Abundo vs. Magsaysay Maritime Corporation

A seafarer is deemed totally and permanently disabled by operation of law when the company-designated physician fails to issue a final and categorical assessment of fitness to work or degree of disability within the 120/240-day period prescribed by Article 198192(1) of the Labor Code and Rule X, Section 2 of the Amended Rules on Employee Compensation (AREC); consequently, the third-doctor referral procedure under Section 20(A)(3) of the POEA-SEC does not apply in the absence of a definitive disability assessment from the company-designated physician.

Jherome G. Abundo was employed by Magsaysay Maritime Corporation as an Able Seaman on board the vessel "Grand Celebration" owned by its principal, Grand Celebration LDA. On December 15, 2012, while securing a lifeboat, a metal block snapped and struck his right forearm, causing a fracture. He was medically repatriated on January 7, 2013, and underwent surgical intervention and rehabilitation. The company-designated physicians issued interim medical assessments suggesting a Grade 10 disability rating and advised continued rehabilitation, while an independent physician engaged by Abundo found him permanently unfit to resume sea duties. The respondents offered US$10,075.00 equivalent to Grade 10 disability, but Abundo demanded the maximum benefit of US$60,000.00 for permanent and total disability under the POEA-SEC.

• On April 25, 2012, petitioner Jherome G. Abundo was engaged by respondents Magsaysay Maritime Corporation and Grand Celebration LDA as Able Seaman for an eight-month contract, departing for the vessel "Grand Celebration" on May 8, 2012.
• On December 15, 2012, while securing a lifeboat, a metal block snapped and hit his right forearm, causing a posterior splint to be applied at a hospital in Brazil to immobilize the area.
• The petitioner was medically repatriated on January 7, 2013, and upon arrival in the Philippines, an X-ray revealed an overriding fracture with a fragment at the distal third shaft of the right radius.
• The petitioner underwent open reduction and internal fixation surgery with plate replacement and screws, followed by physiotherapy to improve the function of his right arm.
• On April 22, 2013, company-designated physician Dr. Esther G. Go issued an interim assessment noting weak grip on the right hand, paresthesia on the right thumb, and left wrist pain upon extreme movements, advising continued rehabilitation and assessing Grade 10 disability (ankylosis).
• On April 26, 2013, company surgeon Dr. Ramon Lao suggested a Grade 10 disability due to ankylosed wrist, but this was merely a suggestion subject to evaluation by the medical coordinator.
• Petitioner consulted independent physician Dr. Rogelio P. Catapang, who found that despite continuous physiotherapy, the petitioner had restricted range of motion, weak grip, inability to lift heavy objects, and was permanently unfit to work as a seafarer.
• Respondents offered US$10,075.00 equivalent to Grade 10 disability, which petitioner rejected, demanding US$60,000.00 representing maximum coverage under the POEA-SEC for permanent disability.

• The petitioner is entitled to permanent and total disability benefits of US$60,000.00 because his incapacity to perform his customary work as a seafarer renders him permanently disabled, not merely the injury itself.
• The assessment of the company-designated physicians was merely interim and not final or categorical, as evidenced by the advice to continue rehabilitation and the use of suggestive language rather than a definitive declaration.
• By operation of law under Article 192(c)(1) of the Labor Code and Rule X, Section 2 of the AREC, the petitioner became permanently disabled after the lapse of the 120/240-day period without a final assessment from the company-designated physician.
• The third-doctor referral procedure under Section 20(A)(3) of the POEA-SEC is inapplicable where there is no final assessment from the company-designated physician to conflict with the seafarer's physician's findings.
• The Court of Appeals erred in reversing the NLRC's factual findings which were supported by substantial evidence.

• The petitioner failed to prove that he suffers from total and permanent disability, as the company-designated physicians consistently assessed his condition as Grade 10 disability.
• The petitioner failed to observe the mandatory conflict-resolution procedure under the POEA-SEC by not referring the conflicting medical findings to a third doctor, which breach renders the company doctor's diagnosis controlling.
• The mere lapse of the 120/240-day period does not automatically vest an award of permanent disability benefits; the degree of disability must still be determined by a competent physician.
• The assessment of the company-designated physician should prevail over that of the petitioner's chosen physician in the absence of a third-doctor referral.
• There is no basis for awarding attorney's fees absent bad faith on the part of the respondents in denying the claim.

• Procedural:
  • Whether the Court of Appeals committed grave abuse of discretion in reversing the National Labor Relations Commission's factual findings and ruling that the third-doctor referral procedure is mandatory.
  • Whether the Supreme Court may re-evaluate the factual findings of the labor tribunals and the Court of Appeals in this case.
• Substantive Issues:
  • Whether the petitioner is entitled to permanent and total disability benefits under the POEA-SEC.
  • Whether the third-doctor referral provision under Section 20(A)(3) of the POEA-SEC applies when the company-designated physician failed to issue a final and categorical disability assessment within the 120/240-day period.
  • Whether the company-designated physician's assessment was final and binding or merely interim.

• Procedural:
  • While the Court of Appeals acted within its jurisdiction in reviewing the NLRC decision via certiorari, it committed a misapprehension of facts by overlooking that the company-designated physician's assessment was merely interim and not final.
  • The Supreme Court may re-evaluate factual findings under recognized exceptions, particularly when the Court of Appeals' judgment is based on a misapprehension of facts and overlooks relevant facts not disputed by the parties which, if properly considered, would justify a different conclusion.
• Substantive:
  • The assessment issued by Dr. Go was merely interim, not final and categorical, as she advised continued rehabilitation and did not declare a definitive degree of disability or fitness to work within the 120/240-day period.
  • Under Article 198192(1) of the Labor Code and Rule X, Section 2 of the AREC, where the company-designated physician fails to give a definitive assessment of fitness to work or permanent disability within the 120/240-day period, the seafarer's temporary total disability is deemed total and permanent by operation of law.
  • The third-doctor referral rule under Section 20(A)(3) of the POEA-SEC does not apply where there is no definitive disability assessment from the company-designated physician to serve as a basis for conflict resolution.
  • The POEA-SEC must be read in harmony with the Labor Code and AREC, not in isolation, to prevent the disability rating from being completely at the mercy of the company-designated physician.
  • The petitioner is entitled to US$60,000.00 in permanent disability benefits and US$1,000.00 in attorney's fees under Article 2208(8) of the Civil Code for being compelled to litigate to protect his rights.

• Final Assessment Requirement — The company-designated physician must arrive at a definite assessment of the seafarer's fitness to work or permanent disability within the 120 or 240-day period; failure to do so results in the seafarer being deemed totally and permanently disabled by operation of law.
• Interim vs. Final Assessment — A medical assessment that merely suggests a disability grade, advises continued treatment, or lacks a categorical declaration of fitness to work is interim and not controlling; only a definitive assessment made within the prescribed period is binding.
• Harmonious Construction of Labor Laws — The POEA-SEC should never be read in isolation from the Labor Code and the Amended Rules on Employee Compensation (AREC); these laws must be applied together to ensure seafarers are not left without redress when company physicians fail to give final assessments.

• "The company-designated physician must arrive at a definite assessment of the seafarer's fitness to work or permanent disability within the period of 120 or 240 days... If he fails to do so and the seafarer's medical condition remains unresolved, the latter shall be deemed totally and permanently disabled."
• "The POEA-SEC should never be read in isolation with other laws such as the provisions of the Labor Code on disability and the AREC. Otherwise, the disability rating of the seafarer will be completely at the mercy of the company-designated physician, without redress, should the latter fail or refuse to give one."

• Sunit v. OSM Maritime Services, Inc. — Cited for the rule that the company-designated physician's assessment within the 120/240-day period must be definite for it to be controlling in determining the seafarer's medical condition.
• Kestrel Shipping Co., Inc. v. Munar — Cited in Sunit for the principle that the assessment must be definite and made within the prescribed period.
• Carcedo v. Maine Marine Philippines, Inc. — Applied to hold that the third-doctor-referral provision does not apply when there is no definitive disability assessment by the company-designated physician, and that temporary disability lapses into permanent disability by operation of law after the 240-day period without final assessment.
• Fil-Pride Shipping Co., Inc. v. Balasta — Cited for the instruction that failure of the company-designated physician to give a definite assessment within the 120/240-day period results in the seafarer being deemed totally and permanently disabled.
• Belchem Philippines, Inc./United Philippine Lines v. Zafra, Jr. — Cited to distinguish interim or suggestive assessments from final and definitive medical assessments required under the POEA-SEC.
• Murillo v. Philippine Transmarine Carriers, Inc. and Dionio v. Trans-Global Maritime Agency, Inc. — Cited to acknowledge the general rule that referral to a third doctor is mandatory when there are conflicting final assessments between the company-designated physician and the seafarer's chosen physician.

• Section 20(A)(3) of the POEA-SEC — Governs the mandatory referral to a third doctor in case of disagreement between the company-designated physician and the seafarer's chosen physician, with the third doctor's decision being final and binding.
• Section 20(A)(6) and Section 32 of the POEA-SEC — Cited by the Court of Appeals regarding the basis for disability grading and awards; the Supreme Court clarified that these apply only when a final assessment exists.
• Article 198192(1), Chapter VI, Title II, Book IV of the Labor Code — Deems temporary total disability lasting continuously for more than 120 days (extendible to 240 days) as total and permanent.
• Rule VII, Section 2(b) of the AREC — Defines total and permanent disability as the inability to perform any gainful occupation for a continuous period exceeding 120 days.
• Rule X, Section 2 of the AREC — Prescribes the 120-day period for temporary total disability benefits, extendible to 240 days, and allows the declaration of permanent status after 120 days as warranted by actual loss of physical functions.
• Article 2208(8) of the Civil Code — Basis for the award of attorney's fees in actions for indemnity under workmen's compensation and employer's liability laws.