Esplago vs. Naess Shipping Philippines, Inc., et al.

A seafarer's claim for total and permanent disability benefits cannot prosper where the company-designated physician issues a final fit-to-work assessment within the justified 240-day extended period and the seafarer fails to comply with the POEA-SEC's mandatory third-doctor referral procedure after his private physician disagrees.

Juan S. Esplago was employed as a motorman by Naess Shipping Philippines, Inc. and/or Kuwait Oil Tanker Company for the vessel Arabiyah under a contract governed by the 2010 POEA-SEC. The 2010 POEA-SEC, deemed incorporated in the employment contract, governs compensation and benefits for work-related injury or illness and prescribes the roles of the company-designated physician, the seafarer's private physician, and a mutually agreed third doctor. The dispute concerns the assessment of Esplago's eye condition and his entitlement to disability benefits under that framework.

Juan S. Esplago was hired by Naess Shipping Philippines, Inc. and/or Kuwait Oil Tanker Company as a motorman for the vessel Arabiyah, with a basic monthly salary of US$666.00. Before his employment, he complied with the required medical examination and underwent a series of tests, after which the company-designated physician declared him fit to work. On July 25, 2011, he boarded the vessel for an eight-month tour of duty. As motorman, his responsibilities included watching over the engine room.

On October 11, 2011, while the vessel was on its way to Indonesia, Esplago was in the engine boiler room when it discharged an excessive amount of smoke that hurt his eyes. He disregarded the incident, thinking it was a simple eye irritation. After several days, however, his left eye vision began to blur until his left eye could no longer see. Upon examination by the ship doctor, he was diagnosed with "left eye cataract," and the ship doctor recommended his repatriation and immediate eye surgery. On October 17, 2011, he sought treatment at the Seamen's Hospital, where he was found to be suffering from "Senile, Mature, Cataract, Left Eye, Senile, Mature, Cataract, Right Eye." After reporting to his agency, he was referred to the Metropolitan Medical Center for treatment and management, where the company-designated physician Dr. Robert D. Lim and his team discovered that Esplago's right eye also had cataract and described his condition as "Cataract Senile Mature, Left Eye; Cataract Senile Mature, Right Eye." Dr. Lim recommended Phacoemulsification with Intra-Ocular Lens for both eyes, and Esplago was prescribed ointments and vitamins.

According to Esplago, the surgical procedure recommended by the ship doctor and the attending doctor at the Seamen's Hospital did not take place because there was no approval from respondents. He continued to take vitamins and apply ointment in the hope that these would correct the vision impairment. After several months of treatment but without surgery, his left eye could no longer see. It was only on June 1, 2012 that he underwent cataract surgery on his left eye, and afterwards respondents refused to provide medication for his right eye, causing it to deteriorate until he could no longer see. On July 13, 2012, he sought the opinion of Dr. Gina Abesamis Tan-Perez, who, after conducting the necessary tests and examinations, concluded that the nature and extent of his illness permanently and totally prohibited him from working and performing the demands of his work as a seaman. As a result, he lost the possibility of being employed as a seaman, but respondents failed to pay him total and permanent disability benefits.

Respondents, for their part, maintained that Esplago's condition was brought about by old age and was therefore not work-related. They asserted that he had surgery on his left eye on January 6, 2012, not on June 1, 2012 as he claimed. They also stated that he underwent continuous medication and treatment and was expected to recuperate within six to eight weeks after the surgery; that after the surgery he was fitted with prescription glasses and declared "fit to resume sea duties" as of May 7, 2012, or within the 240-day period allowed by law. Respondents further posited that the claim for disability benefits should be dismissed for failure to consult a third doctor, whose opinion is binding pursuant to the 2010 POEA-SEC.

The factual findings material to the Supreme Court's analysis were that the boiler room incident, which was the proximate cause of the injury and Esplago's untimely repatriation, transpired on October 11, 2011. He first sought treatment at the Seamen's Hospital on October 17, 2011. Before his cataract surgery on January 6, 2012, he had undergone continuous treatment as early as October 2011 and was referred to the Metropolitan Medical Center for further treatment and management. After the surgery, he continuously received medication and treatment from the ophthalmologist and was fitted with prescription lenses prior to the issuance of the final medical assessment on May 7, 2012. The company-designated physician declared him fit to resume sea duties on May 7, 2012, approximately 200 days after his repatriation and the commencement of his treatment. Dr. Tan-Perez examined him for only a day, on July 13, 2012, and based her assessment of unfitness solely on the observation that his right eye was not operated upon.

• Denial of Recommended Surgery and Medication: Petitioner averred that the surgery recommended by the ship doctor and the Seamen's Hospital attending doctor did not take place because respondents did not approve it; that he continued taking vitamins and applying ointment; that after several months without surgery his left eye could no longer see; that only on June 1, 2012 did he undergo cataract surgery on his left eye; and that respondents thereafter refused to provide medication for his right eye, causing it to deteriorate until he could no longer see.
• Private Physician's Assessment: Petitioner claimed that Dr. Gina Abesamis Tan-Perez, after tests and examinations on July 13, 2012, concluded that the nature and extent of his illness permanently and totally prohibited him from working and performing the demands of his work as a seaman, and that he lost the possibility of employment as a seaman.
• Failure to Issue Timely Final Assessment: Petitioner based his entitlement to total and permanent disability benefits on the alleged failure of the company-designated physician to arrive at a definite assessment of his disability within the 120-day period allowed by law, arguing that by reason of this delay he is deemed totally and permanently disabled by operation of law.
• CA Error: Petitioner argued that the Court of Appeals erred in reversing the NLRC and in holding that he is not entitled to total and permanent disability benefits for failure to comply with the POEA-SEC rule on referral to a third doctor.

• Old Age and Non-Work-Related Condition: Respondents asserted that petitioner's condition was brought about by old age and was not work-related.
• Timely Fit-to-Work Assessment: Respondents maintained that petitioner had surgery on his left eye on January 6, 2012, not June 1, 2012; that he underwent continuous medication and treatment; that he was expected to recuperate within six to eight weeks after surgery; and that after being fitted with prescription glasses, he was declared "fit to resume sea duties" as of May 7, 2012, or within the 240-day period allowed by law.
• Company-Designated Physician's Assessment Prevails: Respondents argued that the company-designated physician's final assessment on May 7, 2012 must prevail over the assessment of petitioner's private physician in the absence of an assessment from a third doctor.
• Failure to Consult Third Doctor: Respondents posited that petitioner's claim for disability benefits should be dismissed for failure to consult a third doctor, whose opinion is binding pursuant to the 2010 POEA-SEC.
• Grave Abuse of Discretion: On appeal to the Court of Appeals, respondents argued that the labor tribunals committed grave abuse of discretion and palpable error of law in awarding total and permanent disability benefits and attorney's fees to petitioner.

• Third-Doctor Referral and Entitlement: Whether the Court of Appeals erred in reversing the NLRC and in holding that petitioner is not entitled to total and permanent disability benefits for failure to comply with the POEA-SEC rule on referral to a third doctor.
• Timeliness of Final Assessment: Whether the company-designated physician's May 7, 2012 fit-to-work assessment was issued within the allowable 120/240-day period, such that petitioner did not become totally and permanently disabled by operation of law.

• Third-Doctor Referral and Entitlement: No. The Court of Appeals did not err in reversing the NLRC and dismissing the claim. Failure to comply with the POEA-SEC's mandatory third-doctor referral procedure when the company-designated physician's findings conflict with the seafarer's private physician constitutes a breach that results in dismissal of the claim for benefits.
• Timeliness of Final Assessment: No. The May 7, 2012 fit-to-work assessment was issued approximately 200 days after repatriation and the commencement of treatment, within the justified 240-day extended period; hence no permanent and total disability arose by operation of law. The company-designated physician's assessment was upheld.

• Third-Doctor Referral and Entitlement: The Court reasoned that a seafarer may consult a physician of his choice, but the law requires that when the company-designated physician's findings conflict with the private physician's findings, both parties must agree on a third doctor whose decision is final and binding. This procedure is strictly mandated by the POEA-SEC and cannot be bypassed or disregarded. Failure to comply is a breach and results in dismissal of the claim. Here, Dr. Tan-Perez assessed petitioner as unfit to work, conflicting with the company-designated physician's fit-to-work assessment. Petitioner did not refer the conflicting assessments to a third doctor. The company-designated physician's certification that petitioner was fit to resume sea duties therefore had to be upheld as final. The private assessment could not prevail also because Dr. Tan-Perez examined petitioner for only one day and based her unfitness finding solely on the unoperated right eye, while the attending specialist, after a series of tests, deemed only the left eye needed surgery and declared petitioner fit after continuous medication and prescription lenses.
• Timeliness of Final Assessment: The Court applied Article 192(c)(1) of the Labor Code, Section 2, Rule X of the Amended Rules on Employees' Compensation, and Section 20(A) of the 2010 POEA-SEC, as synthesized in Vergara, Olidana, and Elburg. Under these rules, the company-designated physician must issue a final assessment within 120 days from the seafarer's report; if justified, the period may be extended to 240 days, with the employer bearing the burden to prove sufficient justification. Failure to issue the assessment within 120 days without justification, or within 240 days even with justification, transforms temporary total disability into permanent total disability regardless of disability grade. Here, the boiler room incident occurred on October 11, 2011; petitioner was repatriated shortly thereafter; he first sought treatment on October 17, 2011; he underwent continuous treatment as early as October 2011 and was referred to the Metropolitan Medical Center; he had left-eye cataract surgery on January 6, 2012; and he continued medication and treatment, including prescription lenses, until the final assessment on May 7, 2012. That assessment was issued approximately 200 days after repatriation and the commencement of treatment, within the 240-day extended period. The records contained a detailed account of the treatment and procedures, sufficiently justifying the extension. The fit-to-work assessment was not indefinite or vague and was supported by exhaustive medical reports and a series of check-ups. Thus, no permanent and total disability arose by operation of law, and the Court of Appeals correctly reversed the NLRC.

• 120/240-Day Rule for Seafarers' Disability Assessments — Under Article 192(c)(1) of the Labor Code, Section 2, Rule X of the Amended Rules on Employees' Compensation, and Section 20(A) of the 2010 POEA-SEC, the company-designated physician must issue a final medical assessment on the seafarer's disability within 120 days from the time the seafarer reported to him. If the physician fails to do so within 120 days without justifiable reason, the seafarer's disability becomes permanent and total. If the failure is with sufficient justification, such as the seafarer requiring further medical treatment or being uncooperative, the period is extended to 240 days, and the employer bears the burden to prove the justification. If the physician still fails to issue an assessment within 240 days, the disability becomes permanent and total regardless of justification. The 240-day period is an exception and should not be presumed. Here, the May 7, 2012 assessment was approximately 200 days after repatriation and treatment, within the justified 240-day period, so no permanent and total disability arose by operation of law.
• Mandatory Third-Doctor Referral — When the company-designated physician's findings conflict with the seafarer's private physician, the parties must jointly agree on a third doctor whose decision is final and binding on both parties. This procedure is strictly mandated by the POEA-SEC and cannot be bypassed or disregarded. Failure to comply constitutes a breach of the rules and results in dismissal of the claim for benefits. Here, petitioner's private physician assessed him as unfit while the company-designated physician declared him fit; petitioner did not consult a third doctor, so the company-designated physician's assessment was upheld.
• Company-Designated Physician's Assessment Prevails Absent Third-Doctor Referral — The company-designated physician's fit-to-work certification is final and binding when the seafarer fails to observe the POEA-SEC procedure for resolving conflicting medical findings. Here, the May 7, 2012 certification that petitioner was fit to resume sea duties was upheld as final.
• Seafarer's Right to a Second Opinion — A seafarer is not precluded from seeking a second opinion from a physician of his choice if he is not satisfied with the company-designated physician's findings. This right, however, is qualified by the mandatory requirement that conflicting findings be submitted to a mutually agreed third doctor to validate a claim for permanent and total disability benefits. Here, petitioner's consultation with Dr. Tan-Perez did not excuse his non-compliance with the third-doctor referral.
• Requisites for Compensation under Section 20-B of the POEA-SEC — A seafarer claiming compensation and benefits under Section 20-B must prove: (1) he suffered an illness; (2) he suffered the illness during the term of his employment contract; (3) he complied with the procedures prescribed under Section 20-B; (4) his illness is an enumerated occupational disease or otherwise work-related; and (5) he complied with the four conditions under Section 32-A for an occupational disease or a disputably-presumed work-related disease to be compensable. Here, failure to comply with the Section 20-B third-doctor procedure was fatal to the claim.
• Definitions of Permanent and Total Disability — Permanent disability is the inability of a worker to perform his job for more than 120 days, or 240 days as the case may be, regardless of whether he loses the use of any part of his body. Total disability is the disablement of an employee to earn wages in the same kind of work of 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. These definitions framed the Court's analysis of whether petitioner's condition had ripened into permanent and total disability.
• Notice of Final Assessment — The company-designated physician is mandated to issue a medical certificate, which should be personally received by the seafarer or, if not practicable, sent by any other means sanctioned by the rules; proper notice is a cornerstone of due process. The Court stated this principle in discussing the final assessment process, although the resolution of the case turned on the timeliness of the assessment and the third-doctor referral.

• "The company-designated physician is expected to arrive at a definite assessment of the seafarer's fitness to work or permanent disability within the period of 120 or 240 days. That should he fail to do so and the seafarer's medical condition remains unresolved, the seafarer shall be deemed totally and permanently disabled." — This passage states the 120/240-day rule and the consequence of the company-designated physician's failure to issue a definite assessment; it is central to the Court's analysis of whether petitioner became permanently and totally disabled by operation of law.
• "The law, however, in its fervent desire to protect both parties from unjust and unfounded claims, requires that in the event that the findings of the company-designated physician is in conflict with the findings of the seafarer's private physician, both parties must come to an agreement and consult with a third doctor or physician in order to validate the claim for permanent and total disability benefits. This procedure cannot be bypassed or disregarded as it is strictly mandated by the POEA-SEC. Failure to comply with the same constitutes a breach of the rules and will result in the dismissal of the claim for benefits." — This is the Court's canonical formulation of the mandatory third-doctor referral rule and the basis for dismissing petitioner's claim.
• "Since the assessment was issued by the company-designated physician on May 7, 2012, or approximately 200 days after petitioner's repatriation and the commencement of his treatment, the same clearly falls within the 240-day extended period allowed by law." — This passage applies the 240-day extended period to the facts and explains why no permanent and total disability arose by operation of law.
• "For petitioner's failure to observe the procedures laid down in the POEA-SEC and the CBA, the Court is left without a choice but to uphold the certification issued by the company-designated physician that the petitioner was "fit to resume sea duties" as final." — This passage states the final consequence of petitioner's non-compliance with the POEA-SEC procedure and the reason the company-designated physician's certification was upheld.

• Jebsen Maritime, Inc. vs. Ravena, 743 Phil. 371, 388-389 (2014) — The Court relied on this case for the summary that a seafarer's disability benefits claim is governed by Articles 191 to 193 of the Labor Code, the POEA-SEC, and the medical findings of the company-designated physician, the seafarer's personal physician, and the mutually agreed third physician. Followed.
• Vergara vs. Hammonia Maritime Services, Inc., 588 Phil. 895, 912 (2008) — Clarified that the 120-day period may be extended to a maximum of 240 days provided the extension is justified. Followed.
• Olidana vs. Jebsens Maritime, Inc., 772 Phil. 234 (2015) — Discussed the 120/240-day period and held that failure of the company-designated physician to make a definite assessment transforms temporary total disability into permanent total disability regardless of disability grade. Followed.
• Kestrel Shipping Co., Inc. vs. Munar — Cited in Olidana; held that the company-designated physician's declaration is an obligation whose abdication transforms temporary total disability to permanent total disability regardless of disability grade. Cited.
• Elburg Shipmanagement Phils., Inc. vs. Quiogue, Jr., 765 Phil. 341 (2015) — Laid down the four guidelines on final medical assessment within 120/240 days and the consequences of failure. Followed.
• Marlow Navigation Philippines, Inc. vs. Osias, 773 Phil. 428 (2015) — Cited as an example where a medical report was properly issued within the 240-day extended period because the seafarer was uncooperative. Cited.
• Aldaba vs. Career Philippines Ship Management, Inc., 811 Phil. 486 (2017) — Cited as an example where disability was deemed permanent and total despite a Grade 8 rating because the assessment was issued on the 163rd day without justifiable reason. Cited.
• Gere vs. Anglo-Eastern Crew Management Phils., Inc., 830 Phil. 695 (2018) — Cited for the rule that failure to issue a final assessment within 120/240 days, lack of proper notice, and merely suggestive ratings result in permanent and total disability. Cited.
• Pastor vs. Baby Shipping Philippines, Inc., G.R. No. 23842, November 19, 2018 — Cited for the principle that the 240-day period is an exception and should not be presumed. Cited.
• Pastrana vs. Bahia Shipping Services, G.R. No. 227419, June 10, 2020 — Cited for the rule that a seafarer's entitlement to disability benefits is governed by the Labor Code, its IRR, the POEA-SEC, and prevailing jurisprudence. Cited.
• Sunit vs. OSM Maritime Services, Inc., 806 Phil. 505, 514 (2017) — Cited for the definitions of permanent and total disability. Cited.

• Article 192(c)(1), Labor Code — Defines permanent and total disability as temporary total disability lasting continuously for more than 120 days, except as otherwise provided in the Rules. Applied to determine whether petitioner's disability became permanent and total by operation of law. The text notes that this is now Article 198(c)(1) under the renumbered Labor Code per DOLE Department Advisory No. 01, Series of 2015.
• Articles 191 to 193, Chapter VI, Labor Code — Govern a seafarer's disability benefits claim. Cited in Jebsen Maritime, Inc. vs. Ravena and applied as part of the governing law.
• Section 2, Rule X, Amended Rules on Employees' Compensation Implementing Title II, 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, in which case temporary total disability benefit shall be paid; the System may declare total and permanent status at any time after 120 days as warranted. Applied to allow the 240-day extended period.
• Section 20(A), 2010 POEA-SEC — Governs compensation and benefits for work-related injury or illness; requires the company-designated physician to issue a final assessment; allows a third doctor if the seafarer's private physician disagrees; and makes the third doctor's decision final and binding. Applied to uphold the May 7, 2012 assessment and to require third-doctor referral. The text also refers to Section 20(B)(3) of the POEA-SEC, now Section 20(A)(3) of the 2010 POEA-SEC.
• Section 20-B, 2010 POEA-SEC — Sets the requisites for compensation and benefits; the seafarer must prove illness, that it was suffered during the term of the employment contract, compliance with the procedures under Section 20-B, that the illness is an enumerated occupational disease or otherwise work-related, and compliance with the four conditions under Section 32-A. Applied to require compliance with the third-doctor procedure.
• Section 32, 2010 POEA-SEC — Provides the schedule of disability or impediment; Grade 1 injuries or disabilities are considered total and permanent, such as blindness or total and permanent loss of vision of both eyes, but not only Grade 1 injuries or disabilities are considered total and permanent. Applied in discussing disability grading.
• Section 32-A, 2010 POEA-SEC — Lists the four conditions for an occupational disease or a disputably-presumed work-related disease to be compensable. Mentioned as a requisite for compensation.
• Rule 45, Rules of Court — Basis for the Petition for Review on Certiorari filed by petitioner. Procedural vehicle for the Supreme Court's review.

Hernando (Acting Chairperson), Inting, and Delos Santos, JJ., concur. Leonen (Chairperson), J., was on wellness leave. Hernando acted as Acting Chairperson per Special Order No. 2828 dated June 21, 2021.