G.R. No. 237250. October 08, 2018

FIRST DIVISION: [G.R. No. 237250, October 08, 2018] SINGA SHIPMANAGEMENT PHILS., INC., AND SINGA SHIPMANAGEMENT PTE. LTD. V. BASILIO P. CASUCO) AND G.R. NO. 237313 (BASILIO P. CASUCO V. SINGA SHIPMANAGEMENT PHILS., INC., AND SINGA SHIPMANAGEMENT PTE. LTD.

This is a consolidated case[1] arising from the same antecedent facts, involving the same parties, and raising inter-related issues, viz:

G.R. No. 237250 is a petition for review on certiorari[2] under Rule 45 of the Rules of Court, filed by Singa Shipmanagement Phils., Inc. and Singa Shipmanagement Pte. Ltd. against Basilio P. Casuco, seeking to reverse and set aside the Decision[3] dated August 24, 2017 and the Resolution[4] dated February 2, 2018 of the Court of Appeals (CA), in CA-G.R. SPNo. 142200; and

G.R. No. 237313 is a petition for review on certiorari[5] under Rule 45 of the Rules of Court, filed by Basilio P. Casuco against Singa Shipmanagement Phils., Inc. and Singa Shipmanagement Pte. Ltd., seeking to partially modify the Decision dated August 24, 2017 and the Resolution dated Februarys, 2018, of the CA, respectively, in CA-G.R. SP No. 142200, only insofar as it reduced the amount of attorney's fees to 5% of the main award.

The antecedent facts are as follows:

On July 29, 2013, Basilio P. Casuco (herein referred to as "Casuco" is the petitioner in G.R. No. 237313 and respondent in GR. No. 237250) entered into a contract of employment with Singa Shipmanagement Pte. Ltd. (herein referred to as "Singa" is the respondent in GR. No. 237313 and petitioner in GR. No. 237250), through the latter's local manning agent, Singa Shipmanagement Phils., Inc. (also a respondent in GR. No. 237313 and petitioner in GR. No. 237250), to work as carpenter on board the vessel,"The World". The contract was for a term of six (6) months with the basic salary of US$857.00.[6]

Casuco's employment was covered by a Collective Bargaining Agreement (CBA) between Row Management LTS and Norwegian Seafarers' Union for Catering/Hotel Personnel.[7] Article 24 of the said CBA provides as follows:
xxxx

A Seafarer who suffers injury as a result of an accident from any cause whatsoever whilst in the employment of the Owners/Company, regardless of fault, including accidents occuring whilst traveling to or from the Ship and whose ability to work is reduced as a result thereof, shall in addition to his sick pay, be entitled to compensation according to the provision of this Agreement.

xxxx

Degree of Permanent Disability: Rate of Compensation:
%
Groups B & C 
Groups A1, A2 & A3 
USD
USD
100
90,000
130,000
75
67,500
90,000
60
54,000
78,000
50
45,000
65,000
40
36,000
52,000
30
27,000
39,000
20
18,000 
26,000
10
9,000 
13,000 

with any differences, including less than 10% disability, to be pro-rated.
Regardless of the degree of disability, an injury which results in loss of profession will entitle the Seafarer to the full amount of compensation, i.e. USD ninety thousand (90,000) for Ratings (Group B & C) and USD one hundred and thirty thousand (130,000) for Officers (Groups A1, A2 & A3). For the purposes of this Article, loss of profession means when the physical condition of the Seafarer prevents a return to sea service, under applicable national and international standards and/or when it is otherwise clear that the Seafarer's condition will adversely prevent the Seafarer's future of comparable employment on board ships.[8]
On August 11, 2013, pursuant to the said contract, Casuco embarked on the sea vessel and commenced his works and duties as seafarer.[9]

On November 22, 2013, Casuco carried a cabinet measuring 1 meter by 1 meter on his right shoulder. When he was about to place the cabinet on top of the scraps, he hit an object which caused the cabinet to press on his shoulders. Casuco immediately felt a sudden sharp pain on his right shoulder and he was unable to move it. He needed the medical assistance of the vessel's doctor, who referred him to an orthopedic doctor offshore.[10]

Casuco was medically attended by an orthopedic doctor in Napoli and was diagnosed with suspicion of lesion of the supraspinatus. He was advised to undergo a magnetic resonance imaging (MRI) and a surgery to repair the supraspinatus. The MRI result confirmed the initial finding of tendon lesion of supraspinatus. Thereafter, Casuco was declared unfit to work.[11]

On November 28, 2013, Casuco was repatriated to the Philippines. He immediately reported to the manning agency and was directly sent to Shiphealth Inc. On December 11, 2013, Shiphealth Inc. issued a medical report that Casuco was diagnosed to have rotator cuff tendonitis in his right shoulder. Shiphealth Inc. recommended that Casuco undergo a physical therapy for six (6) sessions, injection of local steroid, and surgery.[12]

On January 20, 2014, Casuco once again had an MRI procedure at the University Physician Medical Center and the results confirmed that he was suffering from—
Laterally downslopping acromion, which may predispose to development of clinical impingment (sic).

Partial-width full-thickness tear involving the distal suprspinatus (sic) tendon, associated with 2.6 cm tendon retraction and mild supraspinatus muscle atrophy. The remainder of the supraspinatus tendon demonstrates tendinosis.

Severe tendinosis or chronic intrasubstance partial tears of the infraspinatus tendon.

Nonspecific mild edema involving the teres minor muscle, which may be secondary to muscle strain vs.

Moderate to severe joint effusion involving the subacromial-subdeltoid and subcoracoid bursae, likely secondary to the underlying full-thickness tear.
[13]
In a medical report issued on January 23, 2014, Casuco was advised to undergo another six (6) sessions of physical therapy as he was diagnosed to have proximal supraspinatus tear on the right shoulder. In another medical report dated February 19, 2014, due to a negative improvement during physical therapy, Casuco was advised to undergo arthroscopy with repair of supraspinatus surgery.[14]

On April 8, 2014, Casuco underwent subchondral decompression and rotator cuff repair with debridement of biceps tendon at the Manila Doctors Hospital. From April 25, 2014 to May 19, 2014, Casuco underwent post-operative physical therapy.[15]

On July 2, 2014, Shiphealth Inc. issued a medical report indicating that Casuco had Grade 11 disability for inability to raise his arms more than halfway from horizontal to perpendicular. Casuco sought a second opinion from Dr. Leonardo Raymundo, whose medical opinion states:
[Casuco's] present status today on physical examination showed a range of motion of 0 to 80 degrees on active forward flexion and only about 70 degrees of abduction. He was unable to reach his back and therefore has no internal rotation.

DIAGNOSIS:

S/P SUBCROMIAL DECOMPRESSION, ROTATOR CUFF REPAIR AND DEBRIDEMENT OF THE BICEFS (sic) TENDON, RIGHT SHOULDER (April 8, 2014)


RECOMMENDATION:

I advised the patient that his present condition makes him no longer fit to return to active sea duty.
[16]
On July 24, 2014, Casuco submitted Dr. Leonardo Raymundo's medical report together with a request for a third opinion from another doctor to Singa. Singa, however, did not respond to the request for a third opinion prompting Casuco to proceed with grievance proceedings before the Associated Marine Officer and Seamen's Union of the Philippines (AMOSUP).[17]

On November 5, 2014, the proceedings before AMOSUP was declared deadlock in view of the parties' failure to amicably settle the matter. Thereafter, the case was referred to the Office of the Panel of Voluntary Arbitrators, docketed as AC-971-RCMB-NCR-MVA-139-11-12-2014.

On May 26, 2015, the Office of the Voluntary Arbitrators rendered a Decision[18] granting Casuco's claim for full disability benefits.
Ruling of the Voluntary Arbitrators

WHEREFORE, IN VIEW OF THE ABOVE, judgment is hereby promulgated DIRECTING the respondents, JOINTLY and SEVERALLY, to pay complainant the following amount, to wit:

1. Disability Benefits in the amount of Sixty Thousand Dollars (USD60,000.00);

2. Attorney's fees equivalent to 10% of the total amount due;

All other claims are dismissed for lack of merit.

SO ORDERED.[19]
Aggrieved by the above judgment, Singa appealed to the CA, which, in turn, modified the Voluntary Arbitors' Decision.

Ruling of the Court of Appeals
WHEREFORE, the Decision dated May 26, 2015 is hereby AFFIRMED with MODIFICATION reducing the amount of attorney's fees to 5% of the main award.

SO ORDERED.[20]
The CA also denied Singa's motion for reconsideration in its Resolution dated February 2, 2018.

The Issues

Singa submits the following issues for this Court's resolution:

I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED PATENT AND REVERSIBLE ERROR IN FINDING THAT RESPONDENT IS ENTITLED TO TOTAL AND PERMANENT DISABILITY BENEFITS

II
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED PATENT AND REVERSIBLE ERROR IN DISREGARDING THE DECLARATION OF THE COMPANY-DESIGNATED PHYSICIAN

III
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED PATENT AND REVERSIBLE ERROR IN FINDING RESPONDENT IS ENTITLED TO ATTORNEY'S FEES.[21]

While Casuco submits this lone argument:

"WHETHER THE COURT OF APPEALS ERRED IN REDUCING THE AWARD OF ATTORNEY'S FEES TO FIVE PERCENT (5%) OF THE TOTAL AWARDED AMOUNT.[22]
The Court's Ruling

The Office of the Panel of Voluntary Arbitrators and the CA are both correct in sustaining Casuco's entitlement to full disability benefits.

As a rule, in the case of Jebsens Maritime, Inc., and/or Alliance Marine Services, Ltd.,[23] the Court explained:
xxx entitlement of seamen on overseas work to disability benefits is a matter governed, not only by medical findings, but by law and by contract. By law, the material statutory provisions are Articles 191 to 193 under Chapter VI (Disability Benefits) of the Labor Code, in relation with Rule X of the Rules and Regulations Implementing Book IV of the Labor Code; and by contract, the POEA-SEC, as provided under Department Order No. 4, series of 2000 of the Department of Labor and Employment, and the parties' CBA bind the seaman and his employer to each other.[24]
Pertinently, in Magsaysay Maritime Corporation, et al. vs. NLRC, et al.[25], this Court held that:
For disability to be compensable under Section 20 (B) of the 2000 POEA-SEC, two elements must concur: (1) the injury or illness must be work related; and (2) the work related injury or illness must have existed during the term of the seafarer's employment contract. In other words, to be entitled to compensation and benefits under this provision, it is not sufficient to establish that the seafarer's illness or injury has rendered him permanently or partially disabled; it must also be shown that there is a causal connection between the seafarer's illness or injury and the work for which he had been contracted.[26] (Emphasis ours)
Here, it was established that the injury sustained by Casuco occurred while he was performing his job on board the vessel, "The World", and the doctor's diagnosis that he suffered from Subcromial Decompression, Rotator Cuff Repair and Debridement of the Biceps Tendon, Right Shoulder, as also established, was sustained during the term of Casuco's employment contract.

From the documents presented by the parties, Casuco's disability benefit is not measured by the grading he received, which is Grade 11, because Article 24 of the CBA, binding between the herein parties, particularly provides that any seafarer who loses his profession or is permanently disabled shall be entitled to receive 100% compensation. To quote:
xxxx

Regardless of the degree of disability an injury which results in loss of profession will entitle the Seafarer to the full amount of compensation, i.e. USD ninety thousand (90,000) for Ratings (Group B & C) and USD one hundred and thirty thousand (130,000) for Officers (Groups A1, A2 & A3). For the purposes of this Article, loss of profession means when the physical condition of the Seafarer prevents a return to sea service, under applicable national and international standards and/or when it is otherwise clear that the Seafarer's condition will adversely prevent the Seafarer's future of comparable employment on board ships.[27]
The above provision in the CBA is controlling. While Casuco had a Grade 11 disability rating, records show that he was eventually unable to go back to work as a seafarer due to the injury he sustained that resulted in the loss of his profession as a seafarer. Notably, loss of profession, under the same CBA is defined as any instance where "the physical condition of the Seafarer prevents a return to sea service, under applicable national and international standards and/or when it is otherwise clear that the Seafarer's condition will adversely prevent the Seafarer's future of comparable employment on board ships."

Significantly, in Joelson O. Lloreta v. Phil. Transmarine Carriers, Inc., et al.[28], the Labor Code concept of disability compensation to the case of seafarers was restated, viz:
xxx the test of whether or not an employee suffers from permanent total disability is a showing of the capacity of the employee to continue performing his work notwithstanding the disability he incurred. Thus, if by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensability (which, in more detailed manner, describes what constitutes temporary total disability), then the said employee undoubtedly suffers from permanent total disability regardless of whether or not he loses the use of any part of his body.

A total disability does not require that the employee be absolutely disabled or totally paralyzed. What is necessary is that the injury must be such that the employee cannot pursue his usual work and earn therefrom xxx.

xxxx

Total disability, on the other hand, means the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainments could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one's earning capacity.[29] (Emphasis ours)
This Court finds no cogent reason to depart from the findings of the CA that Casuco would not be able to return to his customary work as a seafarer in an ocean-going vessel, due to the strenuous nature of the work demanded by it. It is unlikely that he will be hired or be employed in the same kind of work that he was accustomed to perform because of his condition: the first issued medical opinion by Singa found Casuco to have the inability to raise arms more than halfway from horizontal to perpendicular; and the second opinion also specified that Casuco's range of motion is only set at 0 to 80 degrees on active forward flexion and only about 70 degrees of abduction. Moreover, Casuco was unable to reach his back and therefore has no internal rotation. With his condition, Casuco cannot do the following required activities of a seafarer: lift, pull and carry load, reach above shoulder height. Furthermore, as a carpenter, Casuco is required to accomplish tasks requiring physical movements, which he is now unable to do. He is considered to have an impairment that can prevent normal movement and physical activity.[30]

Casuco is deemed totally and permanently unfit for further sea duty; hence, he is entitled to full disability benefits.

As to the award of attorney's fees, we are inclined to revert it to the amount equivalent to 10% of the total amount due.

While the findings of the CA holds that 10% of US$60,000 as attorney's fees is exorbitant since it was not proven that Singa acted in gross and evident bad faith in denying Casuco's claim for compensation, nonetheless, the case of Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East Zone Union v. Manila Water Company, Inc.[31]is instructive and worthy of note. There, it was ruled that:
xxx Article 111 of the Labor Code, as amended, contemplates the extraordinary concept of attorney's fees and that Article 111 is an exception to the declared policy of strict construction in the award of attorney's fees. Although an express finding of facts and law is still necessary to prove the merit of the award, there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. In carrying out and interpreting the Labor Code's provisions and implementing regulations, the employee's welfare should be the primary and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as embodied in Article 4 of the Labor Code (which provides that "[a]ll doubts in the implementation and interpretation of the provisions of [the Labor Code], including its implementing rules and regulations, shall be resolved in favor of labor") and Article 1702 of the Civil Code (which provides that "[i]n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer).[32] (Emphasis ours)
In the present case, Casuco is entitled to attorney's fees equivalent to 10% of the total amount due. It is undisputed that Casuco was compelled to litigate and incur legal expenses; hence, there is no difficulty in upholding the Voluntary Arbitrators' award of 10% attorney's fees.

In the case of Nazareno v. Maersk Filipinas Crewing, Inc., et al.,[33] the Court held that:
Verily, the courts should be vigilant in their time-honored duty to protect labor especially in cases of disability or ailment. When applied to Filipino seamen, the perilous nature of their work is considered in determining the proper benefits to be awarded. These benefits, at the very least, should approximate the risks they brave on board the vessel every single day.[34]
WHEREFORE, premises considered, judgment is hereby rendered as follows:

1 In G.R. No. 237250, the petition for review is DENIED for lack of merit;

2. In G.R. No. 237313, the petition for review is GRANTED. Accordingly, the Decision of the Court of Appeals, dated August 24, 2017 and the Resolution dated February 2, 2018, in CA-G.R. SP No. 142200, only in so far as it reduced the amount of attorney's fees to 5% of the main award is REVERSED and SET ASIDE; and,

3. The amount of attorney's fees to be awarded to Basilio P. Casuco is REVERTED to equivalent amount of 10% of the main award as contained in the Decision of the Office of the Panel of Voluntary Arbitrators in AC-971-RCMB-NCR-MVA-139-11-12-2014.

SO ORDERED. Bersamin, J., on official business; Del Castillo, J., designated Acting Working Chairperson per Special Order No. 2605 dated September 28, 2018.

[1] See Compliance, dated July 10, 2018 to the Resolution of this Court dated June 25, 2018 directing Acting Division Clerk of Court Librada C. Buena to study the propriety of consolidating the instant two cases (G.R. No. 237250 and G.R. No. 237313) and to make a Report thereon; Rollo of G.R. No. 237250, pp. 337-339 and Rollo of G.R. No. 237313, p. 360.

[2] Id. at 8-33.

[3] Penned by Associate Justice Danton Q. Bueser and concurred in by Associate Justices Normandie B. Pizarro and Marie Christine Azcarraga-Jacob; Id. at 36-46.

[4] Id. at 48-49.

[5] Id. at 8-23.

[6] Id. at 12 (G.R. No. 237250; id. at 10 (G.R. No. 237313).

[7] Id. at 10 (GR. No. 237313).

[8] Id. at 66-67 (G.R. No. 237313).

[9] Id. at 12 (G.R. No. 237250; id. at 10 (G.R. No. 237313).

[10] Id.

[11] Id. at 10-11 (G.R. No. 237313).

[12] Id. at 11 (G.R. No. 237313).

[13] Id. at 172 (G.R. No. 237313).

[14] Id. at 12 (G.R. No. 237313).

[15] Id.

[16] Id.

[17] Id. at 12-13 (G.R. No. 237313).

[18] Id. at 169-185 (G.R. No. 237313).

[19] Id. at 184 (G.R. No. 237313).

[20] Id. at 35.

[21] Id. at 14-15 (G.R. No. 237250).

[22] Id. at 15 (GR. No. 237313).

[23] 678 Phil. 938 (2011).

[24] Id. at 944.

[25] 630 Phil. 352(2010).

[26] Id. at 362-363.

[27] Rollo, p. 67 (G.R. No. 237313).

[28] 622 Phil. 832 (2009).

[29] Id. at 840-841.

[30] Rollo, p. 184 (G.R. No. 237313).

[31] 676 Phil. 262(2011

[32] Id. at 275-276.

[33] 704 Phil. 625 (2013).

[34] Id. at 635.).

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