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Senate says ‘no’ to escrow provision in the Magna Carta for Filipino Seafarers

Senate says ‘no’ to escrow provision in the Magna Carta for Filipino Seafarers
Atty. Dennis Gorecho September 8, 2023

There will be no escrow provision in the Senate version of the Magna Carta for Filipino Seafarers.

The non-inclusion was confirmed by Senator Raffy Tulfo, chairperson of the Senate Committee on Migrant Workers, during the interpellation by Senator Risa Hontiveros on September 4, 2023.

“Seafarers will be ‘penalized’ by the escrow provision that will downplay their rights guaranteed by the constitution instead of protecting their rights and promoting their welfare,” says Senator Hontiveros.

The escrow provision aimed to amend the Labor Code that will have significant impact on the “immediately final and executory” nature of decisions issued by National Labor Relations Commission (NLRC) and the National Conciliation and Mediation Board (NCMB). The proceeds shall remain in escrow until such time the finality of the decision issued by the appropriate appellate court is obtained.

Proponents stressed that such move is necessary to ensure the restitution of monetary awards in case the appropriate appellate court annuls or partially or totally reverses the monetary judgment award.

However, Hontiveros noted that the reversal rates in the CA (28 percent) and Supreme Court (30 percent) cannot overshadow the fact that almost 70 percent of decisions of the appealed NCMB cases are affirmed in favor of labor.

The NLRC reported that the affirmation rate of decisions appealed to the Court of Appeals in 2022 is 92 percent.

Hontiveros stressed that the numbers contradict the sweeping allegations that most cases are “frivolous” and are associated with “ambulance chasers” or lawyers who go to lengths to push seafarers to file labor cases against their foreign employers. There is not even substantial evidence to correlate the losing cases as cases initiated by ambulance chasers.

“Will the 70 percent winning seafarers’ cases be sacrificed due to the 30 percent reversals?” she said.

Hontiveros likewise underscored that the provision is not equitable as the seafarer may move for the execution of the monetary award pending appeal upon posting of a bond, the amount of which shall be determined by the appropriate court.

Under the labor code, the posting of bond is imposed only on the side of employer. Labor is required to pay only a minimal appeal fee.

The proponents of the execution bond erroneously presumed that the seafarer is in the same economic footing with the employer.

A seafarer seeks payment of monetary benefits because of the fact that he is in financial distress due to his medical condition. Many are jobless, sick, disabled and infirm who incur huge debts to sustain their medication while others die before the decision by the Supreme Court is released.

Instead of saving his earnings for his medication, he will be forced to redirect them to the execution bond, jeopardizing further his economic well-being.

The seafarers will wait for longer years before they receive the NLRC/NCMB award if the proposed escrow provision will be included.

In cases of seafarers with medical conditions, some incur huge debts to sustain their medication while others die before the decision by the Supreme Court is released.

Hontiveros further stressed that the escrow provision violates the constitutional guarantee on equal protection, which means that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed.

There is an invalid classification that runs counter to the constitutional provision, which provides that “no person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.” (Article II, Section 1).

It will partake of the nature of class legislation because it singles out seafarer claims from other labor claims, both local and overseas. There lies no substantial distinction between the claims of a seafarer and any other laborer.

Without any leverage in prosecuting his monetary claims, chances are, the seafarer bows to the demand of his employer to either drop his claim or accept a small settlement.

Employers are throwing off-balance the already imbalanced legal battle on seafarers’ claims as every labor dispute is a David and Goliath situation.

In the end, the “balance of scale” will tilt more to capital as this will protect the business interest of the manning agencies and their principal rather than the seafarers themselves.

“It undermines the constitutional mandate to protect the rights of OFWs and to promote their welfare when it deprives seafarers an avenue to receive the fruits of their legal battle,” Hontiveros said.

The House of Representatives approved on March 6, 2023 its version of the Magna Carta (House Bill 7325) that contains the escrow provision.