In Crown Shipping Services vs. John P. Cervas, the Supreme Court ruled that a seafarer who prematurely files a disability claim and abandons medical treatment with the company-designated physician is not entitled to total and permanent disability benefits. The Court emphasized the importance of adhering to the prescribed periods for medical assessment and treatment, as outlined in the Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC). This decision underscores the seafarer’s duty to comply with the company’s medical protocols to properly determine the extent of their disability and eligibility for compensation, balancing the rights and obligations of both the employer and the employee in maritime employment.

High Seas Injury: Was the Seafarer’s Claim Shipshape?

The case revolves around John P. Cervas, an Able Seaman employed by Carisbrooke Shipping Ltd. through its local manning agent, Crown Shipping Services. On December 20, 2012, Cervas sustained a left leg injury during a lifeboat drill amidst rough seas. Upon repatriation, he was examined by the company-designated physician, Dr. Carlos Lagman, who diagnosed him with a fibular fracture and declared him unfit to work. Cervas attended medical treatments, and although the company doctor confirmed that the bone was growing, he still felt some tenderness. However, Cervas discontinued treatment and filed a claim for total and permanent disability benefits. This led to a legal battle concerning the timeliness of his claim and the impact of his decision to halt medical treatment before a final assessment could be made.

The central legal question is whether Cervas was entitled to total and permanent disability benefits, considering he prematurely filed his claim before the 120-day period for the company-designated physician to issue a final assessment had lapsed, and given that he discontinued medical treatment. The Labor Arbiter initially dismissed Cervas’ complaint, citing his premature filing and abandonment of treatment. However, the National Labor Relations Commission (NLRC) reversed this decision, granting Cervas total permanent disability benefits. The Court of Appeals (CA) affirmed the NLRC’s ruling, prompting the employer to elevate the case to the Supreme Court.

The Supreme Court, in its analysis, emphasized that while labor tribunals possess expertise in resolving factual issues, the Court may re-examine facts in cases of conflicting findings. The Court underscored that for an injury and resulting disability to be compensable, they must necessarily result from an accident arising out of and in the course of employment. The Court agreed that Cervas’ injury was sustained while performing his duties as a seaman. Therefore, in general, this injury should be compensable.

The Court then clarified the responsibilities and timelines outlined in Section 20(A) of the 2010 POEA-SEC. This section stipulates that the company-designated physician has 120 days from repatriation to provide a definitive assessment of the seafarer’s fitness or degree of disability. This period may be extended to a maximum of 240 days if further medical attention is required, with the employer having the right to declare the existence of a permanent partial or total disability within this extended period.

The Court outlined four critical rules regarding the company-designated physician’s duty:

1. The company-designated physician must issue a final medical assessment on the seafarer’s disability grading within a period of 120 days from the time the seafarer reported to him;

2. If the company-designated physician fails to give his assessment within the period of 120 days, without any justifiable reason, then the seafarer’s disability becomes permanent and total;

3. If the company-designated physician fails to give his assessment within the period of 120 days with a sufficient justification (e.g. seafarer required further medical treatment or seafarer was uncooperative), then the period of diagnosis and treatment shall be extended to 240 days. The employer has the burden to prove that the company-designated physician has sufficient justification to extend the period; and

4. If the company-designated physician still fails to give his assessment within the extended period of 240 days, then the seafarer’s disability becomes permanent and total, regardless of any justification.

In this case, the Court found that Cervas filed his claim prematurely, on the 99th day after consulting the company-designated physician, well before the 120-day assessment period had expired. By discontinuing treatment due to financial constraints, Cervas prevented the physician from completing the assessment. The Court emphasized that under Section 20(D) of the POEA-SEC, a seafarer’s intentional breach of duties, such as abandoning medical treatment, can result in the forfeiture of disability benefits.

The Supreme Court highlighted the seafarer’s duty to comply with the medical treatment prescribed by the company-designated physician. This is because the company-designated physician needs all the help, data, and medical visits to be able to make a final, definitive assessment. Cervas abandoned the process before the 120-day period expired. However, the Court also noted that a seafarer’s financial incapacity to continue treatment may be a valid justification, provided it is supported by clear and convincing evidence. In this instance, Cervas failed to adequately demonstrate his financial incapacity, especially considering the availability of sickness allowance and potential reimbursement for travel and accommodation expenses under the POEA-SEC.

While the Court acknowledged the importance of a seafarer’s inability to work for more than 120 days in determining entitlement to permanent disability benefits, it stressed that this determination must still occur within the established 120/240-day framework. Cervas failed to provide substantial proof that his injury rendered him unable to work for more than 120 days, nor did he present medical reports from independent physicians to support his claim of permanent disability. Consequently, the Court found Cervas’ claim for total and permanent disability benefits unsubstantiated.

Despite ruling against the disability claim, the Supreme Court recognized Cervas’s plight and the injury he sustained during his employment. In a gesture of social and compassionate justice, the Court awarded Cervas P200,000.00 as financial assistance. This decision reflects the Court’s attempt to balance the interests of both the employer and the worker, acknowledging the seafarer’s injury while upholding the importance of adhering to contractual and procedural requirements.

FAQs

What was the key issue in this case?	The key issue was whether a seafarer was entitled to total and permanent disability benefits after prematurely filing a claim and abandoning medical treatment with the company-designated physician.
What is the 120/240-day rule for seafarer disability claims?	The company-designated physician has 120 days from the seafarer’s repatriation to issue a final assessment. This period can be extended to 240 days if further medical treatment is needed.
What happens if the company-designated physician fails to provide an assessment within the 120/240-day period?	If no assessment is provided within the 120-day period without justification, the seafarer’s disability becomes permanent and total. If justified, the period extends to 240 days; failure to assess within this extended period also results in a permanent and total disability.
What constitutes medical abandonment by a seafarer?	Medical abandonment occurs when a seafarer fails to complete their medical treatment within the 240-day period, preventing the company physician from issuing a final assessment.
What is the effect of medical abandonment on a seafarer’s disability claim?	Medical abandonment can lead to the forfeiture of the seafarer’s right to claim disability benefits, as it is considered an intentional breach of their duties.
What kind of proof is needed if a seafarer claims financial incapacity to continue treatment?	A seafarer must provide clear and convincing evidence of financial incapacity, especially if the manning agency has been providing sickness allowance during the treatment period.
Are seafarers entitled to reimbursement for travel and accommodation expenses during treatment?	Yes, if the treatment is on an out-patient basis, the company should approve the mode of transportation and accommodation, and the seafarer is entitled to reimbursement upon liquidation and submission of receipts.
What was the outcome of this case?	The Supreme Court reversed the Court of Appeals’ decision, denying the seafarer’s claim for total and permanent disability benefits but awarding him P200,000.00 as financial assistance.

In conclusion, the Supreme Court’s decision in Crown Shipping Services vs. John P. Cervas highlights the importance of adhering to the established procedures and timelines for seafarer disability claims. While the Court acknowledged the seafarer’s injury, it emphasized the need for compliance with medical treatment and assessment protocols to ensure a fair and accurate determination of disability benefits.

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: Crown Shipping Services vs. John P. Cervas, G.R. No. 214290, July 06, 2021