ABOSTA SHIPMANAGEMENT CORP., CIDO SHIPPING COMPANY LTD., AND ALEX S. ESTABILLO, PETITIONERS, V. DANTE C. SEGUI, RESPONDENT.

Abosta Shipmanagement versus Segui

The Case

This is a labor case about a seaman's claim for permanent and total disability benefits, and for attorney's fees. Dante Segui, an able seaman, sued his employers Abosta Shipmanagement Corporation, Cido Shipping Company Limited, and Alex Estabillo after he suffered a severe back injury on board and was repatriated, then found unfit to work as a seafarer in any capacity. The employers insist that the company-designated physician's disability grading should control. The case matters because it settles, in one clean set of rules, how the one hundred twenty day and two hundred forty day periods interact with the company doctor's assessment, and when a seafarer's disability becomes permanent and total by operation of law rather than by medical grading.

Procedural History

Segui filed a complaint for disability benefits and attorney's fees. Labor Arbiter Fatima Jambaro-Franco rendered a decision in his favor, holding that he was entitled to the maximum disability benefit and that his own physician's detailed certification should prevail over the company doctor's late grading. The employers appealed to the National Labor Relations Commission, which affirmed the Labor Arbiter and added that the International Transport Workers' Federation standard agreement, providing higher compensation than the POEA Standard Employment Contract, should prevail, and that a seafarer is not deprived of the right to a second opinion. Reconsideration was denied.

The employers then went up to the Court of Appeals by a petition for certiorari under Rule 65 of the Rules of Court, alleging grave abuse of discretion. The Court of Appeals dismissed the petition and affirmed the National Labor Relations Commission, reasoning that disability is total when the worker cannot earn wages in the same kind of work, and permanent when he cannot perform his job for more than one hundred twenty days. Reconsideration was again denied. The employers then filed a petition for review on certiorari under Rule 45 of the Rules of Court before the Supreme Court.

Facts

Segui was hired as an able seaman on board the vessel Grand Quest, at a monthly salary of five hundred sixty-four dollars, under a collective bargaining agreement. He passed his pre-employment medical examination and boarded the vessel in June 2009. He worked more than twelve hours a day. In October 2010, while on duty, he felt cramps followed by severe back pain. The next day he could not stand and stayed in his cabin for the rest of the voyage.

He was examined at ports of call in South Africa, Colombia, and Panama, where he was diagnosed with a lumbar disc problem and recommended for repatriation. He arrived in Manila in December 2010 and was referred to the company-designated physician. A scan showed a disc bulge with herniation at the L4-L5 level. He underwent surgery and was confined for three weeks, followed by therapy, but his pain and numbness persisted.

He consulted his own physician, who declared him permanently and totally unable to work as a seafarer. The employers refused to pay, so he filed the complaint. The company-designated physician eventually issued a Grade 8 disability rating for moderate rigidity, or two thirds loss of motion or lifting power of the trunk, on the two hundred nineteenth day from repatriation, without declaring him fit to work.

Issues

• Whether or not the Court of Appeals erred in affirming disability compensation on the basis of an alleged unproven collective bargaining agreement.
• Whether or not disability compensation is determined by the number of days of treatment rather than by the disability grading issued by the company-designated physician.
• Whether or not the findings of the company-designated physician are entitled to great weight and respect absent evidence of bias.
• Whether or not the seafarer's failure to refer conflicting medical findings to a third physician warrants dismissal of the complaint.
• Whether or not attorney's fees may be awarded absent evidence of bad faith.

Applicable Provisions

Section 20.B of the POEA Standard Employment Contract, as discussed in the decision, provides:

The employer shall be liable for disability compensation for work-related illness/injury sustained during the term of the contract.

This is the contractual basis for the seafarer's claim, and it is read together with the Labor Code and its Implementing Rules on the one hundred twenty day and two hundred forty day periods.

The International Transport Workers' Federation standard agreement, quoted in the decision, provides:

Any Seafarer assessed at less than 50% disability under the attached Annex 4 but certified as permanently unfit for further sea service in any capacity by the Union's Doctor, shall also be entitled to 100% compensation.

This provision supplies the one hundred percent compensation even where the company doctor's grading is below fifty percent, provided the seafarer is certified permanently unfit.

Ruling

On the first issue, the Court held that the existence and coverage of the collective bargaining agreement is a question of fact, not a proper subject of a petition under Rule 45 of the Rules of Court, and that the unanimous findings of the Labor Arbiter, the National Labor Relations Commission, and the Court of Appeals are binding. The records showed the vessel was covered by the agreement during the period of employment, and the employers never specifically denied it.

On the remaining issues, the Court applied the rules summarized in Elburg Shipmanagement versus Quiogue. The company-designated physician must issue a final medical assessment within one hundred twenty days from the time the seafarer reports to him. If he fails to do so without justifiable reason, the disability becomes permanent and total. If the failure is justified, the period extends to two hundred forty days, but the employer bears the burden of proving the justification. If no assessment is given within two hundred forty days, the disability becomes permanent and total regardless of justification. Here, no assessment was issued within one hundred twenty days, and no justification was shown for extending the period. The Grade 8 rating came only on the two hundred nineteenth day, and it did not declare him fit to work. The Court held:

The medical assessment of the company-designated physician is not the alpha and the omega of the seafarer's claim for permanent and total disability. To become effective, such assessment must be issued within the bounds of the authorized 120-day period or the properly extended 240-day period.

On the third physician issue, the Court held that despite the absence of a third independent physician, it may itself determine which medical findings have merit, and the records supported the finding of permanent and total disability. On attorney's fees, the Court affirmed the award, citing Article 2208 of the Civil Code as applied in Gomez versus Crossworld Marine Services.

Doctrine

A seafarer's claim for permanent and total disability benefits is governed by these rules. First, the company-designated physician must issue a final medical assessment within one hundred twenty days from the seafarer's report. Second, if he fails without justifiable reason, the disability becomes permanent and total. Third, if the failure is justified, the period extends to two hundred forty days, and the employer bears the burden of proving the justification. Fourth, if no assessment is given within two hundred forty days, the disability becomes permanent and total regardless of justification. The company doctor's assessment is not conclusive unless issued within the authorized period. And even without a third physician, the courts may resolve conflicting medical findings on the records.

Disposition

The petition was denied, and the decision of the Court of Appeals affirming the award of permanent and total disability benefits and attorney's fees to Segui was upheld.

Remember This

Memorize the four Elburg rules: one hundred twenty days, then two hundred forty days with the employer carrying the burden of justification, after which the disability is conclusively permanent and total. Examiners use this case to test whether a late company disability grading, issued beyond the authorized period, can defeat a seafarer's claim, and whether a third physician referral is indispensable.