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Eastern Shipping Lines v. POEA, G.R. No. 76633
Eastern Shipping Lines v. POEA, G.R. No. 76633
The petitioner does not contend that Saco was not its
CRUZ, J.: employee or that the claim of his widow is not
compensable. What it does urge is that he was not an
The private respondent in this case was awarded the overseas worker but a 'domestic employee and
sum of P192,000.00 by the Philippine Overseas consequently his widow's claim should have been filed
Employment Administration (POEA) for the death of with Social Security System, subject to appeal to the
her husband. The decision is challenged by the Employees Compensation Commission.
petitioner on the principal ground that the POEA had no
jurisdiction over the case as the husband was not an We see no reason to disturb the factual finding of the
overseas worker. POEA that Vitaliano Saco was an overseas employee of
the petitioner at the time he met with the fatal accident
Vitaliano Saco was Chief Officer of the M/V Eastern in Japan in 1985.
Polaris when he was killed in an accident in Tokyo,
Japan, March 15, 1985. His widow sued for damages Under the 1985 Rules and Regulations on Overseas
under Executive Order No. 797 and Memorandum Employment, overseas employment is defined as
Circular No. 2 of the POEA. The petitioner, as owner of "employment of a worker outside the Philippines,
the vessel, argued that the complaint was cognizable including employment on board vessels plying
not by the POEA but by the Social Security System and international waters, covered by a valid contract. 3 A
should have been filed against the State Insurance Fund. contract worker is described as "any person working or
The POEA nevertheless assumed jurisdiction and after who has worked overseas under a valid employment
considering the position papers of the parties ruled in contract and shall include seamen" 4 or "any person
favor of the complainant. The award consisted of working overseas or who has been employed by
P180,000.00 as death benefits and P12,000.00 for burial another which may be a local employer, foreign
expenses. employer, principal or partner under a valid
employment contract and shall include
The petitioner immediately came to this Court, seamen." 5 These definitions clearly apply to Vitaliano
prompting the Solicitor General to move for dismissal Saco for it is not disputed that he died while under a
on the ground of non-exhaustion of administrative contract of employment with the petitioner and
remedies. alongside the petitioner's vessel, the M/V Eastern
Polaris, while berthed in a foreign country. 6
Ordinarily, the decisions of the POEA should first be
appealed to the National Labor Relations Commission, It is worth observing that the petitioner performed at
on the theory inter alia that the agency should be given least two acts which constitute implied or tacit
an opportunity to correct the errors, if any, of its recognition of the nature of Saco's employment at the
subordinates. This case comes under one of the time of his death in 1985. The first is its submission of
its shipping articles to the POEA for processing, promulgate the said regulation; and even with such
formalization and approval in the exercise of its authorization, the regulation represents an exercise of
regulatory power over overseas employment under legislative discretion which, under the principle, is not
Executive Order NO. 797. 7 The second is its subject to delegation.
payment 8 of the contributions mandated by law and
regulations to the Welfare Fund for Overseas Workers, The authority to issue the said regulation is clearly
which was created by P.D. No. 1694 "for the purpose of provided in Section 4(a) of Executive Order No. 797,
providing social and welfare services to Filipino reading as follows:
overseas workers."
... The governing Board of the
Significantly, the office administering this fund, in the Administration (POEA), as hereunder
receipt it prepared for the private respondent's provided shall promulgate the
signature, described the subject of the burial benefits as necessary rules and regulations to
"overseas contract worker Vitaliano Saco." 9 While this govern the exercise of the
receipt is certainly not controlling, it does indicate, in adjudicatory functions of the
the light of the petitioner's own previous acts, that the Administration (POEA).
petitioner and the Fund to which it had made
contributions considered Saco to be an overseas
employee. Similar authorization had been granted the National
Seamen Board, which, as earlier observed, had itself
prescribed a standard shipping contract substantially
The petitioner argues that the deceased employee the same as the format adopted by the POEA.
should be likened to the employees of the Philippine Air
Lines who, although working abroad in its international
flights, are not considered overseas workers. If this be The second challenge is more serious as it is true that
so, the petitioner should not have found it necessary to legislative discretion as to the substantive contents of
submit its shipping articles to the POEA for processing, the law cannot be delegated. What can be delegated is
formalization and approval or to contribute to the the discretion to determine how the law may be
Welfare Fund which is available only to overseas enforced, not what the law shall be. The ascertainment
workers. Moreover, the analogy is hardly appropriate as of the latter subject is a prerogative of the legislature.
the employees of the PAL cannot under the definitions This prerogative cannot be abdicated or surrendered by
given be considered seamen nor are their appointments the legislature to the delegate. Thus, in Ynot v.
coursed through the POEA. Intermediate Apellate Court 12 which annulled Executive
Order No. 626, this Court held:
The award of P180,000.00 for death benefits and
P12,000.00 for burial expenses was made by the POEA We also mark, on top of all this, the
pursuant to its Memorandum Circular No. 2, which questionable manner of the
became effective on February 1, 1984. This circular disposition of the confiscated
prescribed a standard contract to be adopted by both property as prescribed in the
foreign and domestic shipping companies in the hiring questioned executive order. It is
of Filipino seamen for overseas employment. A similar there authorized that the seized
contract had earlier been required by the National property shall be distributed to
Seamen Board and had been sustained in a number of charitable institutions and other
cases by this Court. 10 The petitioner claims that it had similar institutions as the Chairman
never entered into such a contract with the deceased of the National Meat Inspection
Saco, but that is hardly a serious argument. In the first Commission may see fit, in the case of
place, it should have done so as required by the circular, carabaos.' (Italics supplied.) The
which specifically declared that "all parties to the phrase "may see fit" is an extremely
employment of any Filipino seamen on board any generous and dangerous condition, if
ocean-going vessel are advised to adopt and use this condition it is. It is laden with
employment contract effective 01 February 1984 and to perilous opportunities for partiality
desist from using any other format of employment and abuse, and even corruption. One
contract effective that date." In the second place, even if searches in vain for the usual
it had not done so, the provisions of the said circular are standard and the reasonable
nevertheless deemed written into the contract with guidelines, or better still, the
Saco as a postulate of the police power of the State. 11 limitations that the officers must
observe when they make their
distribution. There is none. Their
But the petitioner questions the validity of options are apparently boundless.
Memorandum Circular No. 2 itself as violative of the Who shall be the fortunate
principle of non-delegation of legislative power. It beneficiaries of their generosity and
contends that no authority had been given the POEA to
by what criteria shall they be The reasons given above for the delegation of legislative
chosen? Only the officers named can powers in general are particularly applicable to
supply the answer, they and they administrative bodies. With the proliferation of
alone may choose the grantee as they specialized activities and their attendant peculiar
see fit, and in their own exclusive problems, the national legislature has found it more and
discretion. Definitely, there is here a more necessary to entrust to administrative agencies
'roving commission a wide and the authority to issue rules to carry out the general
sweeping authority that is not provisions of the statute. This is called the "power of
canalized within banks that keep it subordinate legislation."
from overflowing,' in short a clearly
profligate and therefore invalid With this power, administrative bodies may implement
delegation of legislative powers. the broad policies laid down in a statute by "filling in'
the details which the Congress may not have the
There are two accepted tests to determine whether or opportunity or competence to provide. This is effected
not there is a valid delegation of legislative power, viz, by their promulgation of what are known as
the completeness test and the sufficient standard test. supplementary regulations, such as the implementing
Under the first test, the law must be complete in all its rules issued by the Department of Labor on the new
terms and conditions when it leaves the legislature such Labor Code. These regulations have the force and effect
that when it reaches the delegate the only thing he will of law.
have to do is enforce it. 13 Under the sufficient standard
test, there must be adequate guidelines or stations in Memorandum Circular No. 2 is one such administrative
the law to map out the boundaries of the delegate's regulation. The model contract prescribed thereby has
authority and prevent the delegation from running been applied in a significant number of the cases
riot. 14 without challenge by the employer. The power of the
POEA (and before it the National Seamen Board) in
Both tests are intended to prevent a total transference requiring the model contract is not unlimited as there is
of legislative authority to the delegate, who is not a sufficient standard guiding the delegate in the exercise
allowed to step into the shoes of the legislature and of the said authority. That standard is discoverable in
exercise a power essentially legislative. the executive order itself which, in creating the
Philippine Overseas Employment Administration,
The principle of non-delegation of powers is applicable mandated it to protect the rights of overseas Filipino
to all the three major powers of the Government but is workers to "fair and equitable employment practices."
especially important in the case of the legislative power
because of the many instances when its delegation is Parenthetically, it is recalled that this Court has
permitted. The occasions are rare when executive or accepted as sufficient standards "Public interest"
judicial powers have to be delegated by the authorities in People v. Rosenthal 15 "justice and equity" in Antamok
to which they legally certain. In the case of the Gold Fields v. CIR 16 "public convenience and welfare"
legislative power, however, such occasions have in Calalang v. Williams 17 and "simplicity, economy and
become more and more frequent, if not necessary. This efficiency" in Cervantes v. Auditor General, 18 to mention
had led to the observation that the delegation of only a few cases. In the United States, the "sense and
legislative power has become the rule and its non- experience of men" was accepted in Mutual Film Corp. v.
delegation the exception. Industrial Commission, 19 and "national security"
in Hirabayashi v. United States. 20
The reason is the increasing complexity of the task of
government and the growing inability of the legislature It is not denied that the private respondent has been
to cope directly with the myriad problems demanding receiving a monthly death benefit pension of P514.42
its attention. The growth of society has ramified its since March 1985 and that she was also paid a
activities and created peculiar and sophisticated P1,000.00 funeral benefit by the Social Security System.
problems that the legislature cannot be expected In addition, as already observed, she also received a
reasonably to comprehend. Specialization even in P5,000.00 burial gratuity from the Welfare Fund for
legislation has become necessary. To many of the Overseas Workers. These payments will not preclude
problems attendant upon present-day undertakings, the allowance of the private respondent's claim against the
legislature may not have the competence to provide the petitioner because it is specifically reserved in the
required direct and efficacious, not to say, specific standard contract of employment for Filipino seamen
solutions. These solutions may, however, be expected under Memorandum Circular No. 2, Series of 1984, that
from its delegates, who are supposed to be experts in —
the particular fields assigned to them.
Section C. Compensation and Benefits.
—
1. In case of death of the seamen Law shall be enjoyed by the seaman
during the term of his Contract, the or his beneficiaries in accordance
employer shall pay his beneficiaries with such laws.
the amount of:
The above provisions are manifestations of the concern
a. P220,000.00 for of the State for the working class, consistently with the
master and chief social justice policy and the specific provisions in the
engineers Constitution for the protection of the working class and
the promotion of its interest.
b. P180,000.00 for
other officers, One last challenge of the petitioner must be dealt with
including radio to close t case. Its argument that it has been denied due
operators and process because the same POEA that issued
master electrician Memorandum Circular No. 2 has also sustained and
applied it is an uninformed criticism of administrative
c. P 130,000.00 for law itself. Administrative agencies are vested with two
ratings. basic powers, the quasi-legislative and the quasi-
judicial. The first enables them to promulgate
implementing rules and regulations, and the second
2. It is understood and agreed that enables them to interpret and apply such regulations.
the benefits mentioned above shall Examples abound: the Bureau of Internal Revenue
be separate and distinct from, and adjudicates on its own revenue regulations, the Central
will be in addition to whatever Bank on its own circulars, the Securities and Exchange
benefits which the seaman is entitled Commission on its own rules, as so too do the Philippine
to under Philippine laws. ... Patent Office and the Videogram Regulatory Board and
the Civil Aeronautics Administration and the
3. ... Department of Natural Resources and so on ad
infinitum on their respective administrative regulations.
c. If the remains of Such an arrangement has been accepted as a fact of life
the seaman is of modern governments and cannot be considered
buried in the violative of due process as long as the cardinal rights
Philippines, the laid down by Justice Laurel in the landmark case of Ang
owners shall pay Tibay v. Court of Industrial Relations 21 are observed.
the beneficiaries
of the seaman an Whatever doubts may still remain regarding the rights
amount not of the parties in this case are resolved in favor of the
exceeding private respondent, in line with the express mandate of
P18,000.00 for the Labor Code and the principle that those with less in
burial expenses. life should have more in law.
The underscored portion is merely a reiteration of When the conflicting interests of labor and capital are
Memorandum Circular No. 22, issued by the National weighed on the scales of social justice, the heavier
Seamen Board on July 12,1976, providing an follows: influence of the latter must be counter-balanced by the
sympathy and compassion the law must accord the
Income Benefits under this Rule Shall underprivileged worker. This is only fair if he is to be
be Considered Additional Benefits.— given the opportunity and the right to assert and defend
his cause not as a subordinate but as a peer of
management, with which he can negotiate on even
All compensation benefits under plane. Labor is not a mere employee of capital but its
Title II, Book Four of the Labor Code active and equal partner.
of the Philippines (Employees
Compensation and State Insurance
Fund) shall be granted, in addition to WHEREFORE, the petition is DISMISSED, with costs
whatever benefits, gratuities or against the petitioner. The temporary restraining order
allowances that the seaman or his dated December 10, 1986 is hereby LIFTED. It is so
beneficiaries may be entitled to ordered.
under the employment contract
approved by the NSB. If applicable, Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ.,
all benefits under the Social Security concur.
Law and the Philippine Medicare
17 70 Phil. 726.
15 Supra.
16 70 Phil. 340.