FIRST DIVISION
[G.R. No. 248588. June 16, 2021.]
NYK-FIL SHIPMANAGEMENT, INC. and NYK SHIPMANAGEMENT PTE. LTD., petitioners, vs.OMAR D.*ALDECOA, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution dated June 16, 2021which reads as follows:
"G.R. No. 248588 (NYK-Fil Shipmanagement, Inc. and NYK Shipmanagement Pte. Ltd. v. Omar D. Aldecoa). — The instant appeal by certiorari1 under Rule 45 of the Rules of Court assails the Decision 2 dated April 4, 2019 of the Court of Appeals in CA-G.R. SP No. 156175 awarding payment of permanent and total disability benefits to respondent Omar Aldecoa.
Facts of the Case
Petitioner NYK-Fil Shipmanagement, Inc., acting on behalf of its foreign principal, NYK Shipmanagement, Pte. Ltd. (NYK), rehired respondent Omar Aldecoa (Aldecoa) as Oiler onboard the container-type vessel MV NYK Altair. The employment contract was covered by the IBF-JSU AMOSUP-MMAJ Collective Bargaining Agreement (CBA). 3
In July 2016, during his job routine on board the vessel, Aldecoa alleged that he twisted his knee. He initially ignored his condition and carried on with his daily activities. However, on 16 July 2016, as pain persisted on his right knee, Aldecoa had to report his conditions. For this reason, Aldecoa was brought to a hospital in Hong Kong for a medical check-up. 4
On 23 July 2016, Aldecoa was medically repatriated to the Philippines. He was then referred to the company-designated physicians for treatment. Aldecoa was subjected to a magnetic resonance imaging (MRI) test, and the results stated the following impressions: CAacTH
1. Complete anterior cruciate ligament (ACL) tear likely chronic;
2. Complete tear of the posterior horn and body of the medial meniscus;
3. Minimal fluid in the posterior joint capsule. 5
To repair the ACL tear, on 19 September 2016, Aldecoa was subjected to surgery, more specifically, Arthroscopic Anterior Cruciate Ligament Reconstruction, on his right knee. After his surgery, Aldecoa then underwent close monitoring and physiotherapy with the company-designated physicians. The company-designated physician issued a series of medical assessments 6 indicating Aldecoa's continued physical therapy sessions in view of his claim of pain on the injured knee. On December 21, 2016 or 151 days from Aldecoa's repatriation, the company-designated physicians issued a final disability assessment of his conditions with Grade 10. 7 In a medical report 8 dated January 10, 2017, the company-designated physicians further stated that Aldecoa is not totally and permanently unfit as a seafarer. 9 Based on the final disability assessment issued, NYK offered Aldecoa payment of disability benefits amounting to US$10,075.00, which corresponds to the Grade 10 disability schedule under the 2010 Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC). 10
Despite the assessment of the company-designated physician, Aldecoa still claimed of residual pain in his right knee. On January 18, 2017, he sought for a second opinion from his personal physician. On the same day, Aldecoa's physician issued a report 11 stating that Aldecoa "lost his pre-injury capacity." Aldecoa's physician found the seafarer "permanently disabled" and declared him "UNFIT in any capacity for further sea duties." 12 In view of the conflicting assessment, Aldecoa, through his counsel, sent a letter 13 dated February 27, 2017 to NYK regarding the results from the medical examination with his personal physician. He also informed the company of his willingness to be examined by another physician. On February 28, 2017, he moved for the arbitration of his claim for payment of permanent and total disability benefits with the National Conciliation and Mediation Board (NCMB). 14
Ruling of the Voluntary Arbitrator
In a Decision dated 10 April 2018, 15 sole arbitrator Cenon Wesley Gacutan (arbitrator) ruled in favor of Aldecoa. Due to the contradicting assessments of the company-designated physician and Aldecoa's personal physician, the arbitrator held that the procedures under the 2010 POEA-SEC for compensation and benefits for a work-related injury shall be applicable. In applying the provisions of the 2010 POEA-SEC, the arbiter held that when a seafarer makes known to his employer the conflicting assessment of his personal physician and his interest for referral to a third doctor, it is the employer's duty to refer the conflicting assessments to the third physician. 16 Here, the arbitrator observed that NYK did not refer the matter to a third physician despite Aldecoa's letter request. The arbitrator held that NYK's failure to comply with the foregoing obligation is a breach of contract. Thus, the arbitrator could not be bound by the assessment of the company-designated physician. 17
As to the extent of disability, the arbitrator found the same to be permanent and total. Based from the assessment of Aldecoa's physician, the seafarer was still suffering from pain and cannot resume his usual and customary seafarer duties. Permanent and total disability does not mean the state of absolute helplessness but inability to do substantially all material acts necessary to the prosecution of a gainful occupation without serious discomfort or pain and without material injury or danger to life. In this case, the arbitrator based its ruling from the observation of Aldecoa's physician stating that "the long-term outlook for an ACL deficient knee is for the development of significant osteoarthritis eventually leading to a permanent impairment x x x." Thus, Aldecoa's condition is determined as a permanent and total disability. 18 IAETDc
Finally, the arbitrator ruled that the provisions of the CBA on disability benefits is applicable. Under the CBA, injuries that resulted from an accident on board the vessel shall merit the award of disability benefits. The arbitrator explained that Aldecoa was able-bodied and was declared fit-to-work prior deployment. Logically, he must have figured in an accident while onboard the vessel which resulted in his knee injury and his medical repatriation. The arbitrator awarded US$98,848.00 as permanent and total disability benefits under the CBA and 10% attorney's fees. 19
Ruling of the Court of Appeals
NYK filed an appeal by a petition for review under Rule 43 of the Rules of Court with the Court of Appeals CA. In a Decision 20 dated April 4, 2019, the CA upheld the award to Aldecoa of permanent and total disability benefits under the CBA and attorney's fees. Following prevailing jurisprudence, the CA explained that a claim for permanent and total disability benefits by a seafarer shall prosper when the company-designated physician fails to give the seafarer a final disability assessment within the period of 120 days from repatriation, without justifiable reason. In this case, Aldecoa's final disability assessment was issued and furnished to him on December 21, 2016 or 151 days from his repatriation on July 23, 2016. NYK also failed to present justifiable reasons for the extension of the medical treatment beyond the 120-day period to validate the issuance of the final disability assessment. Thus, Aldecoa's condition is deemed permanent and total. Anent the liability of the corporate president, the CA found that the same should not be held solidarily liable in view of the separate personalities of the corporate entity and its officers. 21
In view of the foregoing Decision, NYK filed the instant appeal by certiorari22 under Rule 45 of the Rules of Court. NYK argued that Aldecoa is not entitled to disability benefits awarded under the CBA. The company emphasized that the CBA explicitly provides payment of disability benefits to injuries resulting from accidents on board the vessel. The company claimed no accident onboard the vessel because there was no concrete proof or records to demonstrate the same. 23 Moreover, the company alleged that Aldecoa had a pre-existing condition because he had slipped and twisted his knee three years prior his deployment on MV NYK Altair. 24 In any case, NYK pointed out that if Aldecoa was to be awarded payment of disability benefits, the award should be in accordance with the Grade 10 disability assessment issued by the company-designated physician following the schedule under the 2010 POEA-SEC. The assessment of the company-designated physician should prevail over that of Aldecoa's physician. The assessment of Aldecoa's physician failed to show any medical basis to hold him unfit for sea duty. The company reiterated that its physicians closely monitored and examined Aldecoa's true state from repatriation and series of medical therapies and check-ups. The extension of the medical treatment beyond 120 days is justified as Aldecoa still needed to undergo further rehabilitation due to the latter's complaint of residual pain on his right knee. Eventually, the company-designated physician categorically declared that Aldecoa is not permanently and totally unfit to work. 25 Finally, the company argued that Aldecoa is not entitled to attorney's fees and legal interests. 26
In his Comment, 27 Aldecoa reiterated the ruling of the CA on his entitlement to permanent and total disability benefits. He emphasized that NYK failed to justify the issuance of the final disability assessment within 120 days from his repatriation; that he sustained his knee injury onboard the vessel which hindered his ability to perform the same work he used to do despite receipt of medical treatment from the company-designated physicians; that the CBA provisions are applicable on payment of disability benefits; and that attorney's fees were properly awarded. Aldecoa also argued that he should be paid moral and exemplary damages because NYK deliberately disregarded his medical and financial needs. 28
Ruling of the Court
Based on the arguments of the parties, the main controversy to be resolved is the degree of Aldecoa's disability and the amount of compensation he is entitled to receive when there are conflicting assessments. DcHSEa
Section 20-A of the 2010 POEA-SEC 29 sets out the procedures of compensation and benefits for a work-related injury or illness of a seafarer which occurred during the term of contract. Under the section, the company-designated physician will have the first opportunity to examine the seafarer. 30 Thereafter, the company-designated physician issues an assessment as to the seafarer's medical status which serves as basis whether or not the seafarer is entitled to disability compensation. 31 However, seafarers are not precluded from seasonably seeking the opinion of their personal physician if they disagree with the diagnosis of the company-designated physicians. 32 Should there be an occasion of conflicting assessments of the company-designated physician and the seafarer's personal physician, Section 20-A (3) of the 2010 POEA-SEC provides for a dispute settlement by referring the matter to a third doctor mutually agreed upon by the employer and the seafarer, whose findings shall be final and binding on both parties. 33
We cannot stress enough that Aldecoa and NYK are governed and bound by the foregoing mechanism prescribed in the 2010 POEA-SEC. 34 As the 2010 POEA-SEC is deemed incorporated in the employment contract, its terms and provisions is the law between the parties. 35 Accordingly, the duties and obligations provided therein are mandatory, particularly, the referral of the matter to a third doctor. Thus, the respective obligations of the employer-ship owners, employer-manning companies and seafarers as regards the third doctor provision must be observed. 36 In the case of INC Shipmanagement, Incorporated v. Rosales, 37 We clarified that it is the seafarer's duty to notify and disclose the contradicting assessment of his or her physician to the company. The seafarer shall also signify his or her intention to resolve the conflicting assessments by referral to a third doctor. Upon notification, the employer carries the burden of initiating the process for the referral to a third doctor commonly agreed between the parties. 38 The provision is intended to settle disability claims at the parties' level where the claims can be resolved more speedily than if they were to be brought to court. 39 Further, a violation of the foregoing constitutes breach of contract. 40
In this case, and as observed by the voluntary arbitrator, Aldecoa, through a letter, informed NYK of the conflicting assessment of his personal physician and his willingness to be examined by another doctor. 41 The burden is now left with NYK to initiate the process of the third doctor provision. NYK did not deny knowledge of the letter and simply evaded the issue by insisting that it offered to pay Aldecoa US$10,075.00 as disability compensation for the Grade 10 medical assessment issued by the company-designated physicians. We are mindful that the company can insist on its disability rating even against the contrary opinion by another doctor, unless the seafarer expresses his disagreement by asking for a referral to a third doctor. 42 Furthermore, Aldecoa's filing of the notice to arbitrate the day after he sent his letter to the company, did not preclude NYK from initiating the process for referral to a third doctor. The 2010 POEA-SEC does not require a specific period within which the parties may seek the opinion of a third doctor, and they may do so even during the mandatory conference before the labor tribunals. 43 Here, there was no indication that NYK exerted earnest efforts to commence the third doctor-process during the conciliation proceedings. The company even admits that, at said proceedings, it maintained its offer of disability compensation corresponding to the Grade 10 rating issued by the company-designated physicians. 44 We find no explanation from the company on its failure to observe the mandated conflict-resolution procedure under the 2010 POEA-SEC.
Non-referral to the third doctor should be taken against NYK and should militate against its claim. Thus, the Grade 10 disability rating issued by the company-designated physicians has no binding effect. 45 Relatedly, even with the final assessments from the company-designated physician and the seafarer's physician, We cannot uphold any of the foregoing as the provisions of the 2010 POEA-SEC explicitly provide that the assessment of the third doctor shall be final and binding on the parties. As discussed, the third doctor provision seeks to settle contradicting assessments of the company doctor and that of the seafarer's physician. Due to NYK's failure to initiate the third doctor process, Aldecoa was deprived of determining the true status of his medical health. Without the final determination of the third doctor, the effect is akin to no final assessment rendering the seafarer's disability permanent and total. 46 The foregoing is a reasonable reading of the third doctor provision under Section 20-A (3) of the 2010 POEA-SEC. Otherwise, the provision will be rendered meaningless and will encourage defiance by employer companies, as in this case. SCaITA
Finally, We hold that the provisions of the 2010 POEA-SEC is applicable and not the CBA. Article 28.1 of the CBA 47 is explicit that the seafarer's permanent disability must have resulted from an accident during the term of contract. We have held that the term "accident" may be used as denoting a calamity, casualty, catastrophe, disaster, an undesirable or unfortunate happening; any unexpected personal injury resulting from any unlooked for mishap or occurrence; any unpleasant or unfortunate occurrence, that causes injury, loss, suffering or death; some untoward occurrence aside from the usual course of events. 48 Here, Aldecoa's ACL was diagnosed due to the knee pain he experienced while on board the vessel. Other than an allegation of twisting his ankle while in the performance of his duties as Oiler, We have no other basis to hold that he may have figured in an accident. To Our mind, his condition may simply have been aggravated by his work. There is no proof of unlooked mishaps, occurrences, or fortuitous events that could have resulted in his condition consistent with his employer's admission that he suffered twisted knee three years prior to his las deployment.
WHEREFORE, the petition is DENIED. The Decision dated April 4, 2019 of the Court of Appeals in CA-G.R. SP No. 156175 is AFFIRMED with MODIFICATION. Petitioners NYK-Fil Shipmanagement, Inc. and NYK Shipmanagement, Pte. Ltd. are ORDERED to pay respondent Omar Aldecoa US$60,000.00 as permanent and total disability benefits under the 2010 Philippine Overseas Employment Administration-Standard Employment Contract and ten percent (10%) attorney's fees. All amounts shall earn six percent (6%) interest per annum from finality of this Resolution until full satisfaction.
SO ORDERED."
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
By:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
* M in some parts of the records.
1.Rollo, pp. 3-22.
2. Penned by Associate Justice Jane Aurora C. Lantion, with the concurrence of Associate Justices Maria Elisa Sempio-Diy and Germano Francisco D. Legaspi; id. at 31-40A.
3. CA rollo, pp. 5, 44.
4.Id. at 45.
5.Id.
6.Rollo, pp. 285-287.
7. CA rollo, p. 288.
8.Id. at 289.
9.Id.
10.Id. at 7.
11.Id. at 202-203.
12.Id. at 203.
13.Id. at 199.
14.Id. at 290.
15.Id. at 43-51.
16.Id. at 46-47.
17.Id. at 48.
18.Id. at 49.
19.Id. at 50-51.
20.Supra note 2.
21.Rollo, pp. 37-39.
22.Id. at 30-22.
23.Id. at 9-11.
24.Id. at 12.
25.Id. at 13-17.
26.Id. at 18.
27.Id. at 61-75.
28.Id. at 71-74.
29. Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships, POEA Memorandum Circular No. 010-10, October 26, 2010.
30.Magsaysay Mitsui v. Buenaventura, 823 Phil. 245, 253 (2018).
31.Id.
32.Id.
33. Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships, POEA Memorandum Circular No. 010-10, October 26, 2010.
34. See Philippine Hammonia Ship Agency, Inc. v. Dumadag, 712 Phil. 507 (2013).
35.Id. at 521, citing Magsaysay Maritime Corp. v. Velasquez, 591 Phil. 839 (2008).
36. See Carcedo v. Maine Marine Philippines, Inc., 758 Phil. 30 (2015).
37. 744 Phil. 744 (2014).
38.Id. at 788.
39.Id., citing Philippine Hammonia Ship Agency, Inc. v. Dumadag, 712 Phil. 507 (2013).
40.Supra note 37.
41. CA rollo, p. 199.
42.Ilustricimo v. NYK-Fil Ship Management, Inc., 834 Phil. 693, 705 (2018).
43.Id. at 707.
44.Rollo, p. 7.
45.Supra note 42.
46.Elburg v. Quiogue, 765 Phil. 341 (2015).
47. CA rollo, p. 180.
48.Julleza v. Orient Line Philippines, Inc., G.R. No. 225190, 29 July 2019, citing NFD International Manning Agents, Inc. v. Illescas, 646 Phil. 244 (2010).