DANILLE G. AMPO-ON, PETITIONER, VS. REINIER PACIFIC INTERNATIONAL SHIPPING, INC. AND/OR NEPTUNE SHIPMANAGEMENT SERVICES PTE./NOL LINER (PTE.), LTD., RESPONDENTS.

Ampo-on versus Reinier Pacific International Shipping

The Case

This is a petition for review on certiorari brought by a seafarer, Danille Ampo-on, against his manning agency, Reinier Pacific International Shipping, and its foreign principal, Neptune Shipmanagement Services, to reverse the Court of Appeals and to restore the award of total and permanent disability benefits that the National Conciliation and Mediation Board had earlier granted him. The case matters because it fixes the rule on what makes a company-designated physician's disability assessment final and definite, and because it shows how the law itself, by operation of law, characterizes a seafarer's disability as total and permanent once no final assessment is issued within the prescribed period.

Procedural History

Ampo-on filed a complaint before the National Conciliation and Mediation Board, claiming total and permanent disability benefits under the collective bargaining agreement. The Board ruled in his favor, awarding the maximum disability compensation under the agreement plus attorney's fees, and it denied the respondents' motion for reconsideration. The respondents then elevated the matter to the Court of Appeals by petition for review. The Court of Appeals set aside the Board's ruling and held that the seafarer was entitled only to Grade 8 disability benefits under the Philippine Overseas Employment Administration Standard Employment Contract, giving more credence to the company-designated physician's findings. The seafarer's motion for reconsideration was denied, so he came to the Supreme Court by petition for review on certiorari.

Facts

On February 11, 2014, Ampo-on was employed as an Able Seaman by Reinier Pacific International Shipping for its principal Neptune Shipmanagement Services, on board the vessel APL Barcelona, under an eight-month contract with a basic monthly salary of 671 dollars. After passing the pre-employment medical examination, he was declared fit for sea duty and boarded the vessel.

On October 18, 2014, while doing sanding works, he heard a snap and crunching sound in his back, followed by tremendous pain. At the port of Taiwan he was sent to a hospital, where he was initially diagnosed with a spinal condition and a fracture. He was repatriated on October 23, 2014 and referred to the company-designated physician, who performed tests, advised physical therapy, and suggested back surgery.

On February 6, 2015, the company-designated physician issued a medical report stating that fitness to work was unlikely within the 120 days of treatment and suggesting a Grade 8 disability grading. On March 25, 2015, the seafarer consulted his own independent physician, who found him permanently disabled and unfit to work. He then filed his complaint for total and permanent disability benefits under the collective bargaining agreement. The respondents countered that his condition was not work-related and that his refusal of surgery amounted to notorious negligence.

Issues

• Whether or not the Court of Appeals erred in ruling that the seafarer is entitled to only Grade 8 disability benefits under the Philippine Overseas Employment Administration Standard Employment Contract.
• Whether or not the seafarer's refusal to undergo the suggested surgery constitutes notorious negligence that bars his claim for compensation.
• Whether or not the seafarer is entitled to the total and permanent disability compensation under the collective bargaining agreement, including attorney's fees and damages.

Applicable Provisions

Article 198 of the Labor Code, on permanent total disability, provides:

Article 198. Permanent Total Disability. - (a) Under such regulations as the Commission may approve, any employee under this Title who contracts sickness or sustains an injury resulting in his permanent total disability shall, for each month until his death, be paid by the System during such a disability, an amount equivalent to the monthly income benefit, plus ten percent thereof for each dependent child, but not exceeding five, beginning with the youngest and without substitution: Provided, That the monthly income benefit shall be the new amount of the monthly benefit for all covered pensioners, effective upon approval of this Decree. (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 provision the Court applies to deem the seafarer's disability total and permanent by operation of law once the 120-day period lapsed without a final assessment.

Section 2 of Rule X of the Amended Rules on Employees' Compensation provides:

Section 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 to not 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 fixes the 120-day and 240-day periods within which a definite assessment must be made.

Ruling

On the first issue, the Court ruled in favor of the seafarer. It held that while the company-designated physician's assessment was issued within the 120-day period, it was not a final and definite assessment, because its own language showed the grading was merely interim, declaring that the prognosis was guarded and that if the patient is entitled to disability, his suggested grading is Grade 8. The Court quoted the report:

Based on the patient's present status, his prognosis is guarded. The specialist recommends surgery with Transforaminal Lumbar Interbody Fusion. However, the patient has refused the surgery. Without the surgery, he has already reached maximum medical improvement. Fitness to work is unlikely to be given within his 120 days of treatment. If patient is entitled to disability, his suggested disability grading is Grade 8 - loss of 2/3 lifting power of the trunk.

Because the assessment was interim, it must be disregarded, and absent a final assessment, the law steps in to characterize the disability as total and permanent. The Court stressed that total disability does not require complete paralysis; what is compensated is the incapacity to work and the impairment of earning capacity.

On the second issue, the Court held that the refusal of surgery was not notorious negligence, which it defined as something more than mere or simple negligence, a deliberate act of the employee to disregard his own personal safety. There was no showing that the seafarer was told surgery was the sole remedy or warned of the consequences of choosing physical therapy.

On the third issue, the Court held that the sudden snap in the back during normal exertion was an unintended and unforeseen injurious occurrence, and thus an accident under the collective bargaining agreement. It also noted that the respondents suppressed page three of the Medical Report Form, which showed the certifying doctor had answered yes to whether the illness was due to an accident. Accordingly, the seafarer was entitled to the total and permanent disability compensation of 120,000 dollars under the agreement, plus attorney's fees of ten percent, but not to moral and exemplary damages for lack of proof of malice or bad faith.

Doctrine

A seafarer's entitlement to disability benefits is governed by law, by the contracts of the parties, and by the medical findings. The company-designated physician must arrive at a definite assessment of fitness or degree of disability within 120 days from repatriation, extendible to 240 days if further treatment is required. To be conclusive, the assessment must be complete and definite; an interim grading, one that merely states a guarded prognosis or a suggested rating, is not final and must be disregarded. When no final and definite assessment is issued within the prescribed periods and the condition remains unresolved, the law itself deems the disability total and permanent under Article 198 of the Labor Code. In that situation, the third-doctor referral rule does not apply, because the seafarer has nothing to contest. Finally, refusal of a suggested surgery is not notorious negligence absent proof that the seafarer was warned it was the sole remedy.

Disposition

The petition was granted; the Court of Appeals decision and resolution were reversed and set aside, and the National Conciliation and Mediation Board decision and resolution were reinstated, awarding the seafarer 120,000 dollars in total and permanent disability benefits plus ten percent attorney's fees.

Remember This

Memorize this line: an interim disability grading is no grading at all, and the law then deems the disability total and permanent. Examiners use this case to test the finality requirement for the company-designated physician's assessment and the inapplicability of the third-doctor rule when no final assessment exists.