G.R. No. L-76633 October 18, 1988
EASTERN SHIPPING LINES, INC., petitioner, vs. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR AND EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents.

FACTS

Vitaliano Saco, Chief Officer of the M/V Eastern Polaris owned by Eastern Shipping Lines, Inc., was killed in an accident in Tokyo, Japan, on March 15, 1985. His widow, Kathleen D. Saco, filed a claim for death and burial benefits with the Philippine Overseas Employment Administration (POEA) under Executive Order No. 797 and POEA Memorandum Circular No. 2. The petitioner, Eastern Shipping Lines, contested the POEA’s jurisdiction, arguing that Saco was not an overseas worker but a domestic employee, and thus the claim should fall under the Social Security System and the State Insurance Fund. The POEA assumed jurisdiction, awarded the widow P180,000.00 in death benefits and P12,000.00 for burial expenses, and the petitioner elevated the case directly to the Supreme Court.
The Solicitor General moved to dismiss the petition for failure to exhaust administrative remedies, as the decision should have been appealed first to the National Labor Relations Commission. The Court accepted the direct recourse, noting the questions raised were purely legal and the private respondent did not object, as the usual appeal process would cause prejudicial delay. The core dispute centered on whether Vitaliano Saco was an overseas contract worker under POEA’s regulatory coverage at the time of his death.

ISSUE

Whether the POEA had jurisdiction over the money claim arising from the death of Vitaliano Saco.

RULING

Yes, the POEA validly exercised jurisdiction. The Court upheld the POEA’s factual finding that Saco was an overseas employee. Under the 1985 POEA Rules, overseas employment is defined as “employment of a worker outside the Philippines, including employment on board vessels plying international waters, covered by a valid contract.” A contract worker includes seamen working overseas under a valid employment contract. It was undisputed that Saco died under a contract of employment with the petitioner while the vessel was berthed in a foreign country.
The Court found the petitioner’s own actions constituted implied recognition of Saco’s status as an overseas worker. First, the petitioner submitted its shipping articles to the POEA for processing and approval, an act required under POEA’s regulatory authority over overseas employment. Second, the petitioner made contributions to the Welfare Fund for Overseas Workers, a fund created specifically for Filipino overseas workers. A receipt from this fund described Saco as an “overseas contract worker.” The petitioner’s analogy to Philippine Airlines employees working abroad was rejected, as PAL employees are not seamen and their appointments are not processed through the POEA.
The award was made pursuant to POEA Memorandum Circular No. 2, which prescribed a standard contract for overseas seamen. The Court ruled that the petitioner was bound by this circular’s provisions, and the POEA, in exercising its quasi-judicial function, could interpret and apply its own regulations. The petition was dismissed, and the award in favor of the widow was affirmed, consistent with the constitutional policy of affording greater protection to labor.