Title
Javier vs. Philippine Transmarine Carriers, Inc.
Case
G.R. No. 204101
Decision Date
Jul 2, 2014
Seafarer Javier, diagnosed with coronary artery disease, sought disability benefits. SC ruled medical expenses and disability benefits are separate; upheld sickness allowance deduction but reversed medical expense deduction.
seafarer
heirs
permanent total disability benefits
A

Case Summary (G.R. No. 204101)

Factual Background

The petitioner, Alberto B. Javier, was engaged by Philippine Transmarine Carriers, Inc., for principal Northern Marine Management, Ltd., as pumpman on board the MT Neptune Glory under a nine-month contract beginning March 3, 2003, with a basic monthly salary of US$656.00. He had completed approximately twenty consecutive contracts with the respondents and underwent a pre-employment medical examination that declared him fit for sea service. On November 10, 2003, while aboard the vessel, he experienced severe headache, dizziness, vomiting and weakness. He was confined in Texas on November 15, 2003 and diagnosed with hypertension; he was repatriated to the Philippines on November 23, 2003 for further treatment. Subsequent examinations in Manila culminated in coronary artery bypass surgery on March 30, 2004. After discharge on April 14, 2004, Dr. Efren Vicaldo assessed appellant as suffering from hypertensive cardiovascular disease, coronary artery disease with two-vessel involvement, status post coronary artery bypass graft surgery and status post cerebrovascular accident, and assigned impediment grade one, declaring him unfit to resume seafaring employment.

Labor Arbiter Proceedings and Ruling

The petitioner filed a complaint for disability benefits, sickness allowance, reimbursement of medical expenses, damages and attorneys fees. The Labor Arbiter granted the complaint in a May 31, 2005 decision. The Arbiter awarded a total of US$68,886.40, comprised of US$60,000.00 as disability benefits, US$2,624.00 as sickness allowance for 120 days (equivalent to four months’ basic wage), and attorneys fees equal to ten percent of the monetary award. The Labor Arbiter denied the request for reimbursement of medical expenses and for damages. The Arbiter reasoned that the illness developed during the term of the contract and the company-designated physician failed to assess appellant’s impediment grading within the 120-day POEA-SEC period.

NLRC Resolution and Modifications

The National Labor Relations Commission, in a March 10, 2006 resolution, affirmed the Labor Arbiter’s decision with modification. The NLRC agreed that the nature of the appellant’s duties and his lengthy service made it improbable that the illness was pre-existing and concealment could be presumed. The NLRC, however, found that appellant had executed an April 12, 2004 certification acknowledging receipt in full of sickness allowance equivalent to P144,318.03 and payment in full of medical treatment amounting to P1,928,841.27, totaling P2,073,159.30; the NLRC ordered these amounts to be deducted from the peso equivalent of the US$68,886.40 award. The appellant died on November 1, 2005 and his heirs substituted as petitioners; their motion for reconsideration of the NLRC resolution was denied.

Court of Appeals Disposition

The petitioners filed a certiorari petition with the Court of Appeals in CA-G.R. SP No. 96533. In its May 31, 2012 decision, the Court of Appeals affirmed the NLRC. The CA held that the portion of the Labor Arbiter’s decision denying reimbursement of medical expenses had become final and unappealed and therefore unassailable. The CA likewise upheld the deduction of the sickness allowance on account of the April 12, 2004 certification. Finally, the CA rejected the petitioners’ claim for death benefits because the seafarer died after the contract had terminated and the death was not established as work-related within the term of the contract.

Petitioners’ Contentions on Review

The petitioners contended that the NLRC and the CA erred in ordering deduction of medical expenses from disability benefits because medical expenses, sickness allowance and disability benefits are separate and distinct entitlements under the POEA-SEC. They argued that Section 20-B(2) obliges the employer to provide, at its cost, necessary medical attention until fitness to resume work or the degree of disability is established, and that Section 20-B(3) separately mandates sickness allowance. The petitioners asserted that the P1,928,841.27 spent for medical treatment should not have been deducted from the disability benefits. They further challenged the respondents’ proof of payment of sickness allowance, asserting the respondents presented the April 12, 2004 certification belatedly and failed to substantiate payment by vouchers or receipts.

Respondents’ Position

The respondents maintained that the Court of Appeals and the NLRC committed no grave abuse of discretion. They relied on the CA’s conclusions that the Labor Arbiter’s denial of reimbursement of medical expenses was final because unappealed, and that the respondents had fully paid the sickness allowance. The respondents thus supported the deductions ordered by the NLRC and affirmed by the CA.

Issues Presented and Standard of Review

The Supreme Court framed the principal legal question as whether the medical expenses and sickness allowance should be deducted from disability benefits and whether those benefits are separate and distinct under the POEA-SEC. The Court summarized the limited scope of a Rule 45 petition reviewing a CA decision rendered under Rule 65: the Court examines whether the CA correctly determined the presence or absence of grave abuse of discretion by the NLRC, and the Court’s review is confined to questions of law except insofar as factual findings must be examined to determine whether the CA correctly affirmed the NLRC for lack of grave abuse.

Interpretation of the POEA-SEC and Employers’ Separate Liabilities

The Court analyzed Section 20-B of the 2000 POEA-SEC and concluded that the instrument treats the employer’s liabilities for medical expenses, sickness allowance and disability benefits separately and distinctly by placing them in separate paragraphs with distinct operative triggers and purposes. The Court observed that the employer’s liability to provide medical treatment at cost is conditioned upon the seafarer’s compliance with reporting to the company-designated physician within three days, and that the medical treatment aims at restoring the seafarer’s health. Sickness allowance is intended to compensate for loss of earnings while the seafarer is undergoing medical treatment and is separately mandated. Disability benefits compensate for permanent total or partial loss of earning capacity and are determined by disability grading. The Court further noted that the 2010 amended POEA-SEC (POEA Memorandum Circular No. 10, Series of 2010) made explicit that medical treatment at employer expense, sickness allowance and disability benefits are distinct and that disability benefits are not to be measured by the number of days of medical treatment or sickness allowance.

Factual Findings on Payment and Legal Consequences

The Court accepted the NLRC’s and the CA’s uniform factual finding that the respondents had paid the sickness allowance and the medical expenses claimed. The Supreme Court held that the CA correctly affirmed the deletion of sickness allowance from the monetary award because awarding sickness allowance in addition to a finding that it had been paid would have resulted in an inequitable double payment contrary to the POEA-SEC. Conversely, the Court held that the NLRC committed grave abuse of discretion in ordering deduction of the respondents’ payment of medical expenses from the monetary award. The Court explained that the Labor Arbiter had denied reimbursement of medical expenses and that the moneta

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