VirJen Shipping and Marine Services vs.

NLRC
GR L-58011 & L-58012 (November 18, 1983)

Facts:
Certain seamen entered into a contract of employment for a 12-month period. Some three
months after the commencement of their employment, the seamen demanded a 50% increase of
their salaries and benefits. The seamen demanded this increase while their vessel was on route
to a port in Australia controlled by the International Transport Federation (ITP) where the ITF
could detain the vessels unless it paid its season ITF rates. The facts showed that when the
seamen boarded the vessel M/T Jannu, there was no intention to send their ship to Australia but
would trade in Carribean ports only. The agent of the owner of the vessel agreed to a 25%
increase, but when the vessel arrived in Japan shortly afterwards, the seamen were repatriated
to Manila and their contracts terminated.

The seamen (private respondents) filed a complaint for illegal dismissal with the National
Seamen Board. The NSB rendered a decision declaring that the seamen breached their
employment contracts when they demanded and received from Vir-Jen Shipping wages over
and above their contracted rates.

The NSB decision was appealed to the NLRC which reversed the decision of the NSB and
required the petitioner to pay wages and other monetary benefits corresponding to the
unexpired portion of the manning contract on the ground that the termination of the seamen
was without a valid cause.

Two motions for reconsideration filed with Second Division were denied by said
Division. Another motion for reconsideration was filed with the Supreme Court en banc which
gave its due course, after finding that there was a need to reconcile the decision of the Second
Division with that of the First Division with the Wallem Decision (an earlier case having the
same facts). In that decision, the First Division had ruled that the termination of the seamen was
illegal.

Issue:

Whether or not the termination of the seamen was illegal.

Ruling:
Yes, the Supreme Court en banc found the termination of the seamen’s contract illegal. The
contention that the manning industries in the Philippines would not survive if the instant case is
not decided in favor of the petitioner and would in effect “kill the hen that lays the golden egg” is
not supported by evidence. Filipino seamen are admittedly as competent and reliable as seamen
from any other country in the world. It is competence and reliability, not cheap labor that makes
our seamen so greatly in demand. Certainly the seamen are entitled to government protection
when they ask fair and decent treatment by their employers and when they exercise the right to
petition for improved terms of employment, especially when they fell that these are substandard
or are capable of improvement according to internationally accepted rules.

The seamen did not violate their contracts of employment. The form contracts approved by the
National Seamen Board (now POEA) are designed to protect Filipinos, not foreign shipowners
who can take care of themselves. The standard forms embody the basic minimums which must
be incorporated as parts of the employment contract. To state, therefore, that the affected
seamen cannot petition their employer for higher salaries during the 12-month duration of the
contract runs counter to the established principles of labor legislation.