D. Disability and death benefits

Frequency: ★★★☆☆

1. Labor Code

NB:The Labor Code provisions on disability and death benefits are under Title II – Employees Compensation and State Insurance Fraud, Book IV – Health, Safety and Social Welfare Benefits. Hence, discussions start at No. 2 below on Employees Compensation and State Insurance Fund.

Employees Compensation and State Insurance Fund:

Commission. Commission – means the Employees’ Compensation Commission (ECC). (Article 173[b], Labor Code)

SSS. SSS – means the Social Security System. (Article 173[c], Ibid.)

GSIS. GSIS – means the Government Service Insurance System. (Article 173[d], Ibid.)

System. System – means the SSS or GSIS, as the case may be. (Article 173[e], Ibid.)

Dependents. Dependents – means the legitimate, legitimated, legally adopted or acknowledged natural child who is unmarried, not gainfully employed, and not over twenty-one years of age or over twenty-one years of age provided he is incapable of self-support due to a physical or mental defect which is congenital or acquired during minority; the legitimate spouse living with the employee; and the parents of said employee wholly dependent upon him for regular support. (Article 173[i], Ibid.)

Disability. Disability – means loss or impairment of a physical or mental function resulting from injury or sickness. (Article 173 [n], Ibid.)

Death. Death – means loss of life resulting from injury or sickness. (Article 173 [m], Ibid.)

Beneficiaries. Beneficiaries – means the dependent spouse until he/she remarries and dependent children, who are the primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on dependent children, the illegitimate children and legitimate descendants, who are the secondary beneficiaries: Provided, That the dependent acknowledged natural child shall be considered as a primary beneficiary when there are no other dependent children who are qualified and eligible for monthly income benefit. (Article 173[j], Ibid.)

a. Compulsory Coverage

Coverage in the State Insurance Fund shall be compulsory upon all employers and their employees not over sixty (60) years of age; Provided, That an employee who is over sixty (60) years of age and paying contributions to qualify for the retirement or life insurance benefit administered by the System shall be subject to compulsory coverage. (Article 174, Ibid.)

Effective Date of Coverage. Compulsory coverage of the employer during shall take effect on the first day of his operation, and that of the employee, on the date of his employment. (Article 176, Ibid.)

Limitation of Liability. The State Insurance Fund shall be liable for compensation to the employee or his dependents, except when the injure or kill himself or another, notorious negligence, or otherwise provided under the Labor Code. (Article 178, Ibid.)

Extent of Liability. Unless otherwise provided, the liability of the State Insurance Fund shall be exclusive and in place of all other liabilities of the employer to the employee, his dependents or anyone otherwise entitled to receive damages on behalf of the employee or his dependents. The payment of compensation shall not bar the recovery of benefits as provided for in Section 699 of the Revised Administrative Code, Republic Act Numbered Eleven Hundred Sixty-One, as amended, Republic Act Numbered Six Hundred Ten, as amended, Republic Act Numbered Forty-Eight Hundred Sixty-Four, as amended, and other laws whose benefits are administered by the System or by other agencies of the government. (Article 179, Ibid.)

Liability of Third Parties. When the disability or death is caused by circumstances creating a legal liability against a third party, the disabled employee or the dependents, in case of his death, shall be paid by the System. In case benefit is paid, the System shall be subrogated to the rights of the disabled employee or the dependents, in case of his death, in accordance with the general law. (Article 180[a], Ibid.)

Where the System recovers from such third-party damages in excess of those paid or allowed, such excess shall be delivered to the disabled employee or other persons entitled thereto, after deducting the cost of proceedings and expenses of the System. (Article 180[b], Ibid.)

Non-deprivation of the benefits. Except as otherwise provided, no contract, regulation or device whatsoever shall operate to deprive the employee or his dependents of any part of the income benefits and medical or related services granted. Existing medical services being provided by the employer shall be maintained and continued to be enjoyed by their employees. (Article 181, Ibid.)

Settlement of Claims. The System shall have original and exclusive jurisdiction to settle any dispute with respect to coverage, entitlement to benefits, collection and payment of contributions and penalties thereon, or any other matter related thereto, subject to appeal to the Commission, which shall decide appealed cases within twenty (20) working days from the submission of the evidence. (Article 186, Ibid.)

Review. Decisions, orders or resolutions of the Commission may be reviewed on certiorari by the Supreme Court on question of law upon petition of an aggrieved party within ten (10) days from notice thereof. (Article 187, Ibid.)

Enforcement of Decisions. Any decision, order or resolution of the Commission shall become final and executory if no appeal is taken therefrom within ten (10) days from notice thereof. All awards granted by the Commission in cases appealed from decisions of the System shall be effected within fifteen days from receipt of notice. (Article 188[a], Ibid.)

In all other cases, decisions, orders and resolutions of the Commission which have become final and executory shall be enforced and executed in the same manner as decisions of the Court of First Instance, and the Commission shall have the power to issue to the city or provincial sheriff or to the sheriff whom it may appoint, such writs of execution as may be necessary for the enforcement of such decisions, orders or resolutions, and any person who shall fail or refuse to comply therewith shall, upon application by the Commission, be punished by the proper

court for contempt. (Article 188[b], Ibid.)

b. Benefits

1) Medical Services

Immediately after an employee contracts sickness or sustains an injury, he shall be provided by the System during the subsequent period of his disability with such medical services and appliances as the nature of his sickness or injury and progress of his recovery may require, subject to the expense limitation prescribed by the Commission. (Article 191, Ibid.)

2) Refusal of Examination or Treatment

If the employee unreasonably refuses to submit to medical examination or treatment, the System shall stop the payment of further compensation during such time as such refusal continues. What constitutes an unreasonable refusal shall be determined by the System which may, on its own initiative, determine the necessity, character and sufficiency of any medical services furnished or to be furnished. (Article 194, Ibid.)

3) Rehabilitation Services

(a) The System shall, as soon as practicable, establish a continuing program, for the rehabilitation of injured and handicapped employees who shall be entitled to rehabilitation services, which shall consist of medical, surgical or hospital treatment, including appliances if they have been handicapped by the injury, to help them become physically independent. (Article 196[a], Ibid.)

(b) As soon as practicable, the System shall establish centers equipped and staffed to provide a balanced program of remedial treatment, vocational assessment and preparation designed to meet the individual needs of each handicapped employee to restore him to suitable employment, including assistance as may be within its resources, to help each rehabilitee to develop his mental, vocational or social potential. (Article 196[b], Ibid.)

4) Disability Benefits

For the injury and the resulting disability or death to be compensable, the injury must be the result of accident arising out of and in the course of the employment. (Section 1[a], Rule III, Amended Rules on Employees’ Compensation)

For the sickness and the resulting disability or death to be compensable, the sickness must be the result of an occupational disease listed under Annex “A” of the Rules with the conditions set therein satisfied, otherwise, proof must be shown that the risk of contracting the disease is increased by the working conditions. (Section 1[b], Rule III, Ibid.)

Temporary Total Disability. Under such regulations as the Commission may approve, any employee who sustains an injury or contracts sickness resulting in temporary total disability shall, for each day of such a disability or fraction thereof, be paid by the System an income benefit equivalent to ninety percent of his average daily salary credit, subject to the following conditions: the daily income benefit shall not be less than Ten Pesos nor more than Ninety Pesos, nor paid for a continuous period longer than one hundred twenty days, except as otherwise provided for in the Rules, and the System shall be notified of the injury or sickness. (Article 197[a], Labor Code)

Permanent Total Disability. Under such regulations as the Commission may approve, any employee who contracts sickness or sustains an injury resulting in his permanent total disability shall, for each month until his death, be paid by the System during such a disability, an amount equivalent to the monthly income benefit, plus ten percent thereof for each dependent child, but not exceeding five, beginning with the youngest and without substitution: Provided, That the monthly income benefit shall be the new amount of the monthly benefit for all covered pensioners, effective upon approval of this Decree. (Article 198[a], Ibid.)

The monthly income benefit shall be guaranteed for five years, and shall be suspended if the employee is gainfully employed, or recovers from his permanent total disability, or fails to present himself for examination at least once a year upon notice by the System, except as otherwise provided for in other laws, decrees, orders or Letters of Instructions. (Article 198[b], Ibid.)

The following disabilities shall be deemed total and permanent:

1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided for in the Rules;

2) Complete loss of sight of both eyes;

3) Loss of two limbs at or above the ankle or wrist;

4) Permanent complete paralysis of two limbs;

5) Brain injury resulting in incurable imbecility or insanity; and

6) Such cases as determined by the Medical Director of the System and approved by the Commission. (Article 198[c], Ibid.)

5) Death Benefits

Under such regulations as the Commission may approve, the System shall pay to the primary beneficiaries upon the death of the covered employee, an amount equivalent to his monthly income benefit, plus ten percent thereof for each dependent child, but not exceeding five, beginning with the youngest and without substitution, except as provided for in paragraph (j) of Article 167151 hereof: Provided, however, That the monthly income benefit shall be guaranteed for five years: Provided, further, That if he has no primary beneficiary, the System shall pay to his secondary beneficiaries the monthly income benefit but not to exceed sixty months: Provided, finally, That the minimum death benefit shall not be less than fifteen thousand pesos. (Article 200[a], Ibid.)

Under such regulations as the Commission may approve, the System shall pay to the primary beneficiaries upon the death of a covered employee who is under permanent total disability, eighty percent of the monthly income benefit and his de Provided, That the marriage must have been validly subsisting at the time of disability: Provided, further, That if he has no primary beneficiary, the System shall pay to his secondary beneficiaries the monthly pension remaining balance of the five-year guaranteed period: Provided, finally, That the minimum death benefit shall not be less than fifteen thousand pesos. (Article 200[b], Ibid.)

6) Funeral benefit

A funeral benefit of Three Thousand Pesos (P3,000.00) shall be paid upon the death of a covered employee or permanently totally disabled pensioner. (Article 200[d], Ibid.)

c. Relationship and Dependency

All questions of relationship and dependency shall be determined as of the time of death. (Article 201, Ibid.)

c. Miscellaneous

Delinquent Contributions. An employer who is delinquent in his contributions shall be liable to the System for the benefits which may have been paid by the System to his employees or their dependents, and any benefit and expenses to which such employer is liable shall constitute a lien on all his property, real or personal, which is hereby declared to be preferred to any credit, except taxes. The payment by the employer of the lump sum equivalent of such liability shall absolve him from the payment of the delinquent contribution and penalty thereon with respect to the employee concerned. (Article 202[a], Ibid.)

Failure or refusal of the employer to pay or remit the contribution. Failure or refusal of the employer to pay or remit the contribution herein prescribed shall not prejudice the right of the employee or his dependents to the benefits. If the sickness, injury, disability or death occurs before the System receives any report of the name of his employee, the employer shall be liable to the System for the lump sum equivalent to the benefits to which such employee or his dependents may be entitled. (Article 202[b], Ibid.)

Second Injuries. If any employee under permanent partial disability suffers another injury which results in a compensable disability greater than the previous injury, the State Insurance Fund shall be liable for the income benefit of the new disability: Provided, That if the new disability is related to the previous disability, the System shall be liable only for the difference in income benefits. (Article 203, Ibid.)

Assignment of Benefits. No claim for compensation is transferable or liable to tax, attachment, garnishment, levy or seizure by or under any legal process whatsoever, either before or after receipt by the person or persons entitled thereto, except to pay any debt of the employee to the System. (Article 204, Ibid.)

Same; Earned Benefits. Income benefits shall, with respect to any period of disability, be payable to an employee who is entitled to receive wages, salaries or allowances for holidays, vacation or sick leaves and any other award of benefit under a collective bargaining or other agreement. (Article 205, Ibid.)

Safety Devices. In case the employee’s injury or death was due to the failure of the employer to comply with any law or to install and maintain safety devices or to take other precautions for the prevention of injury, said employer shall pay the State Insurance Fund a penalty of twenty-five percent (25%) of the lump sum equivalent of the income benefit payable by the System to the employee. All employers, especially those who should have been paying a rate of contribution higher than required of them, are enjoined to undertake and strengthen measures for the occupational health and safety of their employees. (Article 206, Ibid.)

Prescriptive Period. No claim for compensation shall be given due course unless said claim is filed with the System within three (3) years from the time the cause of action accrued. (Article 207, Ibid.)

Record of Death or Disability / ECC Logbook. All employers shall keep a logbook to record chronologically the sickness, injury or death of their employees, setting forth therein their names, dates and places of the contingency, nature of the contingency and absences. Entries in the logbook shall be made within five days from notice or knowledge of the occurrence of the contingency. Within five days after entry in the logbook, the employer shall report to the System only those contingencies he deems to be work-connected. (Article 211[a], Ibid.)

All entries in the employer’s logbook shall be made by the employer or any of his authorized officials after verification of the contingencies or the employees’ absences for a period of a day or more. Upon request by the System, the employer shall furnish the necessary certificate regarding information about any contingency appearing in the logbook, citing the entry number, page number and date. Such logbook shall be made available for inspection to the duly authorized representatives of the System. (Article 211[b], Ibid.)

Should any employer fail to record in the logbook an actual sickness, injury or death of any of his employees within the period prescribed herein, give false information or withhold material information already in his possession, he shall be held liable for fifty percent of the lump sum equivalent of the income benefit to which the employee may be found to be entitled, the payment of which shall accrue to the State Insurance Fund. (Article 211[c], Ibid.)

In case of payment of benefits for any claim which is later determined to be fraudulent and the employer is found to be a party to the fraud, such employer shall reimburse the System the full amount of the compensation paid. (Article 211[d], Ibid.)

Notice of Sickness, Injury or Death. Notice of sickness, injury or death shall be given to the employer by the employee or by his dependents or anybody on his behalf within five days from the occurrence of the contingency. No notice to the employer shall be required if the contingency is known to the employer or his agents or representatives. (Article 212, Ibid.)

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BAR EXAM QUESTION

(Question IX, Labor Law, 2018 Bar Exam)

Sgt. Nemesis was a detachment non-commissioned officer of the Armed Forces of the Philippines in Nueva Ecija. He and some other members of his detachment sought permission from their Company Commander for an overnight pass to Nueva Vizcaya to settle some important matters. The Company Commander orally approved their request and allowed them to carry their firearms as the place they were going to was classified as a “critical place.” They arrived at the place past midnight; and as they were alighting from a tricycle, one of his companions accidentally dropped his rifle, which fired a single shot, and in the process hit Sgt. Nemesis fatally. The shooting was purely accidental. At the time of his death, he was still legally married to Nelda, but had been separated de facto from her for 17 years. For the last 15 years of his life, he was living in with Narda, with whom he has two minor children. Since Narda works as a kasambahay, the two children lived with their grandparents, who provided their daily support. Sgt. Nemesis and Narda only sent money to them every year to pay for their school tuition.

Nelda and Narda, both for themselves and the latter, also on behalf of her minor children, separately filed claims for compensation as a result of the death of Sgt. Nemesis. The Line of Duty Board of the AFP declared Sgt. Nemesis’ death to have been “in line of duty”, and recommended that all benefits due to Sgt. Nemesis be given to his dependents. However, the claims were denied by GSIS because Sgt. Nemesis was not in his workplace nor performing his duty as a soldier of the Philippine Army when he died.

(a) Are the dependents of Sgt. Nemesis entitled to compensation as a result of his death? (2.5%)

(b) As between Nelda and Narda, who should be entitled to the benefits? (2.5%)

(c) Are the minor children entitled to the benefits considering that they were not fully dependent on Sgt. Nemesis for support? (2.5%)

SUGGESTED ANSWER:

(a) As to Nelda, she is not entitled to compensation. While legally married to Sgt. Nemesis, she was not living with him, which is a requirement to make a successful claim.

As to the children with Narda, they are entitled to compensation. They qualify as dependents since they children of the decedent and are minors. Their status as illegitimate children is irrelevant.

(b) Neither Nelda and Narda is entitled to the benefits. While the legal spouse, Nelda is not entitled since she was not living with him, which is a requirement. On the other hand, Narda is not the legal spouse, which is a requirement in addition to cohabitation.

(c) Yes. That the minor children are not fully dependent on Sgt. Nemesis for support is irrelevant. To be entitled, they only need to prove that they are his children and that they are minors. Both these requirements are present in favor of the minor children.

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BAR EXAM QUESTION

(Question XII[C], Labor Law, 2017 Bar Exam)

Rosa was granted vacation leave by her employer to spend three weeks in Africa with her family. Prior to her departure, the General Manager of the company requested her to visit the plant of a client of the company in Zimbabwe in order to derive best manufacturing practices useful to the company. She accepted the request because the errand would be important to the company and Zimbabwe was anyway in her itinerary. It appears that she contracted a serious disease during the trip. Upon her return, she filed a claim for compensation, insisting that she had contracted the disease while serving the interest of her employer.

Under the Labor Code, the sickness or death of an employee, to be compensable, must have resulted from an illness either definitely accepted as an occupational disease by the Employees’ Compensation Commission, or caused by employment subject to proof that the risk of contracting the same is increased by working conditions.

Is the serious disease Rosa contracted during her trip to Africa compensable? Explain your answer. (2.5%)

SUGGESTED ANSWER:

Yes. Answer

Under the Amended Rules on Employees Compensation, the sickness and the resulting disability or death to be compensable, the sickness must be the result of an occupational disease listed under Annex “A” of the Rules. Rule

In the case at bar, Rosa contracted the serious disease in the performance of her work or occupation. While called a “request”, it does not rule out the fact that she went to the plant of a client of the company in Zimbabwe in her capacity as an employee and after being “requested” by the General Manager. Due to this, she acquired the serious disease during the trip to the plant. Apply

Thus, the serious disease Rosa contracted during her trip to Africa is compensable. Conclusion

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2. POEA-Standard Employment Contract for Seafarers

a. Overseas employment of Filipino on-board ocean-going ships

Seafarer. Seafarer – refers to any person who is employed or engaged in overseas employment in any capacity on board a ship other than a government ship used for military or non-commercial purposes. (No. 12, Definition of Terms, POEA-SEC, Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships)

Work-Related Illness. Work-Related Illness – any sickness as a result of an occupational disease listed under Section 32-A of this Contract with the conditions set therein satisfied. (No. 16, Ibid.)

Work-Related Injury. Work-Related Injury – injury arising out of and in the course of employment (No. 17, Ibid.)

Pre-existing illness. Pre-existing illness – an illness shall be considered as pre-existing if prior to the processing of the POEA contract, any of the following conditions are present:

(1) The advice of a medical doctor on treatment was given for such continuing illness or condition; or

(2) The seafarer had been diagnosed and has knowledge of such an illness or  condition but failed to disclose the same during pre-employment medical examination (PEME), and such cannot be diagnosed during the PEME. (No. 11, Ibid.)

Point of Hire. Point of Hire – refers to the place indicated in the contract of employment which shall be the basis for determining commencement and termination of contract. (No. 10, Ibid.)

Beneficiary(ies). Beneficiary(ies) – refers to the person(s) to whom the death compensation and other benefits due under the employment contract are payable in accordance with rules of succession under the Civil Code of the Philippines, as amended. (No. 2, Ibid.)

Allottee. Allottee – refers to any person named or designated by the seafarer as the recipient of his remittance to the Philippines. (No. 1, Ibid.)

b. Compensation and benefits for injury or illness

If the injury or illness is the proximate cause [Proximate Cause Theory], or at least increased the risk of his death [Increased Risk Theory] for which compensation is sought, recovery may behad for said death, or for that matter, for the injury or illness. (Racelis v. United Phlippine Lines, Inc., G.R. No. 198408, 12 November 2014)

Even assuming that the ailment of the worker was contracted prior to his employment, this still would not deprive him of compensation benefits. For what matters is that his work had contributed, even in a small degree, to the development of the disease and in bringing about his eventual death. Neither is it necessary, in order to recover compensation, that the employee must have been in perfect health at the time he contracted the disease. A worker brings with him possible infirmities in the course of his employment, and while the employer is not the insurer of the health of the employees, he takes them as he finds them and assumes the risk of liability. If the disease is the proximate cause of the employee’s death for which compensation is sought, the previous physical condition of the employee is unimportant, and recovery may be had for said death, independently of any pre-existing disease. (Seagull Shipmanagement and Transport, Inc. v. Dominion Insurance Corporation, G.R. No. 123619, 08 June 2000)

The twin-requisite for compensation for work-related injury or illness:
1) Work-related; and
2) During the term of the contract (Section 20[A], POEA-SEC, Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships)

Liabilities of the employer when the seafarer suffers work-related injury or illness. –

The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as follows:
1) Continued payment of wages while on board.The employer shall continue to pay the seafarer his wages during the time he is on board the ship. (Section 20[A][1], Ibid.)
2) Liability of medical/dental/surgical/hospital treatment in foreign port. If the injury or illness requires medical and/or dental treatment in a foreign port, the employer shall be liable for the full cost of such medical, serious dental, surgical and hospital treatment as well as board and lodging until the seafarer is declared fit to work or to be repatriated. However, if after repatriation, the seafarer still requires medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time he is declared fit or the degree of his disability has been established by the company-designated physician. (Section 20[A[2]], Ibid.)
3) Sickness allowance. In addition to the above obligation of the employer to provide medical attention, the seafarer shall also receive sickness allowance from his employer in an amount equivalent to his basic wage computed from the time he signed off until he is declared fit to work or the degree of disability has been assessed by the company-designated physician. The period within which the seafarer shall be entitled to his sickness allowance shall not exceed 120 days. Payment of the sickness allowance shall be made on a regular basis, but not less than once a month. (Section 20[A][3], Ibid.)
4) Medicines. The seafarer shall be entitled to reimbursement of the cost of medicines prescribed by the company-designated physician. In case treatment of the seafarer is on an out-patient basis as determined by the company-designated physician, the company shall approve the appropriate mode of transportation and accommodation. The reasonable cost of actual traveling expenses and/or accommodation shall be paid subject to liquidation and submission of official receipts and/or proof of expenses. (Paragraph 2, Section 20[A][3], Ibid.)
5) Traveling expenses. (Ibid.)
6) Accommodation expenses. (Ibid.)
7) Repatriation expenses. In case a seafarer is disembarked from the ship for medical reasons, the employer shall bear the full cost of repatriation in the event the seafarer is declared (1) fit for repatriation; or (2) fit to work but the employer is unable to find employment for the seafarer on board his former ship or another ship of the employer. (Section 20[A][5], Ibid.)

1) Responsibilities of seafarers

1) Post-employment medical w/n 3 working days
General Rule: Post-employment medical examination w/n 3 working days from return.
Exception: physically incapacitated, requires written notice same period

The seafarer shall submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. In the course of the treatment, the seafarer shall also report regularly to the company-designated physician specifically on the dates as prescribed by the company-designated physician and agreed to by the seafarer. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. (Paragraph 3, Section 20[A][3], Ibid.)

2) Right of seafarer to consult own doctor. If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctor’s decision shall be final and binding on both parties. (Paragraph 4, Section 20[A][3], Ibid.)
3) The third-doctor in case of conflicting medical opinion. (Ibid.)
Exception to the third-doctor rule:It is by operation of law that brought forth the conclusive presumption that the seafarer is totally and permanently disabled, there is no legal compulsion for him to observe the procedure prescribed under Section [20-A(3)] of the POEA-SEC. A seafarer’s compliance with such procedure presupposes that the company-designated physician came up with an assessment as to his fitness or unfitness to work before the expiration of the 120-day or 240-day periods. Alternatively put, absent a certification from the company-designated physician, the seafarer had nothing to contest and the law steps in to conclusively characterize his disability as total and permanent. (Island Overseas Transport Corporation v. Beja, G.R. No. 203115, 07 December 2015)
120-day period v. 240-day period: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. (Teekay Shipping Philippines, Inc. v. Ramoga, Jr., G.R. No. 209582, 19 January 2018)
Teekay Shipping Philippines, Inc. v. Ramoga, Jr. (2018)
Here, the records reveal that respondent was medically repatriated on October 4, 2010. It is undisputed that the company-designated physician issued a declaration as to respondent’s fitness to work on April 8, 2011 or 186 days from his repatriation. Thus, to determine whether respondent is entitled to his permanent total disability benefits it is necessary to examine whether the company-designated physician has a sufficient justification to extend the period.
Examination of the records lead Us to conclude that there is a sufficient justification for extending the period. In a Report dated January 11, 2011, the company-designated physician advised respondent to continue his rehabilitation and medications and to come back on February 1, 2011 for his repeat x-ray of the left foot and for re-evaluation. The company-designated physician has determined that respondent’s condition needed further medical treatment and evaluation. Thus, it was premature for the respondent to file a case for permanent total disability benefits on March 4, 2011 because at that time, respondent is not yet entitled to such benefits. The company-designated physician has until June 1, 2011 or the 240th day from his repatriation to make a declaration as to respondent’s fitness to work.
BAR EXAM TIPS
1) Rules on post-employment medial examination within 3 working days from return are moderately asked in the bar exam, particularly on the third-doctor rule.
2) Similarly, familiarize yourself with the 120-day v. 240-day periods.  
4) Benefits under SSS, OWWA, PhilHealth, Pag-IBIG. It is understood and agreed that the benefits mentioned above shall be separate and distinct from, and will be in addition to whatever benefits which the seafarer is entitled to under Philippine laws such as from the Social Security System, Overseas Workers Welfare Administration, Employees’ Compensation Commission, Philippine Health Insurance Corporation and Home Development Mutual Fund (Pag-IBIG Fund). (Section 20[A][7], Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships, a.k.a. POEA-SEC)

2) Compensation and benefits for death

The other liabilities of the employer when the seafarer dies as a result of work-related injury or illness during the term of employment are as follows:
1) The employer shall pay the deceased’s beneficiary all outstanding obligations due the seafarer under this Contract.
2) The employer shall transport the remains and personal effects of the seafarer to the Philippines at employer’s expense except if the death occurred in a port where local government laws or regulations do not permit the transport of such remains. In case death occurs at sea, the disposition of the remains shall be handled or dealt with in accordance with the master’s best judgment. In all cases, the employer/master shall communicate with the manning agency to advise for disposition of seafarer’s remains.
3) The employer shall pay the beneficiaries of the seafarer the Philippine currency equivalent to the amount of One Thousand US dollars (US$1,000) for burial expenses at the exchange rate prevailing during the time of payment. (Section 20[B][4], Ibid.)

Warzone area. It is understood that computation of the total permanent or partial disability of the seafarer caused by the injury sustained resulting from warlike activities within the warzone area shall be based on the compensation rate payable within the warzone area as prescribed in this Contract. (Section 20[C], Ibid.)

Willful or criminal act or intentional breach of duty. No compensation and benefits shall be payable in respect of any injury, incapacity, disability or death of the seafarer resulting from his willful or criminal act or intentional breach of his duties, provided however, that the employer can prove that such injury, incapacity, disability or death is directly attributable to the seafarer. (Section 20[D], Ibid.)

Concealment of pre-existing illness or condition. A seafarer who knowingly conceals a pre-existing illness or condition in the Pre-Employment Medical Examination (PEME) shall be liable for misrepresentation and shall be disqualified from any compensation and benefits. This is likewise a just cause for termination of employment and imposition of appropriate administrative sanctions. (Section 20[E], Ibid.)

Duty to provide medical reports. When requested, the seafarer shall be furnished a copy of all pertinent medical reports or any records at no cost to the seafarer. (Section 20[F], Ibid.)

Crediting of benefits under R.A. 8042, as amended by R.A. 10022. The amounts paid to the seafarer due to accidental or natural death, or permanent total disablement by virtue of the provisions of RA 8042 as amended by RA 10022 and its implementing rules and regulations shall form part of and shall be deducted from the total amount that the seafarer is determined to be finally entitled to under this Contract. (Section 20[G], Ibid.)

Samel Subsistence allowance benefit as provided in R.A. 8042, as amended by R.A. 10022. The principal/employer/company shall grant to the seafarer who is involved in a case or litigation for the protection of his rights in a foreign country, a subsistence allowance of at least One Hundred United States Dollars (US$100) per month for a maximum of six (6) months. (Section 20[H], Ibid.)

Same; Compassionate Visit as provided in R.A. 8042, as amended by R.A. 10022. When a seafarer is hospitalized and has been confined for at least seven (7) consecutive days, he shall be entitled to a compassionate visit by one (1) family member or a requested individual. The employer shall pay for the transportation cost of the family member or requested individual to the major airport closest to the place of hospitalization of the seafarer. It is, however, the responsibility of the family member or requested individual to meet all visa and travel document requirements; (Section 20[I], Ibid.)

Totality of claims. The seafarer or his successor in interest acknowledges that payment for injury, illness, incapacity, disability or death and other benefits of the seafarer under this contract and under RA 8042, as amended by RA 10022, shall cover all claims in relation with or in the course of the seafarer’s employment, including but not limited to damages arising from the contract, tort, fault or negligence under the laws of the Philippines or any other country. (Section 20[J], Ibid.)

Prescription. All claims arising from this contract shall be made within three (3) years from the date the cause of action arises, otherwise the same shall be barred. (Section 30, Ibid.)

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BAR EXAM QUESTION

(Question B.16[c], Part II, Labor Law, 2019 Bar Exam)

W Ship Management, Inc. hired Seafarer G as bosun in its vessel under the terms of the 2010 Philippine Overseas Employment Administration – Standard Employment Contract (POEA-SEC).

On his sixth (6th) month on board, Seafarer G fell ill while working. In particular, he complained of stomach pain, general weakness, and fresh blood in his stool. When his illness persisted, he was medically repatriated on January 15, 2018. On the same day, Seafarer G submitted himself to a post-employment medical examination, wherein he was referred for further treatment. As of September 30, 2018, Seafarer G has yet to be issued any fit-to-work certification by the company-designated physician, much less a final and definite assessment of his actual condition. Since Seafarer G still felt unwell, he sought an opinion from a doctor of his choice who later issued an independent assessment stating that he was totally and permanently disabled due to his illness sustained during work.

Seafarer G then proceeded to file a claim for total and permanent disability compensation. The company asserts that the claim should be dismissed due to prematurity since Seafarer g failed to first settle the matter through the third-doctor conflict resolution procedure as provided under the 2010 POEA-SEC.

(a) What is the third-doctor conflict resolution procedure under the 2010 POEA-SEC? Explain. (2%)

(b) Will Seafarer G’s claim for total and permanent disability benefits prosper despite his failure to first settle the matter through the third-doctor conflict resolution procedure? Explain. (3%)

(c) Assuming that Seafarer G failed to submit himself to a post-employment medical examination within three (3) working days from his return, what is the consequence thereof to his claim? Explain. (2%)

SUGGESTED ANSWER:

(a) The third-doctor conflict resolution procedure refers to the steps that the seafarer has to undergo upon disembarkation to be entitled to compensation for work-related illness or injury.

First, the seafarer shall submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return.

Second, the seafarer may appoint his own physician who shall make a separate medical examination.

Third, if the seafarer-appointed physician disagrees with the assessment, a third doctor may be agreed jointly between the employer and the seafarer. The third doctor’s decision shall be final and binding on both parties.

(b) Yes. Answer

Under labor law jurisprudence, by way of exception to the third-doctor conflict resolution, a seafarer is exempt from compliance if the company-designated physician came up with an assessment as to his fitness or unfitness to work before the expiration of the 240-day periods. Rule

In the case at bar, 258 calendar days have lapsed from disembarkation on 15 January 2018 to the date when the seafarer sought a medical examination with his preferred physician. He is exempt from compliance to the third-doctor conflict resolution. Apply

Thus, Seafarer G’s claim for total and permanent disability benefits will prosper despite his failure to first settle the matter through the third-doctor conflict resolution procedure. Conclusion

(c) Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim for disability benefits.

⦁⦁⦁⦁⦁

BAR EXAM QUESTION

(Question X, Labor Law, 2018 Bar Exam)

Nonato had been continuously employed and deployed as a seaman who performed services that were necessary and desirable to the business of N-Train Shipping, through its local agent, Narita Maritime Services (Agency), in accordance with the 2010 Philippine Overseas Employment Administration Standard Employment Contract (2010 POEA-SEC). Nonato’s last contract (for five months) expired on November 15, 2016. Nonato was then repatriated due to a “finished contract.” He immediately reported to the Agency and complained that he had been experiencing dizziness, weakness, and difficulty in breathing. The Agency referred him to Dr. Neri, who examined, treated, and prescribed him with medications. After a few months of treatment and consultations, Nonato was declared fit to resume work as a seaman. Nonato went back to the Agency to ask for re-deployment but the Agency rejected his application. Nonato filed an illegal dismissal case against the Agency and its principal, with a claim for total disability benefits based on the ailments that he developed on board N-Train Shipping vessels. The claim was based on the certification of his own physician, Dr. Nunez, that he was unfit for sea duties because of his hypertension and diabetes.

b) Can Nonato successfully claim disability benefits against N-Train Shipping and its agent Narita Maritime Services? (2.5%)

SUGGESTED ANSWER:

No. Answer

Under the POEA Standard Employment Contract, there are two requisites for compensation for work-related injury illness, to wit: (a) it is work-related, and (b) it is during the term of the contract. Further, upon disembarking, the seafarer has to undergo a medical examination by the company-designated physician. Thereafter, the seafarer has the right to consult his own physician. If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctor’s decision shall be final and binding on both parties. Rule

In the case at bar, there is no indication that the hypertension and diabetes were work-related, nor was there any showing that it was acquired or it was aggravated during the term of the contract. In fact, he was declared fit to resume work as a seaman. Moreover, if the seafarer-appointed physician contested the findings of the company-designated physician, a third doctor jointly agreed between Nonato and his employer should have been made. Unfortunately, this was not done. Apply

Thus, Nonato cannot successfully claim disability benefits against N-Train Shipping and its agent Narita Maritime Services. Conclusion

⦁⦁⦁⦁⦁

Disclaimer: All information herein is for educational and general information only intended for those preparing for the bar exam. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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