The variability and confusing basis of decisions from the Philippines regarding seafarers' claims for disability compensation remains a point of frustration for shipowners and their P&I Clubs. It is, however, fair to say that the Supreme Court, despite some variation between its three divisions, it has over the past years shown some consistency; unfortunately, these decisions have been adverse to seafarers' employers.
A recent decision from the Third Division of the Supreme Court of the Philippines serves to illustrate the scope of the primary issues often involved in such claims and how, in this instance, the Court resolved them.
Fil Star Maritime Corporation v Hanziel Rosete* involved Second Officer, Mr Rosete, successfully passing a pre-employment medical examination and joining the ship. After one month’s service he experienced sudden onset of blurred vision in his left eye. At a subsequent port of call he was examined and diagnosed with a central retinal vein occlusion ( a blockage in the vein that supplies blood to the eye ). He underwent laser treatment but he was left with a condition that meant he was legally blind in his left eye. The company doctor made an assessment that this constituted a grade 7 disability in recognition of the scale provided in the Philippine Overseas Employment Administration ( POEA) Standard Employment Contract (SEC).
The seafarer filed a claim for full disability benefits under an applicable Collective Bargaining Agreement (CBA), which provided for potential full disability benefits of up to US$105,000.
Before the case came to the Supreme Court it had been through the proper judicial process, and it is beneficial to explain what the outcomes were as it serves to illustrate the variability mentioned at the beginning of this article: In the first instance the case was heard by a Labor Arbiter who granted full disability benefits under the CBA of US$105,000. On review by the National Labor Relations Commission (NLRC) this was changed to an award of US$20,900 to recognise a grade 7 disability entitlement under the POEA contract (which has a maximum entitlement to US$60,000 ). The Court of Appeal then heard the matter and re-instated the award made by the Labor Arbiter. The Supreme Court was the final forum in which the case could be heard.
The Supreme Court ruled on three areas to reach its final decision:
1. Was the medical condition suffered “work related” in terms of the application of the POEA disability clause?
2. Were the enhanced benefits within the CBA applicable ?
3. What was the extent of the disability for the purposes of assessing disability compensation ?
1. What constitutes a “work related” condition under the POEA ?
The Court first considered whether a “central retinal vein occlusion” is a listed “occupational disease” within the POEA. It is not. However, the POEA also contains an umbrella clause that directs that all illnesses are “…disputably presumed as work-related…”. It was thus incumbent on the employer to prove to the Court’s satisfaction that a “central retinal vein occlusion” is not work related. The actual evidence presented to the Court in this regard is not known, nor is there clear judicial guidance as to what is meant by “work related” in terms of how strong a causal connection (if any) is needed between the work activities and the onset of the condition. Other cases have demonstrated that it is sometimes accepted that the simple fact that a condition arose whilst the seafarer was on board is sufficient to make it “work related”. In Rosete the Supreme Court concluded that the employer had not proven that the condition was not workrelated and, thus, the presumption that it was, stood.
This consideration by the Court is perhaps demonstrative of the saying by Alfred Wainwright that “There is no such thing as bad weather, only unsuitable clothing”; The language in the contract may be unhelpful with its presumptive obligation to pay on the part of the shipowner-employer, but with planning and preparation, and a cohesive and convincing case being presented to the Court as to why a condition is not “work related”, the defendant is not powerless when presented with such a claim. Perhaps in Rosete such arguments were made, but the Court was simply not persuaded. It is to be hoped that if the Court has before it sufficient expert evidence, and a well presented legal argument, it would give proper consideration to overturning the presumption of a condition being “work related”. (If there are storm clouds and you walk out the door without your umbrella, expect to get wet.)
2. Was the CBA disability clause applicable ?
The CBA disability clause directed that disability compensation was payable in the event the condition arose from an “accident”. The Supreme Court concluded that Rosete’s eye condition did not arise from any accident and, thus, the CBA disability clause did not apply. It further concluded that if the CBA disability clause did not apply, neither did the CBA disability compensation amounts.
This is a welcome ray of sunshine in an otherwise gloomy forecast as it corrects a “mix and match” approach that has been seen sometimes in the past, whereby there has been an award based upon the reasoning for the payment of disability compensation being drawn from the POEA, with the quantum of that award being taken from the CBA ( which is significantly more in most circumstances ).
3. How do the Courts measure the extent of disability ?
This question is the one that has over recent years caused the greatest frustration for shipowners. It has been illustrated in past Sea Venture articles regarding what is often referred to as the “120 day rule”. There are now a series of Supreme Court decisions which have applied what appears in the Philippine Labor Code in this regard ; that an individual who has been unable to work in his chosen profession for more than 120 days is assessed as being “totally and permanently disabled”. That such a test does not appear in the POEA SEC is ignored. That the POEA SEC directs that a particular condition warrants a certain grading of disability ( such as loss of sight in one eye giving rise to a grade 7 disability ) is not given any merit. That an individual may be assessed as “fit for duty” on day 121, and so is quite obviously not “totally and permanently disabled”, is considered irrelevant. It is those contradictions that make the Court’s decisions in this regard so difficult to accept. In Rosete the Supreme Court considered him to have had a disability that lasted more than 120 days that prevented him from returning to sea and so concluded he was “totally and permanently disabled”.
This decision should not come as a surprise. It simply confirms several that have gone before it. It is the clap of thunder after the flash of lightning ; we know it’s coming but it still startles us.
Unless and until the Supreme Court reverses itself and decides the Labor Code benefit tests have no part to play in the application of the comprehensive POEA SEC disability compensation entitlements, shipowner-employers must expect such rulings and, as far aspracticable, do what they can before the 120 day deadline expires to achieve recovery of the seafarer to the extent where medical testimony can demonstrate his ability to return to duty.
For Mr Rosete the outcome of the case was that his spontaneously occurring central retinal vein occlusion, which unfortunately left him blind in one eye, was considered justification for the payment by his shipowner employer of the full US$60,000 disability compensation under the POEA SEC terms.
*With thanks to Club correspondents Del Rosario and Del Rosario for bringing this case to our attention