New Supreme Court decision favours 240-day disability rule - International Law Office

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Shipping & Transport - Philippines

New Supreme Court decision favours 240-day disability rule

June 13 2012

Facts
Decision

Comment


Facts

An able seaman was diagnosed as suffering from severe acute bronchial asthma with secondary infection and lumbosacral muscle strain. He was repatriated for further treatment. In October 1998 the company-designated physician declared that the seaman's back problem could possibly be resolved with spine surgery. A pulmonologist opined that the seaman's obstructive airway disease needed to be monitored regularly. The seaman was declared disabled with a suggested disability grading of 10 to 20%. Treatment continued and in February 1999 the company-designated physician declared that obstructive pulmonary disease in seafarers tends to be a chronic problem and that medical treatment would no longer be effective in this case.

Wanting to confirm the company-designated doctor's opinion, the company suggested that the seaman be examined by another doctor. The newly appointed doctor also stated that the seaman was permanently unfit for sea service. The parties were unable to agree on the quantum of benefits to which the seaman was entitled, which resulted in the filing of a complaint before the National Labour Relations Commission.

During the proceedings before the labour arbiter, the company again suggested that the seaman be subjected to an independent medical examination by another physician, whose findings would be considered final. The seaman agreed. This third doctor eventually declared that the respondent was unfit to return to work as an able seaman, despite the fact that his impairment was considered to be mild. A settlement did not materialise and a decision was issued by the labour arbiter, awarding $20,154 for payment of disability benefits and a medical allowance of $2,060 plus 5% attorney fees. The labour arbiter held that since the disability was mild, the seaman was not entitled to full disability benefits. The labour arbiter also held that the provisions of the Labour Code do not apply to claims for benefits filed on the basis of the Philippines Overseas Employment Administration Standard Employment Contract (POEA SEC).

The commission affirmed the labour arbiter's decision. It ruled that the respondent's condition could be considered only a partial disability and that the provisions of the code did not apply to his claim.

Decision

The Court of Appeals reversed the commission's decision, declaring that the respondent was suffering from permanent total disability, and increased the award to $60,000. The court further ruled that the respondent's disability brought about by his bronchial asthma was permanent and total, as he had been unable to work since May 1998 – or for more than 120 days. The Court of Appeals based its ruling on the concept of 'permanent and total disability' under the code.

The Supreme Court affirmed the decision of the Court of Appeals.(1) It ruled that in determining disability benefits, it is not only the provisions of the POEA SEC which must be taken into account; the code's provisions on disability also apply in such cases. The Supreme Court extensively cited the decision in Vergara v Hammonia Maritime Services, where it was held that:

"As these provisions operate, the seafarer, upon sign-off from his vessel, must report to the company-designated physician within three 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 SEC and by applicable Philippine laws. If the 120-day 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 also be declared fit to work at any time such declaration is justified by his medical condition."

In the case at hand, since the company-designated doctor had neither issued a declaration that the seaman was fit to work nor assessed a disability grading within a 240-day period, the seaman was considered to be permanently and totally disabled and entitled to full disability benefits of $60,000.

The court also gave credence to the final medical report in which the doctor stated that the seaman "ought not to be considered fit to return to work as a seaman". This bore out the view that his disability was permanent and total as provided under the POEA SEC and the code, as the seaman was no longer employable.

Comment

This Supreme Court decision favoured the position that a seafarer can be declared permanently and totally disabled – and thus entitled to full disability benefits – only when there is no declaration of fitness or determination of disability assessment within 240 days. This is in contrast with several Supreme Court decisions limiting the evaluation period to 120 days (for further details please see "Supreme Court reiterates 120-day disability rule"). Therefore, it is important to have a declaration of fitness or determination of disability issued within 240 days. It is better still if this can be achieved within 120 days.

Also noteworthy is the Supreme Court's explicit ruling that the provisions of the POEA SEC are not the sole factor in determining disability compensation, and that concepts in the Labour Code also apply.

For further information on this topic please contact Ruben T Del Rosario at Del Rosario & Del Rosario law Offices by telephone (+63 2 810 1791), fax (+63 2 817 1740) or email (ruben.delrosario@delrosariolaw.com).

Endnotes

(1) Magsaysay Maritime Corporation v Oberto Lobusta; GR 177578; January 25 2012; First Division; Associate Justice Martin Villarama Jr, Ponente.


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