SC Upholds Disability Claims of Seafarer Injured while Playing Basketball

The Supreme Court has ordered a ship management company and its corporate officers to pay US$90,000 as total and permanent disability benefits to its seafarer employee who suffered an injury while playing basketball on board a ship during his free time.

In a 21-page Decision penned by Associate Justice Samuel H. Gaerlan, the Court granted the petition under Rule 45 of the Rules of Court filed by Rosell R. Arguilles (Arguilles) which sought to annul and set aside the January 24, 2020 Decision and November 9, 2020 Resolution of the Court of Appeals (CA). The said issuances of the CA affirmed the National Labor Relations Commission (NLRC) Resolution which, in turn, reversed the Decision of the Labor Arbiter in favor of Arguilles in a complaint for disability benefits against his former employer, respondents Wilhelmsen Smith Bell Manning, Inc. (Wilhelmsen Manning), its principal Wilhelmsen Ship Management Ltd. (WSML), and Fausto R. Preysler, Jr.

On December 26, 2016, Arguilles, employed as an Ordinary Seaman by Wilhelmsen Manning on behalf of WSML on board the vessel M/V Toronto, suffered an injury in his left ankle while he was playing basketball with his work colleagues in their free time.

After petitioner was medically repatriated to the Philippines, he was referred to Wilhelmsen Manning’s company-designated physicians for an initial evaluation. A magnetic resonance imaging of his injured ankle showed a severely attenuated Achilles tendon consistent with high-grade partial tear.

On February 6, 2017, Arguilles underwent surgery to repair his ankle. The clinical abstract showed that he was diagnosed with “High Grade Achilles Tendon Tear, Left.” Between February 13, 2017 and June 23, 2017, he underwent 49 physical therapy sessions at a clinic to which he was referred by Wilhelmsen Manning. After Wilhelmsen Manning terminated his treatment allegedly because his work-related injury was too severe to be resolved within 120 days, Arguilles consulted an independent physician who then declared him unfit for duty.

When his request for disability benefits from respondents went unheeded, Arguilles filed a complaint before the arbitration branch of the NLRC.

The Labor Arbiter decided in Arguilles’ favor and ordered respondents to pay the latter the amount of US$90,000 plus moral and exemplary damages in the amount of Php450,000. On appeal, the NLRC initially maintained the finding of disability in Arguilles’ favor, but reduced the amount awarded him by the Labor Arbiter. Respondents moved to reconsider, which prompted the NLRC to completely reverse its findings and order the dismissal of Arguilles’ claims. The CA affirmed the NLRC.

In granting Arguilles’ petition, the Supreme Court stressed that the 2010 Philippine Overseas Employment Administration Standard Employment Contract (POEA SEC), in conjunction with the collective bargaining agreement between the Norwegian Shipowners; Association and the Association of Marine Officers; and Seamen’s Union of the Philippines and the Norwegian Seafarers’ Union (NSA-AMOSUP/NSU CBA), which, in turn, governs the relationship between Arguilles and respondents, serves as the main basis for Arguilles’ claims.

On the other hand, Section 2, Rule IV of Department of Labor and Employment Order No. 130, series of 2013 provides that the terms and conditions of seafarers’ employment shall be governed by the POEA SEC.

The Court noted that the POEA SEC defines a work-related injury as an “injury arising out of and in the course of employment,” which does not require that a seafarer must suffer an injury while he or she is in actual performance of his or her duties. The Court added that Section 2(A) of the POEA SEC likewise provides that a seafarer’s contract of employment shall be effective until his or her date of arrival at the point of hire, upon termination of his or her employment.

The Court also said that an employer is duty-bound to provide a seaworthy ship for the seafarer and take all reasonable precautions to prevent accident and injury to the crew, under Section 1(A)(4) of the POEA SEC.

“It is beyond cavil that petitioner’s injury was sustained while his employment contract was still in effect and while he was still on board M/V Toronto. Accordingly, he suffered his injury in the course of his employment. This squarely falls within the POEA SEC’s definition of a work-related injury,” ruled the Court.

The Court, however, made it clear that not all injuries sustained by a seafarer on board a ship shall be compensable, as employers were never intended to be insurers against all accidental injuries their employees might incur while in the course of employment, “but only for such injuries arising from or growing out of the risks peculiar to the nature of work in the scope of the workmen’s employment or incidental to such employment, and accidents in which it is possible to trace the injury to some risk or hazard to which the employee is exposed in a special degree by reason of such employment.”

Citing Section 20(D) of the POEA-SEC, which states that a seafarer shall be disqualified from receiving disability benefits of the employer is able to prove that: (1) the injury, incapacity, or disability is directly attributable to the seafarer; (2) the seafarer committed a crime or willful breach of duties; and (3) the causation between the injury, incapacity, or disability, and the crime or breach of duties, the Court said that the burden rests upon the respondents to prove by substantial evidence that the injury incurred by Arguilles during the course of his employment was directly attributable to his deliberate or willful act.

In the case of Arguilles, he was “merely playing basketball, an employer-sanctioned activity onboard the vessel. It cannot be considered as a reckless or deliberate activity that is unmindful of one’s safety,” remarked the Court. “The records are bereft of any evidence, much less the slightest indication, that the injury suffered by [Arguilles] was intentionally or negligently incurred. Thus, his injury is worthy of compensation.”

The Court further held that in any event, Arguilles’ entitlement to full disability benefits had already lapsed by operation of law. Since no certification as to Arguilles’ condition was issued by the company-designated physician within the 120-day and 240-day periods contemplated by the Court in Elburg Shipmanagement Phils. v. Quiogue, Jr. on claims for total and permanent disability benefits by a seafarer, his condition had already lapsed into total and permanent disability.

The Court likewise declared the corporate officers of Wilhelmsen Manning jointly and severally liable with Wilhelmsen Manning and WSML for the total judgment award, following the provision of the Migrant Workers and Overseas Filipinos Act of 1995, as amended, which states that if the recruitment or placement agency is a juridical being, its corporate officers, directors, and partners shall themselves be jointly and severally liable with the corporation or partnership for money claims. (Courtesy of the Supreme Court Public Information Office)

FULL TEXT of G.R. No. 254586 (Arguilles v. Wilhelmsen Smith Bell Manning, Inc./Wilhelmsen Ship Management Ltd., and Preysler, Jr., July 10, 2023) at: