The Liability Continues

Antonio was employed by a foreign principal employer, Fairport Shipping Co., Ltd. (Fairport Shipping) to work as Master on board the vessel M/V Orionis from August 4, 2009 to July 24, 2010.

Antonio states that Fairport Shipping did not pay his salary and benefits, but assured him that these will be paid in full upon disembarkation. Although Antonio disembarked from the vessel on July 27, 2010, he did not receive his salary and benefits despite his demand.

On July 24, 2012, Antonio filed a complaint before the Office of the Labor Arbiter for money claims against Fairport Shipping and its current local manning agency Stella Marris Shipmanagement, Inc. (Stella Marris).

Stella Marris denied liability for Antonio’s claims. Although Stella Marris acknowledged having executed an Affidavit of Assumption of Responsibility, the same only pertained to the assumption of full and complete responsibility for all contractual obligations to the seafarers originally processed and recruited by its immediate predecessor, Global Gateway Crewing Services, Inc. (Global Gateway). Stella Marris explained that Antonio was originally hired by Skippers United Pacific, Inc. (Skippers United), whose obligations under Antonio’s contract were transferred to Global Gateway. Since said obligations were beyond the coverage of its Assumption of Responsibility, Stella Marris posited that it should not be held liable for Antonio’s claims.

The Office of the Labor Arbiter ruled in favor of Antonio and held the three manning agencies, i.e., Skippers United, Global Gateway, and Stella Marris solidarily liable with Fairport Shipping to pay Antonio his claims. The Office of the Labor Arbiter found Skippers United liable as signatory to the employment contract and Global Gateway as substitute manning agent, which assumed full and complete responsibility for all contractual obligations to the seafarers originally recruited and processed by Skippers United.

The National Labor Relations Commission, in turn, ruled that the Office of the Labor Arbiter erred in holding Skippers United and Global Gateway solidarily liable with Fairport Shipping since they were not impleaded as parties in the complaint. The Commission then found no basis to hold Stella Marris liable, considering that the latter was not the local manning agency which originally deployed Antonio and it did not assume the liability of Skippers United as the deploying agency. According to the National Labor Relations Commission, it was Skippers United which should have been held liable pursuant to Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995, as amended, which provides that the liability of the original manning agency continues during the entire period of the employment contract and is not affected by the transfers or substitutions of manning agencies. Finally, it observed that the liability assumed by Stella Marris under its Affidavit of Assumption of Responsibility pertained only to those employees originally recruited by Global Gateway, and not of Skippers United, as Antonio was in this case.

The Court of Appeals affirmed the Decision of the National Labor Relations Commission. Said Court ruled that Skippers United, as Fairport Shipping’s original manning agent, was solidarily liable with Fairport Shipping for Antonio’s claims under the applicable 2003 POEA Rules and Regulations1recent version is the 2016 Revised POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers (POEA Rules and Regulations) since its liability continued during the entire period of the employment contract and was not affected by the transfers or substitutions of manning agencies. Although Fairport Shipping was a party in the complaint, the Court of Appeals still dismissed Antonio’s petition.

Could Stella Marris be held liable for Antonio’s claims?

The Supreme Court ruled in the negative.

The Court stated that while the POEA Rules and Regulations allow the transfer of the registration and/or accreditation of the foreign principal to another local manning agency, which includes the transfer of the full and complete responsibility over all contractual obligations of the principal to the seafarers, the said transfer, covers only those contractual obligations to seafarers “originally recruited and processed by the former agency” relating to the registration of principal and the transfer of registration.

In the present case, the Court found that Skippers United recruited Antonio and processed his employment as the original local manning agency of Fairport Shipping. For the Court, Skippers United assumed joint and solidary liability with Fairport Shipping under the contract of employment of Antonio as mandated by law.

The Court likewise found that Fairport Shipping thereafter transferred its accreditation or registration to Global Gateway in accordance with POEA Rules and Regulations. And by virtue of an Affidavit of Assumption of Responsibility Global Gateway assumed full and complete responsibility and without qualification all contractual obligations to the seafarers originally recruited and processed by Skippers United for the vessel M/V Orionis. Stella Marris then executed an Affidavit of Assumption of Responsibility covering those contractual obligations of Fairport that were “originally processed and recruited by Global.”

Since the Court considered Stella Marris’ limited assumption of liability to be consistent with the POEA Rules and Regulations which, to reiterate, pertained only to the liability of the substitute manning agent to those contracts originally recruited by the transferor, the Court found no basis to hold Stella Marris liable for Antonio’s claims.

Did the Court deny Antonio’s claims for his failure to implead Skippers United and Global Gateway?

No.

The Court cited relevant portions of Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995, as amended, which provides that the local manning agency assumes joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the employment contract.

This liability remains intact and extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said agreement and covers any and all claims arising therefrom. The solidary liability of the foreign principal and the recruitment agency to the employees shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract.

According to jurisprudence,2Catan v. National Labor Relations Commission, G.R. No. 77279, [April 15, 1988], 243 PHIL 858-864 this must be so, because the obligations covenanted in the recruitment agreement entered into by and between the local agent and its foreign principal are not coterminous 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.

The Court added that even if an Affidavit of Assumption of Responsibility was validly executed by the transferee agent assuming the full and complete responsibility over all contractual obligations of the principal to the seafarers originally recruited and processed by therein original manning agent, the latter’s liability to its recruited workers remained intact because the said workers were not privy to such contract of transfer.

In the present case, the Court discovered that prior to the filing of the complaint in the present case, Antonio had earlier filed a complaint against Skippers United and Fairport Shipping. The Court also noticed that during the pendency thereof, Fairport Shipping’s manning agent transferred from Skippers United to Global Gateway, and Global Gateway to Stella Marris.

However, the Office of the Labor Arbiter rendered a Decision dismissing this earlier complaint, without prejudice to Antonio’s refiling of the case against the alleged proper parties, i.e., Global Gateway, Fairport Shipping, and Stella Marris. Antonio appealed this Decision before the National Labor Relations Commission, but the appeal was dismissed due to his failure to sign the certificate of non-forum shopping. Unfortunately, Antonio no longer moved for reconsideration of the said Resolution.

According to the Court, since both Skippers United and Global Gateway were not impleaded in the present complaint; it could not adjudge their respective liabilities to Antonio.

Nonetheless, the Court took into account the mistake of the Office of the Labor Arbiter in dismissing the earlier complaint. Said the Court: “so as not to cause Antonio serious injustice absent any fault or wrongdoing, the Court deems it proper to remand the present case back to the Office of the Labor Arbiter in order to further implead both Skippers United and Global Gateway as respondents together with Fairport Shipping, the original respondent.”

The Court explained that such course of action found bearing in Section 11, Rule 3 of the Rules of Court, which provides that parties may be added by order of the court on its own initiative at any stage of the action and on such terms as are just.

The Court stated that once Skippers United and Global Gateway, together with Fairport Shipping, are properly impleaded, Antonio’s monetary claims in the present complaint should be resolved by the Office of the Labor Arbiter with utmost dispatch on its merits.

Further reading:

  • Orlanes v. Stella Marris Shipmanagement, Inc., G.R. No. 247702, June 14, 2021.
YouTube player