Disability shall be conclusively presumed to be permanent and total without sufficient justification for the extension of the treatment period.

Permanent total disability; 120-day rule; 240-day rule; Premature complaint; Cause of action; Extension beyond 120 days; Sufficient justification

Orient Hope Agencies, Inc. and/or Zeo Marine Corporation vs. Michael E. Jara

G.R. No. 204307, June 6, 2018


Michael E. Jara (Jara) was hired by Orient Hope, on behalf of its foreign principal, Zeo Marine (collectively referred to as Orient, et al.), as engine cadet on board M/V Orchid Sun. The employment contract was for a duration of 10 months.

On its way to Oman, M/V Orchid Sun sank off Muscat, during which Jara sustained leg injuries. He was treated at Khoula Hospital in Oman and thereafter repatriated and admitted on August 3, 2007 at the Metropolitan Hospital in Manila. Jara was diagnosed to have suffered from “fracture, shaft of left ulna and left fibula.”

On August 28, 2007 and January 9, 2008, he underwent knee operations. He did not return to the company-designated doctor after his check up on March 17, 2008. Jara filed a complaint with the Labor Arbiter, insisting that he was entitled to total permanent disability benefits amounting to US$60,000.00.

On May 29, 2008, Assistant Medical Coordinator Dr. Mylene Cruz-Balbon of the Marine Medical Services of Metropolitan Medical Center issued a letter, which Medical Coordinator Dr. Robert D. Lim noted and which provides a disability grading of Grade 11.

LA Ruling:

The Labor Arbiter (LA) found Jara entitled to compensation equivalent to Grade 11 disability.

He solely relied on the assessment of the company-designated physician. He found no evidence or other medical report on record to dispute the company-designated physician’s determination and to support Jara’s claim.

NLRC Ruling:

The National Labor Relations Commission affirmed the Labor Arbiter’s award. It rejected Jara’s unsubstantiated allegation that he was permanently and fully disabled.

It found no evidence, such as a credible assessment from another doctor, to overturn the company-designated physician’s finding that indeed Jara was suffering from a Grade 11 disability.

Jara filed a Motion for Reconsideration, but it was denied by the National Labor Relations Commission. Insisting that he was entitled to permanent disability compensation, Jara elevated the matter to the Court of Appeals through a Petition for Certiorari under Rule 65.

CA Ruling:

The Court of Appeals held that Jara was “entitled to permanent disability benefits because the assessment of the company-designated physician that he was suffering from a grade 11 disability was issued after nine (9) months or more than 120 days from the time he was medically repatriated.”

Citing Valenzona vs. Fair Shipping Corporation, et al. and Fil-Star Maritime Corporation, et al. vs. Rosete, the Court of Appeals held that Jara’ s disability was permanent and total considering that “he was unable to return to his job for more than one hundred twenty days already.” Given Jara’s knee injury, the Court of Appeals ruled that it would be nearly impossible for Jara to go back to sea duties.


Whether or not the disability assessment by a company-designated physician made after 240 days with the treatment of knee injury still on going and the failure of seafarer to continue treatment is valid

Whether or not the complaint filed before the expiration of the 240-day period lacks cause of action

SC Ruling:

The SC denied the petition with modification by awarding moral and exemplary damages.

The SC held that in claims for a seafarer’s disability benefits, POEA-SEC is deemed incorporated in the seafarer’s employment contract and must be read in light of the relevant provisions on disability of the Labor Code and its implementing rules. In this case, the 2000 version of the POEA-SEC applies since Jara was hired in December 2005 and he filed his complaint in 2008.

The 120-day period mandated in Section 20(B) of the POEA-SEC, within which a company-designated physician should declare a seafarer’s fitness for sea duty or degree of disability, should accordingly be harmonized with Article 198 [192](c)(1) of the Labor Code, in relation with Book IV, Title II, Rule X of the Implementing Rules of the Labor Code, or the Amended Rules on Employee Compensation. Book IV, Title II, Article 198 [192](c)(l) of the Labor Code, as amended, provides that upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one hundred twenty (120) days.

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Rule X, Section 2 of the Implementing Rules of the Labor Code states that If the disability is caused by an injury or sickness it shall not be paid longer than 120 consecutive days where such injury or sickness still requires medical attendance beyond 120 days but not to exceed 240 days from onset of disability in which case benefit for temporary total disability shall be paid.

The SC discussed the interplay of these provisions in Vergara vs. Hammonia Maritime Services, Inc. stating 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. 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.

There must be a sufficient justification to extend the medical treatment from 120 days to 240 days. The 240-day extended period remains to be an exception, and as such, must be clearly shown to be warranted under the circumstances of the case before it can be applied.

Citing Talaroc vs. Arpaphil Shipping Corp., the SC discussed that for a company-designated physician to avail of the extended 240-day period, he or she must perform some complete and definite medical assessment to show that the illness still requires medical attendance beyond the 120 days, but not to exceed 240 days. In such case, the temporary total disability period is extended to a maximum of 240 days. Without sufficient justification for the extension of the treatment period, a seafarer’s disability shall be conclusively presumed to be permanent and total. It is in this case as well that the SC summarized the guidelines to be observed when a seafarer claims permanent and total disability benefits.

In this case, the company-designated physician did not issue a medical assessment within the 120-day period. Nonetheless, the surgical procedure performed on Jara on January 9, 2008, or 159 days from his repatriation, shows that his condition required further medical treatment, justifying the extension of the 120-day period to 240 days. Thus, the SC deemed the temporary total disability period to be accordingly extended up to a maximum of 240 days.

Orient, et al. insist that Jara’s complaint should have been dismissed for lack of cause of action because the 240-day period had yet to lapse when the complaint was filed. The SC was not persuaded.

Related: Interim disability grading can be done in 120 days
Disability grading rendered with the 240-day period binds the Court

The SC held that when Jara filed his Complaint on March 6, 2008, or after more than 120 days had lapsed, the company-designated physician had not yet determined his disability and Jara had not yet fully recovered. Applying the ruling in Island Overseas Transport Corporation vs. Beja, Jara is deemed to have already acquired a cause of action for permanent and total disability benefits.

In this case no medical or progress report was ever made by the company-designated physician other than that issued on May 29, 2008, or 300 days from Jara’s repatriation on August 3, 2007. Jara was last seen by the company-designated physician on March 17, 2008, or on the 227th day from his repatriation. At this point, the company-designated physician is nearing the end of the extended period of 240 days, 13 days to be exact, within which to give Jara’s final disability assessment, yet none was given.

Orient, et al., however, would put the blame on Jara for not returning to the doctor for further consultation and treatment. There is no showing, though, in the records that the physician required him to return within a specified period. Jara could not be faulted for not returning to the company-designated physician who failed to assess him of rightful disability grading after treatment of more than seven (7) months. The company-designated physician should have at least issued a medical report containing an evaluation of Jara’s condition on March 17, 2008. This is reasonably expected given the proximity of Jara’s last check up to the expiration of the 240-day period.

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Instead, the company-designated physician issued an assessment only on May 29, 2008, simply stating that “based on his last follow-up, his suggested disability grading is Grade 11 -stretching leg or ligaments of a knee resulting in instability of the joint.” Furthermore, other than this succinct statement, the report is devoid of any explanation to back up the findings of the company-designated physician or of any detail of the progress of Jara’s treatment, and the approximate period needed for him to fully recover.

The POEA-SEC clearly provides the primary responsibility of a company-designated physician to determine the disability grading or fitness to work of seafarers. To be conclusive, however, company-designated physicians’ medical assessments or reports must be complete and definite to give the proper disability benefits to seafarers. A final and definite disability assessment is necessary in order to truly reflect the true extent of the sickness or injuries of the seafarer and his or her capacity to resume work as such. Otherwise, the corresponding disability benefits awarded might not be commensurate with the prolonged effects of the injuries suffered.

Aside from the belated assessment of Jara’s injury, the medical report dated May 29, 2008 did not contain any definitive declaration as to the seafarer’s fitness to work. On the contrary, the report stated that as of his last check up on March 17, 2008, Jara was still complaining of left knee pain especially upon doing left knee flexion. Under the circumstances of this case, it would be improbable to expect that by March 30, 2008, or the last day of the 240-day period, Jara would have fully recovered from his injury or regained his pre-injury capacity as to be able to go back to his sea duty.

The facts of this case show Jara’s inability to perform his customary sea duties and the company-designated physician’s failure to declare his fitness or unfitness to work, despite the lapse of 240 days. This entitles Jara, under the law, to permanent and total disability compensation. Without a valid final and definitive assessment from company-designated physician, Jara’s temporary and total disability, by operation of law, became permanent and total.

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