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Philippine Shipping Updates – Manning Industry [Download]
By: Ruben Del Rosario, Managing Director, Del Rosario Pandiphil Inc., October 1, 2007
Supreme Court issues new decision upholding “120 days” issue
For the fifth time, the Supreme Court has ruled that a seafarer who is unable to work for more than 120 days is deemed permanently disabled.
In Palisoc vs. Easways Marine, (G.R. 152273, September 11, 2007), Justice Antonio Carpio reiterated the Court’s ruling in Crystal Shipping, Remigio and Holland America.
The Court held that the Labor Code provision which states that “temporary total disability lasting continuously for more than one hundred twenty days” is considered “permanent total disability” is applicable to seafarers. The Court ruled Palisoc to be permanently disabled having been unable to work for more than 120 days.
The Court noted that the seafarer’s doctor gave a Grade 6 disability grading to seafarer. The Court however rejected this finding as the POEA contract states that it is the company physician who should determine seafarer’s grading disability. However as the company physician’s finding of “fit to work” was issued after 120 days; the Court remanded the case back to the Labor Arbiter to determine the proper disability grading.
It is surprising to note that the Court did not grant immediately a Grade 1 disability grading to the seafarer but instead remanded to case back to the Labor Arbiter to make such determination. Does this mean that the Labor Arbiter has options on determining the proper disability grading? Can the Labor Arbiter rule that the seafarer has less than Grade 1 disability grading? In any event, the ruling of the Labor Arbiter as to the disability grading can still be the subject of appeal. This is, of course, after any Motion for Reconsideration on the present decision.
The following is the current state of the 120 day issue::
1. There are now five decisions upholding the 120 days issue (Crystal Shipping, Remigio, Holland America, Micronesia and Palisoc). The decisions basically state that a seafarer who is unable to work for more than 120 days is considered permanently disabled. This ruling is based on Article 192 of the Labor Code which states that a temporary disability lasting for more than 120 days is considered permanent total disability.
2. It should be noted that the Supreme Court in its Crystal Shipping Resolution of 12 February 2007 ruled that disability should be determined by gradings and not by the number of days. This contradicts the decisions on the number of days as determinant of permanent disability.
3. The intervention of the manning industry on the Remigio case is still pending resolution. It is hoped that a Resolution on the Remigio case will be supportive of the manning industry.
4. The defence of work-relation is still a valid defence as work-relation is a condition for compensation under the new POEA contract. The Palisoc case is under the old POEA contract.
5. It is important that the company doctor issues a medical report on disability prior to the expiration of the 120 days.
Synopsis of Palisoc Decision
Palisoc was a fourth engineer working under the old POEA contract when he became ill with renal colic or gallstone impairment. He was repatriated on 23 March 1997. The company physician removed his gall bladder and declared him fit to work after his treatment which was beyond 120 days. Palisoc sought the opinion of his own doctor who declared him with an impediment of Grade 6.
The Labor Arbiter awarded Grade 6 or US$25,000 ruling that seafarer was unfit to work for more than 120 days. The NLRC reversed the ruling reasoning that the 120 days only refers to sickness wages and not to Palisoc’s disability.
On appeal, the Court of Appeals sustained the NLRC’s decision ruling that no disability benefits should be paid. The Court of Appeals ruled that a seafarer shall be granted the corresponding partial or total disability benefits under Section 30-A of the POEA-SEC on the basis of the assessment of the company-designated physician. In this case, the company physician made no such disability assessment as the seafarer was declared fit to work. Further, under Appendix 1 of the POEA-SEC, seafarer’s operation involving the removal of his gallbladder is not a compensable injury, disease or illness. The provisions of the Labor Code (Articles 191 and 192) refer to Employees Compensation and State Insurance Fund which is not applicable to this case.
The Supreme Court reversed the decision of the Court of Appeals. The Supreme Court ruled:
Labor Code Provision on Permanent Total Disability Applies to Seafarers
Article 192 of the Labor Code which defines permanent total disability as “temporary total disability lasting continuously for more than one hundred twenty days” applies to seafarers. The Court cited the Crystal Shipping and Remigio cases.
The Court reasoned that the POEA SEC was intended “to secure the best terms and conditions of employment of Filipino contract workers and ensure compliance therewith and to promote and protect the well-being of Filipino workers overseas.” A contract of labor is impressed with public interest and the New Civil Code expressly subjects it to “the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.”
Assessment of Disability by a Company-Designated Physician
The Supreme Court agreed with the ruling of the Court of Appeals that it is the company-designated physician that should determine the disability of the seafarer. This is the only requirement by the POEA standard employment contract. In this case, the company physician declared the seafarer as fit to work, and therefore no disability grading was made.
Petitioner (seafarer Palisoc) is entitled to Permanent Disability Benefits
The Court rejected the medical certificate of seafarer’s physician which assessed the disability at Grade 6. The company doctor’s report was “fit to work” but this was issued after 120 days. However, as Palisoc was unable to perform his work for more than 120 days, he is considered permanently disabled.
Case remanded back to Labor Arbiter
The Court did not award disability benefits but decided to remand the case back to the Labor Arbiter to determine the seafarer’s disability grade.
Mars C. Palisoc vs. Easways Marine Inc., et.al., G.R. No. 152273, September 11, 2007, Second Division, Justice Antonio Carpio, Ponente
(Please email This email address is being protected from spambots. You need JavaScript enabled to view it. if you want a copy of the decision)
(Author’s Note: Del Rosario was only involved in the Remigio decision which is presently on Motion for Reconsideration)
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