Case Digest: Magsaysay Maritime v. Lobusta

G.R. No. 177578 : January 25, 2012




Respondent Oberto S. Lobusta is a seaman who has worked for Magsaysay Maritime Corporation since 1994. In March 1998, he was hired again as Able Seaman by Magsaysay Maritime Corporation. Lobusta boarded MV "Fossanger" on March 16, 1998. After two months, he complained of breathing difficulty and back pain.

On May 12, 1998, while the vessel was in Singapore, Lobusta was admitted at Gleneagles Maritime Medical Center and was diagnosed to be suffering from severe acute bronchial asthma with secondary infection and lumbosacral muscle strain. Dr. C K Lee certified that Lobusta was fit for discharge on May 21, 1998, for repatriation for further treatment.

Upon repatriation, Lobusta was referred to Metropolitan Hospital. The medical coordinator, Dr. Robert Lim, issued numerous medical reports regarding Lobustas condition. Upon reexamination by the Orthopedic Surgeon on August 11, 1998, he opined that Lobusta needs surgery, called decompression laminectomy, which was done on August 30, 1998.

As the parties failed to reach a settlement as to the amount to which Lobusta is entitled, Lobusta filed on October 2, 2000, a complaint for disability/medical benefits against petitioners before the National Labor Relations Commission (NLRC).

The Labor Arbiter rendered a decision ordering petitioners to pay Lobusta (a) US$2,060 as medical allowance, (b) US$20,154 as disability benefits, and (c) 5% of the awards as attorneys fees. On appeal, the NLRC affirmed the LA decision. Unsatisfied, Lobusta brought the case to the CA. The CA granted the petition for certiorari of Lobusta and modified the findings of the NLRC. As aforesaid, the CA declared that Lobusta is suffering from permanent total disability and increased the award of disability benefits in his favor to US$60,000. Hence, this petition.

Petitioners argue that the CA erred in applying the provisions of the Labor Code instead of the provisions of the POEA contract in determining Lobustas disability, and in ruling that the mere lapse of 120 days entitles Lobusta to total and permanent disability benefits. The CA allegedly erred also in holding them liable for attorneys fees, despite the absence of legal and factual bases.

ISSUE: Whether or not the CA erred in in applying the provisions of the Labor Code instead of the provisions of the POEA contract in determining Lobustas disability, and in ruling that the mere lapse of 120 days entitles Lobusta to total and permanent disability benefits.

HELD: No. CA Decision Affirmed.

Labor Law

Standard terms of the POEA Standard Employment Contract agreed upon are intended to be read and understood in accordance with Philippine laws, particularly, Articles 191 to 193 of the Labor Code, as amended, and the applicable implementing rules and regulations in case of any dispute, claim or grievance.

Petitioners are mistaken that it is only the POEA Standard Employment Contract that must be considered in determining Lobusta's disability. In Palisoc v. Easways Marine, Inc., we said that whether the Labor Codes provision on permanent total disability applies to seafarers is already a settled matter.

In Palisoc, we cited the earlier case of Remigio v. National Labor Relations Commission where we said (1) that the standard employment contract for seafarers was formulated by the POEA pursuant to its mandate under Executive Order No. 247 "to secure the best terms and conditions of employment of Filipino contract workers and ensure compliance therewith," and "to promote and protect the well-being of Filipino workers overseas"; (2) that Section 29 of the 1996 POEA Standard Employment Contract itself provides that all rights and obligations of the parties to the contract, including the annexes thereof, shall be governed by the laws of the Republic of the Philippines, international conventions, treaties and covenants where the Philippines is a signatory; and (3) that even without this provision, a contract of labor is so impressed with public interest that the Civil Code expressly subjects it to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

Temporary total disability only becomes permanent when so declared by the company physician within the periods he is allowed to do so, or upon the expiration of the maximum 240-day medical treatment period without a declaration of either fitness to work or the existence of a permanent disability.

To be sure, there is one Labor Code concept of permanent total disability, as stated in Article 192(c)(1) of the Labor Code, as amended, and the ECC Rules. We also note that the first paragraph of Section 20(B)(3) of the 2000 POEA Standard Employment Contract was lifted verbatim from the first paragraph of Section 20(B)(3) of the 1996 POEA Standard Employment Contract, to wit:

Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician, but in no case shall this period exceed one hundred twenty (120) days.

Applying the foregoing considerations, we agree with the CA that Lobusta suffered permanent total disability. On this point, the NLRC ruling was not in accord with law and jurisprudence.

Upon repatriation, Lobusta was first examined by the Pulmonologist and Orthopedic Surgeon on May 22, 1998. The maximum 240-day (8-month) medical-treatment period expired, but no declaration was made that Lobusta is fit to work. Nor was there a declaration of the existence of Lobustas permanent disability. On February 16, 1999, Lobusta was still prescribed medications for his lumbosacral pain and was advised to return for reevaluation. May 22, 1998 to February 16, 1999 is 264 days or 6 days short of 9 months.

In fact, the CA has found that Lobusta was not able to work again as a seaman and that his disability is permanent "as he has been unable to work since 14 May 1998 to the present or for more than 120 days." This period is more than eight years, counted until the CA decided the case in August 2006. On the CA ruling that Lobustas disability is permanent since he was unable to work "for more than 120 days," we have clarified in Vergara that this "temporary total disability period may be extended up to a maximum of 240 days."

Thus, we affirm the award to Lobusta of US$60,000 as permanent total disability benefits, the maximum award under Section 30 and 30-A of the 1996 POEA Standard Employment Contract. We also affirm the award of US$2,060 as sickness allowance which is not contested and appears to have been accepted by the parties.