G.R. No. 238652 - Esplago vs. Naess Shipping Philippines, Inc.

Case Summary (G.R. No. 238652)

Procedural History

Petitioner filed a complaint before the Labor Arbiter claiming total and permanent disability benefits, sickness wages and attorney’s fees. The LA (February 8, 2013) awarded US$60,000 (permanent and total disability), US$2,664 (sickness wages), and US$6,266.40 (attorney’s fees). The NLRC affirmed the LA decision (July 15, 2013) and denied reconsideration (Aug. 30, 2013). Respondents appealed to the Court of Appeals, which reversed and dismissed the complaint (Sept. 11, 2017) for violation of POEA‑SEC procedures; reconsideration was denied (Mar. 8, 2018). The Supreme Court denied the petition for review and affirmed the CA decision.

Factual Background

Petitioner boarded the vessel on July 25, 2011. On October 11, 2011, while in the engine boiler room, he was exposed to excessive smoke and subsequently experienced eye irritation and progressive visual loss. Initial shipboard and hospital examinations diagnosed cataracts in both eyes. The ship doctor recommended repatriation and immediate surgery. Petitioner underwent treatment, including surgery for at least the left eye. Medical records show ongoing treatment, surgery, prescription eyewear, and follow‑up examinations culminating in a company‑designated physician’s issuance of a final assessment declaring petitioner “fit to resume sea duties” on May 7, 2012. Petitioner later consulted a private physician (July 13, 2012) who concluded permanent and total disability. Parties disputed chronology of surgery(s), degree of disability, causation (work‑related vs. senile/age‑related), and compliance with the POEA‑SEC third‑doctor procedure.

Issue Presented

Whether the Court of Appeals erred in reversing the NLRC’s award of total and permanent disability benefits by holding that petitioner failed to comply with the POEA‑SEC rule on referral to a mutually agreed third doctor, thereby compelling acceptance of the company‑designated physician’s assessment and dismissal of petitioner’s claim.

Applicable Law and Legal Standards

Constitutional backdrop: 1987 Philippine Constitution (decision post‑1990). Statutory and contractual framework: Labor Code provisions on disability benefits (Articles 191–193 and renumbered Article 198(c)(1)), the Amended Rules on Employees’ Compensation (Rule X, Sec. 2), and the POEA Standard Employment Contract (2010 POEA‑SEC) — specifically Sections 20(A) and 32 governing compensation, medical treatment, sickness allowance, final medical assessment, and the third‑doctor mechanism. Pertinent jurisprudence: Jebsen Maritime v. Ravena; Vergara v. Hammonia; Elburg Shipmanagement v. Quiogue; Olidana v. Jebsens Maritime; Kestrel Shipping v. Munar; Gere v. Anglo‑Eastern; Marlow v. Osias; Aldaba v. Career Philippines — all setting interpretive rules on the 120/240‑day assessment periods, employer justification for extending the period, and consequences of noncompliance.

Legal Concepts on Disability Classification

Disability may be temporary or permanent, partial or total. Article 192(c)(1) (renumbered) and implementing rules equate temporary total disability lasting continuously beyond 120 days (subject to the Rules) with total and permanent disability. The Rules allow that temporary total disability may be extended up to 240 days if further treatment is needed; the company‑designated physician must issue a final and definite assessment within these timeframes. Section 32 of the POEA‑SEC provides a schedule of disability gradings (Grade 1 being blindness/total loss of vision), but a disability graded below Grade 1 may nevertheless be deemed total and permanent if it incapacitates the seafarer from work for more than 120 or, where justified, 240 days.

Company‑Designated Physician, 120/240‑Day Rule, and Burden of Justification

The company‑designated physician has the primary obligation to render a final assessment within 120 days from the seafarer’s reporting for treatment. Failure without justifiable reason converts temporary total disability into permanent total disability. A justified extension to 240 days requires demonstrable and continuous medical action — the employer must prove sufficient justification (e.g., ongoing treatment, procedures, surgery) and keep records evidencing the extension. If the 240‑day period lapses without final assessment, the seafarer’s disability becomes permanent and total by operation of law.

Application of Legal Standards to the Present Case

The Court found the seizure of illness, repatriation, referral and continuous treatment beginning October 2011, followed by surgery and ongoing management, to justify the extension of the assessment period to 240 days. The company‑designated physician’s final assessment dated May 7, 2012 (approximately 200 days after repatriation) therefore fell within the 240‑day permissible extension. Respondents produced detailed treatment records, surgeries and continuous follow‑ups that adequately justified the extension; these records satisfied the Elburg criteria for a valid extension and rebutted petitioner’s contention that absence of an assessment within 120 days rendered his condition permanently and totally disabling by operation of law.

Third‑Doctor Rule and Effect of Petitioner’s Noncompliance

POEA‑SEC requires that when the seafarer’s private physician disagrees with the company‑designated physician, both parties must agree on and consult a mutually agreed third doctor, whose decision is final and binding. The Court emphasized that this third‑doctor mechanism is mandatory and cannot be bypassed. Here, petitioner’s private physician examined him only once (July 13, 2012) and reached a contrary conclusion but petitioner did not secure agreement for a third‑doctor determination. Because petitioner failed to invoke or comply with the third‑doctor procedure, the company‑designated physician’s assessment was controlling. Noncompliance with the POEA‑SEC referral rule thus justified dismissal of petitioner’s claim as the proper procedure to resolve conflicting medical assessments was not followed.

Evaluation of Medical Evidence and Credibility

The Court gave weight to the extensive medical records documenting continuous treatment, ophthalmologic procedures, prescriptions, follow‑ups and th

Case Syllabus (G.R. No. 238652)

Procedural Posture

Petition for Review on Certiorari under Rule 45 filed with the Supreme Court in G.R. No. 238652 challenging the Court of Appeals (CA) Decision dated September 11, 2017 and CA Resolution dated March 8, 2018 in CA-GR. SP No. 132639.
The CA Decision reversed and set aside the July 15, 2013 Decision of the National Labor Relations Commission (NLRC).
The NLRC had affirmed the February 8, 2013 Decision of the Labor Arbiter (LA), which ordered respondents to pay petitioner total and permanent disability benefits, sickness wages, and attorney’s fees.
The Supreme Court resolved to deny the petition and affirmed the CA Decision dated September 11, 2017 and CA Resolution dated March 8, 2018.

Factual Antecedents

Petitioner Juan S. Esplago was hired as motorman for the vessel "Arabiyah" by Naess Shipping Philippines, Inc. and/or Kuwait Oil Tanker Company, with a basic monthly salary of US$666.00.
Petitioner alleged he underwent and passed pre-employment medical examination and was declared fit to work by the company-designated physician prior to deployment.
Petitioner boarded the vessel on July 25, 2011 for an eight-month tour of duty; his duties included watching over the engine room.
On October 11, 2011, while in the engine boiler room, the boiler discharged an excessive amount of smoke that hurt petitioner’s eyes; petitioner initially disregarded the incident.
After several days petitioner’s left eye vision blurred and eventually the left eye could no longer see.
The ship doctor examined petitioner and diagnosed "left eye cataract," recommending repatriation and immediate eye surgery.
On October 17, 2011, petitioner sought treatment at the Seamen’s Hospital and was found to be suffering from “Senile, Mature, Cataract, Left Eye; Senile, Mature, Cataract, Right Eye.”
After reporting to his agency, petitioner was referred to the Metropolitan Medical Center where company-designated physician Dr. Robert D. Lim and a team found cataracts in both eyes and described the condition as "Cataract Senile Mature, Left Eye; Cataract Senile Mature, Right Eye."
Dr. Lim recommended Phacoemulsification with Intra-Ocular Lens for both eyes and prescribed ointments and vitamins pending surgery.
Petitioner avers the recommended surgical procedures did not take place due to lack of approval from respondents; he continued medication and ointment but his left eye deteriorated until it could no longer see.
Petitioner claims he underwent left eye cataract surgery on June 1, 2012 and that respondents thereafter refused to provide medication for his right eye, causing further deterioration until it could no longer see.
On July 13, 2012, petitioner consulted Dr. Gina Abesamis Tan‑Perez, who concluded that petitioner’s illness permanently and totally prohibited him from working as a seaman.
Respondents maintained petitioner’s condition was age-related (old age) and not work-related, contending recovery was expected within six to eight weeks after surgery.
Respondents asserted that a company-designated physician issued a final assessment declaring petitioner "fit to resume sea duties" on May 7, 2012, within the 240-day period allowed by law.
Respondents also argued petitioner failed to consult a mutually agreed third doctor as required by the 2010 POEA Standard Employment Contract (POEA-SEC), making the private physician’s adverse finding non-prevailing.

Labor Arbiter and NLRC Decisions

Labor Arbiter Decision dated February 8, 2013 ordered respondents to pay:
- Permanent and total disability benefits — US$60,000.00 (or equivalent in Philippine currency at time of payment);
- Sickness wages — US$2,664.00 (or equivalent in Philippine currency at time of payment);
- Attorney’s fees — US$6,266.40 (or equivalent in Philippine currency at time of payment).
The Labor Arbiter denied all other claims.
The NLRC affirmed the LA Decision in its July 15, 2013 Decision.
Respondents’ motion for reconsideration before the NLRC was denied in a Resolution dated August 30, 2013.
The case proceeded to the CA after parties refused mediation at the Philippine Mediation Center—Court of Appeals.

Court of Appeals Decision

The CA, in its Decision dated September 11, 2017, reversed the NLRC and set aside the NLRC decision dated July 15, 2013 and its August 30, 2013 resolution.
The CA held the LA should have dismissed petitioner’s complaint for being filed in violation of the POEA-SEC provision requiring referral to a third doctor when company-designated physician’s findings conflict with the seafarer’s private physician.
The CA found the NLRC committed grave abuse of discretion in affirming the LA, and denied the ancillary claims for sick wages and attorney’s fees for lack of evidence.
The dispositive CA text: “The complaint filed by respondent Esplago is DISMISSED for lack of merit. SO ORDERED.”
Petitioner moved for reconsideration in the CA, which was denied in the CA Resolution dated March 8, 2018.

Issue Presented to the Supreme Court

Whether the Court of Appeals erred in reversing the NLRC and holding that petitioner was not entitled to total and permanent disability benefits for failure to comply with the POEA-SEC rule on referral to a third doctor.

Supreme Court Ruling and Disposition

The Supreme Court denied the petition and affirmed the CA Decision dated September 11, 2017 and CA Resolution dated March 8, 2018.
The Court concluded the CA did not err and its ruling was consistent with applicable law and jurisprude