The Philippines contributes around a third of the world’s 1.2 million seafarers, so it is unsurprising that the People Claims team deal with a high number of illness and injury cases among Filipino crew. These often result in seafarers filing claims with the National Labor Relations Commission (NLRC) or National Conciliation and Mediation Board (NCMB), usually for contractual compensation for permanent disability.
The legal system in the Philippines through which employment-related claims by seafarers must proceed is complex and sometimes baffling to those not familiar with it. On many occasions, the Club has been asked why a claim has not been resolved many years after its inception, or what stage it has reached and how much further it has to go before it reaches finality.
To demystify the Philippine legal system, the People Claims Team explain the basic structures of the two Arbitration routes in which a claim can be progressed – the NLRC for mandatory Arbitration and the NCMB for voluntary Arbitration. A seafarer seeking payment of, for example, disability compensation or allegedly unpaid wages will seek redress through one of these. The process is based solely on documents – there is no facility for oral witness testimony or for arguments to be presented verbally to the Labor Arbiter in the NLRC or Voluntary Abitrators in the NCMB.
Proceedings in both the NLRC and NCMB begin with the filing of a Single Entry Approach, which entails the attendance of the parties, without lawyers, at mandatory conferences aimed at settling the claims without the need for matters to progress further. In our experience, this does not generally happen and a Summons is then filed by the seafarer. This is followed by at least two further mandatory conferences, which the parties’ lawyers also attend, and which are again aimed at reaching settlement.
If settlement is not reached, the claims then proceed to filing of the first pleading – the Position Paper. Both parties file one, setting out their respective positions. The Complainant (seafarer) will explain why he believes he is entitled to what he is claiming, and the Respondent (Shipowner/employer) will explain why they believe he is not.
After Position Papers, a further pleading – a Reply/Opposition/Comment - has to be filed by each party, in which they explain why they do not accept the arguments in the other party’s Position Paper. The final pleading – the Rejoinder/Memorandum – is then filed, in which the parties respond to the arguments in the other’s Reply.
Once these pleadings are all filed, the claim is deemed “submitted for resolution” by the Labor Arbiter (NLRC) or Panel of Voluntary Arbitrators (NCMB).
The time in which a decision is delivered is variable. It is generally expected within 3 - 6 months but can commonly take longer.
When the decision is delivered, the next step differs between the NLRC and NCMB.
In the NLRC, the unsuccessful party can file an Appeal to the Commission (NLRC). They have 10 days to do so. The Appeal, if pursued by the shipowner, must be secured by a bond and this is usually provided by a Club Letter of Undertaking when an Appeal is filed on behalf of a Member
When the decision on the Appeal is delivered, the unsuccessful party can file a Motion for Reconsideration. Again, they have 10 days to do this.
In the NCMB, there is no appeal stage. Instead, the unsuccessful party who wishes to contest the decision must file a Motion for Reconsideration.
When the decision on the Motion for Reconsideration is delivered, the unsuccessful party can elevate the claim to the Court of Appeals. This is done via a Petition for Certiorari from the NLRC or a Petition for Review from the NCMB.
The denial of a Motion for Reconsideration also means that any award of damages to a seafarer becomes “final and executory” within 10 days unless the Court of Appeals issues a Temporary Restraining Order (TRO).
Final and executory means that the seafarer can file a Motion seeking the issuance of a Writ of Execution, which, if granted, will entitle him to payment of the award of damages. The shipowner may apply for a TRO but in practice these are hardly ever granted. The result of this is that a seafarer who has received an award that is being disputed via a Petition for Certiorari/Review will almost inevitably be paid those monies while the Court of Appeal is in the process of considering the Petition.
When the decision on the Petition is delivered, the unsuccessful party has a final chance of redress by applying to the Supreme Court. The decision rendered here is final, and no further appeal is possible.
If the decision in relation to the Petition for Certiorari/Review, or from the Supreme Court favours the shipowner, they are entitled to restitution of the award previously paid out, once the case reaches finality and the corresponding Entry of Judgment has been issued. More information on the issue of restitution is available in the August “Focus on Philippines” article.
For more information please contact Victoria Brown. Victoria 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.