Nisda vs. Sea Serve Maritime Agency

A seafarer's POEA-SEC remains effective until the seafarer signs off from the vessel and arrives at the point of hire, and a subsequently executed foreign contract not approved by the POEA is void and cannot supersede the POEA-SEC; coronary artery disease manifesting symptoms during the contract term is a compensable work-related occupational disease where the seafarer's employment involved strenuous conditions that caused or aggravated the condition.

Petitioner Carlos N. Nisda was a seafarer who had been repeatedly deployed by foreign principal Khalifa A. Algosaibi Diving and Marine Services Company (ADAMS), a Saudi Arabia-based maritime commerce company, as Tugboat Master over a span of fifteen years beginning in 1987. Nobel Ship Services, Inc. (Nobel) served as ADAMS's local manning agent and representative in the Philippines, with Annabel G. Guerrero as its Vice-President for Finance. During the relevant period, Nisda's employment was governed by a POEA-Standard Employment Contract (POEA-SEC) dated 7 August 2001, which incorporated the 2000 Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels. After Nobel's accreditation was transferred to respondent Sea Serve Maritime Agency (Sea Serve) on 5 May 2003, Sea Serve executed an Affidavit of Assumption of Responsibility assuming full and complete responsibility for all contractual obligations to seafarers originally recruited and processed by Nobel for ADAMS's vessels.

Carlos N. Nisda had been employed by Khalifa A. Algosaibi Diving and Marine Services Company (ADAMS), a foreign maritime commerce company based in the Kingdom of Saudi Arabia, as a Tugboat Master since 1987. ADAMS's local manning agent in the Philippines was Nobel Ship Services, Inc. (Nobel), with Annabel G. Guerrero serving as its Vice-President for Finance. Over the course of fifteen years, Nisda was repeatedly deployed by ADAMS under several employment contracts, working essentially under the same conditions — 48-hour work weeks with a maximum of 105 hours of overtime per month.

On 7 August 2001, Nisda signed a POEA-Standard Employment Contract (POEA-SEC) with ADAMS through Nobel, for the position of Master (Tug) on board M/V Algosaibi-21, at a basic monthly salary of US$1,437.00. The contract duration was stated as "6 MONTHS – Continuation of 3 Months remaining," or nine months in total, commencing upon Nisda's actual departure from the airport in Quezon City on 22 August 2001. Deemed incorporated into the POEA-SEC were the 2000 Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels. Nisda joined the vessel at the port of Rastanura, Saudi Arabia, on 22 August 2001.

On 30 August 2001, while on board M/V Algosaibi-21, Nisda and a representative of ADAMS entered into a second employment contract with a duration of 448 days, a basic salary of US$1,650.00 per month, and an effective date of 22 August 2001. This contract contained a stipulation canceling and superseding all prior agreements. However, the second contract was neither processed nor sanctioned by the POEA. Nisda disembarked from M/V Algosaibi-21 on 12 November 2001 and was repatriated for a month-long paid vacation. He subsequently left the Philippines on 9 December 2001 to embark on M/V Algosaibi-22 at Gizan, Saudi Arabia, in fulfillment of his obligations under the 7 August 2001 POEA-SEC. His deployment continued across multiple vessels: he disembarked from M/V Algosaibi-22 on 7 March 2002, embarked on M/V Algosaibi-42 the next day at the port of Tanjib, and remained on that vessel until his medical repatriation.

On 5 May 2002, while on board M/V Algosaibi-42, Nisda was brought to the Dar Al-Ta'afi Medical Services in Saudi Arabia, complaining of "pain of parascapular region of 6 months duration with paresthesia and numbness of both upper limbs." An orthopedist, Dr. Hossam A. Abubeih, diagnosed him with Myositis of the parascapular region with paresthesia on the upper limbs. His blood pressure was recorded at 160/100 mm/Hg, and he was advised to monitor it regularly. Nisda signed off and disembarked from M/V Algosaibi-42 at the port of Rastanura on 17 July 2002, and was repatriated to Quezon City, Philippines.

Within three days of his arrival, Nisda presented himself at Nobel's office for the requisite post-employment medical examination but was asked to return a week later. In the interim, on 18 July 2002, he returned to his home in Miagao, Iloilo. The following day, he consulted Dr. Geraldine Monteclaro Torrefiel, an internist specializing in allergy, asthma, and immunology, complaining of difficulty in breathing and chest pains radiating to the back — the same condition for which he had been treated in Saudi Arabia. Dr. Torrefiel recommended a complete cardiac evaluation. On 22 July 2002, an electrocardiograph conducted at St. Magdalene Diagnostic Clinic, Inc. revealed left ventricular hypertrophy with strain and/or ischemia. Nisda was referred to St. Luke's Medical Center, where a coronary angiogram on 25 August 2002 showed Severe Three Vessel Coronary Artery Disease and Left Ventricle Diastolic Dysfunction. Cardiologists impressed upon him the necessity of a bypass operation, and on 5 September 2002, Nisda underwent a triple coronary artery bypass surgery at the Makati Medical Center. The Makati Heart Foundation subsequently provided ADAMS the hospital package for the operation, but no response was forthcoming. Months later, Dr. Levi Rejuso, an internist specializing in neurology, issued a medical certificate declaring that Nisda could no longer perform his duties as a Ship Master and was categorized with Grade I disability.

On 4 November 2002, Nisda's counsel sent a formal demand to ADAMS and Nobel for US$60,000.00 in disability benefits, US$6,600.00 as illness allowance for 120 days, and reimbursement of ₱675,000.00 in medical expenses. Despite the demand, no payment was made. Nisda filed a complaint with the NLRC on 16 January 2003. While the complaint was pending, ADAMS remitted on 16 March 2003 the amounts of US$4,389.40 and US$5,997.33 to the Makati Medical Center and Makati Heart Foundation, respectively, covering medical and hospital expenses arising from the bypass operation. On 12 May 2003, Nobel and Guerrero moved to implead Sea Serve Maritime Agency, which had assumed ADAMS's accreditation from Nobel pursuant to an Affidavit of Assumption of Responsibility executed on 5 May 2003. The Labor Arbiter rendered a Decision on 23 July 2003 in favor of Nisda, awarding US$73,260.00 in disability benefits, sickness allowance, and attorney's fees. Sea Serve, which had not been notified of the decision, only learned of it on 10 October 2003 and filed its appeal to the NLRC on 20 October 2003. The NLRC reversed the Labor Arbiter on 14 May 2004, and the Court of Appeals affirmed the NLRC on 27 September 2006, both holding that Nisda's illness was non-compensable because it arose after the expiration of his POEA-SEC.

• Finality of Labor Arbiter's Decision: Petitioner asserted that the Labor Arbiter's Decision dated 23 July 2003 had already attained finality, since respondents Sea Serve and ADAMS filed their appeal with the NLRC beyond the ten-day reglementary period and failed to perfect the appeal for inability to post a valid appeal bond, the surety company having been disaccredited.
• Entitlement to Disability Benefits: Petitioner maintained that his illness was contracted during the term of his POEA-approved contract, pointing to the 5 May 2002 medical certification from the Saudi hospital as substantiating the causative circumstance leading to his permanent total disability, and that the symptoms manifested within the contract's duration.
• Compensability Under the POEA-SEC: Petitioner anchored his claim on Section 20(B), paragraph 6 of his POEA-SEC, which incorporated the 2000 Amended Standard Terms and Conditions, entitling him to disability benefits for a work-related illness suffered during the term of his contract.

• Expiration of the POEA-SEC: Respondents argued that Nisda's heart ailment was diagnosed long after his 7 August 2001 POEA-SEC expired on 21 May 2002, rendering his illness non-compensable under said contract, as Section 20(B) provides for employer liability only for injury or illness suffered during the term of the contract.
• Invalidity of the Second Contract: Respondents maintained that Nisda could not claim benefits under the 30 August 2001 employment contract signed directly with ADAMS, as it had no force and effect in this jurisdiction absent prior POEA approval, and that the NLRC could not acquire jurisdiction over claims arising from contracts without POEA approval.
• Prior Payment of Medical Expenses: Respondents countered that the foreign principal had already remitted payment for Nisda's medical expenses, specifically US$4,389.40 and US$5,997.33 to the Makati Medical Center and Makati Heart Foundation, respectively.
• Personal Liability of Guerrero: Respondents averred that Guerrero was not personally liable for Nisda's claims.

• Timeliness and Perfection of Appeal: Whether the NLRC and Court of Appeals had jurisdiction to alter, modify, or reverse the 23 July 2003 Decision of the Labor Arbiter, which had allegedly already attained finality.
• Compensability of Illness: Whether Nisda's coronary artery disease was contracted during the term of his POEA-SEC and was work-related, entitling him to disability benefits and sickness allowance under the 2000 Amended Standard Terms and Conditions.
• Effectivity of the POEA-SEC: Whether the POEA-SEC remained effective until Nisda's actual repatriation on 17 July 2002, notwithstanding the purported expiration of the nine-month period on 21 May 2002 and the execution of a second contract abroad.

• Timeliness and Perfection of Appeal: Yes, the NLRC and Court of Appeals had jurisdiction. The appeal was timely because Sea Serve was not notified of the Labor Arbiter's decision, and the reglementary period commenced only on 14 October 2003 when counsel personally secured a copy; the appeal bond was validly posted before the disaccreditation of the surety company took effect.
• Compensability of Illness: Yes. Nisda's coronary artery disease was work-related and compensable, the symptoms having manifested during the contract term and the disease being causally connected to the strenuous nature of his employment as a Tugboat Master over fifteen years.
• Effectivity of the POEA-SEC: Yes. The POEA-SEC remained effective until Nisda's actual repatriation on 17 July 2002, pursuant to Section 18 thereof, which provides that employment ceases when the seafarer signs off and arrives at the point of hire; the second contract was void for lack of POEA approval and could not supersede the POEA-SEC.

• Timeliness and Perfection of Appeal: The transfer of accreditation from Nobel to Sea Serve, effected through the Affidavit of Assumption of Responsibility dated 5 May 2003 pursuant to Section 6, Rule I, Book III of the 1991 POEA Rules, made it imperative upon the Labor Arbiter to notify Sea Serve and ADAMS of the adverse decision. The Notice dated 1 August 2003 attached to the Labor Arbiter's Decision informed only Nisda and his counsel, Nobel, Guerrero, and their counsel — omitting Sea Serve entirely. Because Sea Serve was left without knowledge of the decision, the reglementary period for appeal could not commence until it was actually served. The ten-day period began to run only on 14 October 2003, when counsel for Sea Serve and ADAMS personally secured a copy of the Decision; the Joint Appeal Memorandum filed on 20 October 2003 was therefore within the reglementary period. As to the appeal bond, the surety bond issued by Acropolis Central Guaranty Corporation was posted on 17 October 2003, prior to the NLRC Chairman's 3 November 2003 Memorandum disaccrediting Acropolis. The disaccreditation was applied prospectively, and respondents had subsequently transferred the bond to a duly authorized company. Substantial compliance with the rules on appeal was thus satisfied.

• Compensability of Illness: Two elements must concur for an illness to be compensable under Section 20(B), paragraph 6 of the 2000 Amended Standard Terms and Conditions: the illness must be work-related, and it must have existed during the term of the seafarer's employment contract. Section 32-A(11) expressly classifies Cardio-Vascular Disease as an occupational disease if contracted under specified working conditions, including where a person who was apparently asymptomatic before being subjected to strain at work showed signs and symptoms of cardiac injury during the performance of his work and such symptoms persisted. Nisda's physical discomforts as early as 5 May 2002 — parascapular pain, paresthesia, numbness, and elevated blood pressure — bore the hallmarks of coronary artery disease, which does not develop overnight but results from plaque buildup over months or years. It was highly probable that Nisda already had the disease during the life of his POEA-SEC, though undiagnosed because he had yet to experience overt symptoms. His fifteen years of service as a Tugboat Master, a position involving greater strain than that of a radioman (whose heart disease was found work-related in Seagull Shipmanagement), exposed him to different climates, unpredictable weather, and prolonged stress — factors that caused or at least aggravated his condition. Respondents failed to refute this connection. The initial diagnosis of Myositis by an orthopedist was imprecise; Nisda was never seen by a cardiologist in Saudi Arabia despite his elevated blood pressure. The fact that Nisda passed his pre-employment medical examination was not decisive, as such examinations are not exploratory and merely determine fitness for sea service without revealing a seafarer's true state of health. The post-employment medical examination, conducted within three working days of his return as required by Section 20(B)(3), revealed a far more serious condition than initially diagnosed, and it was highly improbable that the disease developed only in the few days after his arrival. ADAMS's own remittance of medical expenses for the bypass operation further undermined its claim that the illness was contracted after the contract expired. Without the opinion of a company-designated physician or a third doctor jointly chosen, the Court ruled based on the evidence submitted, including Nisda's medical certifications, which established Grade I disability.

• Effectivity of the POEA-SEC: Section 2(A) of the POEA-SEC provides that the contract commences upon the seafarer's actual departure from the airport in the point of hire with a POEA-approved contract. Counting nine months from 22 August 2001, the period expired on 21 May 2002. However, Section 2(A) also provides that the POEA-SEC shall be effective until the seafarer's date of arrival at the point of hire upon termination of the employment contract, pursuant to Section 18, which states that employment ceases when the seafarer completes his period of contractual service, signs off from the vessel, and arrives at the point of hire. Nisda signed off and was repatriated only on 17 July 2002; thus, the POEA-SEC concluded on that date. The second employment contract executed on 30 August 2001 directly with ADAMS was void for not having been sanctioned by the POEA. Under Placewell International Services Corporation vs. Camote, a subsequently executed side agreement is void as against existing laws, morals, and public policy, and cannot supersede the terms of the POEA-approved contract. Republic Act No. 8042 expressly prohibits the substitution or alteration of employment contracts already approved and verified by DOLE without DOLE approval. Since the second contract was void, Nisda's employment remained governed by the POEA-SEC until his repatriation on 17 July 2002.

• Two Requisites for Compensability of Seafarer's Illness — Under Section 20(B), paragraph 6 of the 2000 Amended Standard Terms and Conditions, two elements must concur: (1) the injury or illness must be work-related, and (2) the work-related injury or illness must have existed during the term of the seafarer's employment contract. The Court applied both requisites, finding that Nisda's coronary artery disease was work-related given the strenuous nature of his job and his fifteen years of exposure, and that it existed during the contract term because the symptoms manifested on 5 May 2002, well within the POEA-SEC's effective period.

• Occupational Disease — Cardio-Vascular Disease (Section 32-A(11)) — Cardio-Vascular Disease is an occupational disease if contracted under any of three conditions: (a) the heart disease was known to have been present during employment and an acute exacerbation was clearly precipitated by unusual strain by reason of the nature of the work; (b) the strain of work bringing about an acute attack was of sufficient severity and was followed within 24 hours by clinical signs of cardiac insult; or (c) a person who was apparently asymptomatic before being subjected to strain at work showed signs and symptoms of cardiac injury during the performance of his work and such symptoms persisted. The Court found the third condition applicable, as Nisda was apparently asymptomatic before being subjected to the strain of his work but showed signs and symptoms of cardiac injury during the performance of his duties.

• Effectivity of the POEA-SEC Until Actual Repatriation — Under Sections 2(A) and 18 of the POEA-SEC, the employment contract remains effective until the seafarer signs off from the vessel and arrives at the point of hire, regardless of whether the stated contractual duration has elapsed. The Court applied this to hold that Nisda's POEA-SEC was effective until 17 July 2002, the date of his actual repatriation, not merely until 21 May 2002 when the nine-month period nominally expired.

• Void Substitution of POEA-Approved Contract — A second employment contract executed directly between the seafarer and the foreign employer without POEA approval is void and cannot supersede the terms of the POEA-approved standard employment contract, pursuant to R.A. No. 8042 and the ruling in Placewell International Services Corporation vs. Camote. The Court applied this doctrine to hold that the 30 August 2001 contract was void, and the POEA-SEC continued to govern Nisda's employment.

• Pre-Employment Medical Examination Not Exploratory — Pre-employment medical examinations are usually not exploratory in nature; they merely determine whether a seafarer is "fit to work" at sea and do not describe the real state of health of the applicant. The Court relied on this principle to reject respondents' defense that Nisda's passing of his pre-employment medical examination precluded a finding that his heart disease developed during employment.

• Third-Doctor Mechanism — Under Section 20(B)(3) of the 2000 Amended Standard Terms and Conditions, if a doctor appointed by the seafarer disagrees with the assessment of the company-designated physician, a third doctor may be jointly agreed upon, and the third doctor's decision shall be final and binding. The Court noted that respondents never availed of this mechanism, leaving the Court to rule based on the evidence already submitted, including Nisda's medical certifications.

• "Such disease does not develop overnight. The plaque in the coronary arteries would have taken months, if not years, to build up, making it highly probable that petitioner Nisda already had the disease during the life of his POEA-SEC, although it went undiagnosed because he had yet to experience the symptoms." — This passage articulates the ratio decidendi on the temporal element of compensability: the disease's gradual development supports the inference that it existed during the contract term despite late diagnosis.

• "Since the second employment contract petitioner Nisda signed with respondent ADAMS was void for not having been sanctioned by the POEA, then petitioner Nisda's employment with respondent ADAMS was still governed by his POEA-SEC until his repatriation to the Philippines on 17 July 2002." — This states the controlling rule on the invalidity of contract substitution and the continuing effectivity of the POEA-SEC until actual repatriation.

• "If we found in Seagull Shipmanagement that the different climates and unpredictable weather, as well as the stress of the job, had a correlation with the heart disease of a seafarer working as a radioman on a vessel, then what more in the heart disease of a seafarer serving as a ship master, a position involving more strain and pressure?" — This reasoning by analogy establishes the work-relatedness of coronary artery disease for a Tugboat Master, extending the principle from Seagull Shipmanagement to a more demanding position.

• Seagull Shipmanagement and Transport, Inc. vs. National Labor Relations Commission, 388 Phil. 906 (2000) — Controlling precedent followed. The Court awarded benefits to the heirs of a seafarer-radioman who developed heart disease after exposure to different climates and unpredictable weather. The Court extended the reasoning to Nisda's case, noting that a Tugboat Master's position involved even greater strain and pressure.

• Placewell International Services Corporation vs. Camote, G.R. No. 169973, 26 June 2006, 492 SCRA 761 — Followed. Held that a subsequently executed side agreement between an overseas contract worker and the foreign employer is void for being contrary to law, morals, and public policy, and cannot supersede the POEA-approved contract. Applied to invalidate Nisda's second contract with ADAMS.

• NYK-FIL Ship Management, Inc. vs. National Labor Relations Commission, G.R. No. 161104, 27 September 2006, 503 SCRA 595 — Followed. Held that pre-employment medical examinations are not exploratory and cannot be relied upon to inform employers of a seafarer's true state of health. Applied to reject respondents' defense based on Nisda's passing of his pre-employment medical examination.

• The Estate of Posedio Ortega vs. Court of Appeals, G.R. No. 175005, 30 April 2008, 553 SCRA 649 — Cited for the principle that pre-employment medical examinations are usually not exploratory in nature.

• Datuman vs. First Cosmopolitan Manpower and Promotion Services, Inc., G.R. No. 156029, 14 November 2008 — Cited in support of the prohibition against contract substitution under R.A. No. 8042, as articulated in Placewell.

• Acevedo vs. Advanstar Company, Inc., G.R. No. 157656, 11 November 2005, 474 SCRA 656 — Cited for the rule that only questions of law may be raised in petitions under Rule 45, and that findings of fact of quasi-judicial bodies like the NLRC, as affirmed by the Court of Appeals, are generally conclusive on the Supreme Court.

• Pascua vs. National Labor Relations Commission, 351 Phil. 48 (1998) — Cited for the exception allowing the Supreme Court to delve into factual issues when the Labor Arbiter and the NLRC come up with conflicting positions, among other exceptional circumstances.

• Section 20(B), paragraphs 3 and 6, 2000 Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels — Provides the employer's liabilities when a seafarer suffers work-related injury or illness during the term of his contract, including sickness allowance for up to 120 days and compensation for permanent total or partial disability in accordance with the schedule in Section 32. Applied to award Nisda disability benefits and sickness allowance.

• Section 32-A(11), 2000 Amended Standard Terms and Conditions — Lists Cardio-Vascular Disease as an occupational disease compensable when contracted under specified working conditions involving strain. Applied to classify Nisda's coronary artery disease as an occupational disease.

• Section 2(A), POEA-SEC — Provides that the employment contract commences upon the seafarer's actual departure from the airport in the point of hire and remains effective until the seafarer's date of arrival at the point of hire upon termination of the contract. Applied to hold that the POEA-SEC was effective until 17 July 2002.

• Section 18, POEA-SEC — Provides that the employment of the seafarer shall cease when the seafarer completes his period of contractual service, signs off from the vessel, and arrives at the point of hire. Applied in conjunction with Section 2(A) to determine the actual expiration date of the contract.

• Section 6, Rule I, Book III, 1991 POEA Rules and Regulations Governing Overseas Employment — Governs the transfer of accreditation from one agency to another, requiring the transferee agency to assume full and complete responsibility for all contractual obligations to workers originally recruited by the former agency. Applied to establish Sea Serve's liability and its entitlement to notice of the Labor Arbiter's decision.

• Republic Act No. 8042 (Migrant Workers Act of 1995) — Prohibits the substitution or alteration, to the prejudice of the worker, of employment contracts already approved and verified by DOLE without DOLE approval. Applied to invalidate the second employment contract executed between Nisda and ADAMS without POEA sanction.

Consuelo Ynares-Santiago (Chairperson), Presbitero J. Velasco, Jr., Antonio Eduardo B. Nachura, and Diosdado M. Peralta concurred in the decision. No separate concurring opinions were written.