G. R. No. 157373 - July 27, 2004
PENTAGON INTERNATIONAL SHIPPING, INC., Petitioner, vs. WILLIAM B. ADELANTAR, Respondent.
D E C I S I O N
This is a petition for review on certiorari assailing the decision1 of the Court of Appeals dated September 26, 2002 in CA-G.R. SP No. 62839 which modified the decision2 of the National Labor Relations Commission (NLRC).
The antecedent facts are as follows:
On August 16, 1997, respondent William B. Adelantar was hired by Dubai Ports Authority of Jebel Ali under an employment contract (first contract) which provided for an unlimited period of employment with a monthly salary of five thousand five hundred dirhams (Dhs 5,500).
On September 3, 1997, Adelantar and petitioner Pentagon International Shipping, Inc. (Pentagon), for and in behalf of Dubai Ports Authority of Jebel Ali, entered into a Philippine Overseas Employment Administration (POEA) standard employment contract (second contract), this time providing for a 12-month period with basic monthly salary of US$380.00 and fixed overtime pay of US$152.00.
Upon completion of his probationary period on April 5, 1998, Adelantars basic salary was increased to five thousand eight hundred ninety dirhams (Dhs 5,890), while his overtime pay was increased to two thousand three hundred fifty-six dirhams (Dhs 2,356) effective April 1, 1998.
On June 11, 1998, however, the management barred Adelantar from entering the port due to a previous dispute with his superior. He was asked to hand in his health and employment card. On the same date, he received a letter from his employer, stating that he was being terminated for assaulting his superior officer, although he was promised employment in another company.
Adelantar was eventually repatriated after nine (9) months and seven (7) days of service. After almost a year of waiting with no work forthcoming, Adelantar filed a complaint for illegal dismissal with money claim against Pentagon International Shipping, Inc. with the NLRC, docketed as NLRC NCR OFW (M) 99-05-0693.
The Labor Arbiter found that the dismissal of Adelantar was illegal. Consequently, he ordered Pentagon to pay Adelantar the amount of Dhs 24,738.00 representing the latters three (3) months basic salary inclusive of overtime pay. All other claims were denied for lack of merit.3
Adelantar appealed to the NLRC arguing that the Labor Arbiter erred in granting backwages of only three (3) months and in not granting attorneys fees, moral and exemplary damages and reinstatement.
The NLRC affirmed the Labor Arbiters decision and held that under Section 10 of R.A. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, an illegally dismissed contract worker is entitled to the salaries corresponding to the unexpired portion of his contract, or for three (3) months for every year of the unexpired term, whichever is less. Thus, the NLRC awarded backwages to Adelantar equivalent to three (3) months of his basic salary, but exclusive of overtime pay.4
Aggrieved, Adelantar filed a petition for certiorari with the Court of Appeals.
On September 26, 2002, the Court of Appeals rendered judgment modifying the amounts awarded by the Labor Arbiter and the NLRC. The Court of Appeals awarded full backwages to respondent computed from the time of the dismissal up to the finality of the decision. It ruled that Section 10 of R.A. No 8042 is not applicable in this case because said provision only contemplates a fixed period of employment. Moreover, Article 279 of the Labor Code should apply and not Section 10 of R.A. No. 8042, considering that Adelantars first contract provided for an unlimited period of employment.
Pentagon International Shipping, Inc. filed the instant petition for review on certiorari raising the following arguments:
The petition is meritorious.
The August 16, 1997 contract, i.e., the first contract, provided for an unspecified period of employment with Adelantar, as Tug Master, receiving a monthly salary, after his probationary period, of Dhs 5,890.00. This figure in Dirhams was used by the Labor Arbiter in computing the award equivalent to three months salary or the amount of Dhs 24,738.00 inclusive of fixed overtime. This was also used by the NLRC when it affirmed the award equivalent to three months, albeit, excluding the fixed overtime.
The Court of Appeals likewise used the salary stated in Adelantars first contract in adjudging Pentagons liability but it did not limit the award to three months only. In interpreting the above provision, the Court of Appeals, citing Marsaman Manning Agency, Inc. v. NLRC,6 held:
Proceeding from the premise that the first contract, providing for an unlimited period of employment, is the applicable contract rather than the POEA-sanctioned second contract, the Court of Appeals concluded that Section 10 of R.A. No. 8042 is not applicable because "there will be no basis by which to determine the number of years within which the grant of salaries will be based."7 Stated differently, Section 10 of R.A. No. 8042, or The Migrant Workers and Overseas Filipinos Act of 1995, is not applicable in this case because said provision only contemplates a fixed period of employment while the first contract provides for an unlimited period of employment. Section 10 of R.A. No. 8042 provides:
In this respect, the Court of Appeals applied Article 279 of the Labor Code8 using principles of statutory construction to supplement the omission in R.A. No. 8042 regarding the unlimited period of employment. It ratiocinated that the Labor Code and R.A. No. 8042 are statutes in pari materia.
The issue, therefore, is whether the Court of Appeals properly used as basis Article 279 of the Labor Code in its award for backwages to Adelantar.
As early as the case of Coyoca v. NLRC,9 we held that Filipino seamen are governed by the Rules and Regulations of the POEA. The Standard Employment Contract governing the Employment of All Filipino Seamen on Board Ocean-Going Vessels of the POEA, particularly in Part I, Sec. C specifically provides that the contract of seamen shall be for a fixed period. In no case should the contract of seamen be longer than 12 months. It reads:
Under the circumstances, the Court of Appeals erred in resolving the issue of backwages based on the first contract which provided for an unlimited period of employment as this violated the explicit provision of the Rules and Regulations of the POEA. While we recognize that Adelantar executed a contract with Dubai Ports Authority of Ali Jebel and might even have applied said contract in his overseas station, this contract was not sanctioned by the POEA. We agree with the NLRC when it observed thus:
The Court of Appeals erred when it adjudged the first contract as the basis for Pentagons liability instead of the second contract, which is in conformity with the POEAs Standard Employment Contract. As such, there would have been no need to resort to statutory construction where the rules and jurisprudence are clear.
Therefore, Adelantar, a seafarer, is not a regular employee as defined in Article 280 of the Labor Code. Hence, he is not entitled to full backwages and separation pay in lieu of reinstatement as provided in Article 279 of the Labor Code. As we held in Millares, Adelantar is a contractual employee whose rights and obligations are governed primarily by Rules and Regulations of the POEA and, more importantly, by R.A. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995.
We find, however, that the Court of Appeals correctly awarded ten percent (10%) of the monetary award in Adelantars favor as attorneys fees, as he was forced to litigate and hence incurred expenses to protect his rights and interest.12
WHEREFORE, in view of the foregoing, the petition is partly GRANTED and the decision of the Court of Appeals in CA-G.R. SP No. 62839 is REVERSED and SET ASIDE. Petitioner Pentagon International Shipping, Inc. is ORDERED to pay private respondent William B. Adelantar the amount equivalent to the unexpired portion of the September 3, 1997 POEA Standard Contract of Employment plus ten percent (10%) of the award as attorneys fees.
Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ., concur.
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