Santiago vs. CF Sharp Crew Management, Inc.

PAUL V. SANTIAGO, petitioner, vs. CF SHARP CREW MANAGEMENT, INC., respondent.

G.R. No. 162419 July 10, 2007

TINGA, J.:

FACTS: Petitioner had been working as a seafarer for Smith Bell Management, Inc. (respondent) for
about five (5) years. He signed a new contract of employment with the duration of 9 months on Feb 3
1998 and he was to be deployed 10 days after. This contract was approved by POEA. A week before the
date of departure, the respondent received a phone call from petitioner’s wife and some unknown
callers asking not to send the latter off because if allowed, he will jump ship in Canada.

Because of the said information, petitioner was told that he would not be leaving for Canada anymore.
This prompted him to file a complaint for illegal dismissal against the respondent. The LA held the latter
responsible. On appeal, the NLRC ruled that there is no employer-employee relationship between
petitioner and respondent, hence, the claims should be dismissed. The CA agreed with the NLRC’s
finding that since petitioner had not departed from the Port of Manila, no employer-employee
relationship between the parties arose and any claim for damages against the so-called employer could
have no leg to stand on.

ISSUE: When does the employer-employee relationship involving seafarers commence?

RULING: A distinction must be made between the perfection of the employment contract and the
commencement of the employer-employee relationship. The perfection of the contract, which in this
case coincided with the date of execution thereof, occurred when petitioner and respondent agreed on
the object and the cause, as well as the rest of the terms and conditions therein. The commencement of
the employer-employee relationship, as earlier discussed, would have taken place had petitioner been
actually deployed from the point of hire. Thus, even before the start of any employer-employee
relationship, contemporaneous with the perfection of the employment contract was the birth of certain
rights and obligations, the breach of which may give rise to a cause of action against the erring party.
Thus, if the reverse had happened, that is the seafarer failed or refused to be deployed as agreed upon,
he would be liable for damages.

Respondent’s act of preventing petitioner from departing the port of Manila and boarding "MSV
Seaspread" constitutes a breach of contract, giving rise to petitioner’s cause of action. Respondent
unilaterally and unreasonably reneged on its obligation to deploy petitioner and must therefore answer
for the actual damages he suffered.
2. MONTOYA V. ESCAYO, G.R. NO. 82211-12, MARCH 21, 1989, 171 SCRA 442
FACTS: All formerly employed as salesgirls in Montoya’s store, the "Terry's Dry Goods Store,"
separately filed complaints for the collection of sums of money against the petitioner for alleged unpaid
overtime pay, holiday pay, 13th month pay, ECOLA, and service leave pay: for violation of the minimum
wage law, illegal dismissal, and attorney's fees. Montoya moved for the dismissal of the complaints
claiming that among others, salesgirls failed to refer the dispute to the Lupong Tagapayapa for possible
settlement and to secure the certification required from the Lupon Chairman prior to the filing of the cases
with the Labor Arbiter. These actions were allegedly violative of the provisions of P.D. No. 1508.
ISSUE: WON P.D. 1508 (Katarungang Pambarangay Law) is applicable to labor disputes?
HELD: No. The provisions of P.D. No. 1508 requiring the submission of disputes before the barangay
Lupong Tagapayapa prior to their filing with the court or other government offices are not applicable to
labor cases. Requiring conciliation of labor disputes before the barangay courts would defeat the very
salutary purposes of the law. Instead of simplifying labor proceedings designed at expeditious settlement
or referral to the proper court or office to decide it finally, the position taken by the petitioner would only
duplicate the conciliation proceedings and unduly delay the disposition of the labor case.
 VICENTE SAN JOSE, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
OCEAN TERMINAL
SERVICES, INC., respondents. [G.R. No. 121227. August 17, 1998]
DELA CRUZ

FACTS:
 Vicente San Jose, in his position paper, states that he was hired sometime in July 1980 as a stevedore
continuously until he was advised in April 1991 to retire from service considering that he already
reached 65 years old.
 That accordingly, he did apply for retirement and was paid P3,156.39 for retirement pay.
 Contentions of Ocean Terminal Services:
o San Jose only worked on rotation basis and not seven days a week due to numerous stevedores
who cannot all be given assignments at the same time;
o That he performed stevedoring job only on call, so while he was connected with the company
for the past 11 years, he did not actually render 11 years of service;
o That the burden of proving that San Jose’s latest salary was P200.00 rests upon him;
o That he already voluntarily signed a waiver of quitclaim.
 The Labor Arbiter decided the case solely on the merits of the complaint.
 LA arrived at the computation that the retirement differential is P25,443.70.
 NLRC reversed LA on the ground that the differential being claimed by San Jose is based on their
CBA and as provided under the Labor Code, interpretation or implementation of CBA should be
referred by the LA to the grievance machinery or voluntary arbitrator.

ISSUE: Who has jurisdiction over the dispute? VA

HELD:
VA has exclusive jurisdiction over unresolved grievances As provided under the Labor Code, the
NLRC correctly ruled that the Labor Arbiter had no jurisdiction to hear and decide petitioners money-claim
underpayment of retirement benefits, as the controversy between the parties involved an issue arising
from the interpretation or implementation of a provision of the collective bargaining agreement. The
Voluntary Arbitrator or Panel of Voluntary Arbitrators has original and exclusive jurisdiction over the
controversy under Article 261 of the Labor Code, and not the Labor Arbiter.

The court, however, will no longer order the remand of the case
The Court will not remand the case to the Voluntary Arbitrator or Panel of Voluntary Arbitrators for
hearing. This case has dragged on far too long - eight (8) years. Any further delay would be a denial
of speedy justice to an aged retired stevedore. There is further the possibility that any Decision by the
Voluntary Arbitrator or Panel of Voluntary Arbitrators will be appealed to the CA, and finally to this Court.
Formula adopted by LA will be followed.

To recapitulate; the Court hereby rules -

1. That the NLRC correctly ruled that the LA had no jurisdiction over the case, because the case involved
an issue arising from the interpretation or implementation of a Collective Bargaining Agreement;
2. That we adopt the computation formula for the retirement benefits by the LA, and the basis thereof.
The respondent must therefore pay the petitioner the additional amount of Twenty-Five Thousand Four
Hundred Forty-Three and Seventy Centavos P25,443.70) Pesos.
 Ace Navigation Co., Inc. vs. Teoderico Fernandez
G.R. No. 197309 Oct. 10, 2012
Facts:
On October 9, 2008, respondent Teoderico Fernandez, a seaman, assisted by his wife a
filed with the National Labor Relations Commission (NLRC) a complaint for disability benefits,
with prayer for moral and exemplary damages, plus attorney’s fees, against petitioners. The
petitioners moved to dismiss the complaint, contending that the labor arbiter had no jurisdiction
over the dispute. They argued that exclusive original jurisdiction is with the voluntary arbitrator
or panel of voluntary arbitrators, pursuant to Section 29 of the POEA Standard Employment
Contract (POEA-SEC), since the parties are covered by a Collective Bargaining Agreement.
Under Section 14 of the CBA, a dispute between a seafarer and the company shall be settled
through the grievance machinery and mandatory voluntary arbitration. Fernandez opposed the
motion. He argued that inasmuch as his complaint involves a money claim, original and exclusive
jurisdiction over the case is vested with the labor arbiter. Labor Arbiter denied the motion to
dismiss, holding that under Section 10 of Republic Act (R.A.) No. 8042, the Migrant Workers and
Overseas Filipinos Act of 1995, the labor arbiter has original and exclusive jurisdiction over money
claims arising out of an employer-employee relationship or by virtue of any law or contract,
notwithstanding any provision of law to the contrary. The petitioners appealed to the NLRC, but
the labor agency denied the appeal. The petitioners moved for reconsideration, but the NLRC
denied the motion, prompting the petitioners to elevate the case to the Court of Appeals which was
also denied.
Issue:
Whether the Mandatory Arbitration as provided in the parties’ CBA can be waived?
Held:
No, Contrary to the CA’s reading of the CBA’s Article 14, the Court held that there is
unequivocal or unmistakable language in the agreement which mandatorily requires the parties to
submit to the grievance procedure any dispute or cause of action they may have against each other.
Any dispute, grievance, or misunderstanding concerning any ruling, practice, wages or working
conditions in the company or any breach of the contract of employment, or any dispute arising
from the meaning or application of the provisions of this Agreement or a claim of violation thereof
or any complaint or cause of action that any such Seaman may have against the company, as well
as complaints which the company may have against such Seaman shall be brought to the attention
of the Grievance Resolution Committee before either party takes any action, legal or otherwise.
Bringing such a dispute to the Grievance Resolution Committee shall be unwaivable
prerequisite or condition precedent for bringing any action, legal or otherwise, in any forum and
the failure to so refer the dispute shall bar any and all legal or other actions. If by reason of the
nature of the Dispute, the parties are unable to amicably settle the dispute, either party may refer
the case to a mandatory arbitration committee. The mandatory arbitration committee shall consist
of one representative to be designated by the union, and one representative to be designated by the
company and a third member who shall act as Chairman and shall be nominated by mutual choice
of the parties.
Since the parties used unequivocal language in their CBA for the submission of their
disputes to voluntary arbitration (a condition laid down in Vivero for the recognition of the
submission to voluntary arbitration of matters within the original and exclusive jurisdiction of
labor arbiters), we find that the CA committed a reversible error in its ruling; it disregarded the
clear mandate of the CBA between the parties and the POEA-SEC for submission of the present
dispute to voluntary arbitration.
The Court also ruled that Fernandez’s contention, that his complaint for disability benefits
is a money claim that falls within the original and exclusive jurisdiction of the labor arbiter under
Section 10 of R.A. No. 8042 is untenable. It bears stressing at this point that the Court is upholding
the jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators over the present dispute,
not only because of the clear language of the parties’ CBA on the matter; more importantly, to
uphold the voluntary arbitrator’s jurisdiction, in recognition of the State’s express preference for
voluntary modes of dispute settlement, such as conciliation and voluntary arbitration as expressed
in the Constitution, the law and the rules. The Court mentioned that it is settled that when the
parties have validly agreed on a procedure for resolving grievances and to submit a dispute to
voluntary arbitration then that procedure should be strictly observed.
The petition is granted, and Teodorico Fernandez's disability claim is referred to the
Grievance Resolution Committee of the parties' collective bargaining agreement and/or the
Mandatory Arbitration Committee, if warranted.