ELBURG SHIPMANAGEMENT PHILS., INC., ENTERPRISE SHIPPING AGENCY SRL AND/OR EVANGELINE RACHO, PETITIONERS, VS. ERNESTO S. QUIOGUE, JR., RESPONDENT.

Elburg Shipmanagement versus Quiogue

The Case

This is a labor case about a seafarer's claim for permanent and total disability benefits. Ernesto Quiogue, Junior, an able-bodied seaman, sued his employers Elburg Shipmanagement Philippines, Incorporated, Enterprise Shipping Agency SRL, and Evangeline Racho, after the company-designated physician declared him fit to work while his own doctor of choice declared him permanently unfit for sea duty. The case matters because it is the decision that finally settled the confusion in seafarer disability claims: it laid down a clear rule on what happens when the company-designated physician issues the fit-to-work certification beyond the 120-day period but within the 240-day period, and it fixed the consequence when the physician issues no certification at all within those periods.

Procedural History

Quiogue filed a complaint for disability benefits before the Labor Arbiter, who ruled in his favor, ordering the employers to pay him permanent and total disability benefits under the collective bargaining agreement, plus attorney's fees. The employers appealed to the National Labor Relations Commission, which affirmed the Labor Arbiter in full and denied their motion for reconsideration. The employers then went to the Court of Appeals on a petition for certiorari, insisting that the Commission committed grave abuse of discretion in preferring the findings of Quiogue's doctor over those of the company-designated physician. The Court of Appeals affirmed the award of permanent and total disability benefits but deleted the attorney's fees for lack of factual and legal basis, and it denied the employers' motion for reconsideration. The employers then filed a petition for review on certiorari under Rule 45 of the Rules of Court before the Supreme Court.

Facts

Quiogue was hired as an able-bodied seaman on board the vessel MT Filicudi M, under an employment contract governed by the Philippine Overseas Employment Administration Standard Employment Contract and by a collective bargaining agreement that provided higher benefits for disability or death. On November 11, 2010, while he was on duty transferring a fire wire, a co-worker accidentally dropped it on his left foot. He was given first aid and sent to a hospital in Tarragona, Spain, where the x-ray showed a fractured metatarsal bone. On November 19, 2010, his injury prevented him from performing his duties, so he was repatriated and referred to the Metropolitan Medical Center, where he was diagnosed with a non-displaced fracture of the cuneiform bone of the left foot.

He underwent treatment and therapy under the company-designated physician from November 2010 to April 2011. On April 13, 2011, the company-designated physician certified him as fit to work. Despite the treatment, Quiogue continued to feel pain and discomfort, so he sought a second opinion from Doctor Nicanor Escutin, an orthopedic surgeon, who concluded that the injury rendered him permanently and totally incapable of performing his work as a seafarer and unfit for sea duty in whatever capacity.

Quiogue sought compensation for total permanent disability, but the employers refused, insisting that he had been declared fit to work by the company-designated physician. This prompted him to file the complaint. The Labor Arbiter ruled in his favor, finding that the left foot injury affected his dexterity and flexibility and rendered him unable to endure the manual and laborious work required of a seafarer. The Commission affirmed, and the Court of Appeals affirmed with the modification deleting attorney's fees.

Issues

• Whether or not a seafarer is entitled to permanent and total disability benefits when the company-designated physician issues the fit-to-work certification beyond 120 days from repatriation but within the 240-day period.
• Whether or not the findings of the company-designated physician prevail over those of the physician chosen by the seafarer.
• Whether or not the seafarer's previous receipt of permanent disability benefits from a former employer bars his claim against his succeeding employers.
• Whether or not the award of attorney's fees is proper.

Applicable Provisions

Article 192 of the Labor Code, as amended, provides:

ART. 192. Permanent Total Disability, xxx (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 in the Rules;

This is the statutory anchor of the 120-day rule that the Court harmonizes with the Standard Employment Contract and its implementing rules.

Rule X, Section 2 of the Amended Rules on Employees' Compensation, which implements 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 anytime 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 of the period from 120 days to a maximum of 240 days, which the Court reads together with the Standard Employment Contract.

Ruling

On the first issue, the Court held that the mere lapse of 120 days does not automatically entitle a seafarer to permanent and total disability benefits. Following Vergara versus Hammonia Maritime Services, the Court explained that upon sign-off the seafarer is on temporary total disability for a period not exceeding 120 days, and if further medical attention is required, the period may be extended to a maximum of 240 days, within which the employer may declare a permanent partial or total disability. If the medical treatment or evaluation exceeds 240 days, the seafarer is entitled to permanent and total disability benefits. But when the treatment exceeds 120 days yet falls short of 240 days, the Court laid down a new rule: the company-designated physician must make a definite assessment of fitness or disability within the 120 or 240-day periods, and should the physician fail to do so, the seafarer is deemed totally and permanently disabled. The Court also required that the physician's failure be justified, and that the justification be supported by evidence. Applying this to Quiogue, the Court found that the company-designated physician certified him fit to work only on April 13, 2011, which was 145 days after his repatriation on November 19, 2010, and no justification was shown for the delay. He was therefore deemed permanently and totally disabled.

On the second issue, the Court did not need to resolve the clash of medical opinions, because the dispositive ground was the lapse of the period without a timely and justified certification. The Court noted that the extent of a seafarer's disability is determined by the doctor's findings based on the resulting incapacity to work and earn wages, not by simply counting the days of treatment, and it warned that confusing the concepts would induce unscrupulous persons to delay treatment beyond 120 days to avail of the more favorable award.

On the third issue, the Court held that Quiogue's previous receipt of permanent disability benefits from a former employer did not bar his claim against his succeeding employers, because the two claims arose from different employment contracts, years apart, and from different injuries.

On the fourth issue, the Court sustained the deletion of attorney's fees, as there was no sufficient factual and legal basis for the award.

Doctrine

A seafarer's disability claim is governed by the 120-day and 240-day periods read together with Article 192 of the Labor Code and Rule X, Section 2 of the Amended Rules on Employees' Compensation. If the medical treatment or evaluation exceeds 240 days, the seafarer is entitled to permanent and total disability benefits. If it exceeds 120 days but not 240 days, the company-designated physician must issue a definite assessment within those periods; if the physician fails to do so without a justified reason supported by evidence, the seafarer is deemed totally and permanently disabled. The doctor's findings, not the mere counting of days, determine the extent of disability, and a prior disability claim against a former employer does not bar a claim against a succeeding employer.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, which upheld the award of permanent and total disability benefits to Quiogue while deleting the attorney's fees.

Remember This

Memorize the rule: beyond 240 days, the seafarer wins; between 120 and 240 days, the company-designated physician must issue a definite assessment within the period, and failure to do so without justification makes the disability permanent and total. Examiners use this case to test the seafarer's 120-day and 240-day rule and the weight given to the company-designated physician's certification.