G.R. No. 197303 : June 4, 2014




In June 2004, Casenas was hired by APQ, acting for and in behalf of its principal, Crew Management, as Chief Mate for vessel MV Perseverance for a period of eight (8) months starting from June 16, 2004 to February 16, 2005. Casenas further alleged that on June 16, 2004, he left Manila to join his assigned vessel in Miami, Florida, USA, though the vessel could not leave the Florida port because of its incomplete documents for operation; that consequently, he was transferred to another vessel, MV HAITIEN PRIDE, which was in Haiti, although again because of incomplete documents, the vessel could not leave the port and remained at Cap Haitien; that his employment contract was extended by APQ from the original eight (8) months to twenty-six (26) months; that the vessel eventually left for Bahamas; that he felt he became weaker and got tired easily; that despite his unpaid wages and weakened condition, he performed his duties as Chief Mate diligently; that in August 2006, he began to suffer shortness of breath, headache and chest pains; that he was then brought to the Grand Bahamas Health Services and was diagnosed with hypertension and was given medicines; that he was then repatriated due to his condition and he arrived in the Philippines on August 30, 2006; that within three (3) days thereafter, he reported to APQ for post-employment medical examination where the company-designated physician later diagnosed him with Ischemic Heart Disease; that a certain Dr. Ariel G. Domingo likewise examined him, confirming and certifying that he was suffering from Essential Hypertension and Ischemic Heart Disease; that he was declared "unfit for sea service"; that as a result, he was not able to work for more than 120 days from his repatriation; that another medical examination was conducted by Dr. Lina R. Cero, showing that he was suffering from Essential Hypertension with Cariomegally Ischemic Heart Disease and Indirect Inguinal Hernia Right; that he was then advised to take his maintenance medications for life; that APQ refused to provide him further medical attention, thus, he incurred medical expenses in the amount of 6,390.00 by November 2006; that he demanded payment of permanent total disability benefits, sickness allowance and medical expenses to which he was entitled under the POEA Standard Employment Contract (POEA-SEC), but APQ refused to pay; that he, together with other crew members, sent a series of letters and e-mails to the representatives of the shipowners regarding their unpaid wages, but despite efforts, APQ still refused to pay their salaries; that demands for payment were also made to the president of APQ, but the same were refused; and that ultimately, he was compelled to seek redress and filed a complaint for permanent total disability benefits, reimbursement of medical expenses, sickness allowance, non-payment of salaries representing the extended portion of the employment contract, damages, and attorney's fees.

APQ, on the other hand, alleged in its Position Paper that upon expiration of the contract, Cases refused to return to the Philippines until he finally did on August 30, 2006; that thereafter, Cases demanded payment of his wages, overtime and vacation pay for the alleged extended portion of the contract; that it could not be held liable for claims pertaining to the extended portion of the contract for it did not consent to it; that, in fact, as early as January 2005, it had been making arrangements, through American Airlines/American Eagle, for Cases repatriation at the end of his contract in February 2005; that Cases was fully paid of his wages and other benefits for the duration of his 8-month contract; and that Cases suffered illness after the expiration of the contract, hence, it could not be made liable to pay him any benefits for his injury/illness.

Cases, however, disputed the position of APQ, claiming that his contract of employment was duly extended. He denied that APQ had been making arrangements for his repatriation as early as January 2005.

The Labor Arbiter (LA) dismissed Cases' complaint. He was of the view that the employment contract was not extended pursuant to the terms and conditions of the contract. Cases failed to prove mutual consent of the parties to the extension of the contract. He rendered services on MV Haitien Pride from August 1, 2005 to April 30, 2006, after the expiration of his contract with APQ on board the vessel MV Perseverance on February 15, 2005.

The LA pointed out that the illness/disease suffered by Cases was sustained while serving on board MVCap Haitien Pride, which was outside the period of his contractual employment. Thus, Cases' claims could not be awarded.

The NLRC reversed and set aside the LA decision. Based on the records, it found that the employment contract was extended. The illness, Essential Hypertension, suffered by Cases was a compensable disease under Section 32-A, No. 20 of the POEA-SEC. Hence, NLRC ruled that Cases was entitled to his claims because the illness was sustained within the duration of his employment contract.

The CA reinstated the earlier NLRC Resolution. In so ruling, the CA cited the case of Place well International Services Corporation v. Camote, 525 Phil. 817 (2006) where it was written: a subsequently executed side agreement of an overseas contract worker with the foreign employer is void, simply because it is against our existing laws, morals and public policy. The subsequent agreement cannot supersede the terms of the standard employment contract approved by the POEA. Assuming arguendo that petitioner entered into an agreement with the foreign principal for an extension of his contract of employment, sans approval by the POEA, the contract that governs petitioner's employment is still the POEA-SEC until his repatriation. As far as Philippine law is concerned, petitioner's contract of employment with respondents was concluded only at the time of his repatriation on August 30, 2006.

Further, the CA explained that a declaration from the company designated physician as to the fitness or unfitness of a seafarer to continue his sea-duties is sanctioned by Section 20(B)(3) of the POEA-SEC. There being no declaration made by the company-designated physician within the 120-day period as to the fitness of Cases, the CA opined that he was undoubtedly entitled to disability benefits.

APQ filed a motion for reconsideration, while Cases filed his Comment/Opposition. The CA denied the motion for lack of merit.

Hence, this petition.
Whether or not the employment contract of Cases was extended with the consent of APQ/Crew Management.
HELD: Court of Appeals decision is sustained.


Employment contracts of seafarers on board foreign ocean-going vessels are not ordinary contracts. They are regulated and an imprimatur by the State is necessary. While the seafarer and his employer are governed by their mutual agreement, the POEA Rules and Regulations require that the POEA-SEC be integrated in every seafarers contract. In this case, there is no dispute that Cases employment contract was duly approved by the POEA and that it incorporated the provisions of the POEA-SEC.

As earlier stated, the controversy started when Cases claimed sickness and disability benefits as well as unpaid wages from the petitioners upon his return to the Philippines. The petitioners, on the other hand, refused to pay, arguing that Cases sickness was contracted after his employment contract expired.

In Placewell, the Court concluded that the original POEA-approved employment contract subsisted and, thus, the solidary liability of the agent with the principal continued. It ruled that:

R.A. No. 8042 explicitly prohibits the substitution or alteration to the prejudice of the worker, of employment contracts already approved and verified by the Department of Labor and Employment (DOLE) from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the DOLE. Thus, we held in Chavez v. Bonto-Perez, 312 Phil. 88 (1995) that the subsequently executed side agreement of an overseas contract worker with her foreign employer which reduced her salary below the amount approved by the POEA is void because it is against our existing laws, morals and public policy. The said side agreement cannot supersede her standard employment contract approved by the POEA.

APQs primary argument revolves around the fact of expiration of Cases employment contract, which it claims was not extended as it was without its consent. While the contract stated that any extension must be made by mutual consent of the parties, it, however, incorporated Department Order (DO)No. 4 and Memorandum Circular No. 09, both series of 2000, which provided for the Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean Going Vessels.


In Magsaysay Maritime Corporation vs. NLRC, G.R. No. 191903, June 19, 2013, Court reiterated that the seafarer, upon sign-off from his vessel, must report to the company-designated physician within three (3) days from arrival for diagnosis and treatment. For the duration of the treatment but in no case to exceed 120 days, the seaman is on temporary total disability as he is totally unable to work. He receives his basic wage during this period until he is declared fit to work or his temporary disability is acknowledged by the company to be permanent, either partially or totally, as his condition is defined under the POEA-SEC and by applicable Philippine laws. If the 120 days initial period is exceeded and no such declaration is made because the seafarer requires further medical attention, then the temporary total disability period may be extended up to a maximum of 240 days, subject to the right of the employer to declare within this period that a partial or total disability already exists. The seaman may, of course, also be declared fit to work at any time such declaration is justified by his medical condition.

In this case, Casenas immediately reported to APQ for the required post-employment medical examination upon his return to the Philippines. He was referred to the company-designated physician, who diagnosed him to be suffering from lschemic Heart Disease, which was a manifestation of organ damage. Cases likewise consulted two (2) other physicians who certified him to be suffering from Essential Hypertension aside from Ischemic Heart Disease. From the time of Cases' diagnosis by the company-designated physician, he was under the state of temporary total disability, which lasted for at least 120 days as provided by law. Such period could be extended up to 240 days, if further medical attention was required.

There was, however, no showing of any justification to extend said period. As the law requires, within 120 days from the time he was diagnosed of his illness, the company-designated physician must make a declaration as to the fitness or unfitness of Cases As correctly observed by the CA, however, the 120 day period lapsed without such a declaration being made. Cases is now deemed to be in a state of permanent total disability and, thus, clearly entitled to the total disability benefits provided by law.