G.R. No. L-66006 February 28, 1985
BAGONG FILIPINAS OVERSEAS CORPORATION and GOLDEN STAR SHIPPING, LTD., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, DIRECTOR PATRICIA SANTO TOMAS and PROSERFINA PANCHO, respondents.

FACTS

Guillermo Pancho was hired as an oiler by petitioner Golden Star Shipping, Ltd., a Hongkong-based firm, through its local agent, petitioner Bagong Filipinas Overseas Corporation. The parties executed a shipboard employment contract in the Philippines on June 1, 1978, which was approved by the National Seamen Board. The contract stipulated a 12-month term with a monthly wage of US$195. In October 1978, while the vessel was in Sweden, Pancho suffered a cerebral stroke. He was hospitalized and later repatriated to the Philippines, where he eventually died on December 13, 1979.
Respondent Proserfina Pancho, the seaman’s widow, filed a claim for death benefits. The National Seamen Board awarded her P20,000 as disability compensation pursuant to the employment contract, plus attorney’s fees. Dissatisfied, Proserfina appealed to the National Labor Relations Commission (NLRC). The NLRC set aside the Board’s award and instead granted compensation based on Hongkong law, computed at US$621 multiplied by 36 months, plus attorney’s fees. The petitioners challenged the NLRC decision via certiorari.

ISSUE

Whether the amount of death compensation due to the seaman’s beneficiary should be governed by the stipulations in the shipboard employment contract or by Hongkong law.

RULING

The Supreme Court ruled that the shipboard employment contract is controlling. The contract explicitly provided that the seaman’s beneficiaries were entitled to P20,000 “over and above the benefits” for which the Philippine Government might be liable under Philippine law. There was no stipulation in the contract making Hongkong law on workmen’s compensation applicable. The Court distinguished the cited precedent of Norse Management Co. vs. National Seamen Board, as that case involved an employment contract with a specific clause stating that compensation would be based on Philippine law or the law of the vessel’s registry, whichever was greater. No such clause existed in Pancho’s contract. The legal logic is rooted in the principle of contractual autonomy and the specific approval of the contract by the Philippine regulatory agency. The Solicitor General’s opinion, which favored applying the contract, was noted. Consequently, the NLRC decision was reversed, and the National Seamen Board’s original award was reinstated.