Philippine Shipping Update – Manning Industry

By:  Ruben Del Rosario, President, Del Rosario Pandiphil Inc., March 14, 2017 (Issue 2017/04)

In this issue:

Supreme Court holds that mere number of years under contract does not automatically mean that medical condition was brought about by employment
Update: Zambales / Provincial Coast Watch Environmental Monitoring System User Fee

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Supreme Court holds that mere number of years under contract does not automatically mean that medical condition was brought about by employment

The seafarer was engaged by the company for 22 years under different employment contracts.  His last employment was as Third Mate which he completed and eventually repatriated.  For 22 years, there was no account of any ailment he had contracted.

Prior to his next deployment, the seafarer underwent pre-employment examination (PEME).  Noticing that seafarer dragged his right leg, the PEME doctor referred him to a neurologist for consultation and clearance.  However, seafarer did not attend such consultation.

Two years after, the seafarer demanded payment for disability benefits and filed a complaint with the NLRC.  He alleged that during his last employment, he felt something wrong with his body and that he experienced abdominal pain and saw blood in his stool.  He also claimed that after repatriation, he underwent a series of medical check-ups with his private doctors, which revealed that he was suffering from L5-S 1 radiculopathy.

The Labor Arbiter awarded the seafarer with full disability benefits of US$60,000 which was affirmed by the NLRC and the Court of Appeals.  The appellate court even pronounced that the causative circumstances leading to seafarer's permanent disability must have transpired during the 22 years of his employment.

The company petitioned the Supreme Court which was granted and the claim was dismissed.

Seafarer reneged on his obligation to submit himself to a post-employment medical examination within 3 days

The Court noted that there was no dispute on the fact that seafarer failed to submit to a post- employment medical examination by a company-designated physician within 3 working days from disembarkation. The Labor Arbiter, the NLRC, and the appellate court excused the seafarer from complying with this requirement, reasoning that he had not been medically repatriated.

This excuse does not hold water. In the past, we have consistently held that the three-day rule must be observed by all those claiming disability benefits, including seafarers who disembarked upon the completion of contract.  The rationale for the rule is that reporting the illness or injury within 3 days from repatriation fairly makes it easier for a physician to determine the cause of the illness or injury. Ascertaining the real cause of the illness or injury beyond the period may prove difficult. To ignore the rule might set a precedent with negative repercussions, like opening floodgates to a limitless number of seafarers claiming disability benefits, or causing unfairness to the employer who would have difficulty determining the cause of a claimant's illness because of the passage of time. The employer would then have no protection against unrelated disability claims

No proof that seafarer suffered his condition during the term of his employment and is work-related

Claimants for disability benefits must first discharge the burden of proving, with substantial evidence, that their ailment was acquired during the term of their contract.  They must show that they experienced health problems while at sea, the circumstances under which they developed the illness, as well as the symptoms associate with it.

In this case, seafarer did not produce sufficient proof that he experienced his injury or its symptoms during the term of his contract.  What the seafarer submitted were medical reports which were all dated well past his disembarkation from the vessel.  None of the medical reports prove the symptoms of radiculopathy he alleged to have experienced during the term of his contract.  In contrast, the company submitted a Checklist/Interview Sheet for Disembarked Crew indicating that seafarer had no medical check-up in foreign ports; did not report any illness or injury to the master of the vessel or the ship doctor; and did not request a post-medical examination after disembarkation.  Also, based on the records, there is no documentation that seafarer had bouts of sickness, injury, or illness associated with radiculopathy in his 22 years of employment. Hence, based on the evidence, it cannot be reasonably concluded that seafarer contracted radiculopathy during the term of his contract.

Seafarer assessed with a final disability assessment within 120 days; POEA Contract specifies that disability not based on number of days of treatment but by disability grading

The Court noted that the NLRC  and the CA's award of permanent and total disability benefits in seafarer's favor was heavily anchored on his failure to obtain any gainful employment for more than 120 days after his medical repatriation.

Here, records reveal that 102 days from repatriation, the company-designated physician had already given his final assessment on seafarer when he diagnosed the latter with "Flexor Carpi Radialis Tendinitis, Right; Sprain, Right thumb; Extensor Carpi Ulnaris Tendinitis, Right" and gave a final disability rating of "Grade 11" pursuant to the disability grading provided in the 2010 POEA-SEC.  In view of the final disability rating made by the company-designated physician classifying seafarer's disability as merely permanent and partial - which was not refuted by seafarer’s physician except that seafarer's condition was classified as a Grade 10 disability - it is plain error to award permanent and total disability benefits to seafarer.

Moreover, it bears noting that as per respondent's contract with the company, his employment is covered by the 2010 POEA-SEC. It is well settled that the POEA-SEC is the law between the parties and, as such, its provisions bind both of them.  Under Section 20 (A) (6) of the 2010 POEASEC, the determination of the proper disability benefits to be given to a seafarer shall depend on the grading system provided by Section 32 of the said contract, regardless of the actual number of days that the seafarer underwent treatment.

In this case, seafarer's disability was already determined as only permanent and partial, in view of its classification as Grade 11 by the company-designated physician and Grade 10 by his chosen physician. As such, the award of full disability benefits in favor of respondent clearly has no basis and, consequently, must be struck down.

Also, the seafarer failed to show work-relation of his medical condition.  He merely alleged that in his last stint as a Third Mate, he was a watchstander. His job entailed that he was responsible to the captain for keeping the ship, its crew, and its cargo safe for eight hours a day. Still, he did not particularize the laborious conditions of his work that would cause his condition.

The appellate court mentioned that seafarer was consistently engaged in stressful physical labor throughout his 22 years of employment. But it did not define these purported stressful physical activities, nor did it point to any piece of evidence detailing his work.

Number of years of employment does not automatically mean that condition was brought about by employment

For the Labor Arbiter, the NLRC and the Court of Appeals, they ruled that whatever causative circumstances led to his permanent disability must have transpired during his 22 years of employment.

This reasoning was debunked by the Supreme Court as such blanket speculation alone will not rise to the level of substantial evidence. While the degree of determining whether the illness is work-related requires only probability, the conclusions of the courts must be still be based on real, and not just apparent, evidence. The tribunals should have gone beyond their inferences. They should have determined the duties of the seafarer and the nature of his injury, so that they could validly draw a conclusion that he labored under conditions that would cause his purported permanent and total disability.

Scanmar Maritime Services, Inc., Crown Shipmanagement Inc. and Victorio Esta vs. Wilfredo De Leon, G.R. No. 199977,January 25, 2017; First Division, Chief Justice Lourdes Sereno, ponente (Attys. Herbert Tria and Maricris Ferrer of DelRosario & DelRosario handled for vessels interests)

Update:  Zambales / Provincial Coast Watch Environmental Monitoring Use Fee

Update to Philippine Shipping Update Issue 2015/24, December 19, 2015
As an update, the Province of Zambales has issued Ordinance No. 2016-68 dated 14 November 2016 revising Ordinance No. 28 Series of 2015 which mandated the collection of a “Provincial Coastwatch Environmental Monitoring System User Fee”  for vessels passing through the territorial waters of or docking at any port in the Province of Zambales, Philippines. In the revised ordinance, the Province of Zambales imposed an environmental fee on vessels that “pollute the Provincial waters of Zambales.” The Province of Zambales invoked the IALA’s User Pay Services Scheme and the Polluter Pays Principal as justification for the imposition of this environmental fee. Beginning February 2017, vessels that passed through the “Provincial Territorial Waters” (defined in the ordinance as belt of coastal waters extending from 15 km. to 100 km. from the baseline) have received billings for this environmental fee.
Several legal issues were raised against the original ordinance. On 6 October 2015, the Department of Interior and Local Government (DILG) issued a letter to the Governor of the Province of Zambales regarding the collection of Coastal Watch Charges. The DILG's position is that the Province of Zambales, through the enactment of this ordinance, usurped the functions of the Philippine Coast Guard (PCG) to implement a vessel traffic services (VTS) system. The DILG also opined that the ordinance violates Art. 26 of the United Nations Convention on the Law of the Seas (UNCLOS) that allows charges only if there are specific services rendered to foreign vessels passing through the territorial waters of the coastal state. The Maritime Industry Authority (MARINA) issued a similar 16 February 2016 letter/opinion sharing our Law Firm’s view that the ordinance violates the UNCLOS and its letter, the MARINA stated a strong objection to the ordinance’s implementation. The Department of Justice (DOJ) also issued a 7 March 2016 letter/opinion which basically adopted the industry’s position that the ordinance’s imposition of charges violates the freedom of navigation provided under the UNCLOS.
The revised ordinance has not fully addressed the legal issues/objections raised by the industry as adopted/mentioned in the opinions of the DILG, MARINA and DOJ. Basically, it may still be argued that the imposition of the environmental fee under the revised ordinance still violates the freedom of navigation under the UNCLOS as fees are collected even if the Province of Zambales has not rendered “specific services” to the concerned vessels. The revised ordinance may also be challenged on the ground that fees are collected even if there is no proof that the concerned vessels has caused any pollution to the territorial waters of the Province of Zambales.  
Once again, we are taking up the issue of the revised ordinance’s validity to the concerned government agencies.  It is our position that concerned parties may invoke the DILG, MARINA and DOJ opinions to challenge the revised ordinance. In the meantime, we have again advised ship owners/operators who receive a billing statement to reply that the legality of the ordinance is being reviewed and in the meantime, it is strongly urged that any payment be deferred.

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