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Petroleum Shipping Ltd. vs.

941 SCRA 35 |June 16, 2006
Facts: Florello W. Tanchico was hired by Esso International Shipping Co., Ltd., through Trans-Global
Maritime Agency, Inc. as First Assistant Engineer who was later promoted to Chief Engineer. After
completing his eight-month deployment, Tanchico returned to the Philippines for a two-month vacation.
Upon his return and prior to boarding the vessel, medical examination revealed that Tanchico was
suffering from "Ischemic Heart Disease, Hypertensive Cardio- Muscular Disease and Diabetes Mellitus."
He took medications for two months and was subsequently cleared. However, Esso no longer deployed
Tanchico and offered to pay him benefits under the Career Employment Incentive Plan instead. Tanchico
accepted the offer but later filed a complaint for illegal dismissal with claims for 13th month pay among
Issue: Whether or not Tanchico is entitled to his claims for 13th month pay.
Tanchico is not entitled to 13th month pay.
The Court of Appeals erred in granting of 13th month pay to Tanchico on the ground that he was
a regular employee. The Supreme Court reiterated its ruling in Millares vs. NLR which held that seafarers
are considered contractual employees. Their employment, therefore, are governed by the contracts
they sign every time they are rehired. Moreover, PD 851 does not apply to seafarers since it only
contemplates the situation of land-based workers and not of seafarers who generally earn more than
domestic land-based workers.