Philippine Crew Claims “Compliance is Key” - the procedural requirements of the 120/240 days Rule

1. The 120/240 Rule 

In the 2005 landmark case of Crystal Shipping Inc., and/or A/S Stein Line Bergen v Deo P. Natividad, G.R. No. 154798, 20 October 2005 (previously reported in the article Crew Claims in the Philippines - “120 Days” Update) the Supreme Court of the Philippines ruled that where a seafarer is receiving medical treatment as a consequence of a work-related injury or illness and is unable to work for more than 120 days, that seafarer is to be considered permanently and totally disabled and is, consequently, entitled to receive full disability benefits available under his contract of employment. 

This principle became known as the 120-day Rule. 

The Rule further evolved in 2008 in the case of Jesus Vergara v Hammonia Maritime Services, Inc. and Atlantic Marine Ltd., G.R. No. 172933, 6 October 2008, when the Supreme Court ruled that the 120-day period could be extended by an additional 120 days provided that the company designated physician (“CDP”) provides sufficient justification for the extension.

In such circumstances, the seafarer is deemed to have temporary total disability for the initial 120-day period and in the event that the seafarer did not successfully recover within the extended period, the temporary total disability would then become permanent and total. 

This evolution has led to the principle now being commonly referred to as the 120/240 day Rule.

Experience has shown that the Philippine NLRC and NCMB labour arbiters, voluntary arbitrators, and tribunals as well as the Philippine courts strictly interpret the procedural requirements set out by the Supreme Court for extending the treatment period. The slightest deviation from the correct fulfilment of these obligations provides opportunity for the above authorities to rule against employers in respect of claims for compensation brought by seafarers, often resulting in a seafarer being awarded full disability benefits notwithstanding any contrary opinion issued by the company designated physician.

This article seeks to draw attention to particular procedural provisions that employers need to fully comply with when or if a seafarer has sustained an injury or suffered an illness that has been classed as “work-related” by the CDP. 

2. Procedural Provisions

2.1. From when time counts

One of the first aspects to consider is to establish exactly when the initial 120-day limit will commence and expire. In the case of Career Phils Shipmanagement Inc. v Harry Gamboa, G.R. No. 237083, 29 September 2021, the Supreme Court ruled that the 120-day period commenced from the date of the seafarer’s repatriation.

However, in Career Philippines Shipmanagement Inc., Columbia Shipmanagement and/or Verlou R. Carmelino v Ardel S. Garcia, G.R. No. 230352, 29 November 2022, the Supreme Court expressed an alternative view, ruling that the 120-day limit commenced from the date when the seafarer first reported to the CDP.

It may be that the safest position for the employer is to treat the 120-day limit as running from the earliest possible date (i.e. the date of sign off from the ship). Taking the earliest date ought to avoid the risk of an exposure to any adverse consequence  resulting from any ruling declaring such point in time to be the correct date from which the 120-day limit is to commence.

2.2 Documentation and Delivery

Once the expiration date of the 120-day period is determined and recorded, attention should focus on the documentation to be issued within this 120-day period and its proper delivery to the seafarer.

In this respect, the Supreme Court ruled in the case of Arnel T. Gere v Anglo-eastern Crew Management Phils. Inc. and/or Anglo-eastern Crew Management (Asia) Ltd G.R. No. 226656, 23 April 2018, that “the company-designated physician is mandated to issue a medical certificate, which should be personally received by the seafarer, or, if not practicable, sent to him/her by any other means sanctioned by present rules.”  

The exact nature of the certificate (hereafter referred to as a “final medical report”) to be issued by the CDP depends on the seafarer’s individual circumstances; namely whether:-

(1) the seafarer fully recovers from his or her condition - either within 120 or 240 days - such that they are deemed fit to work.
(2) the seafarer reaches maximum medical improvement either within 120 or 240 days albeit retaining a disability. 
(3) the seafarer is to continue treatment beyond 120 days for a further period up to a maximum of 120 days, i.e. a total treatment period of 240 days.

In all circumstances, the CDP must ensure that the seafarer is made fully aware of his or her condition, all examinations and tests conducted, all treatments provided, diagnosis and prognosis and any disability grading. This information should be fully reproduced in the final medical report.

With regard to (1), the CDP’s final medical report must fully explain why the seafarer is fit to work and does not need to receive further treatment (for example, by indicating the various procedures and tests performed and the results of which prove fitness to work). The final medical report must be absolute and definite without any indication that the seafarer requires further evaluation or treatment as this would have the effect of negating the intention of the medical report being “final”.

As regards (2), where the CDP considers the seafarer to have retained a degree of disability, the CDP must indicate in their final medical report the specific disability grading pursuant to Section 32 of the POEA SEC or any Collective Bargaining Agreement (“CBA”) terms that may be included in the seafarer’s contract of employment and must also reproduce the POEA/CBA description that corresponds to that grading. Importantly, it must be explained how the disability grading is justified by reference to the results of medical tests that have been performed during the course of treatment. The type and nature of all such tests must be specifically identified and included in the final medical report.

Here again, the final medical report must not contain any indication that the seafarer still needs further treatment or evaluation. It should clearly indicate that it has been issued by the CDP after they have explored and exhausted all possible treatment options and that there is no further action to be taken on the part of the CDP.

As to (3), where the seafarer has not fully recovered from the condition for which he is being treated and has not been declared fit to work by the CDP, or where the CDP considers that the seafarer has not reached a maximum medical improvement such that the CDP can perform a final disability assessment within the initial 120 day period, the CDP must undertake a complete and definite medical assessment to show that the condition still requires medical attendance beyond 120 days and consequently, issue a written justification stating the reason for the extension.

2.3 The need to justify the additional 120 days and a final medical report

In the absence of a written justification for the extension of the treatment period (separate from the final medical report) and/or a final medical report, a seafarer's disability shall be conclusively presumed to be permanent and total at 120 days and the seafarer would be entitled to receive full disability benefits available under his contract of employment.The onus is on the employer to have the CDP issue the written justification. Whilst there is no obligation on the employer to provide a copy of the written justification itself to the seafarer, it should not be assumed that an extension beyond 120 days is permissible without such justification having been issued.  

It should also be noted that even where the 120-day period is extended but the CDP, nevertheless, fails to give their final assessment within the extended period up to 240 days, then the seafarer's disability becomes permanent and total, regardless of any justification for the extension.

Should the seafarer be uncooperative or refuse to sign or personally receive a final medical report, the CDP must issue an affidavit attesting to this fact and send the final medical report to the seafarer via registered mail, courier, email or such other manner sanctioned by the Rules, which must be received either within 120 or 240 days dependent upon which period is applicable.  

Conclusion

The 120/240 day limitation period is sacrosanct in respect of both the issuance and delivery of final medical reports to seafarers. It is therefore imperative that sufficient time is allowed before the expiration of either limitation period to ensure that the necessary documentation is fully and correctly issued and properly delivered to the seafarer. Late delivery is likely to be adversely treated by the labour arbiters, voluntary arbitrators, tribunals and courts. It is therefore recommended that proof of receipt of all documentation delivered to a seafarer be obtained.

It is hoped that the above commentary will provide assistance to Members and their representatives when monitoring the treatment that is being provided to Philippine crew members for ensuring that the requisite procedural formalities are strictly adhered to within the proscribed time limits.

We also draw our Members’ attention to other relevant articles on this topic, specifically:

1. Philippines – Additional Compensation under Collective Bargaining Agreements referring to the impact of Collective Bargaining Agreements

2. PHILIPPINES – Crew Claim Guidance – Impact of COVID-19 on 120 / 240 Day Rule referring to the impact of Covid-19

3. Crew Claims in the Philippines - Ever Changing Seas reporting on the case of Fil Star Maritime Corporation v Hanziel Rosete.