Danny Labor Laws20
Danny Labor Laws20
Danny Labor Laws20
212049
DECISION
PERLAS-BERNABE, J.:
The Facts
Respondent was employed by petitioner Magsaysay Maritime Corporation (MMC) for its
foreign principal, Princess Cruise Lines, Ltd. (PCL) as Mechanical Fitter on board the
vessel "Star Princess" under a ten (10) month contract that commenced on December 18,
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2009, with a basic salary of US$508.00 per month, exclusive of overtime and other
benefits.
7
On April 27, 2010, respondent suffered injuries when he hit his right elbow and forearm on
a sewage pipe during a maintenance work conducted on board the vessel. He was
immediately provided medical treatment at the ship's clinic and was diagnosed by the ship
doctor with "Lateral Epicondylitis, Right". However, despite treatment, his condition did not
improve. Hence, he was medically repatriated on May 9, 2010. 8
On May 14, 2010, the company-designated physicians also diagnosed respondent with
"Lateral Epicondylitis, Right" and, thus, the latter was advised to undergo physical therapy.
On June 2, 2010, Dr. Robert Lim (Dr. Lim), the company-designated doctor, found that
"[p ]atient claims almost resolution of both lateral elbow paid, decreased pain on the right
wrist, slight limitation of motion of the right wrist, fair grip." On June 23, 2010, another
medical bulletin was issued by Dr. Lim stating that "[p ]atient claims improvement with
physical therapy." On September 15, 2010, Dr. William Chuasuan, Jr. (Dr. Chuasuan),
also a company-designated physician, issued a medical report stating that respondent
was fit to return to work. 9
After the company-designated physicians declared him fit to work, respondent sought the
services of an independent physician, Dr. Manuel C. Jacinto, Jr. (Dr. Jacinto), who, on the
other hand, found him "physically unfit to go back to work" as declared in a medical
10
On even date, respondent filed a complaint for the payment of permanent total disability
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In his Position Paper, respondent averred that he was unfit to perform his job for more
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than 120 days, and that his injuries in his right elbow and forearm were never resolved
and in fact, deteriorated despite medical treatment. And since by reason thereof he had
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lost his capacity to obtain further sea employment and an opportunity to earn an income,
respondent sought for the payment of permanent total disability compensation in the
amount of US$80,000.00 pursuant to the CBA that was enforced during his last
employment contract. He also sought for the payment of moral and exemplary damages in
view of petitioners' unjustified refusal to settle the matter under the CBA and their evident
bad faith in dealing with him, as well as attorney's fees for having been compelled to
litigate.
15
For their part, petitioners maintained that respondent is not entitled to the payment of
permanent total disability benefits since he was declared fit to work by the
company-designated physician. They further denied respondent's claims for moral and
exemplary damages as they treated him fairly and in good faith. They likewise denied
respondent's claim of attorney's fees for lack of basis. 16
The LA Ruling
In a Decision dated April 7, 2011, the LA ruled in favor of respondent, ordering petitioners
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to jointly and severally pay the former the sum of US$80, 100.00, or its peso equivalent at
the time of payment, as permanent total disability benefits, as well as moral and
exemplary damages in the amount of P50,000.00 each.
The LA held that since the treatment of respondent's work related injury and declaration of
fitness to work exceeded the 120-day period under the POEA Standard Employment
Contract (POEA-SEC), and considering further that he was not anymore rehired,
respondent was entitled to permanent total disability benefits in accordance with the CBA.
Moral and exemplary damages were equally awarded for petitioners' refusal to pay
respondent's just claim, which constitutes evident bad faith.
However, the LA denied respondent's other money claims due to his failure to sufficiently
state in his complaint the ultimate facts on which the same were based.
In a Decision dated December 15, 2011, the NLRC reversed and set aside the appealed
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It held that the medical certificate of the independent physician, Dr. Jacinto, in support of
respondent's claim for permanent total disability benefits cannot prevail over the medical
reports of the company-designated physicians who actually treated him. It added that
respondent's injury had clearly healed, considering that he admittedly signed the
certificate of fitness to work, adding too that his doubts about his true medical condition at
the time he was promised redeployment was not proof that he was merely forced to sign
the same. 20
Respondent moved for reconsideration, but was denied in a Resolution dated June 27,
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2012, prompting the filing of a petition for Certiorari before the CA.
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The CA Ruling
In a Decision dated October 25, 2013, the CA granted the certiorari petition and
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Dissatisfied, petitioners filed a motion for reconsideration which was, however, denied in
25
The essential issue for the Court's resolution is whether or not the CA committed grave
error in awarding respondent permanent total disability benefits.
To justify the grant of the extraordinary remedy of certiorari, the petitioner must
satisfactorily show that the court or quasi-judicial authority gravely abused the discretion
conferred upon it. Grave abuse of discretion connotes a capricious and whimsical
exercise of judgment, done in a despotic manner by reason of passion or personal
hostility, the character of which being so patent and gross as to amount to an evasion of
positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in
contemplation of law. 27
In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter
alia, its findings and conclusions are not supported by substantial evidence, or that
amount of relevant evidence which a reasonable mind might accept as adequate to justify
a conclusion. 28
Guided by the foregoing considerations, the Court finds that the CA committed reversible
error in granting respondent's certiorari petition since the NLRC did not gravely abuse its
discretion in dismissing the complaint for permanent total disability benefits for
respondent's failure to establish his claim through substantial evidence.
legal provisions are Articles 191 to 193 of the Labor Code and Section 2, Rule X of the
Amended Rules on Employees' Compensation (AREC), while the relevant contracts are
the POEA Standard Employment Contract (POEA-SEC), the parties' Collective
Bargaining Agreement (CBA), if any, and the employment agreement between the
seafarer and employer.
In this case, the parties entered into a contract of employment in accordance with the
POEA-SEC which, as borne from the records, was covered by an overriding International
Transport Workers' Federation (ITF) Cruise Ship Model Agreement For Catering
Personnel, i.e., the CBA, that was effective from January 1, 2010 until December 31,
2010. Since respondent's injury on board the vessel "Star Princess" that caused his
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eventual repatriation was sustained on April 27, 2010, or during the effectivity of the CBA,
his claim for the payment of permanent total disability compensation shall be governed by
Article 12 (2) of the CBA which provides:
2. Disability:
A Seafarer who suffers injury as a result of an accident from any cause whatsoever whilst
in the employment of the Owners/Company, regardless of fault, including accidents
occurring whilst traveling to or from the Ship and whose ability to work is reduced as a
result thereof, shall in addition to his sick pay, be entitled to compensation according to
the provisions of this Agreement.
The compensation which the Owner/Company, Manager, Manning Agent, and any other
legal entity substantially connected with the vessel shall be jointly and severally liable to
pay shall be calculated by reference to an agreed medical report, with the
Owners/Company and the Seafarer both able to commission their own and when there is
disagreement the parties to this Agreement shall appoint a third doctor whose findings
shall be binding on all parties. The aforesaid medical report determines the Degree of
Disability and the table below the Rate of Compensation.
xxxx
Regardless of the degree of disability an injury or illness which results in loss of profession
will entitle the Seafarer to the full amount of compensation, USD eighty-thousand (80,000)
for Ratings (Group B, C & D) and USD one-hundred-and-twenty-thousand (120,000) for
Officers (Group A). For the purposes of this Article, loss of profession means when the
physical condition of the Seafarer prevents a return to sea service, under applicable
national and international standards and/or when it is otherwise clear that the Seafarer's
condition will adversely prevent the Seafarer's future of comparable employment on board
ships.31
Based on the afore-cited provision, a seafarer shall be entitled to the payment of the full
amount of disability compensation only if his injury, regardless of the degree of
disability, results in loss of profession, i.e., his physical condition prevents a return to
sea service. Based on the submissions of the parties, this contractual attribution refers to
permanent total disability compensation as known in labor law. Thus, the Court examines
the presence of such disability in this case.
Preliminarily, the task of assessing the seaman's disability or fitness to work is entrusted
to the company-designated physician. Section 20 (B) (3) of the 2000 POEA-SEC states:
xxxx
The liabilities of the employer when the seafarer suffers work-related injury or illness
during the term of his contract are as follows:
xxxx
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 post-employment 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. (Emphases supplied)
Under the Labor Code, there are three kinds of disability, namely: (1) temporary total
disability; (2) permanent total disability; and (3) permanent partial disability. Section 2,
Rule VII of the AREC differentiates the disabilities as follows:
SEC. 2. Disability - (a) A total disability is temporary if as a result of the injury or sickness
the employee is unable to perform any gainful occupation for a continuous period not
exceeding 120 days, except as otherwise provided in Rule X of these Rules.
(b) A disability is total and permanent if as a result of the injury or sickness the
employee is unable to perform any gainful occupation for a continuous period
exceeding 120 days, except as otherwise provided for in Rule X of these Rules.
(c) A disability is partial and permanent if as a result of the injury or sickness the employee
suffers a permanent partial loss of the use of any part of his body. (Emphasis supplied)
1âwphi 1
In this case, despite the finding of fitness to work by the company-designated physicians,
the CA declared respondent entitled to permanent total disability benefits for failure of the
former to declare the latter fit to work within the 120-day period provided under Section 20
(B) (3) of the 2000 POEA-SEC, citing the ruling in the cases of Valenzona v. Fair Shipping
Corporation (Valenzona) and Maersk Filipinas Crewing, Inc. v. Mesina (Maersk Filipinas
32 33
Crewing, Inc.) that declared a seafarer permanently disabled if it lasts continuously for
more than 120 days. Both Valenzona and Maersk Filipinas Crewing, Inc. stemmed from
the ruling in Crystal Shipping, Inc. v. Natividad that characterized permanent disability as
34
the inability of a worker to perform his job for more than 120 days, regardless of whether
or not he loses the use of any part of his body.
However, recent jurisprudence now holds that the said 120-day rule is not a magic wand
that automatically warrants the grant of total and permanent disability benefits in his
favor. As clarified by the Court in the later case of Vergara v. Hammonia Maritime
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Services, Inc.: 36
[T]he petitioner has repeatedly invoked our ruling in Crystal Shipping, Inc. v.
Natividad, apparently for its statement that the respondent in the case "was unable to
perform his customary work for more than 120 days which constitutes permanent total
disability." This declaration of a permanent total disability after the initial 120 days of
temporary total disability cannot, however, be simply lifted and applied as a general rule
for all cases in all contexts. The specific context of the application should be considered,
as we must do in the application of all rulings and even of the law and of the implementing
regulations.
Elucidating on this point, Vergara discussed the seeming conflict between Section 20 (B)
(3) of the 2000 POEA-SEC and Article 192 (c) (1) of the Labor Code on permanent total
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disability in relation to Section 2(a), Rule X of the AREC that provided for a 240-day
38
As these provisions operate, the seafarer, upon sign-off from his vessel, must report to the
company-designated physician within three (3) days from arrival for diagnosis and
treatment. For the duration of the treatment but in no case to exceed 120 days, the
seaman is on temporary total disability as he is totally unable to work. He receives his
basic wage during this period until he is declared fit to work or his temporary disability is
acknowledged by the company to be permanent, either partially or totally, as his condition
is defined under the POEA Standard Employment Contract and by applicable Philippine
laws. If the 120 days initial period is exceeded and no such declaration is made
because the seafarer requires further medical attention, then the temporary total
disability period may be extended up to a maximum of 240 days, subject to the right
of the employer to declare within this period that a permanent partial or total
disability already exists. The seaman may of course also be declared fit to work at any
time such declaration is justified by his medical condition. (Emphasis and underscoring
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supplied)
Thus, temporary total disability only becomes permanent when so declared by the
company-designated physician within the periods he is allowed to do so, or upon the
expiration of the maximum 240-day medical treatment period without a declaration
of either fitness to work or the existence of a permanent disability. 40
In this relation, the Court, in the recent case of C.F. Sharp Crew Management, Inc. v.
Taok, laid down the instances when a seafarer may be allowed to pursue an action for
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(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;
(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. 42
Records show that from the time respondent was medically repatriated on May 9, 2010 up
to the time the company designated physicians declared him fit to resume work during his
last follow-up consultation on September 15, 2010, a period of 130 days had
lapsed. Concededly, said period exceeded the 120-day period under Paragraph 3,
Section 20 (B) of the 2000 POEA-SEC and Article 192 of the Labor Code. However,
respondent's injury required further physical therapy/rehabilitation. Therefore, despite the
lapse of the 120-day period, respondent was still considered to be under a state of
temporary total disability, and the company-designated physician, following
the Vergara case, has a period of 240 days from the time the former suffered his injury
within which to make a finding on his fitness for further sea duties or degree of disability.
Note that while respondent has the right to seek the opinion of other doctors under
Section 20 (B) of the POEA-SEC and the CBA, it bears stressing that the employer is
liable for a seafarer's disability, arising from a work-related injury or illness, only after the
degree of disability has been established by the company-designated physician
and, if the seafarer consulted with a physician of his choice whose assessment
disagrees with that of the company designated physician, the disagreement must
be referred to a third doctor for a final assessment. No such mandated third doctor
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The POEA-SEC and the CBA govern the employment relationship between Dumadag and
the petitioners. The two instruments are the law between them. They are bound by their
1âwphi1
terms and conditions, particularly in relation to this case, the mechanism prescribed to
determine liability for a disability benefits claim. x x x Dumadag, however, pursued his
claim without observing the laid-out procedure. He consulted physicians of his choice
regarding his disability after Dr. Dacanay, the company-designated physician, issued her
fit-to-work certification for him. There is nothing inherently wrong with the consultations as
the POEA-SEC and the CBA allow him to seek a second opinion. The problem arose only
when he preempted the mandated procedure by filing a complaint for permanent disability
compensation on the strength of his chosen physicians' opinions, without referring the
conflicting opinions to a third doctor for final determination.
Besides, the findings of Dr. Lim and Dr. Chuasuan should prevail over that of Dr. Jacinto
considering that the former examined, diagnosed, and treated respondent from his
repatriation on May 9, 2010 until he was assessed fit to work on September 15, 2010;
whereas, it appears that the independent physician, Dr. Jacinto, only examined
respondent on October 13, 2010 which was the same day the latter filed his claim for
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permanent total disability benefits. While the medical certificate indicates that respondent
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was under Dr. Jacinta's service beginning "September 2010," no supporting document on
record shows this to be true. In fact, the NLRC even observed that the medical certificate
of Dr. Jacinto was issued after a onetime examination and worse, without any medical
support. Case law dictates that, under these circumstances, the assessment of the
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company-designated physician should be given more credence for having been arrived at
after months of medical attendance and diagnosis, compared with the assessment of a
private physician done in one day on the basis of an examination or existing medical
records. 49
Finally, as the NLRC aptly pointed out, respondent even signed the certification of fitness
to work, which thus operates as an admission in petitioners' favor. The burden of proof to
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show that his consent was vitiated in signing said certification befalls upon respondent; a
burden the latter, however, failed to discharge.
In fine, absent a showing that respondent is entitled to the full disability compensation
under the CBA as afore-discussed, the Court finds that the NLRC did not commit grave
abuse of discretion in dismissing respondent's complaint. The CA ruling should therefore
be reversed.
WHEREFORE, the petition is GRANTED. The Decision dated October 25, 2013 and the
Resolution dated April 7, 2014 of the Court of Appeals in CA-G.R. SP No. 126368 are
hereby REVERSED and SET ASIDE. The complaint of Romeo V. Panogalinog, docketed
as NLRC RAB No. NCR Case No. (M) NCR-10-14690-10, is DISMISSED for lack of merit.
SO ORDERED.
ESTELA M. PERLAS-BERNABE
Associate Justice