FILING OF TOTAL PERMANENT DISABILITY CLAIM PRIOR TO THE EXPIRATION OF THE 240-DAY PERIOD IS PREMATURE

TSM Shipping Phils., Inc. and/or Dampskibsselskabet Norden A/S and/or Capt. Castillo vs. Louie L. Patiño
G.R. No. 210289, March 20, 2017

Facts:

TSM, in behalf of its foreign principal, DNAS, entered into a Contract of Employment with Patino for a period of six months as GP2/0S (General Purpose 2/0rdinary Seaman) for the vessel Nord Nightingale.

On May 20, 2010, while working on board the vessel, respondent injured his right hand while securing a mooring rope. He was brought to a medical facility in Istanbul, Turkey, where X-ray showed a fracture on his 5th metacarpal bone.

Respondent’s right hand was placed in a cast and thereafter he was repatriated. Upon arrival in Manila on May 24, 2010, petitioners referred respondent to the company-designated physician, Dr. Nicomedes G. Cruz (Dr. Cmz), for further treatment. Respondent was also referred to an orthopedic surgeon who recommended surgical operation to correct the malunited fractured metacarpal bone.

On June 8, 2010, respondent underwent Open Reduction and Internal Fixation of the fractured 5th metacarpal bone at Manila Doctors Hospital. He then went through physical therapy. After extensive medical treatments, therapy, and follow-up examinations, Dr. Cruz, on August 17, 2010, rendered an interim assessment of respondent’s disability under the Philippine Overseas Employment Administration -Standard Employment Contract (POEA-SEC), at Grade 10, or loss of grasping power for small objects between the fold of the finger of one hand.

Despite continuing physical therapy sessions with the company-designated physician, respondent filed on September 8, 2010 a complaint with the NLRC against petitioners for total and permanent disability damages, and attomey’s fees. Thereafter, in a Medical Report dated October 11, 2010, Dr. Cruz declared respondent to have reached the maximum medical cure after rendering a final disability rating of Grade 10 on September 29, 2010.

On November 19, 2010, respondent consulted Dr. Nicanor Escutin (Dr. Escutin), who assessed him to have permanent disability unfit for sea duty in whatever capacity as a seaman.

LA Ruling:

The Labor Arbiter awarded respondent total and permanent disability benefits under the AMOSUP CBA in the amount of US$80,000.00, sickness allowance of US$1, 732.00, attorney’s fees equivalent to 10% of the award or US$8,173.20, and moral and exemplary damages of Pl00,000.00 and P50,000.00, respectively, for the fraud and malice that attended the denial of his claims.

The Labor Arbiter observed that respondent is indeed suffering from a total and permanent disability since his rehabilitation took five months or more than 120 days and there was no offer on the part of petitioners to rehire him. The Labor Arbiter found credible Dr. Escutin’s finding that respondent’s injury had rendered him inutile as an ordinary seaman and although total disability does not mean absolute helplessness, his incapacity to work resulted in the impairment of his earning capacity.

TSM appealed to the NLRC.

NLRC Ruling:

In a Decision, the NLRC agreed with the Labor Arbiter that respondent is entitled to permanent total disability benefits because his injury had rendered him incapable of using his right hand, based on the last medical report of Dr. Cruz, where the latter acknowledged that respondent’s right grip is poor.

The NLRC ruled that disability should not be understood based on its medical significance but on the loss of earning capacity but deleted the award based on the AMOSUP CBA as there was no such evidence as well as the damages and attorney’s fees for lack of bad faith. Both parties filed their motions for reconsideration.

The NLRC denied petitioners’ motion for reconsideration. In a subsequent Resolution, the NLRC partly granted respondent’s motion for reconsideration by reinstating the Labor Arbiter’s award of attorney’s fees on the ground that he was forced to litigate his claims.

Petitioners filed a Petition for Certiorari with Prayer for the Issuance of a Writ of Preliminary Injunction and/or Temporary Restraining Order.

CA Ruling:

The CA dismissed the petition. The CA agreed with the findings of both the NLRC and Labor Arbiter that respondent is entitled to a Grade 1 or total permanent disability benefits under the POEA-SEC and that the assessment of respondent’s chosen physician, Dr. Escutin, is credible.

TSM sought reconsideration but it was denied.

Issue/s:

1. Whether or not respondent is entitled to the benefits under AMOSUP CBA
2. Whether or not respondent is entitled to total permanent disability despite when the case was filed within the 240-day period
3. Whether the findings of company physician prevails over that of the complainant’s in the absence of referral with third party physician

SC Ruling:

The SC found merit in the petition.

Because of lack of proof that respondent is covered by the AMOSUP CBA, settled is the finding that his entitlement to disability benefits is governed by the POEA-SEC and relevant labor laws, which are deemed written in the contract of employment with petitioners.

Citing Vergara vs. Hammonia Maritime Services, Inc., the SC held that 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.

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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.

Based on the pronouncement in Vergara, the Court then held, in the case of C.F Sharp Crew Management, Inc. v. Taok, that a seafarer may have basis to pursue an action for total and permanent disability benefits in any of the following conditions: (a) the company-designated physician tailed 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 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 whom 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 <Usability 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-SBC found and declared him unfi.t to work; (g) the company-designated physician declared him totally and pem1ancntly 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 period but he remains incapacitated to perform his usual sea duties after the lapse of the said periods.

To stress, the rule is that a temporary 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.” After the initial interim assessment of Dr. Cruz, respondent continued with his medical treatment. Dr. Cruz then rendered on September 29, 2010 a final assessment of Grade 10 upon reaching the maximum medical cure. Counting from the date of repatriation on May 24, 2010 up to September 29, 2010, this assessment was made within the 240-day period. Clearly, before the maximum 240-day medical treatment period expired, respondent was issued a Grade 10 disability rating which is merely equivalent to a permanent partial disability under the POEA-SEC. Thus, respondent could not have been suffering from a permanent total disability as would entitle him to the maximum benefit of US$60,000.00.

The filing of respondent’s complaint is premature and in breach of his contractual obligation with the petitioners. Dr. Cruz’s Grade 10 disability rating prevails for failure to properly dispute it in accordance with an agreed procedure. Respondent is thus entitled to the amount corresponding to Grade 10 based on the certification issued by Dr. Cruz.