INTER-ORIENT MARITIME ENTER­PRISES, INC., SEA HORSE SHIP MANAGEMENT, INC. AND TRENDA WORLD SHIPPING (MANILA), INC., PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION AND RIZA…

Private respondent Captain Rizalino Tayong, a licensed Master
Mariner with experience in commanding ocean-going vessels, was employed on 6
July 1989 by petitioners Trenda World Shipping (Manila), Inc. and Sea Horse
Ship Management, Inc. through petitioner Inter-Orient Maritime Enterprises,
Inc. as Master of the vessel M/V Oceanic Mindoro, for a period of one
(1) year, as evidenced by an employment contract. On 15 July 1989, Captain Tayong assumed command of petitioners’
vessel at the port of Hongkong. His
instructions were to replenish bunker and diesel fuel, to sail forthwith to
Richard Bay, South Africa, and there to load 120,000 metric tons of coal.

On 16 July 1989, while at the Port of Hongkong and in the process
of unloading cargo, Captain Tayong received a weather report that a storm
code-named “Gordon” would shortly hit Hongkong. Precautionary measures were taken to secure
the safety of the vessel, as well as its crew, considering that the vessel’s
turbo-charger was leaking and the vessel was fourteen (14) years old.

On 21 July 1989, Captain Tayong followed-up the requisition by
the former captain of the Oceanic Mindoro for supplies of oxygen and
acetylene, necessary for the welding-repair of the turbo-charger and the economizer.^[1]
This requisition had been made upon request of the Chief Engineer of the vessel
and had been approved by the shipowner.^[2]

On 25 July 1989, the vessel sailed from Hong Kong for
Singapore. In the Master’s sailing
message, Captain Tayong reported a water leak from M.E. Turbo Charger No. 2
Exhaust gas casing. He was subsequently
instructed to blank off the cooling water and maintain reduced RPM unless
authorized by the owners.^[3]

On 29 July 1989, while the vessel was en route to
Singapore, Captain Tayong reported that the vessel had stopped in mid-ocean for
six (6) hours and forty-five (45) minutes due to a leaking economizer. He was
instructed to shut down the economizer and use the auxiliary boiler instead.^[4]

On 31 July 1989 at 0607 hrs., the vessel arrived at the port of
Singapore.^[5]
The Chief Engineer reminded Captain Tayong that the oxygen and acetylene
supplies had not been delivered.^[6]
Captain Tayong inquired from the ship’s agent in Singapore about the
supplies. The ship agent stated that
these could only be delivered at 0800 hours on August 1, 1989 as the stores had
closed.^[7]

Captain Tayong called the shipowner, Sea Horse Ship Management,
Ltd., in London and informed them that the departure of the vessel for South
Africa may be affected because of the delay in the delivery of the supplies.^[8]

Sea Horse advised Captain Tayong to contact its Technical
Director, Mr. Clark, who was in Tokyo and who could provide a solution for the
supply of said oxygen and acetylene.^[9]

On the night of 31 July 1989, Mr. Clark received a call from
Captain Tayong informing him that the vessel cannot sail without the oxygen and
acetylene for safety reasons due to the problems with the turbo charger and
economizer. Mr. Clark responded that by
shutting off the water to the turbo chargers and using the auxiliary boiler,
there should be no further problem. According to Mr. Clark, Captain Tayong agreed with him that the vessel
could sail as scheduled on 0100 hours on 1 August 1989 for South Africa.^[10]

According to Captain Tayong, however, he communicated to Sea
Horse his reservations regarding proceeding to South Africa without the
requested supplies,^[11] and
was advised by Sea Horse to wait for the supplies at 0800 hrs. of 1 August
1989, which Sea Horse had arranged to be delivered on board the Oceanic
Mindoro.^[12]
At 0800 hours on 1 August 1989, the requisitioned supplies were delivered and
Captain Tayong immediately sailed for Richard Bay.

When the vessel arrived at the port of Richard Bay, South Africa
on 16 August 1989, Captain Tayong was instructed to turn-over his post to the
new captain. He was thereafter
repatriated to the Philippines, after serving petitioners for a little more
than two weeks.^[13]
He was not informed of the charges against him.^[14]

On 5 October 1989, Captain Tayong instituted a complaint for
illegal dismissal before the Philippine Overseas Employment Administration
(“POEA”), claiming his unpaid salary for the unexpired portion of the
written employment contract, plus attorney’s fees.

Petitioners, in their answer to the complainant, denied that they
had illegally dismissed Captain Tayong. Petitioners alleged that he had refused to sail immediately to South
Africa to the prejudice and damage of petitioners. According to petitioners, as a direct result of Captain Tayong’s
delay, petitioners’ vessel was placed “off-hire” by the charterer for
twelve (12) hours. This meant that the
charterers refused to pay the charter hire or compensation corresponding to
twelve (12) hours, amounting to US$15,500.00, due to time lost in the
voyage. They stated that they had
dismissed private respondent for loss of trust and confidence.

The POEA dismissed Captain Tayong’s complaint and held that there
was valid cause for his untimely repatriation. The decision of the POEA placed considerable weight on petitioners’
assertion that all the time lost as a result of the delay was caused by Captain
Tayong and that his concern for the oxygen and acetylene was not legitimate as
these supplies were not necessary or indispensable for running the vessel. The POEA believed that the Captain had
unreasonably refused to follow the instructions of petitioners and their
representative, despite petitioners’ firm assurances that the vessel was
seaworthy for the voyage to South Africa.

On appeal, the National Labor Relations Commission
(“NLRC”) reversed and set aside the decision of the POEA. The NLRC found that Captain Tayong had not
been afforded an opportunity to be heard and that no substantial evidence was
adduced to establish the basis for petitioners’ loss of trust or confidence in
the Captain. The NLRC declared that he
had only acted in accordance with his duties to maintain the seaworthiness of
the vessel and to insure the safety of the ship and the crew. The NLRC directed petitioners to pay the
Captain (a) his salary for the unexpired portion of the contract at US$1,900.00
a month, plus one (1) month leave benefit; and (b) attorney’s fees equivalent
to ten percent (10%) of the total award due.

Petitioners, before this Court, claim that the NLRC had acted
with grave abuse of discretion. Petitioners allege that they had adduced sufficient evidence to
establish the basis for private respondent’s discharge, contrary to the
conclusion reached by the NLRC. Petitioners insist that Captain Tayong, who must protect the interest of
petitioners, had caused them unnecessary damage, and that they, as owners of
the vessel, cannot be compelled to keep in their employ a captain of a vessel
in whom they have lost their trust and confidence. Petitioners finally contend that the award to the Captain of his
salary corresponding to the unexpired portion of the contract and one (1) month
leave pay, including attorney’s fees, also constituted grave abuse of
discretion.

The petition must
fail.

We note preliminarily that petitioners failed to attach a clearly
legible, properly certified, true copy of the decision of the NLRC dated 23
April 1994, in violation of requirement no. 3 of Revised Circular No.
1-88. On this ground alone, the petition
could have been dismissed. But the
Court chose not to do so, in view of the nature of question here raised and
instead required private respondent to file a comment on the petition. Captain Tayong submitted his comment. The Office of the Solicitor General asked
for an extension of thirty (30) days to file its comment on behalf of the
NLRC. We consider that the Solicitor
General’s comment may be dispensed with in this case.

It is well settled in this jurisdiction that confidential and
managerial employees cannot be arbitrarily dismissed at any time, and without
cause as reasonably established in an appropriate investigation.^[15]
Such employees, too, are entitled to security of tenure, fair standards of
employment and the protection of labor laws.

The captain of a vessel is a confidential and managerial employee
within the meaning of the above doctrine. A master or captain, for purposes of maritime commerce, is one who has
command of a vessel. A captain commonly
performs three (3) distinct roles: (1)
he is a general agent of the shipowner; (2) he is also commander and technical
director of the vessel; and (3) he is a representative of the country under
whose flag he navigates.^[16] Of
these roles, by far the most important is the role performed by the captain as
commander of the vessel; for such role (which, to our mind, is analogous to
that of “Chief Executive Officer” [CEO] of a present-day corporate
enterprise) has to do with the operation and preservation of the vessel during
its voyage and the protection of the passengers (if any) and crew and
cargo. In his role as general agent of
the shipowner, the captain has authority to sign bills of lading, carry goods
aboard and deal with the freight earned, agree upon rates and decide whether to
take cargo. The ship captain, as agent
of the shipowner, has legal authority to enter into contracts with respect to
the vessel and the trading of the vessel, subject to applicable limitations
established by statute, contract or instructions and regulations of the
shipowner.^[17]
To the captain is committed the governance, care and management of the vessel.^[18]
Clearly, the captain is vested with both management and fiduciary functions.

It is plain from the records of the present petition that Captain
Tayong was denied any opportunity to defend himself. Petitioners curtly dismissed him from his command and summarily
ordered his repatriation to the Philippines without informing him of the charge
or charges levelled against him, and much less giving him a chance to refute
any such charge. In fact, it was only
on 26 October 1989 that Captain Tayong received a telegram dated 24 October
1989 from Inter-Orient requiring him to explain why he delayed sailing to South
Africa.

We also find that the principal contention of petitioners against
the decision of the NLRC pertains to facts, that is, whether or not there was
actual and sufficient basis for the alleged loss of trust or confidence. We have consistently held that a question of
“fact” is, as a general rule, the concern solely of an administrative
body, so long as there is substantial evidence of record to sustain its action.

The record requires us to reject petitioners’ claim that the
NLRC’s conclusions of fact were not supported by substantial evidence. Petitioners rely on self-serving affidavits
of their own officers and employees predictably tending to support petitioners’
allegation that Captain Tayong had performed acts inimical to petitioners’
interests for which, supposedly, he was discharged. The official report of Mr. Clark, petitioners’ representative, in
fact supports the NLRC’s conclusion that private respondent Captain did not
arbitrarily and maliciously delay the voyage to South Africa. There had been, Mr. Clark stated, a
disruption in the normal
functioning of the vessel’s turbo-charger^[19] and
economizer and that had prevented the full or regular operation of the
vessel. Thus, Mr. Clark relayed to
Captain Tayong instructions to “maintain reduced RPM” during the
voyage to South Africa, instead of waiting in Singapore for the supplies that
would permit shipboard repair of the malfunctioning machinery and equipment.

More importantly, a ship’s captain must be accorded a reasonable
measure of discretionary authority to decide what the safety of the ship and of
its crew and cargo specifically requires on a stipulated ocean voyage. The captain is held responsible, and
properly so, for such safety. He is
right there on the vessel, in command of it and (it must be presumed)
knowledgeable as to the specific requirements of seaworthiness and the
particular risks and perils of the voyage he is to embark upon. The applicable principle is that the captain
has control of all departments of service in the vessel, and reasonable
discretion as to its navigation.^[20] It
is the right and duty of the captain, in the exercise of sound discretion and
in good faith, to do all things with respect to the vessel and its equipment
and conduct of the voyage which are reasonably necessary for the protection and
preservation of the interests under his charge, whether those be of the shipowners,
charterers, cargo owners or of underwriters.^[21] It
is a basic principle of admiralty law that in navigating a merchantman, the
master must be left free to exercise his own best judgment. The requirements of safe navigation compel
us to reject any suggestion that the judgment and discretion of the captain of
a vessel may be confined within a straitjacket, even in this age of electronic
communications.^[22]
Indeed, if the ship captain is convinced, as a reasonably prudent and competent
mariner acting in good faith that the shipowner’s or ship agent’s instructions
(insisted upon by radio or telefax from their offices thousands of miles away)
will result, in the very specific circumstances facing him, in imposing
unacceptable risks of loss or serious danger to ship or crew, he cannot
casually seek absolution from his responsibility, if a marine casualty occurs,
in such instructions.^[23]

Compagnie de Commerce v. Hamburg^[24]
is instructive in this connection. There,
this Court recognized the discretionary authority of the master of a vessel and
his right to exercise his best judgment, with respect to navigating the vessel
he commands. In Comnagnie de
Commerce, a charter party was executed between Compagnie de Commerce
and the owners of the vessel Sambia, under which the former as charterer
loaded on board the Sambia, at the port of Saigon, certain cargo
destined for the Ports of Dunkirk and Hamburg in Europe. The Sambia, flying the German flag, could
not, in the judgment of its master, reach its ports of destination because war
(World War I) had been declared between Germany and France. The master of the Sambia decided to
deviate from the stipulated voyage and sailed instead for the Port of Manila. Compagnie de Commerce sued in the
Philippines for damages arising from breach of the charter party and
unauthorized sale of the cargo. In
affirming the decision of the trial court dismissing the complaint, our Supreme
Court held that the master of the Sambia had reasonable grounds to
apprehend that the vessel was in danger of seizure or capture by the French
authorities in Saigon and was justified by necessity to elect the course which
he took — i.e., to flee Saigon for the Port of Manila — with the result that
the shipowner was relieved from liability for the deviation from the stipulated
route and from liability for damage to the cargo. The Court said:

“The danger from which the master of the Sam­bia fled
was a real and not merely an imaginary one as counsel for shipper
contends. Seizure at the hands of an
‘enemy of the King’, though not inevitable, was a possible outcome of a
failure to leave the port of Saigon; and we cannot say that under the
conditions existing at the time when the master elected to flee from that port,
there were no grounds for a ‘reasonable apprehension of danger’ from seizure by
the French authorities, and therefore no necessity for flight.

The word ‘necessity’ when applied to mercantile affairs, where
the judgment must in the nature of things be exercised, cannot, of course, mean
an irresistible compelling power. What is meant by it in such cases is the force of circumstances which
determine the course a man ought to take. Thus, where by the force of circumstances, a man has the duty cast
upon him of taking some action for another, and under that obligation adopts a
course which, to the judgment of a wise and prudent man, is apparently the best
for the interest of the persons for whom he acts in a given emergency, it
may properly be said of the course so taken that it was in a mercantile sense
necessary to take it.”^[25]
(Underscoring supplied)

Compagnie de Commerce contended
that the shipowner should, at all events, be held responsible for the
deterioration in the value of the cargo incident to its long stay on board the
vessel from the date of its arrival in Manila until the cargo was sold. The Supreme Court, in rejecting this
contention also, declared that:

“But it is clear that the master could not be required to act
on the very day of his arrival; or before he had a reasonable opportunity to
ascertain whether he could hope to carry out his contract and earn his freight;
and that he should not be held responsible for a reasonable delay incident
to an effort to ascertain the wishes of the freighter, and upon failure to
secure prompt advice, to decide for himself as to the course which he should
adopt to secure the interests of the absent owner of the property aboard the
vessel.

The master is entitled to delay for such a period as may be
reasonable under the circumstances, before deciding on the course he will
adopt. He may claim a fair opportunity
of carrying out a contract, and earning the freight, whether by repairing or
transhipping. Should the repair of the
ship be undertaken, it must be proceeded with diligently; and if so done, the
freighter will have no ground of complaint, although the consequent delay be a
long one, unless, indeed, the cargo is perishable, and likely to be injured by
the delay. Where that is the case, it
ought to be forwarded, or sold, or given up, as the case may be, without
waiting for repairs.

A shipowner or shipmaster (if communication with the
shipowner is impossible), will be allowed a reasonable time in which to
decide what course he will adopt in such cases as those under discussion; time
must be allowed to him to­ ascertain the facts, and to balance the
conflicting interests involved, of shipowner, cargo owner, underwriter on ship
and freight. But once the time has
elapsed, he is bound to act promptly according as he has elected either to
repair, or abandon the voyage, or tranship. If he delays, and owing to that delay a perishable cargo suffers damage,
the shipowner will be liable for that damage; he cannot escape that obligation
by pleading the absence of definite instructions from the owners of the cargo
or their underwriters, since he has control of the cargo and is entitled to
elect.”^[26]
(Underscoring supplied)

The critical question, therefore, is whether or not Captain
Tayong had reasonable grounds to believe that the safety of the vessel and the
crew under his command or the possibility of substantial delay at sea required
him to wait for the delivery of the supplies needed for the repair of the
turbo-charger and the economizer before embarking on the long voyage from
Singapore to South Africa.

In this connection, it is specially relevant to recall that,
according to the report of Mr. Robert Clark, Technical Director of petitioner
Sea Horse Ship Management, Inc., the Oceanic Mindoro had stopped in
mid-ocean for six (6) hours and forty-five (45) minutes on its way to Singapore
because of its leaking economizer.^[27]
Equally relevant is the telex
dated 2 August 1989 sent by Captain Tayong to Sea Horse after Oceanic
Mindoro had left Singapore and was en route to South
Africa. In this telex, Captain Tayong
explained his decision to Sea Horse in the following terms:

“I CAPT R.D. TAYONG RE: UR PROBLEM IN SPORE (SINGAPORE) I EXPLAIN AGN TO YOU THAT WE ARE
INSECURITY/DANGER TO SAIL IN SPORE W/OUT HAVING SUPPLY OF OXY/ACET. PLS UNDERSTAND HV PLENTY TO BE DONE
REPAIR FM MAIN ENGINE LIKE TURBO CHARGER PIPELINE, ECONOMIZER LEAKAGE N ETC WE
COULD NOT FIX IT W/OUT OXY/ACET ONBOARD. I AND MR. CLARK WE CONTACTED EACH OTHER BY PHONE IN PAPAN N HE ADVSED US
TO SAIL TO RBAY N WILL SUPPLY OXY/ACET UPON ARRIVAL RBAY HE ALSO EXPLAINED
TO MY C/E HOW TO FIND THE REMEDY W/OUT OXY/ACET BUT C/E HE DISAGREED MR. CLARK
IDEA, THAT IS WHY WE URG REQUEST[ED] YR KIND OFFICE TO ARRANGE SUPPLY
OXY/ACET BEFORE SAILING TO AVOID RISK/DANGER OR DELAY AT SEA N WE
TOOK PRECAUTION UR TRIP FOR 16 DAYS FM SPORE TO RBAY. PLS. UNDERSTAND UR SITUATION.”^[28]
(Underscoring partly in source and partly supplied)

Under all the circumstances of this case, we, along with the
NLRC, are unable to hold that Captain Tayong’s decision (arrived at after
consultation with the vessel’s Chief Engineer) to wait seven (7) hours in
Singapore for the delivery on board the Oceanic Mindoro of the
requisitioned supplies needed for the welding-repair, on board the ship, of the
turbo-charger and the economizer equipment of the vessel, constituted merely
arbitrary, capricious or grossly insubordinate behavior on his part. In the view of the NLRC, that decision of
Captain Tayong did not constitute a legal basis for the summary dismissal of
Captain Tayong and for termination of his contract with petitioners prior to
the expiration of the term thereof. We
cannot hold this conclusion of the NLRC to be a grave abuse of discretion amounting
to an excess or loss of jurisdiction; indeed, we share that conclusion and make
it our own.

Clearly, petitioners were angered at Captain Tayong’s decision to
wait for delivery of the needed supplies before sailing from Singapore, and may
have changed their estimate of their ability to work with him and of his
capabilities as a ship captain. Assuming that to be petitioners’ management prerogative, that
prerogative is nevertheless not to be exercised, in the case at bar, at the
cost of loss of Captain Tayong’s rights under his contract with petitioners and
under Philippine law.

ACCORDINGLY, petitioners having failed to show
grave abuse of discretion amounting to loss or excess of jurisdiction on the
part of the NLRC in rendering its assailed decision, the Petition for Certiorari
is hereby DISMISSED, for lack of
merit. Costs against petitioners.

SO ORDERED.

Bidin, Romero, Melo, and
Vitug, JJ., concur.

^[1]
A “turbo-charger” is a centrifugal blower driven by exhaust gas
turbines and used to supercharge an engine, or to supply a charge to the intake
of an internal-combustion engine at a pressure higher than that of the
surrounding atmosphere (Webster’s New World Dictionary (1974), p. 1532.

An “economizer” is a
device in which water is heated preliminary to entering the boiler proper. The heat which was used in raising the
temperature of the water contained in the boiler to boiling point is utilized,
instead of being wasted, for the purpose of raising the water in the economizer
to a high temperature before it enters the boiler. An increase in the feed water temperature will raise boiler
efficiency. (Ithaca Traction Corp. vs.
Traveler’s Indemnity Co., 177 N.Y.S. 753 [1919])

^[2]
NLRC Decision, p. 3.

^[3]
Report of Mr. Robert B. Clark, p. 1; Records, p. 104.

^[4]
Id., p. 2; Records, p. 103.

^[5]
Id., p. 1; Records, p. 104.

^[6]
Memorandum of appeal of Captain Tayong, p. 3; Records, p. 197.

^[7]
NLRC Decision, p. 3.

^[8]
Memorandum of appeal of Captain Tayong, p. 3; Records, p. 197.

^[9]
Id., pp. 3-4; Records, pp. 196-197.

^[10]
Report of Mr. Clark, p. 1; Records, p. 103.

^[11]
Memorandum of Appeal, p. 4; Records, p. 196.

^[12]
Id., p. 4; Records, p. 196.

^[13]
NLRC Decision, p. 3.

^[14]
Memorandum of appeal, p. 4; Records, p. 196.

^[15]
Lawrence vs. National Labor Relations Commission, 205 SCRA 737 (1992);
Hellenic Philippine Shipping vs. Siete, 195 SCRA 179 (1991); Anscor
Transport & Terminals vs. National Labor Relations Commission, 190
SCRA 147 (1990).

^[16]
See Hernandez and Penasales, Philippine
Admiralty and Maritime Law, p.
388 (1987).

^[17]
Article 610, Code of Commerce.

^[18]
See Article 610, Code of Commerce. See
Fitz vs. The Galiot Amelie, 73 US 18, 18 L Ed 806 (1867);
Steamship Styria vs. Morgan, 186 US 1, 46 L Ed
1027 (1901); McAndrews vs. Thatcher, 70 US 347, 18 L Ed 155 (1865); The Propeller Niagara vs. Cordes, 62 US 7, 16 L Ed
41 (1858).

^[19]
The official statement of Mr. Clark reported that there was “a water leak from
M.E. Turbo-Charger No. 2 Exhaust gas outlet casing.” (Petition, Rollo,
p. 6.)

^[20]
American-Hawaiian S.S. Co. v. Pacific S.S. Co., 41 F 2d 718 (1930); The
Princess Sophia, 61 F 2D 339 (1932).

^[21]
The Styria, 186 US 1, 46 L Ed 1027 (1901); Grays Harbor County vs.
Brimanger (1933), 18 P2d 25; Wandtke vs. Anderson, 74 F 2d 381 (1934); The
Balsa, 10 F 2d 408 (1926); The Pomare, 92 F Supp 185 (1950); The
Vulcan, 60 F Supp 158 (1945); Framlington, 69 F 2d 300 (1934);
United British Steamship Company, Ltd. v. Newfoundland Export and
Shipping, 292 US 651, 78 L Ed 1500 (1934); The Dampskibsselskabet Atalanta
A/S v. US, 31 F 2d 961 (1929); Ralli vs. Troop, 157 US 386
(1894).

^[22]
E.g., The Lusitania, 251 F
715 (1918).

^[23]
See, generally, The Dampskibsselskabet Atalanta A/S v. U.S., 31
F. 2d 961 (1929); Ralli v. Troop, 157 US 386 (1894); Johnson v.
U.S., 74 F 2d 703 (1935); Palmer v. United States, 85 F Supp 764 (1949);
Roberts v. United Fisheries Vessels Co., 141 F 2d 288 (1944).

^[24]
36 Phil. 590 (1917).

^[25]
36 Phil. at 626-627.

^[26]
36 Phil. at 631-632.

^[27]
supra, note 4.

^[28]
As quoted in the Comment of respondent Rizalino D. Tayong, dated 10 July 1994,
p. 4.