G.R. No. 182740 - Escarcha vs. Leonis Navigation Co., Inc.

Eduardo S. Escarcha entered into a one-year employment contract on February 16, 1999, with Leonis Navigation Company, Inc. and World Marine Panama, S.A., serving as First Engineer on the M.V. Diamond Glory with a basic monthly salary of US$950.
He underwent a Pre-Employment Medical Examination (PEME) and was declared fit to work by the company-designated physician; however, the examination was not comprehensive enough to detect all underlying conditions.

Shortly after boarding the vessel on March 11, 1999, Eduardo became ill in April 1999 while en route to New Orleans. He was admitted on May 3, 1999, at the Touro Infirmary, where he was diagnosed with a serious febrile illness.
His condition worsened, and he was eventually rendered comatose. The attending physician, Dr. James R. Patterson, reported that Eduardo was suffering from advanced mycobacterium tuberculosis, advanced HIV disease, cardiac dysrhythmias, and anemia, with Acquired Immune Deficiency Syndrome (AIDS) under treatment.

Eduardo was repatriated to the Philippines on June 17, 1999, for further treatment at the San Lazaro Hospital and was discharged after one and a half months, with orders for regular medical check-ups.
Despite continued treatment, Eduardo died on June 9, 2001. His death certificate listed pneumonia as the immediate cause; pulmonary tuberculosis, tuberculosis meningitis, disseminated candidiasis, anemia secondary to chronic disease, wasting syndrome, scabies, and seborrheic dermatitis as antecedent causes; and AIDS as the underlying cause.

Eduardo’s wife, Lydia Escarcha, along with their three children, filed a complaint for death compensation benefits against the respondents after the petitioners’ repeated failed attempts at conciliation with the labor union.
Initially, Labor Arbiter Jose G. de Vera dismissed the complaint on the ground that Eduardo’s illness was pre-existing, notably due to his concealment of his HIV status during the PEME, as admitted to a foreign nurse, Nigel Griffiths.

The National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s decision in its December 29, 2006, resolution, awarding US$60,000.00 to Lydia and US$15,000.00 to each child, reasoning that the evidence used to support the pre-existing nature of the illness was inconclusive and the illness was aggravated by his employment conditions.
The respondents filed a petition for certiorari before the Court of Appeals (CA) which reversed and set aside the NLRC resolutions, holding that compensation for death is only available if the death occurs during the term of the contract. The CA emphasized the unreliability of the PEME for ruling out a pre-existing condition and concluded that Eduardo’s death, occurring years after his repatriation, did not meet the statutory criteria.

The petitioners argued that Eduardo had no pre-existing illness because he underwent a PEME and was declared fit to work, and that his work-related exposure aggravated his condition. They contended that under the 1996 POEA Standard Employment Contract (SEC), the work-relatedness of the illness was immaterial as long as death occurred during the contract period.
Conversely, the respondents maintained that death benefits are not payable if the death occurs after the termination of the employment contract or when the seafarer has intentionally concealed his medical condition. They also sought the return of the P4,737,810.00 already paid under a writ of execution.

Whether the death of Eduardo qualifies for death compensation benefits under the applicable 1996 POEA-SEC.

Whether death benefits are payable when the death occurs after the termination of the employment contract.
Whether the fact that Eduardo underwent a PEME—which did not include an HIV test—sufficiently clears him of a pre-existing condition.

Whether there is a reasonable causal connection or work-related aggravation between Eduardo’s employment and the illnesses that led to his death.

Whether the working conditions on board could be shown to have triggered or worsened his medical conditions.
Whether the statutory requirement of death occurring “during the term of his contract” supports the claim.

The applicability of the Collective Bargaining Agreement (CBA) benefits terms in view of the contractual provisions and the timing of Eduardo’s death.

Whether the CBA’s conditions for death benefits (death on board or while traveling) are met in this case.