As previously reported the Philippine Labor Code states that a disability lasting continuously for more than 120 days should be considered “total and permanent disability”. In the Crystal Shipping (October 2005) and Remigio (April 2006) cases, the Philippine Supreme Court ruled that seafarers are subject to the Labor Code concept of permanent disability. Hence in both cases, seafarers who were unable to perform their customary work for more than 120 days were awarded the maximum compensation for permanent disability of US$ 60,000.
However, shipowner interests argued that the Labor Code “120 day rule” should not apply to seafarers’ claims which are governed by the Philippines Overseas Employment Agency (POEA) Standard Employment Contract. Fortunately in February 2007, the Supreme Court issued a resolution which clarified that the degree of disability in POEA claims should be measured by medical assessment, rather than number of days of incapacity. (Further background information is available in an earlier website article: Crew Claims in the Philippines - “120 Days” Update)
Nevertheless, the clarifying ruling had not been fairly applied by the National Labor Relations Commission (NLRC), the arbitration forum for determining seafarers’ claims. As a result, owners were at risk of unfavourable rulings that the maximum compensation was payable even where there was expert medical advice that the seafarer was not permanently disabled.
However, three recent NLRC decisions handled by Del Rosario & Del Rosario have correctly followed the Supreme Court’s resolution, which indicates that owners have reason to hope that future arbitration awards will respect the disability gradings evaluated based on the POEA contract.
With thanks to Del Rosario & Del Rosario, Manila, for preparing this article .
