CF Sharp Crew Management Inc. vs. Cunanan

A seafarer's claim for disability benefits cannot rest solely on the disputable presumption of work-relatedness; the claimant must still present substantial evidence that working conditions caused or increased the risk of contracting the illness, and the company-designated physician's fit-to-work assessment prevails over the seafarer's personal physician's findings when the mandatory third-doctor referral procedure under Section 20-B(3) of the 2000 POEA-SEC is not observed.

Respondent Manuel M. Cunanan was hired as an assistant carpenter by petitioner CF Sharp Crew Management Inc., acting for and on behalf of its foreign principal, Norwegian Cruise Lines Inc., under a ten-month employment contract governed by the 2000 POEA Standard Employment Contract (SEC). The POEA-SEC defines work-related illnesses, enumerates occupational diseases and the conditions for their compensability under Section 32-A, prescribes the treatment periods and sickness allowance under Section 20-B, and establishes the procedure for resolving conflicting medical assessments between company-designated physicians and seafarers' personal doctors through a jointly appointed third doctor whose decision is final and binding.

Sometime in October 2009, Manuel M. Cunanan was hired as an assistant carpenter by CF Sharp Crew Management Inc., for and on behalf of its foreign principal, Norwegian Cruise Lines Inc., under a ten-month employment contract. He was deployed on November 20, 2009, initially boarding the vessel M/S Norwegian Spirit and later transferring to M/S Norwegian Dawn on January 24, 2010.

On February 16, 2010, while working on board, respondent consulted the ship physician, who noted elevated blood sugar and hypertension. A repeat examination the following day showed persistently elevated blood sugar, and respondent was advised to seek medical consultation upon return to the Philippines. On February 23, 2010, respondent was medically repatriated. The next day, he was referred to the company-designated clinic, which issued a Medical Report dated March 9, 2010 stating a working impression of Hypertension Stage I, uncontrolled, and Diabetes Mellitus Type 2, uncontrolled.

After a series of examinations and consultations, the company-designated clinic issued a Final Medical Progress Report dated August 24, 2010, diagnosing respondent with Hypertension Stage 1, controlled, and Diabetes Mellitus Type 2, controlled. Both the cardiologist and endocrinologist assessed respondent as fit to resume sea duties, subject to medication compliance and regular monitoring. On the same date, respondent signed a Certificate of Fitness for Work. Petitioners paid all of respondent's medical expenses and sickness allowances during his treatment.

While still under the care of the company-designated physicians, respondent consulted another physician, Dr. Donald S. Camero, on July 27, 2010. On September 29, 2010, Dr. Camero issued a medical certificate diagnosing respondent with Hypertension Stage II and Diabetes Mellitus, declaring him permanently unfit for sea duties and entitled to Disability Grade 1 under the POEA scale. On November 4, 2010, respondent consulted yet another physician, Dr. Eduardo Yu of Mary Chiles General Hospital, who issued a medical certification on February 18, 2011 with substantially identical findings — permanent unfitness for sea duties and entitlement to Disability Grade 1, with the illnesses attributed to exposure to toxic and hazardous materials.

Meanwhile, on October 12, 2010, Norwegian Cruise issued a letter advising respondent that he could no longer be offered re-employment. Respondent thereafter filed before the NLRC a complaint for disability compensation, damages, and attorney's fees. Before the Labor Arbiter, respondent alleged that on the morning of February 16, 2010, while lifting heavy wooden pallets, he accidentally stepped on wet flooring, slid, and struck his chest and abdomen against a metal railing, thereafter experiencing episodic chest and abdominal pains radiating to his right lower extremity. He claimed his working conditions — including exposure to hazardous fumes and materials — aggravated his illnesses, rendering him permanently and totally disabled and entitled to US$80,000.00 under the collective bargaining agreement. Petitioners countered that respondent's illnesses were not work-related, that diabetes mellitus is not among the listed occupational diseases in the POEA-SEC, and that the company-designated physicians had already declared him fit for work. The Labor Arbiter dismissed the complaint, but the NLRC reversed, awarding permanent total disability benefits of US$60,000.00 and 10% attorney's fees. The Court of Appeals dismissed petitioners' certiorari petition on procedural grounds.

• Substantial Compliance with Procedural Rules: Petitioners argued that the copies of the NLRC Decision and Resolution attached to their CA petition, bearing the stamp "certified photocopy," constituted substantial compliance with the Rules of Court, citing Coca-Cola Bottlers Phils., Inc. vs. Cabalo, et al. for the proposition that a "certified xerox copy" is no different from a "certified true copy" as long as the copy is certified by the proper officer as a faithful reproduction of the original.
• Non-Compensability of Illnesses: Petitioners maintained that respondent's hypertension is not an occupational disease because it is not essential hypertension as defined under the POEA-SEC, and that diabetes mellitus is not among the listed occupational diseases, being a familial or genetic illness. They argued that notwithstanding the disputable presumption of work-relatedness, the claimant must still present substantial evidence of a causal connection between the nature of employment and the illness, which respondent failed to do.
• 120-Day Rule: Petitioners asserted that the lapse of 120 days from initial treatment does not automatically entitle respondent to permanent and total disability benefits, because the 120-day initial treatment period may be extended to a maximum of 240 days, as occurred in respondent's case. The company-designated physicians declared respondent fit for work on August 24, 2010, or 184 days from repatriation, within the allowable extended period.
• Primacy of Company-Designated Physician's Assessment: Petitioners argued that the detailed and comprehensive medical reports of the company-designated physicians should prevail over the unsubstantiated medical certificates of respondent's private doctors, and that respondent's non-rehiring does not prove permanent and total disability since seafarers are contractual employees.

• Work-Relatedness of Illnesses: Respondent maintained that his illnesses are work-related and compensable, asserting that his "faulty diet" at sea — consisting of lard-laden, long-dead meat immersed in harmful preservatives — aggravated his diabetes mellitus. He also insisted that his hypertension is essential hypertension, which is an occupational disease under the POEA-SEC, and thus no proof of causation is needed.
• Degree of Disability: Respondent argued that his illnesses rendered him totally and permanently unfit to resume his work as a seafarer, as found by his personal doctors, Dr. Camero and Dr. Yu, who both assessed him as permanently unfit for sea duties and entitled to Disability Grade 1 compensation. He contended that the "fit to work" declaration from the company-designated physicians should not be upheld given the lack of real progress in his health under their treatment.
• Sustaining the CA's Dismissal: Respondent contended that the CA did not err in dismissing petitioners' petition for certiorari, submitting the question of technicality to the Court's discretion.

• Procedural Compliance: Whether the NLRC Decision and Resolution bearing the stamp "certified photocopy" constitutes substantial compliance with the Rules of Court.
• Disputable Presumption and Burden of Proof: Whether the disputable presumption of work-relatedness dispenses with the positive duty of the claimant to prove his claim by substantial evidence.
• 120-Day Rule: Whether total and permanent disability is determined by the mere lapse of 120 days.
• Attorney's Fees: Whether attorney's fees are justified merely because respondent was forced to litigate.

• Procedural Compliance: Yes. The CA erred in dismissing the petition solely on procedural grounds; the relaxation of procedural rules was warranted in the interest of substantial justice, especially given the contradictory findings of the LA and the NLRC.
• Disputable Presumption and Burden of Proof: No. The disputable presumption of work-relatedness does not dispense with the claimant's duty to prove compensability by substantial evidence; awards of compensation cannot rest entirely on bare assertions and presumptions.
• 120-Day Rule: No. Mere inability to work for 120 days does not automatically entitle a seafarer to permanent and total disability benefits; the initial 120-day period may be extended to 240 days, and permanent disability arises only upon declaration by the company-designated physician or expiration of the maximum 240-day period without such declaration.
• Attorney's Fees: No. Because respondent's claim for disability benefits failed, his claim for attorney's fees must likewise fail.

• Procedural Compliance: The CA dismissed the petition for certiorari solely because petitioners failed to attach duplicate original or certified true copies of the challenged NLRC Decision and Resolution. The Court found that relaxation of the rules was the more prudent course in the interest of substantial justice, particularly because the LA and the NLRC had rendered contradictory findings. Petitioners had already attached "certified xerox copies" to the petition before the Court, and respondent neither disputed nor denied their authenticity, even manifesting submission of the technicality question to the Court's discretion. The Court declined to remand, as doing so would serve no purpose save to further delay disposition contrary to the spirit of fair play.

• Disputable Presumption and Burden of Proof: Under the 2000 POEA-SEC, illnesses not listed in Section 32 are disputably presumed work-related, but no similar presumption of compensability is accorded. The seafarer must still prove by substantial evidence that work conditions caused or increased the risk of contracting the disease. Respondent was diagnosed with hypertension (Stage 1) and Type 2 diabetes mellitus, both controlled. Hypertension is compensable as an occupational disease only if classified as primary or essential and causing impairment of vital organs resulting in permanent disability, supported by five specific documentary requirements (chest x-ray, ECG, blood chemistry, funduscopy, and C-T scan reports). Respondent adduced no documentary evidence to substantiate essential hypertension, nor any proof of organ impairment. Diabetes mellitus is not an occupational disease under Section 32-A and is by nature a metabolic and familial disease resulting from poor lifestyle choices. Respondent's changing theories — first an accident, then exposure to toxic materials, then a faulty diet — were all unsubstantiated by competent evidence. Bare allegations do not suffice to discharge the required quantum of proof.

• 120-Day Rule: Under Article 198(c)(1) of the Labor Code, Rule VII Section 2(b) and Rule X Section 2(a) of the AREC, and Section 20-B(3) of the 2000 POEA-SEC, the seafarer is on temporary total disability for 120 days, during which he receives sickness allowance. If the seafarer still requires medical attention beyond 120 days, the period may be extended to a maximum of 240 days. Temporary total disability becomes permanent only when so declared by the company-designated physician within the allowed periods, or upon expiration of the maximum 240-day period without a declaration of fitness or permanent disability. Here, the company-designated physicians' Medical Progress Reports justified the extension beyond 120 days, and the Final Medical Progress Report declaring respondent fit for work was issued on August 24, 2010 — 184 days from repatriation, before the expiration of the 240-day maximum. The NLRC's ruling of permanent and total disability therefore had neither factual nor legal basis.

• Attorney's Fees: Attorney's fees were predicated on the success of the disability claim. Since respondent failed to establish entitlement to disability benefits, the award of attorney's fees could not stand. The Court emphasized that its commitment to the cause of labor does not prevent sustaining the employer when it is in the right.

• Disputable Presumption of Work-Relatedness — Illnesses not listed in Section 32-A of the 2000 POEA-SEC are disputably presumed work-related, but this presumption does not carry with it a presumption of compensability. The seafarer must still prove by substantial evidence that work conditions caused or increased the risk of contracting the illness. Awards of compensation cannot rest entirely on bare assertions and presumptions. In this case, respondent's bare allegations of an accident, toxic exposure, and faulty diet were insufficient; he failed to present the documentary requirements for essential hypertension or any competent proof linking his diabetes to working conditions.

• 120/240-Day Treatment Period Rule — The seafarer is on temporary total disability for the initial 120-day treatment period, during which he receives sickness allowance. This period may be extended to a maximum of 240 days when the seafarer still requires medical attendance. Temporary total disability becomes permanent only when so declared by the company-designated physician within the allowed periods, or upon the expiration of the maximum 240-day period without a declaration of either fitness to work or permanent disability. Mere inability to work for more than 120 days does not automatically warrant permanent and total disability benefits. In this case, the company-designated physicians declared respondent fit for work on the 184th day, within the 240-day maximum, defeating the NLRC's automatic application of the 120-day rule.

• Primacy of Company-Designated Physician's Assessment and Third-Doctor Referral — The company-designated physician has the first opportunity to examine the seafarer and issue a certification of medical status. The determination of fitness for sea duty is the province of the company-designated physician, subject to prescribed periods. Courts may give greater weight to the seafarer's personal physician only when the company-designated physician's findings are clearly biased in favor of the employer. In case of conflicting medical assessments, referral to a jointly appointed third doctor is mandatory, and the third doctor's decision is final and binding. Absent a third doctor's opinion, the company-designated physician's assessment prevails. In this case, no bias was shown, the company physicians' detailed reports outweighed the uncorroborated certificates of respondent's personal doctors, and respondent failed to invoke the third-doctor referral provision.

• Essential Hypertension as Occupational Disease — Under Section 32-A, paragraph 2(20) of the 2000 POEA-SEC, hypertension classified as primary or essential is compensable only if it causes impairment of vital organs (kidneys, heart, eyes, brain) resulting in permanent disability, and must be substantiated by five documentary requirements: (a) chest x-ray report, (b) ECG report, (c) blood chemistry report, (d) funduscopy report, and (e) C-T scan. All must be submitted; otherwise, the claim should not be entertained. Three successive occurrences are required: (1) contracting essential hypertension, (2) organ impairment arising therefrom, and (3) permanent disability arising from that impairment.

• "The disputable presumption that a seafarer's sickness is work-related does not mean that he would only sit idly while waiting for the employer to dispute the presumption. On due process grounds, the claimant-seafarer must still prove by substantial evidence that his work conditions caused or, at least, increased the risk of contracting the disease. This is because awards of compensation cannot rest entirely on bare assertions and presumptions." — This passage articulates the ratio decidendi on the interplay between the disputable presumption of work-relatedness and the seafarer's affirmative burden of proof, a principle frequently cited in subsequent seafarer disability jurisprudence.

• "A seafarer's inability to resume his work after the lapse of more than 120 days from the time he suffered an injury and/or illness is not a magic wand that automatically warrants the grant of total and permanent disability benefits in his favor." — This formulation is the canonical statement of the rule that the 120-day period does not automatically convert temporary total disability into permanent total disability, given the possibility of extension to 240 days.

• "In case of conflicting medical assessments, referral to a third doctor is mandatory; and that in the absence of a third doctor's opinion, it is the medical assessment of the company-designated physician that should prevail." — This passage defines the mandatory nature of the third-doctor referral mechanism under Section 20-B(3) of the 2000 POEA-SEC and its consequence: default to the company-designated physician's assessment.

• C.F. Sharp Crew Management, Inc., et al. vs. Santos, G.R. No. 213731, August 1, 2018, 876 SCRA 87 — Followed. Held that diabetes mellitus is a metabolic and familial disease predisposed by heredity, obesity, or old age, not indicating work-relatedness, and that hypertension and diabetes do not ipso facto warrant permanent and total disability benefits.

• Atienza vs. Orophil Shipping International Co., Inc., et al., 815 Phil. 480 (2017) — Followed. Expounded on the harmonious operation of the Labor Code/AREC provisions and the 2000 POEA-SEC regarding the 120-day and 240-day treatment periods, establishing that temporary total disability becomes permanent only upon declaration by the company-designated physician or expiration of the 240-day maximum.

• Vergara vs. Hammonia Maritime Services, Inc., 588 Phil. 895 (2008) — Followed. Explained how the Labor Code/AREC and the 2000 POEA-SEC provisions operate together: the seafarer is on temporary total disability for 120 days, extendible to 240 days, during which the employer may declare permanent partial or total disability or the seafarer may be declared fit to work.

• Coca-Cola Bottlers Phils., Inc., etc. vs. Cabalo, et al., 516 Phil. 327 (2006) — Cited by petitioners and relied upon. Established that a "certified xerox copy" is no different from a "certified true copy" as long as the copy is certified by the proper officer as a faithful reproduction of the original, supporting substantial compliance with procedural requirements.

• Manansala vs. Marlow Navigation Phils., Inc., et al., 817 Phil. 84 (2017) — Followed. Recognized that the POEA-SEC's treatment of essential hypertension requires an element of gravity — three successive occurrences must be present: contracting essential hypertension, organ impairment arising therefrom, and permanent disability arising from that impairment.

• C.F. Sharp Crew Mgmt., Inc., et al. vs. Castillo, 809 Phil. 180 (2017) — Followed. Established that in the absence of a third doctor's opinion, the medical assessment of the company-designated physician prevails, and that seafarers are contractual employees whose non-rehiring does not prove permanent disability.

• Section 32-A, 2000 POEA-SEC (POEA Memorandum Circular No. 9, series of 2000) — Defines occupational diseases and the conditions for compensability. Section 32-A, paragraph 2(20) specifically governs essential hypertension, requiring that it cause impairment of vital organs resulting in permanent disability, substantiated by five documentary requirements. Applied to hold that respondent failed to satisfy the substantive and documentary requirements for essential hypertension.

• Section 20-B(3), 2000 POEA-SEC — Governs compensation and benefits for injury or illness, prescribing the 120-day sickness allowance period and the mandatory third-doctor referral procedure when the seafarer's personal physician disagrees with the company-designated physician's assessment. Applied to hold that respondent's failure to invoke the third-doctor referral mechanism rendered the company-designated physician's fit-to-work declaration controlling.

• Article 198(c)(1), Labor Code, as amended — Deems temporary total disability lasting continuously for more than 120 days as total and permanent, except as otherwise provided in the Rules. Read in conjunction with the AREC and the POEA-SEC to establish the 120/240-day framework.

• Rule VII, Section 2(b), Amended Rules on Employees' Compensation (AREC) — Defines total and permanent disability as inability to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided in Rule X.

• Rule X, Section 2(a), AREC — Provides that the 120-day temporary total disability period may be extended to a maximum of 240 days when the injury or sickness still requires medical attendance, during which the System may declare total and permanent status at any time after 120 days.

Perlas-Bernabe, S.A.J. (Chairperson), Hernando, Inting, and Rosario, JJ., concurred. No separate concurring opinions were written.