Clemente vs. Status Maritime Corporation

Although an employer's refusal to refer a seafarer to a company-designated physician makes the chosen physician's assessment binding, a seafarer who knowingly conceals a pre-existing illness or condition in the pre-employment medical examination is disqualified from any compensation and benefits under Section 20(E) of the POEA Standard Employment Contract.

Joey Rontos Clemente was engaged as a fitter by Status Maritime Corporation for and on behalf of Beks Gemi Isletmeciligi Ve Ticaret A.S., with Loma B. Aguiman named among the respondents. The engagement was governed by the POEA Standard Employment Contract, which provides the framework for compensation and benefits for injury or illness during the term of a seafarer's contract, including the requirement of a post-employment medical examination by a company-designated physician and the disqualification of a seafarer who knowingly conceals a pre-existing illness or condition.

On August 7, 2015, Joey Rontos Clemente was hired by Status Maritime Corporation as a fitter on behalf of Beks Gemi Isletmeciligi Ve Ticaret A.S. and its owner, Loma B. Aguiman. The contract was for 9+3 months upon mutual consent of both parties, with a basic monthly salary of US$735.20, fixed overtime for 103 hours of US$546.40, 48 hours of work per week, leave pay of US$171.55, leave subject of US$100.80, owner's bonus/extra overtime of US$264.05, overtime rate of US$5.30 per hour, point of hire in Manila, Philippines, and no CBA. Before boarding the vessel, Clemente underwent a pre-employment medical examination and was declared fit to work.

On March 25, 2016, Clemente's shoulder snapped and was dislocated while he was allegedly lifting a heavy object. He was repatriated and recommended for surgical repair after being diagnosed with recurrent left shoulder dislocation. Immediately after repatriation, he reported to Status Maritime, which referred him to the company-designated physician who advised him to undergo an MRI. Status Maritime later disapproved the procedure and rejected his sickness allowance claim. Clemente then consulted Dr. Misael Ticman. After undergoing an MRI, he was diagnosed with "Rotator cuff tear (Supra spinatus), left shoulder." Dr. Ticman concluded that his condition was a permanent disability and declared him unfit to work as a seafarer.

On June 16, 2016, Clemente filed a complaint for permanent total disability before the Labor Arbiter. He claimed US$60,000.00 in disability benefits, P1,000,000.00 in moral damages, P200,000.00 in exemplary damages, and attorney's fees. Status Maritime maintained that he was not entitled to disability benefits because he fraudulently concealed his history of shoulder dislocation. It alleged that Clemente disclosed to his crewmates that he had shoulder dislocations twice in the past. Ken Steven Lachica, one of Clemente's crewmates, stated that he was playing billiards with Clemente when the latter asked for help because he could not move his left shoulder. Jose Lancheta claimed that when the therapist came to relocate Clemente's shoulder, Clemente told him about having shoulder dislocations even before boarding the vessel. Volkan Jose likewise testified that Clemente told him about his history of shoulder dislocation. Status Maritime further claimed that Clemente admitted it was his third episode of shoulder dislocation when he was diagnosed by Dr. Ruben Raj Selvarajah abroad. Hence, when Clemente was repatriated, Status Maritime discontinued his treatment after discovering the fraudulent concealment. Status Maritime also maintained that Clemente's injury was not work-related, and it presented an engine logbook showing that on the day of the incident, there was no pump or compeller maintenance, which is usually done by a fitter, and posited that the injury occurred during a billiard game.

The labor tribunals and the Court of Appeals found that Clemente had suffered left shoulder dislocation twice before employment—in June and July 2015—and that he answered "no" in his medical certificate to the question whether he was suffering from any medical condition likely to be aggravated by service at sea or to render him unfit for service. They also found that his crewmates' testimonies corroborated his admission to Dr. Selvarajah that the March 25, 2016 episode was his third dislocation, and that the engine logbook showed no pump or compeller maintenance on the day of the incident, consistent with the account that the injury occurred during a billiards game. Clemente did not refute the concealment and prior dislocation, and he failed to show the connection of his injury to his work as a fitter.

• Willful Concealment: Petitioner argued that he did not willfully conceal his medical condition during the pre-employment medical examination; he merely forgot to disclose his medical history and, being a layman without medical background, thought there was no need to disclose the information.
• PEME Detection and Estoppel: Petitioner contended that his medical condition should have been detected during the pre-employment medical examination because it was an apparent and external injury, and that respondents were estopped because they had the opportunity to screen him for the injury.
• Reliance on Foreign Physician and Crewmate Testimonies: Petitioner averred that the Court of Appeals erred in relying solely on the findings of the foreign physician and the unverified testimonies of his co-workers.
• Company-Designated Physician: Petitioner questioned the lack of diagnosis by a company-designated physician, stressing that the POEA Standard Employment Contract mandates that a company-designated physician must make their own determination as to the seafarer's medical condition upon repatriation; failure to make a personal determination renders the assessment invalid. He pointed out that Dr. Selvarajah, a foreign doctor, was not a company-designated physician and was not qualified to make conclusive findings, and that Dr. Selvarajah's task was merely to give emergency medical attention, not to determine the nature and extent of his injury. He maintained that the failure of a company-designated physician to give a definite medical finding after the period set under the POEA Standard Employment Contract renders the disability permanent and total.
• Damages and Attorney's Fees: Petitioner claimed that he was entitled to moral and exemplary damages, as well as attorney's fees, because respondents grossly breached their duty to grant him disability benefits.
• Reply — Presumption of Fitness and Work-Relatedness: In his Reply, petitioner reiterated that there was no fraudulent misrepresentation, added that there is a presumption of fitness which was uncontroverted by evidence, and referred to respondents' verified undertaking during the issuance of a license to engage Filipino seafarers that it shall deploy only technically qualified and medically fit applicants. He argued that, at the very least, his employment contributed to the aggravation of his shoulder injury; that work-relatedness was apparent in his job as a fitter requiring manual work; and that his injury occurred while he was working and carrying a heavy object. Assuming the injury was not work-related, he averred that he was still entitled to disability benefits because it occurred during the effectivity of the contract and the POEA Standard Employment Contract does not specify that the injury or illness be work-related for it to be compensable.

• Medical Concealment: Respondents argued that petitioner was not entitled to disability benefits because he was guilty of medical concealment. Citing Section 20(E) of the POEA Standard Employment Contract, they averred that petitioner's failure to disclose his previous shoulder dislocation constituted fraudulent misrepresentation which disqualified him from any compensation or benefit. In his pre-employment medical examination, petitioner categorically denied that he had shoulder dislocations in the past, and this concealment exempted respondents from any obligation for the subsequent manifestation of the injury.
• Evidence and PEME Clearance: Respondents stressed that petitioner failed to refute their evidence and deny his previous episodes of shoulder dislocation. They claimed that petitioner could not capitalize on his pre-employment medical examination clearance because it was possible that his injury was not apparent at the time he was examined, making it difficult to detect, and that it was the seafarer's duty to disclose his medical history.
• Work-Relatedness: Respondents argued that petitioner did not establish that his injury was work-related. They pointed out that petitioner's claim that he was lifting a heavy object when his shoulder snapped was baseless because he neither identified the time and place of the incident nor the object he was lifting. They presented an engine logbook showing that on the day of the incident, there was no pump or compeller maintenance, which is usually done by a fitter. They posited that petitioner's shoulder injury occurred during a billiard game, and an injury during an off-duty incident should not be compensable because it is not work-related.
• Damages and Attorney's Fees: Respondents contended that petitioner was not entitled to damages and attorney's fees as they did not act in bad faith in rejecting his disability claim.

• Entitlement to Permanent and Total Disability Benefits: Whether petitioner is entitled to permanent and total disability benefits.
• Compliance with Referral to Company-Designated Physician: Whether respondents complied with their obligation of referral to a company-designated physician.
• Fraudulent Concealment: Whether petitioner is disqualified from claiming disability benefits due to fraudulent concealment.

• Entitlement to Permanent and Total Disability Benefits: No. Although respondents failed to comply with the referral obligation, petitioner's fraudulent concealment disqualified him from any compensation and benefits under Section 20(E) of the POEA Standard Employment Contract.
• Compliance with Referral to Company-Designated Physician: No. Respondents refused to subject petitioner to a post-employment medical examination by a company-designated physician; Dr. Selvarajah's foreign diagnosis was not a company-designated physician's thorough, final, and definitive assessment.
• Fraudulent Concealment: Yes. Petitioner knowingly concealed his pre-existing shoulder dislocation in his pre-employment medical examination, and Section 20(E) disqualifies him from any compensation and benefits.

• Entitlement to Permanent and Total Disability Benefits: The claim for permanent and total disability benefits was denied. Section 20(A) of the POEA Standard Employment Contract governs the employer's liability when a seafarer suffers a work-related injury or illness during the term of the contract. Under the rules synthesized in Kestrel Shipping Co., Inc. vs. Munar, the seafarer must report to the company-designated physician within three days from arrival; temporary total disability lasts up to 120 days, extendable to a maximum of 240 days, and becomes permanent only upon declaration by the company physician within the allowed periods or upon expiration of the maximum 240-day period without a declaration of fitness or permanent disability. Here, the denial rested on petitioner's fraudulent concealment. Even though respondents failed to comply with the referral obligation, petitioner's knowing concealment of a pre-existing condition disqualified him from any compensation and benefits under Section 20(E).
• Compliance with Referral to Company-Designated Physician: Respondents did not comply with their obligation to refer petitioner to a company-designated physician. Section 20(A) requires the seafarer to submit to a post-employment medical examination by a company-designated physician within three working days upon return, and the employer is correspondingly obliged to conduct a meaningful and timely examination. The company-designated physician must be the doctor who diagnoses the seafarer after repatriation, and the post-employment examination presumes a thorough, final, and definitive assessment. Dr. Selvarajah's diagnosis could not be considered compliance: a strict reading of the POEA Standard Employment Contract requires the company-designated physician to diagnose upon repatriation; even under a liberal application, Dr. Selvarajah's assessment was not thorough, final, and definitive because it was merely for urgent medical care, no tests were shown to have been conducted, and he recommended further tests and an orthopedic surgeon. His report also stated that it was not meant for medicolegal proceedings, should not be used as a reference in any court hearing, and did not support any compensation claim. Petitioner's chosen physician, Dr. Ticman, an orthopedic surgeon, diagnosed a rotator cuff tear after an MRI and declared permanent disability and unfitness to work as a seaman. When there is no post-employment medical examination by a company-designated physician, the evaluation of the chosen physician is considered by law as binding between the parties. Respondents' refusal to submit petitioner to a medical examination contravened their responsibility under the POEA Standard Employment Contract, so Dr. Ticman's permanent disability rating stood.
• Fraudulent Concealment: Petitioner was disqualified due to fraudulent concealment. Section 20(E) provides that a seafarer who knowingly conceals a pre-existing illness or condition in the pre-employment medical examination is liable for misrepresentation and shall be disqualified from any compensation and benefits; the concealment is also a just cause for termination and administrative sanctions. Philman Marine Agency, Inc. vs. Cabanban ruled that a seafarer's failure to disclose an illness or injury of which they have knowledge disqualifies them from claiming disability benefits, and that a seafarer cannot capitalize on a PEME clearance because the PEME is not exhaustive or exploratory; employers are not burdened to discover all pre-existing conditions, as the PEME is only a summary examination of physiological condition. Ayungo vs. Beamko Shipmanagement Corp. likewise held that non-disclosure of a previous medical illness constitutes fraudulent misrepresentation under Section 20(E). Status Maritime Corp. vs. Spouses Delalamon held that a PEME clearance does not preclude the employer from rejecting disability claims if the seafarer willfully concealed medical history, and that a "fit to work" declaration is not conclusive proof of freedom from ailment prior to deployment. Deocariza vs. Fleet Management Services Philippines, Inc. placed the burden on the employer to prove concealment and defined an illness as pre-existing if, prior to POEA contract processing, a medical doctor advised treatment for the continuing illness or condition, or the seafarer had been diagnosed and knew of the illness or condition but failed to disclose it during the PEME and it could not be diagnosed during the PEME. Here, petitioner knowingly concealed his history of shoulder dislocation. The labor tribunals and the Court of Appeals resolved that he had two instances of left shoulder dislocation prior to employment—in June 2015 and July 2015. Knowing of this recurring condition, he should have disclosed it during his pre-employment medical examination. His non-disclosure was apparent in his medical certificate, where he answered "no" to the question "Is applicant suffering from any medical condition likely to be aggravated by service at sea or to render the seafarer unfit for service...?" He could not bank on his PEME clearance because the examination is not exploratory and employers are not burdened to discover all pre-existing conditions. His contention that his co-workers' affidavits should not be credited because they were unverified failed because Article 227 of the Labor Code provides that labor tribunals are not bound by technical rules of evidence and may use all reasonable means to ascertain the facts without regard to technicalities. Respondents also presented an engine logbook showing no pump or compeller maintenance on the day of the incident, which coincided with the co-workers' testimony that they were playing billiards when the injury occurred. Intentional concealment of a pre-existing illness or injury is a ground for disqualification for compensation and benefits under the POEA Standard Employment Contract; while laws give ample protection to seafarers, this protection does not condone fraud and dishonesty. Petitioner could not feign ignorance and downplay the concealment of his medical condition; he knew he had a recurring shoulder dislocation and never denied it. Hence, his disability claim was denied.

• Company-designated physician requirement and employer refusal — Under Section 20(A) of the POEA Standard Employment Contract, the employer must cause the seafarer to undergo a post-employment medical examination by a company-designated physician within three working days from return; the obligation is reciprocal, and the employer must conduct a meaningful and timely examination. The company-designated physician must make a thorough, final, and definitive assessment of the seafarer's condition. If the employer refuses or fails to provide such examination, the seafarer may rely on a physician of choice, and absent a company-designated assessment, the chosen physician's evaluation is considered binding. Applied: respondents refused to subject Clemente to a post-employment examination; Dr. Selvarajah's foreign emergency diagnosis was not a company-designated physician's definitive assessment; Dr. Ticman's permanent disability rating stood.
• Fraudulent concealment of pre-existing illness or condition — Section 20(E) of the POEA Standard Employment Contract disqualifies a seafarer who knowingly conceals a pre-existing illness or condition in the PEME from any compensation and benefits; the concealment is misrepresentation and a just cause for termination and administrative sanctions. The employer bears the burden to prove concealment; an illness is pre-existing if prior to POEA contract processing, a doctor advised treatment for the continuing illness or condition, or the seafarer had been diagnosed and knew of it but failed to disclose it during the PEME and it could not be diagnosed during the PEME. Applied: Clemente knew of two prior shoulder dislocations in June and July 2015, answered "no" to the PEME question on conditions likely aggravated at sea, and never denied the prior episodes; he was disqualified.
• PEME is not exploratory; fit-to-work clearance is not conclusive — A pre-employment medical examination is a summary examination of physiological condition and determines fitness for sea service; it is not exploratory and does not require the employer to discover all pre-existing conditions. A "fit to work" declaration does not excuse a seafarer's willful non-disclosure nor preclude the employer from rejecting disability claims. Applied: Clemente could not rely on his PEME clearance to avoid disqualification.
• Labor tribunals not bound by technical rules of evidence — Article 227 of the Labor Code provides that labor tribunals are not bound by technical rules of evidence and may use all reasonable means to ascertain facts without regard to technicalities. Applied: the affidavits/testimonies of Clemente's crewmates could be accepted despite not being verified.
• Seafarer protection does not condone fraud — While labor laws afford ample protection to seafarers, intentional concealment of a pre-existing illness or injury is a ground for disqualification for compensation and benefits under the POEA Standard Employment Contract. Applied: Clemente's disability claim was denied despite respondents' procedural lapse.

• "A seafarer who knowingly conceals a pre-existing illness or condition in the Pre-Employment Medical Examination (PEME) shall be liable for misrepresentation and shall be disqualified from any compensation and benefits. This is likewise a just cause for termination of employment and imposition of appropriate administrative sanctions." — This is the Section 20(E) rule that supplied the decisive ground for denying Clemente's claim.
• "When there is no post-employment medical examination by a company-designated physician, the evaluation of the chosen physician is considered by law as binding between the parties." — This states the consequence of the employer's refusal to refer the seafarer, which made Dr. Ticman's permanent disability rating binding even though the claim was ultimately disqualified.
• "Intentional concealment of a pre-existing illness or injury is a ground for disqualification for compensation and benefits under the POEA Standard Employment Contract. While our laws give ample protection to our seafarers, this protection does not condone fraud and dishonesty." — This is the ratio for denying benefits despite the employer's procedural lapse.
• "The PEME is not exploratory and does not allow the employer to discover any and all pre-existing medical condition with which the seafarer is suffering and for which he may be presently taking medication." — This defines the limited scope of the PEME and rejects reliance on a fit-to-work clearance to excuse non-disclosure.

• Kestrel Shipping Co., Inc. vs. Munar, 702 Phil. 717 (2013) — Cited for the synthesized rules and periods for determining a seafarer's disability: report to company-designated physician within three days; temporary total disability for up to 120 days, extendable to 240 days; permanent disability only upon declaration or expiration of the maximum period without declaration.
• Manota vs. Avantgarde Shipping Corp., 715 Phil. 54 (2013) — Cited to explain that the three-day post-employment medical examination protects employers from unscrupulous claims and difficulty in determining causation due to passage of time.
• Ebuenga vs. Southfield Agencies, Inc., G.R. No. 208396, March 14, 2018 — Cited for the reciprocal obligation of seafarer and employer in the post-employment medical examination and for the rule that the employer must conduct a meaningful and timely examination.
• Orient Hope Agencies, Inc. vs. Jara, G.R. No. 204307, June 6, 2018 — Cited for the requirement that the company-designated physician's assessment be complete and definite to reflect the true extent of the seafarer's injury and capacity to resume work.
• Dionio vs. ND Shipping Agency and Allied Services, Inc., G.R. No. 231096, August 15, 2018 — Cited for the rule that between a non-existent company-designated physician assessment and the seafarer's chosen physicians' assessment, the latter stands; employer obliged to refer and shoulder medical expenses.
• Philman Marine Agency, Inc. vs. Cabanban, 715 Phil. 454 (2013) — Cited as controlling on disqualification for non-disclosure of a known pre-existing illness and on the non-exploratory nature of the PEME; a fit-to-work clearance does not excuse concealment.
• Ayungo vs. Beamko Shipmanagement Corp., G.R. No. 203161, February 26, 2014 — Cited for the ruling that non-disclosure of a pre-existing illness and medication during PEME constitutes fraudulent misrepresentation disqualifying the seafarer under Section 20(E).
• Status Maritime Corp. vs. Spouses Delalamon, 740 Phil. 175 (2014) — Cited for the rule that a PEME clearance does not preclude the employer from rejecting disability claims upon proof of willful concealment.
• Deocariza vs. Fleet Management Services Philippines, Inc., G.R. No. 229955, July 23, 2018 — Cited for placing the burden on the employer to prove concealment and for defining when an illness is considered pre-existing under Section 20(E).

• POEA Memo. Circ. No. 010-10, Section 20(A) — Governs compensation and benefits for work-related injury or illness during the term of the seafarer's contract; requires the employer to provide medical treatment, sickness allowance, and a post-employment medical examination by a company-designated physician within three working days from return; provides for a third-doctor mechanism and disputable presumption for unlisted illnesses. Applied to determine respondents' referral obligation and the effect of their refusal.
• POEA Memo. Circ. No. 010-10, Section 20(E) — Disqualifies a seafarer who knowingly conceals a pre-existing illness or condition in the PEME from any compensation and benefits; the concealment is misrepresentation and a just cause for termination and administrative sanctions. Applied to deny Clemente's claim.
• Labor Code, Article 227 — Provides that labor tribunals are not bound by technical rules of evidence and may use all reasonable means to ascertain facts without regard to technicalities. Applied to allow consideration of the crewmates' testimonies despite not being verified.

Gesmundo, Carandang, Lazaro-Javier, and Gaerlan, JJ., concur. Lazaro-Javier, J., was designated as an additional Member per Raffle dated June 8, 2020.