The Court does not agree. The provisions of the Constitution as well as the
Labor Code which afford protection to labor apply to Filipino employees whether
working within the Philippines or abroad. Moreover, the principle of lex loci
contractus (the law of the place where the contract is made) governs in this
jurisdiction.[27] In the present case, it is not disputed that the Contract of
Employment entered into by and between petitioners and private respondent was
executed here in the Philippines with the approval of the Philippine Overseas
Employment Administration (POEA). Hence, the Labor Code together with its
implementing rules and regulations and other laws affecting labor apply in this
case.[28] Accordingly, as to the requirement of notice and hearing in the case of a
seafarer, the Court has already ruled in a number of cases that before a seaman can
be dismissed and discharged from the vessel, it is required that he be given a
written notice regarding the charges against him and that he be afforded a formal
investigation where he could defend himself personally or through a representative.
[29]
Hence, the employer should strictly comply with the twin requirements of
notice and hearing without regard to the nature and situs of employment or the
nationality of the employer. Petitioners failed to comply with these twin
requirements.
Petitioners also contend that the wages of private respondent from August
11-22, 1996 were applied to the costs of his repatriation. Petitioners argue that the
off-setting of the costs of his repatriation against his wages for the aforementioned
period is allowed under the provisions of Section 19(E) of Memorandum Circular
No. 055-96 which provides that when the seafarer is discharged for any just cause,
the employer shall have the right to recover the costs of his replacement and
repatriation from the seafarer’s wages and other earnings.
The Court does not agree. Section 19(E) of Memorandum Circular No. 05596 has its counterpart provision under Section H (2), Part II of Memorandum
Circular No. 41, to wit:
SECTION H. REPATRIATION
x x x x