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Gemudian v. Naess Shipping Philippines, Inc. and/or Royal Dragon Ocean Transport, Inc. and/or Pedro Miguel F. Oca, January 20, 2020
Sometime in December 2012, Petitioner Luis Gemudiano (Gemudiano) applied with Naess Shipping for possible employment as seaman upon learning of a job opening in its domestic vessel operations. As advised by Naess Shipping's crewing manager Leah G. Fetero (Fetero), petitioner underwent the mandatory pre-employment medical examination (PEME) where he was declared fit for sea service.
On February 18, 2013, Naess Shipping, for and in behalf of its principal Royal Dragon, executed a "Contract of Employment for Marine Crew on Board Domestic Vessels" (contract of employment) engaging the services of petitioner as Second Officer aboard the vessel "M/V Melling 11," an inter-island bulk and cargo carrier, for a period of six months with a gross monthly salary of P30,000.00. It was stipulated that the contract shall take effect on March 12, 2013. Subsequently, petitioner and respondents executed an "Addendum to Contract of Employment for Marine Crew Onboard Domestic Vessels" (Addendum) stating that the employment relationship between them shall commence once the Master of the Vessel issues a boarding confirmation to the petitioner. Petitioner also bound himself to abide by the Code of Discipline as provided for in the Philippine Merchant Marine Rules and Regulations.
On March 8, 2013, petitioner received a call from Fetero informing him that Royal Dragon cancelled his embarkation. Thus, he filed a complaint for breach of contract against respondents before the Arbitration Branch of the NLRC.
Petitioner alleged that respondents' unilateral and unreasonable failure to deploy him despite the perfected contract of employment constitutes breach and gives rise to a liability to pay actual damages. Respondents, on the other hand, argued that petitioner's employment did not commence because his deployment was withheld by reason of misrepresentation. They stressed that petitioner did not disclose the fact that he is suffering from diabetes mellitus and asthma which render him unfit for sea service. They claimed that the Labor Arbiter (LA) has no jurisdiction over the petitioner's complaint for breach of contract, invoking the absence of employer-employee relationship.
On March 28, 2014, the LA found respondents to have breached their contractual obligation to petitioner and ordered them to pay him P180,000.00 representing his salary for the duration of the contract. The LA applied Section 10 of Republic Act (R.A.) No. 8042, otherwise known as the "Migrant Workers and Overseas Filipinos Act of 1995," which provides that the labor arbiters shall have original and exclusive jurisdiction over "claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages."
NLRC affirmed the decision of LA but with modification as to damages.
On appeal, the CA annulled and set aside the decision of NLRC. It declared that the LA did not acquire jurisdiction over the petitioner's complaint because of the non-existence of an employer-employee relationship between the parties. It emphasized that the perfected contract of employment did not commence since petitioner's deployment to his vessel of assignment did not materialize. It enunciated that petitioner does not fall within the definition of "migrant worker" or "seafarer" under R.A. No. 8042 because his services were engaged for local employment.