Several seamen were employed by a foreign company for employment overseas, through the help of a local maritime agency. The seamen were deployed on 7 May 1985 and discharged on 12 July 1985.
Upon their return to the Philippines, the seamen filed complaints against the local maritime agency for “non-payment of overtime pay, vacation pay, and terminal pay.” Although the Philippine Overseas Employment Administration (POEA) found no merit for approving the claim for terminal pay, it granted the seaman’s complaint for leave pay and overtime pay equivalent to 30% of their basic pay. On appeal, however, the National Labor Relations Commission (NLRC) set aside POEA’s decision on the ground that the case lacked merit. The Supreme Court (SC) sustained the decision of the NLRC.
Upon ruling against the seamen’s claim, the SC first explained that the seamen were not entitled to terminal pay because in reality, the seamen were “actually paid more than the amounts fixed in their employment contracts.” Second, it clarified that overtime pay could not be granted to the seamen for their failure to produce any proof that they actually performed overtime work.
Petitioners have conveniently adopted the view that the “guaranteed or fixed overtime pay of 30% of the basic salary per month” embodied in their employment contract should be awarded to them as part of a “package benefit.” They have theorized that even without sufficient evidence of actual rendition of overtime work, they would automatically be entitled to overtime pay. Their theory is erroneous . . . The rendition of overtime work and the submission of sufficient proof that said work was actually performed are conditions to be satisfied before a seaman could be entitled to overtime pay which should be computed on the basis of 30% of the basic monthly salary. In short, the contract provision guarantees the right to overtime pay but the entitlement to such benefit must first be established.
Citing National Shipyards and Steel Corporation v. CIR, the SC also reiterated its ruling that a worker aboard a vessel is only entitled to overtime pay for work performed beyond the regular eight hour work schedule, since by the very nature of his job, a seaman is on board the vessel for more than eight hours.
We can not agree with the court below that respondent Malondras should be paid overtime compensation for every hour in excess of the regular working hours that he was on board his vessel or barge each day, irrespective of whether or not he actually put in work during those hours. Seamen are required to stay on board their vessels by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their employers to pay them overtime even when they are not actually working… The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they were on board and can not leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours (Cagampan v. NLRC, G.R. No. 85122-24, 22 March 1991, J. Paras).