INTER-ORIENT MARITIME, INCORPORATED AND/OR TANKOIL CARRIERS, LIMITED, PETITIONERS, VS. CRISTINA CANDAVA, RESPONDENT.

Inter-Orient Maritime versus Candava

The Case

This is a petition for review on certiorari brought by Inter-Orient Maritime, Incorporated and Tankoil Carriers, Limited against Cristina Candava, the widow of a seafarer. Cristina claimed death benefits after her husband Joselito died of a germ cell tumor discovered during his employment aboard the vessel M/T Demetra. The case matters because it settles two recurring questions in maritime labor law: whether a seafarer's death is compensable when the illness was contracted during the term of the contract, and whether the release documents he signed during his lifetime bar his heirs from recovering death benefits.

Procedural History

Cristina filed a complaint for death and other monetary benefits before the National Labor Relations Commission, National Capital Region. The Labor Arbiter ruled in her favor, ordering the petitioners to pay death benefits, benefits for the minor child, burial assistance, and attorney's fees. The petitioners appealed to the National Labor Relations Commission, which reversed the Labor Arbiter and held that Joselito did not die during the term of his contract and that his illness was not proven work-related, although it agreed that the complaint was not barred by res judicata. Cristina's motion for reconsideration was denied. She then filed a petition for certiorari with the Court of Appeals, which annulled and set aside the National Labor Relations Commission's ruling and reinstated that of the Labor Arbiter. The Court of Appeals held that there was an implied renewal of the employment contract, so Joselito's death fell within the contract term, and that the petitioners failed to rebut the presumption that the illness was work-related. The petitioners' motion for reconsideration was denied, so they elevated the matter to the Supreme Court by petition for review on certiorari.

Facts

In January 2002, Inter-Orient hired Joselito Candava as an able-bodied seaman for its foreign principal, Tankoil, and deployed him to M/T Demetra for a nine-month contract. His contract expired on October 28, 2002, but because no replacement was available, he continued to work aboard the vessel until February 2003.

On February 13, 2003, Joselito complained of severe abdominal pain and was rushed to a hospital, where he was diagnosed with a strangulated right inguinal hernia and acute appendicitis. He underwent surgery, and the doctors discovered a tumor in his right inguinal canal that appeared oncogenic. He was repatriated to Manila, where the company-designated physician declared him fit to work, yet his requests for work were rejected. On March 28, 2003, he filed a complaint for sick wages and medical expenses, but on the same day sought its dismissal in consideration of 29,813.04 pesos and executed a Release of All Rights. A month later, he was diagnosed with a testicular tumor, an abdominal germ cell tumor, and metastatic carcinoma to the lungs. On August 11, 2003, he filed another complaint for medical benefits, and again on the same day sought its dismissal in consideration of 77,000 pesos and executed a Receipt and Release. On October 9, 2003, Joselito died. His death certificate listed respiratory failure as the immediate cause, pulmonary metastasis as the antecedent cause, and germ cell tumor as the underlying cause. Cristina demanded death benefits from Inter-Orient, but her pleas were ignored, so she filed a complaint before the National Labor Relations Commission.

Issues

• Whether or not Joselito's death is compensable as to entitle Cristina to claim death benefits.
• Whether or not the release documents executed by Joselito during his lifetime bar the claim for death benefits.

Applicable Provisions

Section 2, paragraph B of the 1996 Philippine Overseas Employment Administration Standard Employment Contract provides:

The period of employment shall be for a period mutually agreed upon by the seafarer and the employer but not to exceed twelve (12) months. Any extension of the contract shall be subject to the mutual consent of both parties.

This provision fixes the maximum period of employment and governs whether Joselito's death occurred within the term of his contract.

Ruling

On the first issue, the Court held that the petition lacks merit. The employment of seafarers, including claims for death benefits, is governed by the contracts they sign at the time of their engagement, and the Standard Employment Contract is integrated into every seafarer's contract. Under the 1996 Standard Employment Contract, the illness leading to the seafarer's death need not be shown to be work-related to be compensable, but must be proven to have been contracted during the term of the contract. The Court found that Joselito contracted his illness in the course of employment and that it was aggravated during the same period, establishing a clear causal connection between the illness and his death. The Court rejected the petitioners' argument that the extended contract was void for lack of POEA approval, because the lack of approval was not Joselito's fault, and the petitioners should not benefit from their own wrongful acts. The Court affirmed the Court of Appeals' finding of an implied renewal of the contract for another nine months, from January 29, 2003 to October 28, 2003, so that Joselito's death on October 9, 2003 fell within the contract term.

On the second issue, the Court held that the release documents do not detract from the compensability of Joselito's death. While the documents appeared to have been executed voluntarily, they were the result of a pre-designated scheme to evade payment of benefits. The Court noted that Joselito's two previous complaints were walk-in settlements, and the petitioners never traversed Cristina's assertion that the motion to dismiss and release document for the second complaint were already signed before the complaint was filed. The Court quoted the truism that "necessitous men are not, truly speaking, free men; but to answer a present emergency, will submit to any terms that the crafty may impose upon them." As a rule, quitclaims, waivers, or releases are looked upon with disfavor and are largely ineffective to bar recovery of the full measure of a worker's rights, and the acceptance of benefits does not amount to estoppel. The settlements were therefore struck down for being contrary to public policy.

Doctrine

Under the 1996 Philippine Overseas Employment Administration Standard Employment Contract, the illness leading to the seafarer's death need not be work-related to be compensable, but must be proven to have been contracted during the term of the contract. An injury or accident arises in the course of employment when it takes place within the period of employment, at a place where the employee reasonably may be, and while he is fulfilling his duties or is engaged in doing something incidental thereto. A worker brings with him possible infirmities in the course of his employment, and while the employer is not the insurer of the health of the employees, he takes them as he finds them and assumes the risk of liability. Quitclaims, waivers, or releases are looked upon with disfavor and are largely ineffective to bar recovery of the full measure of a worker's rights, and the acceptance of benefits therefrom does not amount to estoppel. The State's avowed policy is to give maximum aid and protection to labor.

Disposition

The Supreme Court denied the petition and affirmed the Court of Appeals' decision and resolution, ordering the petitioners to pay Cristina Candava 50,000 dollars as death benefits, 7,000 dollars as benefits to the minor child Jerome Lester, 1,000 dollars as burial assistance, and ten percent of the total monetary award as attorney's fees.

Remember This

The single line worth memorizing is that under the 1996 Standard Employment Contract, the illness causing the seafarer's death need only be contracted during the term of the contract, not proven work-related, and quitclaims are disfavored. Examiners like to use this case to test the compensability of death benefits for illnesses not listed in the contract and the invalidity of release documents executed under necessitous circumstances.