APRIL 16, 2018

G.R. No. 211187

SCANMAR MARITIME SERVICES, INC. and CROWN SHIPMANAGEMENT, Petitioners

vs
CELESTINO M. HERNANDEZ, JR., Respondent

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari1 assails the June 27, 2013 Decision2 and February 5, 2014
Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 124003, which dismissed the Petition
for Certiorari filed therewith and thus affirmed the December 9, 2011 Decision4 and February 2, 2012
Resolution5 of the National Labor Relations Commission (NLRC) ordering petitioners Scanmar Maritime
Services, Inc. and Crown Shipmanagement, Inc. (collectively petitioners) to pay respondent Celestino M.
Hernandez, Jr. (respondent) US$66,000.00 as disability benefits and attorney's fees.

Antecedent Facts

On July 2, 2009, petitioner Scanmar Maritime Services, Inc., for and in behalf of its foreign principal,
petitioner Crown Shipmanagement, Inc., entered into a Contract of Employment 6 with respondent for a
period of nine months as Able Seaman for the vessel Timberland. Respondent underwent the pre-
employment medical examination (PEME), where he was declared fit for work.7 He was deployed on
August 3, 2009 and boarded the vessel the next day.

During the course of his employment, respondent experienced pain in his inguinal area and pelvic bone.
The pain continued for weeks radiating to his right scrotum and right medial thigh. He informed the
Captain of the vessel and was brought to a hospital in Sweden on February 3, 2010 where he was found
unfit to resume normal duties. Consequently, respondent was medically repatriated to the Philippines on
February 6, 2010.8

On February 8, 2010, respondent was referred to the companydesignated physician at Metropolitan

Medical Center for medical evaluation. He was diagnosed to have Epididymitis, right, Varicocoele,
left9 and was recommended to undergo Varicocoelectomy, a surgical procedure for the management of
his left Varicocoele.10 On March 26, 2010, the company-designated Urological Surgeon, Dr. Ed R.
Gatchalian (Dr. Gatchalian), performed Varicocoelectomy on him at the Metropolitan Medical
Center11 after obtaining clearance from a Cardiologist. 12 The procedure was a success and respondent
was immediately discharged the following day. 13 Thereafter, he continuously reported to Dr. Gatchalian
for medical treatment and evaluation. He was subjected to numerous laboratory examinations,
medication, and was advised to refrain from engaging in strenuous activities, such as lifting, while
recovering.

Despite continuing medical treatment and evaluation with the company-designated physician, respondent
filed on July 20, 2010 a complaint with the NLRC for permanent disability benefits, damages, and
attorney's fees against petitioners. On August 12, 2010, respondent consulted his own physician, Dr.
Antonio C. Pascual (Dr. Pascual), a Cardiologist, who diagnosed him with Essential Hypertension, Stage
2, Epididymitis, right, Varicocoele, left, S/P Varicocoelectomy and certified him medically unfit to work as
a seaman.14

Meanwhile, on August 24, 2010, Dr. Gatchalian pronounced respondent fit to resume sea duties. 15
Proceedings before the Labor Arbiter

In his position paper, respondent averred that for almost a year since November 2009, when he first
sought medical attention for his work-related illness on board the vessel, he failed to earn wages as a
seafarer. Due to loss of his earning capacity as a result of his unfitness for further sea duties, as attested
by the medical findings of his own physician, Dr. Pascual, respondent claimed that he was entitled to
permanent total disability benefits amounting to US$60,000.00 pursuant to the POEA-SEC as well as
moral, exemplary and compensatory damages for ₱500,000.00 each and 10% attorney's fees.

Petitioners, on the other hand, disclaimed respondent's entitlement to any disability compensation or
benefit since his illness was not an occupational disease listed as compensable under the POEA-
SEC16 and was not considered work-related. Petitioners maintained that respondent was never declared
unfit to work nor was he rendered permanently, totally or partially, disabled, averring that Dr. Gatchalian,
the urological surgeon who closely monitored respondent's condition, already declared him fit to resume
sea duties. Petitioners insisted that Dr. Gatchalian's assessment should prevail over that rendered by Dr.
Pascual, who examined respondent only once. Further, according to petitioners, respondent's failure to
consult a third doctor who is tasked to settle the inconsistencies in the medical assessments in
accordance with the provisions of the POEA-SEC was fatal to his cause.

In a Decision17 dated April 1, 2011, the Labor Arbiter awarded respondent total and permanent disability
compensation in the amount of US$60,000.00 and attorney's fees in the amount of US$6,000.00. The
Labor Arbiter found that respondent's illness had a reasonable connection with his work condition as an
Able Seaman, thus, was work-related and compensable. At any rate, his illness, although not listed as
occupational disease, enjoyed the disputable presumption of work-connection or work-aggravation under
the POEA-SEC. The Labor Arbiter then found credence in the assessment made by respondent's
physician, Dr. Pascual, who certified respondent to be suffering not only from Varicocoele but also from
Stage 2 Hypertension, an illness which was likewise work-related.

Proceedings before the National Labor Relations Commission

Petitioners appealed to the NLRC ascribing serious error on the findings of the Labor Arbiter. Petitioners
maintained that respondent's Varicocoele was not work-related; that respondent was declared fit for sea
duties by Dr. Gatchalian whose declaration correctly reflected respondent's condition as compared to Dr.
Pascual who was not even a specialist in urological disorders; that no third doctor was sought to
challenge Dr. Gatchalian's assessment in violation of the procedure laid down in the POEA-SEC; that
respondent's alleged hypertension could not be made as basis for the payment of disability benefits as
there was no proof that he acquired or suffered such illness during the term of his employment; and that
respondent was not entitled to attorney's fees.

In a Decision18 dated December 9, 2011, the NLRC dismissed the appeal and affirmed the Decision of
the Labor Arbiter. The NLRC sustained the Labor Arbiter's finding that respondent was permanently and
totally disabled; that there was causal connection between the work of respondent and his illnesses
(Varicocoele and Stage 2 Hypertension); and that Dr. Pascual's certification deserves more weight than
the certification of Dr. Gatchalian that was issued after 120 days which, by operation of law, transformed
respondent's disability to total and permanent, as was pronounced in the case of Quitoriano v. Jebsens
Maritime, Inc.[[19]]

Petitioners filed a Motion for Reconsideration20 of the NLRC Decision but was denied in the NLRC
Resolution21 of February 2, 2012.

Proceedings before the Court of Appeals

Petitioners filed a Petition for Certiorari with Urgent Application for the Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Mandatory Injunction to enjoin the enforcement and
execution of the NLRC judgment. Petitioners attributed grave abuse of discretion on the NLRC in
affirming the Labor Arbiter's award of US$60,000.00 as disability benefits and attorney's fees of
US$6,000.00.

The CA, in a Decision22 dated June 27, 2013, dismissed petitioners' Petition for Certiorari and held that
the NLRC did not commit any grave abuse of discretion in rendering its assailed rulings. The CA found
that there was no error in the NLRC's appreciation of the causal connection between respondent's work
as a seaman and his illnesses; that the NLRC correctly upheld the assessment of Dr. Pascual based on
its inherent merit; and that the NLRC properly considered respondent's disability as total and permanent
based on the Court's ruling in the Quitoriano case. The CA likewise found justification in the award of
attorney's fees since respondent was forced to litigate to protect his interest.

Petitioners sought reconsideration23 of the CA Decision. Resolution24 dated February 5, 2014, petitioners'
motion was denied.

Issues

Hence, petitioners filed the present Petition for Review on Certiorari, arguing that:

I.

THE FILING OF THE COMPLAINT WAS PREMATURE AND SHOULD HAVE BEEN DISMISSED
OUTRIGHT BECAUSE

A. THE COMPANY-DESIGNATED PHYSICIAN HAD NOT YET GIVEN A DISABILITY

ASSESSMENT/FIT TO WORK ASSESSMENT WITHIN THE ALLOWABLE 240-DAY PERIOD
WHEN RESPONDENT FILED THE CASE. THERE IS THEREFORE NO ASSESSMENT TO
CONTEST OR TO HAVE A CAUSE OF ACTION AGAINST.

B. EVEN ASSUMING ARGUENDO THAT THE COMPLAINT WAS NOT PREMATURELY FILED
ON THE ABOVE GROUND RESPONDENT'S FAILURE TO COMPLY WITH THE POEA SEC
ON THE MATTER OF REFERRING THE MEDICAL ASSESSMENT TO AN INDEPENDENT
AND THIRD PHYSICIAN RENDERED THE FILING OF THE COMPLAINT PREMATURE.

II.

ABSENT ANY SERIOUS DOUBTS AS TO THE LEGITIMACY AND FAIRNESS OF THE ASSESSMENT
OF THE COMPANYDESIGNATED PHYSICIAN, THE COURT OF APPEALS HAS NO AUTHORITY
WHATSOEVER TO DISREGARD THE FINDINGS OF THE COMPANY-DESIGNATED PHYSICIAN IN
FAVOR OF SEAFARER'S ONE-TIME PHYSICIAN OF CHOICE. CREDENCE SHOULD BE
THEREFORE ACCORDED TO THE ASSESSMENT OF THE COMPANY DESIGNATED PHYSICIAN
ESPECIALLY SINCE THE LATTER IS A SPECIALIST AS COMPARED TO THE SEAFARER'S
PHYSICIAN OF CHOICE WHO POSSESSES DIFFERENT MEDICAL SPECIALIZATION.

III.

RESPONDENT IS NOT ENTITLED TO ATTORNEY'S FEES.25

Petitioners contend that respondent's complaint was prematurely filed and lacked cause of action as there
was no medical assessment yet by the company-designated physician and the 240-day allowable period
within which the company-designated physician may assess respondent had not yet lapsed at the time it
was filed. Petitioners assert that the mere lapse of the 120-day period does not automatically vest an
award of full disability benefits, as it may be extended up to 240 days if the seafarer requires further
medical attention, as in this case. Moreover, the lack of a third doctor opinion is fatal to respondent's
cause.

Petitioners, thus, posit that the timely fit to work assessment of Dr. Gatchalian, which was rendered after
close monitoring of respondent's condition, should have been accorded probative weight by the labor
tribunals, rather than the pronouncement of Dr. Pascual, who examined respondent only once and who is
not even a specialist in urological disorders.

Our Ruling

The Court finds merit in the Petition.

The filing of respondent's complaint

was premature. Respondent is not
entitled to total and permanent
disability compensation.

We find serious error in both the rulings of the NLRC and CA that respondent's disability became
permanent and total on the ground that the certification of the company-designated physician was issued
more than 120 days after respondent's medical repatriation. As correctly argued by petitioners, the 120-
day rule has already been clarified in the case of Vergara v. Hammonia Maritime Services, Inc., 26 where it
was declared that the 120-day rule cannot be simply applied as a general rule for all cases in all contexts.

Article 192(c)(1) of the Labor Code provides that:

Art. 192. Permanent total disability. – X X X

(c) The following disabilities shall be deemed total and permanent:

(1) Temporary total disability lasting continuously for more than one hundred twenty days, except
as otherwise provided for in the Rules;

The Rule referred to in this Labor Code provision is Section 2, Rule X of the Amended Rules on
Employee Compensation (AREC) implementing Title II, Book IV of the Labor Code, which states:

Sec. 2. Period of Entitlement - (a) The income benefit shall be paid beginning on the first day of such
disability. If caused by an injury or sickness it shall not be paid longer than 120 consecutive days except
where such injury or sickness still requires medical attendance beyond 120 days but not to exceed 240
days from onset of disability in which case benefit for temporary total disability shall be paid. However, the
System may declare the total and permanent status at any time after 120 days of continuous temporary
total disability as may be warranted by the degree of actual loss or impairment of physical or mental
functions as determined by the System.

Section 20B(3) of the POEA-SEC, meanwhile provides that:

3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance
equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been
assessed by the company-designated physician but in no case shall this period exceed one hundred
twenty (120) days.

For this purpose, the seafarer shall submit himself to a postemployment medical examination by a
company-designated physician within three working days upon his return except when he is physically
incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as
compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his
forfeiture of the right to claim the above benefits.

If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly
between the employer and the seafarer. The third doctor's decision shall be final and binding on both
parties.

In Vergara, this Court has ruled that the aforequoted provisions should be read in harmony with each
other, thus: (a) the 120 days provided under Section 20B(3) of the POEA-SEC is the period given to the
employer to determine fitness to work and when the seafarer is deemed to be in a state of total and
temporary disability; (b) the 120 days of total and temporary disability may be extended up to a maximum
of 240 days should the seafarer require further medical treatment; and (c) a total and temporary disability
becomes permanent when so declared by the company-designated physician within 120 or 240 days, as
the case may be, or upon the expiration of the said periods without a declaration of either fitness to work
or disability assessment and the seafarer is still unable to resume his regular seafaring duties.27

Thus, in the case of C.F. Sharp Crew Management, Inc. v. Taok,28 a seafarer may be allowed to pursue
an action for total and permanent disability benefits in any of the following conditions:

(a) the company-designated physician failed to issue a declaration as to his fitness to engage in sea duty
or disability even after the lapse of the 120-day period and there is no indication that further medical
treatment would address his temporary total disability, hence, justify an extension of the period to 240
days;

(b) 240 days had lapsed without any certification being issued by the company-designated physician;

(c) the company-designated physician declared that he is fit for sea duty within the 120-day or 240-day
period, as the case may be, but his physician of choice and the doctor chosen under Section 20-B(3) of
the POEA-SEC are of a contrary opinion;

(d) the company-designated physician acknowledged that he is partially permanently disabled but other
doctors who he consulted, on his own and jointly with his employer, believed that his disability is not only
permanent but total as well;

(e) the company-designated physician recognized that he is totally and permanently disabled but there is
a dispute on the disability grading;

(f) the company-designated physician determined that his medical condition is not compensable or work-
related under the POEA-SEC but his doctor-of-choice and the third doctor selected under Section 20-B(3)
of the POEA-SEC found otherwise and declared him unfit to work;

(g) the company-designated physician declared him totally and permanently disabled but the employer
refuses to pay him the corresponding benefits, and

(h) the company-designated physician declared him partially and permanently disabled within the 120-day
or 240-day period but he remains incapacitated to perform his usual sea duties after the lapse of the said
periods. 29

Upon respondent's repatriation on February 6, 2010, he received extensive medical attention from the
company-designated physicians. He was endorsed to a urological surgeon, Dr. Gatchalian, who
recommended and performed surgery on him on March 26, 2010 to address and treat his varicocoele.
After surgery, his condition was continually monitored as he still complained of scrotal and groin
pains.30 He thereafter underwent Inguinoscrotal Ultrasound on May 28, 2010 and July 16, 2010. 31 He was
subjected to further physical and laboratory exams and was recommended by Dr. Gatchalian to undergo
CT Sonogram to further evaluate his condition and recovery, as shown in a Medical Report dated August
19, 2010.32 On August 24, 2010 or 197 days from repatriation, respondent was cleared to go back to
work. 33

After the lapse of 120 days from the date of repatriation, respondent's treatment still continued; thus, the
240-day extension period was justified. At the time respondent filed his complaint on July 20, 2010, or
162 days since repatriation and without a definite assessment from the company-designated physician,
respondent's condition could not be considered permanent and total. "[T]emporary total disability only
becomes permanent when the company-designated physician, within the 240-day period, declares it to
be so, or when after the lapse of the said period, he fails to make such declaration."34

Both the NLRC and the CA mistakenly relied on the case of Quitoriano v. Jebsens Maritime, Inc.,35 which
applied our ruling in Crystal Shipping, Inc. v. Natividad36 that total and permanent disability refers to the
seafarer's incapacity to perform his customary sea duties for more than 120 days. In Quitoriano, the
seafarer filed a claim for total and permanent disability benefits on February 26, 2002 or before October
6, 2008, the date of the promulgation of Vergara, and the prevailing rule then was that enunciated by this
Court in Crystal Shipping. The Court already delineated the effectivity of the Crystal
Shipping and Vergara rulings in the case of Kestrel Shipping Co., Inc. v. Munar 37 by enunciating that, if
the maritime complaint was filed prior to October 6, 2008, the 120-day rule applies; but if the complaint
was filed from October 6, 2008 onwards, the 240-day rule applies. In this case, respondent filed his
complaint on July 20, 2010, hence, it is the 240-day rule that applies.

In this case, respondent filed his complaint for total and permanent disability benefits while he was still
considered to be temporarily and totally disabled; while the company-designated physician was still in the
process of assessing his condition and determining whether he was still capable of performing his usual
sea duties; and when the 240-day period had not yet lapsed. From the foregoing, it is evident that
respondent's complaint was prematurely filed. His cause of action for total and permanent disability
benefits had not yet accrued.

Moreover, respondent's failure to comply with the procedure prescribed by the POEA-SEC, which is the
law between the parties, provided a sufficient ground for the denial of his claim for total and permanent
disability benefits.

Section 20B(3) of the POEA-SEC provides that it is the company-designated physician who is entrusted
with the task of assessing a seafarer's disability.1âwphi1 The provision also provides for a procedure to
contest the company-designated physician's findings. Respondent, however, failed to comply with the
procedure when he filed his complaint on July 20, 2010 without a definite assessment yet being rendered
by the company-designated physician. Worse, he sought an opinion from Dr. Pascual, an independent
physician, on August 12, 2010 despite the absence of an assessment by the company-designated
physician. The medical certificate of Dr. Pascual, nevertheless, was of no use and will not give
respondent that cause of action that he lacked at the time he filed his complaint. Indeed, a seafarer has
the right to seek the opinion of other doctors under Section 20-B(3) of the POEA-SEC but this is on the
presumption that the company-designated physician had already issued a certification as to his fitness or
disability and he finds this disagreeable.38 The Court is thus unconvinced to put weight on the findings of
Dr. Pascual given that respondent has breached his duty to comply with the procedure prescribed by the
POEA-SEC.

WHEREFORE, the Petition is GRANTED. The June 27, 2013 Decision and February 5, 2014 Resolution
of the Court of Appeals in CAG.R. SP No. 124003 are REVERSED and SET ASIDE. Celestino M.
Hernandez, Jr.'s complaint docketed as NLRC OFW Case No. (M) 0709866-10 is DISMISSED.

SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice