Hoegh Fleet Services v. Turallo
REITERATIONFacts
The Antecedents: Bernardo M. Turallo was hired as a Messman by Hoegh Fleet Services Phils., Inc. (Hoegh Fleet) on November 9, 2012, for a nine-month contract. He was declared "fit for sea duty" in his Pre-Employment Medical Examination (PEME). While on board the vessel "Hoegh Tokyo" in September 2013, Turallo experienced back and chest pain, which he reported to his superiors. He was referred to a doctor and subsequently to company-designated physicians upon arrival in Manila. After undergoing various medical tests, including MRI and EMG-NCV, the company-designated physician diagnosed him with "Acromioclavicular Joint Arthritis; Bicep Tear and Cuff Tear, Left Shoulder; Cervical Spondylosis Secondary to C4-C5, C5-C6; Disc Protrusion; Rule Out Ischemic Heart Disease." He underwent surgery for his cervical spine and was advised of a three-month rehabilitation period. Despite continuous rehabilitation, his shoulder pain persisted, prompting him to seek a second opinion. A government physician diagnosed him with "partially and permanently disabled" with impediments of Grade 8, Grade 10, and Grade 11, and declared him "permanently unfit in any capacity for further sea duties." Procedural History: Grievance proceedings were held, but the parties failed to reach a settlement regarding disability compensation. Turallo filed a Notice to Arbitrate. The Panel of Arbitrators ordered Hoegh Fleet to pay Turallo disability compensation of US$90,000.00, sickness allowance of US$3,084.54, and attorney's fees equivalent to 10% of the total monetary award. The Panel denied Hoegh Fleet's motion for reconsideration. The Court of Appeals (CA) affirmed the Panel's decision with modification, reducing the attorney's fees to US$1,000.00. Both Hoegh Fleet and Turallo filed separate petitions for review on certiorari before the Supreme Court. The Petition: Hoegh Fleet questioned Turallo's entitlement to total and permanent disability benefits, arguing that its company-designated physician issued a final Grade 8 disability assessment within the 240-day period. Turallo, on the other hand, questioned the CA's reduction of attorney's fees, seeking the reinstatement of the 10% award.
Issue(s)
Whether Turallo is entitled to total and permanent disability benefits. Whether the attorney's fees awarded are proper.
Ruling
The petitions are unmeritorious. The Supreme Court affirmed the Court of Appeals' decision with modification, increasing the attorney's fees to five percent (5%) of the total monetary award.
Ratio Decidendi
On the entitlement to total and permanent disability benefits: The Court reiterated that under Section 32 of the Philippine Overseas Employment Administration Standard Employment Contract (POEA-SEC), a seafarer is deemed totally and permanently disabled if the company-designated physician fails to arrive at a definite assessment of the seafarer's fitness to work or permanent disability within the period of 120 to 240 days. Even if the injury or disability is classified as partial and permanent (Grades 2 to 14), it can still be considered total and permanent if it incapacitates the seafarer from performing his usual sea duties for more than the prescribed periods. The Court found that the company-designated physician's assessment of Grade 8 disability, as reflected in the December 23, 2013 correspondence, was merely an "interim" assessment and not a final and definite one. The Court also noted that it does not disturb the factual findings of the Panel of Arbitrators and the CA that the company-designated physician failed to issue a final assessment within the prescribed periods. Therefore, under the contemplation of the law and jurisprudence, Turallo is considered totally and permanently disabled, warranting the award of US$90,000.00 as maximum disability compensation stipulated in their Collective Bargaining Agreement (CBA). On the attorney's fees: The Court agreed with the CA that the attorney's fees should be modified, but not to US$1,000.00. Citing Article 111 of the Labor Code, which provides that attorney's fees equivalent to 10 percent of the amount of wages recovered may be assessed against the culpable party, the Court clarified that this 10 percent is the maximum limit. The Court has previously ruled that the National Labor Relations Commission (NLRC) is not prevented from fixing an amount lower than the 10 percent ceiling when circumstances warrant. Considering that Turallo incurred legal expenses and was constrained to litigate with counsel in all stages of the proceedings, and in line with the liberal and compassionate spirit of the Labor Code prioritizing employee welfare, the Court deemed it more reasonable to grant five percent (5%) of the total monetary award as attorney's fees, instead of the US$1,000.00 awarded by the CA or the 10% initially awarded by the Panel.
Main Doctrine
A seafarer is deemed totally and permanently disabled if the company-designated physician fails to issue a final and definite assessment of the seafarer's fitness to work or permanent disability within the period of 120 to 240 days, even if the injury or disability is classified as partial and permanent under the POEA-SEC, provided it incapacitates the seafarer from performing his usual sea duties.