Philippine Shipping Update – Manning Industry

By:  Ruben Del Rosario, President, Del Rosario Pandiphil Inc., May 4, 2017 (Issue 2017/07)

In this issue:

Supreme Court upholds disability assessment issued by the company-designated physician; rules that disability schedule in POEA Contract should be seriously observed

OWWA membership fee of US$25 now valid for two years regardless of contract duration or change of employer, principal or manning agent

Update:  Zambales / Provincial Coast Watch Environmental Monitoring System User Fee; inter-agency group to ask for opinion from the Office of the President
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Supreme Court upholds disability assessment issued by the company-designated  physician; rules that disability schedule in POEA Contract should be seriously observed

The seafarer suffered a fracture to his right hand while securing a mooring rope.  He was brought to a shore medical facility where his affected hand was placed in a cast and thereafter repatriated.

Upon his repatriation, he was referred to the company-designated doctor for examination and treatment.  After 85 days of treatment, the company-designated doctor issued to the seafarer an interim disability assessment of grade “10”.  The seafarer, on the 107th day of his treatment, filed a case for disability benefits with the NLRC against the company.  Thereafter, the company-designated physician declared the seafarer to have reached maximum medical cure with a grade “10” disability.

More than 2 months after filing the complaint, the seafarer sought the medical opinion of his personal doctor who assessed him to be physically unfit to perform the job of the seaman.  On this basis, he anchors his claim for maximum disability benefits.  On the other hand, the company maintains that the seafarer should only be entitled to US$10,075 based on the grade “10” disability assessment of the company-designated physician.

The Labor Arbiter, the NLRC and the Court of Appeals all found for the seafarer and awarded him maximum disability benefits.  They argued that since the seafarer was unable to work for more than 120 days, and that the medical opinion of seafarer’s personal doctor that he was unfit to work was credible.

When the case reached the Supreme Court, the award of disability benefits was modified to US$10,075 based on the grade “10” assessment of the company-designated physician.

The complaint has no cause of action and was prematurely filed

The Court again explained the manner by which the 120/240 day rule works.  For the duration of the treatment but in no case to exceed 120 days, the seaman is on temporary total disability as he is totally unable to work.  If the 120 days initial period is exceeded and no such declaration is made because the seafarer requires further medical attention, then the temporary total disability period may be extended up to a maximum of240 days, subject to the right of the employer to declare within this period that a permanent partial or total disability already exists. The seaman may of course also be declared fit to work at any time such declaration is justified by his medical condition.  

The Court noted that upon seafarer’s repatriation, he was given extensive medical attention by the company-designated physician. Thereafter, an interim assessment of Grade 10 was given by the company-designated physician as seafarer was still undergoing further treatment and physical therapy. However, 107 days after repatriation, seafarer filed a complaint for total and permanent disability benefits. During this time, he was considered under temporary total disability inasmuch as the 120/240-day period had not yet lapsed when the complaint was filed.  Evidently, the complaint was prematurely filed.

Moreover, it is significant to note that when the seafarer filed his complaint, he was armed only with the interim medical assessment of the company-designated physician and his belief that his injury had already rendered him permanently disabled. It was only after the filing of such complaint that he sought the opinion of his own physician.

As such, the complaint should have been dismissed at the first instance or lack of cause of action.

The company-designated doctor’s opinion should prevail

The POEA-SEC clearly provides that when a seafarer sustains a work-related illness or injury while on board the vessel, his fitness or unfitness for work shall be determined by the company-designated physician. However, if the doctor appointed by the seafarer makes a finding contrary to that of the assessment of the company-designated physician, a third doctor may be agreed jointly between the employer and the seafarer and the latter's decision shall be final and binding on both of them. The Court has held that non-observance of the requirement to have the conflicting assessments determined by a third doctor would mean that the assessment of the company-designated physician prevails.

In the absence of a third and binding opinion, the Court was left with no option but to hold the assessment of the company-designated doctor of seafarer's disability final and binding.

The Court further added that at any rate, more weight should be given to this assessment as the company-designated physician was able to closely monitor seafarer’s condition from the time he was repatriated until the issuance of the final medical assessment.  The extensive medical attention given by the company-designated doctor enabled him to acquire a detailed knowledge of seafarer’s medical condition. Under the supervision of the company-designated physician, seafarer underwent surgery and physical therapy. On the basis of the medical records and the results obtained from the medical treatment, said doctor arrived at a definite assessment of seafarer's condition. Having extensively monitored and treated seafarer's injury, the company-designated physician’s diagnosis deserves more weight than seafarer's own doctor.

Schedule of Disability under the POEA Contract should be respected

In closing the Court held that Section 32 of the POEA-SEC provides for a schedule of disability compensation which is often ignored or overlooked in maritime compensation cases. Section 32 laid down a Schedule of Disability or Impediment for Injuries Suffered and Diseases including Occupational Diseases or Illness Contracted which provides that in case of a permanent total or partial disability, the seafarer shall be compensated in accordance with Section 32. Section 32 further declares that any item in the schedule classified under Grade 1 shall be considered or shall constitute total and permanent disability. Therefore, any other grading constitutes otherwise. It should be stressed that it is about time that the schedule of disability compensation under Section 32 be seriously observed.

TSM Shipping Phils., Inc. and/or Dampskibsselskabet Norde A/S and/or Capt. Castillo vs. Louie Patino, G.R. No. 210289,March 20, 2017; First Division, Associate Justice Mariano Del Castillo, ponente (Attys. Charles Dela Cruz and Jerome Pampolina  of Del Rosario & Del Rosario handled for vessels interests)

OWWA membership fee of US$25 now valid for two years regardless of contract duration or change of employer, principal or manning agent

The Implementing Rules and Regulations (IRR) of the Overseas Workers Welfare Administration Act has now been issued.  

As stated in our previous update, a salient provision of the IRR is that OWWA membership contribution of US$25 is now valid for two (2) years regardless of contract duration, change of employer or principal or recruitment/manning agency.  Previously, the contribution of US$25 was valid for 2 years or upon expiration of contract, whichever comes first.  

Update: Zambales / Provincial Coast Watch Environmental Monitoring System User Fee; inter-agency group to ask for opinion from the Office of the President

The Maritime and Ocean Affairs Office (MOAO) of the Department of Foreign Affairs called for an inter-agency meeting last 7 April 2017 to discuss the Zambales Ordinance which imposes “environmental charges” to all vessels that enter the “territorial waters’ of the province of Zambales.  Present in the meeting were representatives from the Office of the President, Department of Interior and Local Government and the Philippines’ Permanent Representative to the International Maritime Organization. Del Rosario & Del Rosario was likewise invited to the inter-agency meeting.  
 
MOAO’s position is that the Ordinance is not consistent with Article 26 of the UNCLOS which prohibits the imposition of the “environmental fees”.  In collecting said fees, the ordinance may be seen as a “disguised toll” on passage since it in effect places a restraint on the exercise of innocent passage in the territorial sea (including the freedom of navigation in the exclusive economic zone), a situation which Article 26 precisely aims to pre-empt.  We have seconded this observation of the MOAO.  

However, MOAO notes that the Province of Zambales may implement the Ordinance unless and until a court orders the suspension of such action pending the determination of its legality.
 
We advised all concerned that we have formally informed MARINA, the Department of Justice and the Philippine Coast Guard regarding the revised Ordinance of Zambales and have sought their position on the same.
 
It was agreed in the meeting that a formal opinion must be sought from the Office of the President as well as through the Office of the Deputy Executive Secretary for Legal Affairs regarding the legality of the said Ordinance.
 
We shall report updates in future issues.

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2017 AsiaLaw Profiles:  Outstanding in Shipping, Maritime & Aviation; Recommended in Dispute Resolution  & Litigation, Insurance, Intellectual Property, Labour & Employment

“Del Rosario & Del Rosario is more or less unrivalled when it comes to maritime work in the Philippines” from Asia-Pacific, The Legal 500, 2014, p. 497

“Del Rosario & Del Rosario is often first port of call for employment law within the maritime industry, where it represents shipowners, agents, insurers and port owners.” Asia-Pacific, The Legal 500, 2014, p. 494

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