G.R. No. 168210; June 17, 2008
Coastal Safeway Marine Services, Inc., petitioner, vs. Leonisa M. Delgado, respondent.

FACTS

Petitioner Coastal Safeway Marine Services, Inc. hired Jerry M. Delgado as a seafarer. He was deployed on August 3, 2001, and was later assigned as Chief Engineer on board M/V “Karan 7.” While on board, Jerry fell ill and was hospitalized. He died on January 8, 2002, in Saudi Arabia due to “acute cessation of blood circulation and respiration.” Respondent Leonisa M. Delgado, Jerry’s widow, demanded death benefits from Coastal, which were denied. She thus filed a complaint with the National Labor Relations Commission (NLRC).
The Labor Arbiter ruled in favor of Leonisa, awarding death benefits. The NLRC affirmed the decision. Coastal filed a Petition for Certiorari with the Court of Appeals, arguing that the applicable contract provisions were from Department Order No. 4 and Memorandum Circular No. 09, Series of 2000. The Court of Appeals dismissed the petition, applying Section 20(A) of the POEA Standard Employment Contract based on Memorandum Circular No. 055, Series of 1996, and held that death occurring during the employment term warrants compensation.

ISSUE

The primary issue is whether the Court of Appeals erred in awarding death benefits based on Section 20(A) of the POEA Standard Employment Contract (Memorandum Circular No. 055-96) instead of the provisions cited in the seafarer’s signed contract.

RULING

The Supreme Court denied the petition and affirmed the award of death benefits. The legal logic centers on determining the governing contract provision at the time of the seafarer’s employment. While Jerry’s contract integrated Department Order No. 4 and Memorandum Circular No. 09, Series of 2000, POEA Memorandum Circular No. 11, Series of 2000, was issued in response to a Temporary Restraining Order from the Supreme Court. This circular expressly provided that Section 20 (on compensation and benefits for death) of the former Standard Terms (Memorandum Circular No. 055-96) shall apply in lieu of the revised version. Since Jerry was deployed in August 2001 and died in January 2002, a period when the TRO was still in effect, the applicable law was indeed the 1996 provisions. Under Section 20(A) of the 1996 contract, the employer is liable to pay death benefits if the seafarer dies during the term of the contract, regardless of whether the illness directly caused the death. Jerry’s death occurred during his contract term, making the benefits compensable. The Court also found the alleged quitclaim invalid for lack of consideration and upheld the award of attorney’s fees as the claimant was compelled to litigate.