Del Rosario Pandiphil Inc.

Shipping and the Law

Court upholds voluntary arbitration clause in POEA contract; dispute must be heard by voluntary arbitrator and not the Labor Arbiter

By: Ruben Del Rosario, Managing Partner, Del Rosario & Del Rosario, August 6, 2005

Seafarer was medically repatriated on October 23, 2003. He filed a complaint for permanent disability compensation on December 4, 2003. Vessel filed a Motion to Dismiss/Refer Case to Arbitration as seafarer was a member of the union AMOSUP which has a collective bargaining agreement (CBA) with vessel and under Section 29 of the POEA Standard Employment Contract, the dispute should be brought before the National Conciliation and Mediation Board (NCMB) for voluntary arbitration.

The Labor Arbiter denied the Motion to Dismiss citing Section 10 of Republic Act No. 8042 (Overseas Migrant Workers Act) which vests in Labor Arbiters jurisdiction on claims of overseas contract workers. Vessel filed a petition for injunction before the NLRC. The NLRC ruled that the CBA must be respected and any dispute must be brought before the grievance committee. Further, Section 29 of the POEA contract provides that parties covered by a collective bargaining agreement shall submit the claim or dispute to the jurisdiction of the voluntary arbitrator or panel of arbitrators.

On appeal by the seafarer to the Court of Appeals, the Court of Appeals upheld the ruling of the NLRC. In the words of Justice Villarama Jr.:

“In the present case, the dismissal of the complaint for payment of disability benefits, sickness allowance, moral and exemplary damages, and attorney’s fees by the petitioner, a Filipino seaman who is a member of the AMOSUP, based on lack of jurisdiction of the Labor Arbiter is Section 29 of the POEA Amended Standard Employment Contract. Said provision provides for referral to voluntary arbitrators or panel of arbitrators in case the parties are covered by collective bargaining agreements such as herein petitioner. Considering that herein petitioner is claiming benefits provided under the Amended POEA Standard Employment Contract, and the terms and conditions of employment of Filipino seamen being primarily governed by the POEA Rules and Regulations, it follows that the procedure provided therein should be observed and complied with by the parties in good faith. The POEA standard employment contract is designed primarily for the protection and benefit of Filipino seamen. Further, upholding the contractual nature of employment of Filipino seafarers is merely consistent with the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor and industrial disputes. We therefore find nothing illegal or contrary to public policy in the provision mandating the referral to voluntary arbitration of any claim or dispute arising from the POEA contract.

Gozarin vs. NLRC, et.al., CA-G.R. SP NO. 88957, May 03, 2005 (Justice Martin S. Villarama, Jr., Twelfth Division, Court of Appeals)

Note: Attys. Herbert Tria and Catherine Mangahas of Del Rosario & Del Rosario handled case for respondent vessel interests.

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Ruben T. Del Rosario is managing partner of Del Rosario & Del Rosario. He is former president of the Maritime Law Association of the Philippines and is currently president of the Philippine Maritime Voluntary Arbitrators Association. Del Rosario is correspondent of several P & I Clubs.

For complete copy of the decision or for further information, please call 63 2 810 1791 or fax 63 2 817 1740 or email ruben.delrosario@delrosario-pandiphil.com

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