreasonably reneged on its obligation to deploy petitioner and must therefore answer for the actual damages he suffered.
We take exception to the Court of Appeals' conclusion that damages are not recoverable by a worker who was not deployed by his agency. The fact that the POEA Rules27 are silent as to the payment of damages to the affected seafarer does not mean that the seafarer is precluded from claiming the same. The sanctions provided for non-deployment do not end with the suspension or cancellation of license or fine and the return of all documents at no cost to the worker. They do not forfend a seafarer from instituting an action for damages against the employer or agency which has failed to deploy him.
The POEA Rules only provide sanctions which the POEA can impose on erring agencies. It does not provide for damages and money claims recoverable by aggrieved employees because it is not the POEA, but the NLRC, which has jurisdiction over such matters.
Since the present petition involves the employment contract entered into by petitioner for overseas employment, his claims are cognizable by the labor arbiters of the NLRC.
The Court also holds that petitioner is entitled to attorney's fees in the concept of damages and expenses of litigation. Attorney's fees are recoverable when the defendant's act or omission has compelled the plaintiff to incur expenses to protect his interest.31 We note that respondent's basis for not deploying petitioner is the belief that he will jump ship just like his brother, a mere suspicion that is based on alleged phone calls of several persons whose identities were not even confirmed. Time and again, this Court has upheld management prerogatives so long as they are exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements.32 Respondent's failure to deploy petitioner is unfounded and unreasonable, forcing petitioner to institute the suit below. The award of attorney's fees is thus warranted.
However, moral damages cannot be awarded in this case. While respondent's failure to deploy petitioner seems baseless and unreasonable, we cannot qualify such action as being tainted with bad faith, or done deliberately to defeat petitioner's rights, as to justify the award of moral damages. At most, respondent was being overzealous in protecting its interest when it became too hasty in making its conclusion that petitioner will jump ship like his brother.
representing salary for nine (9) months as stated in the contract, and attorney's fees at the reasonable rate of 10% of the recoverable amount.
Carpio, Carpio-Morales, Velasco, Jr., JJ., concur.
Quisumbing, J., on official leave.
1 Entitled Paul V. Santiago v. National Labor Relations Commission, et al.
2 Smith Bell Management, Inc. was substituted by present respondent, CF Sharp Crew Management, Inc. which had assumed all the contractual obligations of Cable and Wireless (Marine) Ltd. while the case was pending before the Court of Appeals. See respondent's Comment dated 4 April 2002, Records, p. 140. Hence, it should be understood that from that time on, the appellation "respondent" in this Decision refers to CF Sharp Crew Management, Inc. instead of Smith Bell, Management, Inc.
5 The caption of the complaint docketed as NCR-OFW - (M) 98-07-0788, reads Paul V. Santiago v. Smith Bell Management, Inc. and/or Cable and Wireless (Marine) Ltd./Mr. Jose Pueio/ Pacifico T. Fernandez. From the inception of the case before the labor arbiter until it reached the Court of Appeals, Smith Bell Management, Inc., the foreign principal Cable and Wireless (Marine) Ltd. and the officers of Smith Bell Management, Inc. were named as respondents. When the case reached this Court, petitioner deleted Smith Bell Management, Inc., Cable and Wireless (Marine) Ltd. and the two officers from the caption of the case in all its pleadings filed with the Court, retaining only C.F. Sharp Crew Management, Inc. as respondent. For its part, CF Sharp Crew Management, Inc. also referred to itself as the only respondent in all his pleadings before the Court.
6 Rollo, p. at 88.
10 Resolution dated 9 October 2001; id. at 78.
13 Interpreting Sec. 4, par. (b), Rule II, Book II, POEA Rules and Regulations Governing Overseas Employment; id. at 36.
17 Id. at 11 and 19.
21 Attached as an annex to petitioner's Reply to respondent's Position Paper.
b. Thirty (30) calendar days from the date of processing by the administration of the employment contracts of seafarers.
Failure of the agency to deploy a worker within the prescribed period without valid reasons shall be a cause for suspension or cancellation of license or fine. In addition, the agency shall return all documents at no cost to the worker.
28 Labor Arbiter's Decision; rollo, p. 87.
29 328 Phil. 161 (1996).
30 Id. at 169-170, citing Cagampan v. National Labor Relations Commission, 195 SCRA 533 (1991).
31 Remigio v. National Labor Relations Commission, G.R. No. 159887, 12 April 2006, 487 SCRA 190, 215.
32 San Miguel Corporation v. Ubaldo, G.R. No. 92859, 1 Feburary 1993, 218 SCRA 293, 301.
33 434 Phil. 524, 537-538.
34 This ruling was reiterated in Pentagon International Shipping, Inc. v. Adelantar, G.R. No. 157373, 27 July 2004, 435 SCRA 342; Gu-Miro v. Adorable, G.R. No. 160952, 20 August 2004, 437 SCRA 162, 169; and Petroleum Shipping Ltd. v. National Labor Relations Commission, G.R. No. 148130, 16 June 2006, 491 SCRA 35, 42.

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