Santiago

vs. CF Sharp Crew Management, Inc.

G.R. No. 162419. July 10, 2007

DOCTRINE: Despite the absence of an employer-employee relationship between petitioner and

respondent, the Court rules that the NLRC has jurisdiction over petitioner’s complaint. The
jurisdiction of labor arbiters is not limited to claims arising from employer-employee
relationships.

FACTS: Santiago had been working as a seafarer for respondent Smith Bell for about 5 years
and signed a new 9-month contract which was approved by the POEA. However, a week
before his supposed departure date, the VP of Smith Bell sent a message to the ship captain,
warning him that Santiago might just jump ship in Canada like his brother did one year prior.
Because of this, both agreed to cancel Santiago’s departure.

Because of such, Santiago filed a complaint for illegal dismissal with claims for damages.

LABOR ARBITER’S RULING: Respondent violated the rules and regulations governing
overseas employment when it did not deploy petitioner, causing petitioner to suffer actual
damages representing lost salary income for nine (9) months and fixed overtime fee, all
amounting to US$7,209.00.

NLRC RULING: There is no employer-employee relationship between petitioner and

respondent because under the Standard Terms and Conditions Governing the Employment
of Filipino Seafarers on Board Ocean Going Vessels (POEA Standard Contract), the
employment contract shall commence upon actual departure of the seafarer from the airport
or seaport at the point of hire and with a POEA approved contract. In the absence of an
employer-employee relationship between the parties, the claims for illegal dismissal, actual
damages, and attorney’s fees should be dismissed. On the other hand, the NLRC found
respondent’s decision not to deploy petitioner to be a valid exercise of its management
prerogative.

CA RULING: Petitioner is not entitled to actual damages because damages are not
recoverable by a worker who was not deployed by his agency within the period prescribed
in the POEA Rules. It agreed with the NLRC’s finding that petitioner’s non-deployment was a
valid exercise of respondent’s management prerogative. It added that since petitioner had
not departed from the Port of Manila, no employer-employee relationship between the
parties arose and any claim for damages against the so-called employer could have no leg to
stand on.

PETITIONER’S ARGUMENT: Deployment is a condition for the consummation of the

contract, and since respondent unilaterally and arbitrarily prevented his deployment
without valid basis, the contract should be deemed consummated. Since the contract is
deemed consummated, he should be considered an employee, and thus the Labor Arbiter
and/or the NLRC has jurisdiction over the case.
ISSUE: Whether or not the labor tribunals have jurisdiction to try the case notwithstanding
the fact that Santiago was never deployed, such deployment being a condition for EER to
exist

RULING: YES. The contract in this case involves Santiago’s overseas employment, which
means that the case falls within the NLRC’s jurisdiction.

Respondent is still liable for damages despite the non- consummation of the contract. The
perfection of the contract already brings about rights and obligations on both parties, a
breach of which gives rise to a cause of action against the erring party.

There is no employer-employee relationship in this case because the contract was never
consummated, but the NLRC nevertheless has jurisdiction. The NLRC’s jurisdiction is not
limited to cases where EER exists, as provided in Sec. 10 of RA 8042 which vests jurisdiction
with the NLRC over money claims arising out of ay law or contract involving Filipino workers
for overseas employment including claims for damages.

Despite the absence of an employer-employee relationship between petitioner and

respondent, the Court rules that the NLRC has jurisdiction over petitioner’s complaint. The
jurisdiction of labor arbiters is not limited to claims arising from employer-employee
relationships.

Since the contract in this case involves Santiago’s overseas employment, the case falls under
the above article and thus, within the NLRC’s jurisdiction.