Prudential Shipping and Management Corporation vs. Sta. Rita

Under the POEA Standard Employment Contract, death compensation benefits are payable only if the seafarer dies during the term of his contract; death after repatriation for medical treatment, which terminates employment, does not entitle his beneficiaries to death benefits.

The POEA Standard Employment Contract governs the compensation and benefits due to seafarers and their beneficiaries, including death and sickness benefits. Emerlinda A. Sta. Rita is Virgilio C. Sta. Rita’s wife, and Rene A. Sta. Rita is their son. ZSIL and PSMC are the employers named in the complaint, with PSMC acting as the manning company.

On May 5, 1999, ZSIL, through PSMC, hired Virgilio C. Sta. Rita as an oiler on board the M/V Gulfwind under a 12-month contract at a basic monthly salary of US$335.00 on a 48-hour work week, with overtime pay of US$2.01 per hour and a monthly vacation leave with pay of 4 days. In his pre-employment medical examination, he was found fit for sea duty, although his electrocardiogram (ECG) report revealed a mild left axis deviation. He boarded ship on May 20, 1999.

He became ill while on board. On March 3, 2000, the Marine Medical Unit at New Orleans, Louisiana, USA diagnosed him to be suffering from umbilical hernia; the attending physician advised Virgilio to avoid tasks involving heavy lifting and to undergo surgical repair. He was later repatriated. Upon his arrival in Manila on March 8, 2000, Virgilio was immediately referred to the company-designated physicians at the Metropolitan Hospital for further evaluation and management. He was found positive of peri-umbilical mass due to the presence of ascites. On March 24, 2000, Virgilio was subjected to umbilical herniorrhapy, ultrasound of the upper abdomen, and aspiration of ascitic fluid. The ultrasound done on the day of the operation further revealed that Virgilio had liver cirrhosis with a possible regenerating nodule, for which he was given medication. Five days later, or on March 29, 2000, he was discharged from the hospital. All medical and hospitalization expenses for the herniorrhapy were shouldered by petitioners.

On June 20, 2000, after several post-operation check-ups, Virgilio signed a "Certificate of Fitness for Work" where he released his employer and the manning company from all actions, claims, and liabilities. ZSIL and PSMC later paid his sick wages. Almost eight months later, on February 13, 2001, Virgilio was brought to the Philippine General Hospital (PGH). His HBT ultrasonography of the liver and gallbladder revealed massive ascites, liver cirrhosis, thickening of the gallbladder wall (probably reactive), and splenomegaly, while his chest ultrasonography revealed left massive pleural effusion. On electrocardiogram, he was discovered to have sinus tachycardia and left axis deviation. His roentgenological report further revealed an atherosclerotic aorta which confirmed the earlier finding of pleural effusion.

On March 13, 2001, he was confined at the PGH for "acidosis secondary to liver cirrhosis probably secondary to alcoholic liver disease; hepatocellular carcinoma and left pleural effusion, probably malignant." Virgilio died on March 18, 2001. The immediate cause of death was "cardiopulmonary arrest 2º metabolic acidosis r/o fatal arrhythmia," with "acute renal failure" as the antecedent cause, and "hepatocellular carcinoma" as the underlying cause.

On June 5, 2001, Emerlinda, Virgilio’s wife, and Rene, their son, filed a complaint against ZSIL and PSMC for payment of death compensation, illness allowance, reimbursement of medical expenses, damages, and attorney’s fees before the Labor Arbitration Branch of the NLRC. The case was docketed as NLRC-NCR-OFW-Case No. (M)-01-06-1049-00. Petitioners countered that respondents were not entitled to death benefits because Virgilio died long after his employment had been terminated under Section 18 of the POEA Standard Employment Contract, while respondents maintained that petitioners’ settlement of sick wages and other liabilities was contrary to the claim that Virgilio’s employment had been terminated upon repatriation.

The Labor Arbiter found that while the hernia operation was successful, the liver cirrhosis diagnosed during the operation remained; the CA found that the cause of Virgilio’s death was traceable to cirrhosis presumably acquired while he was in petitioners’ employ.

• Contract Term and Death Benefits: Petitioners argued that under the POEA Standard Employment Contract, death benefits are payable only if the seafarer dies during the term of the contract; since Virgilio died on March 18, 2001, long after his employment was terminated by repatriation on March 8, 2000, respondents were not entitled to death benefits.
• Cause of Death and Work Connection: Petitioners argued that the cause of Virgilio’s death—cardiopulmonary arrest secondary to metabolic acidosis, acute renal failure, and hepatocellular carcinoma—was entirely different from the umbilical hernia for which he was repatriated, and there was no evidence that his illness was contracted during employment or aggravated by his work as an oiler.
• Sickness Allowance, Damages, and Attorney’s Fees: Petitioners argued that sickness allowance had already been paid and was not prayed for, and that they acted in good faith, so they should not be liable for damages and attorney’s fees.
• CA’s Disregard of the Contract: Petitioners argued that the CA disregarded the terms and conditions of the POEA Standard Employment Contract when it held them liable for the seaman’s death, which occurred long after the contract had been terminated.

• Entitlement Despite Post-Employment Death: Respondents countered that even if Virgilio died after his employment had been terminated, petitioners are still liable for death benefits, citing Wallem Maritime Services, Inc. vs. National Labor Relations Commission.
• Work Connection and Aggravation: Respondents argued that there is a causal relationship between Virgilio’s death and his employment; he was diagnosed with liver cirrhosis during the term of his contract, and his exposure to chemicals and toxins as an oiler contributed to the development or aggravation of his illness.
• Degree of Proof: Respondents maintained that in compensation proceedings ultimate certainty is not required; it is enough that the claim is probable, and they are not duty bound to prove work-connection because the 1996 POEA Standard Employment Contract does not require the illness to be work-related to be compensable.
• Bad Faith and Damages: Respondents argued that petitioners’ unjustified refusal to pay their claim amounted to bad faith and malice, making them liable for damages and attorney’s fees.
• Factual Issues Improper: Respondents averred that the issues raised by petitioners are factual and improper in a petition for review on certiorari.

• Death Benefits: Whether respondents are entitled to death compensation benefits under the POEA Standard Employment Contract when Virgilio died after his employment was terminated by repatriation for medical treatment.
• Sickness Allowance: Whether respondents are entitled to sickness allowance when the records show it had already been paid and it was not prayed for.
• Factual Issues in Rule 45: Whether the SC may resolve factual issues in a petition for review on certiorari given the conflicting findings of the Labor Arbiter, NLRC, and CA.

• Death Benefits: No. Under the POEA Standard Employment Contract, death compensation benefits are payable only if the seafarer dies during the term of his contract; Virgilio’s employment was terminated upon his repatriation on March 8, 2000, and he died on March 18, 2001, after termination.
• Sickness Allowance: No. The records show that sickness allowance had already been paid to respondents in June and September 2000 and January 2001.
• Factual Issues in Rule 45: Yes. The SC may resolve factual issues because the findings of the Labor Arbiter, NLRC, and CA conflicted, which is an exception to the rule that only questions of law may be raised in a Rule 45 petition.

• Death Benefits: The SC quoted Section 20(A)(1) and (4)(A, B, C) of the POEA Standard Employment Contract, which makes the employer liable for death compensation benefits when the seafarer dies during the term of his contract. It also noted Section 18(B)(1 to 4), under which the seafarer’s employment is terminated upon sign-off and, if he is disembarked for medical treatment, the employer bears the full cost of repatriation if he is fit for repatriation. Virgilio was repatriated for medical reasons and arrived in the Philippines on March 8, 2000 for surgical repair after being diagnosed with umbilical hernia; his employment was thus terminated upon that repatriation. When he died on March 18, 2001, his employment had long been terminated, so respondents were not entitled to death benefits under the Contract. The SC cited NFD International Manning Agents vs. National Labor Relations Commission for the rule that death during the term makes the employer liable, and Hermogenes vs. Osco Shipping Services, Inc. for the rule that death after termination does not entitle the beneficiaries to death benefits.
• Sickness Allowance: The SC held that petitioners were not liable for sickness allowance because the records showed that it had already been paid to respondents in June and September 2000 and January 2001.
• Factual Issues in Rule 45: The SC stated that in petitions for review on certiorari, only questions of law may be raised, with exceptions including when the factual findings of the appellate court are erroneous, absurd, speculative, conjectural, conflicting, or contrary to the findings culled by the court of origin. Considering the conflicting findings of the NLRC, the CA, and the Labor Arbiter, the SC was impelled to resolve the factual issues along with the legal ones. It cited Gau Sheng Phils., Inc. vs. Joaquin for this rule.

• Death benefits under the POEA Standard Employment Contract require death during the term of employment — The employer is liable for death compensation benefits when the seaman dies during the term of employment; once it is established that the seaman died during the effectivity of his employment contract, the employer is liable. If the seaman dies after the termination of his contract, his beneficiaries are not entitled to the death benefits. The SC applied this by holding that Virgilio’s death on March 18, 2001 occurred after his employment was terminated by repatriation on March 8, 2000, so respondents were not entitled to death benefits.
• Termination of seafarer’s employment upon repatriation for medical treatment — Under Section 18(B)(1 to 4) of the POEA Standard Employment Contract, the employment of the seafarer is terminated upon his sign-off; if he is disembarked for medical treatment pursuant to Section 18(B)(1), the employer bears the full cost of repatriation if the seafarer is fit for repatriation. The SC applied this by holding that Virgilio’s repatriation for medical reasons on March 8, 2000 terminated his employment.
• Rule 45 limited to questions of law; exception for conflicting factual findings — In petitions for review on certiorari, only questions of law may be raised, except when the factual findings of the appellate court are erroneous, absurd, speculative, conjectural, conflicting, or contrary to the findings culled by the court of origin. The SC applied this by resolving the factual issues because the Labor Arbiter, NLRC, and CA had conflicting findings.

• "The death of a seaman during the term of employment makes the employer liable to his heirs for death compensation benefits. Once it is established that the seaman died during the effectivity of his employment contract, the employer is liable." — The SC states the general rule under the POEA Standard Employment Contract before applying it to the facts.
• "However, if the seaman dies after the termination of his contract of employment, his beneficiaries are not entitled to the death benefits enumerated above." — The SC states the exception that is decisive in this case.
• "Virgilio’s employment was thus terminated upon his repatriation on March 8, 2000. Consequently, when he died on March 18, 2001, his employment with petitioners had long been terminated. Hence, respondents are not entitled to receive death benefits under the Contract from petitioners." — The SC applies the rule to the facts and concludes that death benefits are not due.
• "Neither are petitioners liable for sickness allowance since it appears from the records that these had already been paid to respondents in June and September 2000, and January 2001." — The SC disposes of the sickness allowance claim on the ground of payment.

• NFD International Manning Agents vs. National Labor Relations Commission, 348 Phil. 264 (1998) — Controlling precedent cited for the rule that the death of a seaman during the term of employment makes the employer liable to his heirs for death compensation benefits.
• Hermogenes vs. Osco Shipping Services, Inc., G.R. No. 141505, August 28, 2005, 467 SCRA 301 — Precedent relied on for the rule that if the seaman dies after the termination of his contract, his beneficiaries are not entitled to death benefits.
• Gau Sheng Phils., Inc. vs. Joaquin, G.R. No. 144665, September 8, 2004, 437 SCRA 608 — Precedent cited for the rule that only questions of law may be raised in a petition for review on certiorari, subject to exceptions such as conflicting factual findings.

• Section 20(A)(1) and (4)(A, B, C), POEA Standard Employment Contract — Provides death compensation of US$50,000 and an additional US$7,000 to each child under twenty-one but not exceeding four children, plus other liabilities including burial expenses, when the seafarer dies during the term of his contract. The SC applied this by holding that the provision did not cover Virgilio because he died after his employment had been terminated.
• Section 18(B)(1 to 4), POEA Standard Employment Contract — Provides that the employment of the seafarer is terminated upon his sign-off and that, if he is disembarked for medical treatment pursuant to Section 18(B)(1), the employer shall bear the full cost of repatriation if the seafarer is fit for repatriation. The SC applied this by holding that Virgilio’s repatriation for medical reasons on March 8, 2000 terminated his employment.
• Rule 45, Rules of Court — Provides that petitions for review on certiorari may raise only questions of law, subject to exceptions. The SC applied this by resolving the factual issues because the Labor Arbiter, NLRC, and CA had conflicting findings.