ENGR. BENJAMIN B. BERNARDO, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIV.), POBAR MARINE SERVICES, INC., TRANS OCEAN SERVICES CO., LTD/MV JUNO ISLAND, RESPOND…

Bernardo versus Pobar Marine Services

The Case

This is a labor case about a Filipino chief engineer, Benjamin Bernardo, who was discharged from his vessel before the date fixed in his contract because the foreign principal decided to replace its Filipino officers with Korean personnel. He sued his local manning agency and its foreign principals for illegal dismissal. The case matters because it teaches how a change of principal operates as a just cause for terminating a seafarer's employment under the standard terms governing overseas Filipino seafarers, and how the Court fixes the date from which that cause takes effect and the money that must follow from it.

Procedural History

Bernardo filed a complaint for illegal dismissal before the National Capital Region Arbitration Branch of the National Labor Relations Commission. The labor arbiter, Daisy Cauton-Barcelona, ruled in his favor, ordering payment of his salaries for the unexpired portion of his contract, his unpaid leave pay, and attorney's fees. The employers appealed to the National Labor Relations Commission, and its Second Division reversed the labor arbiter, dismissed the complaint for illegal dismissal, and granted only a limited monetary award. Bernardo moved for reconsideration, which the Commission denied. He then came to the Supreme Court by a petition for certiorari under Rule 65, alleging grave abuse of discretion amounting to lack or excess of jurisdiction.

Facts

Bernardo is a marine vessel engineer. Pobar Marine Services is a licensed local manning agency that supplies seafarers to foreign principals, among them Trans-Ocean Services and Iino Marine Services. On December 10, 2001, Pobar engaged Bernardo as Chief Engineer on board the Panamanian bulk carrier M/V Juno Island for a nine-month contract, with a basic monthly salary of 3,723 dollars inclusive of fixed overtime pay, leave pay, and other allowances. He boarded the vessel on January 15, 2002 and began his tour of duty.

On February 9, 2002, a serious accident at sea caused a massive oil spill from the vessel M/V Minerva Island, a sister vessel of M/V Juno Island, off Soma in northern Japan. Because of that spillage, the owner of both vessels decided to transfer the manning of the Captain and Chief Engineer positions from Filipino to Korean personnel. Bernardo was informed by facsimile on April 16, 2002, and the next day he was told that the owner was prepared to pay the corresponding compensation for the pre-termination of his contract. His services were officially terminated on April 29, 2002, and he was repatriated on May 2, 2002.

It is undisputed, however, that the actual and official transfer of the manning of M/V Juno Island from Iino Marine to Seto Ship Management did not take effect until June 15, 2002, some forty-seven days after Bernardo was discharged. Aggrieved, he filed his complaint for illegal dismissal.

Issues

• Whether or not the pre-termination of Bernardo's employment on the ground of a change of principal was a valid dismissal for just cause.
• Whether or not the date of the change of principal, rather than the date of his actual discharge, should be the reckoning point for the termination and for the wages due him.
• Whether or not the certification on non-forum shopping signed by his counsel, acting under a special power of attorney, was fatally defective.

Applicable Provisions

Section 26 of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels provides:

Section 26. Change of Principal. – (A) Where there is a change of principal necessitating the termination of employment of the seafarer before the date indicated in the Contract, the seafarer shall be entitled to earned wages, repatriation at employer's expense and one month basic pay as termination pay.

This is the provision the Court applies to test whether the dismissal was for just cause and to measure the termination pay owed to the seafarer.

Ruling

On the first issue, the Court held that there was a just cause. The principal handling the management and stewardship of M/V Juno Island was indeed removed and changed, bringing Section 26 into operation. The Court reasoned that Bernardo was removed for a just cause that was definite to happen, even though it was still forthcoming when he was terminated. The change was already certain as early as his receipt of the April 16, 2002 facsimile, and the principal was in fact changed from Filipino to Korean, showing that his removal was not based on a fictitious, simulated, or inexistent cause.

On the second issue, the Court agreed that the dismissal was valid but corrected the reckoning. The termination should not be counted from April 29, 2002, the date of his actual discharge, but from June 15, 2002, when the just cause actually assumed its effectivity. Bernardo was therefore entitled to his salary for the forty-seven days between those dates, computed at his aggregate monthly salary of 3,723 dollars, or 5,832 dollars and 70 cents. As he was legitimately removed on the ground of change of principal, he was likewise entitled to one month of his basic salary as termination pay under Section 26, or 3,723 dollars. Together these amount to 9,555 dollars and 70 cents, plus his repatriation expenses and attorney's fees.

On the third issue, the Court held that the certification was not defective. A certification of non-forum shopping must be executed by the principal party and not by counsel, unless the latter is clothed with a special power of attorney. Here, counsel signed not as a mere counsel but as the duly appointed attorney-in-fact under a special power of attorney, so that counsel and petitioner are, by legal contemplation, one and the same individual for purposes of the case.

Doctrine

A change of principal that necessitates the termination of a seafarer before the date indicated in the contract is a just cause for dismissal, and the seafarer is entitled to earned wages, repatriation at the employer's expense, and one month basic pay as termination pay. The cause need not have fully taken effect at the moment of discharge; it is enough that the change is definite to happen and not fictitious, simulated, or inexistent. The termination, however, is reckoned not from the date of actual discharge but from the date the just cause actually assumed its effectivity, and the seafarer must be paid his salary for the intervening period. Finally, a certification of non-forum shopping signed by counsel is valid when counsel acts under a special power of attorney, for then counsel and the petitioner are one and the same individual for purposes of the case.

Disposition

The petition was denied and the Commission's finding that Bernardo was terminated for cause was affirmed, but the monetary judgment was modified, ordering the private respondents to pay him 9,555 dollars and 70 cents or its peso equivalent, his repatriation expenses, and ten percent of the total monetary award as attorney's fees.

Remember This

The line worth memorizing is that a change of principal is a just cause even if it is still forthcoming, but the termination is reckoned from the date the cause actually took effect, not from the date of discharge. Examiners use this case to test the requisites of a valid change of principal under Section 26 and the rule on who may sign a certification of non-forum shopping.