The commencement of an employer-employee relationship must be treated separately from the perfection of an employment contract. Santiago v. CF Sharp Crew Management, Inc.,[14] which was promulgated on 10 July 2007, is an instructive precedent on this point. In said case, petitioner was hired by respondent on board “MSV Seaspread” for US$515.00 per month for nine (9) months, plus overtime pay. Respondent failed to deploy petitioner from the port of Manila to Canada. We made a distinction between the perfection of the employment contract and the commencement of the employer-employee relationship, thus:
The perfection of the contract, which in this case coincided with the date of execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as well as the rest of the terms and conditions therein. The commencement of the employer-employee relationship, as earlier discussed, would have taken place had petitioner been actually deployed from the point of hire. Thus, even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party.[15]
Despite the fact that the employer-employee relationship has not commenced due to the failure to deploy respondents in this case, respondents are entitled to rights arising from the perfected Contract of Employment, such as the right to demand performance by C.F. Sharp of its obligation under the contract.
The right to demand performance was a categorical pronouncement inSantiago which ruled that failure to deploy constitutes breach of contract, thereby entitling the seafarer to damages:
Respondent’s act of preventing petitioner from departing the port of Manila and boarding “MSV Seaspread” constitutes a breach of contract, giving rise to petitioner’s cause of action. Respondent unilaterally and unreasonably reneged on its obligation to deploy petitioner and must therefore answer for the actual damages he suffered.
We take exception to the Court of Appeals’ conclusion that damages are not recoverable by a worker who was not deployed by his agency. The fact that the POEA Rules are silent as to the payment of damages to the affected seafarer does not mean that the seafarer is precluded from claiming the same. The sanctions provided for non-deployment do not end with the suspension or cancellation of license or fine and the return of all documents at no cost to the worker. They do not forfend a seafarer from instituting an action for damages against the employer or agency which has failed to deploy him.[16]
The appellate court could not be faulted for its failure to adhere toSantiago considering that the Court of Appeals Decision was promulgated way back in 2003 while Santiago was decided in 2007. We now reiterateSantiago and, accordingly, decide the case at hand.
We respect the lower courts’ findings that C.F. Sharp unjustifiably refused to return the documents submitted by respondent. The finding was that C.F. Sharp would only release the documents if respondent would sign a quitclaim. On this point, the trial court was affirmed by the Court of Appeals. As a consequence, the award by the trial court of moral damages must likewise be affirmed.
Moral damages may be recovered under Article 2219 of the Civil Code in relation to Article 21. The pertinent provisions read:
Art. 2219. Moral damages may be recovered in the following and analogous cases:
x x x x
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
x x x x
Art. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.
We agree with the appellate court that C.F. Sharp committed an actionable wrong when it unreasonably withheld documents, thus preventing respondents from seeking lucrative employment elsewhere. That C.F. Sharp arbitrarily imposed a condition that the documents would only be released upon signing of a quitclaim is tantamount to bad faith because it effectively deprived respondents of resort to legal remedies.
Furthermore, we affirm the award of exemplary damages and attorney’s fees. Exemplary damages may be awarded when a wrongful act is accompanied by bad faith or when the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner which would justify an award of exemplary damages under Article 2232 of the Civil Code. Since the award of exemplary damages is proper in this case, attorney’s fees and cost of the suit may also be recovered as provided under Article 2208 of the Civil Code.[17]
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