PHILIPPINE TRANSMARINE CARRIERS INC., UNIBROS SHIPPING CORP. AND/OR CARLOS SALINAS, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION), SANTIAGO J. VILLASIN, …

Philippine Transmarine Carriers versus Villasin

The Case

This is a petition for certiorari brought by Philippine Transmarine Carriers, Unibros Shipping Corporation, and Carlos Salinas against the National Labor Relations Commission and the seafarer Santiago Villasin. The petitioners ask the Supreme Court to undo the Commission's award of permanent total disability benefits and attorney's fees to a seafarer who suffered a head injury on board while his employment contract was still running. The case matters because it gathers into one ruling the whole architecture of a seafarer's disability claim: the two elements of compensability under the standard overseas employment contract, the disputable presumption of work-relatedness, the quantum of substantial evidence, and the true reach of the post-employment medical examination requirement.

Procedural History

Villasin filed a complaint before the Labor Arbiter for disability benefits, sickness allowance, damages, and attorney's fees. The Labor Arbiter dismissed the complaint for lack of merit. Villasin appealed to the National Labor Relations Commission, which reversed, vacated and set aside the Labor Arbiter's decision, and ordered the respondents to pay, jointly and severally, sixty thousand dollars or its Philippine peso equivalent as total permanent disability benefits, plus ten percent of that amount as attorney's fees. The petitioners moved for reconsideration, and the Commission denied the motion. The petitioners then came to the Supreme Court by petition for certiorari, imputing grave abuse of discretion amounting to lack of jurisdiction.

Facts

Villasin was hired as an Able Seaman under a nine-month, POEA-approved contract signed on 4 June 2010, and he boarded the vessel on 9 June 2010. On 7 April 2011 the vessel was sold to new owners and renamed, and the crew, including Villasin, agreed to continue their contracts under the new owners. On 25 April 2011, while moving a heavy load in the engine room, Villasin lost his balance and struck his head on the railings. He reported the incident and was given analgesics that gave no relief. A medical report issued on 27 April 2011 recorded a head contusion due to a fall, and a physician in Las Palmas confirmed a traumatic subdural hematoma after two days of confinement.

Villasin disembarked on 10 June 2011 upon completion of his contract and arrived in the Philippines the next day. On 12 June 2011 he reported to the local agency for a medical referral, but he was not referred to the company physician, so on that same day he consulted an internist on his own, who diagnosed hearing loss of both ears and severe complex cerebral function disturbance, among other conditions. On 20 July 2011 he consulted an ear, nose, and throat specialist, who issued a medical certificate assessing work-related total hearing loss of both ears and a head injury due to an accident, categorized as Disability Grade One for total hearing loss.

The petitioners countered that Villasin completed his contract without any medical claim at the exit interview, that he signified an intention to re-apply, that he failed to comply with the three-day post-employment medical examination, and that Unibros Shipping no longer owned the vessel while Salinas had acted without bad faith.

Issues

• Whether or not the National Labor Relations Commission committed grave abuse of discretion in setting aside the Labor Arbiter's decision and awarding permanent total disability benefits to Villasin.
• Whether or not Villasin's failure to submit to a post-employment medical examination by a company-designated physician barred his claim.
• Whether or not Unibros Shipping and Carlos Salinas should be dropped as parties.
• Whether or not the award of attorney's fees was proper.

Applicable Provisions

Section 20, paragraph A, subparagraph 6 of the 2000 POEA Standard Employment Contract 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 contractual source of the disability benefit and fixes the schedule and the governing rates.

Section 20, paragraph B, subparagraph 3 of the same contract 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 this period exceed one hundred twenty (120) days.

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 result in his forfeiture of the right to claim the above benefits.

If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the employer and the seafarer. The third doctor's decision shall be final and binding on both parties.

This provision defines the reporting requirement and, as the Court reads it, confines the company physician's determination to the sickness allowance rather than to the whole disability claim.

Ruling

On the first issue, the Court ruled that the Commission did not commit grave abuse of discretion. In a certiorari proceeding the Court does not re-weigh the sufficiency of evidence; it asks only whether the Commission acted without or in excess of jurisdiction or with grave abuse of discretion. Entitlement to disability benefits is governed not only by medical findings but by law and by contract. Two elements must concur: the injury or illness must be work-related, and it must have existed during the term of the employment contract. The Court held that both were present. The disputable presumption of compensability favored Villasin, and the petitioners offered no evidence that the hearing loss and cerebral disturbance were not work-related; Section 32 of the contract even lists them as occupational diseases. The head injury suffered on board, confirmed as a traumatic subdural hematoma, was reasonably linked to the conditions diagnosed two days after disembarkation, since physical head injury can damage the middle ear. The employer is not the insurer of the health of his employees, but he takes them as he finds them and assumes the risk of an aggravated weakened condition. The required quantum is only substantial evidence.

On the second issue, the Court ruled that the failure to report to the company physician did not bar the claim. The determination of the company-designated physician pertains only to the entitlement to sickness allowance. The provision itself recognizes the seafarer's right to a second medical opinion and to consult a physician of his choice, and even allows a third opinion. Here, in any event, Villasin reported to the agency within the period and was simply not referred.

On the third issue, the Court refused to drop Unibros Shipping, which failed to substantiate by proof its bare claim that the vessel had been sold, and which showed no new contract executed with any alleged new owner. As to Salinas, the Court dismissed the claim against him because there was no evidence that he, as former president of the manning agency, acted with malice and bad faith in denying the claim.

On the fourth issue, the award of attorney's fees stood, the Commission having granted it as part of the relief upheld by the Court.

Doctrine

For a seafarer's injury or illness to be compensable, two elements must concur: it must be work-related, and it must have existed during the term of the employment contract. Neither element alone suffices; there must be a causal connection between the illness or injury and the work contracted for. It is enough that a reasonable linkage exists, such that the work may have contributed to the establishment or at the very least the aggravation of any pre-existing condition. The employer is not the insurer of the health of his employees, but he takes them as he finds them and assumes the risk of a weakened condition being aggravated. The quantum of proof in labor cases is substantial evidence, not proof beyond reasonable doubt. The post-employment medical examination by a company-designated physician governs the sickness allowance; it does not extinguish the seafarer's right to seek a second opinion or to claim disability benefits.

Disposition

The petition for certiorari was dismissed, and the Commission's award of permanent total disability benefits and attorney's fees in favor of Villasin was upheld, with the claim against Salinas dismissed.

Remember This

Memorize the two-element test: work-relatedness plus existence during the term of the contract, proved by substantial evidence. Examiners use this case to test the limits of the three-day post-employment medical examination and the disputable presumption of compensability in seafarers' claims.