Overview of amendments to the Standard Employment Contract

Overview of amendments to the Standard Employment Contract

April 20 2011

Introduction
Amendments

Introduction

The Philippines Overseas Employment Administration (POEA) Standard Employment Contract (SEC) was last amended in 2000. A tripartite meeting to discuss proposed amendments was held in May 2008 with representatives from the manning agencies representing employers, the seafarers’ union and the government represented by the POEA. A technical working group was formed which consulted with various industry stakeholders and, after more than two years’ work, the POEA (through its governing board) issued a resolution dated October 4 2010 approving the amendments to the existing SEC. The 2010 amendments to the contract were published in the Manila Times on October 28 2010 and came into effect on November 12 2010. The amendments have prospective application and cover those seafarers whose employment contracts were processed from November 12 2010.(1)

Amendments

The amendments made to the existing contract are as follows.

‘Vessel’ substituted for ‘ship’
The 2006 Maritime Labor Convention uses the word ‘ship’ instead of ‘vessel’ and thus the word ‘ship’ is now used in the SEC.

‘Allottee’ and ‘beneficiary’ of the seafarer defined.

There has always been confusion as to the rightful recipient(s) of death compensation because the terms ‘allottee’ and ‘beneficiary’ remained undefined. Under the amendments, the ‘allottee’ is the person designated by the seafarer as the recipient of his or her salary allotment. The beneficiary is the person(s) to whom the death compensation and other benefits are paid and is based on the Philippine law on succession. Thus, not all allottees are automatically considered as beneficiaries.

Simply stated, the right of the allottee, as the terms suggest, is limited to the allotment of the seafarer which is equivalent to at least 80% of his or her monthly basic salary. Thus, if a seafarer’s mother is his allottee and he dies survived by his wife and one child, the death compensation is paid to the wife and child and not to the mother, in accordance with the Philippine law on succession.(2)

Concept of ‘pre-existing illness’ introduced
The conditions under which an illness can be considered as pre-existing have been made explicit in the new SEC. An illness is pre-existing if advice from a medical doctor on treatment was given for such illness or a seafarer was diagnosed with the illness and failed to disclose it in his Pre-Employment Medical Examination or such illness could not be diagnosed during the medical examination.(3)

Phrase ‘resulting to disability or death’ deleted
This phrase was removed from the definition of ‘work-related injury and illness’, as not all illnesses/injury results in disability or death. Seafarers can be declared fit to work from a work-related injury or illness.(4)

Mandatory coverage of seafarers under social security regimes
It is now the principal/employer’s duty to extend coverage to seafarers under the Social Security System, Health Insurance Corporation, Employees Compensation Commission and Home Development Mutual Fund. Although there was a memorandum of agreement in July 1988 that seafarers are to be covered under the Social Security System, there have been issues as to whether it was actually enforced. The new SEC has clarified this and now requires seafarers to be covered by the system. Likewise, the Home Mutual Development Fund Law of 2009 made membership and coverage of Filipino seafarers mandatory from January 1 2010.(5)

Paid leave increased
Paid leave has been increased by 80% from 2.5 days to 4.5 days.(6)

Voluntary arbitration clause and recognition of Maritime Industry Labor Arbitration Council
The new SEC now states that an aggrieved seafarer shall elevate an unsatisfactory resolution of his or her grievance to voluntary arbitration as agreed in the collective bargaining agreement. Voluntary arbitration in the Philippines is administered by the National Conciliation and Mediation Board of the Department of Labour and Employment.

If a seafarer has no collective bargaining agreement, he or she may elevate the complaint to the Maritime Industry Labor Arbitration Council (MILAC). The MILAC’s goal is to establish within the maritime industry a specialised body through disputes can be resolved through the arbitration council. The MILAC is still to issue its rules and regulations.(7)

Delays, detours or violations of travel itinerary during repatriation
The existing SEC is silent on whether manning agents and their principal are liable or not whenever a seafarer delays or makes a detour after signing off from the vessel as a result of the termination of his or her employment contract. The new SEC is explicit on this issue; it is now clear that if a seafarer delays, makes a detour or proceeds to a destination other than through the travel itinerary arranged by the employer, the manning agents and their principals shall not be liable for any illness or injury that is suffered or death that occurs during this period, from the point the seafarer delays or makes a detour or violates the arranged travel itinerary.(8)

120-day limitation period applies only to illness allowance, not medical treatment
This amendment is a reaction to various court and National Labour Relations Commission decisions in which the 120-day period is equated to the limitation on the obligation of the manning agents/principals to provide medical treatment to seafarers or as a gauge in determining whether a seafarer is suffering from total and permanent disability. The new SEC states that the 120-day period refers only to payment of illness allowance, but not to the provision of medical treatment because the duration of treatment would depend not on the number of days, but on when the seafarer will be declared fit to work orthe degree of disability has been established by the company-designated physician.(9)

Medical expenses
Seafarers shall be entitled to reimbursement of the cost of medicines as prescribed by the company-designated physician. If the seafarer is an outpatient, the company shall approve the appropriate mode of transportation and accommodation for his or her treatment, which should be reasonable and subject to liquidation through official receipts/proof of expenses.(10)

Failure to report regularly to company doctor during treatment
The purpose of this amendment is to ensure that seafarers report regularly to the company-designated physician to undergo the required treatment. Failure to do so will result in the forfeiture of the seafarer’s right to claim the benefits provided in the SEC.(11)

Compensation based on disability gradings
This amendment was prompted by the 120-day issue. The POEA now states that disability shall be based solely on the disability gradings provided under Section 32 of the SEC. It is hoped that the courts and the National Labour Relations Commission will abandon the 120-day concept of total and permanent disability.(12)

Payment of benefits under Amended Migrant Workers Act to claims underSEC
The death and disability benefits that a seafarer or his or her beneficiaries are entitled to receive under the Amended Migrant Workers Act shall be deducted from the total death or disability benefits that the seafarer/beneficiaries shall receive under the SEC. The seafarer/beneficiaries shall not receive an amount in excess of the total benefits provided under the SEC, unless there is a collective bargaining agreement providing for more benefits.(13)

Additional benefits
Under the amendments, the principal assumes the obligation of paying $100 per month to a seafarer for a maximum of six months whenever the seafarer is involved in litigation in a foreign country for the protection of his or her rights. It seems that even if the seafarer files a complaint against his or her employer, as long as he or she can claim it is for the protection of his or her rights, he or she should still be paid this benefit. Under ‘compassionate visit’, when a seafarer is hospitalised for at least seven consecutive days, the principal/owners must shoulder the cost transporting one family member or a requested individual to the major airport closest to the place where the seafarer is hospitalised. This benefit appears to cover only transportation costs and not visa and travel document requirements.(14)

Occupational diseases
During the deliberation of the amendments, doctors representing the owners and the seafarers’ unions were invited to act as resource persons for the purpose of revisiting the list of occupational diseases and determining whether these can be acquired by seafarers, taking into account the nature of their work on board the vessel. The list was revised and the conditions in order for a disease to be considered occupational have been amended.(15)

Death or disability caused by sexually transmitted disease
Incidents of death or disability arising from sexually transmitted diseases are gradually increasing. The new SEC now states that death or disability which is directly cause by sexually transmitted disease or which arises from complications thereof shall be neither compensable nor entitled to the benefits provided under the SEC.(16)

Table of offences amended
Due to the proliferation of pornography cases (ie, child pornography, possession of pornographic materials) involving seafarers in foreign jurisdictions, it was decided to include those acts in the table of offences which warrant the imposition of an appropriate penalty, in order to serve as a possible deterrent. The penalties corresponding to these acts have been revised depending on the gravity and frequency of the offences.(17)

For further information on this topic please contact Ruben T Del Rosario at Del Rosario & Del Rosario Law Offices by telephone (+63 2 810 1791), fax (+63 2 817 1740) or email (ruben.delrosario@delrosariolaw.com).

Endnotes

(1) The 2010 amended POEA SEC may be downloaded at www.delrosariolaw.com.

(2) Numbers 1 and 3, Definition of Terms.

(3) Number 11, Definition of Terms.

(4) Number 16, Definition of Terms.

(5) Section 1(A)(2).

(6) Section 12.

(7) Section 16(C).

(8) Section 19(F).

(9) Paragraph 1, Section 20(A)(3).

(10) Paragraph 2, Section 20(A)(3).

(11) Paragraph 3, Section 20(A)(3).

(12) Paragraph 2, Section 20(A)(6).

(13) Section 20(G).

(14) Section 20(H-I).

(15) Section 32(A).

(16) Section 32(A).

(17) Section 33.

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