G.R. No. 160952 ; August 20, 2004
MARCIAL GU-MIRO, petitioner, vs. ROLANDO C. ADORABLE and BERGESEN D.Y. MANILA, respondents.

FACTS

Petitioner Marcial Gu-Miro was employed as a Radio Officer by respondent Bergesen D.Y. Philippines under a POEA-approved contract for a fixed term of eight months commencing April 15, 1996. After the contract expired in December 1996, his employment was extended until September 9, 1997, when his services were terminated due to redundancy. The company had an internal policy granting a Re-employment Bonus to seafarers who sign a subsequent contract after completing a prior one. Upon termination, Gu-Miro demanded this incentive bonus, but the company refused.
Gu-Miro filed a complaint with the NLRC. The Labor Arbiter dismissed the claim, finding he failed to prove entitlement under the company policy’s specific conditions. The NLRC reversed, ruling the nine-month extension constituted re-employment under the policy and awarded him US$594.56 as incentive bonus. Both parties sought reconsideration, and Gu-Miro subsequently elevated the case to the Court of Appeals.

ISSUE

Whether the Court of Appeals correctly computed the incentive bonus due to Gu-Miro and whether he should be considered a regular employee entitled to backwages or separation pay.

RULING

The Supreme Court affirmed the Court of Appeals’ modification of the bonus computation but denied the claim for regularization. On the first issue, the Court upheld the legal logic that the company’s internal policy on re-employment bonus, while not in the POEA contract, formed part of the employment terms. The NLRC correctly construed the nine-month extension of service after the original fixed-term contract as a “re-employment” triggering the bonus scheme. However, the NLRC erroneously computed the bonus based only on the basic wage for the extended period (9 months). The policy entitled Radio Officers to 8% of the basic wage per month of “actual service.” The Court agreed with the Court of Appeals that “actual service” encompassed the entire period of the renewed engagement from April 15, 1996, to September 9, 1997—totaling 16.8 months—warranting a bonus of US$1,189.12.
On the second issue, the Court ruled Gu-Miro was not a regular employee. His employment was governed by a fixed-term contract approved by the POEA, which is recognized in maritime employment. The completion of the contract and the subsequent extension for another finite period did not convert his status to regular under Article 280 of the Labor Code. His tenure remained defined by contracts for specific voyages or periods, characteristic of seafarers. Consequently, he was not entitled to backwages or separation pay upon termination due to a lawful cause like redundancy.