Title
Yialos Manning Services, Inc. vs. Borja
Case
G.R. No. 227216
Decision Date
Jul 4, 2018
Seafarer Borja, injured on duty, sought total permanent disability benefits. SC ruled partial disability (Grade 11) per company physician, awarding US$7,465, reversing CA's decision.
seafarer
total permanent disability benefits
lumbar strain
A

Case Summary (G.R. No. 227216)

Factual Background

Borja was employed as an oiler for approximately nine months and boarded M/V Thetis on April 20, 2010. On November 9, 2010, after performing maintenance work and lifting a metal plate, Borja experienced pain in the buttocks radiating down the back of his leg. He was referred to a company physician in Taixing, China, who diagnosed him with inter-vertebral protrusion. The physician declared Borja unfit to work for three months and advised temporary palliative care or bed rest for one month. Borja was medically repatriated on November 25, 2010.

Upon return, Borja reported to YMSI’s office and was referred to Marine Medical Services at Metropolitan Medical Center (MMC). Dr. Robert D. Lim diagnosed lumbar strain and advised medication and physical therapy at a nearer hospital or at University of Perpetual Help – Dr. Jose Tamayo Medical Center (UPH-DJTMC) in Binan, Laguna, while requiring monthly re-evaluations. Borja underwent an electromyograph (EMG) test at UPH-DJTMC on January 27, 2011, with findings described as chronic bilateral L5-S1 radiculopathies probably secondary to lumbar canal stenosis. On April 15, 2011, Dr. William Chuasuan of MMC issued a disability rating of “Grade 11 – slight rigidity of 1/3 [loss of] motion or lifting power of the trunk.”

Borja continued therapy at UPH-DJTMC due to persistent back pain. He demanded reimbursement of medical expenses and the payment of permanent total disability benefits, but YMSI denied the claims.

Labor Arbiter Proceedings

Borja filed a complaint before the Labor Arbiter on July 7, 2011 for payment of salaries or wages for the unexpired portion of the contract, disability benefits, moral and exemplary damages, and attorney’s fees. During conciliation, the parties agreed to refer the matter for a third medical opinion, but Borja allegedly backed out. On February 9, 2012, Labor Arbiter Cheryl M. Ampil rendered a decision granting Borja’s claim for total permanent disability.

The Labor Arbiter reasoned that the test for permanent total disability was inability to perform customary work for more than 120 days, extendible up to 240 days at the option of the petitioner or the company-designated physician. It found that petitioners did not extend Borja’s medical treatment and that disability was assessed only on April 15, 2011, or 149 days after repatriation. It awarded permanent total disability benefits and attorney’s fees, reasoning that Borja was compelled to litigate due to petitioners’ failure to pay.

NLRC and Court of Appeals Rulings

Petitioners appealed to the NLRC. They contended that Borja’s disability was not determined by lapse of days but by medical findings, that the company-designated physician’s disability grading was controlling for seafarers, and that the POEA-SEC did not embody a permanent unfitness clause entitling the seafarer to full disability based on timing alone. They also asserted that attorney’s fees could not be awarded absent malice or bad faith.

The NLRC dismissed the appeal on May 15, 2012 and denied reconsideration on July 9, 2012, sustaining Borja’s entitlement to total and permanent disability and attorney’s fees.

Petitioners then sought relief from the CA through a petition for certiorari. The CA dismissed the petition, holding there was no grave abuse of discretion. Citing Kestrel Shipping Co. v. Munar, it ruled that Borja’s condition was considered total and permanent because he was still undergoing therapy even beyond the 240-day period and there was no showing he could resume sea duty or became employed after filing the complaint. On attorney’s fees, the CA affirmed the finding that Borja was entitled thereto because petitioners failed to satisfy his valid claim.

Issues Raised Before the Supreme Court

The Supreme Court framed the pivotal issue as whether Borja was entitled to total permanent disability benefits given conflicting medical pronouncements: Borja’s appointed physician versus the company-designated physician. Petitioners insisted that Borja’s disability was only “Grade 11” as certified by the company-designated physician, and that the CA erred in treating Borja’s entitlement as flowing merely from the medical certification’s issuance after 120 days.

The Parties’ Contentions

Petitioners maintained that the company-designated physician’s grading controlled and that the disability scale in the POEA-SEC, not the number of days of treatment, determined the degree of disability. They also argued that the contractual conflict-resolution mechanism was disregarded and that, absent the binding third doctor procedure, Borja could not supplant the company physician’s assessment.

Borja argued for entitlement to permanent total disability benefits and attorney’s fees, invoking the effect of the passage of the relevant periods and his own physician’s findings. He further contended that he was not obliged to comply with the POEA-SEC conflict-resolution procedure because, in his view, he was already totally and permanently disabled by operation of law when the company-designated physician did not declare him fit within the 120-day and 240-day periods.

Legal Basis and Reasoning

The Court held that the central difficulty in seafarer disability compensation cases arises when there is a conflict between the company-designated physician and a seafarer-appointed physician. The Court reiterated that where the seafarer’s work-related injury or illness falls under the employment contract and the POEA-SEC, medical fitness and disability classification within the prescribed periods must follow the contract’s mechanism.

The Court emphasized that the parties’ relationship was governed by the POEA-SEC signed on April 8, 2010, which is treated as the law between the parties. It pointed to Section 20(B)(3) of the POEA-SEC, whose last paragraph provides that if the doctor appointed by the seafarer disagrees with the company-designated physician’s assessment, the matter must be resolved by a third doctor jointly agreed upon by the employer and the seafarer, and the third doctor’s decision is final and binding. The Court stressed that, under jurisprudence, referral to a third doctor is mandatory when (1) there is a valid and timely assessment by the company-designated physician and (2) the appointed doctor of the seafarer refutes that assessment, consistent with Marlow Navigation Philippines, Inc. v. Osias.

The Court also discussed NLRC En Banc Resolution No. 008-14, which required labor arbiters to provide parties time to secure a third doctor and for the doctor to submit reassessment. It further applied the doctrine in Bahia Shipping Services, Inc. v. Constantino, placing the burden on the seafarer who contests the company-designated physician’s certification to make a positive action and notify the company of the contrary finding so the third doctor selection process can be initiated. The Court applied the same logic in the absence of a third doctor resolution: the assessment of the company-designated physician should stand.

The Court then invoked Vergara v. Hammonia Maritime Services, Inc. (Vergara) to stress that while a seafarer may seek additional opinions, the final determination must be made through the agreed POEA-SEC procedure. It held that if the seafarer does not avail of the third doctor mechanism, the company-designated doctor’s certification remains the final determination that prevails.

Addressing petitioners’ allegations, the Court noted that the parties allegedly agreed during the mandatory conference before the Labor Arbiter to seek a third doctor, but that during the next scheduled conference Borja refused to submit to a third doctor and demanded payment instead. In his Comment, Borja did not deny the refusal. The Court held his legal theory—that he was relieved from complying with the conflict-resolution procedure due to supposed total and permanent disability by operation of law—was untenable.

The Court explained that under Section 32 of the POEA-SEC, only illnesses or injuries classified as Grade 1 constitute total permanent disability. It clarified that ailments graded from Grade 2 to Grade 14 are considered partial permanent disability, subject to the schedule of rates in the POEA-SEC. Hence, the passage of the 120-day or 240-day periods does not automatically entitle the seafarer to total permanent disability. The company-designated physician is the one who certifies whether the seafarer is fit to work or suffers from partial or total permanent disability within the allowed periods, through the contract’s framework.

In applying Vergara, the Court clarified the conceptual sequence: the seafarer is under temporary total disability for the duration of treatment for an initial maximum of 120 days, extendible up to 240 days when further medical attention is needed, while the company physician assesses the seafarer’s condition within those periods. It emphasized that disability benefits depend on the disability grading under the POEA-SEC schedule rather than on the mere number of treatment days. It further explained that only if, after the lapse of 240 days, the seafarer remains incapacitated and the company-designated physician has made no assessment at all—either of fitness to work or partial or total permanent disability—does a conclusive presumption of total and permanent disability arise.

The Court then reviewed the timeline in Borja’s case. Borja arrived in the Philippines on November 25, 2010, and his continuous check-ups at MMC showed medical follow-ups, including advice to continue physical therapy and medication on March 11, 2011, with a return date of April 1, 2011 for re-evaluation. The Court treated the extension of the 120-day period as justified due to further treatment needs. On April 15, 2011, within the allowed maximum 240-day timeframe, Dr. Chuasuan issued the disability rating of “Grade 11.” Consequently, the Court held that, absent a binding contrary third doctor resolution, this company-design

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