Phil-Man Marine Agency, Inc. vs. Dedace

A seafarer is deemed totally and permanently disabled when the company-designated physician fails to issue a full, complete, and categorical medical assessment within the 120-day period from repatriation, and the disputable presumption that the illness is work-related stands unless the employer presents sufficient controverting evidence justifying the assessment with medical findings.

Phil-Man Marine Agency, Inc. is a domestic corporation engaged in the business of manning ships, acting as local agent for its principal, Dohle (IOM) Limited, a foreign shipowner. On 18 June 2003, Phil-Man engaged the services of Aniano P. Dedace, Jr. to work as an Able Seaman on board the vessel M/V APL Shanghai under a nine-month employment contract governed by the 2000 POEA-Standard Employment Contract for Filipino Seafarers. The contract incorporated the standard terms and conditions prescribed by Department Order No. 4, series of 2000, of the Department of Labor and Employment, which govern the employment of Filipino seafarers on-board ocean-going vessels.

On 18 June 2003, Phil-Man Marine Agency, Inc. engaged the services of Aniano P. Dedace, Jr. to work on board the vessel M/V APL Shanghai for and on behalf of its principal, Dohle (IOM) Limited, under a nine-month contract as Able Seaman with a basic monthly salary of US$465.00. On 26 July 2003, Dedace boarded the vessel and commenced his duties.

Sometime in January 2004, Dedace began experiencing frequent intermittent pains in his lower right abdomen and left groin. On 20 February 2004, he was admitted to the Gleneagles Maritime Medical Centre in Singapore, where Dr. Lee Choi Kheong initially diagnosed him with multiple right liver nodules suspected to be haemangiomata and a benign right kidney cyst. After further tests and a CT scan, Dr. Lee diagnosed Dedace with Disseminated Sepsis with Multiple Liver Abscesses, noting that the lesions had reduced in size with antibiotic therapy and that Dedace could be discharged with oral medication for further treatment at home.

Dedace was repatriated to the Philippines on 1 March 2004 and referred to Dr. Nicomedes G. Cruz, the company-designated physician. On 27 March 2004, an MRI was performed, revealing two lesions in the right lobe of the liver and a lesion in the right kidney. Phil-Man inquired from Dr. Cruz whether Dedace's illness was work-related. In his reply dated 20 May 2004, Dr. Cruz stated that their gastroenterologist — who was not named — was of the opinion that the liver nodules were benign and not work-related, diagnosing the condition as Disseminated Sepsis with Multiple Liver Abscesses and benign liver nodules. On 7 June 2004, Phil-Man wrote to Dedace informing him that his illness was not work-related and therefore not compensable, and that all payments and treatment would be stopped. Dedace was never issued a medical certificate reflecting Dr. Cruz's final medical assessment or fitness-to-work declaration. This denial prompted Dedace to file his claims before the NLRC.

• Illness Not Listed as Compensable: Petitioners argued that since Dedace's illness, Sepsis, is neither listed as a disability under Section 32 of the 2000 POEA-SEC nor listed as an occupational disease under Section 32-A, the burden rests upon Dedace to present substantial evidence showing a causal connection between his illness and the nature of his employment, which burden he failed to discharge.
• No Contrary Medical Finding: Petitioners averred that the records show Dedace did not, by way of a contrary medical finding, contest the medical assessment made by the company-designated physician, invoking Magsaysay Maritime Corporation vs. NLRC in support.
• Attorney's Fees Lacks Legal Basis: Petitioners argued that the CA erred in awarding attorney's fees, positing that attorney's fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate.

• Company-Designated Physician Failed to Explain Assessment: Respondent maintained that the CA correctly resolved the case in his favor because the company-designated physician failed to explain his assessment that his illness was not work-related.
• Entitlement to Attorney's Fees: Respondent contended that the CA properly awarded attorney's fees as he was forced to retain the services of counsel in order to protect his rights which the petitioners refused to recognize.

• Work-Relatedness and Compensability: Whether the CA erred in ruling that Dedace's illness was work-related and therefore compensable, and in awarding permanent total disability benefits.
• Attorney's Fees: Whether the CA erred in awarding attorney's fees in favor of Dedace.

• Work-Relatedness and Compensability: No. The CA did not err. The company-designated physician failed to issue a full, complete, and categorical medical assessment within the 120-day period from repatriation, and the disputable presumption of work-relatedness under Section 20(B)(4) of the POEA-SEC was not overcome.
• Attorney's Fees: No. The CA did not err. Attorney's fees were properly awarded because Dedace was forced to litigate and incur expenses to protect his rights and interest after petitioners refused to pay the disability benefits rightfully due him.

• Work-Relatedness and Compensability: Section 20(B)(4) of the 2000 POEA-SEC provides that illnesses not listed under Section 32 are disputably presumed to be work-related. This presumption operates in favor of the seafarer, and the burden rests upon the employer to overcome it with contrary evidence. In this case, Dr. Cruz's 20 May 2004 letter — which was not even addressed to Dedace and merely relayed the opinion of an unnamed gastroenterologist — cannot be considered an effective assessment under the POEA-SEC. The company-designated physician is required to make a definite assessment of the seafarer's fitness or permanent disability within 120 days from repatriation; otherwise, the seafarer is deemed totally and permanently disabled. Dr. Cruz neither offered his own opinion nor gave any explanation for the statement that the illness was not work-related. The letter was based merely on the opinion of an unnamed specialist, and the records do not show that Dedace was examined by or placed under the care of any gastroenterologist. An unsubstantiated assessment, even if made by the company-designated physician, is tantamount to a bare claim which must be rejected. The Court distinguished Magsaysay Maritime Corporation vs. NLRC, where the company-designated physician gave a full, complete, and categorical assessment explaining her basis — a circumstance absent here. Because the company-designated physician effectively failed to make an assessment, Dedace was deemed totally and permanently disabled as of the date of expiration of the 120-day period counted from his repatriation. Consequently, the issue of whether his illness is work-related became moot. Moreover, Dedace was under no obligation to consult a physician of his choice, as that duty arises only if the company-designated physician issues an assessment within the 120-day period.

• Attorney's Fees: Attorney's fees in their extraordinary concept refer to indemnity for damages ordered by the court to be paid by the losing party, as enumerated in Article 2208 of the Civil Code, particularly paragraph 7 pertaining to actions for recovery of wages. In labor cases, the award of attorney's fees is not limited to instances of unlawful withholding of wages under Article 111 of the Labor Code; the Court has held that such award is legally and morally justifiable where an employee was forced to litigate and incur expenses to protect his rights and interest. Dedace was forced to litigate and retain counsel as a result of petitioners' refusal to pay the disability benefits rightfully due him, justifying the award of attorney's fees equivalent to ten percent (10%) of the total monetary award.

• Disputable Presumption of Work-Relatedness — Under Section 20(B)(4) of the 2000 POEA-SEC, illnesses not listed under Section 32 are disputably presumed to be work-related. This presumption operates in favor of the seafarer, and the burden rests upon the employer to overcome it with contrary evidence. Unless contrary evidence is presented by the employer, the presumption stands. In this case, the employer failed to overcome the presumption because the company-designated physician's assessment was unsubstantiated and incomplete.

• 120-Day Period for Medical Assessment — The company-designated physician must arrive at a definite assessment of the seafarer's fitness or permanent disability within 120 days from repatriation (extendible to 240 days in justified cases). Failure to do so renders the seafarer totally and permanently disabled as of the date of expiration of the 120-day period. The assessment must be full, complete, and categorical — not a bare claim. An unsubstantiated assessment, even if made by the company-designated physician, must be rejected by the courts.

• Duty to Consult Personal Physician — The seafarer's duty to consult a physician of his own choice arises only if the company-designated physician was able to issue an assessment within the 120-day period. Where the company-designated physician fails to make an assessment within that period, the seafarer's failure to adduce a medical certificate from a personal physician is not fatal to his cause.

• Attorney's Fees in Labor Cases — Attorney's fees in labor cases are not limited to instances of unlawful withholding of wages under Article 111 of the Labor Code. The award is legally and morally justifiable where the employee was forced to litigate and incur expenses to protect his rights and interest, pursuant to Article 2208(7) of the Civil Code.

• "An unsubstantiated assessment, even if made by the company-designated physician, is tantamount to a bare claim which must be rejected by the courts." — This passage articulates the ratio decidendi that a company-designated physician's assessment must be justified by medical findings, not merely asserted, to overcome the disputable presumption of work-relatedness.

• "Considering that the company-designated physician effectively failed to make an assessment, Dedace is deemed totally and permanently disabled as of the date of the expiration of the 120-day period counted from his repatriation to the Philippines. Consequently, there could no longer be any issue on whether his illness is work-related or not." — This passage establishes the consequence of the physician's failure to assess within the 120-day period: automatic total and permanent disability, rendering the work-relatedness inquiry moot.

• "It is not the issuance of a medical certificate showing that the seafarer's illness is work-related or that he is totally and permanently unfit for sea duties which makes the employer liable. A seafarer's cause of action for total and permanent disability benefits accrues when, among others, the company-designated physician fails to issue a declaration as to his fitness to engage in sea duty or disability rating even after the lapse of the 120-day period and there is no indication that further medical treatment would address his temporary total disability." — This passage defines the accrual of a seafarer's cause of action for disability benefits based on the employer's inaction rather than the seafarer's affirmative proof.

• Magsaysay Maritime Corporation vs. NLRC, 630 Phil. 352 (2010) — Distinguished. Petitioners invoked this case to argue that the seafarer bears the burden of proving causal connection between illness and employment. The Court distinguished it on the ground that in Magsaysay, the company-designated physician gave a full, complete, and categorical assessment explaining her basis, which was absent in the present case.

• Libang, Jr. vs. Indochina Ship Management, Inc., 743 Phil. 286 (2014) — Followed. The Court relied on this case to emphasize that the company-designated physician breaches his obligation under Section 20(B)(3) of the POEA-SEC when he fails to give a definite assessment, and that an uncertain and incomplete assessment is insufficient.

• Kestrel Shipping Co., Inc. vs. Munar — Cited for the principle that the company-designated physician is expected to arrive at a definite assessment within the 120 or 240 days; otherwise, the seafarer is deemed totally and permanently disabled.

• C.F. Sharp Crew Management, Inc. vs. Taok, 691 Phil. 521 (2012) — Cited for the proposition that a seafarer's cause of action for total and permanent disability benefits accrues when the company-designated physician fails to issue a declaration of fitness or disability rating after the lapse of the 120-day period.

• Dahle-Philman Manning Agency, Inc. vs. Heirs of Andres G. Gazzingan, 760 Phil. 861 (2015) — Cited for the principle that while the company-designated physician must declare the nature of a seafarer's disability, such declaration is not conclusive and its inherent merit will still be weighed and duly considered by the court.

• Section 20(B), 2000 POEA-SEC — Governs compensation and benefits for injury or illness of seafarers. Section 20(B)(3) requires the company-designated physician to assess the seafarer's fitness or disability within 120 days from repatriation and provides for sickness allowance. Section 20(B)(4) establishes the disputable presumption that illnesses not listed under Section 32 are work-related. Section 20(B)(6) provides for compensation according to the schedule of benefits in Section 32 in case of permanent total or partial disability.

• Article 2208, Civil Code — Enumerates the instances where attorney's fees may be awarded, particularly paragraph 7 pertaining to actions for recovery of wages. Applied to justify the award of attorney's fees in this labor case.

• Article 111, Labor Code — Provides that attorney's fees may be awarded in cases of unlawful withholding of wages. The Court clarified that the award of attorney's fees in labor cases is not limited to this provision but extends to situations where the employee was forced to litigate to protect his rights.

Presbitero J. Velasco, Jr. (Chairperson), Lucas P. Bersamin, Marvic M.V.F. Leonen, and Alexander G. Gesmundo concurred.