The principal issue in this case is whether or not the transfer clause of the Standard Employment
Contract (SEC)ii[2] is violative of Article 34(i) of the Labor Code.
Said clause provides that:
The CREWMEMBER agrees to be transferred at any port to any vessel owned or operated,
manned or managed by the same employer provided it is accredited to the same manning agent
and provided further that the rating of the crewmember and the rate of his wages and terms of
service are in no way inferior and the total period of employment shall not exceed that originally
agreed upon.
Article 34(i) of the Labor Code, on the other hand, reads:
(i) It shall be unlawful for any individual, entity, licensee or holder of authority to substitute or
alter employment contract approved and verified by the Department of Labor from the time of
actual signing thereof by the parties up to and including the periods of expiration of the same
without the approval of the Secretary of Labor.
The NLRC, in setting aside the decision of the POEA, ruled that the intended transfer of Capt.
Gucor to another vessel was in effect an alteration of his original contract which could not be
done without the approval of the Secretary of Labor.
The NLRCs ruling does not persuade.
It must be noted that the standard employment contract was adopted and approved conformably
with Section 3, Rule II, Book V of the POEA Rules and Regulations which reads as follows:
Section 3. - Standard Employment Contract. The Administration shall undertake development
and/or periodic review of region, country and skills specific employment contracts for landbased
workers and conduct regular review of standard employment contracts (SEC) for seafarers.
These contracts shall provide for minimum employment standards herein enumerated under
Section 2iii[3] of this Rule and shall recognize the prevailing labor and social legislations at the
site of employment and international conventions. The SEC shall set the minimum terms and
conditions of employment. All employers and principals shall adopt the SEC in connection with
the hiring of workers without prejudice to their adoption of other terms and conditions of
employment over and above the minimum standards of the Administration.
On the other hand, elucidating the rationale behind Article 34 (i), this Court held in Seagull
Maritime Corp., et al. v. Balatongan, et al.,iv[4] thus:
The reason why the law requires that the POEA should approve and verify a contract under
Article 34(i) of the Labor Code is to insure that the employee shall not thereby be placed in a
disadvantageous position and that the same are within the minimum standards of the terms and
conditions of such employment contract set by the POEA. This is why a standard format for
employment contracts has been adopted by the Department of Labor. (Underscoring supplied)