Abella vs. Abosta Shipmanagement Corporation

A company-designated physician's final medical assessment must not only be issued within the mandated 120/240-day periods but must also be furnished to the seafarer within those periods; failure to do so renders the seafarer totally and permanently disabled by operation of law, even if the assessment states a partial disability rating. The rule applies where the seafarer is merely verbally informed of the rating and receives a copy only during the mandatory conference before the Labor Arbiter, 396 days after repatriation.

Abella was employed as an oiler by Abosta, on behalf of its foreign principal Panstar, on board M/V Sino Trader under a 10-month employment contract; Alex S. Estabillo was Abosta's Vice-President and Managing Director. Claims for injury or illness suffered by seafarers during the term of their employment contract are governed by Section 20(A) of the POEA-SEC, which requires the seafarer to report to a company-designated physician and provides for a third-doctor mechanism if the seafarer's chosen physician disagrees with the company-designated assessment. Section 10 of Republic Act No. 10022 makes the principal employer, recruitment/placement agency, and corporate officers jointly and solidarily liable for money claims.

Abella worked as an oiler for Abosta, on behalf of its foreign principal Panstar, on board M/V Sino Trader under a 10-month employment contract. He was deployed on March 20, 2016. On June 23, 2016, Abella and his crewmates were ordered to carry the ship's supplies and food provisions. While carrying a sack of rice, Abella allegedly felt a sudden snap on his left lower back with a sharp pain radiating down to his thigh/leg. The incident was immediately reported to his superiors, and Abella was given pain relievers and a waist protector. Because his condition did not improve, he was brought to the Maritime Medical Centre Pte., Ltd. in Singapore, where he was diagnosed with "Lumbar spondylosis with discopathy at L4L5L5S1" and prescribed medication. Due to persistent pain, he was again brought to a hospital in Brazil. On August 6, 2016, Abella was repatriated to the Philippines for further medical treatment.

When Abella arrived in the Philippines, he immediately reported to the company-designated physician at NGC Medical Specialist Clinic on August 8, 2016. After running a series of laboratory tests, the company-designated physician diagnosed him with "Herniated Nucleus Pulpos L3-L4, Disc Protrusion L5-S1 and L-4 Radiculopathy," and recommended that he undergo physical therapy. Abella claimed, however, that respondents ceased his treatment and rehabilitation on February 16, 2017. During a conference held on February 20, 2017, respondents informed Abella that he was suffering from Grade 8 disability and offered him the corresponding disability benefits in the amount of US$16,795.00. Abella allegedly requested further treatment or an improved monetary offer, but his requests were denied. On April 25, 2017, Abella consulted an orthopedic surgeon, Dr. Cesar H. Garcia, who diagnosed him with "Disc Protrusion L5S1 & Radiculopathy" and declared him permanently unfit for sea duty in any capacity. The April 25, 2017 Medical Assessment issued by Dr. Garcia stated: Present PE Findings: (+) SLRT (L) RT 25; (+) Spasm Lumbosacral paraspinal muscles; Final Dx: Disc Protrusion L5S1 & Radiculopathy; Recommendation: Patient is permanently unfit for sea duty in whatever capacity.

Abella instituted a complaint for payment of total and permanent disability benefits, medical expenses, damages, and attorney's fees on May 24, 2017 following respondents' alleged refusal to pay him total and permanent disability benefits. In his Position Paper dated September 6, 2017, Abella argued that he should be deemed totally and permanently disabled because his condition had rendered him incapacitated to work as a seafarer for more than 240 days, and the company-designated physician failed to timely issue a final medical assessment. He emphasized that respondents were not able to present any piece of evidence of a final medical assessment even during the mandatory conferences before the Labor Arbiter. Respondents, in their Position Paper dated September 4, 2017, outlined the timeline of Abella's treatment and attached the corresponding medical reports, including the alleged final disability assessment issued by the company-designated physician on November 22, 2016, stating that Abella was suffering from Grade 8 disability, equivalent to moderate rigidity or 2/3 loss of motion or lifting power of the trunk. They contended that the November 22, 2016 Medical Assessment should prevail and stressed that Abella failed to provide them a copy of the medical assessment of his doctor of choice prior to his filing of the complaint.

Meanwhile, the parties agreed to refer the conflicting medical findings to a third doctor. The appointed third doctor, Dr. Reneil Jay Peña, recommended that Abella undergo Magnetic Resonance Imaging (MRI) scan and Electromyography (EMG) test. Despite the release of the MRI scan and EMG test results, the medical assessment of Dr. Peña was not secured. Abella alleged that the non-completion of the conflict-resolution procedure was due to respondents' fault, while respondents claimed otherwise. The results of the medical tests ordered by the third doctor showed that Abella was suffering from "chronic L4 radiculopathy, left."

The Labor Arbiter found that the absence of a third doctor opinion did not preclude deciding the case on the evidence and gave more weight to the company-designated physician's reports, which were detailed, supported by objective procedures, and demonstrated an outline of medical treatment, while Dr. Garcia's April 25, 2017 Medical Assessment was based only on a physical examination without supporting tests and previous reports. The NLRC found that the company-designated physician issued a final medical assessment on November 22, 2016, or 108 days from repatriation, and that this assessment prevailed over Dr. Garcia's assessment, which was issued after a single consultation and did not contain a disability rating; the third doctor's test results alone, without a third doctor assessment, did not warrant a finding of total and permanent disability. The Court of Appeals found that Abella failed to establish his claim by substantial evidence, that the company-designated physician was more familiar with his medical status, and that his inability to work after 120/240 days did not automatically entitle him to total and permanent disability benefits absent evidence that he sought re-employment with other manning agencies but was refused because of his injury.

• Conflict-Resolution Procedure: Petitioner faulted respondents for suddenly refusing to continue with the conflict-resolution procedure after they learned of the alleged unfavorable MRI scan and EMG test results; the non-completion of the procedure cast serious doubt on his condition, and such doubt should be resolved in his favor.
• Total and Permanent Disability: Petitioner claimed that the MRI scan and EMG test results, among others, constituted proof that his disability had incapacitated him to work as a seafarer for more than 240 days, and that the company-designated physician failed to issue a conclusive and definite medical assessment.
• Insufficiency of Grade 8 Assessment: Petitioner argued that while the November 22, 2016 Medical Assessment stated that he was suffering from Grade 8 disability, it failed to mention whether his condition would improve or whether he could still continue to work as a seafarer.
• Bad Faith and Precedent: Petitioner postulated that affirming the Court of Appeals Decision would, in effect, reward respondents for their bad faith and set a precedent for employers.
• Damages and Attorney's Fees: Petitioner prayed for damages and attorney's fees, but the decision notes that he did not discuss said claims.

• Conflict-Resolution Procedure: Respondents countered that it was Abella who insisted on filing pleadings before the Labor Arbiter instead of completing the conflict-resolution procedure by securing the assessment of the third doctor; this was fatal to his claim.
• Grade 8 Benefits: Respondents argued that Abella should only be entitled to Grade 8 disability benefits as stated in the November 22, 2016 Medical Assessment.
• Weight of Company-Designated Assessment: Respondents maintained that the only reasonable measure to determine Abella's disability was the November 22, 2016 Medical Assessment, which they duly presented and furnished to Abella's counsel during one of the mandatory conferences held before the Labor Arbiter, and that the Court of Appeals did not err in giving more weight to the medical assessment issued by the company-designated physician.
• Damages and Attorney's Fees: Respondents denied liability for damages and award of attorney's fees for lack of bad faith on their part.

• Total and Permanent Disability Benefits: Whether Abella is entitled to total and permanent disability benefits under the POEA-SEC.
• Moral and Exemplary Damages and Attorney's Fees: Whether Abella is entitled to moral and exemplary damages and attorney's fees.

• Total and Permanent Disability Benefits: Yes. The company-designated physician and respondents failed to furnish Abella a copy of the November 22, 2016 Medical Assessment within the 120/240-day periods mandated by law; without proper notice, he is deemed totally and permanently disabled by operation of law and entitled to US$60,000.00 under the POEA-SEC.
• Moral and Exemplary Damages and Attorney's Fees: No as to moral and exemplary damages; yes as to attorney's fees. Bare allegations of sleepless nights, anxiety, wounded feelings, financial difficulties, and bad faith are insufficient for moral and exemplary damages, but attorney's fees at 10% of the total judgment award are warranted under Article 2208 of the Civil Code.

• Total and Permanent Disability Benefits: Although a Rule 45 petition in labor cases is generally limited to questions of law and review of grave abuse of discretion, the Court entertained the case because of misapprehension of facts or grave abuse of discretion. Claims for disability benefits for injuries suffered by seafarers on board or during the term of their employment contract are governed by Section 20(A) of the POEA-SEC. Under that provision, the seafarer must report to the company-designated physician within three days from repatriation, while the company-designated physician has the corresponding obligation to issue a final assessment of the seafarer's disability within the periods mandated by law. It is not enough for the company-designated physician to issue a medical assessment within 120 or 240 days from repatriation; to be binding, the medical assessment must be final, definite, and conclusive, otherwise the law will step in and consider the seafarer totally and permanently disabled. A final, conclusive, and definite medical assessment must clearly state whether the seafarer is fit to work or the exact disability rating, or whether the illness is work-related, and without any further condition or treatment; it should no longer require any further action on the part of the company-designated physician and must be issued after all possible treatment options have been exhausted within the periods allowed by law. Apart from issuing the assessment, the company-designated physician and/or the company must also furnish the seafarer a copy thereof. As held in Gere vs. Anglo-Eastern Crew Management Phils., Inc., the company-designated physician must not only "issue" a final medical assessment but must also "give" it to the seafarer, who must be fully and properly informed of his medical condition, including the results of examinations, treatments, diagnosis and prognosis, and disability grading; proper notice is a cornerstone of due process. Here, respondents and the company-designated physician failed to furnish Abella a copy of the November 22, 2016 Medical Assessment within the periods mandated by law. Instead, respondents merely informed Abella of his Grade 8 disability rating during the conference held on February 20, 2017. Respondents admitted that they only furnished Abella a copy of the November 22, 2016 Medical Assessment through his counsel during one of the mandatory conferences before the Labor Arbiter; the assessment, attached to respondents' Position Paper, was furnished on September 8, 2017, or 396 days from Abella's repatriation. A verbal notice of the seafarer's disability rating is not enough. The seafarer must be furnished a copy of the final medical assessment to evaluate it and decide whether he agrees; if he does not agree, he may bring it to an independent doctor who can better understand the company-designated physician's opinion through a copy of the assessment. Abella could not be expected to make an informed decision based on a mere verbal declaration. Insofar as he was concerned, there was no final medical assessment issued by the company-designated physician to contest, so he need not seek the opinion of an independent physician, more so refer the matter to a third doctor. Without proper notice of the November 22, 2016 Medical Assessment to Abella, he is already deemed totally and permanently disabled by operation of law and entitled to the corresponding disability benefits under the POEA-SEC; the medical assessment of Dr. Garcia and the absence of a medical assessment from a third doctor became immaterial.
• Moral and Exemplary Damages and Attorney's Fees: The Court found no basis to award moral and exemplary damages in favor of Abella. As held by the Labor Arbiter and the NLRC, Abella's bare allegations — that he and his family suffered sleepless nights, serious anxiety, wounded feelings and financial difficulties, and that respondents acted in bad faith — were not sufficient to award damages. Nonetheless, Abella is entitled to attorney's fees equivalent to ten percent (10%) of the total judgment award pursuant to Article 2208 of the Civil Code. In accordance with prevailing jurisprudence, a legal interest of six percent (6%) per annum shall also be imposed on the total monetary award. Respondents shall be jointly and solidarily liable to Abella for the total judgment award in accordance with Section 10 of R.A. 10022.

• Final, Conclusive, and Definite Medical Assessment — A company-designated physician's medical assessment is binding only if it is final, definite, and conclusive. It must clearly state whether the seafarer is fit to work or the exact disability rating, or whether the illness is work-related, and must be without any further condition or treatment. It should no longer require any further action on the part of the company-designated physician and must be issued after all possible treatment options have been exhausted within the periods allowed by law. In this case, the November 22, 2016 Medical Assessment did not bind Abella because it was not furnished to him within the mandated periods.
• Duty to Furnish a Copy of the Final Medical Assessment — The company-designated physician must not only issue a final medical assessment but must also give it to the seafarer. The seafarer must be fully and properly informed of his medical condition, including the results of his medical examinations, the treatments extended to him, the diagnosis and prognosis, and his disability grading. The medical certificate should be personally received by the seafarer or, if not practicable, sent by any other means sanctioned by present rules. Proper notice is a cornerstone of due process. A verbal notice of the disability rating is insufficient. In this case, respondents' failure to furnish Abella a copy of the November 22, 2016 Medical Assessment within the 120/240-day periods violated due process and the POEA-SEC guidelines.
• Total and Permanent Disability by Operation of Law — If the company-designated physician fails to issue a final, conclusive, and definite medical assessment, or fails to furnish the seafarer a copy thereof within the periods mandated by law, the seafarer is deemed totally and permanently disabled by operation of law and is entitled to the corresponding disability benefits under the POEA-SEC. In this case, because Abella was not properly notified of the November 22, 2016 Medical Assessment, he was deemed totally and permanently disabled, making Dr. Garcia's assessment and the absence of a third-doctor assessment immaterial.
• Joint and Solidary Liability under the Migrant Workers' Act — Under Section 10 of Republic Act No. 10022, the principal employer and the recruitment/placement agency are jointly and severally liable for money claims, and if the recruitment/placement agency is a juridical being, its corporate officers and directors are themselves jointly and solidarily liable with the corporation. In this case, Abosta, Panstar, and Estabillo were held jointly and severally liable for the total judgment award.
• Attorney's Fees under Article 2208 of the Civil Code — In the absence of stipulation, attorney's fees and expenses of litigation cannot be recovered except in the cases enumerated by law, including when the court deems it just and equitable that they be recovered; in all cases, the attorney's fees must be reasonable. In this case, Abella was awarded attorney's fees equivalent to ten percent (10%) of the total judgment award.

• "A final, conclusive, and definite medical assessment must clearly state whether the seafarer is fit to work or the exact disability rating, or whether such illness is work-related, and without any further condition or treatment. It should no longer require any further action on the part of the company-designated physician and it is issued by the company-designated physician after he or she has exhausted all possible treatment options within the periods allowed by law." — This passage defines the standard for a binding company-designated physician's assessment, which the Court applied to hold that the November 22, 2016 Medical Assessment did not bind Abella because it was not furnished within the mandated periods.
• "In following the foregoing guidelines [in Elburg], it must be emphasized that the company-designated physician must not only "issue" a final medical assessment of the seafarer's medical condition. He must also — and the Court cannot emphasize this enough — "give" his assessment to the seafarer concerned. That is to say that the seafarer must be fully and properly informed of his medical condition." — Quoted from Gere vs. Anglo-Eastern Crew Management Phils., Inc., this passage establishes the duty to furnish the seafarer a copy of the final medical assessment and grounds that duty in due process.
• "Without proper notice of the November 22, 2016 Medical Assessment to Abella, he is already deemed totally and permanently disabled by operation of law, and therefore entitled to the corresponding disability benefits under the POEA-SEC. The medical assessment of Dr. Garcia as well as the absence of a medical assessment from a third doctor become immaterial." — This is the ratio decidendi on the disability claim: failure to give proper notice of the company-designated physician's assessment rendered Abella totally and permanently disabled by operation of law.
• "To require the seafarer to seek the decision of a neutral third-party physician without primarily being informed of the assessment of the company-designated physician is a clear violation of the tenets of due process, and shall not be countenanced by the Court." — This passage explains why the seafarer cannot be compelled to pursue the third-doctor procedure before receiving a copy of the company-designated physician's assessment.

• Gere vs. Anglo-Eastern Crew Management Phils., Inc., G.R. Nos. 226656 & 226713, April 23, 2018, 862 SCRA 432 — Controlling precedent cited and quoted for the rule that the company-designated physician must not only issue but also give the final medical assessment to the seafarer, and that failure to do so violates due process.
• Jebsens Maritime, Inc. vs. Mirasol, G.R. No. 213874, June 19, 2019, 905 SCRA 112 — Cited for the definition of a final, conclusive, and definite medical assessment, which the Court applied in determining whether the November 22, 2016 Medical Assessment could bind Abella.
• Fuji Television Network, Inc. vs. Espiritu, 749 Phil. 388 (2014) — Cited for the rule that a petition for review on certiorari under Rule 45 in labor cases is limited to reviewing whether the Court of Appeals correctly determined the presence or absence of grave abuse of discretion and deciding other jurisdictional errors of the NLRC.
• Cirtek Employees Labor Union-Federation of Free Workers vs. Cirtek Electronics, Inc., G.R. No. 190515, June 6, 2011, 650 SCRA 656 — Cited for the exception allowing the Court to entertain questions of fact when there is misapprehension of facts or grave abuse of discretion, which justified the Court's review in this case.

• Section 20(A), POEA Standard Employment Contract (POEA-SEC) — Governs compensation and benefits for injury or illness suffered by a seafarer during the term of the employment contract. It requires the seafarer to submit to a post-employment medical examination by a company-designated physician within three working days upon return, obliges the employer to provide medical treatment until the seafarer is declared fit or the degree of disability is established, provides sickness allowance for a period not exceeding 120 days, and allows a third doctor to be agreed upon jointly if the seafarer's doctor disagrees with the company-designated assessment. The Court applied this provision to hold that the company-designated physician must issue a final, conclusive, and definite assessment and furnish a copy to the seafarer within the mandated periods; failure to do so renders the seafarer totally and permanently disabled by operation of law.
• Section 10, Republic Act No. 10022 (Migrant Workers' Act of 1995, as amended) — Provides that the liability of the principal employer and the recruitment/placement agency for money claims is joint and several, and that if the recruitment/placement agency is a juridical being, the corporate officers and directors and partners shall themselves be jointly and solidarily liable with the corporation or partnership. The Court applied this provision to hold Abosta, Panstar, and Estabillo jointly and severally liable for the total judgment award.
• Article 2208, Civil Code — In the absence of stipulation, attorney's fees and expenses of litigation cannot be recovered except in the cases enumerated by law, including when the court deems it just and equitable that they be recovered; in all cases, the attorney's fees must be reasonable. The Court applied this provision to award Abella attorney's fees equivalent to ten percent (10%) of the total judgment award.
• Rule 45, Rules of Court — Governs petitions for review on certiorari. In labor cases, the Court generally may only entertain questions of law and review whether the Court of Appeals correctly determined the presence or absence of grave abuse of discretion and other jurisdictional errors of the NLRC, subject to exceptions such as misapprehension of facts or grave abuse of discretion. The Court applied this rule in entertaining Abella's petition.

Gesmundo, C.J., Carandang, Lazaro-Javier, and Gaerlan, JJ., concur. Lazaro-Javier, J., was designated as an additional Member per Raffle dated February 1, 2021.