Termination due vessel sale or change of principal

Termination due vessel sale or change of principal
ATTY. DENNIS GORECHO 3 Sept 2018 http://cebudailynews.inquirer.net/192330/termination-due-vessel-sale-cha...

The seafarer is entitled to receive his basic wage until the date of joining another vessel in the event of vessel sale or change of principal and he opted to complete his contract by joining another vessel of the same principal.

The employment of Filipino seafarers is governed by the Standard Employment Contract (SEC) they sign and duly approved by the Philippine Overseas Employment Administration (POEA) every time they are rehired and their employment is terminated upon its completion.

As a general rule, the period of employment shall be for a period mutually agreed upon by the seafarer and the employer but not to exceed 12 months. The Maritime Labor Convention 2006 (MLC2006) prescribes that the seafarer has the right to be repatriated within a contract period of less than 12 months.

The commencement of POEA contract is from the time when the contracted seafarer actually departs from the Philippines, either airport or seaport, for employment. It shall cease when the seafarer completes his period of contractual service aboard the ship, signs-off from the ship and arrives at the point of hire.

The POEA contract requires the seafarer to arrive at the point of hire as it signifies the completion of the employment contract, and not merely its expiration.

Similarly, a seafarer’s employment contract is terminated even before the contract expires as soon as he arrives at the point of hire and signs off for medical reasons, due to shipwreck, voluntary resignation or for other just causes

Other “just causes“ for termination of POEA contract include vessel sale (Section 23) and change of principal (Section 26) under the following rules:
A. The seafarer shall be entitled to earned wages, repatriation at employer’s expense and one month basic pay as termination pay.

B. If by mutual agreement, the seafarer continues his service on board the same vessel, such service shall be treated as a new contract. The seafarer shall be entitled to earned wages only.

C. In case arrangements has been made for the seafarer to join another vessel to complete his contract, the seafarer shall be entitled to basic wage until the date of joining the other vessel.

Thus, the seafarer has two options after he receives his earned wages: either one month basic wage as separation pay or to continue the unexpired contract.

The operative phrase for third scenario is “until the date of joining the other vessel” for the seafarer’s entitlement to basic wage while he is awaiting redeployment due to vessel sale or change of principal. Thus, it can be considered as “standby pay” as compensation for the waiting period.

The employer has the burden to prove that the termination of the contract is based on a valid cause. To discharge this burden, the employer must present substantial evidence — or such amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion — that the cause of the termination was valid. Otherwise, it can be a case of illegal dismissal wherein the seafarer must be paid the income for the unexpired portion of his contract.

Under POEA rules, the licensed manning agency of the new principal automatically assumes full and complete responsibility over the seafarer originally recruited and deployed by the previous licensed manning agency, if the seafarer opts to sign an employment contract with the new principal. Otherwise, the licensed manning agency which originally recruited and deployed the seafarer shall retain full and complete responsibility over the contractual obligations of the original principal.