G.R. No. 225425 - WILHELMSEN SMITH BELL MANNING, INC., WILHELMSEN SHIP MANAGEMENT LTD., AND FAUSTO R. PREYSLER, JR., PETITIONERS, v. FRANKLIN J. VILLAFLOR, RESPONDENT.

This is a Petition for Review on Certiorari¹  under Rule 45 of the Rules of Court, assailing the Decision² dated March 7, 2016 and Resolution³ dated May 19, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 142966.

Wilhelmsen Smith Bell Manning, Inc., on behalf of its principal Wilhelmsen Ship Management Ltd. (petitioners) hired Franklin J. Villaflor (respondent) as Third Engineer on board their vessel MIV NOCC Puebla on a seven-month contract dated August 22, 2012. Respondent underwent the required pre-employment medical examinations and was thereby pronounced fit to work on August 22, 2012 . On September 5, 2012, respondent boarded the vessel.⁴

Sometime in March 2013, while conducting maintenance works on the vessel and lifting heavy engine and generator spare parts with his crewmates, respondent felt severe back pain which caused him to fall on his knees. He was given pain relievers by his superiors for immediate relief but was advised by the Master to be repatriated for further examination.⁵

Respondent was, thus, medically repatriated on March 28, 2013.⁶

Upon arrival in Manila, petitioners referred respondent to Marine Medical Service for examination. He was diagnosed to have SIP Laminotomy, L4 Bilateral Interspinous Process Decompression Coflex and has been advised to regularly consult with the specialists for the monitoring of his condition. He also underwent out-patient rehabilitation sessions at the Metropolitan Medical Center.⁷

On July 9, 2013, Dr. William Chuasuan, Jr. (Dr. Chuasuan), an Orthopedic and Adult Joint Replacement Surgeon, issued a letter addressed to the company-designated physician, Dr. Robert D. Lim (Dr. Lim), stating that respondent's prognosis is guarded and that the latter had already reached his maximum medical improvement. Consequently, Dr. Chuasuan gave respondent a disability grading of 8 or 2/3 loss of lifting power of the trunk. Despite this, the company-designated physician still advised respondent to continue with his medications and rehabilitation. Respondent was also directed to see Dr. Lim sometime in May 2014.⁸

On June 5, 2014, respondent independently consulted a physician of his choice, Dr. Manuel C. Jacinto, Jr. (Dr. Jacinto). On July 21, 2014, Dr. Jacinto issued a Medical Certificate, stating that respondent's disability is total and the cause of injury is work-related/work-aggravated, thus, declaring respondent unfit to go back to work as a seafarer.⁹ This prompted respondent to file a complaint for total and permanent disability benefits against petitioners.

For its part, petitioners alleged that respondent's condition was merely brought about by the recurrence of his lumbar problem from his previous employment, for which he had already claimed total and permanent disability benefits from his previous employer.¹⁰

In a Decision dated April 16, 2015, the labor arbiter dismissed the complaint for disability benefits, finding that respondent's injury is not work-related as it was merely a recurrence of the condition he suffered from his previous employment and as such , the complained injury did not occur during his term of employment with petitioners. It disposed, thus:

WHEREFORE, premises considered, the instant complaint is dismissed for lack of merit.¹¹

On appeal, the National Labor Relations Commission (NLRC) affirmed the dismissal of the complaint, finding that respondent failed to exhibit good faith when he entered into the contract of employment with petitioners as he already knew that he was not fit to work then, considering that he previously pursued a case for and was actually granted total and permanent disability benefits against his former employer. Hence, respondent's appeal was likewise dismissed:

WHEREFORE, premises considered, the appeal of the [respondent] is hereby dismissed for lack of merit.

SO ORDERED.¹²

Respondent's motion for reconsideration of said NLRC Resolution was likewise denied in its Resolution dated September 24, 2015.¹³

A different conclusion was reached on certiorari to the CA. The appellate court ruled that petitioners cannot harp on the fact that respondent had previously claimed disability benefits from his former employer. According to the CA, the fact that respondent was able to find gainful employment even after such claim against his former employer does not preclude him from instituting another disability claim against his petitioners as long as his complained injury is work-related or work-aggravated and that such injury has prevented him from doing the same work.¹⁴

On the merits, the CA found that when petitioners engaged respondent's services, they were aware of the latter's history of back injury as this was disclosed by respondent in his PEME. Despite such history, respondent passed all the required tests in the PEME and was declared fit to work. The CA also found that while respondent had a pre-existing back problem, his condition was aggravated by the nature of his work on board the vessel as Third Engineer like lifting heavy materials during maintenance operations, among others. It was further found that while Dr. Chuasuan gave respondent a Grade 8 disability rating, his findings also stated that the prognosis on respondent's case is guarded, meaning "the outcome of the patient's illness is in doubt." Respondent was thereafter still required to continue his medications and rehabilitation for over a year since his repatriation. Hence, the CA concluded that respondent is considered totally and permanently disabled. The CA disposed, thus:

WHEREFORE, in view of the foregoing, the instant Petition is hereby GRANTED. Consequently , the assailed Resolutions dated July 31, 2015 and September 24, 2015 rendered by public respondent NLRC-2^nd Division in NLRC LAC No. 06-000486-15/NLRC NCR-OFW-M-08-10443-14 are hereby REVERSED and SET ASIDE and a new one entered ordering [petitioners] to jointly and severally pay [respondent] the following: a) permanent total disability benefits of US$60,000.00 at its peso equivalent at the time of actual payment; and b) attorney's fees often percent (10%) of the total monetary award at its peso equivalent at the time of actual payment.

SO ORDERED.¹⁵

Petitioners then filed a motion for reconsideration which was denied by the CA in its May 19, 2016 assailed Resolution:

WHEREFORE, in view of the foregoing, the instant Motion is hereby DENIED.

SO ORDERED.¹⁶

Hence, this Petition .
Issue
In the main, petitioners argue that the CA erred in granting total and permanent disability benefits to respondent considering that he was assessed with a Grade 8 disability by the company-designated doctor. Petitioners reasoned that, according to the rules, the company-designated doctor's assessment should prevail over the seafarer's personal doctor. Further, petitioners argue that mere inability to work for over 120 days does not entitle a seafarer to total and permanent disability compensation. Also, petitioners point out that, in the first place, respondent's condition was pre-existing and not suffered on board.

Ultimately, the issue before us is whether or not respondent is entitled to total and permanent disability benefits.

The Court's Ruling

We find no reversible error on the assailed CA Decision and Resolution. Accordingly, we affirm the assailed rulings, but modify the same by imposing legal interest upon the monetary awards given by the CA.

For disability to be compensable under Section 20(A) of the 2010 POEA - SEC, the two elements must concur: (1) the injury or illness must be work-related; and (2) the work-related injury or illness must have existed during the term of the seafarer's contract. The POEA-SEC defines work­ related injury as one "arising out of and in the course of employment." Jurisprudence is to the effect that compensable illness or injury cannot be confined to the strict interpretation of said provision in the POEA-SEC as even pre-existing conditions may be compensable if aggravated by the seafarer's working condition. It is not necessary that the nature of the employment be the sole and only reason for the illness or injury suffered by the seafarer.¹⁷ It is sufficient that there is a reasonable linkage between the disease suffered by the employee and his work to lead a rational mind to conclude that his work may have contributed to the establishment or, at the very least, aggravation of any pre-existing condition he might have had.¹⁸The Court explained in one case:

Common sense dictates that an illness could not possibly have been " contracted as a result of the seafarer's exposure to the described risks" if it has been existing before the seafarer's services are engaged. Still, pre-existing illnesses may be aggravated by the seafarer's working conditions. To the extent that any such aggravation is brought about by the work of the seafarer, compensability ensues x x x.¹⁹

Thus, the CA correctly ruled that petitioners could not harp on the fact of respondent's previous disability benefits complaint against his former employer to support their argument that respondent's condition is not work-related as it is pre-existing. It is noteworthy that despite such back injury history , respondent was able to pass all the required tests in the PEME. It should also be pointed out that petitioners were aware of such history as respondent disclosed the same in his PEME. Nevertheless, petitioners engaged his services. Hence, while it may be true that respondent's back injury is a recurrence of his previous condition, still, such recurrence can be attributed to the nature of his work on board petitioners' vessel. As found by the CA, the normal duties of a Third Engineer include daily maintenance and operation of the engine room, which entail activities such as lifting of heavy materials and spare parts. It was also established that respondent felt pain in his back while lifting some heavy spare engine parts during maintenance operations with his co-workers. That respondent's condition is work-aggravated and as such, compensable , cannot be denied.

As to the extent of compensability, the entitlement of an overseas seafarer to disability benefits is governed by the la w , the employment contract, and the medical findings in accordance with the rules.²⁰

By law, the seafarer 's disability benefits claim is governed by Articles 191 to 193, Chapter VI of the Labor Code, in relation to Rule X, Section 2 of the Implementing Rules and Regulations (IRR) of the Labor Code.²¹ Article 192 (c) (1) of the Labor Code provides:

Art. 192. Permanent total disability. x x x x

C. The following disabilities shall be deemed total and permanent:

(1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided in the Rules;

x x x x

Rule VII, Section 2(b) of the Amended Rules on Employees' Compensation also provides:

(b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided for in Rule X of these Rules.

The exception to the 120-day rule repeatedly cited above is Rule X of the Implementing Rules and Regulations (IRR) of Book IV of the Labor Code, specifically Section 2 thereof which states:

Section 2. Period of entitlement. - (a) The income benefit shall be paid beginning on the first day of such disability. If caused by an injury or sickness it shall not be paid longer than 120 consecutive days except where such injury or sickness still requires medical attendance beyond 120 days but not to exceed 240 days from onset of disability in which case benefit for temporary total disability shall be paid. However , the System m a y declare the total and permanent status at any time after 120 days of continuous temporary total disability as may be warranted by the degree of actual loss or impairment of physical or mental functions as determined by the System. (Emphasis supplied)

By contract, it is governed by the employment contract which the seafarer and his employer/local manning agency executes prior to employment, and the applicable POEA-SEC that is deemed incorporated in the employment contract.²² In this case, the parties · executed the contract of employment on August 22, 2012, thus, the 2010 POEA-SEC is applicable.

Relevant provision of Section 20(A) thereof provides:

SECTION 20. COMPENSATION AND BENEFITS

A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS

The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as follows :

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6. In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 32 of his Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted.
   
   The disability sh a ll be based solely on the disability gradings provided under Section 32 of this Contract, and shall not be measured or determined by the number of days a seafarer is under treatment or the number of days in which sickness allowance is paid.
   

By the medical findings, the assessment of the company-designated doctor generally prevails, unless the seafarer disputes such assessment by exercising his right to a second opinion by consulting a physician of his choice, in which case, the medical report issued by the latter shall also be evaluated by the labor tribunal and the court, based on its inherent merit. In case of disagreement in the findings of the company-designated doctor and the seafarer's personal doctor, the parties may agree to jointly refer the matter to a third doctor whose decision shall be final and binding on them.²³

In the landmark case of Elburg  Shipnwnagement Phils., Inc. v. Quiogue,  JJ,²⁴ the Court had the occasion to summarize the rules above-cited regarding the company-designated physician's duty to issue a final medical assessment on the seafarer's disability grading to determine the extent of compensation:

1. The company-designated physician must issue a final medical assessment on the seafarer's disability grading within a period of 120 days from the time the seafarer reported to him;
   
   
2. If the company-designated physician fails to give his assessment within the period of 120 days, without any justifiable reason, then the seafarer's disability becomes permanent and total;
   
   
3. If the company-designated physician fails to give his assessment within the period of 120 days with a sufficient justification (e.g. seafarer required further medical treatment or seafarer was uncooperative), then the period of diagnosis and treatment shall be extended to 240 days. The employer has the burden to prove that the company-designated physician has sufficient justification to extend the period; and
   
   
4. If the company-designated physician still fails to give his assessment within the extended period of 240 days, then the seafarer's disability becomes permanent and total, regardless of any justification.
   

In this case, respondent was repatriated on March 28, 2013. He was immediately referred to the company-designated physician upon arrival. While he was subjected to a series of medications and rehabilitation, no definite disability assessment was, however, given to respondent at all. The Grade 8 disability rating given by Dr. Chuasuan cannot be considered as the complete, definite, and final medical assessment contemplated by the rules. Consider: the Grade 8 disability assessment given by Dr . Chuasuan was merely addressed to Dr. Lim, who despite such assessment from the specialist, still advised respondent to continue with his medications and rehabilitation. Records also show that up to May 2014, respondent was still ordered to see Dr. Lim for re-evaluation . Respondent's treatment lasted for over a year, evidencing that respondent's condition remained unresolved. Also worthy is the fact that Dr. Chuasuan's prognosis on respondent's condition was guarded, meaning, " the outcome of the patient's illness is in doubt." Clearly, there is nothing definite and final in the assessment given by the company-designated doctor/s to respondent's condition. Due to this failure, respondent's disability, under legal contemplation, is deemed total and permanent.²⁵

To emphasize, a final and definite disability assessment within the 120-day or 240 - day period under the rules is necessary In order to truly reflect the true extent of the sickness or injuries of the seafarer and his capacity to resume to work as such. ²⁶ Otherwise, the corresponding disability benefits awarded might not be commensurate with the prolonged effects of the injuries suffered.²⁷

Invoking Section 20(A)(6) o f the 2010 POEA - SEC will not help petitioners' case. Indeed, the recent amendments on the POE A - SEC, specifically Section 20(A)(6) thereof, states that "[t]he disability shall be based solely on the disability gradings provided under Section 32 of this contract, and shall not be measured or determined by the number of days a seafarer is under treatment or the number of days in which sickness allowance is paid. " Never the less, the Court has consistently ruled that before the disability gradings under Section 32 should be considered, the disability ratings should be properly established and contained in a valid and timely medical report of a company-designated physician or the third doctor agreed upon by the parties. In other words, the periods prescribed by the rules should still be complied with. Thus, the foremost consideration of the courts should be to determine whether the medical assessment or report of the company-designated physician was complete and appropriately issued; otherwise, the medical report shall be set aside and the disability grading contained therein cannot be seriously appreciated.²⁸ As above-discussed, no final and complete assessment was given in this case.

Lastly, we find no cogent reason to deviate from the CA's award of attorney's fees to the respondent. Considering that respondent was forced to litigate and incur expenses to protect his right and interest, he is entitled to a reasonable amount of attorney's fees pursuant to Article 2208(8)²⁹ of the New Civil Code. However, in accordance with prevailing jurisprudence,³⁰ the Court hereby imposes legal interest upon the disability benefits and attorney's fees awarded by the CA at the rate of 6% per annum, reckoned from the finality of this Decision until its full payment.

WHEREFORE, premises considered, the Petition is DENIED. The assailed Decision dated March 7, 2016 and Resolution dated May 19, 2016 of the Court of Appeals in CA G.R. SP No. 142966 are hereby AFFIRMED with MODIFICATION that the monetary awards made therein shall earn legal interest of 6% per annum from finality of this Decision until full payment.

SO ORDERED.

Peralta, C.J., (Chairperson), Caguioa, Lazaro-Javier and Lopez, JJ., concur.

Endnotes:

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¹ Rollo, pp. 3-33 .

² Penned by Associate Justice Franchito N. Diamante, with Associate Justices Japar B. Dimaampao and Carmelita Salandan Manahan, concurring id. at 41-56.

³ Id. at 58-61.

⁴ Id. at 43.

⁵ Id.

⁶ Id.

⁷ Id.

⁸ Id. at 50.

⁹ Id. at 50-51.

¹⁰ Id. at 44-46.

¹¹ Id. at 46.

¹² Id . at 47 .

¹³ Id. at 48.

¹⁴ Id. at 49.

¹⁵ Id. a t 55-56.

¹⁶ Id. at 60-61.

¹⁷ Manansala v. Marlow Navigation  Phils.,  Inc., 817 Phil. 84, 96 (2017), August 23, 2017 citing Magsaysay Maritime  Services v. Laurel , 707 Phil. 210, 225 (2013).

¹⁸ Dohle-Philams Manning  Agency Inc. v. Heirs of Andres  G. Gazzingan, represented  by  Lenie L. Gazzongan , 760 Phil. 861, 878 (2015) citing Magsaysay  Maritime Services v. Laurel, 707 Phil. 210, 225 (2013).

¹⁹ Supra note 17, at 96.

²⁰The Late Alberto B. Javier,et al. v. Philippine Transmarine Carriers, Inc., et al., 738 Phil. 374 (2014).

²¹ Id.

²² Id.

²³ Section 20(8)(3) , POEA-SEC (2000); Tradephil Shipping Agencies, Inc. v. Dela Cruz, 806 Phil. 338, 355-356 (2017).

²⁴ 765 Phil. 341, 362-363 (2015).

²⁵ See Pastor v.  Bibby Shipping  Philippines, Inc., G.R. No. 238842, November 19, 2018.

²⁶ Id .

²⁷Sunil v. OSM Maritime Services, Inc., 806 Phil. 505, 519 (2017).

²⁸Olidana v. Jebsens Maritime,Inc., 772 Phil. 234, 245 (2015).

²⁹ Article 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered,except:
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(8)In actions for indemnity under workmen's compensation and employer's liability laws;

³⁰See Lara's Gifts and Decors. Inc. v. Midtown Industrial Sales, Inc., G..R.No.225433, August 28, 2019.