Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 123882 November 16, 1998
JOE ASHLEY AGGA, VICTORINO MAIMIM, E!IL"ERTO EVANGELISTA,
"ENH#R SANTOS, RICHMON! CASTILLO, ROMEO AVILA, SEG#N!O G#A!E$,
JR., OSCAR MALOLOY%ON, RICAR!O "EL!A, R#EL TONACAO, ROM#LO !ILA&%
!ILA&, JOSE SERGIO 'RANCO, REYNAL!O VILLAR, ROM#LO !ELA CR#$,
CAMILO CAIG, NICOLAS #RS#A, MARTIN "A(E$, JR., MARIO SOSA )*+
,OO!Y &A!ILLA, petitioners,
vs.
NATIONAL LA"OR RELATIONS COMMISSION, S#&&LY OIL'IEL! SERVICES, INC.
)*+ #N!ERSEAS !RILLING, INC., respondents.

&#NO, J.:
Private respondent Supply Oilfield Services, Inc. (SOS) hired petitioners to work on
board SEDO!"P #$%, a drillship owned and operated by private respondent
&nderseas Drillin', Inc. (&DI).
(he e)ploy)ent contracts ran for one year with petitioners en*oyin' two )onths+ off
with pay for every two )onths+ duty. (he contracts also provided that for service of %,
hours a day, $ days a week in a two-shift ,#-hour operation, petitioners would receive a
fi.ed )onthly co)pensation coverin' /basic rate, allowances, privile'es, travel
allowances and benefits 'ranted by law durin' and after e)ploy)ent with the
co)pany./
In a co)plaint filed with the Philippine Overseas E)ploy)ent 0d)inistration (POE0),
petitioners clai)ed that private respondents failed to pay the) overti)e pay, holiday
pay, rest day pay, %1th )onth pay and ni'ht shift differential. (hey likewise alle'ed that
private respondents did not co)ply with the )andatory insurance re2uire)ent of the
rules 'overnin' overseas e)ploy)ent. (hey further averred that while private
respondents )ade the) use passports for overseas contract workers whenever they
departed for, and returned fro), overseas e)ploy)ent, they were also instructed to use
sea)an+s books upon reachin' port for transfer to, and while aboard, the oilri'.
Petitioners opined that this practice entitled the) to the benefits 'ranted by law to both
land-based workers and sea)en.
In their 0nswer and Position Paper, private respondents denied liability. (hey said that
the benefits referred to in the e)ploy)ent contracts already included overti)e pay,
holiday pay, ter)ination pay and %1th )onth pay. (hey likewise denied that petitioners
were entitled to ni'ht shift differential since no proof was sub)itted to show that any of
the), at any ti)e, had actually worked fro) %3433 p.). to 5433 a.). In addition, private
respondents belied petitioners+ clai) that they did not co)ply with the )andatory
insurance re2uire)ent. (hey alle'ed that petitioners were insured with "lue ross
(0sia-Pacific) Insurance, 6td. a'ainst death and per)anent disability. 6astly, private
respondents contended that petitioners, as offshore oilri''ers, had nothin' to do with
)annin' a vessel or sea navi'ation. 7ence, petitioners were )erely land-based
workers, not sea)en.
On 8uly ,, %99,, the POE0 dis)issed petitioners+ co)plaint for lack of )erit.
1

Petitioners appealed to the :ational 6abor ;elations o))ission (<irst Division). (hey
sub)itted the followin' principal issues for resolution4 (%) whether or not the lu)psu)
)ode of pay)ent of )onthly salary is le'al= (,) whether or not there were
underpay)ents of their salary= (1) whether the days-off pay should be considered as
part of their salaries or should be re'arded as vacation leave pay or bonus separate
therefro)= and (#) whether or not respondents substantially co)plied with the insurance
re2uire)ent under POE0 rules.
&pon the other hand, private respondents infor)ed the :6; that the POE0 had
already dis)issed the clai)s for underpay)ent of labor benefits and lack of insurance
covera'e in the consolidated cases docketed as POE0 ase :o. 9%-%,-%1#> and
POE0 ase :o. 9,-3%-33%% filed by fourteen of the nineteen petitioners, and that the
dis)issal was affir)ed on appeal by its Second Division. (he decision has beco)e
final.
On :ove)ber ,$, %99?, the respondent :6; pro)ul'ated the
Decision
2
assailed herein, dis)issin' petitioners+ appeal. It reiterated the decision in
POE0 ase :o. 9%-%,-%1#> and POE0 ase :o. 9,-3%-33%%, viz.4
Perusin' the unrefuted copy of the POE0 decision attached as 0nne.
/%/ to respondents+ ;eply dated 0u'ust %#, %99?, it appears that in
*ustifyin' his decision, the 0d)inistrator held4
<ro) the fore'oin' factual backdrop, the issues for
resolution in the instant case are4
1
%. @hether or not co)plainants had been underpaid of their co)pensation= and
,. @hether or not co)plainants are a)ply covered by insurance.
0nent the first issue, we find in the ne'ative. 0fter co)parison of the Su))ary of
lai)s of the o)plainants and (able , of the ;espondents (0vera'e Aonthly Salary of
o)plainants vs. Statutorily Aandated "asic Salary and "enefits), we arrived at the
conclusion that the alle'ed underpay)ents represent the difference between the
a)ounts under olu)n E (0ctual Pay on "oard) and the a)ounts under olu)n D
(total of basic salary B overti)e pay C pre)iu) pay B %1th )onth pay C vacation pay).
(o illustrate, we take the case of co)plainant 0''a who has a basic salary of &SD933,
overti)e!pre)iu) pay of &SD9$1.$% and %1th )onth!vacation pay of &SD%?3 totallin'
&SD,,3,1.$%. (he latter a)ount represents the statutorily )andated basic salary and
benefits of co)plainant 0''a. 7e received his actual pay on board in the su) of
&SD%,?33. (hus, &SD,,3,1.$% )inus &SD%,?33 e2uals &SD?,1.$%. (he latter a)ount
is what now co)plainant 0''a clai)s as underpay)ent and for a period of two )onths,
his total clai) is &SD%,3#$.#,.
@e note that in arrivin' at the alle'ed underpay)ent, co)plainant 0''a totally
disre'arded his day-off pay or pay while on leave under olu)n < in the a)ount of
&SD$?3. (hus, with his pay on board of &SD%,?33 plus his day-off pay of &SD$?3,
co)plainant 0''a received an avera'e )onthly salary of &SD,,,?3 which is a bit hi'her
than his statutorily )andated salary and benefit of &SD,,3,$.$% in the a)ount of
&SD,,,.,9. (he aforesaid for)ula applies to all the co)plainants. (hus, we see no
case of underpay)ent at bar.
(he clai) for underpay)ents of the co)plainants is pre)ised on their wron'
interpretation of the salary )e)oranda issued to the) individually wherein they insist
that vacation leave pay and days-off pay are additional frin'e benefits which should not
affect pay)ent of ite)s % to ? therein and to which we disa'ree.
(he vacation leave pay is different fro) /days-off pay./ o)plainants+ vacation pay is
accounted under olu)n deno)inated as %1th )onth pay but also for a vacation pay
of one )onth which is clearly indicated by the prescribed for)ula, i.e. /"asic Salary (0)
. .%5$. (he product over a period of twelve )onths results in two )onths basic pay as
(3.%5$ . %, E ,.33#). (he two )onths therefore corresponds to the %1th )onth pay and
the one )onth vacation leave pay. It is therefore erroneous for co)plainants to contend
that the vacation leave pay is a distinct benefit when in truth and in fact the sa)e has
been duly considered in the co)putation of their statutorily )andated co)pensation
under the colu)n of %1th )onth pay.
@hile the days-off pay constitutes co)plainants+ salary in the sa)e way as their
lu)psu) pay while on board the oil ri', therefore co)plainants should not co)pare the
a)ounts under colu)n D ((otal of 0 B " B ) with the a)ounts under olu)n E (0ctual
Pay while on "oard) only but with the a)ounts under colu)n /E/ and /</ (pay while on
board or days-off pay) which su) is listed under colu)n F (0vera'e Aonthly Salary
over a %,-Aonth Period). (he days-off pay is paid to the co)plainants even thou'h they
are not workin' and should therefore be considered in the co)putation of their total
co)pensation.
... ... ...
@ith respect to the second issue, we rule in the affir)ative. (he evidence on record
shows that co)plainants were provided with insurance covera'e superior to that
)andated by law. o)plainants are insured under two "lue ross Insurance Policies,
i.e. the Disability Inco)e Insurance (Policy :o. ID33%,>, FP-3%) and a @orldwide
E.ecutive 7ealth Plan (Policy :o. @3311,1 FP$-3%). &nder the disability inco)e
insurance, should the e)ployee 'et sick or in*ured, he is entitled to a )onthly inde)nity
of &SD,33. @hile under the @orldwide E.ecutive 7ealth Plan, the benefits to which the
insured workers are entitled are enu)erated in the (able of Insured "enefits. (he
Personal 0ccident Plan "enefits to which the co)plainants are entitled are as follows4
"E:E<I(S PE; PE;SO:
%. Death &SD%?,333
,. Per)anent total &SD%?,333
loss of si'ht of both eyes
1. Per)anent total loss of si'ht of &SD$,?33
one eye
#. 6oss of two li)bs &SD%?,333
?. 6oss of one li)b &SD$,?33
5. Per)anent total &SD%?,333
loss of si'ht of
one eye and loss
2
of one li)b
$. Per)anent total &SD%?,333
disable)ent
(other than loss of
si'ht of one eye or
both eyes or loss
of li)b)
Gerily, the benefits provided therein are far 'reater than )andated by law which is
P?3,333.33 for death due to accident.
In an appeal dated <ebruary ,5, %991, the co)plainants 2uestioned the aforesaid
decision. (hey, however, li)ited their appeal to clai)s for additional vacation pay and
insurance covera'e.
... ... ...
(I)t then follows that to the e.tent that the POE0 has concluded that there is /no case of
underpay)ent at bar,/ the sa)e has to be bindin'ly observed by us vis-a-vis
co)plainants+ sub)itted issue in their draft decision of /(,) whether or not there had
been underpay)ents as clai)ed by appellants under the provisions of PD ##,./
Aoreover, on 8une %1, %99?, the Second Division of this o))ission dis)issed
co)plainants+ appeal /for lack of )erit./ 0t the end of its e.tended resolution, the
o))ission concluded that the co)plainants failed /to show in a satisfactory )anner
the facts upon which/ they based their clai)s.
... ... ...
(his thus disposes the third and fourth issues advanced by co)plainants for our
resolution in their earlier )entioned draft resolution.
... ... ...
Even the first issue sub)itted to us for our resolution (which, in their draft resolution,
has been defined by co)plainants as /whether or not the lu)psu) )ode of pay)ent of
appellants+ )onthly salary is le'al/) was, for all le'al intents and purposes, already
resolved in that other case for inherently sub)itted for the resolution of the POE0 and
the Second Division of this o))ission in that other case was the 2uestion of whether
or not the /fi.ed salary/ )ode of pay)ent stipulated in the parties+ contract was valid.
(he POE0 0d)inistrator could not have concluded that /we see no case of
underpay)ent at bar/ if, in his opinion, the parties+ /fi.ed salary/ )ode of co)pensation
was ille'al, aware that such declaration of nullity was precisely the end-'oal of
co)plainants+ co)plaint.
Si)ilarly, the :6; Second Division would not have dis)issed co)plainants+ appeal if
it were of the view, as ar'ued by co)plainants, that respondent SOS+ lu)psu) )ode of
pay)ent was ille'al.
Indeed, our resolvin' said first issue anew would a)ount to a duplicitous e.ercise of
appellate *urisdiction.
3
On 8anuary %$, %995, petitioners filed a )otion for reconsideration. In an Order
-
dated
8anuary 13, %995, the respondent :6; denied petitioners+ )otion.
7ence, this petition for certiorari
.
raisin' the followin' issues4
I
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6
@e affir).
0nent the first issue, petitioners contend that the lu)psu) )ode of pay)ent of salaries
is ille'al, citin' 0rticles ? and 5 of the :ew ivil ode, 0rticles >5, >$, 93, 91 and 9# of
PD ##, and "ook G, ;ule II, Section ,(a) of the %99% POE0 ;ules.
@e do not a'ree. 0s correctly observed by the respondents, none of the afore)etioned
laws and rules prohibit the sub*ect pay)ent sche)e. (he cited articles of the :ew ivil
ode )erely provide that a'ree)ents in violation of law or public policy cannot be
entered into and have le'al effect. (he cited provisions of PD ##, si)ply declare that
ni'ht shift differential and additional re)uneration for overti)e, rest day, Sunday and
holiday work shall be co)puted on the basis of the e)ployee+s re'ular wa'e. In like
fashion, the %99% POE0 ;ules )erely re2uire e)ployers to 'uarantee pay)ent of
wa'es and overti)e pay. (hus, petitioners+ stance is bereft of any le'al support.
0nent the second and third issues, petitioners alle'e that their fi.ed )onthly salaries
represented only their basic salaries and did not include overti)e pay, holiday pay, %1th
)onth pay and ni'ht shift differential. In POE0 ase :o. 9%-%,-%1#> and POE0 ase
:o. 9,-3%-33%%, the 0d)inistrator found and ruled that petitioners were not underpaid
and that their fi.ed )onthly co)pensation already co)prised their basic salary, ni'ht
shift differential, overti)e pay, holiday pay and %1th )onth pay. Petitioners did not
appeal this rulin'. In this li'ht, respondent :6; correctly held4
@ith Section %, ;ule G, "ook GII of the POE0 ;ules dated Aay 1%, %99% (issued
pursuant to E.O. ,#$) providin' that /(D)ecisions and!or awards of the 0d)inistration
shall be final and e.ecutory unless appealed to the :ational 6abor ;elations
o))ission (:6;) by any or both parties,/ it then follows that to the e.tent that the
POE0 has concluded that there is /no case of underpay)ent at bar,/ the sa)e has to
be bindin'ly observed by us vis-a-vis co)plainants+ sub)itted issue in their draft
4
decision of /(,) whether or not there had been underpay)ents as clai)ed by appellants
under the provisions of P.D. ##,.
/
(he fourth issue deserves scant consideration. (he )atter of orderin' the :6; to
co)pel the POE0 to set up standard e)ploy)ent contract and 'uidin' rates for oilri'
workers is beyond the *urisdiction of this ourt.
@ith respect to the fifth issue, we find petitioners+ char'e that private respondents failed
to provide the) with life and personal accident insurance 'roundless. (he POE0 and
the :6; have found that private respondents insured petitioners with "lue ross
(0sia-Pacific) Insurance, 6td. under two policies which even provide for covera'e
superior to that )andated by the rules. "efore this ourt, however, petitioners assail
these insurance policies as they were alle'edly issued by a forei'n insurance co)pany
not licensed to do business in the Philippines. (he contention is raised for the first ti)e
and cannot be considered.
8
In re'ard to the si.th issue, the evidence shows that petitioners are land-based workers
and hence, not entitled to benefits appertainin' to sea-based workers. Petitioners have
nothin' to do with )annin' vessels or with sea navi'ation. (heir use of a sea)an+s
book does not detract fro) the fact that they are truly land-based e)ployees.
Petitioners+ plea that we suspend SOS+ license for )akin' the) use two (,) passports is
off-line. 0'ain, they never prayed for this relief before the POE0 and the :6;. (his
ourt is the i)proper venue for the belated plea.
<inally, the clai)s for attorney+s fees and da)a'es of the petitioners have no basis as
private respondents did not act in bad faith or with )alice.
I: GIE@ @7E;EO<, the decision of the :6; dated :ove)ber ,$, %99? is
0<<I;AED. :o costs.
SO O;DE;ED.
5