This Supreme Court decision clarifies that a seafarer’s employment contract can be implicitly extended beyond its stated expiration date if the manning agency is aware of the continued service and fails to object. The case underscores the importance of protecting seafarers’ rights, especially concerning disability benefits, and holds manning agencies accountable for their obligations even when formal contract extensions are absent. This ensures that seafarers receive just compensation and medical assistance when illness arises during their extended service.

Beyond the Contract: When Silence Implies Consent for Seafarers

This case revolves around Angelito L. Caseñas, a seafarer, and his claims for disability benefits and unpaid wages against APQ Shipmanagement Co., Ltd. and APQ Crew Management USA, Inc. The central legal question is whether Caseñas’ employment contract was effectively extended with the implied consent of APQ/Crew Management, despite the lack of a formal written agreement, thus entitling him to the claimed benefits. This involves a careful examination of the circumstances surrounding his continued service and the actions of the involved parties.

The facts of the case reveal that Caseñas was hired as a Chief Mate for an eight-month period. However, due to unforeseen circumstances such as incomplete vessel documentation, he was transferred to another vessel, MV Haitien Pride. He continued to work on this vessel even after his initial contract period had lapsed. During this extended period, Caseñas experienced severe hardships, including lack of food and water, and eventually developed hypertension and ischemic heart disease. Upon his repatriation, he sought disability benefits and unpaid wages, which APQ denied, claiming that his contract had expired.

The Labor Arbiter initially dismissed Caseñas’ complaint, concluding that the employment contract was not extended. However, the National Labor Relations Commission (NLRC) reversed this decision, finding that the contract was indeed extended and that Caseñas was entitled to his claims. Subsequently, the NLRC reconsidered its position, stating that there was no proof of consent to the extension by APQ. This led Caseñas to file a petition for certiorari with the Court of Appeals (CA), which then granted his petition, reinstating the earlier NLRC resolution.

The Supreme Court, in its analysis, addressed the issue of contract extension, emphasizing that employment contracts of seafarers are not ordinary contracts. These are regulated and require state imprimatur through the POEA-SEC, which is integrated into every seafarer’s contract. The Court highlighted that the key to determining the complete termination of an employment contract involves three requirements: termination due to expiration or other causes, signing off from the vessel, and arrival at the point of hire.

Applying these principles, the Court found that Caseñas did not sign off from the vessel upon the expiration of his initial contract, nor did he arrive at his point of hire in Manila. Instead, he continued to serve on board the MV Haitien Pride, indicating an implied extension of his contract. The Court cited Interorient Maritime Enterprises, Inc. v. NLRC, emphasizing that the local agency and its foreign principal are duty-bound to repatriate the seaman to the point of hire to effectively terminate the contract of employment.

Furthermore, the Court addressed APQ’s argument that Caseñas transferred to a different vessel not specified in his original contract. It invoked Section 15 of the POEA-SEC, which allows for the transfer of a seafarer to any vessel owned or operated by the same employer, provided it is accredited to the same manning agent and the terms of service are not inferior. Since APQ did not dispute that MV Haitien Pride was operated by Crew Management and accredited by APQ, the transfer was deemed valid.

The Court also considered the issue of the vessel’s seaworthiness. Caseñas claimed his transfer was due to the fact that MV Perseverance could not leave port because of incomplete documents for its operation. The Court reasoned that incomplete documents render a vessel unseaworthy, and a seafarer cannot be forced to sail with an unseaworthy vessel, pursuant to Section 24 of the POEA-SEC. This reinforced the argument that Caseñas’ contract should have been terminated and he should have been repatriated, yet it was not.

Regarding APQ’s claim of lack of consent to the contract extension, the Court found that APQ’s actions demonstrated implied consent. APQ was aware that Caseñas continued working on board the vessel after the expiration of his initial contract but did not object. Moreover, APQ sent communications to OWWA regarding the status of MV Haitien Pride and its crew, indicating continuous involvement and knowledge of Caseñas’ continued service. The Supreme Court referenced that APQ’s President stated,

Soon as I receive any information from them, I will at once inform your good office as I have then already prepared my travel again to Miami, Florida once MV Haitien Pride be on her sailing to Miami.

APQ’s consistent communication and involvement indicated its awareness and acceptance of the extended contract. Given its knowledge of the extended contract, APQ was held solidarily liable with Crew Management for Caseñas’ claims, including unpaid wages during the extended portion of his contract.

As for Caseñas’ claim for medical and disability benefits, the Court noted that the symptoms of his illness began to manifest during the term of his employment contract. The Court then stated that,

Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one hundred twenty (120) days.

The overall state and condition to which Caseñas was exposed over time was the cause of his illness. The Supreme Court thus reiterated the guidelines established in Magsaysay Maritime Corporation vs. NLRC and Vergara vs. Hammonia Maritime Services, Inc., indicating that a seafarer must report to the company-designated physician within three days of arrival for diagnosis and treatment.

In this case, Caseñas promptly reported to APQ for a post-employment medical examination and was diagnosed with Ischemic Heart Disease. Although the law allows for a temporary total disability period of up to 240 days, the company-designated physician did not make a declaration as to Caseñas’ fitness within 120 days. The Court correctly observed that the 120 day period lapsed without such a declaration being made. As a result, Caseñas was deemed to be in a state of permanent total disability and entitled to total disability benefits.

FAQs

What was the key issue in this case?	The key issue was whether the seafarer’s employment contract was extended with the implied consent of the manning agency, despite the lack of a formal written agreement, and whether the seafarer was entitled to disability benefits.
What is the POEA-SEC?	The POEA-SEC refers to the Philippine Overseas Employment Administration Standard Employment Contract. It sets the minimum terms and conditions for the employment of Filipino seafarers on board foreign ocean-going vessels, ensuring their protection.
What are the requirements for the termination of a seafarer’s employment contract?	The requirements include termination due to expiration or other causes, signing off from the vessel, and arrival at the point of hire. All three conditions must be met for the contract to be considered fully terminated.
What does the transfer clause in the POEA-SEC allow?	The transfer clause allows a seafarer to be transferred to any vessel owned or operated by the same employer, provided it is accredited to the same manning agent and the terms of service are not inferior.
What happens if a vessel is declared unseaworthy?	If a vessel is declared unseaworthy, the seafarer cannot be forced to sail with it, and the employment contract may be terminated. In such cases, the seafarer is entitled to earned wages, repatriation, and termination pay.
What is the significance of a company-designated physician in disability claims?	The company-designated physician must assess the seafarer’s condition within 120 days of medical treatment. If no declaration of fitness or unfitness is made within this period, the seafarer may be deemed permanently disabled and entitled to disability benefits.
What does it mean for a manning agency to have ‘implied consent’ to a contract extension?	Implied consent means that the manning agency, despite not formally agreeing to extend the contract in writing, was aware of the seafarer’s continued service and did not object to it. Their actions and communications indicate acceptance of the extended employment.
What are the consequences of a manning agency’s implied consent to a contract extension?	If a manning agency has implied consent, it becomes solidarily liable with the principal for the seafarer’s claims arising from the extended contract, including unpaid wages and disability benefits.

In summary, the Supreme Court’s decision underscores the importance of protecting seafarers’ rights and holding manning agencies accountable for their obligations, even in the absence of formal contract extensions. This ruling ensures that seafarers receive fair compensation and benefits when they continue to serve beyond the initial contract period and subsequently become ill or disabled.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: APQ Shipmanagement Co., Ltd. vs. Angelito L. Caseñas, G.R. No. 197303, June 04, 2014