Escrow insertion in draft seafarers law is unconstitutional

Escrow insertion in draft seafarers law is unconstitutional
Louis 'Barok' Biraogo May 27, 2023, https://manilastandard.net/opinion/columns/citizen-barok-by-louis-biraog...

Currently pending before the bicameral committee of both houses of Congress is a draft of a new law, the Magna Carta of Filipino Seafarers.

That draft has an insertion which is patently unconstitutional.

Under the Labor Code, a seafarer who gets disabled or incapacitated while deployed at sea is entitled to compensation under his standard employment contract as approved by the Philippine Overseas Employment Administration.

If the shipping company commits a breach of the standard employment contract, the Filipino seafarer can file the corresponding case against the shipping company before the National Labor Relations Commission (NLRC), a quasi-judicial agency which resolves, among others, seafarer’s cases.

The Labor Code requires that complaints from seafarers should first be resolved by the labor arbiter.

Thereafter, the losing party may appeal to the NLRC. The appeal is raffled off to the corresponding division of the Commission.

If the shipping company loses its case at the level of the labor arbiter and it appeals the ruling to the Commission, the shipping company is required to post a cash or surety bond equivalent to the total amount of money awarded by the labor arbiter to the seafarer, exclusive of damages and attorney’s fees.

In some exceptionally meritorious cases, however, the Commission is authorized by law to reduce the amount of the appeal bond.

If the shipping company fails to post the required appeal bond, its appeal will be dismissed, and the decision of the labor arbiter becomes final and unappealable, and is ripe for execution, which means enforcement of the judgment.

In the event that the shipping company posts the requisite appeal bond, its appeal will be given due course and will be resolved on its merits.

If the shipping company loses its appeal, and fails to get a reconsideration of the decision by the Commission, the said decision becomes final and executory.

The decision is immediately executory, and the proceeds of the appeal bond posted by the shipping company is given to the seafarer to satisfy the judgment in his favor.

While the shipping company may elevate the case to the Court of Appeals on a petition for certiorari, filing the petition alone is not enough to stop the execution of the decision of the NLRC.

Unless the shipping company convinces the appellate court to issue a temporary restraining order to stop the execution, the execution shall proceed accordingly.

The Supreme Court explained the rationale for this procedure is to ensure the seafarer of the proceeds of a judgment in his favor without needless delay, pursuant to constitutional mandate that the State shall afford protection to labor.

Shipping companies, however, complain the current procedure is inequitable for them.

The shipping companies point out that in the event that they win in the Court of Appeals or in the Supreme Court, they will no longer able to recover the money the seafarer obtained from them by reason of the decision of the NLRC.

They lament that almost always, the seafarer shall have already spent the money, or shall have absconded or passed away, or is already insolvent.

That is why an organization of shipping companies had been campaigning for a provision in the draft Magna Carta of Filipino Seafarers.

Their proposal is in the event the shipping company loses its appeal in the NLRC, the proceeds of the appeal bond shall not be paid immediately to the seafarer, but shall instead be deposited to an escrow account with a reputable bank, and shall stay there until the case is resolved with finality either by the Court of Appeals or the Supreme Court.

Under the draft law, the seafarer may get the amount in escrow only if he posts a bond for it.

As stated earlier, that provision on escrow is now in the draft law pending before the bicam committee of Congress.

That escrow provision is unconstitutional because it is class legislation, i.e., it applies only against seafarers.

It does not apply to migrant workers who are not seafarers.

In other words, land-based overseas Filipino workers will be entitled to immediately get the proceeds of the appeal bond once they win the case at the level of the NLRC, while winning seafarers must wait until the courts of law resolve the case with finality.

The counter-escrow bond the seafarer must post to get what has been awarded to him by the NLRC, requires money, and more often than not, the seafarer is already destitute because of his disability.

In short, the bond for lifting the escrow is a solvency requirement imposed by law on one who is insolvent by reason of his being a disabled seafarer.

Obviously, the escrow provision violates the equal protection clause of the Constitution, and the constitutional mandate that the State shall afford protection to labor.