SCANMAR MARITIME SERVICES, INC. AND CROWN SHIPMANAGEMENT, INC., PETITIONERS, VS. CELESTINO M. HERNANDEZ, JR., RESPONDENT.

Scanmar Maritime Services versus Hernandez

The Case

This is a petition for review on certiorari brought by Scanmar Maritime Services, Inc. and Crown Shipmanagement, Inc., the manning agency and its foreign principal, against Celestino M. Hernandez, Jr., an able seaman they had deployed on the vessel Timberland. The seafarer sued for total and permanent disability benefits, damages, and attorney's fees after he was medically repatriated for a urological condition that was later surgically treated. The case matters because it fixes the moment a seafarer's cause of action for permanent disability accrues, and it draws the line between the one hundred twenty day rule and the two hundred forty day rule in the assessment of a seafarer's fitness to work.

Procedural History

Hernandez filed a complaint with the National Labor Relations Commission for permanent disability benefits, damages, and attorney's fees. The Labor Arbiter ruled in his favor, awarding sixty thousand dollars as total and permanent disability compensation and six thousand dollars as attorney's fees, finding his illness work-related and compensable. The employers appealed to the National Labor Relations Commission, which dismissed the appeal and affirmed the Labor Arbiter, holding that the company-designated physician's certification, issued after one hundred twenty days, had by operation of law transformed the disability into a total and permanent one. The employers' motion for reconsideration was denied.

The employers then went up to the Court of Appeals on a petition for certiorari with an urgent application for a temporary restraining order and a writ of preliminary mandatory injunction, imputing grave abuse of discretion to the National Labor Relations Commission. The Court of Appeals dismissed the petition and affirmed the labor tribunals, finding no grave abuse of discretion in the appreciation of the causal connection between the seafarer's work and his illnesses, in upholding the assessment of his physician of choice, and in treating the disability as total and permanent. Reconsideration was denied. Hence, the employers filed the present petition for review on certiorari before the Supreme Court.

Facts

On the second of July, 2009, Scanmar, for and on behalf of its foreign principal Crown Shipmanagement, entered into a nine-month contract of employment with Hernandez as an able seaman for the vessel Timberland. He passed the pre-employment medical examination, was declared fit for work, was deployed on the third of August, 2009, and boarded the vessel the next day.

During his employment he experienced pain in his inguinal area and pelvic bone, radiating to his right scrotum and right medial thigh. He informed the Captain and was brought to a hospital in Sweden, where he was found unfit to resume normal duties. He was medically repatriated on the sixth of February, 2010. Two days later he was referred to the company-designated physician, who diagnosed epididymitis on the right and varicocele on the left, and recommended a varicoelectomy. On the twenty-sixth of March, 2010, the company-designated urological surgeon, Doctor Gatchalian, performed the surgery successfully, and the seafarer was discharged the following day. He continued to report to Doctor Gatchalian for treatment and evaluation, underwent laboratory examinations, and was advised to refrain from strenuous activities while recovering.

Despite the continuing treatment, Hernandez filed his complaint on the twentieth of July, 2010. On the twelfth of August, 2010, he consulted his own physician, Doctor Pascual, a cardiologist, who diagnosed him with essential hypertension, stage two, epididymitis on the right, and varicocele on the left, after surgery, and certified him medically unfit to work as a seaman. On the twenty-fourth of August, 2010, or one hundred ninety-seven days from repatriation, Doctor Gatchalian pronounced him fit to resume sea duties.

Issues

• Whether or not the seafarer's complaint for total and permanent disability benefits was prematurely filed because the company-designated physician had not yet issued a disability or fit-to-work assessment within the allowable two hundred forty day period.
• Whether or not the seafarer's failure to refer the conflicting medical assessments to a third doctor under the POEA Standard Employment Contract rendered his complaint premature and fatal to his cause.
• Whether or not the assessment of the company-designated physician, a specialist, should prevail over the one-time assessment of the seafarer's physician of choice.
• Whether or not the seafarer is entitled to attorney's fees.

Applicable Provisions

Article 192 of the Labor Code provides:

Art. 192. Permanent total disability. – x x x (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 is the statutory anchor of the one hundred twenty day rule, which the Court reads together with the implementing rules and the contract.

Section 2, Rule X of the Amended Rules on Employee Compensation 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 supplies the extension to two hundred forty days where further medical attendance is required.

Section 20B(3) of the POEA Standard Employment Contract provides:

3. 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 entrusts the assessment to the company-designated physician and prescribes the procedure for contesting that assessment, which the seafarer must follow.

Ruling

On the first issue, the Court found merit in the petition and held that the complaint was prematurely filed. The Court declared that the one hundred twenty day rule cannot be applied as a general rule for all cases in all contexts, and that the provisions must be read in harmony: the one hundred twenty days is the period given to the employer to determine fitness to work, that period may be extended to a maximum of two hundred forty days should the seafarer require further medical treatment, and a temporary total disability becomes permanent when so declared by the company-designated physician within one hundred twenty or two hundred forty days, or upon the expiration of those periods without a declaration while the seafarer is still unable to resume his regular seafaring duties. Here, after one hundred twenty days the treatment continued, justifying the extension. When the complaint was filed on the twentieth of July, 2010, or one hundred sixty-two days since repatriation and without a definite assessment, the condition could not be considered permanent and total. The Court held:

[T]emporary total disability only becomes permanent when the company-designated physician, within the 240-day period, declares it to be so, or when after the lapse of the said period, he fails to make such declaration.

The Court also clarified that the labor tribunals mistakenly relied on the earlier ruling that incapacity to perform customary sea duties for more than one hundred twenty days constitutes total and permanent disability. That ruling governs complaints filed before the sixth of October, 2008, the date the two hundred forty day rule was promulgated; complaints filed from that date onwards are governed by the two hundred forty day rule. Since this complaint was filed in 2010, the two hundred forty day rule applies.

On the second issue, the Court held that the seafarer's failure to comply with the procedure prescribed by the POEA Standard Employment Contract, which is the law between the parties, was a sufficient ground to deny the claim. The company-designated physician is entrusted with the task of assessing disability, and the contract provides the procedure to contest the findings. The seafarer filed his complaint without a definite assessment, and worse, sought an independent opinion despite the absence of an assessment. The Court stressed that the right to seek other doctors presupposes that the company-designated physician had already issued a certification as to fitness or disability and the seafarer finds it disagreeable.

On the third issue, the Court was unconvinced to put weight on the findings of the physician of choice, given that the seafarer had breached his duty to comply with the prescribed procedure. On the fourth issue, since no cause of action had accrued, the award of attorney's fees could not stand.

Doctrine

A seafarer's cause of action for total and permanent disability benefits accrues only when the company-designated physician, within the two hundred forty day period, declares the disability permanent, or when, after the lapse of that period, no such declaration is made and the seafarer remains unable to resume his regular sea duties. The one hundred twenty day period under Article 192 of the Labor Code and Section 20B(3) of the POEA Standard Employment Contract is the period to determine fitness to work; it may be extended to two hundred forty days where further medical treatment is required. A complaint filed while the seafarer is still temporarily and totally disabled, before the two hundred forty day period lapses, is premature. The seafarer who disagrees with the company-designated physician must first secure an assessment and then invoke the third doctor procedure; he cannot manufacture a cause of action by consulting his own physician before any assessment exists.

Disposition

The petition was granted; the Court of Appeals decision and resolution were reversed and set aside, and the seafarer's complaint was dismissed.

Remember This

Memorize this line: temporary total disability becomes permanent only when the company-designated physician declares it so within the two hundred forty day period, or when that period lapses without a declaration. Examiners use this case to test the one hundred twenty day versus two hundred forty day rule, the prematurity of a seafarer's complaint, and the mandatory third doctor procedure under the POEA Standard Employment Contract.