Title
Status Maritime Corp. vs. Spouses Delalamon
Case
G.R. No. 198097
Decision Date
Jul 30, 2014
Margarito, a seafarer, concealed pre-existing diabetes during pre-employment medical exam; illness deemed non-work-related, disqualifying heirs from disability benefits.
seafarer
permanent disability benefits
sickness allowance

Case Summary (G.R. No. 198097)

Employment and Medical Events During the Contract

Margarito was hired by Status Maritime Corporation for and on behalf of its principal, Fairdeal Group Management S.A., as Chief Engineer with a monthly basic salary of US$1,300.00. The original contract covered nine months from July 26, 2005 to April 26, 2006, and Margarito later requested and was granted an extension until October 2006. He left Manila on July 26, 2005 to join the vessel M/T Fair Jolly and immediately discharged his duties.

In September 2006, while the vessel was in the United Arab Emirates (UAE), Margarito complained of loss of appetite. He was sent to the National Medical Center at the Port of Fujairah, UAE, for diagnosis and treatment. In a Medical Report dated September 2, 2006, he was diagnosed with Renal Insufficiency: Diabetes Mellitus; IHD Blood + CBC + Anemia. He was medically repatriated on September 6, 2006.

Filing of the NLRC Complaint and Subsequent Deterioration

On December 29, 2006, Margarito and his wife Priscila filed a complaint before the Labor Arbiter for payment of permanent disability benefits, sickness allowance, damages, and attorneys’ fees against Fairdeal, M/T Fair Jolly, Status Maritime, and Status Maritime’s president, Loma B. Aguiman. The complaint was docketed as NLRC NCR OFW Case No. (M) 06-12-03874-00. The complaint alleged that petitioners failed to provide medical assistance during the time Margarito underwent medical treatment for an illness allegedly acquired in their employ. It was also averred that Margarito was physically weak when he arrived in the Philippines and did not immediately report for company medical examination, although Priscila claimed she had notified petitioners through a certain Allan Lopez.

After Margarito’s condition worsened, he was brought to Las Piñas Doctors Hospital where clinical and laboratory tests were conducted. Based on a 2D Echocardiography report dated September 12, 2006, he was found afflicted with T/C renal insufficiency and coronary artery disease. He was hospitalized again from December 18, 2006 to January 4, 2007 at Manila Doctors Hospital. In a medical certificate issued on January 17, 2007 by Dr. Elizabeth B. Salazar-Montemayor, he was found to be suffering from End Stage Renal Disease 2 Diabetic Nephropathy. A right renal cortical cyst was also diagnosed on December 19, 2006. Thereafter, he underwent dialysis treatments three times a week and eventually became bedridden.

During the pendency of the case, Margarito died on September 11, 2007, with cause of death stated as CVA or Cardiovascular Accident.

Petitioners’ Defenses in the Labor Proceedings

Petitioners denied liability. They argued primarily that Margarito failed to comply with Section 20(B), paragraph (3) of the 2000 Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (POEA-SEC), which required submission for post-employment medical examination within three (3) working days from arrival, and that he was only examined by petitioners’ designated physician on March 30, 2007 during the mandatory conference stage.

Petitioners further maintained that Margarito’s illness was not compensable. They relied on a medical report dated May 17, 2007 by Dr. Wilanie Romero Dacanay of the Marine Medical Services of Metropolitan Medical Center stating that Chronic Kidney Disease secondary to Diabetic Nephropathy is NOT work-related. Petitioners also claimed Margarito had an existing diabetes condition, supposedly diagnosed six years earlier, and had been taking 500 mg of Metformin. Based on this, petitioners argued that Margarito concealed his condition during the Pre-Employment Medical Examination (PEME), which allegedly disqualified him from disability benefits. They likewise challenged respondents’ claim of compensability for failure to allege and prove by substantial evidence that Margarito’s work conditions had causal relation to, or increased his risk of contracting, the illness.

Labor Arbiter and NLRC Rulings

The Labor Arbiter, in a decision dated September 28, 2007, dismissed respondents’ complaint for lack of merit on the ground that Margarito’s illness was not work-related. The NLRC affirmed the dismissal in its Resolution dated October 23, 2008, and added that Margarito did not comply with the mandatory requirement of reporting within three days from disembarkation for post-employment medical examination pursuant to the POEA-SEC.

Court of Appeals’ Reversal and Grant of Benefits

Upon appeal, respondents advanced evidence of work-relatedness, including a medical evaluation dated June 25, 2007 by Dr. Efren R. Vicaldo of the Philippine Heart Center. Dr. Vicaldo narrated that Margarito had nausea and anorexia noted in June 2006 in the UAE and was diagnosed with kidney disease, while the history revealed he was also a known diabetic for six years and maintained on Metformin. Dr. Vicaldo stated that after repatriation Margarito underwent dialysis and that he was then unfit to resume work in any capacity, with the illness considered work-aggravated/related and requiring regular hemodialysis. The Court of Appeals treated the illness as substantially connected to employment conditions and found Margarito totally disabled, relying on the medical need for regular dialysis and medical aid.

In its Decision dated May 27, 2011, the Court of Appeals reversed the findings of the labor tribunals. It held that Margarito was exempt from strict compliance with the three-day reporting requirement because, upon arrival in the Philippines, his physical condition was already deteriorating and demanded urgent medical attention. The Court of Appeals also held that Priscila notified petitioners of his condition through Allan Lopez. It further ruled that Margarito’s cause of death, CVA, was listed as an occupational disease under the POEA-SEC, and that although renal disease was not similarly listed, it was disputably presumed work-related under Section 32-A(11) of the POEA-SEC. It reasoned that his work contributed to development and exacerbation of his illness due to exposure to stress, different climates, and erratic time zones while on board for about fourteen months. The Court of Appeals then awarded sickness allowance and permanent disability benefits, grading Margarito’s disability as Grade 1 disability under Section 32 of the POEA-SEC based on the need for regular aid and attendance.

Petitioners’ motion for reconsideration was denied by the Court of Appeals in a Resolution dated August 4, 2011, prompting the present review by petitioners.

Issues Framed by Petitioners and Respondents

Petitioners argued that Margarito was disqualified from any illness benefit on three main grounds: (1) his diabetes was pre-existing and he concealed it during PEME; (2) he failed to report for post-employment medical examination within the three-day period under the POEA-SEC; and (3) respondents failed to specifically allege and prove by substantial evidence the causal connection between work conditions and the illness.

Respondents countered that Margarito’s renal insufficiency, diabetes mellitus, and related cardiac ailment were acquired during the term of employment, and that his failure to comply with the three-day reporting rule should be excused because he was already severely ill upon arrival. They denied concealment and claimed petitioners’ physicians found him fit to work during the PEME. They insisted that compensability did not turn on whether an illness was pre-existing, but on whether it was work-related or work-aggravated, which, according to respondents, had been substantially established by the evidence.

Legal Framework on Post-Employment Medical Examination and Its Exceptions

In resolving the petition, the Court emphasized that the core dispute involved factual matters which, generally, it could not revisit under Rule 45. Nevertheless, it proceeded to examine the records because the findings of the Court of Appeals were contrary to those of the Labor Arbiter and the NLRC.

The Court held that, in this case, the three-day mandatory reporting requirement under Section 20(B)(3) of the POEA-SEC could be dispensed with. As a general rule, a medically repatriated seafarer must submit himself to a post-employment medical examination by the company-designated physician within three working days upon return. The Court explained that the rule exists to give the employer’s doctors a reasonable opportunity to determine whether the illness was work-related within a time frame that supports reliable causation. The Court cited the rationale in Jebsens Maritime, Inc. v. Undag, including the fairness concern that ignoring the rule would open the floodgates to unrelated disability claims and deprive employers of protection against stale causation inquiries.

The Court reiterated that the POEA-SEC itself provides an exemption: when a seafarer is physically incapacitated to comply within three days, written notice to the employer within the same period is deemed sufficient compliance. The Court referred to Wallem Maritime Services, Inc. v. NLRC, where the seafarer’s terminal illness and the employer’s knowledge through the seafarer’s wife had excused noncompliance.

Applying these principles, the Court found the same circumstances in Margarito’s case. It held that when Margarito was repatriated on September 6, 2006, he was already suffering from renal insufficiency with diabetes mellitus and IHD. Soon thereafter he was confined at Las Piñas Doctors Hospital for the same renal ailment, which then worsened into coronary artery disease. He began dialysis in December and eventually became bedridden. These medical episodes established that his physical condition was deteriorating upon arrival, making it unreasonable to expect compliance with personal reporting to the company office. The Court also found that the petitioners were on sufficient notice because they knew Margarito had been diagnosed with a seriou

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