Oscares vs. Magsaysay Maritime Corp.

A seafarer's injury sustained while engaged in an act of personal comfort on board a vessel — such as singing — is compensable as arising out of and in the course of employment, provided the seafarer did not willfully injure himself or act with notorious negligence, and the disability grading is governed by the 2010 POEA-SEC when the CBA invoked is not properly authenticated or shown to be the one referred to in the employment contract.

Oscares was employed as Second Assistant Engineer on board the vessel MV K. Garnet under a contract approved by the POEA on August 14, 2015, with SK Shipping (Singapore) Pte. Ltd., through its manning agent Magsaysay Maritime Corporation. He was responsible for the maintenance, operation of engineering, electrical, and electronic systems of the vessel. Arnold B. Javier was the President of Magsaysay Maritime Corporation. Entitlement to disability benefits by seafarers is governed not only by the contract between the parties but also by the Labor Code and the POEA-SEC, and the rule on compensation for work-related injuries of seafarers is analogous to the rule under the Workmen's Compensation Act.

On August 14, 2015, the Philippine Overseas Employment Administration approved the contract of employment between Oscares and respondent SK Shipping (Singapore) Pte. Ltd., through its manning agent Magsaysay Maritime Corporation. Oscares was certified as fit to work by respondents' examining physician on August 29, 2015. He was hired as Second Assistant Engineer on board the vessel MV K. Garnet, responsible for the maintenance, operation of engineering, electrical, and electronic systems of the vessel.

On November 4, 2015, while the vessel was anchored in Panama, Oscares was singing in front of a videoke machine together with another crew member when he slipped and fell out of balance, suffering major knee injuries. First aid was administered to him. On November 11, 2015, he was sent to a medical facility in San Luis Hospital, Mexico, where he was diagnosed with fracture fragmentary of the tibia bone epiphysis in the right leg and fracture crack of the tibia bone epiphysis in the left leg. It was recommended that he undergo major knee surgery or osteosintesis-fixation and sterilization. Oscares was declared unfit to work for 10 weeks.

On December 10, 2015, Oscares was repatriated to Manila. Upon arrival, he reported to respondents who referred him to NGC Medical Specialist Clinic, Inc. (NGC) for post-employment medical examination and management. Oscares underwent x-ray of both knees on December 14, 2015, which revealed a complete oblique fracture of the right medical condyle, and he was recommended to undergo major knee surgery. Respondents insisted that Oscares should shoulder the cost of his surgery. Since his protests fell on deaf ears, he was compelled to undergo the necessary surgery on December 29, 2016, shouldering both the surgery and his subsequent physical rehabilitation. Nonetheless, he was required to continue reporting to NGC.

On March 16, 2016, NGC issued an interim disability assessment of Grade 10 — complete immobility of a knee joint in full flexion. However, Oscares' attending physician in Seamen's Hospital, Iloilo declared him unfit for duty on April 12, 2016, with removal of his plates recommended thereafter. On July 28, 2016, Dr. Nicomedes G. Cruz issued a final disability assessment of Grade 10 for Oscares. Before that, Oscares had sought the opinion of Dr. Manuel Magtira, an orthopaedist, who issued a medical report dated July 12, 2016 recommending permanent disability and considering him permanently unfit in any capacity for further sea duties. Dr. Victor Pundavela, another doctor consulted by Oscares, issued a medical report on July 14, 2016 likewise stating that he was permanently disabled and unfit for sea duty in any capacity.

Consequently, Oscares sent a demand letter dated July 25, 2016 to respondents for a copy of his final assessment and referral to a third doctor. Since respondents took no action, he filed a notice to arbitrate against them. After mandatory conciliation/mediation, the parties reached a deadlock. The Panel of Voluntary Arbitrators ruled on July 14, 2017 that Oscares was entitled to total and permanent disability benefits worth US$131,797.00 based on the CBA, plus moral damages of P100,000.00 for respondents' gross negligence in delaying and refusing to shoulder Oscares' medical needs, and attorney's fees equivalent to 10% of the total award. The CA reversed, holding that Oscares' injury was not work-related, work-caused, or work-aggravated and had no connection whatsoever to his official duties, rendering it non-compensable.

• Work-Relatedness Under the Continuous Employment Principle: Oscares argued that under Iloilo Dock & Engineering Co. vs. Workmen's Compensation Commission, since seafarers are paid from embarkation until disembarkation and must stay on board even during rest and recreation, any injury incurred during rest and recreation should be compensable as long as their actions are not contrary to law or intentionally self-inflicted.
• Presumption of Work-Relation: It is presumed that an injury was directly caused by or arose out of employment or was aggravated by it if it was established through evidence that the injury occurred in the course of employment. Since Oscares incurred his injury while in the course of his employment on the vessel, the presumption applies.
• Inadequacy of Designated Physician's Assessment: Respondents' designated physician failed to issue a categorical certification that Oscares was fit to work, failed to discuss the implication of his disability on his capacity to return to work, and did not clarify Oscares' medical condition. Due to respondents' failure to issue a final assessment in accordance with the law, Oscares is presumed to have total and permanent disability and is entitled to a Grade 1 disability rating.
• Failure to Refer to Third Doctor: Respondents failed to respond to Oscares' offer to refer his case to a third physician, so Oscares cannot be faulted for filing the complaint without a third doctor's opinion, and the certification from his chosen physicians should prevail.

• Due Process Argument Raised Late: Oscares cannot argue for the first time before the Supreme Court that his right to due process was violated when respondents' designated physician did not give him a copy of the final assessment, as Oscares was well-aware of the Grade 10 disability assessment explained to him on his last medical visit.
• Sufficiency of Designated Physician's Assessment: The POEA-SEC does not require the company-designated physician to discuss the implication of disability on capacity to work. Section 20A only requires an assessment of fitness to work or degree of disability, which respondents' designated physician complied with.
• Inapplicability of Iloilo Dock: Iloilo Dock & Engineering Co. does not state that rest and recreation forms part of employment, and in any event is inapplicable because the issue there was compensability of death in relation to proximity to the workplace, whereas here the issue is whether an injury incurred during rest and recreation is compensable.
• Injury Not Work-Related: Oscares was not hired to sing on board, so his injury was not incidental to his employment. His act of singing while jumping was a purely personal and social function with no relation to his duties as Second Assistant Engineer.
• No Basis for Total and Permanent Disability: The mere fact that respondents did not rehire Oscares is not conclusive proof of disability, as Oscares did not show that he sought employment elsewhere but was unsuccessful due to his condition.
• Premature Consultation of Private Physicians: Oscares failed to comply with the POEA-SEC's requirement that a final assessment must be made by the company-designated physician before it can be disputed through a secondary assessment. Oscares consulted his chosen physicians on July 12 and 14, 2016, before respondents' designated physician issued the final assessment on July 28, 2016.
• Wrong CBA and No Entitlement to Damages: The CBA submitted by Oscares is different from the CBA in their contract, so he cannot claim benefits under it. He is also not entitled to moral damages and attorney's fees because respondents dutifully complied with their obligations by giving him medical attention prior to the issuance of the final assessment.

• Compensability of Injury: Whether Oscares' injury sustained while singing on board the vessel is compensable as work-related under the POEA-SEC.
• Proper Disability Grading and Governing Instrument: Whether Oscares is entitled to total and permanent disability benefits under the CBA or disability benefits under the POEA-SEC, and the proper disability grading and amount.
• Sickness Allowance: Whether Oscares is entitled to sickness allowance under Section 20(A)(3) of the 2010 POEA-SEC.
• Moral Damages and Attorney's Fees: Whether Oscares is entitled to moral damages and attorney's fees.
• Joint and Solidary Liability: Whether respondents, including Arnold B. Javier as President of Magsaysay Maritime Corporation, are jointly and severally liable.

• Compensability of Injury: Yes. Oscares' injury is compensable as work-related, his act of singing being necessary to his health and comfort while on board the vessel and incidental to employment, with no showing of willful self-injury or notorious negligence.
• Proper Disability Grading and Governing Instrument: Grade 10 under the 2010 POEA-SEC, not total and permanent disability under the CBA. The CBA submitted by Oscares was not signed by either respondents or the International Transport Worker's Federation, and it is unclear whether it is the same CBA referred to in the employment contract. The corresponding compensation for Grade 10 is US$10,075.00.
• Sickness Allowance: Yes. Oscares is entitled to sickness allowance equivalent to his basic wage computed from the time he signed off until he is declared fit to work or the degree of disability has been assessed by the company-designated physician, not exceeding 120 days, pursuant to Section 20(A)(3) of the 2010 POEA-SEC.
• Moral Damages and Attorney's Fees: Yes. Respondents acted in bad faith by failing to comply with their obligation under Section 20(A)(2) of the 2010 POEA-SEC to provide medical attention at cost to the employer, warranting moral damages under Article 2220 of the Civil Code. Attorney's fees are awarded pursuant to Article 2208 of the Civil Code.
• Joint and Solidary Liability: Yes. Respondents, including Arnold B. Javier as President of Magsaysay Maritime Corporation, are jointly and severally liable pursuant to Section 10 of RA No. 8042, as amended by RA No. 10022.

• Compensability of Injury: For a seafarer's injury to be compensated, it must be shown that the injury is work-related and that it existed during the term of the employment contract. A work-related injury is one arising out of and in the course of employment. Drawing from Iloilo Dock & Engineering Co. vs. Workmen's Compensation Commission and Luzon Stevedoring Corporation vs. Workmen's Compensation Commission — both decided under the Workmen's Compensation Act but applied to seafarer cases — the Court held that acts reasonably necessary to health and comfort of an employee while at work, such as satisfaction of thirst, hunger, or other physical demands, are incidental to employment, and injuries sustained in the performance of such acts are compensable. Oscares' act of singing was considered necessary to his health and comfort while on board the vessel. He neither willfully injured himself nor acted with notorious negligence, which is defined as something more than mere or simple negligence — a deliberate act to disregard one's own personal safety. Jumping while singing is not inherently dangerous, and respondents themselves did not allege that Oscares intentionally injured himself or was negligent. He simply lost his balance. Accordingly, the injury is compensable.
• Proper Disability Grading and Governing Instrument: The Court reviewed the schedule of disability or impediment for injuries under Section 32 of the 2010 POEA-SEC and found a comparable disability equivalent to Grade 10: "Complete immobility of a knee joint in full extension — Gr. 10." The corresponding rate of compensation is US$10,075.00. Oscares' injury does not qualify for a Grade 1 rating, as the medical conditions affecting the lower extremities that qualify for Grade 1 — such as loss of both feet at ankle joint or above, failure of fracture of both hips to unite, and paralysis of both lower extremities — are more severe than Oscares' condition. The Court rejected the Panel's reliance on the CBA because the CBA submitted by Oscares was not signed by either respondents or the International Transport Worker's Federation, and it was unclear whether the CBA entitled "P.N.O. 'TCC' Collective Agreement" was the same one referred to in the contract of employment, which stated "IBF-FKSU/AMOSUP KSA." Therefore, the 2010 POEA-SEC governs.
• Sickness Allowance: Pursuant to Section 20(A)(3) of the 2010 POEA-SEC, Oscares is entitled to sickness allowance equivalent to his basic wage computed at the time he signed off until he is declared fit to work or the degree of disability has been assessed by the company-designated physician, not exceeding 120 days. Respondents did not submit proof that they reimbursed Oscares for the expenses he incurred in seeking medical attention.
• Moral Damages and Attorney's Fees: Under Article 2220 of the Civil Code, moral damages may be awarded in breaches of contract when the defendant acted fraudulently or in bad faith. Although respondents' designated physician recommended surgery, Oscares himself shouldered the cost. Respondents acted in bad faith by failing to comply with their obligation under Section 20(A)(2) of the 2010 POEA-SEC, which requires the employer to provide medical attention at cost to the employer after the seafarer's repatriation. Attorney's fees are warranted under Article 2208 of the Civil Code, which provides for recovery in actions for indemnity under workmen's compensation and employer's liability laws.
• Joint and Solidary Liability: Under Section 10 of RA No. 8042, as amended by RA No. 10022, if the recruitment/placement agency is a juridical being, the corporate officers and directors shall be jointly and solidarily liable with the corporation for claims and damages. In Gargallo vs. Dohle Seafront Crewing (Manila), Inc., the Court explained that while corporate officers are generally not personally liable for corporate contracts due to the separate and distinct legal personality of the corporation, personal liability may validly attach when the officer is made by a specific provision of law personally answerable for his corporate action. The same joint and solidary liability was imposed on the foreign employer, local manning agency, and its officer/director in Cariño vs. Maine Marine Phils., Inc.

• Personal Comfort Doctrine — Acts reasonably necessary to the health and comfort of an employee while at work, such as satisfaction of thirst, hunger, or other physical demands, or protecting oneself from excessive cold, are incidental to employment, and injuries sustained in the performance of such acts are compensable as arising out of and in the course of employment. The Court applied this doctrine to seafarers, holding that Oscares' act of singing on board the vessel was necessary to his health and comfort and thus incidental to his employment, making his resulting injury compensable.
• Work-Related Injury (Seafarer Context) — For a seafarer's injury to be compensated, two elements must be shown: (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. A work-related injury is one arising out of and in the course of employment. The rule on compensation for work-related injuries of seafarers is analogous to the rule under the Workmen's Compensation Act, requiring a preliminary link between the illness and the employment before the presumption of work-relation can attach.
• Notorious Negligence — Notorious negligence is something more than mere or simple negligence or contributory negligence; it signifies a deliberate act of the employee to disregard his own personal safety. The Court found that jumping while singing cannot be considered a reckless or deliberate act unmindful of one's safety, as there is nothing inherently dangerous about it, and respondents did not allege intentional self-injury or negligence.
• Joint and Solidary Liability of Corporate Officers under RA No. 8042 — Under Section 10 of RA No. 8042, as amended by RA No. 10022, corporate officers and directors of a recruitment/placement agency are jointly and solidarily liable with the corporation for claims and damages. This is an exception to the general rule that corporate officers are not personally liable for corporate contracts, as personal liability may attach when the officer is made by a specific provision of law personally answerable for his corporate action.

• "acts reasonably necessary to health and comfort of an employee while at work, such as satisfaction of his thirst, hunger, or other physical demands, or protecting himself from excessive cold, are incidental to the employment and injuries sustained in the performance of such acts are compensable as arising out of and in the course of employment." — This passage, drawn from Luzon Stevedoring Corporation vs. Workmen's Compensation Commission, articulates the personal comfort doctrine as applied by the Court to establish the compensability of Oscares' injury.
• "Oscares' act of singing can be considered necessary to his health and comfort while on board the vessel. He incurred his injury while he was performing this act. Oscares neither willfully injured himself nor acted with notorious negligence." — This is the Court's direct application of the personal comfort doctrine to the facts, establishing the ratio decidendi for compensability.
• "Notorious negligence is defined as something more than mere or simple negligence or contributory negligence; it signifies a deliberate act of the employee to disregard his own personal safety." — This passage defines the standard for excluding compensability based on employee conduct, distinguishing ordinary loss of balance from a deliberate disregard of personal safety.
• "personal liability of such corporate director, trustee, or officer, along (although not necessarily) with the corporation, may validly attach when he is made by a specific provision of law personally answerable for his corporate action." — This formulation, drawn from Gargallo vs. Dohle Seafront Crewing (Manila), Inc., articulates the exception to the corporate veil doctrine that permits personal liability of corporate officers under RA No. 8042.

• Iloilo Dock & Engineering Co. vs. Workmen's Compensation Commission, 135 Phil. 95 (1968) — Cited for the definition of "in the course of employment" as when an injury takes place within the period of employment, at a place where the employee reasonably may be, and while fulfilling duties or engaged in something incidental thereto. Though decided under the Workmen's Compensation Act, the Court applied its definition to seafarer cases.
• Luzon Stevedoring Corporation vs. Workmen's Compensation Commission, 193 Phil. 91 (1981) — Cited for the personal comfort doctrine: acts reasonably necessary to health and comfort of an employee while at work are incidental to employment, and injuries sustained in the performance of such acts are compensable. The Court found its ruling applicable because, like the POEA-SEC, Act No. 3428 makes personal injury from any accident arising out of and in the course of employment compensable.
• Phil-Nippon Kyoei, Corp. vs. Gudelosao, 790 Phil. 16 (2016) — Cited to establish that death benefits granted under the Labor Code are similar to those granted in the POEA-SEC, both given when the death is due to a work-related cause during the term of the employee's contract, and to note that the Workmen's Compensation Act was the first law on workmen's compensation in the Philippines.
• Gargallo vs. Dohle Seafront Crewing (Manila), Inc., 793 Phil. 535 (2016) — Cited for the principle that corporate officers' personal liability may validly attach when made personally answerable by a specific provision of law, supporting the joint and solidary liability of Arnold B. Javier under Section 10 of RA No. 8042.
• Cariño vs. Maine Marine Phils., Inc., G.R. No. 231111, October 17, 2018 — Cited as precedent for imposing joint and solidary liability on the foreign employer, local manning agency, and its officer/director.
• Marlow Navigation Philippines, Inc. vs. Heirs of Ganal, 810 Phil. 956 (2017) — Cited for the definition of notorious negligence as something more than mere or simple negligence, signifying a deliberate act to disregard one's own personal safety.
• Guerrero vs. Philippine Transmarine Carriers, Inc., G.R. No. 222523, October 3, 2018 — Cited for the settled rule that for a seafarer's injury to be compensated, it must be work-related and must have existed during the term of the employment contract.

• Section 20(A), 2010 POEA-SEC — Governs the employer's obligations upon a seafarer's work-related injury or illness. Section 20(A)(2) requires the employer to provide medical attention at cost to the employer after repatriation; the Court found respondents violated this provision by requiring Oscares to shoulder his surgery costs, warranting moral damages. Section 20(A)(3) entitles the seafarer to sickness allowance equivalent to basic wage from sign-off until declared fit to work or disability assessed, not exceeding 120 days.
• Section 32, 2010 POEA-SEC — Contains the schedule of disability or impediment grades. The Court applied Item 23 under "Lower Extremities" — "Complete immobility of a knee joint in full extension — Gr. 10" — to Oscares' injury, with a corresponding compensation rate of US$10,075.00. The Court contrasted this with Grade 1 conditions (e.g., loss of both feet at ankle joint or above, failure of fracture of both hips to unite, paralysis of both lower extremities) to show Oscares' condition does not qualify for total and permanent disability.
• Section 10, RA No. 8042, as amended by RA No. 10022 — Provides that if the recruitment/placement agency is a juridical being, the corporate officers and directors shall be jointly and solidarily liable with the corporation for claims and damages. Applied to hold Arnold B. Javier, as President of Magsaysay Maritime Corporation, jointly and severally liable.
• Article 2220, Civil Code — Allows moral damages in breaches of contract when the defendant acted fraudulently or in bad faith. Applied because respondents acted in bad faith in failing to comply with their obligation to provide medical attention at cost to the employer.
• Article 2208, Civil Code — Provides for recovery of attorney's fees in actions for indemnity under workmen's compensation and employer's liability laws. Applied to award attorney's fees to Oscares.
• Articles 197 to 199, Title II, Book IV, Labor Code, in relation to Rule X of the Implementing Rules and Regulations — Cited as the statutory framework governing entitlement to disability benefits by seafarers, alongside the contract between the parties.
• Section 2, Act No. 3428 (Workmen's Compensation Act), as amended — Cited as the first law on workmen's compensation in the Philippines, making personal injury from any accident arising out of and in the course of employment compensable, and as the source of the personal comfort doctrine applied by analogy to seafarer cases.
• Section 18, Rule XI, 2011 NLRC Rules of Procedure, as amended by En Banc Resolution Nos. 11-12 (Series of 2012) and 05-14 (Series of 2014) — Governs restitution where an executed judgment is reversed or annulled. The Court noted that if respondents had indeed paid the full judgment award, Oscares must return the excess, but respondents submitted no proof of payment, so no restitution was ordered.

Peralta, C.J., Caguioa, Zalameda, and Gaerlan, JJ., concurred. No separate concurring opinions were written.