Case Summary (G.R. No. 34840)
Key Dates and Procedural Posture
Accident occurred on January 4, 2014; repatriation and treatment followed. Notices and disability assessments were exchanged between April and September 2014. Notice to Arbitrate filed September 12, 2014. NCMB Decision (May 29, 2015) granted total and permanent disability benefits. CA affirmed with modification on April 21, 2016 (reducing award to US$60,000 under POEA SEC). Supreme Court review of consolidated petitions resulted in affirmation of the CA decision.
Applicable Law and Governing Instruments
Constitutional framework: 1987 Philippine Constitution (applicable given decision date). Statutory and regulatory sources: Labor Code Article 192(c)(1); Amended Rules on Employees’ Compensation, Rule X, Section 2 (period of entitlement, 120/240 days). Contractual instruments: POEA Standard Employment Contract (POEA‑SEC) provisions, specifically Section 20(B) regarding company-designated physician and referral to a third doctor; the parties’ Collective Bargaining Agreement (CBA), Article 20.1.4 (permanent medical unfitness and compensation schedule). Controlling jurisprudence cited: Elburg Shipmanagement Phils., Inc. v. Quiogue Jr., Formerly INC Shipmanagement, Inc. v. Rosales, and other Supreme Court rulings interpreting the 120/240‑day rules and mandatory third‑doctor referral.
Factual Background — Employment Terms
Petitioner was engaged as an able seaman aboard MV JENNY N under a nine‑month contract. Salary and benefits were specified; employment was governed by the POEA‑SEC and the AMOSUP‑Anglo‑Eastern CBA. The CBA contained specific provisions on permanent medical unfitness and corresponding compensation amounts for ratings, officers, and effective years.
Factual Background — Accident and Initial Treatment
On January 4, 2014, petitioner suffered an on‑duty injury (fell awkwardly on his right arm). He received initial treatment in Trinidad and Tobago (x‑ray, cast) and was repatriated to the Philippines on January 10, 2014. He was treated at Marine Medical Services and referred to Dr. Bernal at Cardinal Santos Medical Center. Medical impressions included a closed complete fracture of the right radius, undisplaced. He underwent multiple examinations and treatments through August 27, 2014.
Dispute Over Disability Grading and Notice
Respondents contend that interim and final disability gradings were made by the company-designated physician based on communications from Dr. Bernal: an interim “Grade 10 — loss of grasping power” (letter dated April 28, 2014) and a suggested final “Grade 10 — ankylosed wrist in normal position” (letter dated August 12, 2014). Respondents further produced an e‑mail to petitioner’s counsel confirming a telephone conversation about the company physician’s assessment. Petitioner denied ever being properly informed of any company-designated physician assessment and, after 240 days without an assessment from the company physician, consulted his personal physician on September 11, 2014, who assessed Grade 8 and declared the petitioner permanently unfit for sea duties.
Procedural History Before NCMB and CA
Petitioner filed a Notice to Arbitrate under the CBA and POEA procedures. The Panel of Voluntary Arbitrators (NCMB) awarded total and permanent disability benefits (US$95,949.00), sickness allowance, and attorney’s fees. Respondents appealed to the CA, which affirmed with modifications: it reduced the disability award to US$60,000.00 pursuant to the POEA‑SEC schedule and deleted the sickness allowance for lack of merit. Both parties sought Supreme Court review.
Issues Presented to the Supreme Court
- Whether the company-designated physician issued a final disability grading within 120 days, or, if extended, within 240 days, such that the company’s grading would control. 2) Whether referral to a neutral third‑party physician is mandatory when there is disagreement between the company-designated physician and the seafarer’s personal physician. 3) Whether petitioner is entitled to full disability benefits under the CBA or to the POEA‑SEC benefit under the facts presented. 4) Whether petitioner was entitled to attorney’s fees.
Governing Rule on the 120/240‑Day Periods
The Court restated the rules derived from Elburg and subsequent jurisprudence: (1) the company-designated physician must issue a final medical assessment within 120 days from the seafarer’s reporting; (2) absence of an assessment within 120 days without justification renders the disability permanent and total; (3) if sufficient justification exists (e.g., further treatment required or seafarer uncooperative), the employer must prove justification to extend diagnosis to 240 days; and (4) failure to issue an assessment within 240 days results in permanent and total disability by operation of law.
Duty to Give Notice and Effect on Due Process
The Court emphasized that the company-designated physician must not merely “issue” an assessment internally but must “give” and properly inform the seafarer of the assessment (medical certificate personally received or sent by an acceptable means). Proper notice is necessary so the seafarer may evaluate the assessment and, if he disagrees, request referral to a jointly agreed neutral third doctor. The mandatory third‑doctor referral procedure can only be invoked after the seafarer has been properly informed of the company-designated physician’s assessment; requiring the seafarer to seek a third‑doctor determination absent proper notice violates due process.
Application of Rules to the Present Case — Notice and Timing
The Court found respondents’ documentary evidence insufficient to prove that petitioner was properly informed within the prescribed periods. The April and August letters from Dr. Bernal were addressed to Dr. Lim (company physician) and constituted suggested/internal assessments; they do not prove that petitioner received a medical certificate or was personally notified. The only document showing communication to petitioner’s counsel postdated the filing of the Notice to Arbitrate and indicated that petitioner was informed of the assessment only on September 17, 2014 (250 days after repatriation and five days after the Notice to Arbitrate). The respondents offered no explanation or justification to extend the 120‑day period to 240 days, and thus failed to meet the employer’s burden to show sufficient justification.
Effect of Failure to Notify — Disability Deemed Total and Permanent
Because respondents failed to furnish the petitioner a copy of his medical certificate and failed to properly notify him within
...continue readingCase Syllabus (G.R. No. 34840)
Court, Citation, and Procedural Posture
- Supreme Court Second Division decision reported at 830 Phil. 695; 115 OG No. 1, 7 (January 7, 2019); docketed G.R. No. 226656 (April 23, 2018), consolidated with G.R. No. 226713.
- Decision authored by Justice Reyes, Jr.; concurring Justices named: Carpio, Acting C.J. (Chairperson), Peralta, Perlas-Bernabe, and Caguioa.
- The matter consists of consolidated Petitions for Review on Certiorari under Rule 45:
- G.R. No. 226656: Petition filed by Arnel T. Gere (petitioner) against Anglo‑Eastern Crew Management Phils., Inc. and Anglo‑Eastern Crew Management (Asia), Ltd. (respondents).
- G.R. No. 226713: Petition filed by respondents against petitioner.
- The petitions challenge: (a) the Court of Appeals Decision in CA‑G.R. SP No. 142422 (promulgated April 21, 2016) which affirmed with modification the Panel of Voluntary Arbitrators’ Decision (May 29, 2015) and Resolution (August 25, 2015) granting total and permanent disability benefits to petitioner; and (b) the Court of Appeals Resolution of August 26, 2016 upholding its earlier decision.
Parties and Employment Terms
- Petitioner: Arnel T. Gere, a Filipino seafarer and member of AMOSUP (Associated Marine Officers’ and Seamen’s Union of the Philippines).
- Respondents: Anglo‑Eastern Crew Management (Asia), Ltd., through its manning agent in the Philippines Anglo‑Eastern Crew Management Phils., Inc.
- Employment contract: Petitioner signed a Contract of Employment with respondents; terms included:
- Position: able seaman aboard MV JENNY N for nine (9) months.
- Compensation: basic monthly salary US$582.00 on a 44‑hour work week; overtime pay US$324.00; vacation leave pay US$213.00.
- Incorporation of Collective Bargaining Agreement (CBA) between AMOSUP and respondents (CBA provisions relevant to disability and permanent medical unfitness cited).
Factual Background (Antecedent Facts)
- Accident and initial treatment:
- On January 4, 2014, petitioner sustained an on‑duty accident while placing a rat guard on the vessel’s headline, stepped on a bulwark support, lost balance, and landed awkwardly/heavily on his right arm.
- Petitioner was immediately referred to a medical facility in Trinidad and Tobago where x‑ray was performed and a cast was placed on the affected arm.
- Petitioner was repatriated to the Philippines on January 10, 2014, for medical reasons.
- Philippine medical care and diagnosis:
- Petitioner was confined at Marine Medical Services (respondents’ accredited medical services provider) and referred to Dr. Ferdinand R. Bernal (orthopedic surgeon at Cardinal Santos Medical Center).
- Medical examinations disclosed the impression: “Closed Complete Fracture, Right Radius, Undisplaced.”
- From repatriation until August 27, 2014, petitioner underwent various medical examinations, procedures, and treatments on his right arm and subsequently on his hips.
- Divergence over disability grading and notice:
- Respondents’ asserted timeline and assessments:
- April 28, 2014: company‑designated physician allegedly received an interim disability grading of “Grade 10 – loss of grasping power” (letter from Dr. Bernal addressed to Dr. Lim).
- August 12, 2014: company‑designated physician allegedly received a suggested final disability grading of “Grade 10 – ankylosed wrist in normal position” (letter from Dr. Bernal to Dr. Lim).
- Respondents contend they informed petitioner of these assessments and offered the corresponding disability benefits; an e‑mail from Ms. Delia V. Andrada to petitioner’s counsel was produced confirming a telephone conversation advising of the company physician’s assessment and a settlement offer.
- Petitioner’s position:
- Petitioner denied being informed of the company‑designated physician’s interim and final assessments.
- More than 240 days of treatment had lapsed without receiving any disability grading from the company‑designated physician, so on September 11, 2014 he consulted his personal physician, Dr. Manuel Fidel M. Magtira (Armed Forces of the Philippines Medical Center).
- Dr. Magtira opined the petitioner had “partial permanent disability with Grade 8 impediment based on the POEA contract” and concluded the petitioner was “now permanently UNFIT in any capacity for further sea duties.”
- Respondents’ asserted timeline and assessments:
- Administrative and arbitral proceedings:
- Petitioner demanded disability benefits under the CBA; respondents denied the claim.
- Petitioner filed a Notice to Arbitrate before the Office of the Panel of Voluntary Arbitrators of the NCMB; unilateral settlement negotiations failed.
- Panel of Voluntary Arbitrators Decision (May 29, 2015) directed respondents to pay:
- US$95,949.00 as full disability benefits under the CBA;
- US$2,328.00 representing illness allowance;
- 10% of total monetary award for attorney’s fees; other claims dismissed.
- Respondents appealed to the Court of Appeals, which modified the award: reduced the total and permanent disability benefit from US$95,949.00 to US$60,000.00 pursuant to the 2010 POEA‑SEC and deleted the sickness allowance for lack of merit.
- Both parties elevated the matter to the Supreme Court.
Issues Presented to the Court
- Petitioner’s principal claim:
- Where there is no definite and final assessment of fitness to work or permanent disability by the company‑designated physician within the prescribed period, the law treats the disability as permanent and total entitling the seafarer to full disability benefits under the CBA.
- Respondents’ principal arguments:
- Petitioner should be dismissed for disregarding the conflict‑resolution procedure (referral to a third doctor) mandated by the POEA Standard Employment Contract (POEA‑SEC) and the parties’ CBA.
- The disability assessment of the company‑designated physicians must be accorded authoritative value because it is based on extensive medical examinations and treatment, as opposed to petitioner’s personal physician.
- The seafarer’s disability assessment should be based solely on the disability gradings under the POEA‑SEC (citing Scanmar Maritime Services, Inc. v. Conag).
- In any event, the respondents contend the degree of disability was determined within the 240‑day period under the Labor Code implementing rules.
- Petitioners contend petitioner is not entitled to attorney’s fees because respondents were not in bad faith and there is no equitable basis for such fees.
Legal Rules and Doctrines Applied by the Court
- 120‑day and 240‑day rules and their statutory sources:
- Article 192(c)(1) of the Labor Code (Permanent Total Disability) provides that certain disabilities are deemed total and permanent when temporary total disability lasts continuously for more than 120 days, “except as otherwise provided in the Rules.”
- Amended Rules on Employees’ Compensation, Rule X, Section 2 (1995) provides that income benefit for temporary total disability is paid beginning on first day and not longer than 120 consecutive days except where med