INTERNATIONAL SHIP CREW MANAGEMENT, INC., VICTORIO VELONZA, AND ISHIMA PTE. LTD., PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION) AND ERNESTO A. CARDOZA, …

International Ship Crew Management versus Cardoza

The Case

This is a petition for certiorari under Rule 65 of the Rules of Court brought by International Ship Crew Management, its officer Victorio Velonza, and the foreign principal Ishima PTE. LTD., against the National Labor Relations Commission and the seafarer Ernesto A. Cardoza. The petitioners ask the Supreme Court to annul the Commission's award of permanent total disability benefits and attorney's fees to Cardoza, a Chief Cook who fell ill on board ship. The case matters because it gathers into one decision the working rules on seafarers' disability claims: the 120-day test, the 240-day extension, the weight of the company doctor's certification, and the meaning of concealment in the pre-employment medical examination.

Procedural History

Cardoza filed a complaint for medical expenses and other causes of action before the Labor Arbiter. The Labor Arbiter dismissed the complaint. Cardoza appealed to the National Labor Relations Commission, which reversed and set aside the Labor Arbiter's decision and ordered the petitioners to pay, jointly and severally, 60,000 dollars as permanent total disability benefits plus ten percent as attorney's fees. The petitioners moved for reconsideration, and the Commission denied the motion. The petitioners then went up to the Supreme Court by petition for certiorari under Rule 65, imputing grave abuse of discretion amounting to lack or excess of jurisdiction.

Facts

Cardoza was hired as Chief Cook of the vessel M/T High Presence under a nine-month contract at a monthly salary of 590 dollars, using the standard terms of the Philippine Overseas Employment Administration. Before sailing, he underwent an extensive pre-employment medical examination. The company-designated physicians certified him fit to work, and he was given cardiac clearance even though his ECG showed a significant finding of left atrial abnormality. He departed Manila in October 2007 and began work two days later.

In March 2008 he suffered pain in the fourth toe of his right foot, which swelled until he could no longer walk. Seen at a hospital in Singapore, he was diagnosed with an abscess of the right fourth toe with cellulitis, uncontrolled diabetes mellitus, and hypertension, with blood pressure at 210 over 100, and was declared unfit to sail. He was repatriated on March 16, 2008, and immediately reported to the company physician, who confirmed infected wound, hypertension, and type two diabetes mellitus, and placed him under continuous treatment.

On June 17, 2008, the company physician certified that Cardoza would be fit to work on July 15, 2008. Yet the physician's own report of July 17, 2008 recorded persistently elevated blood pressures, the last reading at 220 over 130, and advised continued medication and regular check-up. Cardoza consulted another physician, who issued a certificate in September 2008 declaring him medically unfit for work as a seaman. When the petitioners refused his claim for disability benefits, he filed the complaint.

Issues

• Whether or not Cardoza is entitled to permanent total disability compensation despite the company-designated physician's certification that he was fit to work.
• Whether or not Cardoza should have awaited the lapse of the 240-day temporary total disability period before claiming permanent total disability benefits.
• Whether or not Cardoza is disqualified from claiming disability benefits for allegedly concealing his pre-existing hypertension and diabetes mellitus in his pre-employment medical examination.
• Whether or not Cardoza's diabetes mellitus and hypertension are compensable under the standard contract.
• Whether or not Cardoza is entitled to attorney's fees.

Applicable Provisions

The definition of total and permanent disability under the implementing rules of the Labor Code, as cited in the decision, provides:

A disability is total and permanent if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided for in Rule X of these Rules.

This is the yardstick the Court used to measure Cardoza's incapacity from his repatriation in March 2008 to the July 2008 medical report.

Section 20 of the standard contract on concealment, as quoted by the petitioners and addressed by the Court, provides:

A seafarer who knowingly conceals and does not disclose past medical condition, disability and history in the pre-employment medical examination constitutes fraudulent misrepresentation and shall disqualify him from any compensation and benefits. This may also be a valid ground for termination of employment and imposition of the appropriate administrative and legal sanctions.

The Court tested whether Cardoza's non-disclosure amounted to the fraudulent concealment this provision punishes.

Ruling

On the first issue, the Court held that the company physician's fit-to-work certification could not be given credence because it contradicted his own findings. He certified fitness effective July 15, 2008, yet his report of July 17, 2008 showed uncontrolled blood pressure requiring continuous medication. The Court applied the true test: whether the worker's inability to perform his job lasted more than 120 days. From repatriation on March 16, 2008 to July 17, 2008, exactly 123 days had elapsed, and Cardoza still could not perform his work as Chief Cook. Permanent disability, the Court stressed, is understood less by its medical significance than by the loss of earning capacity.

On the second issue, the Court held that the 240-day maximum period applies only where the company-designated physician fails to make a declaration within 120 days. Here the physician did declare, on the 102nd day, so the extension had no application.

On the third issue, the Court held that there was no concealment. The company physician had extensively examined Cardoza and noted a significant finding of left atrial abnormality on his ECG, yet still cleared him through a cardiologist and certified him fit to work. An employee declared fit to work at the start of employment, notwithstanding a significant finding known to the employer's physician, cannot be said to have concealed an illness. The employer had the opportunity to screen and verify, and must accept liability.

On the fourth issue, the Court held that the diabetes mellitus and hypertension were compensable under the standard contract. On the fifth, having been compelled to litigate to recover what was due him, Cardoza was entitled to attorney's fees.

Doctrine

Permanent total disability is the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body; the true test is evidence of inability to perform customary work beyond that period. The 240-day extended period applies only when the company-designated physician makes no declaration on fitness or disability within 120 days. A fit-to-work certification that contradicts the physician's own clinical findings cannot prevail. Finally, there is no fraudulent concealment under Section 20 of the standard contract where the employer's own physician examined the seafarer, noted a significant finding, and nonetheless declared him fit to work.

Disposition

The petition was denied and the Commission's award of 60,000 dollars in permanent total disability benefits plus ten percent attorney's fees, payable jointly and severally by the petitioners, was upheld.

Remember This

Memorize the line: permanent disability is inability to perform one's job for more than 120 days, measured by loss of earning capacity, not by medical significance. Examiners use this case on the 120-day and 240-day rules for seafarers and on concealment in the pre-employment medical examination.