HEIRS OF THE LATE DARIO DIAZ, REPRESENTED BY HIS WIFE, GLORIA M. DIAZ, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION, DOLPHIN SHIP MANAGEMENT, INC., ALAMAT SHIPPING CORP.…

Heirs of the Late Dario Diaz versus National Labor Relations Commission

The Case

This is a petition for certiorari brought by Gloria Diaz, as surviving spouse and legal heir of the late seafarer Dario Diaz, against the National Labor Relations Commission, the manning agency Dolphin Ship Management, its foreign principal Alamat Shipping Corporation, and its officer Marcelo Raneses. The widow seeks to reverse the Commission's affirmance of the Labor Arbiter's dismissal of her claim for death benefits, burial allowance, moral and exemplary damages, and attorney's fees under the POEA Standard Employment Contract. The case matters because it is the Court's clean statement of two rules every maritime labor examinee must carry: that the burden of proving entitlement to seafarer's benefits rests on the claimant by substantial evidence, and that the three-day post-employment medical examination is mandatory, with non-compliance forfeiting the claim.

Procedural History

Gloria Diaz filed a complaint before the Labor Arbiter for death benefits, burial allowance, moral and exemplary damages, and attorney's fees. The Labor Arbiter dismissed the case for lack of merit. On appeal, the National Labor Relations Commission, Sixth Division, affirmed the dismissal. Her motion for reconsideration was denied. She then went up to the Supreme Court by petition for certiorari under Rule 65, charging grave abuse of discretion amounting to lack or excess of jurisdiction. The Supreme Court denied the petition.

Facts

Dolphin Ship Management, a Philippine manning agency acting for its foreign principal Alamat Shipping Corporation, hired Dario Diaz as Chief Cook on board the vessel Herefore Express on January 5, 2011, for a stipulated period of six months. Before deployment he underwent medical examinations and was found fit to work by the company-designated physician. He allegedly had difficulty breathing while on board but never reported it to the captain. His contract lapsed after six months, and he arrived in the Philippines on August 12, 2011.

While in the Philippines, Dario allegedly suffered a heart attack, shown by an undated clinical abstract issued by Dr. Theserie Evangelista. On December 15, 2011, a cardiology report by Dr. Romeo Meriño declared him not fit to work. On August 8, 2012, Dario died, with the death certificate listing cardiac arrest as the immediate cause, status asthmaticus as the antecedent cause, and bronchial asthma as the underlying cause.

On December 14, 2012, Gloria filed the complaint, claiming that her husband's illness was contracted on board and was work-related, and that his death converted his disability benefits into death benefits. The private respondents denied liability, saying Dario finished his contract and was repatriated on its expiration, that he never reported any illness, and that he forfeited his benefits for failing to undergo the mandatory post-employment medical examination within three working days of his return. Conciliation failed, and the case was decided on the position papers and evidence.

Issues

• Whether or not the widow is entitled to death benefits under the POEA Standard Employment Contract in connection with the death of her husband, the seafarer Dario Diaz.
• Whether or not the widow is entitled to moral and exemplary damages and to attorney's fees.

Applicable Provisions

Section 20 B, Number 3 of the POEA Standard Employment Contract, as quoted in the decision, provides:

Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall exceed one hundred twenty (120) days.

This fixes the sickness allowance and the one hundred twenty day ceiling that frame the seafarer's post-employment claim.

The same Section 20 B, Number 3 continues:

For this purpose the seafarer shall submit himself to a post-employment medical examination by a company designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall resort in his forfeiture of the right to claim the above benefits.

This is the three-day mandatory reporting rule whose breach the Court held fatal to the widow's claim.

Ruling

On the first issue, the Court held that the petition is devoid of merit. Whoever claims entitlement to benefits provided by law must establish the right by substantial evidence, which the Court described as more than a mere scintilla, such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might opine otherwise. The burden lies on the claimant, who must show that the illness resulting in disability was contracted during the term of the employment contract. Here the widow failed. There was no record of any medical complaint on board the vessel or after Dario's arrival on August 12, 2011. The medical certificates were issued long after he disembarked, and the clinical abstract was undated. Apart from her bare allegation and Dario's unsigned and undated affidavit, there was no evidence that the illness arose during employment. The Court therefore credited the private respondents' claim that Dario was repatriated on completion of his contract, not for medical reasons.

Even assuming he was repatriated for medical treatment, the Court held that Section 20 B, Number 3 required him to submit to a post-employment medical examination within three working days of arrival, or, if physically incapacitated, to give written notice to the agency within the same period. Dario's examination came only on December 15, 2011, months after his return, and there was no showing of physical incapacity to justify the delay. The Court stressed that the three-day rule must be strictly observed, since within three days it would be fairly manageable for the physician to identify whether the disease was contracted during employment or whether working conditions increased the risk. To ignore the rule would open the floodgates to a limitless number of seafarers claiming disability benefits and leave employers without protection against unrelated claims. Non-compliance thus forfeited the right to claim.

The Court likewise rejected the argument that Dario's having been found fit to work before embarkation proved that the illness was acquired on board. A clean pre-employment examination does not necessarily mean the illness arose during employment, especially where there was no medical complaint on board and no timely post-employment examination.

On the second issue, the Court denied moral and exemplary damages for want of any concrete showing of bad faith or malice on the part of the private respondents. On attorney's fees, the Court held that as a matter of sound policy an award of attorney's fees remains the exception rather than the rule, and the Labor Arbiter and the Commission must make express findings of fact and law bringing the case within the exception. Absent stipulation, attorney's fees are ordinarily not recoverable, otherwise a premium would be placed on the right to litigate.

Doctrine

First, the claimant of seafarer's death or disability benefits bears the burden of proving entitlement by substantial evidence, and must establish that the illness was contracted during the term of the employment contract. Second, under Section 20 B, Number 3 of the POEA Standard Employment Contract, the seafarer must submit to a post-employment medical examination by a company-designated physician within three working days of return, or, if physically incapacitated, give written notice to the agency within the same period; failure to comply results in forfeiture of the right to claim the benefits. Third, a finding of fitness to work before embarkation does not by itself prove that the illness was acquired during employment. Fourth, moral and exemplary damages require a concrete showing of bad faith or malice, and attorney's fees remain the exception rather than the rule, requiring express findings to justify the award.

Disposition

The Supreme Court denied the petition and affirmed the dismissal of the widow's claim for death benefits, damages, and attorney's fees.

Remember This

Memorize the line that the three-day post-employment medical examination is mandatory and its breach forfeits the seafarer's claim, with the burden of proof on the claimant by substantial evidence. Examiners use this case to test the strict observance of the three-day reporting rule, the physical incapacity exception requiring written notice, and the rule that a clean pre-employment examination does not prove a work-related illness.