Around a third of the world’s 1.2 million seafarers are Filipinos. They contribute around US$6 billion a year to the Philippine economy. Developments in the country’s employment laws are therefore of key importance to shipowners.
Over the next few months, UK Club Senior Claims Director, Tony Nicholson, who also chairs the Philippine working group of the International Group of P&I Clubs’ personal injury subcommittee, and Senior Claims Executive Stephen Michaels will be providing an update on; Angkla Seafarers’ Protection Act, Garnishment and The National Conciliation & Mediation Board.
ANGKLA SEAFARERS’ PROTECTION ACT
This Act is a new law, aimed at protecting seafarers and their families from the unscrupulous practices of “ambulance chasing” lawyers, signed by President Aquino on 26th November 2015.
It was introduced in September 2013 by the son of a former Sea Captain, and ANGKLA (ANCHOR) Party-list Representative, Congressman Manalo, the first elected voice representing the Maritime Industry in Government.
Whilst the existing code of Professional Responsibility of Lawyers prohibits “ambulance chasing”, no statutory provision exists which completely and expressly prohibits it in the enforcement of labour rights. Under the new Act, any individual or group – whether lawyers or not – found to be soliciting directly or via agents will be imprisoned for 1–2 years and/or fined PHP50,000–100,000 (approximately US$1–2,000). In addition, legal fees for claimant lawyers are now capped at 10% of the total amount awarded.
This is a mature industry, where generous no fault contractual obligations are available to Filipino seafarers, under the terms of either the POEA Standard Employment Agreement (POEA SEC), or a Collective Bargaining Agreement (CBA). However, there is growing concern that seafarers and their families are being exploited as a business opportunity by an increasing number of Claimant lawyers, with diverse legal backgrounds, with reports of fees being charged at rates ranging from 25% to as high as 60%. Many of these lawyers rely on “runners”, some of whom are ex-seafarers themselves, to find potential clients, often by targeting relatives visiting a seafarer in hospital. “Runners” are at the heart of the business model and competition for their services can be strong.
If seafarers are encouraged to pursue a claim in arbitration, they potentially prejudiced their entitlement to contractual benefits. For example, a recent Supreme Court decision in a claim handled by the UK P&I Club again made it clear that failure to follow the advice of an employer’s doctor regarding treatment results in non-entitlement to disability benefits.
Whilst both the NLRC and in particular, the NCMB, often resolve cases in a manner employers find frustrating, giving consideration to the merits of the case and the applicable contractual terms, they never award more than the maximum contractual benefit available. Unfortunately some claimant lawyers have persuaded seafarers or their families that more money was available - but this only led to claimants receiving less than their contractual entitlement. The widows will eventually, be awarded compensation in line with the contract, only to receive substantially less once the lawyers have taken a significant proportion of the recovery made.
Similarly, when a disability grading determined by the company doctor is upheld by the NLRC or NCMB, it is extremely disappointing to see the Claimant’s lawyer benefit from the generous no-fault contractual benefits available to the seafarer and/or their next of kin. The correct compensation would have been paid in any event in accordance with the disability grading, yet in pursuing a claim for 100% compensation under a CBA, regardless of whether there is a valid claim under the CBA, or a CBA even exists, a Claimant will end up with less than their contractual entitlement after their lawyer takes a significant proportion of what would have been paid in any event.
An increasing amount of money which should rightly find its way to seafarers and their families is finding its way to Claimant lawyers, which perhaps explains why we continue to see an increasing number of Claimant lawyers, with very diverse legal backgrounds, becoming interested in seafarers’ cases.
When did the law take effect?
The Secretary of Labor & Employment signed the Implementing Rules & Regulations (IRR), which defines how the law is to be interpreted and enforced, on 19th April 2016. Following publication in two newspapers, in general circulation on 6th May, the law came into effect on 21st May 2016.
For more information please contact Tony Nicholson. Tony is part of The People Claims Syndicate which handles all P&I/Defence matters relating to crew, stevedores, passengers, stowaways, refugees and third party visitors involving injury, illness, death, drug smuggling, immigration fines, loss of or damage to effects of crew/others and occupational disease.