DEATH BENEFITS RULE TO DETERMINE WHICH AMONG THE POEA-SEC, ITF, OR CBA PROVISIONS WILL BE APPLICABLE

Death benefit is one of those guaranteed to the seafarer. However, where the provisions of ITF, POEA-SEC, and CBA do not provide the same amount, the most beneficial shall be followed based on the respective rules.

Thus, the Supreme Court held in a November 20, 2017 case as follows:

Maersk-Filipinas Crewing, Inc. vs. Rosemary G. Malicse
G.R. Nos. 200576 & 200626, November 20, 2017

Facts:

Efren was employed as an able-bodied seaman by petitioner AP Moller Singapore Pte., Ltd. for a term of nine months through its agency, Maersk-Filipinas Crewing, Inc.

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Four months later Efren complained of a fever and headache while on board Maersk Tide. When paracetamol, bed rest, and tetracycline administered by the vessel’s medical staff did not work, he was sent to Clinica Hospital del Atlantico in Panama. On 29 May 2007, he died.

The death certificate of Efren stated that he died of “multiple organ dysfunction, Septicemia and Mononucleosis due to Cytomegalovirus.” Neither party disclaimed that Efren died of septicemia, which is severe blood poisoning or infection.

Maersk, et al. paid Rosemary USD1,000 representing burial benefits. As for death benefits, they offered her USD 40,000, which was equivalent to half of the death benefits provided by the Collective Bargaining Agreement (CBA) between Maersk and Singapore Organization of Seamen, the union to which her husband belonged. When she demanded a full copy of the CBA, as well as a copy of the International Transport Workers Federation Standard Collective Agreement (ITF Agreement) from Maersk, et al., the latter refused.

Consequently, Rosemary filed a Complaint before the Executive Labor Arbiter (LA) for death benefits, moral and exemplary damages, and attorney’s fees. Maersk, et al. responded that the death of her husband was not caused by a work-related illness. Rosemary countered by arguing that according to the ITF Agreement, she was entitled to death benefits regardless of the cause of Efren’s death.

LA Ruling:

The LA sustained the claim of Rosemary that the labor union of her husband was an affiliate of the ITF. The LA held that the ITF Agreement should prevail over the CBA and the 2000 Philippine Overseas Employment Administration Standard Employment Contract for Seafarers (POEA-SEC). The ITF Agreement, said the LA, had a more beneficial provision on granting death benefits since it awards claims regardless of the seafarer’s cause of death.

The LA granted death benefits of USD 82,500 to Rosemary and ordered Maersk, et al. to pay her moral damages of PhP5 million, exemplary damages of PhP3 million, and 10% attorney’s fees.

Maersk, et al. appealed before the National Labor Relations Commission (NLRC). Rosemary likewise appealed and demanded payment for · loss of income and interest on her monetary claims.

NLRC Ruling:

The NLRC dismissed the appeals. Both parties moved for reconsideration, but to no avail.

The NLRC held that the LA correctly appreciated the applicability of the ITF Agreement. In addition, the NLRC declared that Maersk, et al. had the burden of proving that Efren had died of a non-compensable illness.

Finding that Maersk, et al. had failed to discharge such burden, the NLRC affirmed the ruling of the LA with the modification that moral and exemplary damages be reduced to P100,000 and P50,000, respectively.

Maersk, et al. and Rosemary separately filed Petitions for Certiorari before the CA, with essentially the same arguments as those raised a quo. At the outset, the appellate court issued a Temporary Restraining Order and a Writ of Preliminary Injunction in favor of Maersk, et al..

CA Ruling:

The CA found no grave abuse of discretion on the part of the NLRC.

In its assailed Decision, the CA maintained that Maersk, et al. were liable to Rosemary for full death benefits and damages, but that she was not entitled to additional compensation in the form of income losses and interest claims.

The CA echoed the appreciation of the NLRC that employers have the burden of proof in showing that the seafarer died from a non-compensable illness. Based on records, the appellate court ruled that Maersk, et al. had failed to show that they were not liable to pay Rosemary’s claims for death benefits.

Maersk, et al. and Rosemary unsuccessfully moved for reconsideration. Maersk, et al. filed the instant Petition for Review on Certiorari, questioning the grant of death benefits and damages, as well as the applicability of the ITF Agreement. Rosemary waived her right to comment on this petition.

Issue/s:

Whether or not, under the circumstances, the ITF, CBA, or POEA provisions are applicable

Whether or not the burden of proving compensability lies with the employer

SC Ruling:

The SC held that the following are the conditions for the applicability of the ITF Agreement: (1) the seafarer is a member of a union, (2) which is affiliated with the ITF, (3) that has entered into a special agreement with Maersk, et al.

The SC found that none of the pieces of evidence adduced by the parties has depicted with clarity the relationship of Efren’s labor union -Singapore Organisation of Seamen -with the ITF. Furthermore, none of the documents portrayed that Maersk, et al. entered into any special agreement.

In this light, the SC found grave abuse of discretion on the part of the CA for awarding the death benefits provided by the ITF Agreement sans any proof of the applicability thereof.

Given that the ITF Agreement is not an overriding instrument in this case, the SC applied the minimum acceptable terms in a seafarer’s employment contract provided by the POEA-SEC.

Citing Legal Heirs of Deauna vs. Fil-Star Maritime Corp., the SC clarified that beneficial CBA clauses prevail over the POEA-SEC in that the special clauses on collective bargaining agreements must prevail over the standard terms and benefits formulated by the POEA in its Standard Employment Contract.

In comparing the provisions of CBA and POEA-SEC, the SC found that the CBA provides higher death benefits of USD80,000. However, the cause of death of the seafarer must be due to an accident; otherwise, his beneficiaries would receive only USD40,000. That amount is lower than the benefit granted by the POEA-SEC, which is USD50,000. But before beneficiaries may receive compensation under the POEA-SEC, there must be substantial evidence that the seafarer died of c. work-related illness.

Thus, the SC concluded that the Rosemary is entitled to the more beneficial provision of the POEA-SEC if his death is proven to have been work-related. Otherwise, the CBA’s provision on the grant of USD40,000 regardless of the cause of death will apply. The labor tribunals, therefore, should have ascertained whether or not Efren’s death was caused by a work-related illness.

The SC further held that the correct approach in adjudging claims of seafarers for death and disability benefits is to determine whether the claimants have proven the requisites of compensability under Section 32-A of the POEA-SEC, viz: (1) the seafarer’s work must have involved the risks described therein; (2) the disease was contracted as a result of the seafarer’s exposure to the described risks; (3) the disease was contracted within a period of exposure and under such factors necessary to contract it; and (4) there was no notorious negligence on the part of the seafarer.

Here, Rosemary has failed to satisfy the required positive propositions on compensability. First, she did not describe the tasks performed by Efren on board Maersk Tide. While his employment contract identified him as an able-bodied seaman, none of the documents on record enumerated his particular duties. Rosemary did not even explain how his work environment caused his fever and headache, and how these conditions worsened into the alleged fatal illness.

Second, given the dearth of evidence as regards Efren’s actual job, there was absolutely no showing of how his duties or tasks contributed to the development of his illness. Therefore, there could be no basis to conclude that his multiple organ failure secondary to septicemia was contracted as a result of his exposure to the risks of his trade.

The SC disposed that Maersk, et al. were correct to offer Rosemary only USD40,000. Based on their uncontested narrative, they had already proposed the payment of that sum to Rosemary as early as the negotiations preceding the filing of the claims before the LA.