Was a company manager correctly held solidarily liable for a seafarer’s disability despite not being a corporate officer, director, or partner — simply because he was the signatory in the employment documents? Loadstar International Shipping, Inc. and Edgardo Calderon vs. Richard T. Cawaling G.R. No. 242725, June 16, 2021

TOPIC: RIGHTS OF OFWS - PART 3 OF 10 

Was a company manager correctly held solidarily liable for a seafarer’s disability despite not being a corporate officer, director, or partner — simply because he was the signatory in the employment documents?

Loadstar International Shipping, Inc. and Edgardo Calderon vs. Richard T. Cawaling
G.R. No. 242725, June 16, 2021
THIRD DIVISION

FACTS OF THE CASE 

Loadstar International Shipping, Inc. (LISI), through its Personnel Department Head Edgardo Calderon, hired Richard T. Cawaling as a Cook on board the vessel MV MANGIUM for a 12-month contract at USD 500 per month. After passing his pre-employment medical examination (PEME), Cawaling was deployed on July 27, 2014.

By October 2014, Cawaling experienced muscle pain and stiffness. He reported this, but medical attention was delayed until the vessel docked in Manila. He was diagnosed by the company-designated physician, Dr. Paul Teves, with Acute Tenosynovitis (Trigger Finger), recommending surgery and therapy. Despite subsequent worsening of his condition and medical recommendations for surgery, the procedure was not performed. Cawaling claimed he was never notified about his surgery schedule and eventually consulted his own doctor, who declared him unfit for sea service with a Grade 1 disability.

LISI later issued him a Certificate of Separation based on a letter supposedly signed by Cawaling admitting that he had a pre-existing condition (Dystonia) which he failed to disclose. Cawaling, denying the authenticity of the signature, filed a complaint for disability benefits, moral and exemplary damages, and attorney’s fees.

In the Labor Arbiter’s ruling, LISI, LSCI (Loadstar Shipping Co., Inc.), and Calderon were held solidarily liable to pay USD 60,000 as permanent and total disability compensation, USD 6,000 as attorney’s fees, and ₱100,000 each for moral and exemplary damages.

On appeal, the NLRC ruled that LSCI was not the employer and absolved it of liability. However, it upheld LISI and Calderon’s solidary liability. The Court of Appeals affirmed, ruling that LISI voluntarily submitted to the Labor Arbiter’s jurisdiction by filing a position paper and seeking affirmative relief. It further held that Calderon was solidarily liable under Section 10 of Republic Act No. 8042, as amended, even if not a corporate officer per se.

ISSUE IN THE SUPREME COURT

Was Edgardo Calderon, as merely the Head of Personnel, properly held solidarily liable for disability benefits under the Migrant Workers Act despite not being a corporate officer, director, or partner?

SUPREME COURT RULING

Yes. The Supreme Court affirmed the rulings of the NLRC and the Court of Appeals. While Calderon claimed he was not a corporate officer, he signed documents on behalf of LISI and acted as its authorized representative. The Court found that Section 10 of R.A. 8042, as amended, imposes solidary liability on corporate officers of recruitment agencies — and Calderon's role placed him within the purview of such liability. His execution of employment documents and his designation via special power of attorney by LISI's president confirmed his key operational role.

The Court also held that LISI voluntarily submitted to jurisdiction by filing a position paper and seeking relief, thus curing any lack of summons. LISI was found to be an overseas recruitment agency as defined under labor regulations, despite its claim of being a Philippine overseas shipping enterprise.

As for Cawaling’s disability, the Court sustained the award, noting the nature of his work contributed to or aggravated his condition. Doubts in the authenticity of the alleged admission letter were resolved in favor of labor.

DISPOSITIVE PORTION

WHEREFORE, premises considered, the instant Petition for Review on Certiorari is DENIED. The Decision dated January 25, 2018 and the Resolution dated September 17, 2018, both of the Court of Appeals, in CA­-G.R. SP No. 148464 are hereby AFFIRMED.

Loadstar International Shipping, Inc. and Edgardo Calderon are ORDERED to pay, jointly and severally, Richard T. Cawaling the following:

1. Total disability benefit – USD 60,000.00
2. Attorney's fees – USD 6,000.00
3. Moral Damages – ₱100,000.00
4. Exemplary Damages – ₱100,000.00

SO ORDERED.

 

Should managerial employees like personnel heads be made financially liable for corporate obligations, even if they are not formally part of the board or corporate officers?

 

IMPORTANT DOCTRINES QUOTED IN THE CASE

1. "The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several."
   – Section 10, R.A. No. 8042, as amended. This ensures immediate payment of benefits to OFWs, regardless of corporate structure.
2. "Voluntary appearance in the action shall be equivalent to service of summons."
   – Rule 14, Section 23, 2019 Rules of Civil Procedure. Filing a position paper seeking relief constitutes voluntary submission to jurisdiction.
3. "In disability compensation, it is not the injury per se which is compensated, but the incapacity to work."
   – This principle supports the finding of permanent and total disability even without absolute helplessness.

 

Classification: Labor Law

 

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READ FULL TEXT OF THE CASE HERE. 

🎓 This short legal digest is for law students, reviewees, and baristas who are reviewing core doctrines in Philippine Labor Law. This video will help recall and understand key legal doctrines from a landmark Supreme Court ruling involving labor rights, jurisdiction, and corporate accountability under the Migrant Workers and Overseas Filipinos Act.

 

📌 CASE TITLE:
Loadstar International Shipping, Inc. and Edgardo Calderon vs. Richard T. Cawaling
G.R. No. 242725 | Promulgated: June 16, 2021

NATURE OF THE CASE: Labor Law – Overseas Filipino Workers (OFW) Disability Claim; Jurisdiction; Corporate Officer Liability under R.A. No. 8042

PARTIES:

• Petitioners: Loadstar International Shipping, Inc. and Edgardo Calderon (Personnel Head)
• Respondent: Richard T. Cawaling (Seafarer/Cook on board MV Mangium)

 

⚖️ BRIEF CASE SUMMARY:
Seafarer Richard Cawaling developed a debilitating illness during deployment. After being medically neglected and subsequently declared unfit for sea duty by an independent doctor, he filed a complaint for total and permanent disability benefits. LISI argued lack of jurisdiction and disclaimed Calderon’s liability, insisting that he was not a corporate officer.

The main issue was:

Can a personnel manager be held solidarily liable under R.A. No. 8042 for disability claims despite not being a formal corporate officer?

The Supreme Court ruled YES, holding both LISI and Calderon solidarily liable, affirming the lower courts. It found that Calderon exercised authority in company operations, and that LISI was an accredited overseas recruitment agency subject to R.A. No. 8042.

 

💬 Should managerial employees without board membership be made personally liable for corporate acts under labor laws meant to protect OFWs?

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📚 10 IMPORTANT DOCTRINES FROM THE CASE

1. Voluntary Appearance Equals Jurisdiction

Filing a position paper and seeking affirmative relief constitutes voluntary appearance, curing lack of summons.
(G.R. No. 242725, June 16, 2021)

2. POEA Accreditation Defines Agency Status

An entity is a recruitment/placement agency under R.A. 8042 if it deploys workers abroad, regardless of its internal classification.
(Citing POEA Certification and factual conduct of LISI)

3. Solidary Liability of Corporate Officers

Corporate officers, directors, and partners of recruitment agencies are solidarily liable for money claims of OFWs.
(Section 10, R.A. No. 8042 as amended by R.A. No. 10022)

4. Incapacity Beyond 120 Days is Permanent

If a worker cannot work beyond 120 days, the disability is deemed permanent and total.
(Citing jurisprudence: Vergara doctrine and G.R. No. 242725)

5. Liberal Construction in Favor of Labor

Doubts in evidence must be resolved in favor of labor, ensuring protection of workers under constitutional and statutory mandates.
(G.R. No. 242725; 1987 Constitution; Art. 4, Labor Code)

6. Personal Liability May Arise by Law, Not Just Title

Liability attaches not only to officers by title, but also by function and conduct, as held in Oscares v. Magsaysay Maritime Corp.
(Applied in G.R. No. 242725)

7. Pre-existing Condition Defense Requires Proof

An alleged failure to disclose a pre-existing illness must be proven; unverified or questionable documents cannot defeat a claim.
(G.R. No. 242725; contested signature in “Letter-Request”)

8. Filing Without Summons Still Grants Right to be Heard

Even if not initially summoned, a party is not denied due process if it is later able to submit pleadings and defend itself.
(G.R. No. 242725)

9. Corporate Veil May Be Pierced When Needed

When corporations are operated as a single entity or used to defeat labor rights, the court may disregard the fiction of separate identity.
(G.R. No. 242725 citing doctrinal principles)

10. RA 8042 as a Police Power Legislation

The Migrant Workers Act is a police power measure, intended to protect OFWs by ensuring someone is always liable for their claims.
(G.R. No. 242725; citing Gopio v. Bautista)

 

📌 DISCLAIMER:
This video is for educational purposes only and is intended to assist law students, bar takers, and reviewers. The content is based on Supreme Court rulings and official references, but we do not guarantee its infallibility or finality. Made using premium AI technology for academic support.