CASE DIGEST: Sea Power v. Salazar

G.R. No. 188595 : August 28, 2013




On 11 April 2003, Armando was employedas an Able Seaman by petitioner Sea Power Shipping Enterprises, Inc. After 17 months, his contract ended and after two days upon his return to the Philippines, he was taken to the Tanza Family General Hospital, where he was confined in the Intensive Care Unit (ICU) for three days. According to medical reports, he suffered from pneumonia.

Armando checked in and out of several hospitals thereafter. At the Philippine General Hospital where he was transferred in October 2004, he was diagnosed as suffering from lung carcinoma with brain metastases. On 1 March 2005, he succumbed to metastatic lung carcinoma and died of cardio-respiratory arrest, secondary to acute respiratory failure, and secondary to multi-organ failure. Subsequently, his widow instituted before the labor arbiter (LA) a collection suit against petitioners for death and illness benefits, because her husband died of an illness that he had contracted while he was at sea.

Petitioners denied liability. According to the agency, claims for death benefits, minor childs allowance, and burial expenses under Section 20(A) of the POEA Contract (Death Benefits) would only prosper if the seafarer died during his employment term. Considering that Armando died six months after his repatriation, it argued that Salazar could not claim death benefits.

LA denied all of respondents monetary claims. On appeal, the NLRC reversed the LAs decision but did not award death benefits to respondent, stating that the death of Armando was not compensable, because he did not die during the term of his contract. Motion for reconsideration was filed by both parties but the NLRC denied both motions.

Through a Rule 65 petition, respondent assailed before the CA the denial of death benefits by the LA and the NLRC,On the other hand, petitioners no longer instituted an action for certiorari. At this point therefore, the NLRCs grant of monetary awards consisting of illness benefits, moral damages, and attorneys fees are already final and binding on both parties. The CA granted respondents petition and included the award of death benefits. Aggrieved, petitioner now comes to the SC via petition for review on certiorari.

ISSUE: Whether or not respondent may be granted death benefits on top pf the illness benefits?

HELD: No. CA decision affirmed with modification

Labor Law

Section 20(A) of the POEA Contract, and a long line of jurisprudence explaining the provision, require that for respondent to be entitled to death benefits, Armando must have suffered a work-related death during the term of his contract. Here, it is undisputed that Armando died on 1 March 2005 or six months after his repatriation. Thus, on the basis of Section 20(A), his beneficiaries are precluded from receiving death benefits. In relying upon this provision, both the LA and the NLRC correctly exercised their discretion in denying respondents claims for death benefits.

Under its auspices, however, the CA found that the labor courts had gravely abused their discretion in refusing to grant death benefits to respondent. According to the CA, petitioners must pay USD 58,000 death benefits under Section 20(B)(4) in relation to Section 32 of the POEA Contract.

Section 20(B)(4) of the POEA Contract provides that "those illnesses not listed in Section 32 of this Contract are disputably presumed as work related." Given that Armandos lung cancer is not listed under Section 32, it follows that the CA correctly afforded respondent the benefit of the presumption under the law.

However, the CA failed to appreciate that Section 20(B)(4) only affords a disputable presumption. In Leonis Navigation Co., Inc. v. Villamater, we explained that the legal presumption in Section 20(B)(4) should be read together with the requirements specified by Section 32-A of the POEA Contract.

Unlike Section 20(A), Section 32-A of the POEA Contract considers the possibility of compensation for the death of the seafarer occurring after the termination of the employment contract on account of a work-related illness. But, for death under this provision to be compensable, the claimant must fulfill the following:
The seafarer's work must involve the risks describe herein;
The disease was contracted as a result of the seafarer's exposure to the described risks;
The disease was contracted within a period of exposure and under such other factors necessary to contract it;
There was no notorious negligence on the part of the seafarer.
In fulfilling these requisites, respondent must present no less than substantial evidence. Substantial evidence is more than a mere scintilla. It must reach the level of relevant evidence as a reasonable mind might accept as sufficient to support a conclusion. Unfortunately, the CA failed to establish its factual basis for awarding respondent her death benefits claim.

This approach to case disposition by the CA making factual findings based only on presumptions, and absent the quantum of evidence required in labor cases is an erroneous application of the law on compensation proceedings. As we have ruled in Gabunas, Sr. v. Scanmar Maritime Services, Inc., citing Government Service Insurance System v. Cuntapay, claimants in compensation proceedings must show credible information that there is probably a relation between the illness and the work. Probability, and not mere possibility, is required; otherwise, the resulting conclusion would proceed from deficient proofs. Thus, since the CA crafted a legal conclusion out of conjectures and without substantial evidence, we rule that a reversible error of law attended its award of death benefits, minor childs allowance, and burial expenses. For this reason, death benefits should not be granted. PARTIALLY GRANTED.