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Supreme Court upholds terms of the Danish CBA that any award by Danish authorities should be offset from any entitlement under the POEA Contract

Philippine Shipping Update – Manning Industry


Supreme Court upholds terms of the Danish CBA that any award by Danish authorities should be offset from any entitlement under the POEA Contract

Seafarer was engaged by the company as Fitter on-board the ship and his employment was covered by a Danish CBA.  During employment, the seafarer suffered from a shoulder sprain which caused his medical repatriation.  The seafarer underwent treatment with the company-designated physician and was provided a grade “10” interim disability assessment.  But when he was asked to continue his treatment, he stopped reporting on the 234th day and instead sought consultation with his personal doctor who assessed him to be unfit to work as a seaman.  The seafarer, in accordance with the provisions of the CBA, filed a claim before the Danish Shipowner Accident Insurance Association.  Thereafter, the seafarer filed a complaint for disability benefits before the NLRC for payment of disability compensation under the POEA Contract.

The Labor Arbiter granted the claim for disability compensation and awarded full disability benefits considering that the company-designated physician was unable to provide a final medical assessment within 120 days.  As to the issue of the CBA, the Labor Arbiter held that this is no longer enforceable as the same expired on 2010 and the incident occurred on 2012.   
On appeal, the NLRC reversed the Labor Arbiter’s Decision and dismissed the case without prejudice to refiling.  The NLRC held that the CBA is still applicable as the same states that it shall remain effective unless otherwise terminated by the parties.  As such, the complaint is dismissible pending result of the National Board Industrial Industries (NBII) under the Danish Industrial Injuries Act (DIIA). This however does not deprive the seaman of the right to proceed against the company in accordance with the POEA-SEC, but the remedy should be after the claim under the Danish Act is settled.
The seaman filed a petition with the Court of Appeals and during its pendency, the NBII had already rendered its Decision granting disability benefits and loss of earning capacity to the seafarer.  The Court of Appeals reinstated the decision of the Labor Arbiter and held that the disability of the seaman lapsed into a permanent and total disability in the absence of a final and definitive assessment within the period of 240 days. However, the amount awarded by the NBII shall be offset against the amount adjudged by the Labor Arbiter.
When the case reached the Supreme Court, the Court agreed with the NLRC but with modifications.
The CBA remains effective
The Court upheld the findings of the NLRC that the CBA is effective and applicable during the time of the incident.  While it is stated that the CBA covers the period 1  February 2008 to 31 January 2010 only, however, Article 21 thereof provides, that the agreement shall be effective as from February 1, 2008 until January 31, 2010 and further if notification of termination has not been given neither by the DSA nor by the AMOSUP within a 3 months’ notice before the date of expiration. It is  clear from the above provision that the CBA’s life extends beyond 31 January 2010 absent a  notification of termination by either party. Since no evidence that such notification had been made, then the CBA remains effective even after 31 January 2010.  Having establish that the CBA remained effective, its provisions on the award of disability should be followed, particularly as it is not contrary to law, the POEA Contract, and public policy. In fact, it  is more favorable to the seafarer and does not prevent him from recovery under the provisions of the POEA Contract.
The CBA provisions referring to the Danish Industrial Injuries Act applies
On the award of disability, the CBA provides that: When meting out compensations according to POEA Rules, any entitlements according to the Danish Industrial Injuries Act should be set off. The set off is based on a  conversion of any running benefits into a lumpsum according to specific rules laid down by the Danish Minister of Social Affairs. The CBA provides that any amount awarded under the DIIA shall be subtracted from the compensation the seafarer is found to be entitled under the POEA Contract. Any deficiency would be the amount payable to the seafarer. Necessarily, a prior ruling in accordance with the DIAA is  necessary in order to determine whether such deficiency exists. 
The Court noted that the NBII has already rendered its Decision granting seafarer the following: a) 8% disability benefits in the amount of USD9,596.39 or DKK64,408.00,40 b) loss of earning capacity equivalent to 75% for which the seafarer will receive a monthly compensation in the amount of DKK6,268.00 from January 28, 2015 until June 10, 2038, when the seafarer reaches 68 years old.  As such, there is no more any practical value in dismissing the case on the ground of prematurity merely because seafarer instituted this action during the pendency of the proceedings before the NBII. 
The seafarer did not object or comment to the presentation of the NBII decision before the Court of Appeals.  Similarly, no objection was made by the seafarer with respect to the company’s submission that he had already received a  total of DKK98,661.00 or US$14,566.78 – representing disability benefits of DKK.64,408.00 or USD9,596.39 which seafarer received on May 26, 2015, and DKK34,253.00 or USD4,970.38, back payment for loss of earning capacity until February 29, 2016.
The Court held that the NBII Decision, of itself, is  presumptive evidence of the rights as between the parties. Coupled with its partial execution in the form of payment to seafarer of disability benefits, there remains to be no genuine issue in this case but the execution of its remaining disposition vis-à-vis the provisions of POEA Contract. Pursuant to the NBII Decision, the Danish Shipowner Accident Insurance Association affirmed that seafarer is entitled to receive DKK2,860.00 by way of monthly compensation for loss earning capacity until he reaches the age of 68 years or to a  total amount of DKK764,411.00 or USD121,601.4347 as compensation for loss of earning capacity.
On the other hand, the maximum disability compensation that can be awarded under the POEA Contract is US$60,000.00 which corresponds to permanent and total disability benefits. Considering that this amount is significantly lesser than the amount already awarded by the Danish Authorities, the resolution of the issue of whether seafarer is entitled to the  same is already moot. Otherwise stated, with the offsetting provision under the CBA, whether the Court rules the seafarer entitled to total and permanent liability under the POEA-SEC, the result would be the same, there is no additional obligation imposed upon the company. Necessarily, as the amount awarded by the Danish Authorities in their decision is higher than the maximum possible award under the POEA Contract, there can be no resulting deficiency. 
Torm Shipping Philippines, Inc., Torm S/A vs. P. A., G.R. No. 229228, January 26, 2021; Associate Justice Samuel Gaerlan, ponente 
Firm News 
In an effort to provide information and updates to their clients, Del Rosario Law has conducted a series of virtual meetings and discussions with several P&I Clubs.  
UKP&I Club
We are grateful to the Correspondents Team of UK Club headed by Neil Beckwith in organizing a virtual meeting via Lifesize on 7 May 2021 between the Club’s People’s Claims handlers from various regional offices including London, Piraeus, Tokyo, Hong Kong and Singapore and the Del Rosario Law Partners. Our Senior Partners Joseph Rebano and Herbert Tria presented on “Pandemic induced changes: Crewing landscape - Deployment to Repatriation” followed by more interactive discussion.
It was great to interact with our friends from the UK Club despite these challenging times. 
Japan P&I Association
In an unprecedented gesture, Japan P&I Club (JPIA) through their Nobuko Genda, Masatoshi Fukushima and various crew claims handlers from Tokyo, Fukuoka, Kobe and Imabari offices awarded certificates to nine (9) lawyers and claims handlers of Del Rosario/ Pandiphil in recognition of their outstanding performance and service to the Club for the year 2020. The virtual ceremonies took place via Zoom on 31 May 2021. Del Rosario through Senior Partners Joseph Rebano and Herbert Tria then delivered a presentation on “Pandemic induced changes: Crewing landscape - Deployment to Repatriation.” 
Our heartfelt thanks to JPIA. This will certainly inspire us more to exceed clients’ expectations.
Britannia P&I
Del Rosario Partners enhanced their relationship with Britannia Club through a Zoom virtual meeting with the Club’s People Risk team from various offices including London, Hong Kong, Tokyo and Singapore held on 3 June 2021, The main agenda was the presentation given by our Partners Joseph Rebano and Florencio Aquino titled: “Pandemic induced changes: Crewing landscape - Deployment to Repatriation.” An interactive session on related topics then ensued. 
Thanks to Ella Hagel for making it possible at Club’s end. We look forward to more mutually beneficial meetings – online or in-person – in the future.
North of England P&I
It was like a reunion among friends when Del Rosario had a virtual meeting with the Personal Injury and Correspondents teams of North of England P&I Club (North) on 15 June 2021. Abbie Rudd and Lucy Dixon have been consistent yearly visitors to the Philippines and during the pandemic, it was good to update each other through online means. Del Rosario also took the opportunity to send their best wishes to Nick Tonge who was retiring soon and whom the firm had a pleasure of dealing with for many years. The meeting was capped by a presentation by our Senior Partner, Charles Dela Cruz on “Pandemic induced changes: Crewing landscape - Deployment to Repatriation.”           
Again, our thanks for the invaluable and productive discussions and we hope to reach out to our other partners in the near future. 

Areas of Specialization: Shipping, Labour, Transport, Corporate, Mergers & Acquisitions, Insurance, Immigration, Litigation, Arbitration, Intellectual Property
2018 AsiaLaw Profiles: Outstanding in Shipping, Maritime & Aviation; Recommended in Dispute Resolution & Litigation, Intellectual Property, Labour & Employment

“Del Rosario & Del Rosario has the strongest shipping practice in the Philippines. They definitely deserves the top ranking.” AsiaLaw Profiles 2018

“We rely on them when there’s a problem. We can trust them. And they can deliver the service required.” The Legal 500 2018

“For almost four decades, DelRosarioLaw has led in the shipping and transport practice in the Philippines by assisting stakeholders in fostering institutional changes to ensure the continued viability of the local shipping and manning sectors. This enduring reputation has made the firm’s opinion in major maritime policies of the country most sought after.” Chambers Asia-Pacific 2018

Del Rosario & Del Rosario, a four-decades-old firm, is considered to be among the top shipping and maritime practices in the country. It has also built a formidable reputation in insurance and reinsurance, and has more than 30 lawyers, including 10 partners.” The Philippines Law Firm Awards 2018




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Edmon Ruiz

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