The Supreme Court ruled that Executive Order No. 1088 (E.O. 1088) did not repeal the provisions of Philippine Ports Authority Administrative Order No. 03-85 (PPA AO 03-85) concerning nighttime and overtime pay for harbor pilots. The court clarified that pilotage fees should be imposed for each pilotage maneuver, such as docking or undocking, and affirmed that the Philippine Ports Authority (PPA) retains the authority to regulate pilotage fees, provided they do not fall below the rates set by E.O. 1088.

Navigating the Tides: Does a Fixed Pilotage Rate Cover All Services?

This case, The United Harbor Pilots’ Association of the Philippines, Inc. vs. Association of International Shipping Lines, Inc., revolves around conflicting interpretations of Executive Order No. 1088 and its impact on the fees and regulations governing harbor pilots in the Philippines. At the heart of the dispute is whether E.O. 1088, which provides for uniform pilotage rates, eliminates additional charges for nighttime and overtime services, and whether the fixed rates apply to each individual maneuver or the entire package of services. This legal battle questions the scope of executive orders and the authority of the PPA to regulate pilotage services, ensuring fair compensation for harbor pilots while maintaining standardized rates for shipping lines.

The United Harbor Pilots’ Association of the Philippines, Inc. (UHPAP) sought to ensure its members received appropriate compensation, including nighttime and overtime pay. This led them to challenge the interpretation of Executive Order No. 1088. This order, issued by then-President Ferdinand Marcos, aimed to standardize pilotage fees across all Philippine ports based on a vessel’s tonnage. The Association of International Shipping Lines, Inc. (AISL), representing various shipping companies, argued that E.O. No. 1088 impliedly repealed PPA Administrative Order No. 03-85, which allowed for additional charges for pilotage services rendered during nighttime and overtime. The Philippine Ports Authority (PPA) also weighed in, adding another dimension to the debate.

On March 1, 1985, the PPA issued Administrative Order No. 03-85, which adopted provisions similar to those in Customs Administrative Order No. 15-65. These provisions allowed for additional charges for pilotage services conducted between 1800H to 1600H, or on Sundays and holidays. Section 16 of PPA AO No. 03-85 stated:

“Section 16. Payment of Pilotage Service Fees – Any vessel which employs a Harbor Pilot shall pay the pilotage fees prescribed in this Order and shall comply with the following conditions:

x x x         x x x         x x x

“c) When pilotage service is rendered at any port between 1800H to 1600H, Sundays or Holidays, an additional charge of one hundred (100%) percentum over the regular pilotage fees shall be paid by vessels engaged in foreign trade, and fifty (50%) percentum by coastwise vessels. This additional charge or premium fee for nighttime pilotage service shall likewise be paid when the pilotage service is commenced before and terminated after sunrise.

“Provided, however, that no premium fee shall be considered for service rendered after 1800H if it shall be proven that the service can be undertaken before such hours after the one (1) hour grace period, as provided in paragraph (d) of this section, has expired.”

The conflict arose when AISL, relying on PPA Resolution No. 1486, refused to pay UHPAP’s claims for nighttime and overtime pay. This led UHPAP to set a cut-off date for these payments, threatening to limit pilotage services to daylight hours only. AISL then filed a petition for declaratory relief with the Regional Trial Court (RTC) to clarify the rights and obligations under E.O. No. 1088 in relation to PPA AO No. 03-85.

The RTC ruled in favor of AISL, declaring that the PPA lacked the authority to impose, and UHPAP was not authorized to collect, any overtime or night shift differential for pilotage services. The court also stated that the pilotage fees in E.O. No. 1088 referred to the totality of pilotage services, not separate fees for each maneuver. UHPAP appealed this decision, leading to the Supreme Court case.

The Supreme Court addressed three key issues. First, it considered whether E.O. No. 1088 repealed the provisions of PPA AO No. 03-85 regarding additional pay for holiday work and premium pay for nighttime service. Second, it examined whether the rates fixed in E.O. No. 1088 applied to every pilotage movement. Third, it considered whether E.O. No. 1088 deprived the PPA of its right to promulgate new rules and rates for payment of fees, including additional pay for holidays and premium pay for nighttime services. The court relied on established principles of statutory construction in its analysis.

In addressing the first issue, the Supreme Court emphasized that repeals by implication are disfavored. It stated that for an implied repeal to occur, the laws must be convincingly and unambiguously repugnant and inconsistent. The Court found that E.O. No. 1088 and PPA AO No. 03-85 addressed different subjects: E.O. No. 1088 set uniform rates for pilotage services, while PPA AO No. 03-85 provided for additional charges under specific circumstances. The court harmonized the two orders, concluding that E.O. No. 1088 did not repeal the provisions for nighttime and overtime pay.

The second issue concerned whether the rates in E.O. No. 1088 applied to each pilotage maneuver or the entire package of pilotage services. The Supreme Court recognized that applying the rate to the totality of services would undermine the benefit intended for harbor pilots. Pilotage services involve various maneuvers, including docking, undocking, conduction, and shifting. Applying a single fee regardless of the number of services rendered would create an unjust situation. Thus, the Court interpreted the schedule of fees in E.O. No. 1088 to apply to each pilotage maneuver, aligning with the law’s intent to increase and rationalize pilotage service charges.

Finally, the Supreme Court addressed whether E.O. No. 1088 deprived the PPA of its authority to set new rules and rates for payment of fees. The Court affirmed the PPA’s power to regulate pilotage, subject to the limitation that new rates should not fall below those fixed in E.O. No. 1088. It cited Presidential Decree No. 857, which vests the PPA with the power to supervise, control, and regulate services within ports, including pilotage. The Court emphasized that the PPA retains the authority to adjust pilotage fees, ensuring that the rates remain fair and reasonable.

The Supreme Court’s decision has significant implications for harbor pilots and shipping lines in the Philippines. By clarifying that E.O. No. 1088 did not eliminate additional charges for nighttime and overtime services, the Court ensured that harbor pilots receive fair compensation for services rendered under demanding conditions. Furthermore, the Court’s interpretation of the fee schedule as applying to each pilotage maneuver, rather than the entire package of services, prevents an unjust reduction in the take-home pay of harbor pilots.

The ruling also reaffirms the PPA’s regulatory authority over pilotage services, allowing it to adapt rates to changing circumstances, provided they remain consistent with the minimums set by E.O. No. 1088. The decision promotes a balanced approach, maintaining standardized rates for shipping lines while ensuring fair compensation for harbor pilots. The decision is an important guide for statutory interpretation, especially regarding implied repeals and the harmonization of laws.

FAQs

What was the key issue in this case?	The key issue was whether Executive Order No. 1088 repealed provisions for additional nighttime and overtime pay for harbor pilots and how pilotage fees should be calculated.
Did E.O. No. 1088 repeal PPA AO No. 03-85?	No, the Supreme Court ruled that E.O. No. 1088 did not repeal PPA AO No. 03-85. They address different subjects: E.O. No. 1088 standardizes rates, while PPA AO No. 03-85 provides for additional charges.
How are pilotage fees calculated under E.O. No. 1088?	Pilotage fees are imposed for each pilotage maneuver, such as docking or undocking, rather than for the entire package of services. This ensures fair compensation for harbor pilots.
Does the PPA still have the authority to regulate pilotage fees?	Yes, the PPA retains the authority to regulate pilotage fees, but new rates must not fall below those fixed in E.O. No. 1088.
What is pilotage service?	Pilotage service involves navigating a vessel from a specific point offshore to an assigned area at the pier and vice versa, typically performed by a harbor pilot familiar with the local topography.
Why did AISL refuse to pay UHPAP’s claims for nighttime and overtime pay?	AISL refused to pay based on PPA Resolution No. 1486, which they interpreted as disallowing overtime premium or charges for services rendered during holidays.
What was the RTC’s initial ruling?	The RTC ruled in favor of AISL, stating that the PPA lacked the authority to impose and UHPAP was not authorized to collect overtime or night shift differentials.
What was the basis for the Supreme Court’s decision?	The Supreme Court based its decision on principles of statutory construction, emphasizing that repeals by implication are disfavored and laws should be harmonized when possible.

In summary, the Supreme Court’s decision clarifies the roles and responsibilities concerning pilotage fees, ensuring harbor pilots are justly compensated while maintaining regulatory balance within the Philippine maritime sector. The decision also emphasizes that it is critical to harmonize laws to give effect to both.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: United Harbor Pilots’ Association vs. Association of International Shipping Lines, G.R. No. 133763, November 13, 2002