Waivers and quitclaims in the Covid-19 pandemic

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By Dennis Gorecho

Waivers and quitclaims are ineffective in barring recovery of the full measure of a seafarer’s rights, including the underpayment of monetary benefits during their extended work on board the vessel.

This was the pronouncement by Atty. Bernard Olalia, administrator of Philippine Overseas Employment Administration (POEA), during the recent webinar organized by the Philippine Overseas Labor Office (POLO) in Washington, D.C., in
celebration of Migrant’s Day.

Olalia answered a query by a seafarer on the issue of waivers signed on board stating that they will not be paid during the extension the whole monetary package as indicated in their original POEA contract.

As a general rule, the period of employment shall be for a period mutually agreed upon by the parties but not to exceed 12 months.

The contract shall cease when the seafarer completes his period of contractual service aboard the ship, signs-off and arrives at either airport or seaport of the point of hire.

But airline and port restrictions have made it difficult for seafarers to get home.

If a seafarer keeps working longer than the agreed period, any subsequent period is to be considered an extension of the contract.

The POEA issued a memorandum stating that consummated contract of seafarers who are prevented by circumstances of the Covid-19 pandemic to disembark or to be repatriated can be extended for a maximum of 60 days.

Their employment is governed by the contracts they sign at the time of engagement, which have the force of law between the parties as long as the stipulations therein are not contrary to law, morals, public order, or public policy.

Deemed written in the seafarer’s contract is a set of standard provisions implemented by the POEA, called the Standard Terms and Conditions, which are considered to be the minimum requirements acceptable to the government for the employment of Filipino seafarers on board foreign ocean-going vessels.

The POEA contract is crafted for the sole purpose of ensuring that the seafarers are not put at a disadvantage in their desire of seeking greater economic benefit abroad.

Olalia underscored that the provisions of the POEA contract must be strictly enforced and not disregarded “without justifiable reason” even during the current pandemic.

There are reports that some employers are paying only basic wages, while some none at all, during the extension period.

The seafarer must not be forced to accept monetary benefits that are lower than those stated in the original contract.

The Supreme Court ruled that the obligations and liabilities of the local agency and its foreign principal do not end upon the expiration of the contracted period as they were duty bound to repatriate the seafarer to the point of hire to effectively terminate the contract of employment (Interorient Maritime v. NLRC, 330 Phil. 493).

“A subsequently executed side agreement which reduced one’s salary below the amount approved by the POEA is void because it is against existing laws, morals and public policy. It cannot supersede the contract approved by the POEA. This is a scheme all too frequently resorted to by unscrupulous employers against helpless OFWs who are compelled to agree to satisfy their basic economic needs. Such practice is known as contract substitution for which the recruitment agency may be held accountable.” (Chavez v. Bonto-Perez, 312 Phil. 88)

The Migrant  Workers and Overseas Filipinos Act (RA 10022) explicitly prohibits the substitution or alteration to the prejudice of the worker, of employment contracts from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the DOLE. Olalia cited the several rulings of the Supreme Court that a deed of release or quitclaim cannot bar an employee from demanding what is legally due him.

As a rule, quitclaims, waivers or releases intended to limit the employer’s liability for full compensation provided under the law and contract are looked upon with disfavor by the courts.

“The reason for this is that the employee does not really stand on an equal footing with his employer. In some cases he may be so penurious that he is willing to bargain even rights secured to him by law. He had no means of questioning his employer’s acts. He had no choice but to accept what was being offered to him.” (JGB and associates v. Arrojado, GR 109390 March 7, 1996)

The Supreme Court aptly used in the Arrojado case the phrase “necessitous men are not free men” with respect to actions of employers in capitalizing on the vulnerable position of seafarers in entering into such agreement and take advantage of the situation to their prejudice.

The International Transport Workers Federation (ITF) earlier said that the pandemic cannot be used by the employers as an excuse to renege on their obligation to the seafarers as keyworkers.

Atty. Dennis Gorecho heads the seafarers’ division of the Sapalo Velez Bundang Bulilan law offices. For comments, e-mail [email protected].

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