The Facts
This case originated from a Complaint filed by Fermin F. Guerrero against OSM
Shipping Philippines, Inc.; and its principal, Philippine Carrier Shipping Agency Services
Co. The Complaint was for illegal dismissal and non-payment of salaries, overtime pay
and vacation pay. The facts are summarized in the NLRC Decision as follows:
[Private respondent] was hired by [Petitioner] OSM for and in behalf of its principal,
Phil Carrier Shipping Agency Services Co. (PC-SLC) to board its vessel M/V
[Princess] Hoa as a Master Mariner for a contract period of ten (10) months. Under
the said contract, his basic monthly salary is US$1,070.00, US$220.00 allowance,
US$321.00 fixed overtime, US$89 vacation leave pay per month for x x x 44 hours f]
work per week. He boarded the vessel on July 21, 1994 and complied faithfully with
the duties assigned to him.
[Private respondent] alleged that from the start of his work with M/V Princess Hoa, he
was not paid any compensation at all and was forced to disembark the vessel
sometime in January 1995 because he cannot even buy his basic personal necessities.
For almost seven (7) months, i.e. from July 1994 to January 1995, despite the services
he rendered, no compensation or remuneration was ever paid to him. Hence, this case
for illegal dismissal, [non-payment] of salaries, overtime pay and vacation pay.
[Petitioner] OSM, for its part, alleged that on July 26, 1994, Concorde Pacific, an
American company which owns M/V Princess Hoa, then a foreign registered vessel,
appointed x x x Philippine Carrier Shipping Agency Services Co. (PC-SASCO) as
ship manager particularly to negotiate, transact and deal with any third persons,
entities or corporations in the planning of crewing selection or determination of
qualifications of Filipino Seamen. On the same date, [Petitioner] OSM entered into a
Crew Agreement with x x x PC-SASCO for the purpose of processing the documents
of crew members of M/V Princess Hoa. The initial plan of the [s]hip-owner was to use
the vessel in the overseas trade, particularly the East Asian Growth Area. Thereafter,
the contract of [private respondent] was processed before the POEA on September 20,
1994.
OSM alleged further that the shipowner changed its plans on the use of the vessel.
Instead of using it for overseas trade, it decided to use it in the coastwise trade, thus,
the crewmembers hired never left the Philippines and were merely used by the
shipowner in the coastwise trade. Considering that the M/V Princess Hoa was a
foreign registered vessel and could not be used in the coastwise trade, the shipowner
converted the vessel to Philippine registry on September 28, 1994 by way of bareboat
chartering it out to another entity named Philippine Carrier Shipping Lines Co.
(PCSLC). To do this, the shipowner through Conrado V. Tendido had to terminate its