Philippine Shipping Updates – Manning Industry [Download]

Court of Appeals denies award for loss of earnings

By:  Ruben Del Rosario, Managing Director, Del Rosario Pandiphil Inc., March 22, 2004

Seafarer suffered acute myocardial infarction while serving on board the MV Wave. He underwent a coronary bypass and was repatriated. On treatment by the company physician, the physician certified that under the Medical Examination Guidelines of the Department of Health, a person who has undergone a coronary bypass would be cleared for work after six months. Seafarer however presented a doctor’s certificate that he can no longer work as a seafarer. Seafarer eventually filed a claim for sickness wages, disability benefits and loss of earnings. The Labor Arbiter awarded US $920 as sickness allowance, US$60,000 as disability benefit, US$62,929 as loss of earning capacity and US$12,383.72. This was affirmed by the NLRC. On appeal to the Court of Appeals, the court ruled that the appeal was partly meritorious. The Court of Appeals ruled thus:

1. Sick wages. The award for sickness wages was reversed as seafarer was already paid his sickness wages. The Receipt and Release dated July 2, 2001 proved payment of US$920 as sickness wages.

2. Disability Benefits. The award of US$60,000 as disability benefits was granted. Seafarer’s medical certificate showed that he was no longer fit to resume his seafaring duties. Under the old POEA contract, the illness need not be work-related. It is enough that the illness occurred during the term of the employment contract. The Court explained that disability “does not mean an absolute helplessness but rather an incapacity to perform gainful work which is expected to be permanent…total disability does not require that the employee be absolutely disabled or totally paralyzed. What is necessary is that the injury must be such that he cannot pursue her usual work and earn therefrom…It is not the injury that is compensated but the incapacity to work resulting in the impairment of one’s earning capacity. The court has construed permanent total disability as the “lack of ability to follow continuously some substantially gainful occupation without serious discomfort or pain and without material injury or danger to life. It is therefore clear from established jurisprudence that the loss of one’s earning capacity determines the disability compensation one is entitled to.”

3. Loss of Earnings. The award for loss of earnings is reversed. In the words of the court: “Considering that (seafarer) had been declared unfit to perform his seafaring duties and that his earning capacity was likewise impaired and for which he was duly awarded the sum of US$60,000 as disability benefit, logic follows, that he should no longer be awarded the sum of US$62,929.72 for loss of earning capacity for to grant otherwise, would be repugnant to the rule of double recovery. Besides, nowhere in the POEA Standard Contract of Employment did it provide for such a grant. Hence, the award of US$62,929.72 for loss of earning capacity is deleted.”

4. Attorney’s Fees. The award for attorney’s fees of US$12,383.72 was not granted for lack of factual and legal basis. The Court reasoned thus: “The general rule is that attorney’s fees could not be recovered as part of damages because of the policy that no premium should be placed on the right to litigate. Attorney’s fees could not be awarded to a party simply, because the judgement as favorable to it, for that amounts to imposing a premium on the right to redress grievances in court. In the instant case, (vessel) had resisted the (seafarer’s) claims due to their honest believe tha the latter was still physically fit to return to his job as seaman as certified by their own company physician.

Sea Power Shipping Enterprises Inc. et.al. vs. NLRC, et.al., CA-GR SP No. 75052, February 27, 2004

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