G.R. No. 229228 - Torm Shipping Philippines, Inc. vs. Alacre

TORM SHIPPING PHILIPPINES, INC. and its principal TORM S/A are the petitioners, while Pamfilo A. Alacre is the respondent.
The respondent was hired as a Fitter onboard the vessel Torm Kristina for a period of six months at a basic monthly salary of US$648.00.
Prior to his embarkation on March 12, 2012, the respondent underwent a Pre-Employment Medical Examination and was declared fit to work.

In July 2012, while on board the vessel, the respondent experienced pain in his right shoulder and sought medical attention.
He was initially diagnosed with “Right shoulder sprain, right hand joint sprain.”
Repatriated to the Philippines on July 8, 2012, he was referred to the company-designated physician at the NGC Medical Specialist Clinic, Inc.
The respondent underwent a series of treatments from July 10, 2012, up to October 24, 2012.
On October 29, 2012, the NGC Medical Clinic issued a report assigning an interim disability grading of “Grade 10: inability to raise arm more than halfway from horizontal to perpendicular.”
Due to persistent shoulder pain, the respondent sought a second opinion from Dr. Venancio P. Garduce, Jr., an orthopedic specialist, who concluded that the respondent could no longer work as a seaman and recommended a Grade 3 disability grading.
On February 13, 2013, the respondent underwent surgery on his right shoulder, and despite discharge on February 16, 2013, further physical therapy was advised.

Owing to the failure of his condition to improve, the respondent filed a complaint with the Labor Arbiter (LA) on June 24, 2013, seeking recovery of permanent total disability benefits, along with claims for moral and exemplary damages and attorney’s fees.
On February 21, 2014, LA Jaime M. Reyno rendered a decision finding merit in the complaint and ordered the petitioners to pay US$60,000.00 as permanent total disability benefits plus attorney’s fees, dismissing all other claims.
The LA based his ruling on the application of the Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC), noting that the Collective Bargaining Agreement (CBA) did not cover the period in question.

The petitioner appealed the LA’s decision to the National Labor Relations Commission (NLRC), which on August 29, 2014, rendered a decision reversing the LA’s ruling, based on the argument that the CBA remained effective due to the absence of a termination notification.
The NLRC held the respondent’s complaint as premature, directing that relief should await the resolution of his claim before the Danish National Board of Industrial Injuries (NBII), and ruled on off-setting provisions under the CBA.
The respondent’s motion for reconsideration was denied by the NLRC in a Resolution dated October 31, 2014.

The respondent then filed a petition for certiorari with the Court of Appeals (CA), challenging the NLRC’s decision on the ground of grave abuse of discretion.
On July 13, 2016, the CA granted the petition for certiorari, reinstated the LA’s decision awarding US$60,000.00, and annulled the NLRC decision and resolution.
Petitioners raised several points of error, arguing that:

The respondent’s complaint was premature since he had already approached the Danish authorities for recovery of disability benefits.
The award of permanent total disability benefits under the POEA-SEC was erroneous, given that the disability claim was not substantiated.
The CA failed to address the issue of off-setting, leaving room for dispute.
The award of attorney’s fees lacked a sufficient basis.

8% disability benefits amounting to USD9,596.39 (or DKK64,408.00).
Monthly compensation for loss of earning capacity until the respondent reached 68 years old, calculated based on a detailed schedule from January 2015 to June 2038.

The NBII decision, having already led to partial execution through payments, was recognized by the CA, and its provisions on off-setting were considered in determining whether the maximum US$60,000.00 benefit under the POEA-SEC was exceeded.

The interplay of the CBA’s continued effectiveness, the POEA-SEC’s limitations, and the NBII’s award culminated in an exhaustive dispute over the respondent’s entitlement to further compensation.
The respondent maintained that he was entitled to permanent and total disability benefits based on his inability to resume work as a seaman.
Petitioners reiterated their stance that, with the NBII award exceeding the maximum benefit allowable under the POEA-SEC and given the off-setting provisions of the CBA, no additional obligation existed on their part.
The matter reached the Supreme Court via a Petition for Review on Certiorari, focusing on these intertwined issues.

Whether the CBA remained effective beyond its stated duration due to the absence of a termination notice.
Whether its provisions, including those for off-setting disability benefits awarded under the Danish Industrial Injuries Act, should govern the respondent’s claim.

Whether the respondent’s filing of the complaint before the Labor Arbiter was premature since prior claims had already been interposed before the Danish Shipowner Accident Insurance Association.
The implications of concurrent proceedings before the NBII on the validity of the complaint under the POEA-SEC.

Whether the award of US$60,000.00 as permanent total disability benefits under the POEA-SEC was proper, given the evidence concerning the nature of the respondent’s disability.
The appropriateness of awarding attorney’s fees under the circumstances of the case.

How the NBII decision and its resulting awards interact with the maximum disability compensation allowed under the POEA-SEC.
Whether the application of the off-setting provision under the CBA precludes any additional obligation on the petitioners to pay beyond the NBII-determined amounts.