Bunayog vs. Foscon Shipmanagement, Inc.

When an employer ignores a seafarer's valid written request for third doctor referral that is accompanied by the medical report or abstract of the seafarer's chosen physician, the seafarer's physician's findings should be deemed final and binding against the employer, unless such findings lack scientific basis or are unsupported by medical records, in which case the tribunals and courts must review the conflicting medical assessments based on their inherent merits and the totality of evidence.

Petitioner Teodoro B. Bunayog was engaged by Foscon Shipmanagement, Inc. on behalf of its foreign principal, Green Maritime Co., Ltd., as a chief cook onboard the vessel MIT Morning Breeze for a period of nine months. The governing contract was the 2010 POEA-SEC (Memorandum Circular No. 10, Series of 2010), specifically Section 20(A)(3), which establishes a conflict-resolution mechanism: when a seafarer's chosen physician disagrees with the company-designated physician's assessment, a third doctor mutually agreed upon by the parties may be consulted, and the third doctor's decision shall be final and binding on both parties. The parties' Collective Bargaining Agreement likewise binds the seafarer and employer. Entitlement to disability benefits by a seafarer is governed not only by medical findings but also by law (Articles 197-199 of the Labor Code) and by contract (the POEA-SEC and CBA).

Petitioner Teodoro B. Bunayog was engaged by Foscon Shipmanagement, Inc. on behalf of its foreign principal, Green Maritime Co., Ltd., as a chief cook onboard the vessel MIT Morning Breeze for a nine-month contract. On July 31, 2016, while on board, petitioner experienced cough, fever, and difficulty in breathing. He was brought to a clinic in Japan on August 2, 2016, where he was diagnosed with left lung pneumonia and declared unfit for sea duty. He was repatriated to the Philippines on August 4, 2016 and immediately referred to a company-designated physician.

Upon evaluation, petitioner was diagnosed with pneumonia with recurrent pleural effusion, left s/p thoracentesis, left. From August 6, 2016 through September 28, 2016, he underwent a series of medical treatments under the company-designated physician, including hospital admission, laboratory exams, chest x-rays, ultrasounds, thoracentesis, intravenous medication, and nebulization. Repeat ultrasounds showed progressive decrease in pleural effusion, and on September 28, 2016, the company-designated physician declared petitioner fit to work, with a final diagnosis of "Pneumonia with Recurrent Pleural Effusion, Left — Resolved S/P Thoracentesis, Left."

Thereafter, petitioner consulted Dr. Noel C. Gaurano, a physician of his own choice, who declared him unfit for sea duty due to pleural effusion. On November 10, 2016, petitioner, through counsel, sent a letter to Evelyn M. Defensor, president of Foscon, informing her of Dr. Gaurano's findings and signifying his willingness to undergo another test or examination to confirm his permanent disability. He attached Dr. Gaurano's medical report to the letter. Respondents failed to respond to the letter for reasons unknown. Petitioner subsequently filed a complaint for total and permanent disability benefits, transportation expenses, and attorney's fees, claiming entitlement to US$60,000.00 since he could no longer perform his tasks as chief cook.

The Labor Arbiter dismissed the complaint, giving credence to the company-designated physician's findings over those of petitioner's physician of choice, noting that the latter's conclusion was based on popular observation rather than a specific study of petitioner's condition. The NLRC affirmed, ruling that the employer's failure to seek a third doctor did not automatically bind the employer to the seafarer's physician's assessment. The CA likewise affirmed, disregarding the assessment of petitioner's physician because he did not require petitioner to undergo medical tests and his assessment was not based on petitioner's response to a specific treatment.

• Entitlement to Disability Benefits: Petitioner argued that the CA gravely erred in not awarding him total and permanent disability benefits, maintaining that he is entitled to US$60,000.00 since he can no longer perform his tasks as a chief cook.
• Entitlement to Attorney's Fees and Moral Damages: Petitioner argued that the CA gravely erred in not awarding attorney's fees and moral damages.

• Company-Designated Physician's Findings Prevail: Respondents countered that petitioner is not entitled to any disability compensation because the company-designated physician had already declared him fit to work.
• Greater Weight to Company-Designated Physician: Respondents argued that as between the findings of the company-designated physician and the petitioner's physician of choice, the former's findings should prevail since petitioner's doctor examined him only once.

• Disability Benefits: Whether petitioner is entitled to total and permanent disability benefits.
• Attorney's Fees and Moral Damages: Whether petitioner is entitled to attorney's fees and moral damages.

• Disability Benefits: No. Although the employer violated the POEA-SEC by ignoring the seafarer's valid written request for third doctor referral, the seafarer's chosen physician's medical report lacked scientific and medical basis, compelling the Court to review the conflicting findings on their inherent merits — where the company-designated physician's extensive treatment and monitoring proved more credible.
• Attorney's Fees and Moral Damages: No. The petition was dismissed in its entirety, the Court finding no reason to overturn the decisions of the LA, NLRC, and CA in favor of respondents.

• Disability Benefits: The Court first established that referral to a third doctor is mandatory under Section 20(A)(3) of the 2010 POEA-SEC, and that a seafarer's failure to comply renders the company-designated physician's assessment final and binding. However, an exception exists under Dionio vs. Trans-Global Maritime Agency, Inc.: when the company-designated physician's findings lack scientific basis or are unsupported by medical records, tribunals and courts may consider the inherent merits of the respective medical findings. The Court then clarified the requirements for a valid written request for third doctor referral, partially modifying Benhur Shipping Corp. vs. Riego by requiring that the seafarer attach to the written request the medical report or medical abstract of his chosen physician, or at the very least indicate its contents therein, to enable the employer to assess whether a contrary finding genuinely exists and to allow the third doctor to conduct an exhaustive assessment. Petitioner's letter to respondents, accompanied by Dr. Gaurano's medical report, constituted a valid written request. Respondents' failure to respond within ten days constituted a violation of the POEA-SEC. Adopting the rationale of Justice Caguioa's dissent in Benhur, the Court held that when the employer is at fault for non-referral, the seafarer's physician's findings should be deemed final and binding — unless those findings are tainted with bias, lack scientific basis, or are unsupported by medical records. Upon review of Dr. Gaurano's medical report, the Court found it bereft of scientific and medical basis: Dr. Gaurano merely defined pleural effusion, enumerated its causes and treatment, and concluded petitioner was unfit for sea duty without correlating test results to his conclusion, without discussing the results of the tests petitioner underwent, and without requiring petitioner to undergo any medical examination prior to issuing the certificate. The Court was thus not precluded from reviewing the conflicting findings on their inherent merits. On the totality of evidence, the company-designated physician's findings were more credible, as they were based on consistent examination and treatment of petitioner's condition over nearly two months, including multiple ultrasounds, thoracentesis, laboratory exams, and progressive monitoring showing resolution of the condition. The Court found no grave abuse of authority on the part of the company-designated physician.

• Attorney's Fees and Moral Damages: No separate discussion was devoted to this issue beyond the general dismissal of the petition. The Court found nothing on record that would justify compensation on top of the monetary aid and assistance already extended to petitioner by respondents, and affirmed the lower tribunals' rulings in favor of respondents.

• Mandatory Third Doctor Referral — Under Section 20(A)(3) of the 2010 POEA-SEC, when a seafarer's chosen physician disagrees with the company-designated physician's assessment, the conflicting findings must be referred to a third doctor mutually agreed upon by the parties, whose decision shall be final and binding. Referral is mandatory; failure of the seafarer to comply renders the company-designated physician's assessment final and binding. The Court applied this doctrine but clarified the requirements for a valid request and the consequences of the employer's refusal.

• Requirements for a Valid Written Request for Third Doctor Referral — The seafarer must send a written request or demand to the employer, accompanied by the medical report or medical abstract of his chosen physician, or at the very least indicating the contents thereof. Without the medical report or its contents, the request is deemed invalid and as if none had been made. This modifies the earlier ruling in Benhur Shipping Corp. vs. Riego, which held that a mere statement regarding fitness to work or disability rating was sufficient. The Court clarified that the third doctor needs the medical report to make an exhaustive assessment, and the employer needs it to verify that a contrary finding genuinely exists.

• Consequences of Employer's Refusal to Respond to Valid Request — When the seafarer makes a valid written request for third doctor referral and the employer ignores or refuses it, the employer violates the POEA-SEC. The seafarer's physician's findings should then be deemed final and binding against the employer, unless those findings are tainted with bias, lack scientific basis, or are unsupported by medical records, in which case the tribunals and courts must review the conflicting findings based on their inherent merits and the totality of evidence. This adopts the rationale of Justice Caguioa's dissent in Benhur.

• Exception to Company-Designated Physician's Prevailing Assessment — Even when the company-designated physician's assessment would ordinarily prevail (as in cases of non-referral due to the seafarer's fault), tribunals and courts are not bound by such findings if they are shown to lack scientific basis or be unsupported by the seafarer's medical records. In such cases, the inherent merits of the respective medical findings shall be considered. This was established in Dionio vs. Trans-Global Maritime Agency, Inc.

• Comprehensive Guidelines for Third Doctor Referral — The Court laid down eight guidelines: (1) the seafarer must send a written request to the employer within a reasonable period; (2) the request must be accompanied by or indicate the contents of the medical report or abstract of the seafarer's physician; (3) if there is no valid request, the employer may ignore it without violating the POEA-SEC, and the company-designated physician's findings shall be final and binding unless biased; (4) upon a valid request, the employer must send a written reply within 10 days, after which the parties have 15 days to secure a third doctor and 30 days for the third doctor to submit an assessment; (5) if the employer ignores or refuses the valid request, the employer violates the POEA-SEC and the seafarer may file a complaint; (6) upon filing of the complaint, the LA during mandatory conference shall give the parties 15 days to secure a third doctor and 30 days for the assessment; (7) if the third doctor is not secured due to the employer's refusal or failure to agree, the seafarer's physician's findings shall be conclusive unless biased, but if due to the seafarer's fault, the company-designated physician's findings shall be conclusive; (8) if despite the employer's failure to respond, the parties secure a third doctor during mandatory conference, the third doctor's findings shall be final and binding.

• "We, therefore, hold and so rule that only by attaching to the written request or demand the medical report or the medical abstract of his physician or indicating therein the contents thereof, may a seafarer be deemed to have duly and fully disclosed to the employer the contrary assessment of his/her own doctor." — This passage establishes the new requirement for a valid third doctor referral request, modifying the prior ruling in Benhur and serving as a safeguard against abuse by seafarers submitting unsupported contrary assessments.

• "Simply, in order not to incentivize the employer for its failure to respond or assent to the seafarer's valid request for a third doctor referral, the findings of the seafarer's physician of choice should be considered final and binding. An exception to this rule is when the seafarer's physician's findings 'are tainted with bias or not supported by medical records or lack scientific basis, in which case, the courts are not precluded to review the conflicting findings and decide the case based on the totality of the evidence.'" — This passage articulates the Court's adoption of Justice Caguioa's dissenting rationale in Benhur as the controlling doctrine, establishing that employers who ignore valid third doctor referral requests should not be "rewarded" but should instead face the consequence of the seafarer's physician's findings being deemed binding.

• "Indeed, the rule that the company-designated doctor's findings shall prevail in case of non-referral of the case to a third doctor is not a hard-and-fast rule as labor tribunals and the courts are not bound by the medical findings of the company-doctor. Instead, the inherent merits of the respective medical findings shall be considered." — This passage, quoting Dionio, establishes the critical exception that allows courts to look beyond the general rule of the company-designated physician's prevailing assessment when scientific basis is lacking — a principle that proved decisive in this case.

• Transocean Ship Management (Phils.), Inc. vs. Vedad, 707 Phil. 194 (2013) — Cited for the rationale underlying the third doctor referral mechanism: because a company-designated physician may be biased in favor of the company, the seafarer is given the option to seek a second opinion, and the law anticipates divergence in findings by incorporating a third doctor mechanism.

• INC Navigation Co. Philippines, Inc. vs. Rosales, 744 Phil. 774 (2014) — Cited for the settled rule that referral to a third doctor is a mandatory procedure and that the company can insist on its disability rating unless the seafarer expresses disagreement by requesting referral to a third doctor.

• Dionio vs. Trans-Global Maritime Agency, Inc., 843 Phil. 409 (2018) — Cited for the exception to the general rule: when the company-designated physician's findings lack scientific basis or are unsupported by medical records, the inherent merits of the respective medical findings shall be considered. This exception was directly applied in the present case.

• Benhur Shipping Corp. vs. Riego, G.R. No. 229179, March 29, 2022 — Cited and partially modified. Benhur held that a written request for third doctor referral need not be accompanied by the medical report of the seafarer's physician. The present case clarified that the medical report or its contents must be attached or indicated. The Court also adopted Justice Caguioa's dissenting opinion in Benhur as the controlling doctrine on the consequences of employer non-compliance.

• Reyes vs. Jebsens Maritime, Inc., G.R. No. 230502, February 15, 2022 — Cited for the rule that when the employer refuses or ignores the seafarer's valid request for third doctor referral, the company-designated physician's findings cannot be automatically deemed conclusive, and tribunals must weigh the inherent merits of the medical findings. The Court noted that this ruling, while empowering courts to assess conflicting findings, effectively "rewarded" employers for non-compliance, which the present decision sought to rectify.

• Ledesma vs. CF Sharp Crew Management, Inc., G.R. No. 241067, October 5, 2022 — Cited as a recent application of the rulings in Reyes and Benhur, where the employer failed to respond to the seafarer's demand letter and the Court resolved the conflicting findings on fitness to resume sea duty.

• Maersk-Filipinas Crewing, Inc. vs. Alferos, 850 Phil. 1075 (2019) — Cited for the principle that the seafarer acquires the right to validly insist on an assessment different from the company-designated physician's only after signifying intent to refer to a third doctor, and that the duty to secure the third doctor's opinion belongs to the seafarer.

• Raza vs. Daikoku Electronics Phils., Inc., 765 Phil. 61 (2015) — Cited for the principle that while the Court is committed to social justice and protection of the working class, it recognizes that management also has rights entitled to respect, and the aim is to strike a balance between labor and capital.

• Section 20(A)(3), 2010 POEA-SEC (Memorandum Circular No. 10, Series of 2010) — The core provision governing the conflict-resolution mechanism for seafarer disability claims. It requires the seafarer to submit to post-employment medical examination by a company-designated physician, provides that if a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the employer and the seafarer, and the third doctor's decision shall be final and binding. The Court interpreted this provision to impose obligations on both parties and established detailed procedural guidelines for its implementation.

• Articles 197-199 (formerly Articles 191-193), Chapter VI, Book IV, Labor Code, in relation to Rule X of the Implementing Rules — The material statutory provisions governing disability benefits, cited as the legal framework for seafarer disability claims alongside the POEA-SEC and the parties' CBA.

• NLRC En Banc Resolution No. 008-14, November 12, 2014 — Directs all Labor Arbiters, during mandatory conference, to give the parties a period of 15 days to secure the services of a third doctor and an additional 30 days for the third doctor to submit a reassessment. The Court adopted this directive as the standard timeline for the third doctor referral procedure.

Justices Caguioa, Inting, Zalameda, M. Lopez, J. Lopez, Dimaampao, Marquez, Kho, Jr., and Singh concurred. Chief Justice Gesmundo issued a separate concurring opinion. Senior Associate Justice Leonen issued a separate concurring opinion. Justice Lazaro-Javier issued a concurring opinion. Justices Hernando and Rosario were on leave.