TSM Shipping Philippines, Inc. v. Patiño
REITERATIONFacts
The Antecedents: Louie L. Patiño (respondent) was employed by TSM Shipping Phils., Inc. (TSM) for its foreign principal, Dampskibsselskabet Norden A/S (DNAS), as GP2/OS. On May 20, 2010, while working, respondent injured his right hand while securing a mooring rope. He was treated in Istanbul, Turkey, where a fracture of the 5th metacarpal bone was diagnosed. He was repatriated to Manila on May 24, 2010, and referred to the company-designated physician, Dr. Nicomedes G. Cruz (Dr. Cruz). Dr. Cruz recommended surgery, which was performed on June 8, 2010. Respondent underwent physical therapy. On August 17, 2010, Dr. Cruz issued an interim assessment of Grade 10 disability. Despite continuing therapy, respondent filed a complaint for total and permanent disability benefits on September 8, 2010. On October 11, 2010, Dr. Cruz issued a final disability rating of Grade 10, declaring respondent had reached maximum medical cure. Procedural History: Respondent consulted Dr. Nicanor Escutin on November 19, 2010, who assessed him with permanent disability unfit for sea duty. The Labor Arbiter awarded respondent US$80,000.00 under the AMOSUP CBA, plus sickness allowance, attorney's fees, moral, and exemplary damages. The National Labor Relations Commission (NLRC) modified this, awarding US$60,000.00 as permanent total disability benefits under the POEA-SEC, deleting damages and attorney's fees. The NLRC later reinstated attorney's fees. The Court of Appeals (CA) affirmed the NLRC's decision. Petitioners filed a Petition for Review on Certiorari with the Supreme Court. The Petition: Petitioners assail the CA's decision, arguing that respondent was assessed with Grade 10 disability by the company-designated physician, not Grade 1, and that the CA erred in awarding US$60,000.00 based solely on loss of earning capacity and the 120-day rule, disregarding the company physician's findings and the absence of a third doctor's opinion.
Issue(s)
Whether the Court of Appeals erred in affirming the award of US$60,000.00 as disability benefits despite the company-designated physician's assessment of Grade 10 disability, considering the prematurity of the complaint. Whether the sole claim of 'loss of earning capacity' and the '120-day rule' should equate to an award of US$60,000.00 despite the lack of substantial evidence for Grade 1 disability and the undisputed evidence of Grade 10 disability. Whether the medical findings of the company-designated physician should be upheld over that issued by the physician appointed by the respondent, and the implications of failing to follow the procedure for a third doctor's opinion. Whether the Court of Appeals erred in affirming the award for 10% attorney's fees despite the absence of proof of bad faith on the part of the petitioners, and whether the failure to rehire constitutes proof of disability.
Ruling
The Supreme Court granted the petition, set aside the decisions of the Court of Appeals and the NLRC, and ordered the petitioners to pay respondent US$10,075.00, representing the compensation for Grade 10 disability under the POEA-SEC.
Ratio Decidendi
On the prematurity of the complaint and entitlement to total and permanent disability compensation: The Court ruled that respondent's complaint for total and permanent disability benefits was premature. Under Article 192(c)(1) of the Labor Code and Section 2, Rule X of the Amended Rules on Employees' Compensation, temporary total disability lasting continuously for more than 120 days may be deemed permanent total disability. However, this is subject to the provisions of the POEA-SEC. Section 20 B(3) of the POEA-SEC states that a seafarer is entitled to sickness allowance until declared fit to work or the degree of permanent disability is assessed by the company-designated physician, not exceeding 120 days, which may be extended up to 240 days if further medical attention is required. Respondent filed his complaint on September 8, 2010, which was only 107 days after his repatriation on May 24, 2010. During this period, he was considered under temporary total disability as the 120/240-day period had not yet lapsed. Therefore, the complaint was filed prematurely. The Court found serious error in the lower tribunals' rulings that respondent's disability was permanent and total based on the 120-day rule and loss of earning capacity. The rule is that temporary total disability becomes permanent only when the company-designated physician declares it so within the 240-day period, or fails to make such a declaration after the lapse of the period. Dr. Cruz issued a final assessment of Grade 10 disability on September 29, 2010, which was within the 240-day period. This Grade 10 rating is equivalent to permanent partial disability under the POEA-SEC, not permanent total disability. Thus, respondent could not be entitled to the maximum benefit of US$60,000.00. On entitlement to total and permanent disability compensation: The Court found serious error in the lower tribunals' rulings that respondent's disability was permanent and total based on the 120-day rule and loss of earning capacity. The rule is that temporary total disability becomes permanent only when the company-designated physician declares it so within the 240-day period, or fails to make such a declaration after the lapse of the period. Dr. Cruz issued a final assessment of Grade 10 disability on September 29, 2010, which was within the 240-day period. This Grade 10 rating is equivalent to permanent partial disability under the POEA-SEC, not permanent total disability. Thus, respondent could not be entitled to the maximum benefit of US$60,000.00. On the weight of medical opinions: The Court emphasized that the medical opinion of the company-designated physician should prevail over that of the seafarer's physician if the procedure for a third doctor's opinion is not followed. The POEA-SEC clearly provides that the company-designated physician determines the fitness or unfitness for work. If a seafarer's doctor disagrees, a third doctor may be jointly agreed upon, whose decision is final and binding. In this case, respondent consulted Dr. Escutin after filing his complaint and after Dr. Cruz had already issued a final assessment. No third doctor was appointed. Therefore, Dr. Cruz's assessment of Grade 10 disability prevails. Furthermore, Dr. Cruz had closely monitored respondent's condition from repatriation until his last follow-up, including surgery and physical therapy, giving his assessment more weight. On attorney's fees and failure to rehire: The Court deleted the award of attorney's fees, finding no evidence that petitioners acted in bad faith. The litigation arose from a dispute over disability benefits, not from malicious denial of claims. The Court found no basis for the Labor Arbiter's pronouncement that petitioners' failure to rehire respondent was conclusive proof of his disability. There was no showing that respondent sought re-employment or that it was a matter of course for petitioners to re-hire him, nor was there evidence that he was denied employment elsewhere due to his condition.
Main Doctrine
A seafarer's claim for permanent total disability benefits is premature if filed before the lapse of the 120/240-day period for medical treatment and assessment by the company-designated physician, and the assessment of the company-designated physician prevails over that of the seafarer's physician if the procedure for a third doctor's opinion is not followed.