G.R. No. 190161 - Canuel vs. Magsaysay Maritime Corp.

On July 14, 2006, Nancing R. Canuel was hired by Magsaysay Maritime Corporation as Third Assistant Engineer for its foreign principal, Kotani Shipmanagement Limited, to serve on board the vessel M/V North Sea.
He was employed under a twelve-month contract, with a basic salary of US$640.00 per month, and underwent the required pre-employment medical examination in which he was declared fit to work by the company-designated physician.
Nancing joined the vessel on July 19, 2006 and began his duties pursuant to the terms of his employment.

On February 20, 2007, while on board and during the performance of his duties, Nancing was involved in an accident that injured the right side of his body.
On March 5, 2007, at Shanghai Seamenas Hospital in China, he was diagnosed with bilateral closed traumatic hemothorax.
Nancing informed his wife, petitioner Anita N. Canuel, on March 12, 2007, about the accident and his subsequent confinement.
He was medically repatriated on March 24, 2007 and admitted immediately to Manila Doctors Hospital, where a team led by Dr. Benigno A. Agbayani Jr. managed his care.
Due to his deteriorating condition, Nancing was shifted to the intensive care unit on April 8, 2007, and eventually died on April 25, 2007.
His death certificate indicated acute respiratory failure as the immediate cause of death, with lung metastasis and a probable primary cause of bone cancer in its antecedent and underlying sections.

On May 23, 2007, Anita, acting on her own behalf and on behalf of their minor children (Charmaine, Charlene, and Charl Smith), filed a complaint before the National Labor Relations Commission (NLRC).
The complaint sought recovery of death benefits, death compensation for the minor children, burial allowance, damages, and attorney’s fees.
The petitioners contended that Nancing’s death was due to a work-related injury sustained on the vessel.

Respondents (Magsaysay Maritime Corporation, Eduardo U. Manese, and Kotani Shipmanagement Limited) denied liability for the claimed benefits.
They argued that Nancing died of acute respiratory failure caused by non-work-related illnesses, such as moderately differentiated adenocarcinoma, pneumonia, pulmonary edema, and lung cancer.
The company doctor opined that the illness was not work-related and, therefore, not compensable under the established rules.

The LA ruled in favor of petitioners, awarding an aggregate sum of US$72,000.00 comprising US$50,000.00 for death benefits, US$21,000.00 (US$7,000.00 per minor child), and US$1,000.00 for burial expenses.
Additionally, the LA awarded illness allowance, moral damages, exemplary damages, and attorney’s fees based on evidence that Nancing’s death resulted from the work-related injury sustained during his employment.
The LA rejected the respondent’s contention that lung cancer, as a non-work-related condition, was the proximate cause of death.

The NLRC denied the respondents’ appeal despite acknowledging that Nancing’s employment was technically terminated upon his medical repatriation.
It maintained that his death was attributable to the same work-related injury or illness that necessitated his repatriation, and thus petitioners were entitled to compensation.

Court of Appeals (CA) Ruling – May 19, 2009; Motion for Reconsideration on October 30, 2009

The CA held that the NLRC committed grave abuse of discretion in granting death benefits, dismissing the petitioners’ complaint.
The CA relied on precedents—specifically, the Klaveness case—to assert that a seafarer’s death occurring after the termination of his contract (following medical repatriation) is not compensable.
Following the CA’s decision, the petitioners elevated the case to the Supreme Court on certiorari.

Injury and hospitalization occurred during the term of employment.
Although medical repatriation resulted in termination of the contractual relationship, petitioners argued the causative work injury should still render the death compensable.
The Supreme Court was asked to resolve whether the CA erred in its interpretation and application of the rules regarding death benefit compensability under the POEA Standard Employment Contract.

Whether the Court of Appeals erred in holding that the NLRC committed grave abuse of discretion by awarding death benefits despite the termination of the seafarer’s employment contract due to medical repatriation.
Whether the death of the seafarer, which occurred after his repatriation, is compensable under Section 20 of the 2000 POEA Standard Employment Contract, given that the work-related injury sustained on board was the proximate cause of his eventual demise.
Whether the termination of the employment contract due to medical repatriation should preclude the awarding of death benefits, or if the causal nexus between the work injury and death warrants compensation under the principles of liberal construction and state policy favoring labor protection.