Gemudiano Vs Naess

22. LUIS G. GEMUDIANO, JR., PETITIONER, VS. NAESS SHIPPING PHILIPPINES, INC.
AND/OR ROYAL
DRAGON OCEAN TRANSPORT, INC. AND/OR PEDRO MIGUEL F. OCA, RESPONDENTS.
Nature of Action: Breach of Contract
Facts: Petitioner applied with Naess Shipping for possible employment as seaman upon learning of a job
opening in its domestic vessel operations. He had an interview with Naess Shipping and completed the
training on International Safety Management (ISM) Code at the Far East Maritime Foundation, Inc. As
advised by Naess Shipping's crewing manager Fetero, petitioner underwent the mandatory pre-
employment medical examination (PEME) where he was declared fit for sea service. The expenses for
the PEME were shouldered by petitioner.
Petitioner signed an Embarkation Order duly approved by Fetero stipulating the terms and conditions of
his employment, and directing him to request for all the necessary documents and company properties
from the person he was going to replace in his vessel of assignment.
On February 18, 2013, Naess Shipping, for and in behalf of its principal Royal Dragon, executed a
"Contract of Employment for Marine Crew on Board Domestic Vessels" (contract of employment)
engaging the services of petitioner as Second Officer aboard the vessel "M/V Melling 11," an inter-island
bulk and cargo carrier, for a period of six months with a gross monthly salary of P30,000.00. It was
stipulated that the contract shall take effect on March 12, 2013. Subsequently, petitioner and
respondents executed an "Addendum to Contract of Employment for Marine Crew Onboard Domestic
Vessels" (Addendum) stating that the employment relationship between them shall commence once the
Master of the Vessel issues a boarding confirmation to the petitioner. Petitioner also bound himself to
abide by the Code of Discipline as provided for in the Philippine Merchant Marine Rules and Regulations.
Petitioner received a call from Fetero informing him that Royal Dragon cancelled his embarkation. Thus,
he filed a complaint for breach of contract against respondents before the Arbitration Branch of the
NLRC alleging that respondents' unilateral and unreasonable failure to deploy him despite the perfected
contract of employment constitutes breach and gives rise to a liability to pay actual damages. As a
defense, respondents argued that petitioner's employment did not commence because his deployment
was withheld by reason of misrepresentation stressing that petitioner did not disclose the fact that he is
suffering from diabetes mellitus and asthma which render him unfit for sea service.
Issue: Whether or not there was a perfected contract of employment
Held: Yes. There is no doubt that there was already a perfected contract of employment between
petitioner and respondents. The contract had passed the negotiation stage or "the time the prospective
contracting parties manifest their interest in the contract." It had reached the perfection stage or the so-
called "birth of the contract" as it was clearly shown that the essential elements of a contract, i.e.,
consent, object, and cause, were all present at the time of its constitution. Petitioner and Fetero,
respondents' Crewing Manager, freely entered into the contract of employment, affixed their signatures
thereto and assented to the terms and conditions of the contract (consent), under which petitioner
binds himself to render service (object) to respondents on board the domestic vessel "M/V Meiling 11"
for the gross monthly salary of P30,000.00 (cause). An examination of the terms and conditions agreed
upon by the parties will show that their relationship as employer and employee is encapsulated in the
perfected contract of employment. Thus, by virtue of said contract, respondents and petitioner assumed
obligations which pertain to those of an employer and an employee. Under Section D of the Addendum,
"the employment relationship between the Employer on one hand and the Seaman on the other shall
commence once the Master has issued boarding confirmation to the seaman." Relying on this provision,
the respondents insist that there is no employer-employee relationship between them and petitioner
and that the labor arbiter had no jurisdiction over the petitioner's complaint. True, the parties to a
contract are free to adopt such stipulations, clauses, terms and conditions as they may deem convenient
provided such contractual stipulations should not be contrary to law, morals, good customs, public order
or public policy. But such is not the case here.

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22. LUIS G. GEMUDIANO, JR., PETITIONER, VS. NAESS SHIPPING PHILIPPINES, INC.

Nature of Action: Breach of Contract

Issue: Whether or not there was a perfected contract of employment

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