sc06 - vir-jen v. nlrc | g.r. no. l-58011-12

6/22/2015 G.R. No. L-58011-12

http://www.lawphil.net/judjuris/juri1982/jul1982/gr_l_58011_12_1982.html 1/15

TodayisMonday,June22,2015

RepublicofthePhilippinesSUPREMECOURT

Manila

SECONDDIVISION

G.R.No.L5801112July20,1982

VIRJENSHIPPINGANDMARINESERVICES,INC.,petitioner,vs.NATIONALLABORRELATIONSCOMMISSION,ROGELIOBISULA,RUBENARROZA,JUANGACUTNO,LEONILOATOK,NILOCRUZ,ALVAROANDRADA,NEMESIOADUG,SIMPLICIOBAUTISTA,ROMEOACOSTA,andJOSEENCABO,respondents.

MaximoA.Savellano,Jr.,forpetitioner.

SolicitorGeneralandRomeoM.Deveraforrespondents.

BARREDO,J.:

Petitionforcertiorariseekingtheannulmentorsettingaside,onthegroundsofexcessofjurisdictionandgraveabuseofdiscretion,of thedecisionof theNationalLaborRelationsCommission inconsolidatedNSBCasesNos.225079and225279thereof,1thedispositiveportionofwhichreadsthus:

WHEREFORE,theDecisionappealedfromshouldbe,asitisherebymodifiedinthiswise:

Respondent Virjen Shipping and Marine Services, Inc., is hereby ordered to pay the following to thecomplainant Seamen who have not withdrawn from the case, namely: Capt. Rogelio H. Bisula, RubenArroza,JuanGacutno,LeoniloAtok,NiloCruz,AlvaroAndrada,NemesioAdug,SimplicioBautista,RomeoAcostaandJoseEncabo:

1.theirearnedwagescorrespondingtotheperiodfrom16to19April1979

2. the wages corresponding to the unexpired portion of their contracts, as adjusted by therespondentCompanyeffective1March1979

3.theadjustedrepresentationallowancesofthecomplainantSeamenwhoservedasofficersandwhohavenotwithdrawnfromthecase,namely:Capt.RogelioBisula,RubenArroza,JuanGacutno,LeoniloAtokandNiloCruz

4.theirvacationpayequivalenttoonehalf()month'spayaftersix(6)monthsofserviceandanotheronehalf()month'spayafterthecompletionoftheoneyearcontract

5.theirtankerservicebonusequivalenttoonehalf()month'spayand

6.theirearnedovertimepayfromltol9April1979.

TheSecretariatof theNationalSeamenBoard isalsoherebydirected to issuewithin five (5)days fromreceiptofthisDecisionthenecessaryclearancestothesuspendedSeamen.(pp.8687,Record.)

Thefactualandlegalbackgroundofthesecasesisrelatedmostcomprehensivelyinthe"ManifestationandComment"filedbytheSolicitorGeneral.Itisasfollows:

The records show that private respondents have a manning contract for a period of one (1) year withpetitionerinrepresentationofitsprincipalKyoeiTankerCo.Ltd.ThetermsandconditionsofsaidcontractwerebasedonthestandardcontractoftheNSB.ThemanningcontractwasapprovedbytheNSB.Awareof theproblem thatvesselsnotpaying rates imposedby the InternationalTransportWorkersFederation(ITF) would be detained or interdicted in foreign ports controlled by the ITF, petitioner and privaterespondentsexecutedasidecontracttotheeffectthatshouldthevesselM/TJannuberequiredtopayITFrateswhen it calls on any ITF controlled foreign port, private respondentswould return to petitioner the

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amountssopaidtothem.

On March 23, 1979, the master of the vessel who is one of the private respondents sent a cable topetitioner,whilesaidvesselwasenroute toAustraliawhich isan ITFcontrolledport,stating thatprivaterespondents were not contented with the salary and benefits stipulated in the manning contract, anddemandedthattheybegiven50%increasethereof,asthe"bestandonlysolutiontosolveITFproblem."Apparently,referenceto"ITF"inprivaterespondents'cablemadepetitionerapprehensivesincethevesselatthattimewasenroutetoAustralia,anITFport,andwouldbeinterdictedanddetainedthereat,shouldprivaterespondentsdenouncetheexistingmanningcontracttotheITFandshouldpetitionerrefuseorbeunabletopaytheITFrates,whichrepresentmorethan100%ofwhatisstipulatedinthemanningcontract.Placedundersuchsituation,petitionerrepliedbycabledatedMarch24,1979toprivaterespondents,asfollows:

...WEARESURPRISEDWITHTHISSUDDENCHANGEOFATTITUDEANDDEMANDSFOR WE HAVE THOROUGHLY EXPLAINED AND DISCUSSED ALL MATTERSPERTAINING TO YOUR PRESENT EMPLOYMENT AND BELIEVED THAT WE FULLYUNDERSTOOD EACH OTHER ... WE SHALL SUFFER AND ABSORB CONSIDERABLEAMOUNTOFLOSSESWITHYOURDEMANDOFFIFTYPERCENTASWEAREALREADYCOMMITTEDTOPRINCIPALSTHEREFORETOMINIMIZEOURLOSSESWEPROPOSEANINCREASEOFTWENTYFIVEPERCENTONYOURBASICPAYSPLUSTHESPECIALCOMPENSATIONFORTHISPARTICULARVOYAGE...(p.7Comment)

OnMarch26,1979,petitionerwrotealettertotheNSBdenouncingtheconductofprivaterespondentsasfollows:

ThisistoinformyouthatonMarch24,1979,wereceivedacablefromCapt.RogelioBisula,Masteroftheabovereferencevesselreadingasfollows:

URINFO ENTIRE JANNU OFFICERS AND CREW NOT CONTENTED WITH PRESENTSALARYBASEDONVOLUMEOFWORKTYPEOFSHIPWITHHAZARDOUSCARGOANDREGISTERED IN A WORLDWIDE TRADE STOP WHAT WE DEMAND IS ONLY FIFTYPERCENT INCREASEBASEDONPRESENTBASICSALARYSTOPTHISDEMANDTHEBEST AND ONLY SOLUTION TO SOLVE PROBLEM DUE YOUR PRESENT RATESESPECIALLY TANKERS VERY FAR IN COMPARISON WITH OTHER SHIPPINGAGENCIESINMANILA.

towhichwerepliedonMarch24,1979,asfollows:

WEARESURPRISEDWITHSUDDENCHANGE,OFATTITUDEANDDEMANDSFORWEHAVE THOROUGHLY EXPLAINED AND DISCUSSED ALL MATTERS PERTAINING TOYOURPRESENTEMPLOYMENTANDBELIEVEDTHATWEFULLYUNDERSTOODEACHOTHERSTOPFRANKLYSPEAKINGWESHALLSUFFERANDABSORBCONSIDERABLEAMOUNT OF LOSSES WITH YOUR DEMAND OF FIFTY PERCENT AS WE ARECOMMITTEDTOPRINCIPALSTHEREFORETOMINIMIZEOURLOSSESWEPROPOSEAN INCREASE OF TWENTY FIVE PERCENT ON YOUR BASIC PAY STOP YOURUNDERSTANDING AND FULL COOPERATION WILL BE VERY MUCH APPRECIATEDSTOPPLSCONFIRMSOONEST.

OnMarch25,1979wereceivedthefollowingcommunicationfromtheMasterofsaidvessel:

OFFICERS AND CREW HESITATING TO GIVE UP DEMAND OF FIFTY PERCENTINCREASEBUTFORTHEGOODANDHARMONIOUSRELATIONSHIPONBOARDANDRECONSIDERING YOUR SUPPOSED TO BE LOSSES IN CASE WE CONDITIONALLYCOOPERATEWITHYOURPROPOSEDINCREASEANDTWENTYFIVEPERCENTBASEDON INDIVIDUAL BASIC PAY WITH THE FOLLOWING TERMS AND CONDITION STOPEFFECTIVITY OF TWENTY FIVE PERCENT INCREASE MUST BE MARCH/79 STOPINCREASE MUST BE COLLECTIBLE ON BOARD EFFECTIVE ABOVE DATE UNTILDISEMBARKATION STOP ALLOTMENT TO ALLOTEES REMAIN AS IS STOPREASONABLE REPALLOWS FOR ALL OFFICERS BE GIVEN EFFECTIVE MARCH/79STOP BONUS FOR 6 MONTHS SERVICES RENDERED BE COLLECTIBLE ON BOARDSTOPOFFICERS/CREW30PCTO/TSHUDBEBASEDNEWUPGRADEDSALARYSCALESTOP MASTER/CHENGR/CHMATE SPECIAL COMPENSATION GIVE BY YOURCOMPANYPRIORDEPARTUREMANILAREMAINASIS.

towhichwerepliedonMarch25,1979,asfollows:

WE AGREE ALL CONDITIONS AND CONFIRM IT SHALL BE PROPERLY ENFORCEDSTOP WILL PREPARE ALL REQUIRED DOCUMENTS AND WILL BE DELIVERED ONBOARD.

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For your further informationandguidance, theabovementioneddemandsof theofficersand crew (25%

increase in basic pay, increase in overtime pay and increase in representation allowance) involve an

additionalamountofUS$3,096.50permonth,whichourcompanyisnotinapositiontoshoulder.

We are, therefore, negotiating with our Principals, Messrs. Kyoei Tanker Company, Limited, for the

amendmentofouragencyagreementinthesensethatourmonthlyfeebeincreasedcorrespondingly.We

have sent our Executive VicePresident, Mr. Ericson M. Marquez, to Japan to represent us in said

negotiationandwewillinformyouoftheresultsthereof.(Annex"E"ofPetition)

Inviewofprivaterespondents'conductandbreachofcontract,petitioner'sprincipal,KyoeiTankerCo.,Ltd.

terminatedthemanningcontractinaletterdatedApril4,1979,whichreadsinpart

This iswith reference toyour letterofMarch26,1979andourconferencewithMr.Ericson

Marquez inTokyoonMarch29,1979,regarding theunexpectedandunreasonabledemand

forsalaryincreaseofyourofficersandcrewontheabovevessel.

Franklyspeaking,we fullyagreewithyou that thisaction takenbyyourofficersandcrew in

demandingincreaseintheirsalariesandovertimeafterbeingonboardforonlythreemonths

was very unreasonable. Considering the circumstances when the demand was made, we

believethattheiractionwasdefinitelyabusiveandplainblackmail.

Weregrettoadviseyouthatsincethisvesselisonlyunderourmanagement,wealsocannot

afford to grant your request for an increase of US$3,096.50 effective March 1, 1979, as

demanded by your crew. Your crew should respect their employment contracts which was

approved by your government and yourNational SeamenBoard shouldmake sure that all

seamenshouldfollowtheircontracts.

Foryourinformation,wehavediscussedthismatterwiththeownersofthevessel,particularly

theattitudeandmentalityofyourcrewonboard.Ourcommonandfinaldecisionisnottogrant

yourrequestbutalsototerminateourManningAgreementeffectiveuponcrew'schangewhen

thevesselarrivesatJapanoratanypossibleportaboutendApril,1979.

We regret that we have to take this drastic step in order to protect ourselves from further

problemifwecontinuewithyourpresentofficersandcrewbecauseiftheirdemandisgranted,

thereisnoguaranteethattheywillnotdemandfurtherincreaseinsalariesinthefuturewhen

theyhavechance.Also,asyouknow thepresent freightmarket isverybadandwecannot

afford an unexpected increase in cost of operations and more so with a troublesome and

unreliablecrewthatyouhaveonboard.

Inviewofthecircumstancesmentionedabove,pleaseconsiderthisletterasourofficialnotice

ofcancellationofourManningAgreementeffectiveupon thedateofcrew'schange. (Annex

"F"ofPetition).

OnApril6,1979,petitionerwrotetheNSBaskingpermissiontocancelthemanningcontractwithpetitioner,

saidletterreadingasfollows:

This is with reference to our letter of March 26, 1979, informing you of the sudden and

unexpecteddemandsof theofficersandcrewof theabovevessel fora twenty fivepercent

(25%) increase in their basic salaries and overtime, plus an increase of the officers'

representationallowances,involvingatotalofUS$3,096.50permonth.

As we have advised in our aforementioned letter, we have negotiated with our Principals,

Messrs.KyoeiTankerCo.,Ltd., toamendourAgencyAgreementby increasingourmonthly

feebyUS$3,096.50,andattachedherewith iscopyofour letterdatedMarch26,1979duly

receivedbyourPrincipalsonMarch31,1979.

In this connection, we wish to inform your good office that our Principals have refused to

consider our request for an increase and have also advised us of their final decision to

terminateourManningAgreementeffectiveuponvessel'sarrivalinJapanonoraboutApril17,

1979.

For your further information,weencloseherewith xerox copyof theKyoei TankerCo., Ltd.

letterdatedApril4,1979,whichwejustreceivedtodayviaairfreight.

Thisisthefirsttimethatacancellationofthisnaturehasbeenmadeuponus,andneedlessto

say, we feel very embarrassed and disappointed but we have no other alternative but to

acceptthesaidcancellation.

In view of the foregoing, we respectfully request your authority to cancel our Contracts of

Employmentandtodisembarktheentireofficersandcrewuponvessel'sarrivalinJapanonor

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about17thApril,1979.(Annex"G",ofPetition).

OnApril10,1979,theNSBthroughitsExecutiveDirectorCresencioC.Dayaowrotepetitionerauthorizingittocancelthemanningcontract.TheNSBlettertopetitionerreads:

We have for acknowledgment your letter of 6 April 1979 in connection with the abovecaptionedsubject.

Consideringthecircumstancesenumeratedinyourletterunderreply(andalsoinyourletterofMarch 1979), we authorize you to cancel your contracts of employment with thecrew/membersof theM/T"Jannu"andyoumaynowdisembark thewholecomplimentuponthevessel'sarrivalinJapanonoraboutApril17,1979.

Wetrustthatyouwillnotencounteranydifficultyinconnectionwiththedisembarkationofthecrew/members.(Annex"H"ofPetition).

TheseamenwereaccordinglydisembarkedinJapanandrepatriatedtoManila.TheythenfiledacomplaintwiththeNSBforillegaldismissalandnonpaymentofwages.Aftertrial,theNSBfoundthattheterminationoftheservicesoftheseamenbeforetheexpirationoftheiremploymentcontractwasjustified"whentheydemandedand in fact received from the companywagesover andabove the contracted rateswhich ineffect was an alteration andmodification of a valid and existing contract ..." (Annex "D", Petition). Theseamen appealed the decision to the NLRC which reversed the decision of the NSB and required thepetitioner to pay the wages and othermonetary benefits corresponding to the unexpired portion of themanning contract on the ground that the termination of the said contract by petitionerwaswithout validcause.Hence,thepresentpetition.(Pp.29,Manifestation&Comment)

In its petition which contains practically the same facts and circumstances abovequoted, petitioner submits for Ourresolutionthefollowingissues:

I.ThattherespondentNLRCactedwithoutorinexcessofitsjurisdiction,orwithgraveabuseofdiscretionin said NSB Cases Nos. 225079 and 225279 when it adjudged the petitioner Virjen liable to therespondentsseamen for terminating its employment contracts with them despite the fact that priorauthorizationtoterminateorcancelsaidemploymentcontractsandtodisembarkthesaidrespondentswasfirst secured from and was granted by, the National Seamen Board, the government agency primarilychargedwiththesupervisionanddisciplineofseamenandtheapprovalandenforcementofemploymentcontracts

II.ThattherespondentNLRCactedwithgraveabuseofdiscretion,orwithoutorinexcessofitsjurisdiction,or contrary to law and the evidence when it concluded that "there is nothing on record to show thatrespondentsseamenmadeanythreatthattheywouldcomplainorreporttotheITFtheirlowwageratesiftheirdemandorproposalforawageincreasewasnotmet",despitethefactthatintheircableofMarch23,1979 to the petitioner, the said respondents made the following threats and impositions: "WHAT WEDEMAND IS ONLY 50 PERCENT INCREASE BASED ON PRESENT BASIC SALARY STOP THISDEMAND THE BEST AND ONLY SOLUTION TO SOLVE ITF PROBLEMS", that there are othersubstantial and conclusive evidence to support the existence of such threats and intimidationwhich therespondent NLRC failed and refused to consider and that the evidence substantially and conclusivelyshowsthatthepetitionerVirjenwas,infact,threatenedandintimidatedintogivingsuchsalaryincreasesduetosuchcabledthreatsandintimidationoftheprivaterespondents

III.That therespondentNLRCactedwithgraveabuseofdiscretionorwithoutor inexcessof jurisdictionwhenitconcluded,ineffect,thattherespondentsseamenactedwithintheirrightswhentheyimposedupontheiremployer, thehereinpetitioner, theirdemands forsalaryandwages increases, indisregardof theirexistingNSBapprovedcontractsofemployment,notwithstandingthesubstantialandconclusivefindingsoftheNSB,thetrieroffactswhichisinthebestpositiontoassessthespecialcircumstancesofthecase,thatthe said respondents breached their respective contracts of employment with the petitioner, withoutsecuringthepriorapprovaloftheNSBasrequiredbytheNewLaborCode,asamended,andwiththeuseofthreats,intimidationandcoercion,whentheydemandedand,infact,receivedfromthepetitionersalariesorwagesoverandabovetheircontractedrateswhichthepetitionerwas"constrainedtomake"inorder"topreventthevesselfrombeinginterdictedand/ordetainedbytheITFbecauseatthetimethedemandforsalaryincreasewasmadethevesselwasenroutetoKwinana,Australia(viaSenipah,Indonesia),aportweretheITF isstrongandmilitant,""for in theevent thevesselwouldbedetainedand/or interdictedthecompany(petitioner)wouldsuffermorelossesthanpayingtheseamen25%increaseoftheirsalary"

IV. That respondent NLRC committed a grave abuse of discretion or exceeded its jurisdiction or actedcontrarytolawwhenitfailedandrefusedtoadmitandtakeintoaccounttheADDENDUMAGREEMENT,datedDecember27,1978,entered intobetweenthepetitionerandtheprivaterespondents,whichwouldhave further enlightened the respondent NLRC on the "ITF PROBLEMS" insinuated by the privaterespondents in their cable ofMarch 23, 1979 to threaten and intimidate the petitioner into granting thesalaryincreasesinquestion

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V. That respondent NLRC committed a grave abuse of discretion or acted without or in excess of itsjurisdiction or contrary to lawwhen it ordered the petitionerVirjen to pay, amongothers, to the privaterespondents their "wages corresponding to the unexpired portion of their contracts" the said petitionerhavingalreadylostitstrustandconfidenceontheprivaterespondentsthattheemployercannotbelegallycompelledtocontinuewiththeemploymentofpersonsinwhomithasalreadylostitstrustandconfidencethat payment to the private respondents of their wages corresponding to the unexpired portion of theircontractwouldbetantamounttoretainingtheirservicesaftertheiremployer,petitionerherein,hadalreadylostitsfaithandtrustinthem

VI.That the respondentNLRCcommittedagraveabuseofdiscretionorexceeded its jurisdiction in stillincludingandconsideringROMEOACOSTAasoneoftheappellantsinthetwo(2)aforementionedNSBcasesandmakinghimabeneficiaryofitsdecision,datedJuly8,1981,modifyingtheNSBdecision,datedJuly2,1980,despite the fact thatwaybackonOctober23,1980,Acostahadalready filed insaidNSBcases a pleading, entitled "SATISFACTION OF JUDGMENT" in which he manifested that he was notappealing the NSB decision anymore as the judgment in his favor was already fully satisfied by thepetitionerVirjen

VII.ThattherespondentNLRChadnomorejurisdictiontoentertainprivaterespondents'appealbecausetheNSBdecisionbecame finalandexecutory for failureofsaid respondents toserveonhepetitioneracopyoftheir"APPEALANDMEMORANDUMOFAPPEAL"withintheten(10)dayreglementaryperiodforappealandevenaftertheexpirationofsaidperiod

VIII. That the respondent NLRC had no jurisdiction to entertain the appeal by the private respondentsbasedon the supposedly verified "APPEALANDMEMORANDUMOFAPPEAL" because the supposedsignatureofthepersonpurportedlyverifyingthesameisforgedandthatthenewcounselappearingfortheprivaterespondentsonappealwasnotevenauthorizedbysomeoftheprivaterespondentstoappearforthem

IX. That the respondent NLRC committed a grave abuse of discretion or acted without or in excess ofjurisdictionorcontrarytolawwhenitmisconstrued,misinterpretedandmisappliedtotheinstantcasetherulingofthisHonorableSupremeCourtinWallemPhilippinesShipping,Inc.vs.TheHon.MinisterofLabor,et al., G.R No. 50734, prom. February 20, 1981, despite distinct and fundamental differences in factsbetweentheWallemCaseandtheinstantcase

X.That therespondentNLRCcommittedagraveabuseofdiscretionoractedwithoutor inexcessof itsjurisdictionoractedcontrary to lawwhen it failedandrefusedtoconsiderandpassuponthesubstantialissuesofjurisdiction,lawandfactsandmattersofpublicinterestsraisedbythepetitionerinitsURGENTMOTION/APPELLEE'S MEMORANDUM ON APPEAL, dated April 24, 1981, and in its MOTION FORRECONSIDERATIONAND/ORNEWTRIAL,datedJuly20,1981,filedinthetwo(2)cases

XI. That the respondent NLRC committed a grave abuse of discretion or acted without or in excess ofjurisdictionorcontrary to lawwhen it failedand refused to reconsiderandsetaside itsdecisionsubjectmatter of this petition for certiorari, consideringChat if allowed to stand, the said decisionwill open thefloodgatesforFilipinoseamentodisregardNSBapprovedcontractsofemploymentwithimpunity,leadingto the destruction of the Philippine manning industry, which is a substantial source of revenue for thePhilippinegovernment,aswellastheimageoftheFilipinoseamenwhowillundoubtedlybecomeknownfarand wide as one prone to violate the solemnity of employment contracts, compoundedwith the use ofthreats, intimidation and blackmail, thereby necessitating a policy decision by this Honorable SupremeCourtonthematterforthesurvivalofthemanningindustry.(Pp.59,Record.)

Weshalldealfirstwiththejurisdictionalissue(No.VIIabove)totheeffectthattheappealofprivaterespondentsfromthedecisionoftheNationalSeamen'sBoardagainstthemwasfiledoutoftime,consideringthatcopyofsaiddecisionwasreceivedbythemonJuly9,1980andtheyfiledtheirmemorandumofappealonlyonJuly23,1980orfourteen(14)dayslater,whereasunderarticle223oftheLaborCodewhichgovernsappealsfromtheNationalSeamen'sBoardtotheNationalLaborRelationsCommissionperArticle20(b)oftheCodeprovidesthatsuchappealsmustbemadewithinten(10)days.

In this connection, it is contended in the comment of private respondents that petitioner has overlooked that underSection7,RuleXIII,,BookVoftheImplementingRulesoftheLaborCode,thetendayperiodspecifiedinArticle223referstoworkingdaysandthatthisCourthasalreadyupheldsuchconstructionandmannerofcomputationinFabulavs.NLRC,G.R.No.54247,December19,1980.Now,computingthenumberofworkingdaysfromJuly9toJuly23,1980Wefindthattherewereexactlyten(10)days,hence,ifWeadheretoFabula,theappealinquestionmustbeheldtohavebeenmadeontime.

ButpetitionerhereinmaintainsthattheMinisterofLabormaynot,undertheguiseofissuingimplementingrulesofalawas authorized by the law itself, go beyond the clear and unmistakable language of the law and expand it at hisdiscretion.Inotherwords,sinceArticle223oftheLaborCodeliterallyprovidesthus:

Appeal. Decisions, awards, or orders of the Labor Arbiters or compulsory arbitrators are final and

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executory unless appealed to the Commission by any or both of the parties within ten (10) days fromreceiptofsuchawards,orders,ordecisions.Suchappealmaybeentertainedonlyonanyofthefollowinggrounds:

(a)If thereisaprimafacieevidenceofabuseofdiscretiononthepartofthelaborArbiterorcompulsoryarbitrator

(b)Ifthedecision,order,orawardwassecuredthroughfraudorcoercion,includinggraftandcorruption

(c)Ifmadepurelyonquestionsoflawand

(d) Ifseriouserrors in thefindingsof factsareraisedwhichwouldcausegraveor irreparabledamageorinjurytotheappellant.

Todiscouragefrivolousordilatoryappeals,theCommissionortheLaborArbitershallimposereasonablepenalty,includingfinesorcensures,upontheerringparties.

the implementing rulesmaynotprovide that thesaidperiodshouldbecomputedon thebasisofworking days. This,indeed,isalegalissuenotbroughtupnorpasseduponsquarelyinFabula,andpetitionerpraysthatthisCourtruleonthepointonceandforall.

Aftermatureandcarefuldeliberation,Wehavearrivedattheconclusionthattheshortenedperiodoften(10)daysfixedbyArticle223contemplatescalendardaysandnotworkingdays.Wearepersuadedtothisconclusion,ifonlybecauseWebelievethat it ispreciselyintheinterestof laborthatthelawhascommandedthat laborcasesbepromptly, ifnotperemptorily,disposeof.Longperiods foranyacts tobedoneby thecontendingpartiescanbe takenadvantageofmore bymanagement than by labor.Most labor claims are decided in their favor andmanagement is generally theappellant.Delay,inmostinstances,givestheemployersmoreopportunitynotonlytoprepareeveningeniousdefenses,what withwellpaid talented lawyers they can afford, but even towear out the efforts andmeager resources of theworkers,tothepointthatnotinfrequentlythelattereithergiveuporcompromiseforlessthanwhatisduethem.

Alltheforegoingnotwithstanding,andbearinginmindthepeculiarcircumstancesofthiscase,particularly,thefactthatprivaterespondentsmusthavebeenmisledbytheimplementingrulesaforementioned.Wehaveoptedtojustthesamepassonthemeritsofthesubstantialissuesherein,evenasWeadmonishallconcernedtohenceforthactinaccordancewith our foregoing view. Verily, the Minister of Labor has no legal power to amend or alter in any material sensewhateverthelawitselfunequivocallyspecifiesorfixes.

Weneednotponder longon thecontentionofpetitioner regarding thealleged forgeryof thesignatureof respondentRogelioBisulaandtheallegedlackofauthorityofthenewcounselofrespondents,Atty.B.C.Gonzales,toappearforthem. Resolution of these minor points, considering their highly controversial nature, so much so that they couldrationally to our mind, be decided either way, may be dispensed with in order that We may go to the moretranscendentallyimportantmainissuesbeforeUs.

AsfarasissueNo.VIaboveregardingtheinclusionofRomeoAcostaamongthebeneficiariesofthedecisionhereininquestion,therecanbenoreasonwhypetitionershouldnotbesustained.It isundeniedthatAcostahasfiledaformalsatisfactionofjudgment.Indeed,itisquiterelevanttomentionatthispointthatoriginally,thereweretwentyeight(28)claimantsagainstpetitioner,Thisnumberwasfirstreducedtofifteen(15)thentoten(10)andfinallytonine(9)now,bywithdrawaloftheclaimantsthemselves.Theseseriesofwithdrawalslendnolittledegreetoaddedenlightenmentofthediscussionhereunderoftheadversepositionsoftheremainingclaimants,ontheonehand,andthepetitioner,ontheother.

Tobeginwith, let itbeborne inmind thatseamen'scontractsof thenatureWehavebeforeUsnowarenotordinaryones.Therearespecie,lawsandrulesgoverningthempreciselyduetothepeculiarcircumstancesthatsurroundthem.Relatedly,WequotefromtheManifestationandCommentoftheSolicitorGeneral:

Theemploymentcontractinquestionisunlikeanyordinarycontractofemployment,forthereasonthatamanning contract involves the interests not only of the signatories thereto, such as the local Filipinorecruitingagent(hereinpetitioner),theforeignownerofthevessel,andtheFilipinocrewmembers(privaterespondents),butalsothoseofotherFilipinoseameningeneralaswellasthecountryitself.Accordingly,Article12oftheLaborCodeprovidesthatit isthepolicyoftheStatenotonly"toinsureandregulatethemovementofworkersinconformitywiththenationalinterest"butalso"toinsurecarefulselectionofFilipinoworkers for overseas employment in order to protect the good name of the Philippines abroad". TheNational Seamen Board (NSB), which is the agency created to implement said state policies, is thusempoweredpursuanttoArticle20oftheLaborCode"tosecurethebestpossibletermsandconditionsofemploymentforseamen,andtoinsurecompliancethereof"notonlyonthepartoftheownersofthevesselbutalsoonthepartofthecrewmembersthemselves.

ConformablytothepowervestedintheNSB,thelawrequiresthatallmanningcontractsshallbeapprovedbysaidagency.Itlikewiseprovidesthat"itshallbeunlawfultosubstituteoralteranypreviouslyapprovedandcertifiedemploymentcontractwithouttheapprovalofNSB"(Section35,RulesandRegulationsintherecruitmentandplacementofFilipinoseamenaboardforeigngoingships)andauthorizestheemployeror

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ownerofthevesseltoterminatesuchcontractforjustcauses(Section32,Ibid).Amongsuchjustcauses

forterminationare"badconductandunwantedpresenceprejudicialtothesafetyoftheship"(Guidebook

forshippingemployers,page8)andmaterialbreachofsaidcontract.

ThestringentrulesgoverningFilipinoseamenaboardforeign,goingshipsaredictatedbynationalinterest.

Thereareabout120,000registeredseamenwiththeNSB.Onlyabout50,000ofthemareemployedand

70,000orsoarestillhopingtobeemployed.ThoseFilipinoseamenalreadyemployedonboardforeign

goingshipsshouldaccordinglyconductthemselveswithutmostproprietyandabidestrictlywiththeterms

and conditions of their employment contract, and the NSB should see to that, in order that owners of

foreignownedvesselswillnotonlybeencouragedtorenewtheiremploymentcontractbutwillmoreoverbe

inducedtohireotherFilipinoseamenasagainstothercompetingforeignsailors.(Pp.1517,Manifestation

&CommentoftheSolicitorGeneral)

Pertinently,theLaborCodeofthePhilippinesprovidesforthecreationofaNationalSeamenBoard(NSB)thus:

ART.20.NationalSeamenBoard.(a)ANationalSeamenBoardisherebycreatedwhichshalldevelopedandmaintainacomprehensiveprogram forFilipinoseamenemployedoverseas. Itshallhave thepower

andduty:

(1)Toprovidefreeplacementservicesforseamen

(2)Toregulateandsupervisetheactivitiesofagentsorrepresentativesofshippingcompanies

in the hiring of seamen for overseas employment and secure the best possible terms of

employmentforcontractseamenworkersandsecurecompliancetherewithand

(3)TomaintainacompleteregistryofallFilipinoseamen.

(b) The Board shall have original and exclusive jurisdiction over all matters or cases including money

claims,involvingemployeremployeerelations,arisingoutoforbyvirtueofanylaworcontractsinvolving

Filipinoseamenforoverseasemployment.Thedecisionof theBoardshallbeappealabletotheNational

LaborRelationsCommissionuponthesamegroundsprovidedinArticle223hereof.Thedecisionsofthe

NationalLaborRelationsCommissionshallbefinalandinappealable.

The finalityandunappealabilityof thedecisionsof theNationalLaborRelationsCommissionconferredby theabove

provisions incasesof thenaturenowbeforeUsnecessarily limitsOurpower in thepremises to theexerciseofOur

plenarycertiorarijurisdiction.AndundertheschemeofsaidArticle20,inrelationtoArticle223ofthesameCode,the

reviewingauthorityoftheCommissionislimitedonlytothefollowinginstances:

Appeal.Decisions, awards, or orders of the Labor Arbiters or compulsory arbitrators are final andexecutory unless appealed to the Commission by any or both of the parties within ten (10) days from

receiptofsuchawards,orders,ordecisions.Suchappealmaybeentertainedonlyonanyofthefollowing

grounds:

(a) If there isprimafacieevidenceofabuseofdiscretionon thepartof theLaborArbiterorcompulsoryarbitrator

(b)Ifthedecision,orderorawardwassecuredthroughfraudorcoercion,includinggraftandcorruption

(c)Ifmadepurelyonquestionsoflawand

(d) Ifseriouserrors in thefindingsof factsareraisedwhichwouldcausegraveor irreparabledamageor

injurytotheappellant.

Todiscouragefrivolousordilatoryappeals,theCommissionortheLaborArbitershallimposereasonable

penalty,includingfinesorcensures,upontheerringparties.

Inallcases,theappellantshallfurnishacopyofthememorandumofappealstotheotherpartywhoshall

fileananswernotlaterthanten(10)daysfromreceiptthereof.

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Inthelightoftheforegoingperspectiveof lawandpolicy,all theotherissuesraisedbypetitionermaybedisposedof

together.Anywaytheyrevolvebasicallyaroundthefollowingquestions:

1. In theeventofconflict in theconclusionsof theNationalSeamenBoard,ontheonehand,andtheNationalLabor

RelationsCommissionontheother,onamatterthatisfundamentallyanissueoffact,whichoneshouldprevail?

2.Underthefactsofthiscase,wasitlegallyproperfortheCommissiontodisregardthepermissiongrantedbytheNSB

tothepetitionertodisembarkanddiscontinuetheemploymentofhereinrespondents?

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3.Asamatteroffact,didrespondentbreachtheircontractwithpetitioner,soastoentitlethelattertotakethepunitiveactionhereincomplainedof?

4.Was theconformityofpetitioner topay respondentsadditionalcompensationof25%securedbysaid respondentsthruthreatsofgraveinjurytopetitionerwho,therefore,accededtosuchincreaseinvoluntarily?

Wefeelthattheresolutionoftheinstantcontroversyhingesonwhetherornotitwasviolativeoflawandpolicyinthelight of the peculiar nature of the contracts in question as already explained at the outset of this opinion, for therespondents tomake thedemand foran increaseof50%of their respectivewagesstipulated in theirNSBapprovedcontractswhile theywerealready in themidstof thevoyage toKwinana,Australia (an ITFcontrolledpost),pointedlymentioningintheircablegramthatsuch"demand(was)thebestandonlysolutiontosolveITFproblem"?

Onthesequestions,theNSBfoundandheld:

1.WhetherornottheSeamenbreachedtheirrespectiveemploymentcontracts

2.WhetherornottheSeamenwereillegallydismissedbytheCompany

3.Whetherornotthemonetaryclaimsoftheseamenarevalidandmeritorious

4.WhetherornotthemonetaryclaimsoftheCompanyarevalidandmeritorious

5.WhetherornotdisciplinaryactionshouldbetakenagainsttheSeamen.

Withrespecttothefirstissue,theBoardbelievesthattheanswershouldbeintheaffirmative.ThisissofortheSeamendemandedand in fact received from theCompanywagesover andabove their contractedrates,which ineffect isanalterationormodificationofavalidandsubsistingcontractandthesamenothaving been done thru mutual consent and without the prior approval of the Board the alteration ormodificationiscontrarytotheprovisionsoftheNewLaborCode,asamended,moreparticularlyArt.34(i)thereofwhichstatesthat:

Art.34.Prohibitedpractices.Itshallbeunlawfulforanyindividual,entity,licenseeorholderofauthority:

xxxxxxxxx

(i)TosubstituteoralteremploymentcontractsapprovedandverifiedbytheDepartmentofLaborfromthetimeofactualsigningthereofbythepartiesuptoandincludingtheperiodofexpirationofthesamewithouttheapprovaloftheDepartmentofLabor

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TherevisionofthecontractwasnotdonethrumutualconsentfortheCompanydidnotvoluntarilyagreetoanincreaseofwage,butwasonlyconstrainedtomakeacounterproposalof25%increasetopreventthevessel from being interdicted and/or detained by the ITF because at the time the demand for salaryincreasewasmadethevesselwasenroute toKwinana,Australia (viaSenipah, Indonesia),aportwheretheITFisstrongandmilitant.However,aperusaloftheCables(Exhs."D"&"F","3"&"5")comingfromtheSeamenaddressedtotheCompanywouldshowthethreateningmannerbywhichthedesireforasalaryincreasewasmanifested,contrarytotheirclaimthatitwasmerelyarequest.Aforesaidcablesareherebyquotedforreadyreference:

RYCV11121314 RECEIVED URINFO ENTIRE JANNU OFFICERS AND CREW NOT AGREEABLEWITH YOUR SUGGESTIONS THEY ARE NOT CONTENTED WITH PRESENT SALARY BASED INVOLUMEOFWORKSTYPEOFSHIPWITHHAZARDOUSCARGOANDREGISTERED INAWORLDWIDE TRADE STOP REGARDING URCABV14 OFFICERS AND CREW NOT INTERESTED IN ITFMEMBERSHIP IF NOT ACTUALLY PAID WITH ITF RATE STOP WHAT WE DEMAND IS ONLY 50PERCENT INCREASEBASEDONPRESENTBASICSALARYSTOPTHISDEMANDTHEBESTANDONLYSOLUTIONTOSOLVEITFPROBLEMDUEYOURPRESENTRATEESPECIALLYINTANKERSVERYFARINCOMPARISONWITHOTHERSHIPPINGAGENCIESINMANILASTOPLETUSSHAREEQUALLYTHEFRUITSOFLONELINESSSACRIFICESANDHARDSHIPWEAREENCOUNTERINGONBOARDWEREMAIN...

REURVIRJEN15 OFFICERS AND CREW HESITATING TO GIVE UP DEMAND OF 50PERCENT INCREASEBUTFORGOODANDHARMONIOUSRELATIONSHIPONBOARDANDRECONSIDERINGYOURSUPPOSETOBELOSSESINCASEWECONDITIONALLYCOOPERATE WITH YOUR PROPOSE INCREASE OF 25 PERCENT BASED ONINDIVIDUAL MONTHLY BASIC PAY WITH FOLLOWING TERMS AND CONDITIONS AAEFFECTIVITY OF 25 PERCENT INCREASE MUST BE MARCH/79 PLUS SPECIALCOMPENSATION MENTIONED URCAB VIRJEN14 BB NEW COMPANY CIRCULAR ONUPGRADED NEW SALARY SCALE DULY SIGNED AND APPROVED BE FORWARDEDKWINANA AUSTRALIA OR HANDCARRIED BY YOUR REPRESENTATIVE TO DISCUSS

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MATTERSOFFICIALLYCC25PERCENTINCREASEMUSTBECOLLECTABLEONBOARDEFFECTIVEABOVEDATEUNTILDISEMBARKATIONSTOPALLOTMENTTOALLOTTEESREMAIN AS IS DD REASONABLE REPALLOWS FOR ALL OFFICERS BE GIVENEFFECTIVE MARCH/79 EE BONUS FOR 6 MONTHS SERVICE RENDERED BECOLLECTIBLEONBOARD FFOFFICERS/CREW 30 PERCENT'OT SHOULDBEBASEDNEW UPGRADED SALARY SCALE GG MASTER/CHENGR/CHMATE SPECIALCOMPENSATIONGIVEBYYOURCOMPANYPRIORDEPARTUREMANILABEREMAINASISSTOPTHEABOVETERMSANDCONDITIONSSHOULDBEPROPERLYENFORCEAND DOCUMENTED ALSO COPIES AND FORWARDED ONBOARD ON ARRIVALKWINANAAUSTRALIACONFIRM...

WhiletheBoardrecognizestherightsoftheSeamentoseekhigherwagesprovidedtheincreaseisarrivedatthrumutualconsent,itcouldnothowever,sanctionthesameiftheconsentoftheemployerissecuredthruthreats,intimidationorforce.Inthecaseatbar,theCompanywascompelledtoaccedetothedemandoftheSeamenforasalaryincreasetoforestallthepossibilityofthevesselbeinginterdictedbytheITFatKwinana,Australia, for in theevent thevesselwouldbedetainedand/or interdicted theCompanywouldsuffermorelossesthanpayingtheSeamen25%increaseoftheir

With respect to thesecond issue, theBoardbelieves that the terminationof theservicesof theSeamenwaslegalandinaccordancewiththeprovisionsoftheirrespectiveemploymentcontracts.ConsideringthefindingsoftheBoardthattheSeamenbreachedtheircontracts,theirsubsequentrepatriationwasjustified.While itmaybe true that theSeamenwerehired foradefiniteperiod theirservicescouldbe terminatedpriortothecompletionofthefuntermthereofforajustandvalidcause.

It may be stated in passing that Virjen Shipping & Marine Services, Inc., despite the fact that it wascompelledtoaccedetoa25%salaryincreasefortheSeamen,triedtoconvinceitsprincipalKyoeiTanker,Ltd.toanadjustmentintheiragencyfeetoanswerforthe25%increase,butthelatternotonlydeniedtherequest but likewise terminated their Manning, Agreement. The Seamen's breach of their employmentcontractsandthesubsequentterminationoftheManningAgreementofVirjenShipping&MarineServices,Inc.withtheKyoeiTanker,Ltd.,justifiedtheterminationoftheSeamen'sservices.

WithrespecttothethirdissuethefollowingarethefindingsoftheBoard:

As regards the claim of the Seamen for the payment of their salaries for the unexpired portion of theiremploymentcontractsthesameshouldbedenied.ThisissobecauseofthefindingsoftheBoardthattheirdismissalwaslegalandforajustcause.Awardsofthisnatureisproperonlyincaseswhereaseafarerisillegallydismissed.(Pp.148151,Record)

DisagreeingwiththeforegoingfindingsoftheNSB,theNLRCheld:

Themore important issue to be resolved in this case, however, is the question ofwhether theSeamenviolated theiremploymentcontractswhen theydemandedorproposedand in factacceptedwagesoverandabove their contracted rates.Statedotherwise, could theSeamen rightfully demandor propose therevision of their employment contracts?While they concede that they are bound by their contracts, theSeamenclaim that theircableasking for the revisionof theircontract rateswasavalidexerciseof theirrighttogrievance.

The right to grievance is recognized in this jurisdiction even if there is a valid and subsisting contract,especiallywheretherearesuperveningfactsoreventsofwhichapartytothecontractwasnotapprisedatthetimeof itsconclusion.AspointedoutbytheSupremeCourt in theWallemcase,supra, it"isabasicrightofallworkingmentoseekgreaterbenefitsnotonlyforthemselvesbutfortheirfamiliesaswell..."andthe "Constitution itself guarantees the promotion of social welfare and protection to labor." In this care,recordsshow that itwas impressedon theSeamen that theirvesselwouldbe tradingonly inCaribbeanports. This was admitted by the Company in its cable to the Seamen on 10 January 1979. After theconclusion of their contracts, however, and after they had boarded the vessel, the principals of theCompanydirectedthevesseltocanatdifferentportsortoengagein"worldwidetrade"whichisadmittedlymoredifficult andhazardous than trading inonlyonemaritimearea.This is a substantial change in theoriginal understanding of the parties. Thus, in their cable asking for a wage increase, the SeamenexpressedtheirdissatisfactionbyinformingtheCompanythattheywere"notcontentedwith(their)presentsalarybasedonvolumeofwork, typeofshipwithhazardouscargoand registered inworldwide trade."(emphasissupplied.)Withsuchchangeintheoriginalagreementoftheparties,wefindthattheSeamenwerewellwithintheirrightsindemandingfortherevisionoftheircontractrates.

Wealsonote that theCompanywasnotexactly ingood faith incontracting theserviceof theSeamen.During his briefing in Manila, the Company instructed the master of the vessel, complainant Bisula, toprepare two (2) sets of payrolls, one set reflecting the actual salary rates of theSeamenand the othershowinghigherratesbasedonPanamanianShippingarticleswhichapproximatethoseprescribedbyITFfor itsmember seafarers. In compliance with this instruction, Bisula prepared the latter payrolls. ThesepayrollswereintendedfortheconsumptionofITFifandwhenthevesselcalledonportswhereITFrates

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wereoperational, theevident purposebeing to show ITF that theCompanywaspaying the same ratesprescribedbysaidlaborfederationandtherebypreventtheinterdictionofthevessel.AndwhenthevesselwasenroutetoAustralia,anITFcontrolledport,theCompanyarrangedfortheSeamen'smembershipwithITFandactuallypaidtheirmembershipfeeswithouttheirknowledgeandconsent,therebyexposingthemtothedangerofbeingdisciplinedbytheNSBSecretariatforhavingaffiliatedwithITF.AllthesehavetobementionedheretobetterunderstandthefeelingsoftheSeamenwhentheyaskedfortherevisionoftheirwagerates.2(Pp.8385,Record)

Comparingthesetwodecisions,WedonothesitatetoholdthattheNLRCoversteppedtheboundariesofitsreviewingauthorityandwasoverlenient.Whetherornotrespondentshadbreachedtheircontractwitpetitionerisafactualissue,thepeculiarnuancesofwhichwerebetterknowntotheNSB,thefactfindingauthority. Indeed,evenif itwasnothingmorethantheinterpretationofthecablegramsentbyrespondentstopetitioneronMarch23,1979thatweretheonlyquestiontoberesolved,thatis,whetherornotitcarriedwithitorconnotedathreatwhichnaturallypanickedpetitioner,which,tobesure,couldbeaquestionoflaw,still,asWeseeit,theconclusionoftheNLRCcannotbejustified.

TheNLRCruledthatintheexerciseoftheirrighttopresentanygrievancestheyhadandintheirdesiretoalleviatetheircondition, itwasbutwellandproper forrespondents tomakeaproposal for increaseof theirwages,whichpetitionercouldacceptorreject.Wedonotseeitthatway.

Definitely,thereferenceinthecablegramtotheconformityofpetitionertorespondents'demandwas"thebestandonlysolutiontoITFproblem"hadanundertonewhichnaturallyplacedpetitionerhardlyinapositiontoanswerthemwithaflatdenial.ItwouldbetheacmeofnaiveteforUstogoalongwiththecontentionthatthecablegramofMarch23,1979wasamereproposalandhadnotracenortintofthreatatall.Indeed,itisallegedinthepetitionandthereisnodenialthereof thatonApril23,1979,ChiefMateJacoboCatabayof theM/TJannu,whowasamong theclaimantsat first,revealedthat:

OnApril23,1979,ChiefMateJacoboH.Catabayof theM/TJannu, inasignedstatementreport to thepetitioner,markedandadmittedinevidenceasExh."10A"duringthetrialstated,asfollows:

On our departure at Keelung, we did not have destination until three (3) days later thatHarman cabled us to proceed toSenipah, Indonesia to load fun cargo to be discharged atKwinana,Australia.Captaintoldeveryonethatifonlywestayedsolongwiththeship,hewillreport to ITF personally in order to get backwages. In view that we onlyworked for threemonthssothebackwagesissosmallanddoesnotworth.Fromthattimeon,ChiefEngr.andCaptainhaveanightlycloseddoorconferencetheyarrivedattheconclusiontoaskfor50%salaryincreaseandtheyhavemodifiedacertainplatforms.TheycertainlybelievethatVirjenhave no choice because the vessel is going to ITF port so they called a general meetingconductedatthebridgeduringmydutyhoursintheafternoon.Allengineanddeckpersonnelwerepresentinthatmeeting.(Pp.1920,Record.)

Welltaken,indeed,istheSolicitorGeneral'sobservationthat:

Private respondents'conduct isuncalled for.Whileemployeesmaybe free to request their employers toincrease theirwages, they should not use threat of sucha nature and in sucha situation as to put theemployerattheircompletemercyandwithnochoicebuttoaccedetotheirdemandsortofacebankruptcy.Thisiswhatprivaterespondentsdid,whichisanactofbadconductprejudicialtothevessel,andamaterialbreachoftheexistingmanningcontract.Ithasadverseconsequencesthatlednotonlytotheterminationoftheexistingmanningcontractbut to the rejectionbyKyoeiTankerCo.Ltd.ofpetitioner'soffer tosupplycrewmemberstothreeothervessels,therebydeprivingunemployedFilipinoseamenoftheopportunitytowork on said vessels. Thus, in a letter datedMay 17, 1979, Kyoei Tanker Co. Ltd. wrote petitioner asfollows:

This is with reference to your letter of Feb. 23, 1979, submitting your manning offers on our three (3)managedvesselsfordeliveryasfollows:

1.M/V"Maya"crew,deliveryendMay,1979,

2.M/T"Cedar"28crew,deliveryendJune,1979,

3.M/T"GlobalOath"30crew,deliveryend,June1979.

Inthisconnection,wewishtoadviseyouthat,asaresultofourunpleasantexperiencewithyourcrewontheM/T"Jannu",ownershavedecidedtogivethemanningcontractsontheabovethreevesselstootherforeigncrewinsteadofyourcompany.

Wedeeplyregretthatalthoughyourcrewperformanceonourotherfour(4)vesselshavebeensatisfactory,we were unable to persuade owners to consider your Philippine crew because of the bad attitude andactuationofyourcrewmannedonboardM/T"Jannu".

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Aswehavealreadyadvisedyou,ownershavespentmorethanUS$30,000.00toreplacethecrewofM/T"Jannu" in Japan last April 19, 1979 which would have been saved if your crew did not violate theiremploymentcontracts.(Annex"K"ofPetition),

In the lightofall the foregoingand the lawandpolicyon thematter, it issubmitted that therewasvalidjustification on the part of petitioner and/or its principal to terminate the manning contract. (Pp. 1214,ManifestationandCommentoftheSolicitorGeneral.)

AtfirstglanceitmightseemthatthejudgmentoftheNLRCshouldhavemoreweightthanthatofNSB.Havinginview,however, the set up and relationship of these two entities framed by the LaborCode, theNSB is not only chargeddirectlywiththeadministrationofshippingcompaniesinthehiringofseamenforoverseasemploymentbyseeingtoitthatourseamen"securethebestpossible termsofemployment forcontractseamenworkersandsecurecompliancetherewith." Its compositionasof the time this controversyarose isworth notingfor it ismadeupof theMinister ofLabor as Chairman, the Deputy Minister as Vice Chairman, and a representative each of the Ministries of ForeignAffairs, National Defense, Education and Culture, the Central Bank, the Bureau of Employment Service, a worker'sorganization and an employee's organization and the ExecutiveDirector of theOverseasEmploymentDevelopmentBoard.(Article23,LaborCode)ItissuchaboardthathastoapproveallcontractsofFilipinoseamen(Article18,LaborCode).Andaftersuchapproval,thecontractbecomesunalterable,itbeing"unlawful"underArticle34oftheCode"foranyindividual,entity,licenseeorholderofauthority:(i)tosubstituteoralteremploymentcontractsapprovedandverifiedbyDepartmentofLaborfromthetimeofactualsigningthereofbythepartiesuptoandincludingtheperiodofexpirationofthesamewithouttheapprovalof theDepartmentofLabor." Inotherwords, it isnotonlythatcontractsmaynotbealteredormodifiedoramendedwithoutmutualconsentofthepartiestheretoitisfurthernecessarytohavethechangeapprovedbytheDepartment,otherwise,theguiltypartieswouldbepenalized.

ThepoweroftheNLRCinrelationtotheworksandactuationsoftheNSBisonlyappellate,accordingtoArticle20(b),read in relation to Article 223, principally, over questions of law, since as to factual matters, it may exercise suchappellatejurisdictiononly"iferrorsinthefindingsoffactareraisedwhichwouldcausegraveorirreparabledamageorinjurytotheappellant."(par.d)

TheNLRChasnotedinitsdecisionthatrespondentswereoriginallymadetobelievethattheirshipwouldgoonlytotheCaribbean ports and yet after completing trips to Inchon, Korea and Kuwait and Keelung, Taiwan, it was suddenlydirected tocallatKwinana,Australia,an ITFcontrolledport.The recordshows that this imputation ismoreapparentthanreal, for respondentsknewfromtheverymoment theywerehired thatworldwidevoyagesordestinationswerecontemplated in their agreement. Somuch so that corresponding steps had to be taken to avoid interference of ortrouble about the ITF upon the ship's arrival at ITF controlled ports. As already stated earlier, the ITF requires theseamenworkingonanyvesselcallingatportscontrolledbythemtobepaidtheratesfixedbytheITFwhicharemuchhigherthanthoseprovidedinthecontract'ssignedhere,totheextentofcausingtremendouslossifnotbankruptcyoftheemployer.

Andso,asrevealedtotheNLRClater,inanticipationpreciselyofsuchperiltotheemployerandultimateunemploymentoftheseamen,intheinstantcase,theusualprocedureundeniablyknowntorespondentsofhavingtwopayroll's,onecontainingtheactuallyagreedratesandtheotherITFrates,thelattertobeshowntotheITFinorderthattheshipmaynotbedetainedorinterdictedinKwinana,wasfollowed.ButaccordingtotheNLRC,thispracticeconstitutesdeceptionand bad faith, and worse, it is an effect within the prohibition against alteration of contracts approved by the NSB,considering there isnothing toshowthatNSBwasmadeawareof thesocalledaddendumorsideagreement to theeffectthatshouldtheshipmannedbyrespondentsbemadetocallananyITFcontrolledport,thecontractwithITFrateswouldbeshownand, if foranyreason,therespondentsarerequiredtobeactuallypaidhigherratesandtheyaresopaid,theexcessovertheratesagreedintheNSBcontractshallbereturnedtopetitionerlater.

It isof insubstantialmomentthatthesideagreementoraddendumwasnotmadeknowntoorpresentedasevidencebefore theNSB.Wearepersuaded thatmoreor less theNSBknows that thegeneralpractice is tohavesuchsidecontracts.Moreimportantly,thesaidsidecontractsarenotmeantatalltoalterormodifythecontractsapprovedbytheNSB.Rather,theyarepreciselypurportedtoenforcethemtotheletter,makingitclearerthateveniftheshipshavetocall at ITF controlled ports, the same shall remain to be the real and binding agreement between the parties, inintentionaldisregardofwhatevertheITFmayexact.

Wehold that therewasnobad faith inhavingsaidsidecontracts, the intent thereofbeing toput intoeffect theNSBdirectedarrangementsthatwouldprotecttheshipmanningindustryfromunjustandruinningeffectsofITFintervention.Indeed,examiningthesaidsideagreements, it isnotcorrecttosaythattherespondentswerecaughtunaware,orbysurprisewhen theywere advised that the shipwould proceed to Kwinana, Australia, even assuming they had beensomehowinformedthattheywouldsailtotheCaribbean.Saidsideagreementstextuallyprovide:

KNOWALLMENBYTHESEPRESENTS:

ThisAddendumAgreement entered into by and betweenKYOEITANKERCO., LTD.,Principals, of thevesselM.T. "JANNU", represented herein byVIRJENSHIPPING&MARINESERVICES, INC.,Manila,Philippines,asManningAgents(hereinafterreferredtoastheCompany),

and

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Thehereinmentionedofficersandcrew,andengagedbytheCompanyascrewmembersofthevesselM/T"JANNU"with their positions, seaman certificate numbers and signatures (hereinafter referred to as theCrewmember),hereundershown:

WITNESSETHthat:

1.WHEREAS,theCrewmemberishiredandrecruitedasamemberofthecrewonboardthevesselM/T"JANNU"withthecorrespondingContractsofEmploymentsubmittedto,verifiedanddulyapprovedbytheNationalSeamenBoard that theemploymentcontract referred to,hasclearlydefined the rateofsalary,wages,and/oremploymentbenefitsforaperiodofone(1)year(ortwelve(12)months),andanyextensionthereof.

2. WHEREAS, the parties hereby further agree and covenant that should the abovementioned vesselenter,dockordropanchorinportsofothercountries,theCrewmembershallnotdemand,askorreceive,andtheCompanyshallhavenoobligationtopaytheCrewmember,salaries,,wagesand/orbenefitsoverand above those provided for in the employment contract submitted to, verified and approved by theNationalSeamenBoard,whichshallremaininfullforceandeffectbetweentheparties.TheCompanyaswellastheOwners,,Charterers,AgentsshallneitherbeheldaccountablenorliableforanyamountotherthanwhatisagreeduponandstipulatedintheaforesaidNSBapprovedContractsofEmployment.

3.WHEREAS,thepartieslikewiseagreethatshouldthevesselenter,dockordropanchorinanyforeignport, and in theevent that theCompany (and/or itsOwners,Charterers,Agents),are forced,pressured,coercedorcompelled,inanywayandforwhatevercauseorreason,topaytheCrewmembereitherdirectlyorthrutheirrespectiveallotteesorotherpersons,salariesandbenefitshigherthanthoseratesimposedintheNSBapprovedcontract,theCrewmemberherebyagreesandbindshimselftoreceivethesaidpaymentinbehalfof,andintrustfor,theCompany(and/oritsOwners,Charterers,Agents),andtoreturnthesaidamount in full to the Company or to its agent/s in Manila, Philippines immediately upon his and/or hisallottees receipt thereof theCrewmember herebywaives formalwritten demand by theCompany or itsagent/sforthereturnthereof.TheCrewmemberherebyfullyunderstandsthatfailureorrefusalbyhimtoreturntotheCompanythesaidamount,will renderhimcriminally liableforEstafa,asprovidedfor in theRevisedPenalCodeofthePhilippines,andinsuchcase,thepartiesherebyagreethatanycriminaland/orcivilactioninconnectiontherewithshallbewithintheexclusivejurisdictionofPhilippineCourts.

4.WHEREAS, if, inorder toavoiddelays to thevessels, theCompany is forced,pressured, coercedorcompelled to sign a Collective Bargaining Agreement or any other Agreement with any foreign union,particularly ITFor ITFaffiliatedunions,and tosignnewcrews'contractofemploymentstipulatinghigherwages,salariesorbenefits than theNSBapprovedcontract, thesaidagreementsandcontractsshallbevoidfromthebeginningandtheCrewmembershallbedeemedtohaveautomaticallywaivedtheincreasedsalariesandbenefitsstipulatedinthesaidagreementsandemploymentcontractsuntoandinfavoroftheCompany, and shall remainunalterably boundby the rates, terms, and conditionsof theNSBapprovedcontract.

5.WHEREAS,thepartiesalsoagreethatshouldtheCompany,asaprecautionaryoranticipatorymeasurefor thepurposeofavoidingcostlydelays to thevesselprejudicial to itsown interest,decide tonegotiateand/orenterintoanyagreementinadvancewithanyforeignbasedunion,particularlyITForITFaffiliatedunions, in any foreign portwhere the vessel involved hereinmay enter, dock or drop anchor,whateverincreasesinsalariesorbenefitstotheCrewmemberthattheCompanymaybecompelledtogive,overandabovethosestipulatedintheNSBapprovedemploymentcontractsoftheCrewmember,shag,likewise,bedeemed ineffective or void from the beginning as far as the Crewmember is concerned, and any suchincreasesinsalariesorbenefitswhichtheCrewmembershallreceivepursuanttheretoshallbeheldbytheCrewmembers in trust for theCompanywith theobligation to return thesame immediatelyupon receiptthereof,attheCompany'soritsagent'sofficeatManila,Philippines.Itisfullyunderstoodthattheratesofpayandallother termsandconditionsembodied in theNSBapprovedemploymentcontractsshallbeofcontinuingvalidityandeffectivitybetweentheparties,irrespectiveofthecountriesorportswherethesaidvesselshallenter,dockordropanchor,andirrespectiveofanyagreementwhichtheCompanymayenterormayhaveenteredintowithanyunion,particularlyITForITFaffiliatedunions.

6. WHEREAS, it is likewise agreed that any undertaking made by the Company and/or the NationalSeamenBoardupon the requestof theCompany, imposedbyany foreignunion,particularly ITFor ITFaffiliated unions,whichwill negate or render in effective any provisions of this agreement, shall also beconsiderednullandvoidfromthebeginning.

7.WHEREAS,lastly,thisAddendumAgreementisenteredintoforthemutualinterestofbothpartiesinlinewiththeCompany'sdesiretocontinuetheserviceoftheFilipinocrewmembersonboardtheirvesselandtheCrewmembers'desiretokeeptheiremploymentonboardthesubjectvessel,thusmaintainingthegoodimageoftheFilipinoseamenandcontributingtothedevelopmentofthePhilippinemanningindustry.

8.ThatboththeCompanyandtheCrewmemberagreeandbindthemselvesthatthisAgreementshallbeconsidered an addendum to, or as part of, theNSBapproved employment contract entered into by the

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CompanyandtheCrewmember.

INWITNESSWHEREOF, we have hereunto affixed our signatures this December 28, 1978 atManila,Philippines.

THECOMPANYVIRJENSHIPPING&MARINESERVICES,INC.

By:

(SGD.)CAPT.RUBENR.BALTAZAROperationsDept.

THECREWMEMBERS

Name

Position SC# Signature

1. RubenArroza

2ndMate 104728 SGD.

2. CresencianoAbrazaldo

3rdMate 91663 SGD.

3. SalvadorCaunan

ThirdEngr.

84995 SGD.

4. NiloCruz 4thEngr. 157762 SGD.

5. PacificoLabios

A/B 139045 SGD.

6. RamonJavier

A/B 170545 SGD.

7. JoaquinCordero

A/B 96556 SGD.

8. RodolfoCrisostomo

O/S 162121 SGD.

9. RenatoOliveros

O/S 137132 SGD.

10. RogelioSaraza

O/S 149635 SGD.

11. NemesioAdug

Pumpman 157215 SGD.

12. FranciscoBenemerito

Oiler 89467 SGD.

13. RufinoGutierrez

Oiler 173663 SGD.

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14. Juol RamMaul

Oiler 84934 SGD.

15. SteveMario

Wiper 146096 SGD.

16. SimplicioBautista

ChiefCook

169142 SGD.

17. RomeoAcosta

SecondCook

159960 SGD.

18. DelfinDagohoy

Messman 144096 SGD.

19. JoseEncabo

Messman 179551 SGD.

(Pp.99103,AnnexD1ofPetition)

TheNLRChascitedWallemPhilippineShippingInc.vs.TheMinisterofLabor,G.R.No.5073437,February20,1981(102SCRA835).NolessthantheSolicitorGeneralmaintainsthatsaidcitedcaseisnotcontrolling:

AcarefulexaminationofWallemPhilippineShipping Inc.vs.TheMinisterofLabor,G.R.No.5073437,February,20,1981showsthatthesameisdissimilartothecaseatbar.IntheWallemcase,therewasanexpressagreementbetweentheemployerand the ITFrepresentative,underwhichsaidemployerbounditselftopaythecrewmemberssalaryratessimilartothoseofITF.WhenthecrewmembersintheWallemcasedemandedthattheybepaidITFrates,theyweremerelyaskingtheiremployertocomplywithwhathad been agreed uponwith the ITF representative,which conduct on their part cannot be said to be aviolationofcontractbutanefforttourgeperformancethereof.Suchisnotthesituationinthecaseatbar.Inthe caseat bar, petitioner andprivate respondentshada sideagreement,wherebyprivate respondentsagreed to return to petitionerwhatever amounts petitionerwould be required to pay under ITF rates. Inotherwords,petitionerandprivate respondentsagreed thatpetitionerwouldnotpay the ITF rate.Whenprivate respondentsused ITFas threat tosecure increase insalary, theyviolated themanningcontract.Moreover,inthecaseatbar,petitionerterminatedthemanningcontractonlyaftertheNSBauthorizedittodoso,after it found thegrounds therefor tobevalid.On theotherhand, the terminationof themanningcontractintheWallemcasewaswithoutpriorauthorizationfromtheNSB.

Itwillbenotedthatprivaterespondentssentacabletopetitionerdemandinganincreaseof50%oftheirbasicsalaryastheonlysolutiontotheITFproblematatimewhenthevesselM/TJANNUwasenroutetoAustralia,anITFport.ThefactthatprivaterespondentsmentionedITFintheircableclearlyshowsthatifpetitionerwould not accede to their demands, theywould denouncepetitioner to ITF.Thus,ChiefMateJacoboCatabayinhisreportdatedApril23,1979(Exh.10A)stated:

OnourdepartureatKeelung,wedidnothavedestinationuntil threedays later thatHarmancabledus toproceed toSenipah, Indonesia to load funcargo tobedischargedatKwinana,Australia.Captaintoldeveryonethatifonlywestayedsolongwiththeship,hewillreporttoITFpersonallyinordertogetbackwages.Inviewthatweonlyworkedforthreemonthssothebackwagesissosmallanddoesnotworth.Fromthattimeon,ChiefEngr.andCaptainhavea nightly closed door conference until they arrived at the conclusion to ask for 50% salaryincreaseandtheyhavemodifiedacertainplatforms.TheycertainlybelievethatVirjenhavenochoicebecausethevesselisgoingtoITFportsotheycalledageneralmeetingconductedat the bridge duringmy duty hours in the afternoon. All engines and deck personnel werepresentinthatmeeting.(Emphasissupplied)

Reporting thewageschemeto the ITFwouldmean that thevesselwouldbe interdictedanddetained inAustraliaunlesspetitionerpaytheITFrates,whichrepresentmorethan100%ofwhatisstipulatedinthemanningcontract.Petitionerwasthusforcedtograntprivaterespondentsanincreaseof25%intheirbasicsalary.Thatsuchgrantofa25%increasewasnotvoluntaryisshownbythefactthatpetitionerimmediatelydenouncedtheseamen'sconducttoNSBandsubsequentlyaskedsaidagencyauthoritytoterminatethemanningcontract.(Pp.1012,Manifestation&CommentofSolicitorGeneral)

Summarizing,WeareconvincedthatsincetheNSB,consideringitsofficialroleinmatterslikethosenowbeforeUs,is

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the factfindingbody,and there isnosufficient cogency in theNLRC's finding that therewasno threatemployedbyrespondentsonpetitioner,and, itappearingfurtherthat thewellpreparedManifestationandCommentof theSolicitorGeneralsupportsthedecisionoftheNSB,whichbody,toOurmind,wasinabetterpositionthantheNLRCtoappraisethe relevantnuancesof theactuationsofbothparties,Weareof theconsideredview that thedecisionof theNLRCunderquestionconstitutesgraveabuseofdiscretionandshouldbesetasideinfavoroftheNSB'sdecision.

InElHogarFilipinoMutualBuildingandLoanAssociationvs.BuildingEmployeesInc.,107Phil.473,citingSanMiguelBreweryvs.NationalLaborUnion,97Phil.378,Weemphasized:

Much as we should expand beyond economic orthodoxy, we hold that an employer cannot be legallycompelled to continue with the employment of a person who admittedly was guilty of misfeasance or

malfeasancetowardshisemployer,andwhosecontinuanceintheserviceofthelatterispatentlyinimicalto

his interest. The law in protecting the rights of the laborer, authorizes neither the oppression nor self

destructionoftheemployer.(Page3,Record)(Emphasissupplied)

Itistimelytoaddhereinclosingthatsituationswhereinemployersarepracticallylaidinambushorplacedinapositionnotunlikethoseinahighjackwhetherintheair,landormidseamustbeconsideredtobewhattheyreallyare:actsofcoercion,threatandintimidationagainstwhichthevictimhasgenerallynorecoursebuttoyieldattheperilofirreparableloss.Andwhensuchhappeningsaffect thenationaleconomy,aspointedoutby theSolicitorGeneral, theymustbetreated tobe in thenatureof economic sabotage.They shouldnot be tolerated.ThisCourt has tobe careful not tosanctionthem.

WHEREFORE,thepetitionhereinisgrantedandthedecisionoftheNLRCcomplainedofherebysetasidethedecisionoftheNSBshouldstand.

Nocosts.

Concepcion,Jr.,Guerrero,AbadSantos,DeCastroandEscolin,JJ.,concur.

Aquino,J.,concurintheresult.

Footnotes

1NSBCaseNo.225079isacomplaintforillegaldismissalandnonpaymentofearnedwagesfiledby27officersandcrew/membersofthevesselM/T"Jannu"againsthereinpetitionerwhileNSB225279isacomplaintforbreachofcontractandrecoveryofexcesssalaries,overtimepayfiledbypetitioneragainstthecomplainantsintheothercase.

2Pleaseseeclarificationofthepointthatrespondentsweremisledastowhethertheywerehiredforworldwidevoyagesornotinthelatterpartofthisopinion.

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