ALBAR SHIPPING & TRADING CORPORATION, DOJIMA MARINE CO., LTD. AND ALBAR KATO, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION AND REYNALDO S. CUSTODIO, RESPONDENTS.

Albar Shipping versus Custodio

The Case

This is a petition for certiorari under Rule 65 of the Rules of Court filed by Albar Shipping and Trading Corporation, Dojima Marine Company Limited, and Albar Kato against the National Labor Relations Commission and the seafarer Reynaldo Custodio. The petitioners ask the Supreme Court to annul the Commission's affirmance of a Labor Arbiter's award of permanent total disability benefits, sickness allowance, and attorney's fees in favor of Custodio, who had served as Master of the vessel M/V Forest Arrest. The case matters because it fixes where the burden of proof lies when a seafarer's illness is not in the list of occupational diseases, and because it shows how the failure of a company-designated physician to issue a timely fit-to-work declaration ripens into a conclusive presumption of total and permanent disability.

Procedural History

Custodio first filed a complaint for disability benefits and damages, but moved for its dismissal on the ground of prematurity because his illness had not yet been fully diagnosed. The Labor Arbiter dismissed that case without prejudice. After obtaining his own physician's diagnosis, Custodio filed a new complaint for disability benefits, unpaid sickness allowance, hospitalization and medical expenses, and attorney's fees. The Labor Arbiter ruled in his favor, ordering the petitioners to pay permanent total disability benefits, sickness allowance, and attorney's fees. The petitioners appealed to the National Labor Relations Commission, which dismissed the appeal and affirmed the Labor Arbiter in full. The Commission denied their motion for reconsideration. The petitioners then went up to the Supreme Court by petition for certiorari under Rule 65, alleging grave abuse of discretion.

Facts

Albar Shipping, for and on behalf of Dojima Marine, hired Custodio as Master of the vessel M/V Forest Arrest. He boarded on November 17, 2011, after having been declared fit for sea duty in his pre-employment medical examination. In the course of his employment he experienced severe stomach pain and difficulty in walking. On December 4, 2011, he was brought to a hospital in China, where he was advised to undergo surgery for acute appendicitis. He chose less invasive management and was repatriated on December 7, 2011 for further treatment.

In Manila, he was diagnosed with urinary tract infection and urolithiasis, and was referred to the company-designated physician, who after tests diagnosed prostatitis or prostate enlargement and placed him under medication. On January 19, 2012, that physician reported that the prognosis was good and that Custodio would be declared fit to work after sixty to ninety days of treatment, adding that prostatitis is neither work-related nor work-aggravated. After fifty-seven days of treatment, and with a biopsy scheduled to determine the cause of his leg pain, the petitioners advised discontinuance of medical treatment, taking the position that there was no causal connection between his illness and his working condition and that further treatment would be for his own account.

Custodio then consulted his own physician, who diagnosed him with a cluster of serious conditions classified as Impediment Grade 1, equivalent to total permanent disability. When his repeated requests for his complete sickness allowance went unheeded, he filed the complaint that led to this case. More than two years after repatriation, the company-designated physician had made no definite assessment of his fitness or disability to work.

Issues

• Whether or not the National Labor Relations Commission gravely abused its discretion in holding that Custodio's prostatitis is work-related and work-aggravated, and in awarding permanent total disability benefits.
• Whether or not Custodio is entitled to attorney's fees equivalent to ten percent of the total judgment award.

Applicable Provisions

Section 20, paragraph B, of the Philippine Overseas Employment Administration Standard Employment Contract, on the disputable presumption of work-relatedness, provides:

Those illnesses not listed in Section 32 of this Contract are disputably presumed as work related.

This is the provision that shifts the burden of evidence to the employer once the seafarer shows an illness contracted during the term of the contract.

Section 20, paragraph B, of the same contract, on compensation for disability, provides:

In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 32 of this Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted.

This is the basis for the award of disability benefits once total and permanent disability is established.

Ruling

On the first issue, the Court held that the petition lacks merit and affirmed the Commission. Certiorari under Rule 65 lies only upon a clear showing of grave abuse of discretion, meaning discretion exercised in an arbitrary or despotic manner by reason of passion or personal hostility so patent and gross as to amount to an evasion of a positive duty. The Court found the Commission's findings supported by substantial evidence. Relying on Section 20, paragraph B, the Court ruled that the disputable presumption operates in favor of the seafarer and that the burden rests on the employer to overcome it, or at least to show that the growth, development, and aggravation of the illness did not arise out of the working conditions. Here, the company-designated physician gave only a general declaration that prostatitis was not work-related, with no medical explanation, so his opinion was neither binding nor conclusive. The medical literature cited by the petitioners actually supported the connection, since holding urine for long periods, which a Master on watch must do, forces urine into the ducts of the prostate and makes infection more likely. The Court stressed that the employment need not be the sole cause of the illness; a reasonable linkage suffices to show that the work may have contributed to its onset or, at the very least, its aggravation.

On the second issue, the Court likewise sustained the award. Even setting aside work-relatedness, the company-designated physician never issued a fit-to-work certificate within the periods fixed by the contract. Reading the contract in harmony with the Labor Code, the Court explained that the one hundred twenty days is the period to determine fitness to work, extendible to a maximum of two hundred forty days, and that a temporary disability becomes permanent when declared within those periods or when they expire without any declaration while the seafarer remains unable to resume his duties. The physician's impression that Custodio would be fit after sixty to ninety days was not sufficient compliance, especially since treatment was cut short after fifty-seven days. The conclusive presumption of total and permanent disability therefore arose. Finally, since Custodio was compelled to litigate to protect a valid claim, attorney's fees at ten percent of the total award were proper.

Doctrine

Under Section 20, paragraph B, of the Standard Employment Contract, an illness not listed as an occupational disease is disputably presumed work-related, and the employer bears the burden of rebutting that presumption with substantial evidence. A bare declaration by the company-designated physician, unsupported by medical explanation, cannot overcome it. It is enough that a reasonable linkage exists between the illness and the seafarer's work, even if the employment is not the sole cause, so long as the work may have contributed to the illness or aggravated a pre-existing condition. Separately, if the company-designated physician fails to issue a fit-to-work or disability declaration within the one hundred twenty day period, extendible to two hundred forty days, the seafarer is conclusively presumed totally and permanently disabled. Attorney's fees at ten percent may be awarded where the employee is forced to litigate to vindicate a valid claim.

Disposition

The petition was dismissed, and the Decision and Resolution of the National Labor Relations Commission were affirmed, leaving Custodio entitled to permanent total disability benefits, sickness allowance, and attorney's fees.

Remember This

Memorize this line: the employer, not the seafarer, must rebut the disputable presumption of work-relatedness, and a silent company-designated physician after the statutory periods yields a conclusive presumption of total and permanent disability. Examiners use this case in maritime labor questions on the burden of proof for unlisted illnesses and on the one hundred twenty to two hundred forty day rule.