Seagull Maritime Corp V Balatongan

SEAGULL MARITIME CORP.
AND PHILIMARE SHIPPING & EQUIPMENT SUPPLY, petitioners

vs.
NERRY D. BALATONGAN, NATIONAL LABOR RELATIONS COMMISSION AND PHILIPPINE
OVERSEAS EMPLOYMENT ADMINISTRATION, respondents.
Facts:
 On November 2, 1982, a "crew Agreement" was entered into by private respondent Nerry D.
Balatongan and Philimare Shipping and Equipment Supply (hereinafter called Philimare)
whereby the latter employed the former as able seaman on board its vessel "Santa Cruz"
(renamed "Turtle Bay") with a monthly salary of US $ 300.00. Said agreement was processed
and approved by the National Seaman's Board (NSB) on November 3, 1982.
 While on board said vessel and parties entered into a supplementary contract of employment
on December 6, 1982 which provides among others: (1) The employer shall be obliged to insure
the employee during his engagement against death or permanent invalidity caused by accident
on board up to US $ 40,000 - for death caused by accident and US $ 50,000 - for permanent total
disability caused by accident.
 On October 6, 1983 Balatongan met an accident in the Suez Canal, Egypt as a result of which he
was hospitalized at the Suez Canal Authority Hospital. Later, he was repatriated to the
Philippines and was hospitalized at the Makati Medical Center from October 23, 1983 to March
27, 1984. On August 19, 1985 the medical certificate was issued describing his disability as
"permanent in nature.
 Balatongan demanded payment for his claim for total disability insurance in the amount of US $
50,000.00 as provided for in the contract of employment but his claim was denied for having
been submitted to the insurers beyond the designated period for doing so.
 Thus, Balatongan filed on June 21, 1985 a complaint against Philimare and Seagull Maritime
Corporation in the Philippine Overseas Employment Administration (POEA) for non-payment of
his claim for permanent total disability with damages and attorney's fees.
 Petitioners argue that the supplementary violates Article 34(i) of the Labor Code on the
prohibited practice of substituting or altering employment contracts.
 After the parties submitted their respective position papers with the corresponding
documentary evidence, the officer-in-charge of the Workers Assistance and Adjudication Office
of the POEA rendered for respondents to pay complainant the amount of US $ 50,000.00
representing permanent total disability insurance and attorney's fees at 10% of the award.
Payment should be made in this Office within ten (10) days from receipt hereof at the prevailing
rate of exchange. This Office cannot however rule on damages, having no jurisdiction on the
matter.
 Seagull and Philimare appealed said decision to the National Labor Relations Commission (NLRC)
on June 4, 1986. Hence, Seagull and Philimare filed this petition for certiorari with a prayer for
the issuance of a temporary restraining order.
Issue: WON the supplementary contract providing for insurance is valid
Ruling:
Yes. The supplementary contract is valid. It is indubitably clear that the purpose of having overseas
contracts of employment approved by the NSB (POEA) is whether or not such contracts conform to the
minimum terms and conditions prescribed by the NSB (POEA). The law did not at all prohibit any
alteration which provided for increases in wages or other benefits voluntarily granted by the employer.
Under Section 2, Rule 1, Book V of the Rules and Regulations of the POEA, the standard format of
employment contracts shall set the minimum standards of the terms and conditions of employment. All
employers and principals shall adopt the model contract in connection with the hiring of
workers without prejudice to their adopting other terms and conditions of employment over and above
the minimum standards of the Administration.'
The reason why the law requires that the POEA should approve and verify a contract under Article 34(i)
of the Labor Code is to insure that the employee shall not thereby be placed in a disadvantageous
position and that the same are within the minimum standards of the terms and conditions of such
employment contract set by the POEA.
Regarding with the contention of petitioner that his claim was denied for having been submitted to the
insurers beyond the designated period for doing so, it was only on August 19, 1985 that he was issued a
medical certificate describing his disability to be permanent in nature. It was not possible for private
respondent to file a claim for permanent disability with the insurance company within the one-year
period from the time of the injury, as his disability was ascertained to be permanent only
thereafter. Petitioners did not exert any effort to assist private respondent to recover payment of his
claim from the insurance company.

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SEAGULL MARITIME CORP.

AND PHILIMARE SHIPPING & EQUIPMENT SUPPLY, petitioners

Issue: WON the supplementary contract providing for insurance is valid

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