4/6/2021
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stipulating the terms and conditions of his employment, and directing him to request
for all the necessary documents and company properties from the person he was going
to replace in his vessel of assignment.
On February 18, 2013, Naess Shipping, for and in behalf of its principal Royal Dragon,
executed a "Contract of Employment for Marine Crew on Board Domestic Vessels"
(contract of employment) engaging the services of petitioner as Second Officer aboard
the vessel "M/V Meiling 11," an inter-island bulk and cargo carrier, for a period of six
months with a gross monthly salary of P30,000.00. It was stipulated that the contract
shall take effect on March 12 , 2013 . Subsequently, petitioner and respondents
executed an " Addendum to Contract of Employment for Marine Crew Onboard
Domestic Vessels" (Addendum) stating that the employment relationship between them
shall commence once the Master of the Vessel issues a boarding confirmation to the
petitioner. Petitioner also bound himself to abide by the Code of Discipline as provided
for in the Philippine Merchant Marine Rules and Regulations.
On March 8, 2013, petitioner received a call from Fetero informing him that Royal
Dragon cancelled his embarkation. Thus, he filed a complaint for breach of contract
against respondents before the Arbitration Branch of the NLRC.
In his Position Paper,[5] petitioner alleged that respondents' unilateral and unreasonable
failure to deploy him despite the perfected contract of employment constitutes breach
and gives rise to a liability to pay actual damages. He also asserts that he is entitled to
the award of moral and exemplary damages and attorney's fees on account of
respondents' dishonesty and bad faith, as well as their wanton, fraudulent and
malevolent violation of the contract of employment.
Respondents, on the other hand, argued that petitioner's employment did not
commence because his deployment was withheld by reason of misrepresentation. They
stressed that petitioner did not disclose the fact that be is suffering from diabetes
mellitus and asthma which render him unfit for sea service. They claimed that the
Labor Arbiter has no jurisdiction over the petitioner's complaint for breach of contract ,
invoking the absence of employer-employee relationship.
On March 28, 2014, the LA found respondents to have breached their contractual
obligation to petitioner and ordered them to pay him P180,000.00 representing his
salary for the duration of the contract. The LA applied Section 10 of Republic Act (R.A.)
No. 8042, otherwise known as the " Migrant Workers and Overseas Filipinos Act of
1995," which provides that the labor arbiters shall have original and exclusive
jurisdiction over " claims arising out of an employer-employee relationship or by virtue
of any law or contract involving Filipino workers for overseas deployment including
claims for actual , moral, exemplary and other forms of damages." The Labor Arbiter
declared that upon perfection of the employment contract on February 18, 2013, the
rights and obligations of the parties had already arisen. Thus, when respondents failed
to deploy petitioner in accordance with their perfected contract, they became liable to
pay him actual damages in the amount of P180,000.00.[6]
Aggrieved thereby, respondents filed an appeal with the NLRC assailing the March 28,
https://elibrary.judiciary.gov.ph/thebookshelf/showdocsfriendly/1/65999
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