PERMANENT AND TOTAL DISABILITY OCCURS DESPITE MORE THAN GRADE 1 RATING IF THE SEAFEARER IS PRECLUDED FROM EARNING OR DOING THE SAME WORK HE IS ACCUSTOMED OR TRAINED TO DO

Permanent and total disability arises if the seafarer’s illness or injury prevents him from engaging in gainful employment for more than 120 or 240 days, as the case may be, despite having more than Grade 1 disability rating.

The SC held as follows:

HOEGH FLEET SERVICES PHILS., INC., vs. TURALLO
G.R. No. 230481, July 26, 2017

Facts:

Hoegh Fleet Services Phils., Inc. (Hoeh) hired Turallo as a Messman on board vessel “Hoegh Tokyo” for nine (9) months. The employment contract also covered by a Collective Bargaining Agreement between the Associated Marine Officers’ and Seaman’s Union of the Philippines and Hoegh Fleet Services. Turallo was found “fit for sea duty” in the Pre-Employment Medical Examination (PEME).

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Turallo felt pain on the upper back of his body and chest pain, which was reported to his superiors as evidenced by the “Incident/ Accidents Personnel” signed by Turallo’ s department head and the master of the vessel. Turallo was referred to a doctor by the ship’s captain. Said referral also mentioned that Turallo was discharged from the ship on 23 September 2013.

Upon arrival in Manila, Turallo was referred to the company-designated physician, who in turn referred him to an orthopedic surgeon and cardiologist. He underwent medical and laboratory tests and was advised to return for re-evaluation.

Turallo underwent MRI of the cervical spine and left shoulder and EMG-NCV. On 4 October 2013, after the said tests, the company-designated physician diagnosed Turallo with “Acromioclavicular Joint Arthritis; Bicep Tear and Cuff Tear, Left Shoulder; Cervical Spondylosis Secondary to C4-C5, C5-C6; Disc Protrusion; Rule Out Ischemic Heart Disease” and recommended that he undergo the following procedures: “Dobutamine Stress Echocardiogram Arthroscopic Surgery, Acromioclavicular Joint Debridgment, Subacrominal Decompression Cuff Repair using Double Row 3-4 anchors, Biceps Tenodesis using 1-2 anchors”.

In a “private and confidential” correspondence to Capt. Desabille, head of the crew operations, the company-designated physician reported that Turallo had undergone a C4-C5, C5-C6 Discectomy Fusion with PEEK Prevail on 19 December 2013, and that the specialist opined that the estimated length of treatment after surgery is three (3) months of rehabilitation for strengthening and mobilization exercise. The letter further stated that based on Turallo’ s condition at that time, if the latter is entitled to disability, the closest interim assessments are Grade 8 (shoulder)- ankylosis of one shoulder and Grade 10 (neck)”moderate stiffness or 2/3 loss of motion in neck.

In another correspondence of same date addressed to Capt. Desabille, the company-designated physician noted Turallo’s condition and stated the treatment and processes that the latter has undergone and further noted that Turallo was in stable condition, he was advised to continue physical therapy on out-patient basis and was prescribed seven (7) different take home medications.

Despite Turallo’ s continuous rehabilitation treatment, pain in his left shoulder persisted, hence, he followed up his pending surgery therefor several times to no avail. This prompted Turallo to seek a second opinion.

Turallo consulted with Dr. Manuel Fidel Magtira, a government physician of the Vizcarra Diagnostic Center who, after x-ray of his left wrist and shoulder joints, found him to be “partially and permanently disabled with separate impediments for the different affected parts of (his) body of Grade 8, Grade 10 and Grade 11, based on the POEA contract” but declared him as “permanently unfit in any capacity for further sea duties”

Grievance proceedings were held between the parties at the AMOSUP, where the petitioners offered the amount of Thirty Thousand Two Hundred Thirty One US Dollars (US$30,231. 00) corresponding to .a Grade 8 disability compensation based on the maximum amount of Ninety Thousand US Dollars (US$90,000.00). Turallo, however proposed the settlement .amount of Sixty Thousand US Dollars (US$60,000.00). The parties failed to reach an agreement.

Turallo then filed a Notice to Arbitrate with the National Conciliation and Mediation Board. At this point, petitioners increased their offer from Thirty Thousand Two Hundred Thirty One US Dollars (US$30,231.00) to Fifty Thousand US Dollars (US$50,000.00) plus allowances for further medical treatments and expenses. Turallo, however still refused to accept such amount.

Despite efforts to arrive at an agreement, the parties failed to settle their differences, hence, they were directed to submit their pleadings and evidence for the resolution of the issues before the panel of arbitrators (PA).

PA Ruling:

The Panel of Arbitrators (PA) ordered Hoegh, et al. to pay Turallo jointly and solidarily the disability compensation in the amount of US$90,000.00, sickness allowance and attorney’s fees equivalent to ten percent (10%) of the total monetary award.

The PA denied the motion for reconsideration. Thus, Hoegh, et al. filed a petition with the CA.

CA Ruling:

The CA found no cogent reason to reverse the findings of the Panel. It explained that the employment of seafarers and its incidents, including claims for death benefits, are governed by the contracts they sign every time they are hired or rehired.

Also, while the seafarers and their employees are governed by their mutual agreements, the Philippine Overseas Employment Agency (POEA) rules and regulations require the POEA-Standard Employment Contract (SEC), which contains the standard terms and conditions of the seafarer’s employment in ocean-going vessels, be integrated in every seafarer’s contract. Entitlement, thus, to disability benefits by seamen is a matter governed not only by medical findings but by law and contract.

The CA was not persuaded with Hoegh’s allegation that its company-designated physician actually issued a final assessment, invoking the document signed by its orthopedic and spinal surgery specialist as Turallo is still undergoing surgery during this period.

The CA held further that even assuming that the company-designated physician’s disability rating was actually given and considered definitive, Turallo would still have a cause of action for total and permanent disability compensation as he remained incapacitated to perform his usual sea duties after the lapse of 120 or 240 days, such being the period for the company-designated physician to issue a declaration of his fitness to engage in sea duty.

The Motion for Reconsideration was denied. Hoegh Fleet and Turallo filed separate petitions for review on certiorari, which were consolidated by the Supreme Court.

Issue/s:

Whether or not Turallo is entitled to award for total and permanent disability despite the fact that his medical findings state otherwise at just Grade 8 rating

Whether or not failure of the company-designated physician to issue final disability within the 120-day to 240-day period results in permanent and total disability.

SC Ruling:

The SC denied the petitions.

As to the petition of Hoegh, the SC held that indeed, under Section 32 of the POEA-SEC, only those injuries or disabilities that are classified as Grade 1 may be considered as total and permanent. However, if those injuries or disabilities with a disability grading from 2 to 14, hence, partial and permanent, would incapacitate a seafarer from performing his usual sea duties for a period of more than 120 or 240 days, depending on the need for further medical treatment, then he is, under legal contemplation, totally and permanently disabled.

In other words, an impediment should be characterized as partial and permanent not only under the Schedule of Disabilities found in Section 32 of the POEA-SEC but should be so under the relevant provisions of the Labor Code and the Amended Rules on Employee Compensation (AREC) implementing Title II, Book IV of the Labor Code.

That while the seafarer is partially injured or disabled, he is not precluded from earning doing the same work he had before his injury or disability or that he is accustomed or trained to do. Otherwise, if his illness or injury prevents him from engaging in gainful employment for more than 120 or 240 days, as the case may be, he shall be deemed totally and permanently disabled.

Moreover, the company-designated physician is expected to arrive at a definite assessment of the seafarer’s fitness to work or permanent disability within the period of 120 or 240 days. That should he fail to do so and the seafarer’s medical condition remains unresolved, the seafarer shall be deemed totally and permanently disabled.

The SC held further that indeed the company-designated physician failed to issue a final assessment of Turallo’s disability grading.

Hence, under the contemplation of the law abovementioned, Turallo is considered as totally and permanently disabled. The SC found that the Panel, as affirmed by the CA, is correct in concluding that the Grade 8 disability grading given cannot be considered as a final assessment as the said letter expressly states that it was merely an “interim” assessment.

Citing Fil-Star Maritime Corporation vs. Rosete and Tamin vs. Magsaysay Maritime Corporation, the SC concluded that the company-designated doctor’s certification issued within the prescribed periods must be a final and definite assessment of the seafarer’s fitness to work or disability, not merely interim, as in this case. warranted.

As regards Turallo’s petition challenging the reduction of the amount of attorney’s fees, the SC held that Article 111 of the Labor Code indeed provides that the culpable party may be assessed attorney’s fees equivalent to 10 percent of the amount of wages recovered.

It also provides that it shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s fees which exceed 10 percent of the amount of wages recovered. Section 8, Rule VIII, Book III of the Implementing Rules of the Labor Code sustains the same and states that attorney’s fees shall not exceed 10 percent of the amount awarded.

A closer reading of these provisions show that the 10 percent only serves as the maximum of the award that may be granted. Citing the case of Taganas vs. National Labor Relations Commission that Article 111 does not even prevent the NLRC from fixing an amount lower than the ten percent ceiling prescribed by the article when the circumstances warrant it. With that, the SC is not tied to award 10 percent attorney’s fees to the winning party, as what Turallo wishes to imply.

With that, the SC found more reasonable to grant five percent (5%) of the total monetary award as attorney’s fees to Turallo.