Elburg Shipmanagement Phils., Inc. v. Jugo

FIRST DIVISION

[G.R. No. 249814. December 7, 2021.]

ELBURG SHIPMANAGEMENT PHILS., INC./ELBURG SHIPMANAGEMENT HONGKONG, LTD./MS. ANGELA A. PADRE, petitioners,vs. LORETO A. JUGO, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated December 7, 2021 which reads as follows:

"G.R. No. 249814 (Elburg Shipmanagement Phils., Inc./Elburg Shipmanagement Hongkong, Ltd./Ms. Angela A. Padre v. Loreto A. Jugo). — This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, seeking to reverse and set aside the Decision 2 dated June 7, 2019 and the Resolution 3 dated October 9, 2019 of the Court of Appeals (CA) in CA-G.R. S.P. No. 158073, which reversed the findings of the National Labor Relations Commission (NLRC) and ordered petitioners to jointly and severally pay respondent total and permanent disability benefits and attorney's fees.

The Antecedents

On May 14, 2016, Loreto A. Jugo (respondent) entered a 9-month employment contract with petitioners Elburg Shipmanagement Phils., Inc. and Elburg Shipmanagement Hongkong, Ltd. (petitioners), where he agreed to serve as an oiler on board the vessel, "St. George." 4

On September 20, 2016, while respondent was on board the vessel, he experienced abdominal pain with episodes of nausea and vomiting. Upon medical examination in China, respondent was diagnosed to be suffering from "Helicobacter pylori." Consequently, several medications were administered to him. He was also admitted in a hospital, until his discharge on September 24, 2016. 5

On September 25, 2016, respondent was medically repatriated in the Philippines. Upon arrival, he was referred to the Marine Medical Services for further evaluation and was diagnosed to be suffering from "Distal Erosive Esophagitis, Duodenal Ulcer, and Erosive Gastritis."6

After a series of medical examinations and treatments, the company-designated physician issued a medical certification dated February 7, 2017, stating that:

This is regarding the case of Oiler Loreto A. Jugo x x x who was diagnosed to Distal Esophagitis — Healed; Duodenal Ulcer — Healed; Erosive Gastritis — Healed; H. plyori Infection — Resolved.

Patient did not sign his certificate of fitness to work saying that he wants to seek a second opinion regarding H. plyori testing.7 (Emphasis supplied)

Thus, on March 17, 2017, respondent consulted his own doctor, Dr. May S. Donato (Dr. Donato), who issued an examination report with the following findings:

Recurrent Gastritis secondary to Erosive Gastritis;

xxx xxx xxx.

Due to the above findings, Seaman Jugo will not be able to perform his job as seaman effectively, efficiently and productively. He is therefore given a permanent disability. (Emphasis supplied) 8

Respondent claimed that the parties agreed to submit the conflicting medical assessments of the company-designated physician and his personal doctor to Dr. Reinero A. Prieto (Dr. Prieto). Thus, sometime in May 2017, the parties met at the East Avenue Medical Center in Quezon City, but Dr. Prieto declined to render an opinion. Hence, so as not to waste their time, the parties, through their counsels and companions, searched for another doctor in the same hospital. 9 DETACa

Accordingly, on May 25, 2017, respondent went back to East Avenue Medical Center for the scheduled consultation and medical examination with Dr. Jovonie B. Cacal (Dr. Cacal). However, petitioners' counsel failed to appear. Respondent was then told to proceed with the consultation and to just furnish them with a copy of the results. After medical examination, Dr. Cacal issued a Medical Report declaring respondent to be "UNFIT TO WORK AS SEAFARER IN WHATEVER CAPACITY" with a Grade 2 disability grading. 10

On July 11, 2017, respondent filed a complaint for total and permanent disability benefits with prayer for the payment of moral and exemplary damages, as well as, attorney's fees. Respondent contended that he is entitled to total disability benefits as he could no longer work as a seafarer for more than 120 days and even after the lapse of 240 days. In the alternative, he asserted that he is entitled to disability benefits equivalent to Grade 2 disability as the finding of the third doctor was final and binding. 11

For their part, petitioners countered that respondent is not entitled to any disability benefits as he was already declared fit to work by the company-designated physician. Petitioners also claimed that the parties mutually agreed to appoint Dr. Prieto, as the third doctor, but the latter refused to render a third opinion citing his acquaintance with the company doctor. After such refusal, petitioners denied that they agreed to appoint Dr. Cacal as replacement. According to the petitioners, the opinion of Dr. Cacal declaring respondent to be suffering from a Grade 2 disability grading is not the third opinion contemplated under the Philippine Overseas Employment Association-Standard Employment Contract (POEA-SEC) because the same was unilaterally secured by the respondent and therefore a one-sided certification. 12

On March 5, 2018, the Labor Arbiter (LA) rendered a Decision 13 dismissing respondent's complaint, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered DISMISSING the Complaint for lack of merit.

All other claims are dismissed for lack of merit.

SO ORDERED. 14

In arriving at such disposition, the LA held that the parties could have resolved the controversy had they mutually appointed a third physician. The LA noted that the parties initially agreed to appoint Dr. Prieto, but the latter refused the appointment. With his refusal, the parties should have agreed to appoint another doctor. The LA disbelieved respondent's claim that the parties have mutually appointed Dr. Cacal, who issued him a Grade 2 disability grading. As there was no proof that the parties agreed to appoint Dr. Cacal, the LA had to evaluate the medical findings of the company-designated physician and respondent's chosen doctor. As between the two, the LA gave more preference to the assessment of the company-designated physician who declared respondent fit to work, as the same was arrived at after a regular and continuous monitoring and treatment of respondent's medical condition as against the one-time consultation of respondent's personal doctor, who declared him unfit for work.

As for respondent's claim for damages and attorney's fees, the LA denied the same, there being no proof that petitioners acted with bad faith or negligence in denying respondent's monetary claims.

Feeling aggrieved, respondent elevated the matter to the NLRC.

On May 22, 2018, the NLRC rendered a Decision, 15 dismissing the appeal for having been filed four days late from the reglementary period. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, the Memorandum of Appeal belatedly filed by complainant Loreto Antasuda Jugo is hereby DISMISSED for non-perfection. Accordingly, the assailed Decision of the Office of Labor Arbiter Agnes Alexis Lucero-Grano is hereby AFFIRMED.

SO ORDERED. 16

Dismayed, respondent filed a Motion for Reconsideration.

On August 22, 2018, the NLRC rendered a Resolution, 17 the decretal portion of which reads:

WHERFORE, n premises considered, the Motion for Reconsideration of complainant Loreto Antasuda Jugo praying for the reinstatement of his appeal is GRANTED. Nevertheless, his appeal is DISMISSED for lack of merit. Accordingly, the assailed Decision of the Office of Labor Arbiter Agnes Alexis Lucero-De Grano is hereby AFFIRMED.

SO ORDERED. 18

In the main, the NLRC reinstated the appeal after finding that the Memorandum of Appeal of respondent had in fact been filed on time. As to the substantive merits, the NLRC adopted the findings of the LA that the fit-to-work assessment of the company-designated physician prevails over the unfit to work assessment of the respondent's doctor who examined him only once. aDSIHc

Unyielding, respondent filed a petition for certiorari before the CA. On June 7, 2019, the CA rendered the assailed Decision granting respondent's claim for total and permanent disability benefits, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING, the petition is GRANTED. The challenged Decision and Resolution of respondent NLRC are NULLIFIED. Private respondents are held jointly and severally liable to pay petitioner: a) permanent total disability benefits; b) attorney's fees of ten percent (10%) of the total monetary award; and c) interest at the rate of six percent (6%) per annum from the date of finality of this Decision until full satisfaction.

SO ORDERED. 19

The CA held that the company-designated physician has an initial period of 120 days to determine the fitness or disability of the seafarer for sea service from repatriation, which can be extended to 240 days if there is a need for further medical treatment or if the seafarer was uncooperative. However, in this case, the company-designated physician issued the Medical Certification dated February 7, 2017, declaring respondent fit for sea service only on the 135th day from repatriation without any documentary evidence that would show the necessity of extending the medical treatment or assessment period of respondent's disability. Thus, the initial 120 days cannot be extended to 240 days. As the fit-to-work assessment of the company-designated physician was issued beyond the authorized 120 days, the CA opined that respondent's disability is deemed total and permanent in nature entitling him to total and permanent disability benefits.

Anent respondent's claim for moral and exemplary damages, the CA denied the same as there was no proof that petitioners acted with bad faith and negligence. However, the CA held that the respondent is entitled to attorney's fees, in addition to 6% legal interest per annum on all monetary awards.

Dismayed by the unfavorable ruling, petitioners resorted to this present petition for review on certiorari, ascribing serious error and grave abuse of discretion on the part of the CA when it awarded the respondent his claim for total and permanent disability benefits, as well as attorney's fees.

In essence, petitioners submit that the mere lapse of 120 days with the respondent remaining incapacitated to resume his duties and earn a gainful employment does not automatically entitle him to permanent disability benefits, particularly, since the company-designated physician has timely issued a fit-to-work assessment within the 240-day prescriptive period. 20 For the petitioners, this fit-to-work assessment of the company-designated physician constitutes a categorical declaration of respondent's fitness to resume his seafaring duties, thereby precluding him for claiming total and permanent disability benefits. 21

Furthermore, petitioners propound that the respondent is not entitled to disability compensation for prematurely filing the complaint for disability benefits before the NLRC without first resorting to the POEA-SEC's conflict resolution procedure and in unilaterally securing an alleged third doctor opinion after the said case was already filed. 22

On the other hand, respondent counters that the CA correctly awarded him total and permanent disability benefits in view of the failure of the company-designated physician to issue a temporary disability assessment within the 120-day period, which would have justified the application of the extended 240-day period. 23

Our Ruling

The petition is bereft of merit.

Settled is the rule that entitlement of seafarers to disability benefits is governed not only by medical findings, but also by contract and by law. 24 The relevant contracts are: (a) the POEA-SEC, which is a standard set of provisions deemed incorporated in every seafarer's contract of employment; (b) the CBA, if any, and; (c) the employment agreement between the seafarer and his employer. 25 By law, the Labor Code provisions on disability benefits apply with equal force to seafarers. 26

In this case, respondent entered an employment contract with petitioners on May 14, 2016. Thus, the 2010 POEA-SEC contract governs their relations and correlatively, respondent's claims for disability benefits.

Pursuant to Section 20 (A) 27 of the 2010 POEA-SEC, when a seafarer suffers a work-related injury or illness in the course of employment, the company-designated physician is obligated to arrive at a definite assessment of the former's fitness or degree of disability within a period of 120 days from repatriation. 28 During the said period, the seafarer shall be deemed on temporary total disability and shall receive his/her basic wage until he/she is declared fit to work or his/her temporary disability is acknowledged by the company to be permanent, either partially or totally, 29 as his/her condition is defined under the POEA-SEC and by applicable Philippine laws. 30 However, if the 120-day period is exceeded and no definitive 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, 31 subject to the right of the employer to declare within this period that a permanent partial or total disability already exists. 32 But before the company-designated physician may avail of the allowable 240-day extended treatment period, he must perform some significant act to justify the extension of the original 120-day period. 33 Otherwise, the law grants the seafarer the relief of permanent total disability benefits due to such non-compliance. Simply put, the 240-day period remains to be an exception to the rule and should not be presumed. 34 ETHIDa

Correlatively, in Elburg Shipmanagement Phils., Inc. v. Quiogue, Jr., 35 this Court has laid down the guidelines on the periods within which the company-designated physician must issue a final and definitive disability assessment, to wit:

1. The company-designated physician must issue a final medical assessment on the seafarer's disability grading within a period of 120 days from the time the seafarer reported to him;

2. If the company-designated fails to give his assessment within the period of 120 days, without any justifiable reason, then the seafarer's disability becomes permanent and total;

3. If the company-designated physician fails to give his assessment within the 120 days with a sufficient justification (e.g., seafarer required further medical treatment or seafarer was uncooperative), then the period of diagnosis and treatment shall be extended to 240 days.

The employer has the burden to prove that the company-designated physician has sufficient justification to extend the period; and

4. If the company-designated physician still fails to give his assessment within the extended period of 240 days, then the seafarer's disability becomes permanent and total, regardless of any justification. 36

Notably, while Elburg mentions that the 120 or 240-day periods shall be reckoned from the time the seafarer reported to the company-designated physician, this Court clarified in Pastrana v. Bahia Shipping Services37 that said period should be counted from the medical repatriation of the seafarer, viz.:

While Elburg states that the 120 or 240-day periods shall be reckoned "from the time the seafarer reported to [the company-designated physician]," subsequent cases consistently counted said periods from the date of the seafarer's repatriation for medical treatment. This is true even in cases where the date of repatriation of the seafarer does not coincide with the date of his first consultation with the company-designated physician. This will be observed, for instance, in Jebsens Maritime, Inc. v. Pasamba and Teekay Shipping Philippines, Inc. v. Ramoga, Jr. This is consistent with Section 20(A)(3) which provides for the repatriation of the seafarer in case of work-related illness or injury, and the obligation of the employer to give the seafarer sickness allowance from the time he signed off until he is declared fit to work or the degree of his or her disability has been assessed, but not exceeding 120 days, x x x.

Hence, as it stands, it is mandatory for the company-designated physician to issue a final disability assessment within the 120/240-day period from repatriation. To avail of the extended 240-day period, the company-designated physician must perform some complete and definite medical assessment to show that the illness still requires medical attendance beyond 120 days, but not to exceed 240 days. 38 The employer bears the burden of proving that the company-designated physician had a reasonable justification to invoke the 240-day period. 39 Without a valid final and definitive assessment from the company-designated physician within the 120/240-day period, the law already steps in to consider the seafarer's temporary disability as total and permanent. 40 Thus, a temporary total disability becomes total and permanent by operation of law. 41

In this case, there is no dispute that the respondent was repatriated on September 25, 2016. Hence, the company-designated physician had until January 23, 2017, or the 120th day from repatriation to arrive at a definite assessment of respondent's medical condition. However, the company-designated physician only issued a certification declaring respondent fit to work on February 7, 2017, or the 135th day from repatriation without providing any justifiable reason to extend the period to 240-days. As aptly held by the CA, there was no other document to establish that the company-designated physician has declared the necessity of extending the treatment or assessment period of respondent's disability. Accordingly, petitioners cannot validly invoke the application of the extended 240-day period. Thus, the failure of its company-designated physician to issue a final and definite assessment of the respondent's fitness for sea service within the initial 120-days period has rendered his temporary disability as total and permanent.

Based on the foregoing, it is already futile to discuss whether the medical assessment of respondent's chosen doctor should be preferred over the medical assessment of the company-designated physician. In Phil-Man Marine Agency, Inc. v. Dedace, Jr., 42 this Court enunciated that the duty of a seafarer to consult with his/her own physician arises only if the company-designated physician was able to issue an assessment within 120 days from the date of his/her repatriation. It is not the issuance of a medical certificate showing that the seafarer's illness is work-related or that he is totally and permanently unfit for sea duties which makes the employer liable. 43 A seafarer's cause of action for total and permanent disability benefits accrues when, among others, the company-designated physician fails to issue a declaration as to his fitness to engage in sea duty or disability rating even after the lapse of the 120-day period 44 and there is no indication that further medical treatment would address his temporary total disability. 45

For the same reason, this Court finds no merit in petitioners' contention that respondent prematurely filed the complaint when he failed to comply with the conflict resolution procedure under the POEA-SEC. Since the company-designated physician failed to arrive at a final disability assessment within the mandatory 120-day period, it was clearly unnecessary for the respondent to consult his own doctor, much less to seek a third doctor opinion. Such conflict resolution mechanism under Section 20 (A) (3) of the POEA-SEC only takes effect if the company-designated physician had issued a valid and definite assessment, 46 which is not the case here. To reiterate, the failure of the company-designated physician to issue either a fit-to-work certification or a final disability rating within the time frame prescribed by law has already rendered respondent's disability total and permanent in nature, entitling him to disability benefits. cSEDTC

On this score, the CA did not err in awarding respondent with his claim for total and permanent disability benefits.

On the matter of attorney's fees, Article 2208 of the New Civil Code provides that attorney's fees can be recovered in actions for the recovery of wages of laborers and actions for indemnity under employer's liability laws. Attorney's fees are also recoverable when the defendant's act or omission has compelled the plaintiff to incur expenses to protect his interest. 47 Such conditions being present in this case, this Court sustains the award of attorney's fees equivalent to 10% of the total monetary awards in favor of the respondent.

Lastly, this Court adopts the imposition of legal interest at the rate of 6% per annum on the total monetary awards from the date of finality of this Resolution until full payment pursuant to Nacar v. Gallery Frames. 48

WHEREFORE, premises considered, the petition is DENIED. The Decision dated June 7, 2019 and the Resolution dated October 9, 2019 of the Court of Appeals in CA-GR. S.P. No. 158073 are hereby AFFIRMED.

Petitioners Elburg Shipmanagement Philippines, Inc. and Elburg Shipmanagement Hongkong, Ltd. are held jointly and severally liable to pay respondent Loreto A. Jugo: a) permanent total disability benefits; b) attorney's fees of ten percent (10%) of the total monetary award; and c) interest at the rate of six percent (6%) per annum from the date of finality of this Resolution until full payment.

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 3-34.

2. Penned by Associate Justice Priscilla Baltazar-Padilla (Ret.), with Associate Justices Louis P. Acosta and Tita Marilyn B. Payoyo-Villordon, concurring; id. at 42-58.

3.Id. at 60-61.

4.Id. at 43.

5.Id.

6.Id. at 43-44.

7.Id. at 44.

8.Id. at 45.

9.Id. at 45-46.

10.Id. at 46-47.

11.Id. at 47.

12.Id.

13. Penned by Labor Arbiter Agnes Alexis Lucero-De Grano; id. at 63-71.

14.Id. at 71.

15.Id. at 73-78.

16.Id. at 77.

17.Id. at 80-92.

18.Id. at 91.

19.Id. at 57-58.

20.Id. at 16.

21.Id. at 18.

22.Id. at 21.

23.Id. at 107.

24.Vergara v. Hammonia Maritime Services, Inc., 588 Phil. 895, 908 (2008).

25.Gargallo v. Dohle Seafront Crewing (Manila), Inc., 769 Phil. 915, 926-927 (2015).

26.Philasia Shipping Agency Corp. v. Tomacruz, 692 Phil 632, 646 (2012).

27. SECTION 20. COMPENSATION AND BENEFITS. —

A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS

The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as follows:

xxx xxx xxx

2. x x x. However, if after repatriation, the seafarer still requires medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time he is declared fit or the degree of his disability has been established by the company-designated physician.

3. In addition to the above obligation of the employer to provide medical attention, the seafarer shall also receive sickness allowance from his employer in an amount equivalent to his basic wage computed from the time he signed off until he is declared fit to work or the degree of disability has been assessed by the company-designated physician. The period within which the seafarer shall be entitled to his sickness allowance shall not exceed 120 days. Payment of the sickness allowance shall be made on a regular basis, but not less than once a month.

xxx xxx xxx

For this purpose, the seafarer shall submit himself to a postemployment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. In the course of the treatment, the seafarer shall also report regularly to the company-designated physician specifically on the dates as prescribed by the company-designated physician and agreed to by the seafarer. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits.

If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctor's decision shall be final and binding on both parties.

28.Gamboa v. Maunlad Trans., Inc., G.R. No. 232905, August 20, 2018.

29.Sunit v. OSM Maritime Services, Inc., 806 Phil. 505 (2017).

30.Teodoro v. Teekay Shipping Philippines, Inc., G.R. No. 244721, February 5, 2020.

31.Pastor v. Bibby Shipping Philippines, Inc., G.R. No. 238842, November 19, 2018.

32.Deocariza v. Fleet Management Services, Philippines, Inc., 836 Phil. 1087 (2018).

33.Talaroc v. Arpaphil Shipping Corp., 817 Phil. 598, 611-612 (2017).

34.Esplago v. Naess Shipping Phils., Inc., G.R. No. 238652, June 21, 2021.

35. 765 Phil. 341 (2015).

36.Id. at 362-363.

37. G.R. No. 227419, June 10, 2020.

38.Id.

39.Id.

40.Supra note 33, at 618.

41.Supra note 28.

42. 835 Phil. 536 (2018).

43.Id. at 552.

44.Supra note 28.

45.Maersk Filipinas-Crewing, Inc. v. Alferos, G.R. No. 216795, April 1, 2019.

46.Alster International Shipping Services, Inc. v. Gersalia, G.R. No. 237760, November 18, 2020.

47.Atienza v. Orophil Shipping International Co., Inc., 815 Phil. 480, 508 (2017).

48. 716 Phil. 267, 283 (2013).

n Note from the Publisher: Copied verbatim from the official document.