Aurelio Dela Cruz Nalica III vs. Jebsen Maritime, Incorporated

G.R. No. 272550
Seafarer's disability claim: flawed med assessment, no CBA proof, POEA-SEC applies, attorney's fees granted.
labor law due process seafarer

Case Summary (G.R. No. 272550)

Origins of the Dispute and Initiation of Arbitration

The case began with a Notice to Arbitrate filed by Aurelio before the NCMB on September 20, 2019. He sought total and permanent disability benefits, moral and exemplary damages, and attorney’s fees against Jebsens et al. After the parties executed a Submission Agreement, the dispute proceeded to voluntary arbitration. With no amicable settlement reached, the parties submitted their respective position papers.

Employment and Pre-Employment Medical Fitness

In his Position Paper dated January 14, 2021, Aurelio stated that on July 24, 2018 he signed an employment contract with Jebsens to serve as Second Engineer on board CMS Osaka Express, for the foreign principal Hapag-Lloyd Aktiengesellschaft, for six months plus or minus one. He reported that he passed the required pre-employment medical examination, where he was declared “fit for duty.” He then boarded the vessel and performed his duties.

The Injury, Subsequent Pain, and Attempted Medical Management

Aurelio narrated that on November 28, 2018, an oil spill occurred at the main engine and leaked to the lower deck. He was ordered to clean the oil and conduct a safety inspection. While cleaning a greasy floor, he claimed he stumbled on an uneven surface and used his right arm to grasp a metal railing to prevent a fall. He then experienced excruciating pain due to overstretching of his right shoulder. Although he tolerated the pain and continued working, the following day his pain intensified.

He reported to the Chief Mate, who advised pain relievers. Aurelio stated the medication provided only temporary relief and that, given the vessel’s distance from any port, an offshore medical consultation was not feasible. He continued taking pain relievers and using hot compresses.

In December 2018, during the vessel’s bunkering operation, Aurelio was ordered to continue working for nearly nine hours despite ongoing shoulder pain. He claimed the task required constant vigilance and meticulous care with insufficient breaks.

Offshore Consultation and Initial Restrictions

On January 2, 2019, Aurelio was referred to an offshore clinic and underwent physical examinations and an X-ray, but he alleged he was not informed of the results. He was told to return to the vessel and, when he sought clarification, the Captain only advised that he would undergo another offshore consultation at Velocity Urgent Care.

On January 5, 2019, he was referred to Velocity Urgent Care in the United States. A medical report dated January 5, 2019 diagnosed “Pain in right Shoulder (M25.511 No Workup)” and noted he was considered fit to work but restricted him to “left-handed duty only.” It also advised him to “remain off the ship until evaluation by orthopedics and until his shoulder is pain free.” Aurelio further stated that he was not allowed to stay in the hospital and was ordered to continue working until a reliever could board the vessel. On January 15, 2019, he was finally repatriated for medical reasons.

Post-Employment Treatment Under the Company’s Designated Physicians

After repatriation, Aurelio returned to Jebsens et al. on January 16, 2019 and requested a post-employment medical examination. He was referred to the company-designated physician at Ship Health, Inc., and advised to undergo physical therapy and further treatment at Manila Doctors Hospital. He complied but reported no improvement.

Aurelio later claimed that the company-designated physician informed him that his treatment had been terminated, but he was not given a clear explanation. He requested a copy of the final medical assessment, but he was allegedly refused and instructed to obtain it from Jebsens et al.

Aurelio then sought independent examinations. His family engaged Dr. Manuel Fidel M. Magtira, who recommended an MRI, which suggested “CONSIDER POSSIBILITY OF AVASCULAR NECROSIS OF THE RIGHT HUMERAL HEAD, SUGGEST CLINICAL CORRELATION.” In a medical report dated July 4, 2019, Dr. Magtira concluded Aurelio was “total and permanent unfitness for sea duty.” Aurelio also obtained the opinion of orthopedic surgeon Dr. Domingo A. Chua, Jr., who, in a medical report dated July 5, 2019, similarly declared “total and permanent unfitness for sea duty.”

Aurelio’s Demands for a Final Assessment and the Alleged Refusal

Aurelio requested payment of total and permanent disability benefits, but Jebsens et al. denied the claim. In a letter dated July 17, 2019, he informed Jebsens et al. of Dr. Magtira’s and Dr. Chua’s findings and reiterated his request for a third medical opinion and for a copy of the company-designated physician’s final assessment. He alleged that his follow-up attempts were ignored.

For their part, Jebsens et al. asserted that on January 2, 2019 Aurelio consulted with a doctor in Jacksonville, USA and reported right shoulder pain. They claimed the attending physician initially diagnosed “strain, right shoulder” and later, after MRI, diagnosed strain of unspecified muscle, fascia and tendon at the shoulder and upper arm level, right arm, and an elevated blood pressure reading without diagnosis of hypertension.

Company-Designated Final Grading and the Offered Compensation

Aurelio was repatriated in Balboa, Panama on January 12, 2019 and arrived in the Philippines on January 15, 2019. After evaluation by Ship Health, the company-designated physician allegedly found tenderness and swelling and recommended six sessions of physical therapy. Eventually, the company-designated physician issued a final disability grading embodied in a medical report dated June 25, 2019.

On June 26, 2019, Jebsens et al. arranged a meeting where Aurelio was informed of treatment cessation and was offered compensation equivalent to Grade 9 disability under the POEA-SEC, amounting to USD 13,060.00. On July 23, 2019, Aurelio’s counsel informed Jebsens et al. of the independent medical findings and asserted the injury was an accident while on board, thus invoking the CBA. Counsel indicated an intention to undergo a third doctor referral, but Aurelio alleged the parameters proposed by Jebsens et al. were unacceptable and the third assessment did not proceed.

Ruling of the Panel of Voluntary Arbitrators

The Panel of Voluntary Arbitrators (PVA) issued a Decision dated September 20, 2021 in Aurelio’s favor. It ordered Jebsen Maritime, Inc. and/or Hapag-Lloyd Aktiengesellschaft to pay Aurelio USD 170,512.00 for total and permanent disability benefits and attorney’s fees equivalent to ten percent (10%) of the award.

The PVA held that the Final Disability Assessment was issued 196 days from repatriation, which it deemed beyond the 120-day period. It further found that the company-designated physician’s final medical report was not categorical and definite, particularly for lacking certification whether Aurelio was “fit to work.” Based on this, the PVA concluded that Aurelio was entitled to permanent total disability benefits by operation of law. Jebsens et al.’s motion for reconsideration was denied.

Proceedings in the Court of Appeals

The CA reversed the PVA. In a Decision dated October 5, 2023, it granted Jebsens et al.’s petition and set aside the PVA’s awards, ordering instead payment of disability benefits equivalent to Grade 9 under the POEA-SEC.

The CA ruled that the 120-day period for diagnosis and treatment was validly extended. It found that the 120 days would have fallen on May 16, 2019, but on May 11, 2019 Aurelio still claimed right shoulder pain, as reflected in a medical report dated May 11, 2019. The CA noted the company-designated physician recommended continued physical therapy and follow-ups with Physiatry and Orthopedic Shoulder Surgery. It concluded that the final medical assessment issued on June 25, 2019 fell within the extended period and was received by Aurelio through counsel on July 31, 2019, also within the 240-day period.

On the report’s substance, the CA considered the June 25, 2019 medical report definitive and conclusive. It reproduced the report indicating a Grade 9 disability for ankylosis or one shoulder with the shoulder blade remaining mobile, and it accepted that the company-designated physician had declared the final disability based on POEA-SEC schedule and functional capacity. The CA also held Aurelio failed to prove entitlement to the more beneficial CBA compensation due to insufficient substantial evidence of an accident.

A motion for reconsideration was denied.

Issues on Review and the Supreme Court’s Treatment of Factual Matters

In the Supreme Court, Aurelio argued that due process required a final, conclusive, and definite assessment supported by a clear justification for extension beyond 120 days, and that the company-designated physician failed to explain his condition and did not furnish him with the final medical assessment after treatment was discontinued on June 25, 2019. He also insisted that the company refused to refer him for a third medical opinion on terms he considered improper. Aurelio further contended his injury was work-related as it resulted from an accident while on board, and that he was totally and permanently disabled. He added that a final medical report must certify fitness to work; absent such certification, the assessment should be considered provisional, and he argued the report’s language—“IF ENTITLED and IF NEEDED”—rendered it non-categorical.

In its analysis, the Court reiterated that petitions under Rule 45 generally raise only questions of law. It nonetheless revisited factual matters due to recognized exceptions, including the CA’s alleged oversight of undisputed facts and direct conflict with the PVA’s findings.

The Nature of Disability Compensation and the POEA-SEC Framework

The Court explained that in disability compensation, the compensable event is not merely the injury, but the employee’s incapacity to work and its effect on earning capacity. It distinguished total disability as inability to perform usual work and permanen

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