HomeCommentaryProposed escrow provision in Magna Carta for seafarers ‘prejudicial’

Proposed escrow provision in Magna Carta for seafarers ‘prejudicial’

The inclusion of an escrow provision in the pending Magna Carta for Filipino seafarers will adversely affect legal battles for labor claims

The inclusion of an escrow provision in the pending Magna Carta for Filipino seafarers will adversely affect legal battles for labor claims.

The employers and manning agencies again proposed the provision, which in essence aims to amend the Labor Code. It will have significant impact on the “immediately final and executory” nature of decisions that will be issued by the National Labor Relations Commission (NLRC) and the National Conciliation and Mediation Board (NCMB).

They stressed that such move is necessary to ensure the restitution of monetary awards in case the appropriate appellate court annuls or partially or totally reverses the monetary judgment award. The proceeds shall remain in escrow until such time the finality of the decision issued by the appropriate appellate court is obtained.



They proposed the provision while misleadingly blaming the dwindling numbers of deployed seafarers on the increasing number of litigated cases involving monetary claims for disability and death benefits, as well as illegal dismissal, and unpaid or underpayment of salaries and wages.

Described as “ambulance chasers,” they have deliberately and sweepingly depicted seafarers’ lawyers as “unscrupulous” in an attempt to deflect the real issues why cases are being filed. They criticized most lawyers who go to lengths to push seafarers to file labor cases against their foreign employers.

They consistently used the phrase “balancing the interest of the seafarer and the company” on the premise that their proposals will ensure employment of Filipinos on board foreign ocean-going vessels.

Employers are throwing off-balance the already imbalanced legal battle on seafarers’ claims as every labor dispute is a David and Goliath situation.

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In essence, they utilize the phrase that seafarers seek “benefits even beyond the claims they are actually entitled” to sanitize the problematic legal battle for seafarer’s compensation.

Valid claims, employers argue, necessarily must follow what the POEA contract dictates: a contract that contains terms and conditions formulated more favorable to employers and is littered with ambiguous provisions, generalizations, technicalities that a seafarer does not understand.

Under the 1996 POEA contract, for disability or death to be compensable, it is sufficient that the seafarer suffered injury or illness during the term of his employment. The cause of illness or death is immaterial.

However, the restrictive clause “work-related” was added under Section 20 (B) of the 2000 POEA contract to limit the employer’s liabilities.

The 2000 POEA SEC defined “work-related injury” as “injury resulting in disability or death arising out of and in the course of employment” and “work-related illness” as “any sickness resulting to disability or death as a result of an occupational disease listed under Section 32-A of the contract.”

Two elements must concur for compensability: first, that the injury or illness must be work-related; and second, it must have existed during the term of the seafarer’s employment contract. The first requirement appeared in the 2000 and 2010 POEA contract but is absent in the 1996 version.

Through such restrictive provisions of the POEA contract, claims for disability and death compensation became a legal battleground, which is partly attributable to the fact that employers do not hesitate to harness their immense resources to limit their liability.

Data from the Commission on Human Rights (CHR) indicated that from 2015 to 2019, it took 7.2 years on average for an OFW money claims case to go through the entire judicial process from the date of filing of the complaint in the NLRC up to the time the Supreme Court decides on it.

The seafarer will wait for longer years before they receive the NLRC/NCMB award if the proposed escrow provision will be included.

Without any leverage in prosecuting monetary claims, chances are, the seafarer bows to the demand of his employer to either drop his claim or accept a small settlement.

In cases of seafarers with medical conditions, some incur huge debts to sustain their medication while others die before the decision by the Supreme Court is released.

Unless their definition of “valid claims” is changed, through the deletion of the “work-related” clause, and through the reversion to the old 1996 POEA Contract, the denials of seafarers’ claims will continue and will result in increasing legal cases. The compensation scheme should be less restrictive and more realistic.

If the provision that aims to delay in execution will be included, the proposed Magna Carta becomes a tool of oppression and inequity to the prejudice of the seafarer.

In the end, the “balance of scale” will tilt more to capital as this will protect the business interest of the manning agencies and their principal rather than the seafarers themselves.

Atty. Dennis R. Gorecho heads the seafarers’ division of the Sapalo Velez Bundang Bulilan law offices. For comments, email [email protected], or call 09175025808 or 09088665786

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