Title
Transocean Ship Management , Inc. vs. Vedad
Case
G.R. No. 194490-91
Decision Date
Mar 20, 2013
Seafarer Inocencio Vedad, diagnosed with tonsil cancer during employment, was denied permanent disability benefits but granted a 120-day sickness allowance and medical expense reimbursement under POEA-SEC.
seafarer
sickness allowance
medical expenses

Case Summary (G.R. No. 194490-91)

Factual Background

Before deployment, Inocencio underwent the required pre-employment medical examination (PEME), which gave him a clean bill of health. During the voyage on board M/V Invicta, he fell ill and experienced fever, sore throat, and pain in his right ear, prompting medical examination at a port where the ship docked. At Port Louis, Mauritius, he underwent an examination on February 4, 2006 which found “chronic suppurative otitis media right [CSOM(R)] with acute pharyngitis[, with] mild maxillary sinusitis,” and he was prescribed antibiotics and ear drops, with a recommendation for follow-up examination of the CSOM(R). His condition persisted, and on February 16, 2006 he underwent a follow-up examination in Tanjung Priok, Indonesia. For further evaluation and treatment, he was eventually repatriated for medical reasons on February 19, 2006, despite not having completed the 10-month employment contract.

Immediately upon repatriation, Inocencio reported to the company-designated physician, Dr. Nicomedes G. Cruz (Dr. Cruz), for diagnosis and treatment at NGC Medical Clinic in Manila. On May 10, 2006, Inocencio underwent tonsillectomy. Later, the histopathology report revealed cancer of the right tonsil. The final histopathologic diagnosis stated “undifferentiated carcinoma, right tonsil; and chronic tollicular tonsillitis with actinomycosis, left tonsil.” Dr. Cruz advised that Inocencio undergo chemotherapy and further linear treatment estimated to cost PhP 500,000. Transocean and General Marine promised to shoulder these medical procedures. Inocencio started the treatment but could not continue because the promised payment was not provided.

Confronted with the refusal or failure to fund the required treatment and the consequences of his inability to work, Inocencio filed a Complaint before the Labour Arbiter on July 17, 2006 for disability benefits and sickness allowance, among others.

Labour Arbiter Proceedings

On August 10, 2007, the Labour Arbiter awarded Inocencio USD 60,000 as permanent total disability benefits, plus 10% attorney’s fees, and ordered the respondents to pay the amount in its peso equivalent at the time of actual payment. It dismissed all other claims.

In reaching this result, the Labour Arbiter applied Section 20 of the POEA-SEC and treated Inocencio’s tonsil cancer as presumptively work-related because it had not been proved otherwise and because it lasted for more than 120 days. The Labour Arbiter also found that Transocean and General Marine had reneged on their promise to shoulder the medical procedures prescribed for Inocencio’s treatment.

NLRC Proceedings

Transocean, Salinas, and General Marine appealed. On May 29, 2008, the NLRC vacated the Labour Arbiter’s decision and awarded sickness allowance limited to the period equivalent to 120 days or four months’ salary, amounting to USD 4,616, and ordered payment or reimbursement of Inocencio’s medical expenses. The NLRC deleted the award of permanent total disability benefits.

The NLRC reasoned that the June 9, 2006 medical report and certification by Dr. Cruz, the company-designated physician, that the tonsil cancer was not work-related, shifted the burden of proof to Inocencio. Inocencio, in the NLRC’s view, failed to substantiate work-relatedness. The NLRC also ruled that PEME alone was not conclusive proof of health prior to deployment. Still, the NLRC recognized that Inocencio was permanently totally disabled and that he was not at fault for failing to undergo treatment due to Transocean and General Marine’s failure to provide the promised payment, and thus ordered reimbursement of medical expenses.

Court of Appeals Disposition

Both parties elevated the dispute to the Court of Appeals. On July 28, 2010, the Court of Appeals modified the NLRC Decision by setting aside the award of sickness allowance of USD 4,616, while affirming the order for reimbursement of medical expenses. It denied the petition in CA-G.R. SP No. 105615 for lack of merit.

The Court of Appeals agreed with the NLRC that Inocencio’s cancer of the tonsils was not work-related, relying on the certification of Dr. Cruz and noting that such determination was not rebutted by contrary findings, consistent with NYK-Fil Ship Management, Inc. v. Talavera. It also held that Inocencio’s bare allegations of causation did not constitute substantial proof of work-relatedness, and that the PEME did not render the tonsil cancer work-related because the PEME was not sufficiently exploratory to fully ascertain his health prior to employment.

At the same time, the Court of Appeals ruled that Transocean and General Marine must pay or reimburse the medical expenses based on their offer and promise to shoulder the chemotherapy and related treatment. It emphasized that Inocencio did initiate some of the prescribed procedures, but they could not continue because Transocean and General Marine unilaterally withheld payment.

Issues Raised Before the Supreme Court

Transocean and co-petitioners argued that the Court of Appeals committed grave abuse of discretion in ordering them to reimburse or pay Inocencio’s medical expenses. Inocencio, for his part, assigned reversible errors in the Court of Appeals rulings, contending that the factual findings of the NLRC and the Court of Appeals were not based on substantial evidence, that the Court of Appeals decisions were contrary to applicable law and jurisprudence, and that he should have been awarded attorney’s fees.

Legal Basis and Reasoning: Sickness Allowance Under Section 20 of the POEA-SEC

The Supreme Court held that Inocencio was entitled to sickness allowance. It recognized that Inocencio became ill aboard M/V Invicta and was repatriated for medical reasons before the expiry of his 10-month contract. The Court treated these circumstances as directly activating the sickness allowance entitlement under Section 20 of the POEA-SEC.

Under Section 20(B), the seafarer is entitled to sickness allowance equivalent to basic wage until declared fit to work or until the degree of permanent disability is assessed by the company-designated physician, but in no case exceeding 120 days. The provision also contemplates post-employment medical examination by the company-designated physician within three working days upon return, with a specific forfeiture consequence if the seafarer fails to comply with the reporting requirement. More importantly for the Court’s analysis, those illnesses not listed in Section 32 are disputably presumed as work related, and the dispute mechanism in Section 20(B)(3) allows a third doctor—selected jointly by employer and seafarer—to decide final work-relatedness when there is divergence in the assessments.

The Supreme Court reasoned that even if Inocencio’s illness was later medically declared not work-related, this fact did not prejudice his right to sickness allowance because the illness manifested while he was onboard and he was repatriated for medical treatment before the end of the contract. At the time of repatriation, Dr. Cruz had not yet medically declared the illness as not work-related, so the disputable presumption under Section 20(B)(4) applied. Accordingly, Inocencio was entitled to sickness allowance pending the assessment and declaration by the company-designated physician regarding work-relatedness. The Court further added that if the company-designated doctor declared the ailment non-work-related but the seafarer contested it with a second opinion, the seafarer would remain entitled to sickness allowance while awaiting the third doctor’s final determination, but still limited to 120 days.

Applying these rules, the Court held that Inocencio was entitled to the 120-day sickness allowance from the time of repatriation on February 19, 2006, because his illness manifested and he was repatriated during the period of employment. The Supreme Court also treated the later finding of tonsil cancer as not defeating the mandated purpose of sickness allowance—to cushion the seafarer’s needs when unable to work—citing the social justice orientation of labor legislation. It sustained the NLRC’s award of sickness allowance as conforming to the POEA-SEC.

Legal Basis and Reasoning: Denial of Permanent Total Disability Benefits for Lack of Substantiated Work-Relatedness

The Supreme Court denied Inocencio’s claim for permanent total disability benefits, anchoring the result on whether his illness was work-related. It found no compelling reason to depart from the NLRC’s factual finding, affirmed by the Court of Appeals, that Inocencio failed to establish work-relatedness by substantial evidence.

The Court emphasized that in Rule 45 petitions, only questions of law may be raised, and that factual findings of quasi-judicial agencies like the NLRC, when affirmed by the Court of Appeals, are conclusive and binding upon the Supreme Court. It then evaluated the evidentiary posture: tonsil cancer or tonsillar carcinoma was not included in the list of occupational diseases. Thus, Inocencio bore the burden to show by substantial evidence that the cancer developed or was aggravated from work-related causes. The Court noted that Inocencio offered nothing beyond bare allegations.

Crucially, the Court reviewed that upon repatriation, Dr. Cruz examined Inocencio, diagnosed and treated him until the histopathology report revealed cancer, and Dr. Cruz later issued an assessment and certification on June 9, 2006 that the cancer was not work-related or work-aggravated. The Court explained the significance of the POEA-SEC mechanism: the seafarer could seek a second opinion from a physician of his choice and, in the event of divergence, a third doctor would decide with finality. The Court held that Inocencio failed to seek a second opinion. With no proof of work-relatedness adequately supported, the Court treated the company-designated physician’s certification as the final determination to prevail under the contract mechanism.

The Court also co

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