The Supreme Court’s decision in Kestrel Shipping Co., Inc. v. Munar clarifies what constitutes total and permanent disability for Filipino seafarers under the Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC). The Court ruled that if a seafarer’s injury prevents them from performing their usual sea duties for over 120 or 240 days, and the company-designated physician fails to provide a conclusive assessment within that timeframe, the seafarer is deemed totally and permanently disabled. This ruling emphasizes the importance of timely and accurate medical assessments in protecting the rights of Filipino seafarers injured while working overseas, and clarifies how long a seafarer can receive benefits.

Anchor’s Weight: When Back Pain Leads to a Seafarer’s Permanent Disability Claim

This case revolves around Francisco Munar, a pump man who suffered a back injury while working on a ship. After manually lifting a heavy anchor windlass motor, Munar experienced severe lumbar pain. Medical examinations in South Africa revealed degenerative changes in his spine, rendering him unfit for his usual sea duties. Upon repatriation to the Philippines, Munar underwent further treatment, including surgery and physiotherapy. However, his condition persisted, leading to a dispute over the extent of his disability and the corresponding benefits.

The central legal question was whether Munar’s condition qualified as a total and permanent disability, entitling him to maximum compensation under the POEA-SEC. Kestrel Shipping argued that Munar’s disability should be classified as Grade 8, based on the assessment of their company-designated physician, Dr. Chua. Munar, on the other hand, contended that his inability to return to work due to his back injury constituted a total and permanent disability, warranting a Grade 1 rating.

The Labor Arbiter (LA) sided with Munar, awarding him total and permanent disability benefits. The LA gave more weight to the assessment of Dr. Chiu, Munar’s independent physician, who stated that Munar could not return to work due to his back injury. The National Labor Relations Commission (NLRC) affirmed the LA’s decision, emphasizing the uncertainty in the company-designated physician’s report regarding Munar’s recovery timeline.

The Court of Appeals (CA) also agreed with the NLRC’s finding of total and permanent disability but reduced the attorney’s fees. Petitioners elevated the case to the Supreme Court, questioning the credibility of Munar’s doctor-of-choice and insisting on the correctness of the grade assigned by their doctors to Munar’s disability. The Supreme Court, however, ultimately denied the petition, upholding the CA’s decision.

In its analysis, the Supreme Court emphasized the interplay between the POEA-SEC, the Labor Code, and the Amended Rules on Employee Compensation (AREC). The Court clarified that while the POEA-SEC provides a schedule of disabilities, the determination of whether a disability is total and permanent must also consider the seafarer’s ability to engage in gainful employment. Building on this principle, the Court highlighted that a disability graded from 2 to 14 under the POEA-SEC could still be considered total and permanent if it incapacitated the seafarer from performing their usual sea duties for more than 120 or 240 days.

The Court stressed the importance of the company-designated physician’s role in providing a definitive assessment of the seafarer’s fitness to work within the prescribed timeframe. The Court stated that failure to do so would lead to the seafarer being deemed totally and permanently disabled. As the Supreme Court stated in Remigio v. NLRC:

“disability should not be understood more on its medical significance but on the loss of earning capacity. Permanent total disability means disablement of an employee to earn wages in the same kind of work, or 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 attainment could do. It does not mean absolute helplessness.”

Furthermore, the Court addressed the procedural aspects of contesting the company-designated physician’s assessment. Section 20-B(3) of the POEA-SEC outlines a mechanism for resolving conflicting medical opinions, involving the selection of a third doctor whose opinion shall be final and binding. However, the Court clarified that compliance with this procedure presupposes that the company-designated physician has issued an assessment within the prescribed timeframe. Absent such an assessment, the seafarer is not obligated to follow the procedure and the law intervenes to characterize the disability as total and permanent.

One crucial point of contention was the applicability of the Court’s ruling in Crystal Shipping, Inc. v. Natividad, which held that permanent disability is the inability to perform one’s job for more than 120 days. The Court acknowledged that its subsequent pronouncements in Vergara v. Hammonia Maritime Services, Inc. presented a restraint against the indiscriminate reliance on Crystal Shipping. Vergara clarified that the 120-day period is not a hard-and-fast rule and that the period of temporary total disability may be extended up to 240 days if further medical treatment is required. However, the Court also emphasized that Vergara should not be applied retroactively to deprive seafarers of causes of action that had already accrued under the previous jurisprudence.

In the present case, the Court noted that when Munar filed his complaint, Dr. Chua had not yet determined the nature and extent of Munar’s disability, Munar was still undergoing physical therapy, and the then-prevailing rule in Crystal Shipping characterized disabilities lasting over 120 days as permanent. Therefore, the Court concluded that Munar was entitled to total and permanent disability benefits, even though Dr. Chua eventually issued a disability grading within the extended 240-day period.

FAQs

What was the key issue in this case?	The central issue was whether Francisco Munar’s back injury, sustained while working as a pump man, qualified as a total and permanent disability under the POEA-SEC, entitling him to maximum compensation.
What is the significance of the 120/240-day period?	The 120-day period is the initial timeframe for the company-designated physician to assess the seafarer’s fitness to work. This period can be extended to 240 days if further medical treatment is needed, after which the seafarer is considered permanently disabled if there is no assessment made.
What happens if there are conflicting medical opinions?	The POEA-SEC provides a procedure where a third doctor, jointly selected by the employer and seafarer, can provide a final and binding opinion. This process is necessary only if the company doctor has already made an assessment within the 120/240 day period.
What is the role of the company-designated physician?	The company-designated physician plays a critical role in assessing the seafarer’s condition and determining their fitness to work or the extent of their disability within the 120/240-day period, this assesment will be the basis for the compensation to be given to the seafarer.
What happens if the company-designated physician fails to provide an assessment within the timeframe?	If the company-designated physician fails to provide a conclusive assessment within 120 or 240 days, the seafarer is deemed totally and permanently disabled by operation of law and the seafarer can file for compensation.
Does a Grade 8 disability automatically disqualify a seafarer from total and permanent disability benefits?	No. The Supreme Court clarified that even a disability graded from 2 to 14 under the POEA-SEC can be considered total and permanent if it prevents the seafarer from performing their usual sea duties for more than 120 or 240 days.
How do the Labor Code and AREC relate to the POEA-SEC?	The Supreme Court clarified that the POEA-SEC should be interpreted in harmony with the Labor Code and AREC. These laws define the rights of a seafarer in the event of work related death, injury or illness.
What was the impact of the Vergara ruling on this case?	The Vergara ruling clarified the application of the 120/240-day periods for disability assessments. However, the Court ruled that it should not be applied retroactively to deprive seafarers of causes of action that had already accrued under the previous jurisprudence.

The Kestrel Shipping case provides valuable guidance on the determination of total and permanent disability for Filipino seafarers. It underscores the importance of timely medical assessments and clarifies the interplay between various legal frameworks in protecting the rights of seafarers injured while working overseas. The Supreme Court emphasizes that a seafarer’s inability to perform their customary work, coupled with the failure of the company-designated physician to provide a conclusive assessment, can lead to a finding of total and permanent disability, ensuring that seafarers receive the compensation they deserve.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Kestrel Shipping Co., Inc. v. Munar, G.R. No. 198501, January 30, 2013