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Supreme Court awards death benefits based on the applicable agreement most beneficial to the heirs

Philippine Shipping Update – Manning Industry

By:  Ruben Del Rosario, President, Del Rosario Pandiphil Inc., 28 February 2018 (Issue 2018/04)
 
Supreme Court awards death benefits based on the applicable agreement most beneficial to the heirs
 
The seafarer was employed under a duly approved POEA Contract with an overriding collective bargaining agreement (CBA) entered between the company and the Singapore Organization of Seamen (SOS).   During the term of his employment, the seafarer died due to multiple organ failure secondary to Septicemia or severe blood poisoning or infection.
 
The company offered to compensate the heirs with US$40,000 which is half of the death benefits provided under the SOS CBA.  This was rejected by the heirs and instead, they claimed benefits under the International Transport Workers Federation (ITF) Agreement in the amount of US$82,500.
 
The claim of the heirs was favored by the Labor Arbiter, the NLRC and the Court of Appeals where the award of death benefits was based on the ITF Agreement.
 
However, upon scrutiny of the Supreme Court, the award was reduced based on the provisions of the SOS CBA.
 
The Court explained that entitlement to benefits of seafarers on overseas work is a matter governed not only by medical findings, but also by law and contract. By contract, the POEA Contract and the CBA bind seafarers and their employers. An overriding instrument, such as an ITF Agreement, also forms part of the covenants of the parties to each other if applicable.
 
Here, the ITF Agreement presented states that if a seafarer dies through any cause during employment, the heirs shall be entitled to US$82,500 death benefits.  The ITF agreement likewise states that it is only applicable if there is a “Special Agreement” made between the union, which is an affiliate of the ITF and the company.  The Court, after perusing the evidence of the parties failed to see any Special Agreement between the SOS union and the company to make the ITF Agreement applicable to them.  As such, the claim based on the ITF Agreement was disregarded.
 
As the ITF Agreement is not an overriding instrument in this case, the Court then compared the provisions of the POEA Contract and the CBA to determine which among them is more beneficial to the heirs.
 
The POEA Contract provides that in case of the work-related death of a seafarer during the term of his contract, the employer shall pay his beneficiaries, among others, US$50,000 death benefits.  On the other hand, the CBA states that the company shall pay compensation to a seafarer for any death arising from an accident equivalent to US$80,000.  It is further provided that if a seafarer dies from natural causes or illness while in the employment of the Company, the Company shall pay fifty percent of the quantum payable for death.
 
Comparing the relevant provisions, the SOS CBA clearly provides higher death benefits of US$80,000. However, the cause of death of the seafarer must be due to an accident; otherwise, his beneficiaries would receive only US$40,000. That amount is lower than the benefit granted by the POEA Contract, which is US$50,000. But before beneficiaries may receive compensation under the POEA Contract, there must be substantial evidence that the seafarer died of a work-related illness. Thus, the heirs are entitled to the more beneficial provision of the POEA Contract if his death is proven to have been work-related. Otherwise, the SOS CBA's provision on the grant of USD 40,000 regardless of the cause of death will apply.
 
In this case, the heirs failed to satisfy the required positive propositions on compensability. First, the tasks performed by the seafarer on-board were not discussed.  In fact, the heirs did not even explain how seafarer’s work environment caused his fever and headache, and how these conditions worsened into the alleged fatal illness. Second, given the lack of evidence as regards the seafarer’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.  As such, the POEA Contract will not apply as the heirs failed to prove work-relation of the illness which caused the death of the seafarer.
 
Nevertheless, as the SOS CBA provision on death benefits does not require work-relation if a seafarer dies during employment due to an illness, the heirs are entitled to the same.   As such, the Court ruled that the company was correct to offer US$40,000 death benefits to the heirs as stated in the SOS CBA.
 
Maersk-Filipinas Crewing, Inc./AP Moller Singapore PTE Ltd. vs. Rosemary Malicse (legal wife of the deceased seafarer Efren Malicse, representing the latter’s estate), G.R. Nos. 200576 and 200626, November 20, 2017, First Division, Chief Justice Maria Lourdes Sereno, ponente
 
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  • IRR Seafarer's Protection Act
  • Seafarers Protection Act
  • ORDINANCE No. 28 Series of 2015 Zambales, Philippines
  • NLRC MEMO on 3rd Doctor
  • NLRC Rules of Procedure 2011
  • Standard Terms and Conditions of Del Rosario Law
  • POEA SEC - 2010 Amendments
  • POEA Memorandum Circular No. 10 Series of 2010
  • Governing Board Resolution No. 09 Series of 2010

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