SC Clarifies Conditions on Seafarer Disability Benefit Claims
June 30, 2023
Certain conditions must be met before a seafarer can be barred from claiming disability benefits due to concealment of pre-existing illnesses.
Thus ruled the Supreme Court’s Second Division, in a 14-page Decision penned by Justice Mario V. Lopez, granting the petition for review on certiorari filed by Loue B. Mutia. The petition challenged the rulings by the Court of Appeals and the National Labor Relations Commission (NLRC) which had denied the award of disability benefits in favor of Mutia.
In 2014, Mutia, an assistant cook at the vessel M/V Norwegian Jade, owned by C.F. Sharp Crew Management, Inc. (C.F. Sharp Crew), filed a claim for total and permanent disability benefits following incidents of severe back pain and vision disorder while on the job which resulted in his repatriation. Under the Collective Bargaining Agreement covering Mutia’s employment, employees were entitled to a maximum benefit of USD 100,000.00 in case of disability resulting in loss of profession.
Mutia claimed that he was incapacitated to perform his duties for more than 120 days and that the company-designated physician failed to make a definitive assessment of his medical condition within 120 days from the time he was repatriated.
In response, C.F. Sharp Crew argued that Mutia was disqualified from claiming permanent total disability benefits because he materially concealed a pre-existing medical condition during his pre-employment medical examination (PEME). C.F. Sharp Crew claimed that Mutia stated he had no pre-existing medical conditions despite earlier being diagnosed with acute otitis media, an infection of the middle ear.
The Labor Arbiter ruled in favor of Mutia, rejecting C.F. Sharp Crew’s defense because Mutia’s prior illness, the ear infection, had no causal connection with Mutia’s present medical illnesses, namely: “L5-S1 dessication with annual tear,” “multiple sclerosis,” “blurring of vision,” and “neuromyelitis optica.”
The NLRC, however, reversed the Labor Arbiter, holding that Section 20(E) of the 2010 Philippine Overseas Employment Administration Standard Employment Contract (POEA-SEC), which disqualifies seafarers from claiming disability benefits if they conceal their previous medical condition, applies to all pre-existing illnesses or conditions, with no qualification and exception. The Court of Appeals upheld the NLRC’s ruling, prompting Mutia to file his petition before the Supreme Court.
In ruling in favor of Mutia, the Supreme Court clarified that C.F. Sharp Crew did not dispute that Mutia’s medical conditions were work-related and acquired during the term of his contract. It was also established that the company-designated physician failed to issue a final medical assessment within the prescribed period of 120 days from the time Mutia was repatriated, which makes his disability permanent and total following the Court’s 2015 ruling in Elburg Shipmanagement Phils. v. Quiogue, Jr. Hence, the only issue was whether Mutia was barred from his disability claim under Section 20(E) of the 2010 POEA-SEC for concealing a pre-existing medical condition.
In resolving the issue, the Court held that Section 20(E) must be interpreted in harmony with the other provisions of the 2010 POEA-SEC.
The Court noted that Section 20(A) states that the employer shall be liable when a seafarer suffers a work-related injury or illness during the contract term.
Further, Section 1(A)4 requires that the principal/employer/master/company must provide a seaworthy ship and take all reasonable precautions to prevent accident, injury, or sickness to the seafarer. Section 1(A)6 also requires them to provide a workplace conducive for the promotion and protection of the health of the seafarers in accordance with the Maritime Labor Convention 2006, which states that seafarers should be “protected from the financial consequences of sickness, injury or death occurring in connection with their employment.”
Harmonizing all these provisions, the Court held that the reasonable interpretation of Section 20(E) of the 2010 POEA-SEC would be that the concealed illness must be related to the present disability claim for injury or illness. A contrary interpretation would lead to an absurd situation where employers are absolved from liability arising from a work-related illness or injury even if they are negligent in their duties, leaving seafarers disadvantaged, said the Court.
The Court also stressed that consistent with the constitutional policy guaranteeing the full protection of labor, the 2010 POEA-SEC provisions must be construed fairly, reasonably, and liberally in favor of the seafarer.
The Court thus laid down the following conditions that must be complied with before an employer can be freed from liability for a seafarer’s disability arising from a pre-concealed illness or injury:
- The seafarer is suffering from a pre-existing illness or injury as defined under Item 11(b) of the 2010 POEA-SEC;
- The seafarer intentionally concealed the illness or injury; and
- The concealed pre-existing illness or injury has a causal or reasonable connection with the illness or injury suffered during the seafarer’s contract.
“In the absence of these conditions, the employers remain liable for work-related injury or illness consistent with their duties to provide a seaworthy ship and to take precautions to avoid the seafarer’s accident,” said the Court.
In the case of Mutia, the Court found that all the three conditions were not met.
Under Item 11(b) of the 2010 POEA-SEC, pre-existing illness refers to a continuing illness or condition that cannot be diagnosed during the PEME. In the case of Mutia, however, there was no proof that Mutia’s ear condition still persisted at the time of the PEME. In addition, the PEME itself diagnosed Mutia as having “mild hearing loss.” Hence, Mutia’s ear infection did not qualify as a pre-existing illness, the Court ruled.
On the second condition, the Court held that the unrelatedness of Mutia’s prior ear illness and his present medical conditions negated an intent to profit from the concealment.
Finally, the third condition was likewise absent since it was not established by C.F. Sharp Crew that Mutia’s prior ear condition caused or aggravated his present medical illnesses of “L5-S1 dessication with annual tear,” “multiple sclerosis,” “blurring of vision,” and “neuromyelitis optica.”
The Court concluded that Mutia is therefore entitled to a total and permanent disability benefit of USD 100,000.00 under the CBA, plus 10% attorney’s fees, with a legal interest of 6% upon finality of the decision until fully paid.
FULL TEXT OF G.R. NO. 242928 dated June 27, 2022 at: https://sc.judiciary.gov.ph/242928-loue-b-mutia-vs-c-f-sharp-crew-mgt-inc-norwegian-cruise-lines-m-v-norwegian-jade-and-juan-jose-p-rocha/
(Courtesy of the Supreme Court Public Information Office)