Philippine Supreme Court Jurisprudence

This is a petition for review on certiorari¹ assailing the Decision² dated 24 November 2014 and the Resolution³ dated 29 June 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 119633. The CA affirmed the Decision⁴ dated 12 January 2011 of the National Labor Relations Commission (NLRC) Second Division which dismissed petitioner's claim for disability benefits and other monetary awards.

The Facts

Respondent Bernhard Schulte Shipmanagement (Cyprus) (Bernhard), a foreign shipping company doing business in the Philippines through its local manning agent, respondent BSM Crew Service Centre Philippines, Inc. (BSM) hired petitioner Veronico O. Tagud (Tagud) as Able Bodied Seaman since 2005. BSM is a domestic corporation engaged in the manning and recruitment of Filipino seafarers on board ocean going vessels and respondent Narcissus Duran is the company's President and authorized representative.

On 7 March 2008, Tagud was re-hired by respondents as Able Bodied Seaman for the Kota Pemimpin vessel under a contract approved by the Philippine Overseas Employment Administration (POEA). The terms and conditions of the employment stated:

Duration of contract: Position: Basic Monthly Salary: Hours of Work: Leave and Food Allowance: Gtrd Ot: Overtime: Point of Hire:

7 months Able Bodied Seaman US$648/month 40 hours/week $317/month $561/month $4.68/hour after 120 hours Manila, Philippines5

Tagud passed the required pre-employment medical examination at the American Outpatient Clinic and was declared to be "Fit for Sea Duty (without restriction)."⁶ On 24 March 2008, Tagud was deployed and joined the Kota Pemimpin vessel in Hongkong on the same day.

Tagud's job as Able Bodied Seaman required him to (1) stand watch while in port or at sea, and (2) perform routine deck department maintenance tasks, e.g. cleaning, painting, and preserving the ship. Tagud's other responsibilities also include underway replenishment, cargo handling, forklift operation, and helicopter flight deck operations.

On 18 October 2008, while on duty doing a sanding job, Tagud lost his balance due to the sudden tilting of the ship and his right elbow region crashed against a hard object. As a result, he lost sensation and strength on his upper right extremity. After three days, he was brought to a doctor for medical attention when the vessel docked in Wynnum, Queensland.

Tagud underwent an x-ray of his right elbow. The x-ray report dated 21 October 2008 yielded the following result:

Clinical History: Trauma to the lateral elbow three days ago.
Findings: There is no fracture. There is a small olecranon spur. No other abnormality.⁷

Twenty-one days later, on 8 November 2008, Tagud disembarked in Singapore and was repatriated to Manila on the same day.

Tagud alleged that when he reported to his manning agency, he was not given any assistance or even referred to a company-designated physician for a follow-up medical examination. After four months, on 9 and 10 March 2009, Tagud sought medical attention at Sta. Isabel Medical Clinic in Caloocan City. Dr. Ruben Chua examined Tagud and prescribed medicines for Tagud's elevated blood pressure and pain in his upper right extremities.

Then sometime in September 2009, Tagud sought another medical consultation for neuritis with loss of strength of the right hand at Peter the Rock Family Medical Polyclinic in Caloocan City and was attended to by Dr. Sisinio Quilicot. Tagud returned on 16 January 2010 to Dr. Quilicot for a follow-up treatment of his neuritis which became chronic. With an illness which limits the flexion of his upper right extremity, Tagud was no longer employed in any gainful occupation.

On 11 December 2009, Tagud filed a complaint⁸ with the NLRC, National Capital Region, Quezon City, against respondents for permanent and total disability benefits, sickness wages, reimbursement of medical expenses, damages, and attorney's fees.

On 3 February 2010, Tagud sought for a thorough medical examination at the Veterans Memorial Medical Center in Quezon City. The attending physician, Dr. Liberato Casison, reported his assessment:

Subject has permanent disability neurologic in nature caused by repetitive vibratory trauma and physical trauma during work.
Disability rating: Disability 1.⁹

Tagud claimed that as a result of his work-related illness which he contracted during the term of his employment, he should be entitled to permanent disability benefits in the amount of US$125,000 in accordance with the schedule of rates applied by the foreign principal for crew of its vessels.¹⁰

Respondents denied any liability to Tagud. They contended that on 8 November 2008 Tagud was repatriated to the Philippines on a "finished contract'' as stated in Tagud's disembarkation report. Respondents maintained that after Tagud's disembarkation, Tagud did not (1) complain of any illness or infirmity, (2) mention any accident or incident on board the Kota Pemimpin vessel, and (3) ask for any post-employment medical examination after disembarkation. Respondents also asserted that Tagud failed to report to his manning agency within the three-day mandatory reporting period reckoned from the date of his repatriation.

In a Decision¹¹ dated 10 September 2010, the Labor Arbiter granted Tagud's complaint. The dispositive portion of the Decision states:

WHEREFORE, premises considered, judgment is hereby rendered ordering respondents BSM Crew Service Centre Inc., and/or Bernhard Schulte Shipmanagement (Cyprus) to pay complainant Veronico O. Tagud jointly and severally, the Philippine Peso equivalent at the time of actual payment of ONE HUNDRED TWENTY-FIVE [THOUSAND] US DOLLARS (US$ 125,000) representing total permanent disability benefits plus ten percent (10%) of the judgment award as and for attorney's fees.

All other claims are dismissed for lack of merit.

SO ORDERED.¹²

Respondents filed an appeal¹³ with the NLRC. In a Decision¹⁴ dated 12 January 2011, the NLRC reversed the Labor Arbiter's decision. The NLRC stated that Tagud failed to prove that he reported to the manning agency within three days from his arrival in the Philippines on 8 November 2008 in order to be examined or treated for any injury sustained during the period of his employment. The NLRC added that it took Tagud about four months from his discharge from the vessel to seek medical treatment for a claim of "work-related injury." Thus, the NLRC declared that in the absence of a physician's opinion on Tagud's medical status immediately after repatriation, there can be no basis for his claim for disability benefits. The dispositive portion of the NLRC's decision states:

WHEREFORE, all the foregoing premises considered, the assailed Decision is hereby REVERSED and/or SET ASIDE, and a new one entered DISMISSING the instant complaint for lack of merit.

SO ORDERED.¹⁵

Tagud filed a motion for reconsideration. The NLRC Second Division, in a Resolution dated 24 March 2011, denied the motion for lack of merit.¹⁶

On 30 May 2011, Tagud filed a petition for certiorari with the Court of Appeals. In a Decision dated 24 November 2014, the CA dismissed the petition. The CA stated that during petitioner's employment on board MN Kota Pemimpin, there was no incident or accident report submitted by his captain; and upon his arrival in the Philippines, Tagud did not report to respondents any ailment or injury he allegedly suffered on board said vessel. The CA concluded that petitioner was repatriated on a finished contract and not for any other reason. Thus, he is not entitled to claim any disability benefits absent proof of compliance with the requirements set forth m Section 20(B)(3) of the 2000 POEA Standard Employment Contract.

Tagud then filed a motion for reconsideration which was denied by the CA in a Resolution dated 29 June 2015. ¹⁷

Hence, the instant petition.

The Issue

The issue in this case is whether or not the CA erred in affirming the decision of the NLRC which dismissed petitioner's claim for permanent disability benefits.

The Court's Ruling

The petition lacks merit.

Petitioner contends that his injury was work-related and had existed during the term of his employment. Petitioner states that he submitted medical evidence consisting of an x-ray examination result issued by a medical facility in Wynnum, Queensland. Petitioner adds that even if his repatriation was regarded as a finished contract, this should not change the nature of his work-related injury. Petitioner also insists that his alleged non� compliance with the three-day mandatory reporting requirement should be considered as an exception since his non-compliance was not his fault but the inadvertence or deliberate refusal of respondents.

Respondents, on the other hand, maintain that in order to be entitled to claim disability benefits, a seafarer must submit himself to the company-designated physician for evaluation within three days from repatriation which petitioner did not do. Respondents reiterate that the most important basis to determine if the illness or injury is work-related and compensable is the post-employment medical examination. Without this examination or its equivalent, respondents cannot be made liable for compensation. Also, respondents contend that petitioner disembarked from the vessel due to a finished contract and not for medical reasons. Thus, he cannot claim any disability benefits since his contract had already ended.

At the outset, this Court only entertains question of law under Rule 45 of the Rules of Court. However, the Court admits of exceptions, such as in this case, when the factual findings of the labor arbiter, NLRC or courts below are in conflict with each other. Here, the labor arbiter found that petitioner should be awarded total permanent disability benefits and attorney's fees and the NLRC and the CA, on the other hand, decreed otherwise.

A seafarer employed on overseas vessels is entitled to disability benefits by law and by contract. By law, the provisions of Articles 191 to 193 under Chapter VI (Disability Benefits) of the Labor Code, in relation to Rule X of the Rules and Regulations Implementing Book IV of the Labor Code, are applicable. By contract, the POEA Standard Employment Contract (POEA-SEC) and the parties' Collective Bargaining Agreement bind the seafarer and the employer to each other.¹⁸

In this case, Tagud executed his employment contract with respondents on 7 March 2008. Accordingly, the 2000 POEA-SEC, as provided under Department Order No. 4, series of 2000, issued by the Department of Labor and Employment (DOLE) on 31 May 2000, applies here.

The POEA, pursuant to said order by the DOLE to formulate the guidelines on the implementation of the amended contract for seafarers, issued Memorandum Circular (MC) No. 9, series of 2000, on 14 June 2000. MC No. 9 or the POEA standard agreement, entitled Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels, sets the minimum requirements acceptable to the POEA for Filipino seafarers employed on board ocean-going vessels and became effective for all agreements signed starting 25 June 2000.

In a Resolution dated 11 September 2000, this Court issued a temporary restraining order (TRO) on the implementation of certain amendments of the 2000 POEA-SEC. However, this TRO was lifted on 5 June 2002.¹⁹ Thus, the 2000 POEA-SEC governs the relations between the parties in determining if Tagud is entitled to permanent disability benefits.

Section 20(B) of the 2000 POEA-SEC provides the compensation and benefits a seafarer is entitled to in case of illness or injury. The provision states:

SECTION 20. COMPENSATION AND BENEFITS

x x x x

B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS

The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as follows:

1. The employer shall continue to pay the seafarer his wages during the time he is on board the vessel;

2. If the injury or illness requires medical and/or dental treatment in a foreign port, the employer shall be liable for the full cost of such medical, serious dental, surgical and hospital treatment as well as board and lodging until the seafarer is declared fit to work or to be repatriated.

However, if after repatriation, the seafarer still requires medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time he is declared fit or the degree of his disability has been established by the company-designated physician.

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.

4. Those illnesses not listed in Section 32 of this Contract are disputably presumed as work related.

5. Upon sign-off of the seafarer from the vessel for medical treatment, the employer shall bear the full cost of repatriation in the event that the seafarer is declared (1) fit for repatriation; or (2) fit to work but the employer is unable to find employment for the seafarer on board his former vessel or another vessel of the employer despite earnest efforts.

6. In case of permanent total or partial disability of the seafarer caused by either injury or illness, the seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 33 of his Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted. (Emphasis supplied)

For disability to be compensable under Section 20(B) of the 2000 POEA-SEC, two elements must concur: (1) that the illness or injury must be work-related, and (2) that the work-related illness or injury must have existed during the term of the seafarer's employment contract.

The 2000 POEA-SEC defines "work-related injury" as Injury resulting in disability or death arising out of and in the course of employment and "work-related illness" as any sickness resulting to disability or death as a result of an occupational disease listed under Section 32-A of the 2000 POEA-SEC. Thus, the seafarer only has to prove that his illness or injury was acquired during the term of employment to support his claim for sickness allowance and disability benefits.

It is stated in Section 20 (B)(3) of the 2000 POEA-SEC that a seafarer, upon signing off from the vessel for medical treatment, is required to submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return. The only exception is when the seafarer is physically incapacitated to do so, in which case, the seafarer must give a written notice to the agency within three working days in order to have complied with the requirement. Otherwise, he forfeits his right to claim his sickness allowance and disability benefits.

In Heirs of the Late Delfin Dela Cruz v. Philippine Transmarine Carriers, Inc.,²⁰ we held that the three-day mandatory reporting requirement must be strictly observed since within three days from repatriation, it would be fairly manageable for the company-designated physician to identify whether the illness or injury was contracted during the term of the seafarer's employment or that his working conditions increased the risk of contracting the ailment. Moreover, the post-employment medical examination within three days from arrival is required to ascertain the seafarer's physical condition, since to ignore the rule would set a precedent with negative repercussions because it would open the floodgates to seafarers claiming disability benefits that are not work-related or which arose after the employment. It would certainly be unfair to the employer who would have difficulty determining the cause of a claimant's illness considering the passage of time. In such a case, the employer would have no protection against unrelated claims. Therefore, it is the company-designated physician who must proclaim that the seafarer suffered a permanent disability, whether total or partial, due to either illness or injury, during the term of the latter's employment.

In the present case, Tagud disembarked in Singapore and was repatriated to Manila on 8 November 2008. He alleged that he reported to his manning agency but was not given any assistance or referred to a company-designated physician. However, Tagud did not present any evidence to prove that he tried to submit himself to a company-designated physician within three working days upon his return. Tagud did not also present any letter that he was physically incapacitated to see the company� designated physician in order to be exempted from the rule. It took him about four months from repatriation or on 9 and 10 March 2009 to seek medical attention for pain in his upper right extremities, not from respondents' company-designated physician, but at a private clinic in Caloocan City. No other documents were submitted to prove that he asserted his rights against the company, or that he immediately took action to seek medical assistance from the company, within three days from his repatriation.

It is true that the POEA standard employment contract is designed primarily for the protection and benefit of Filipino seafarers in the pursuit of their employment on board ocean-going vessels and its provisions should be construed and applied fairly, reasonably, and liberally in favor or for the benefit of the seafarer and his dependents.²¹ However, one who claims entitlement to the benefits provided by law should not only comply with the procedural requirements of law but must also establish his right to the benefits by substantial evidence.²² The burden, therefore, rests on Tagud to show that he suffered or contracted his illness or injury, while still employed as a seafarer, which resulted in his permanent disability.

Unfortunately, Tagud failed to discharge this burden. He only presented an x-ray report dated 21 October 2008 taken in Wynnum, Queensland, where the Kota Pemimpin vessel docked three days after he lost his balance due to the tilting of the ship which hurt his right elbow region. But even findings in the x-ray result stated that there was no fracture and no abnormality except for a small olecranon spur. This finding is therefore not conclusive and can lead to many other assumptions. Also, after the x-ray procedure was taken, Tagud could have immediately requested for a follow-up check-up or demonstrated that he was in need of urgent medical attention. But he did not. Thus, the reasonable conclusion is that at the time of his repatriation, Tagud was not suffering from any physical disability requiring immediate medical assistance and that his employment was terminated due to a finished contract. It is also well noted that many other incidents could have occurred in the duration of four months from the time he was repatriated until he consulted a private physician which could have triggered the pain in his upper right extremities and that such illness or injury could not have been work-related at the time he was still employed by respondents.

In sum, we agree with the findings and conclusions of the NLRC and the CA. We hold that Tagud is not entitled to permanent disability benefits for his failure to (1) undergo a post-employment medical examination within the three-day mandatory reporting period as required under the law, or to show that such failure was due to a valid reason; (2) establish that his illness or injury was work-related; and (3) show that his illness or injury was contracted during the term of his employment contract.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 24 November 2014 and the Resolution dated 29 June 2015 of the Court of Appeals in CA-G.R. SP No. 119633.

SO ORDERED.

Perlas-Bernabe, Caguioa,^*Tijam, and Reyes, Jr., JJ., concur.

Endnotes:

^* Designated additional member per Raffle dated 4 December 2017.

¹ Under Rule 45 of the 1997 Revised Rules of Civil Procedure.

²Rollo, pp. 10-25. Penned by Associate Justice Myra V. Garcia-Fernandez, with Associate Justices Fernanda Lampas Peralta and Francisco P. Acosta concurring.

³ Id. at 27-28.

⁴ Id. at 124-137. Erroneously dated 12 January 2010.

⁵ Id. at 96.

⁶ Id. at 97.

⁷ Id. at 99.

⁸ Docketed as NLRC-NCR Case No. (M) 12-16885-09.

⁹Rollo, p. 81.

¹⁰ Id. at 116.

¹¹ Id. at 113-122.

¹² Id. at 121-122.

¹³ Docketed as NLRC LAC No. 10-000839-10.

¹⁴Rollo, pp. 124-137.

¹⁵ Id. at 137.

¹⁶ Id. at 139-140.

¹⁷ Id. at 27-28.

¹⁸Magsaysay Maritime Corp. v. National Labor Relations Commission (2^nd Div.), 630 Phil. 352, 362 (2010).

¹⁹ See POEA Memorandum Circular No. 2 dated 5 June 2002.

²⁰ 758 Phil. 382, 394-395 (2015).

²¹Wallem Maritime Services, Inc. v. NLRC, 376 Phil. 738, 749 (1999).

²²Manota v. Avantgarde Shipping Corp., 715 Phil 54, 63 (2013).