Supreme Court rules that PEME is not measure of seafarer’s true state of health

Death due to fighting not compensable

Accident in CBA does not include illness

Dismissal of Third Engineer held illegal as only evidence is telex transmission

Supreme Court upholds findings of company-designated physician; sustains validity of Release and Quitclaim  

December 4, 2006

Synopsis:Seafarer suffered lumbar sprain and had diabetes. After treatment by the company-designated physician, he was declared “fit to work”. After three months, he was paid sickness wages and he signed a release and quitclaim. After eleven months, seafarer filed a claim for benefits and argued that his personal physicians found him “unfit to work” and entitled to Grade 8 disability. The Supreme Court ruled that under the POEA Standard Employment Contract, it is the company-designated physician that determines fitness to work. The company physician extensively treated seafarer and seafarer had no more medical complaints. Seafarer never questioned the competency and assessment of the company physician. In fact, seafarer signed a release and quitclaim which he understood as it was in Filipino wherein he admitted the correctness of the assessment of the company doctor and acknowledged that he could no longer claim for disability benefits.

FACTS: Seafarer was hired as a bosun under the old POEA Standard Employment Contract. He fell from a ladder and suffered lumbar sprain. On November 15, 2000, he was found to have neuromyositis with the waist and diabetes. He was referred to the company doctor for medical treatment. On December 13, 2000, seafarer returned to the clinic with no more complaints of back pains and with normal results of sugar examination, hence, he was declared “fit for duty” by the company doctor. After three (3) months, seafarer executed a Release and Quitclaim and acknowledged the receipt of US$405.00 as his sickwages. However, on November 27, 2001, seafarer filed a complaint for disability benefit, reimbursement of medical expenses, damages, and attorney’s fees. To support his claim, he presented three medical certificates issued by three (3) personal doctors recommending a Grade 8 disability.

The Labor Arbiter dismissed the complaint, holding that seafarer was not entitled to disability benefits because he was declared “fit for duty” and that he executed a release and quitclaim and already received his sickness allowance. Both the NLRC and the Court of Appeals ruled against seafarer. Seafarer elevated his claim to the Supreme Court.

Seafarer avers that the quitclaim he executed is invalid, as the amount he received as consideration therefore was much lower than what he should have received under the POEA Standard Employment Contract. He went on to argue that quitclaims are frowned upon by the Court as they are contrary to public policy.

RULING: The Supreme Court denied the seafarer’s petition for review. The Court ruled:

1. Seafarer was declared “fit to work” and thus, he has no more right to claim disability benefits under the contractual provisions of the POEA Standard Employment Contract. The company-designated physician examined and treated seafarer from the time he was repatriated up to his recovery. He was given extensive medical attention. He had no more complaints for back pain and his sugar examination revealed normal results. He was thus declared “fit to work.”

2. Seafarer did not question the competency and the assessment of the company doctor when the latter declared him fit for duty or fit to work. He only questioned such declaration after eleven (11) months upon being examined by his personal doctors who only treated said seafarer for one (1) day.

3. Seafarer executed a release and quitclaim in favor of the vessel, around three (3) months after the assessment. From the document itself, the element of voluntariness in its execution is evident. Seafarer also appears to have fully understood the contents of the document he was signing, as the important provision thereof had been relayed to him in Filipino. Therefore, seafarer admitted the correctness of the assessment of the company doctor and acknowledged that he could no longer claim for disability benefits. ”

The Court further ruled:

While seafarer may be correct in stating that quitclaims are frowned upon for being contrary to public policy, the Court has, likewise, recognized “legitimate waivers that represent a voluntary and reasonable settlement of a worker’s claim should be respected as the law between the parties. Where the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being valid and binding undertaking.  

Benjamin L. Sarocam vs. InterOrient Maritime Ent. Inc. and Demaco United Ltd., G.R. No. 167813, June 27, 2006, First Division, Justice Romeo Callejo Sr., Ponente

Supreme Court rules that PEME is not measure of seafarer’s true state of health  

November 17, 2006

Synopsis:Seafarer argued that his illness is compensable as it was contracted during his employment. He presented as proof his PEME which showed him “fit to work”. The Labor Arbiter awarded Grade 9 or US$6,530 as disability benefits. On appeal, the NLRC increased the disability benefits to Grade 1 or $60,000. The Supreme Court disagreed and dismissed the complaint. The Court ruled: A seafarer cannot rely on his PEME to prove that he acquired his illness during employment. While a PEME may reveal enough for vessel interests to decide whether a seafarer is fit for overseas employment, it may not be relied upon to inform vessel interests of seafarer’s true state of health. The PEME could not have divulged respondent’s illness considering that the examinations were not exploratory. It was only after respondent seafarer was subjected to extensive medical procedures including MRI of the thoracic and lumbosacral spine that seafarer’s illness was finally diagnosed as a case of avascular necrosis of the hip with septic arthritis. Seafarer had revealed that his illness antedated his employment by nine days. Disability arising from a pre-existing illness is not compensable.

FACTS: Seafarer was employed as a boatswain under the old POEA Standard Employment Contract. On February 22, 1999, he requested for medical attention due to high fever and pains at his left hip bone socket. The company doctor diagnosed him to have septic arthritis and avascular necrosis of the left hip and gave him a disability grading of half of Grade 9. Seafarer filed a claim for permanent total disability benefits of US$60,000.

The Labor Arbiter directed him for medical evaluation to any government hospital, in order to determine the extent of his disability. Seafarer complied and was advised by the government doctor not to engage in manual work that would entail prolonged standing, running and carrying heavy objects.

The Labor Arbiter awarded disability benefits of US$6,530.00, equivalent to impediment grade of half of Grade 9 and attorney’s fees.

The NLRC modified the decision and awarded total disability benefits of US$60,000.00 and ruled that petitioners’ negligence, coupled with the fact that the nature of the illness of respondent seafarer renders him incapable of pursuing his profession as a seafarer, sufficed to categorize respondent’s disability as permanent total disability. The Court of Appeals affirmed the NLRC ruling. Petitioner vessel brought the case to the Supreme Court and argued that the appeals court failed to consider that the condition of respondent pre-existed his employment, thereby limiting, if not negating their liability.

RULING: The Supreme Court, through Justice Morales, reversed the decision and dismissed the claim:

The Court said that: “in order to hold petitioners (vessel) liable to respondent (seafarer) for disability benefits, respondent (seafarer) must present concrete proof that he acquired or contracted the injury or illness, which resulted to his disability, during the term of his contract.” As gleaned from the records, seafarer disclosed that as early as January 19, 1999, or nine (9) days prior to his deployment, he had been experiencing fever, moderate to high grade, intermittent, associated with chills, body malaise and pain on the lumbosacral area radiating to left lower extremity. This clearly shows that his ailment antedated his employment and that he did not contract it while working on board the vessel for more than three (3) weeks. “Disability arising from a pre-existing illness is not compensable.”

Seafarer argues that prior to his employment, he underwent a thorough PEME conducted by the company-designated physician and was pronounced “fit to work.” This means that his illness was acquired during employment.

On this issue, the court ruled:

“While a PEME may reveal enough for the petitioner (vessel) to decide whether a seafarer is fit for overseas employment, it may not be relied upon to inform petitioners of a seafarer’s true state of health. The PEME could not have divulged respondent’s illness considering that the examinations were not exploratory. It was only after respondent seafarer was subjected to extensive medical procedures including MRI of the thoracic and lumbosacral spine that respondent’s illness was finally diagnosed as a case of avascular necrosis of the hip with septic arthritis.”

The court further held:

“It having been satisfactorily shown that respondent was really not fit to work as a boatswain due to his pre-existing illness and, therefore, he is not entitled to disability compensation, necessarily, he is not entitled to attorney’s fees.”  

NYK-FIL Ship Management, Inc. and/or NYK Ship Management HK., Ltd., vs. NLRC and Lauro A. Hernandez, G.R. No. 161104, September 27, 2006, Third Division, Justice Conchita Carpio-Morales, Ponente

Death due to fighting not compensable

August 22, 2006

Messman died as a result of a stab-wound inflicted by a bosun due to a fight while on board the vessel, 32 nautical miles northeast of Brisbane.

The widow filed a claim for death benefits.

Both the Labor Arbiter and the NLRC denied the claim.

“The Labor Arbiter correctly cited the applicable law which is Section 20-A of the POEA Standard Employment Contract (SEC) on Compensation and Benefits for Death. From the aforequoted provision it is clear that for death to be compensable, two conditions must concur: (1) the seafarer dies during the term of his employment contract; and, (2)the cause of the seafarer’s death must be work-related.

“In the present case, it is not disputed that the first condition was satisfied. As to the second element, we find the death of Rolly Mirasol completely unrelated to his work as a messman, as correctly ruled by the Labor Arbiter. Too much has been said by both parties as to who started the fight or who is the unlawful aggressor in the fight that caused the death of the seafarer. To us the same is immaterial and irrelevant. For regardless of who has the valid arguments on the said issue what is apparent is that the fight between two workers which started from an argument over something that is not even related to their respected work caused the death of seafarer Mirasol. No amount of justification can convince us that the same is work-related as contemplated under Section 20-A of the Standard Employment Contract. While this Commission sincerely commiserates with complainants, it is clear that the death of seafarer Mirasol do.”  

NLRC NCR CA NO. 040772-04, NLRC OFW CASE NO. (M) 03-07-1801-00, March 20, 2006, Commissioner Perlita B. Velasco, Ponente

Accident in CBA does not include illness

August 22, 2006

Seafarer suffered “retinal detachment” on his right eye. He claimed that said condition is due to an “accident” and not due to “illness” and is covered by the higher compensation levels under the JSU AMOSUP CBA. Further, claimant argued that illnesses are not specifically excluded from the CBA and therefore covered by it. The Court of Appeals ruled:

“A careful reading of the CBA clearly provides that it covers only permanent disability resulting from an accident, to wit:

“SECTION 1. A seafarer who suffers permanent disability as a result of an accident, regardless of fault, but excluding injuries caused by a seafarer’s willful act, whilst in the employment of the Company x x x and whose ability to work is reduced as a result thereof, shall in addition to sick pay pay,be entitled to compensation.x x x[1]

From the provision cited, it is clear that the use of the work “accident” is controlling in the instant case before us. Simply put, the aforementioned section specifies that in order for an employee suffering from permanent disability to receive compensation in addition to his sick pay, he must meet the following requirements: (1) that the permanent disability resulted from an accident; (2) that while it is not necessary to ascertain whose fault caused the accident, it must not result from the seafarer’s willful act; (3) that the accident must have happened while the seafarer is employed with the company; and (4) that, as a result of the permanent disability resulting from the accident, the seafarer’s ability to work is reduced. In the absence of any accident causing the permanent disability, a seafarer may not claim for benefits under Section 1 of the CBA. Considering that there is no doubt in this instance that the injury of the petitioner did not result from an accident, then the CBA provisions cannot be made to apply in his case. Furthermore, there is no merit in petitioner’s statement that “if the CBA really intended not to compensate disabilities of the eye not caused by an accident, then the provisions in Appendix B are illogical and absurd.”[2] A cursory reading of Appendix B[3] reveals that this is merely a compensation scale to determine the percentage of compensation of the different disabilities that may result from the seaman’s employment. Said “compensation scale”cannot lend credence or support to petitioner’s argument that disabilities NOT caused by accidents are within the purview of the CBA.” ”  

CA. G.R. SP NO. 75431, May 19, 2006, Justice Mariflor P. Punzalan Castillo, Ponente

Dismissal of Third Engineer held illegal as only evidence is telex transmission

August 3, 2006

Third engineer was dismissed for “lack of discipline, irresponsible and lack of diligence.” Submitted to the NLRC was a telex Chief Engineer’s report dated September 10, 1997 detailing the incompetence of seafarer which included:

“…being slack and not caring of his job and duties; resented discipline; several occasion(s) during working hours smoking and having snacks; cannot be trusted to do his job unless supervised perpetually; requires constant pushing and motivation”.

The Supreme Court agreed with the ruling of the Court of Appeals and the NLRC that one telex is not enough to discharge the burden of proving that the dismissal was for just cause.

The Court held:"

“The rule in labor cases is that the employer has the burden of proving that the dismissal was for just cause; failure to show this would necessarily mean that the dismissal was unjustified and therefore, illegal. The two-fold requirements for a valid dismissal are as follows: (1)The two-fold requirements for a valid dismissal are as follows: (1) dismissal must be for a cause provided for in the Labor Code, which is substantive; and (2) the observance of notice and hearing prior to the employee’s dismissal which is procedural."

“The only evidence relied upon by (vessel) in justifying the (Chief Engineer’s) dismissal is the Chief Engineer’s Report dated September 10, 1997. The question that arises, therefore, is whether the Report constitutes substantial evidence proving that respondent’s dismissal was for cause."

“Substantial evidence is defined as that amount of relevant evidence which is a reasonable mind might accept as adequate to justify conclusion. As all three tribunals (Labor Arbiter, NLRC and the Courts of Appeals) found, the Report cannot be given any weight or credibility because it is uncorroborated, based purely on hearsay, and obviously merely an afterthought. While rules of evidence are not strictly observed in proceedings before administrative bodies, (vessel) should have offered additional proof to corroborate the statements described therein.”  

G.R. No. 148893, July 12, 2006, First Division, Justice Ma. Alicia Austria-Martinez, Ponente