Philippine Shipping Update – Manning Industry
By: Ruben Del Rosario, President, Del Rosario Pandiphil Inc., July 29, 2013 (Issue 2013/12)
Supreme Court rules seafarer who abandons his treatment cannot claim benefits; company doctor is the one to assess disability as per POEA contract; concept of “income benefit” introduced by Court
The seafarer was medically repatriated due to a spine condition on 31 August 2005. Upon repatriation, the seafarer was referred to the company-designated doctor for treatment where he underwent surgery and physical therapy until 17 March 2006 and was supposed to return for further examination on 6 April 2006.
In the interim, the seafarer filed a complaint before the NLRC for payment of disability benefits, sick wages and attorney’s fees on 19 January 2006 despite the fact that he was still advised to undergo further treatment. The seafarer argued that he should be paid full disability benefits based on his CBA considering that he was not declared fit to work despite the lapse of 120 days.
During the NLRC proceedings, the seafarer submitted a medical report from his doctor declaring him permanently unfit as a seafarer.
The Labor Arbiter awarded US$70,000.00 disability benefits to the seafarer as the latter was considered permanently and totally disabled because he was unable to perform work or earn a living in the same kind of work for more than 120 days from his repatriation. It was noted that the seafarer was under treatment for 197 days (date of the last report of the company-designated doctor) and there was no declaration of degree of disability of fitness to work issued. The NLRC affirmed the decision of the Labor Arbiter. In turn, the Court of Appeals affirmed the ruling of the NLRC.
Upon further appeal the Supreme Court held that seafarer is not entitled to disability benefits for two reasons.
There was no assessment issued by the company-designated doctor as to the extent of the seafarer’s disability as required by the POEA Contract
The Supreme Court noted that under then Section 20 (B) (3) of the POEA Contract, the company-designated doctor is tasked with the duty of determining the fitness to work or degree of disability of the seafarer. In this case, the company-designated doctor could not be faulted in not issuing a final medical assessment as the seafarer was still undergoing treatment and was even advised to return on 6 April 2006 to which he did not comply. The company therefore could not be blamed in claiming that the seafarer abandoned his treatment.
The 240 days period within which to treat the seafarer has not yet lapsed.
The Supreme Court again reminded that the rule is 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 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 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.
Based on the above rule, when the company-designated doctor issued her last progress report on 17 March 2006, 197th day of treatment, the seafarer was under legal contemplation under a state of temporary total disability since the 240-day period had not yet lapsed. The Labor Arbiter, the NLRC and the Court of Appeals, therefore, grossly misappreciated the facts and the applicable law when they ruled that because seafarer was unable to perform his work for more than 120 days, he became entitled to permanent total disability benefits. The failure to issue a disability assessment or a fit-to-work declaration after 197 days from his repatriation by the company-designated doctor is not a ground to award permanent total disability benefits. There was no assessment yet because the seafarer was still undergoing treatment and evaluation by the company doctors, especially the orthopedic surgeon, within the 240-day maximum period provided under the above-cited rule. The seafarer was supposed to return for further evaluation but he did not honor his appointment.
The Supreme Court again cited the earlier case of CF Sharp Crew Management, Inc. v. Taok in disregarding the findings of seafarer’s personal doctor. The Court noted that while the seafarer had a right to seek the opinion of other doctors, this is on the assumption that the company-designated doctor already issued a final medical assessment which he finds disagreeable. In this case, the seafarer prevented the company-designated doctor to issue a declaration of fitness or unfitness when he no longer reported for medical evaluation. The seafarer did not follow the correct procedure to contest the findings of the company-designated doctor and for this reason; the findings of his personal doctor cannot be given weight.
The issue of “income benefit” of a seafarer under temporary total disability
As explained by the Supreme Court in their decision, a seafarer is considered under temporary total disability for the first 120 days of treatment. If further treatment is needed beyond 120 days, the period may be extended up to 240 days and during this period, the seafarer is still considered to be under temporary total disability. As such, the Supreme Court held that considering that seafarer was under temporary total disability for a period of 197 days, he should be provided with income benefit equivalent to 197 days. The Supreme Court referred to “income benefit” as those referred under the Rules and Regulations Implementing Book IV of the Labor Code, Section 2, Rule X which is an employees’ compensation law that is to be paid out by the State Insurance Fund. However, the Supreme Court ordered the company to pay income benefit to the seafarer.
Author’s Note: In this case, the Supreme Court reiterated its previous rulings that the claim of the seafarer should not prosper considering that when he filed his complaint, he was still under treatment within the 240 days period and he no longer presented himself to the company-designated doctor for further treatment. As such, the company-designated doctor was not able to provide a final medical assessment in accordance with the POEA Contract.
Also, this decision strengthens the provision on medical abandonment now contained in the 2010 POEA Contract which states that a seafarer shall regularly report to the company designated doctor on the dates prescribed and failure to so do will result in the forfeiture of his right to benefits.
Unfortunately for vessel interests, the Supreme Court appears to have introduced a new concept in this case, that is, the payment of “income benefit”. The Court held that the seafarer is entitled to 197 days of “income benefit” for the period he was under a state of temporary total disability. While “income benefit” was referred to by the Supreme Court as that stated in the Rules and Regulations implementing Book IV of the Labor Code (Employees’ Compensation law which entitles the seafarer to up to maximum income benefit equivalent to 240 days), the same nevertheless appears to refer to sick wages as previous rulings of the Court clearly said that during the time of temporary total disability, the seafarer receives his basic wage until he is declared fit or the degree of his disability is established. If this is so, then the Supreme Court would appear to have extended the entitlement of the seafarer to sick wages beyond the 120 days provided for in the POEA contract. As this case is handled by Del Rosario, we have filed a Motion for Clarification / Reconsideration on the issue. The meaning of “income benefit” must be clarified and the award of said benefits beyond 120 days must also be clarified.
Magsaysay Maritime Corporation and/or Westfal-Larsen and Co., A/S, vs. NLRC First Division, and Wilson Capo; G.R. No. 191903 ; Second Division; June 28, 2013; Associate Justice Arturo Brion, Ponente (Attys. Lovereal Ocampo and Herbert Tria of Del Rosario & Del Rosario handled for vessel interests).
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