Case Digest: STOLT-NIELSEN TRANSPORTATION GROUP, INC., and CHUNG GAI SHIP MANAGEMENT vs. SULPECIO MEDEQUILLO, JR.

G.R. No. 177498 18 January 2012

FACTS:

Medequillo filed a complaint before the POEA against the petitioners for illegal dismissal and failure to deploy. On 06 November 1991, he was hired by Stolt Nielsen on behalf of its principal Chung-Gai Management on board the vessel Stolt Aspiration. While the vessel was docked at MV Stolt Aspiration, he joined the crew for nearly three months. However, he was ordered by the ship’s master to disembark the vessel and he was repatriated back to Manila for no reason or explanation.

He was transferred to Stolt Pride under a second contract, with approval of the POEA. Despite the commencement of the second contract, he was not deployed despite follow-ups from Medequillo. When he sought for the return of his passport, seaman’s book and other papers, he was made to sign a document that he cannot seek for employment with other agencies.

LABOR ARBITER: The Labor Arbiter found that Medequillo was constructively dismissed. He found that the first contract entered into by and between the petitioner and Medequillo had been novated by the second contract. Petitioners appealed that Medequillo cannot be considered as having been illegally dismissed because he had not even been deployed yet.

NLRC: The NLRC upheld the finding of unjustified terminal

ISSUE: 

1. Whether or not the first employment contract between the petitioner and Medequillo is separate and distinct from the second one.
2. What is the consequence of the non-deployment of the respondent?

RULING:

1. YES. With the finding that respondent was still employed under the first contract when he negotiated with the petitioners on the second contract, novation became an unavoidable conclusion.
2. The POEA Standard Employment Conract provides that employment shall commence upon the actual departure of the seafarer from the airport or seaport in the port of hire. Thus, the contention of the petitioners of the alleged poor performance of the respondent while on board the first ship cannot be sustained to justify non-deployment. Under the POEA Rules, failure of an agency to deploy a worker within the prescribed period without valid reasons shall be a cause for the suspension or cancellation of license or fine.