Elburg Shipmanagement Phils., Inc. vs. Quiogue, Jr.

A seafarer's disability becomes permanent and total when the company-designated physician fails to issue a final medical assessment within 120 days from the seafarer's report, unless the physician provides sufficient justification for extending the period to 240 days; the employer bears the burden of proving that justification, and failure to assess within 240 days makes permanent and total disability conclusive. A prior award of permanent disability benefits from a former employer does not bar a claim against a succeeding employer for a different injury under a different contract.

Quiogue was hired by Elburg Shipmanagement Philippines, Inc., for and on behalf of its principal Enterprise Shipping Agency SRL, to work as an Able Bodied Seaman on board the vessel MT Filicudi M. His employment contract was governed by the POEA-SEC and the ITF TCC CBA, which provided higher benefits in the event of disability or death. The dispute concerns the statutory and contractual framework for seafarers' permanent total disability claims, particularly Article 192(c)(1) of the Labor Code, Rule X, Section 2 of the Amended Rules on Employees' Compensation, and Section 20 of the POEA-SEC.

Respondent Ernesto S. Quiogue, Jr. was hired by Elburg Shipmanagement Philippines, Inc., for and on behalf of its principal Enterprise Shipping Agency SRL, to work as an Able Bodied Seaman on board the vessel MT Filicudi M with a basic salary of US$363.00. His employment contract was governed by the POEA-SEC and the ITF TCC CBA, which provided for higher benefits in the event of disability or death of a worker.

On November 11, 2010, while Quiogue was on duty transferring the fire wire, a co-worker accidentally dropped it on his left foot. He was immediately given first aid and thereafter sent to a hospital in Tarragona, Spain, where an x-ray examination showed that one of his metatarsal bones was fractured. On November 19, 2010, because the injury prevented him from performing his duties on board, he was repatriated and immediately referred to the Metropolitan Medical Center, where he was diagnosed with a non-displaced fracture of the cuneiform bone of the left foot.

Quiogue underwent treatment and therapy with the company-designated physician from November 2010 to April 2011. On April 13, 2011, the company-designated physician certified him as fit to work. Despite the treatment, Quiogue continued to feel pain and discomfort in his injured foot. He consequently sought a second opinion from Dr. Nicanor Escutin, an orthopedic surgeon, who after a battery of tests concluded that the extent of the injury rendered Quiogue permanently and totally incapable of performing his work as a seafarer. Dr. Escutin's medical certificate stated a final diagnosis of fracture of the cuneiform bone of the left foot and traumatic arthritis of the left foot, gave him a permanent disability rating, and declared him unfit for sea duty in whatever capacity as a seaman.

Quiogue sought compensation based on total permanent disability from petitioners, but they refused, insisting that he was not entitled to total permanent disability benefits because the company-designated physician had declared him fit to work. This refusal prompted Quiogue to file a complaint before the NLRC. In their Reply before the Court of Appeals, petitioners also informed the CA that Quiogue had previously filed a complaint claiming permanent disability benefits against his previous employer for injuries he sustained when he accidentally slipped from the vessel's stairway while on duty, and that the labor tribunal's favorable findings on his entitlement to permanent disability benefits were affirmed by the CA, which petitioners claimed showed Quiogue's propensity to make legal processes a money-making venture. Quiogue countered that his previous receipt of disability compensation from his former employer was irrelevant to his present claim because the two claims arose from different employment contracts years apart and not simultaneous, and the injuries were different.

The Labor Arbiter found that Quiogue's left foot injury affected his dexterity and flexibility in walking and enduring weights, and that this became a liability to his employment because he could no longer endure the manual and laborious work required of him as a seafarer. The NLRC found that Quiogue remained unemployed even after he filed the complaint to recover permanent total disability compensation. The Court of Appeals found that from Quiogue's repatriation on November 19, 2010, to the company-designated physician's fit-to-work certification on April 13, 2011, 145 days had elapsed, or more than 120 days. The records also showed that despite medication and therapy with the company-designated physician, Quiogue still experienced recurring pains in his injured left foot.

• Prior Disability Award as Bar: Petitioners argued that Quiogue had previously filed a claim for total and permanent disability benefits for which he was found to be suffering from permanent disability, and that the award of US$150,000.00 plus attorney's fees of US$15,000.00 in 2007 must bar his claim for disability benefits against them.
• Weight of Company-Designated Physician: Petitioners maintained that Dr. Escutin's disability report cannot prevail over the company-designated physician's findings absent any showing that the declaration of fitness to work was tainted with fraud or irregularity; citing Vergara vs. Hammonia Maritime Services, Inc., they argued that more weight should be given to the assessment of company doctors who attended and treated the seafarer throughout his illness than to the findings of doctors who merely examined him upon recovery and only to determine the degree of disability.
• Second Opinion Does Not Automatically Set Aside Company Findings: Petitioners argued that while the seafarer is entitled to seek a second or third opinion from his private doctors, this does not automatically set aside the findings of the company-designated physician.
• PEME Not Exploratory: Petitioners contended that it was of no moment that they never objected to Quiogue's pre-employment medical examination declaring him fit to work, because a PEME is not exploratory in nature and is not indicative of a seafarer's complete and whole medical condition.
• No Automatic Entitlement Based on 120 Days: Petitioners argued that Quiogue was not entitled to permanent and total disability benefits on the pretext that his medical treatment lasted for more than 120 days or that he was unable to return to seafaring duties for the same period.
• Dangerous Precedent: Petitioners claimed that awarding total and permanent disability benefits to Quiogue would have the effect of establishing a dangerous precedent.
• Attorney's Fees: Petitioners pointed out that the NLRC should not have awarded attorney's fees in favor of Quiogue because its basis was not discussed in the Labor Arbiter's decision.

• Prior Award Irrelevant: Quiogue countered that his previous receipt of disability compensation from his former employer was irrelevant to his present claim for permanent disability benefits against petitioners; the two claims for total and permanent disability came from different employment contracts which were years apart and not simultaneous, and the injuries were different, it being plain bad luck that he was injured in both employment contracts.
• Right to Second Opinion: He argued that under the POEA-SEC, the seafarer may object to the company-designated physician's assessment by securing a second opinion from a doctor of his choice; thus, the company-designated physician's declaration of fitness, despite recurring pains in his left injured foot, could not be considered an absolute determination of his health condition, and Dr. Escutin's assessment of permanent total disability deserved full credence.
• Disability Not Based Solely on 120 Days: Quiogue asserted that there was no basis for petitioners' allegation that his permanent disability claim was only due to his inability to work for 120 days; he claimed that he suffered permanent disability due to a work-related injury which prevented him from returning to his sea duties until the present time, and that it was not the period that was being compensated but the fact that he was rendered incapable to work due to disability.
• No Dangerous Precedent: He argued that petitioners' fear that affirming the award would set a dangerous precedent should not be given credence.

• Entitlement to Permanent Total Disability Benefits: Whether Quiogue is entitled to permanent and total disability benefits despite the company-designated physician's fit-to-work certification issued more than 120 days after his repatriation.
• 120/240-Day Rule: Whether the company-designated physician's failure to issue a final medical assessment within 120 days, without sufficient justification for extending the period to 240 days, renders the seafarer's disability permanent and total.
• Weight of Private Physician's Findings: Whether the findings of the seafarer's private physician, Dr. Escutin, may be upheld over the company-designated physician's declaration of fitness to work.
• Prior Disability Award as Bar: Whether Quiogue's previous award of permanent disability benefits from a former employer bars his claim for disability benefits against petitioners.
• Attorney's Fees: Whether the award of attorney's fees was proper.

• Entitlement to Permanent Total Disability Benefits: Yes. The company-designated physician failed to issue a final assessment within 120 days from repatriation without sufficient justification; the fit-to-work certification on April 13, 2011, or 145 days after repatriation, was beyond the authorized 120-day period, so the disability was permanent and total under Article 192(c)(1) of the Labor Code and the 120/240-day rules.
• 120/240-Day Rule: Yes. If the company-designated physician fails to give an assessment within 120 days without justifiable reason, the disability becomes permanent and total; if sufficient justification exists, the period may be extended to 240 days, but the employer bears the burden of proving justification, and failure to assess within 240 days makes permanent and total conclusive.
• Weight of Private Physician's Findings: Yes. The seafarer may consult a physician of his choice under the POEA-SEC; the labor tribunals properly evaluated Dr. Escutin's findings and found his Grade 1 disability rating appropriate, especially as Quiogue was not redeployed despite the fit-to-work assessment.
• Prior Disability Award as Bar: No. The prior receipt of permanent disability benefits from a former employer did not bar the present claim against succeeding employers, as the claims arose from different employment contracts and different injuries.
• Attorney's Fees: No. The award of attorney's fees was properly deleted because the Labor Arbiter failed to explain the factual and legal basis for it in the decision; attorney's fees cannot be justified only in the fallo.

• Entitlement to Permanent Total Disability Benefits: The governing law is Article 192(c)(1) of the Labor Code, which deems total and permanent the disabilities arising from temporary total disability lasting continuously for more than 120 days, except as otherwise provided in the Rules. Rule X, Section 2 of the Amended Rules on Employees' Compensation allows payment beyond 120 days but not exceeding 240 days where the injury or sickness still requires medical attendance. In Vergara vs. Hammonia Maritime Services, Inc., the Court harmonized Section 20 of the POEA-SEC, Article 192(c)(1), and Rule X, Section 2: the seafarer is on temporary total disability for up to 120 days; if the 120-day period is exceeded and no declaration is made because further medical attention is required, the period may be extended to a maximum of 240 days; the employer may declare permanent partial or total disability within that period; and the seaman may be declared fit to work at any time if justified. The Court then harmonized conflicting jurisprudence: cases denying benefits despite more than 120 but not more than 240 days did so because the company-designated physician opined that further medical treatment was required or the seafarer was uncooperative, thus justifying extension; cases granting benefits did so because the company-designated physician gave no justification for extending the period. The Court laid down the rules: the company-designated physician must issue a final medical assessment within 120 days from the seafarer's report; if he fails without justifiable reason, the disability becomes permanent and total; if he fails with sufficient justification, the period is extended to 240 days, with the employer bearing the burden to prove justification; and if he still fails within 240 days, the disability becomes permanent and total regardless of justification. Applying these rules, Quiogue was repatriated on November 19, 2010 and was unable to work for more than 120 days. The company-designated physician was silent on any need to extend the diagnosis and treatment period to 240 days, and the fit-to-work certification was issued only on April 13, 2011, or 145 days after repatriation. Because the certification was beyond the authorized 120-day period and no sufficient justification for extension was shown, Quiogue's disability was permanent and total. His entitlement did not rest solely on inability to work for more than 120 days but also on the company-designated physician's belated definite assessment without justifiable reason; he also remained unemployed even after filing the complaint.
• 120/240-Day Rule: The 120-day period under Article 192(c)(1) is the general rule, while the 240-day period under Rule X, Section 2 of the IRR is exceptional. The Court emphasized that the company-designated physician must perform some significant act before invoking the 240-day period, and must provide sufficient justification to extend the original 120-day period. Otherwise, the seafarer must be granted permanent and total disability benefits due to non-compliance. If the 240-day period is applied unconditionally, the IRR would become absolute and render the law inoperable, contrary to statutory construction. The Court balanced the seafarer's and employer's interests by requiring the company-designated physician's assessment to be issued within the authorized 120-day period or the properly extended 240-day period. The concern in INC Shipmanagement, Incorporated vs. Rosales about unscrupulous delay is addressed because the employer can extend only upon sufficient justification, such as need for further medical treatment or the seafarer's uncooperativeness.
• Weight of Private Physician's Findings: The right of a seafarer to consult a physician of his choice is sensible when the physician's findings are duly evaluated by the labor tribunals in awarding disability claims. Here, the NLRC evaluated the credibility of Dr. Escutin's findings and found that his Grade 1 disability rating was more appropriate and applicable to Quiogue's injury. With these medical findings and the fact that Quiogue failed to be redeployed by petitioners despite the fit-to-work assessment, Dr. Escutin's assessment should be upheld. Even without Dr. Escutin's official finding, Quiogue is deemed to have suffered permanent total disability because permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body; total disability means disablement from earning wages in the same kind of work or similar nature that he was trained for or accustomed to perform; and a total disability does not require complete disability or total paralysis, only that the injury prevents the employee from pursuing his usual work and earning from it, and is permanent if it lasts continuously for more than 120 days.
• Prior Disability Award as Bar: The Court found no basis for petitioners' contention that Quiogue's previous award of permanent disability benefits barred his present claim. The CA correctly concluded that the fact that Quiogue had previously received permanent disability benefits from his former employer for an injury sustained during that employment was immaterial and did not nullify a similar claim against his succeeding employers. In Micronesia Resources vs. Cantomayor, the possibility that the claimant could work again at sea did not negate the claim for permanent total disability benefits, and in Crystal Shipping, Inc. vs. Natividad, the law does not require that the illness be incurable; what is important is that the claimant was unable to perform his customary work for more than 120 days, which constitutes permanent total disability. Because Quiogue had not been able to resume work for more than 120 days and his disability did not fall within the exception provided by the Rules, the CA correctly sustained the award.
• Attorney's Fees: The CA was correct in deleting the award of attorney's fees for failure of the Labor Arbiter to explain Quiogue's entitlement thereto. There must always be a factual basis for the award of attorney's fees, and the factual, legal, or equitable justification must be set forth in the text of the decision. The matter of attorney's fees cannot be touched once and only in the fallo; otherwise, the award should be thrown out as speculative and conjectural. In the absence of a stipulation, attorney's fees are ordinarily not recoverable; otherwise, a premium would be placed on the right to litigate.

• 120/240-Day Rule for Seafarers' Permanent Total Disability — The company-designated physician must issue a final medical assessment on the seafarer's disability grading within 120 days from the time the seafarer reported to him. If the physician fails to give an assessment within 120 days without justifiable reason, the seafarer's disability becomes permanent and total. If the physician fails within 120 days with sufficient justification—such as the seafarer requiring further medical treatment or being uncooperative—the period of diagnosis and treatment is extended to 240 days, and the employer bears the burden to prove that justification. If the physician still fails to give an assessment within the extended 240-day period, the seafarer's disability becomes permanent and total regardless of any justification. The Court applied this rule to Quiogue: the company-designated physician issued the fit-to-work certification 145 days after repatriation, without any justification for extending the 120-day period, so the disability was permanent and total.
• Permanent Total Disability as Loss of Earning Capacity — Permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body. Total disability means the disablement of an employee to earn wages in the same kind of work or similar nature that he was trained for or accustomed to perform, or any kind of work which a person of his mentality and attainments could do. It does not require complete disability or total paralysis; what is necessary is that the injury prevents the employee from pursuing his usual work and earning from it, and it is permanent if it lasts continuously for more than 120 days. The Court used this doctrine to support Quiogue's entitlement even apart from Dr. Escutin's official finding.
• Seafarer's Right to a Second Opinion — Under the POEA-SEC, a seafarer may object to the company-designated physician's assessment by securing a second opinion from a doctor of his choice. The right to consult a physician of his choice is sensible when the physician's findings are duly evaluated by the labor tribunals in awarding disability claims. The company-designated physician's declaration of fitness is not an absolute determination of the seafarer's health condition. In this case, the NLRC properly evaluated Dr. Escutin's findings and found his Grade 1 disability rating more appropriate, especially since Quiogue was not redeployed despite the fit-to-work assessment.
• Prior Disability Benefits from a Former Employer Do Not Bar a Subsequent Claim — The receipt of permanent disability benefits from a former employer for an injury sustained in that employment does not nullify a similar claim against succeeding employers. The law does not require the illness to be incurable; what matters is that the seafarer was unable to perform his customary work for more than 120 days. The Court applied this doctrine in rejecting petitioners' argument that Quiogue's prior award of US$150,000.00 plus attorney's fees of US$15,000.00 in 2007 barred his present claim.
• Attorney's Fees Must Have a Factual Basis in the Decision — An award of attorney's fees must always have a factual basis, and the factual, legal, or equitable justification must be set forth in the text of the decision. The matter cannot be touched once and only in the fallo; otherwise, the award is speculative and conjectural. In the absence of a stipulation, attorney's fees are ordinarily not recoverable. The Court applied this doctrine to affirm the CA's deletion of the attorney's fees awarded by the Labor Arbiter.
• Harmonization of the Labor Code and Its IRR — The 120-day period under Article 192(c)(1) of the Labor Code is the general rule, while the 240-day period under Rule X, Section 2 of the IRR is exceptional. The company-designated physician must provide sufficient justification to extend the original 120-day period; otherwise, the seafarer must be granted permanent and total disability benefits. Applying the 240-day period unconditionally would render the law inoperable. The Court used this harmonization to resolve conflicting jurisprudence on seafarers' disability claims.

• "The company-designated physician must issue a final medical assessment on the seafarer's disability grading within a period of 120 days from the time the seafarer reported to him;" — This is the first of the Court's four summary rules, establishing the general deadline for the company-designated physician's final assessment.
• "If the company-designated physician fails to give his assessment within the period of 120 days, without any justifiable reason, then the seafarer's disability becomes permanent and total;" — This states the consequence of an unjustified failure to assess within 120 days, the core ratio for Quiogue's entitlement.
• "The fact that Quiogue was declared "fit to work" by the company-designated physician (with whom he underwent treatment and therapy from November 2010 to April 2011) on April 13, 2011 does not matter because the certification was issued beyond the authorized 120-day period." — This applies the 120-day rule to the facts, explaining why the belated fit-to-work certification did not defeat the claim.
• "The matter of attorney's fees cannot be touched once and only in the fallo of the decision or else, the award should be thrown out for being speculative and conjectural." — This states the rule requiring a factual basis for attorney's fees within the decision itself, supporting the deletion of the award.

• Vergara vs. Hammonia Maritime Services, Inc., 588 Phil. 895 (2008) — The controlling precedent that harmonized Section 20 of the POEA-SEC, Article 192(c)(1) of the Labor Code, and Rule X, Section 2 of the IRR; it established that the seafarer is on temporary total disability for up to 120 days, extendible to 240 days if further medical attention is required, and that the seafarer may be declared fit to work at any time if justified.
• Crystal Shipping, Inc. vs. Natividad, 510 Phil. 332 (2005) — Initially held that permanent disability is the inability of a worker to perform his job for more than 120 days regardless of loss of use of any body part; later modified by Vergara, but cited for the rule that inability to perform customary work for more than 120 days constitutes permanent total disability.
• Quitoriano vs. Jebsens Maritime, Inc., 624 Phil. 523 (2010) — Cited by the CA for the rule that a seafarer's disability is permanent and total when the fit-to-work certification was issued more than five months after medical repatriation.
• Oriental Shipmanagement Co., Inc. vs. Bastol, 636 Phil. 358 (2010) — Cited by the NLRC in holding that Quiogue's disability was permanent and total because more than five months had transpired from injury to the fit-to-work certification.
• INC Shipmanagement, Incorporated vs. Rosales, G.R. No. 195832, October 1, 2014, 737 SCRA 438 — Held that the doctor's findings should prevail over the simple lapse of the 120-day period and that disability is determined by the disability grading, not merely by counting treatment days; the Court harmonized this with the 120/240-day rules.
• APQ Shipmanagement vs. Caseñas, G.R. No. 197303, June 4, 2014, 725 SCRA 108 — Awarded permanent total disability benefits where the medical diagnosis and treatment exceeded 120 days but not 240 days and there was no showing of justification to extend the period.
• Krestel Shipping Co., Inc. vs. Munar, G.R. No. 198501, January 30, 2013, 689 SCRA 795 — Clarified that injuries or disabilities with a grading from 2 to 14 may be considered total and permanent if they incapacitate the seafarer from performing usual sea duties for more than 120 or 240 days, and that failure of the company-designated physician to assess within the period deems the seafarer totally and permanently disabled.
• Carcedo vs. Maine Marine Philippines, Inc., G.R. No. 203804, April 15, 2015 — Held that the company-designated physician's failure to give a definitive impediment rating beyond the extended temporary disability period, after 120 days but less than 240 days, caused the total and temporary disability to lapse into total and permanent disability.
• C.F. Sharp Crew Management, Inc. vs. Taok, G.R. No. 193679, July 18, 2012, 677 SCRA 296 — Enumerated a seafarer's causes of action for total and permanent disability, including failure to issue a declaration after 120 days without indication that further treatment would address the disability, and lapse of 240 days without certification.
• Micronesia Resources vs. Cantomayor, 552 Phil. 130 (2007) — Held that the possibility that the claimant could work again at sea does not negate the claim for permanent total disability benefits; cited against petitioners' argument that prior or subsequent work capacity barred the claim.
• Delos Santos vs. Jebsen Maritime, Inc., 512 Phil. 301 (2005) — Cited for the rule that attorney's fees must have a factual, legal, or equitable justification set forth in the text of the decision and cannot be awarded only in the fallo.
• GSIS vs. CA, 349 Phil. 357 (1998) — Cited for the principle that disability benefits should be understood not on medical significance but on loss of earning capacity.
• Maersk Filipinos Crewing Inc. vs. Mesina, G.R. No. 200837, June 5, 2013, 697 SCRA 601 — Cited for the right of a seafarer to consult a physician of his choice and for the guidelines on permanent total disability.
• United Philippine Lines, Inc. vs. Beseril, 521 Phil. 380 (2006) — Cited for the rule that a fit-to-work certification issued beyond the authorized 120-day period does not defeat the seafarer's claim for permanent total disability benefits.

• Article 192(c)(1), Labor Code — Provides that disabilities shall be deemed total and permanent when temporary total disability lasts continuously for more than 120 days, except as otherwise provided in the Rules. The Court applied this as the general 120-day rule for Quiogue's claim.
• Rule X, Section 2, Amended Rules on Employees' Compensation (IRR of Book IV, Labor Code) — Provides that income benefit shall not be paid longer than 120 consecutive days except where the injury or sickness still requires medical attendance beyond 120 days but not to exceed 240 days from onset of disability; the System may declare total and permanent status after 120 days. The Court applied this as the exceptional 240-day extension, which required sufficient justification and proof by the employer.
• Section 20(B)(3), POEA-SEC — Provides that upon sign-off for medical treatment, the seafarer is entitled to sickness allowance until declared fit to work or the degree of permanent disability is assessed by the company-designated physician, but in no case shall the period exceed 120 days; the seafarer must submit to post-employment medical examination; if a doctor appointed by the seafarer disagrees, a third doctor may be agreed jointly, whose decision is final and binding. The Court cited this to recognize the seafarer's right to a second opinion and to require the company-designated physician's assessment within the 120-day period.
• Section 20, POEA-SEC — Quoted in the decision as providing that the seafarer is entitled to sickness allowance until declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall the period exceed 120 days. The Court used this provision in harmonizing the 120-day and 240-day periods.
• Section 32, POEA-SEC — Referenced through Krestel Shipping Co., Inc. vs. Munar, classifying injuries or disabilities; Grade 1 may be considered total and permanent, while grades 2 to 14 may also be considered total and permanent if they incapacitate the seafarer from performing usual sea duties for more than 120 or 240 days. The Court cited this in discussing disability grading.
• Rule 45, Rules of Court — The procedural rule under which petitioners filed the petition for review on certiorari. The Court denied the petition.

Carpio (Chairperson), Brion, Perlas-Bernabe, and Leonen, JJ., concur. Perlas-Bernabe, J., was designated Acting Member in lieu of Associate Justice Mariano C. Del Castillo per Special Order No. 2115 dated July 22, 2015.