Title
Pacific Ocean Manning, Inc. and/or vs. Ships UK Ltd. vs. Nicolas F. Bobiles
Case
G.R. No. 259982
Decision Date
Oct 28, 2024
Pacific Ocean Manning, Inc. sought to challenge the CA decision awarding Bobiles total permanent disability but the court upheld that Bobiles meets the criteria for permanent disability per the Labor Code.
attorney fees
disability
compensation

Case Summary (G.R. No. 156643)

Factual Background

Bobiles was engaged by POMI as a pumpman on board the vessel Nordic Vega under a contract approved by the POEA on December 8, 2016 and covered by the Filipino ITF IBF TCC AMOSUP CBA. He commenced duty on December 24, 2016. On January 27, 2017, he sustained acute back pain while inspecting and lifting equipment. He received on-board medical advice from CIRM, remained largely immobile, and was disembarked in Vadinar, India, on February 27, 2017. Diagnostic studies, including MRI, revealed disc bulges and L4-L5 disc herniation with radiculopathy. He returned to the Philippines on February 28, 2017 and underwent further evaluation and physiotherapy. A private physician on October 30, 2017 opined that he was permanently unfit as a seaman. The company-designated physician issued, on September 4, 2017, a disability assessment of Grade 11 but contemporaneously indicated further follow-up, creating dispute over the finality of the assessment.

Procedural History

Bobiles filed a claim before the National Conciliation and Mediation Board seeking total permanent disability compensation and attorney’s fees. The NCMB rendered a decision on August 21, 2018 ordering POMI and V. Ships UK Ltd. to pay US$102,308.00 as total permanent disability compensation plus attorney’s fees equivalent to ten percent of the award. After denial of reconsideration, the petitioners appealed to the Court of Appeals, which on July 15, 2021 affirmed with modification and reduced the award to US$60,000.00, solidarily payable. The CA denied the petitioners’ motion for reconsideration on March 22, 2022. The petitioners then filed a Petition for Review on Certiorari under Rule 45 before the Supreme Court.

Issues Presented

The principal issues were whether (1) the company-designated physician’s failure to issue a conclusive final medical assessment within the prescribed period relieved Bobiles from compliance with the POEA-SEC third-doctor referral requirement and thus rendered his disability total and permanent; (2) the quantum of disability compensation should follow the CBA or the POEA-SEC schedule; and (3) Bobiles was entitled to attorney’s fees under Article 111, Labor Code, or under Article 2208(2) or Article 2208(8), Civil Code, or under the catchall Article 2208(11).

Parties’ Contentions

Petitioners contended that Bobiles refused to submit to referral to a third doctor under the POEA-SEC, that the company physician had adequate justification to extend the diagnostic period, and that Bobiles was not entitled to attorney’s fees because petitioners paid his medical and sickness allowances. Bobiles countered that the company-designated physician failed to issue a final disability rating within the required period, thus triggering the rule that his disability be deemed total and permanent; that the POEA-SEC third-doctor provision was inapplicable because there was no conclusive company assessment; and that he was entitled to damages and attorney’s fees because he was compelled to litigate.

Legal Basis and Reasoning

The Court examined controlling jurisprudence governing seafarer disability claims. It reiterated the rule in Marlow Navigation Philippines Inc. v. Osias and Paleracio v. Sealanes Marine Services, Inc. that referral to a third doctor under the POEA-SEC is mandatory only when (1) the company-designated physician issues a valid and timely assessment, and (2) the seafarer-appointed doctor refutes that assessment. The Court restated the rules from Elburg Shipmanagement Phils., Inc. v. Quiogue, Jr.: the company-designated physician must issue a final medical assessment within 120 days of the seafarer’s reporting; failure without justifiable reason renders the disability permanent and total; a justified extension may reach 240 days but the employer bears the burden to prove justification; and failure even within the extended period again results in deemed total and permanent disability.

Applying those rules, the Court found no final assessment within the original 120-day period; the company physician’s June 14, 2017 note recommending continued therapy and follow-up supported the conclusion that further treatment was required and justified extension to 240 days. However, the Court held that the Grade 11 assessment dated September 4, 2017 could not be treated as final because a contemporaneous medical certificate of the same date indicated ongoing follow-up and re-evaluation on October 11, 2017. The Court cited Benhur Shipping Corp. v. Riego to show that a supposedly final report accompanied by continuing treatment or certifications cannot be treated as a final assessment under the POEA-SEC and Elburg. Consequently, the company-designated physician failed to issue a final and valid assessment within the extended period, and the law deemed Bobiles’ disability total and permanent.

On the measure of compensation, the Court explained that because the CBA’s disability compensation applied only to “permanent disability as a result of an accident” and the record did not show that the disability resulted from such an accident, the POEA-SEC Schedule of Disability Allowances controlled. The Court affirmed the CA’s award of US$50,000.00 increased by 120% to US$60,000.00 and, citing precedent, imposed legal interest of six percent per annum from finality of the Supreme Court decision until full payment.

On attorney’s fees, the Court clarified three distinct rules. First, Article 111, Labor Code, authorizes attorney’s fees only in cases of unlawful withholding of wages. The Court rejected application of Article 111 because this case concerned disability compensation, not unpaid wages, and relied on prior decisions such as G.J.T. Rebuilders Machine Shop v. Ambos and T&H Shopfitters Corporation v. T&H Shopfitters Corporation/Gin Queen Workers Union that confined Article 111 to wage-withholding cases. Second, Article 2208(2), Civil Code, permits recovery of attorney’s fees only where the defendant’s act compelled the plaintiff to litigate with third persons or incur expenses to protect the plaintiff’s interest in relation to third persons. The Court emphasized the requirement that the litigation be against a third party, citing the wrongful-act doctrine and authorities including the discussion in American Jurisprudence and The Borden Company v. Doctors Pharmaceuticals, Inc. The Court held that petitioners’ actions compelled Bobiles to litigate only against them, not against third persons, and thus Article 2208(2) did not apply. Third, Article 2208(8), Civil Code, applies only to actions for indemnity under workmen’s compensation and employer’s liability laws; it does not extend to contract claims such as those under the POEA-SEC. Finally, the Court considered the catchall provision Article 2208(11) but declined to award attorney’s fees under its discretionary clause because no factual, legal, or equitable justification was shown and because petitioners co

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