PHILASIA SHIPPING AGENCY CORPORATION AND/OR INTERMODAL SHIPPING, INC., PETITIONER, VS. ANDRES G. TOMACRUZ, RESPONDENT.

Philasia Shipping versus Tomacruz

The Case

This is a petition for review on certiorari brought by Philasia Shipping Agency Corporation and Intermodal Shipping, Incorporated against Andres G. Tomacruz, a seafarer who served them as an oiler aboard the vessel M/V Saligna. Tomacruz filed a complaint for disability benefits, sickness wages, damages, and attorney's fees after the company refused to rehire him following a declaration by the company-designated physician that he was fit to work. The case matters because it settles, for the Bar candidate, that a seafarer's entitlement to disability benefits is governed not by medical findings alone but by contract and by law, and that the Labor Code concept of permanent total disability applies to seafarers with equal force.

Procedural History

Tomacruz filed his complaint before the Quezon City Arbitration Branch of the National Labor Relations Commission. The Labor Arbiter dismissed the complaint, holding that the company-designated physician's assessment deserved greater weight and that the employer had no obligation to re-contract a seafarer whose contract had ended. Tomacruz appealed to the National Labor Relations Commission, which affirmed the Labor Arbiter and later denied his motion for reconsideration. Tomacruz then elevated the matter to the Court of Appeals through a petition for certiorari under Rule 65, alleging grave abuse of discretion. The Court of Appeals granted the petition, reversed the National Labor Relations Commission, and awarded permanent total disability benefits of 60,000 dollars or its peso equivalent, plus attorney's fees of ten percent of the total monetary award. The Court of Appeals denied the employers' motion for reconsideration. The employers then came to the Supreme Court by petition for review on certiorari.

Facts

Andres G. Tomacruz was a seafarer whose services were engaged by Philasia Shipping Agency Corporation on behalf of Intermodal Shipping, Incorporated. He had completed four prior contracts with the employers, and for all five contracts he underwent a pre-employment medical examination and obtained a fit to work rating before deployment. A twelve-month Philippine Overseas Employment Administration Contract of Employment was signed on January 9, 2002, and he boarded M/V Saligna on January 15, 2002, performing his duties without incident.

Sometime in September 2002, during the term of his last contract, Tomacruz noticed blood in his urine. He reported this to the Ship Captain, who referred him to a doctor in Japan. Check-ups and ultrasounds revealed a stone in his right kidney, but no medical certificate was issued and he was allowed to continue working. He was eventually repatriated to the Philippines and sent to Micah Medical Clinic and Diagnostic Laboratory, whose November 19, 2002 ultrasound report revealed stones in both kidneys. Referred to Dr. Nicomedes Cruz, the company-designated physician, he underwent more tests, medications, and treatments. On July 25, 2003, Dr. Cruz declared him fit to work despite stones about 0.4 centimeters in size in both kidneys and the possibility of hematoma.

Armed with the fit to work declaration, Tomacruz went to the employers' office to seek a sixth contract, but was told that because of the huge amount spent on his treatment, their insurance company did not like his services anymore. He then sought the opinion of Dr. Efren R. Vicaldo, who on September 9, 2003 issued a Medical Certificate finding bilateral nephrolithiasis, status post shock wave lithotripsy, and an impediment grade of seven at 41.80 percent, stating that Tomacruz was unfit to resume work as a seaman in any capacity and that his illness was considered work aggravated. On November 3, 2003, Tomacruz filed his complaint.

Issues

• Whether or not the Court of Appeals erred in granting the petition for certiorari despite the absence of grave abuse of discretion on the part of the National Labor Relations Commission.
• Whether or not the Labor Code provisions on permanent total disability apply to a seafarer's claim for disability benefits under the Philippine Overseas Employment Administration Standard Employment Contract.
• Whether or not Tomacruz is entitled to permanent total disability benefits despite the company-designated physician's declaration that he was fit to work.
• Whether or not the award of attorney's fees is proper.

Applicable Provisions

Article 192 of the Labor Code provides:

ART. 192. PERMANENT TOTAL DISABILITY. (c) The following disabilities shall be deemed total and permanent: (1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided for in the Rules.

This provision supplies the test of permanence: a temporary total disability that lasts beyond the statutory period is deemed total and permanent.

Section 2 of Rule X of the Rules and Regulations implementing Book IV of the Labor Code provides:

SEC. 2. Period of entitlement. – (a) The income benefit shall be paid beginning on the first day of such disability. If caused by an injury or sickness it shall not be paid longer than 120 consecutive days except where such injury or sickness still requires medical attendance beyond 120 days but not to exceed 240 days from onset of disability in which case benefit for temporary total disability shall be paid. However, the System may declare the total and permanent status at any time after 120 days of continuous temporary total disability as may be warranted by the degree of actual loss or impairment of physical or mental functions as determined by the System.

This rule fixes the outer limit of medical treatment at 240 days, beyond which permanence is deemed to set in.

Section 20 (B) (3) of the Philippine Overseas Employment Administration Standard Employment 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.

This provision is read hand in hand with the Labor Code provisions to govern the seafarer's period of temporary total disability.

Ruling

On the procedural issue, the Court held that the Court of Appeals did not err. The power of the Court of Appeals to review National Labor Relations Commission decisions via a petition for certiorari under Rule 65, and to pass upon the evidence when necessary to resolve factual issues, is settled. The Court of Appeals sustained the factual findings below but found itself unable to affirm the rulings in light of the applicable law.

On the applicability of the Labor Code, the Court held that the employers were mistaken in their notion that only the Standard Employment Contract should be considered. Entitlement of seafarers to disability benefits is governed not only by medical findings but also by contract and by law. By contract, the Standard Employment Contract binds the seafarer and the employer. By law, the Labor Code provisions on disability apply with equal force to seafarers. The Court explained that a contract of labor is so impressed with public interest that the Civil Code subjects it to the special laws on labor, and that the Standard Employment Contract itself provides that all rights and obligations of the parties shall be governed by the laws of the Republic of the Philippines.

On entitlement, the Court affirmed the Court of Appeals. From the time Tomacruz was repatriated on November 18, 2002, he submitted himself to the care and treatment of the company-designated physician. When that physician declared him fit to work on July 25, 2003, 249 days had already lapsed from repatriation. His temporary total disability should therefore be deemed total and permanent pursuant to Article 192 (c) (1) of the Labor Code and its implementing rule. The Court clarified that the temporary total disability period may be extended up to a maximum of 240 days, but this clarification did not change the judgment. The company-designated physician's certification that he was fit to work did not make him ineligible, because the fact remained that he was unable to work for more than 240 days. The Court also held that the issue of whose doctor's opinion should prevail had become irrelevant, since entitlement was decided on the bases of law and contract, not on medical findings. The case of Sarocam versus Interorient Maritime Enterprises was held not in point, because the seafarer there was declared fit for duty only thirteen days from repatriation.

On attorney's fees, the Court held the award proper, since Tomacruz was forced to file a complaint when the employers refused to heed his demand for payment of disability benefits and sickness wages.

Doctrine

A seafarer's entitlement to disability benefits is governed not only by medical findings but also by contract and by law. The Labor Code provisions on permanent total disability, particularly Article 192 (c) (1), apply to seafarers with equal force, and are read hand in hand with the Standard Employment Contract. A temporary total disability that lasts continuously for more than one hundred twenty days, extendable to a maximum of 240 days, is deemed total and permanent. Where the company-designated physician declares the seafarer fit to work only after the 240-day period has lapsed, the disability is considered permanent and total, and the fit to work declaration does not matter.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, holding the employers jointly and severally liable for permanent total disability benefits and attorney's fees.

Remember This

Memorize this line: a fit to work declaration issued after 240 days does not matter, because the disability has already become permanent and total by operation of law. Examiners use this case to test whether the Labor Code concept of permanent total disability applies to seafarers alongside the Standard Employment Contract, and to test the 120-day and 240-day periods.