G.R. No. 154185 , November 22, 2005
AMELIA J. DELOS SANTOS, Petitioner, vs. JEBSEN MARITIME, INC., Respondent.

FACTS

Petitioner Amelia J. Delos Santos is the wife of seafarer Gil R. Delos Santos. On or about August 10, 1995, respondent Jebsen Maritime, Inc., for and in behalf of Aboitiz Shipping Co., hired Gil Delos Santos as third engineer of MV Wild Iris under a POEA-approved contract for a fixed period of one month for the specific undertaking of conducting the vessel to and from Japan. After the vessel’s return to the Philippines a month later, Delos Santos remained on board while the vessel underwent repairs in Cebu. After repairs, the vessel (renamed MV Super RoRo 100) engaged in domestic coastwise trade. During this domestic employment period, Delos Santos was paid in Philippine pesos. Approximately five months into these inter-island voyages, Delos Santos fell ill, experiencing chest pain, numbness, body weakness, and temporary paralysis. He underwent a spinal operation at an accredited hospital, with respondent shouldering the expenses. He later underwent a second spinal operation at a non-accredited hospital and subsequent medical treatment, expenses for which were paid by the spouses. Respondent refused reimbursement, citing that all sickness benefits under the SSS Law had been paid. Petitioner filed a complaint with the NLRC for disability benefits, sick wage allowance, reimbursement of medical expenses, moral damages, and attorney’s fees. The Labor Arbiter ruled in favor of petitioner. The NLRC modified the decision, ordering respondent and Aboitiz Shipping to jointly pay the Philippine peso equivalent of US$60,000 as total disability benefits, US$2,452 as sickness wages, and P103,804.87 as reimbursement for medical expenses, plus attorney’s fees. The NLRC held that the POEA-approved contract was still effective when Delos Santos fell ill. The Court of Appeals, on a petition for certiorari, modified the NLRC decision by deleting the awards for disability compensation benefits (US$60,000), sickness wages (US$2,452), and attorney’s fees.

ISSUE

Which law governs the employer-employee relationship between seafarer Gil Delos Santos and respondent Jebsen Maritime after the vessel returned from its one-month conduction voyage to Japan and began domestic operations—the POEA Standard Employment Contract (POEA-SEC) or the Labor Code?

RULING

The Supreme Court DENIED the petition, affirming the Court of Appeals’ modification. The governing law is the Labor Code, not the POEA-SEC.
The POEA-approved contract was for a fixed period of one month for a specific undertaking (the conduction voyage to and from Japan). Upon the vessel’s return, that specific contract expired. The subsequent retention of Delos Santos’ services while the vessel underwent repairs and its engagement in domestic coastwise trade constituted a new employment arrangement. During this domestic period, Delos Santos was paid in Philippine pesos through a local bank, indicating a shift to a local employment scheme. The POEA-SEC applies to seafarers employed or deployed overseas. Since the vessel was thereafter engaged solely in domestic trade, the employment relationship was removed from the coverage of overseas employment and the POEA-SEC. Consequently, the terms of the expired POEA contract, including its provisions for disability benefits and sickness allowance payable in US dollars, ceased to apply. Delos Santos’ rights following his illness during the domestic employment period are governed by the provisions of the Labor Code and the Social Security System (SSS) Law. The award of disability benefits and sickness allowance under the POEA-SEC was correctly deleted by the Court of Appeals.