Anuat v. Pacific Ocean Manning

CARPIO, J.:

The Case Before the Court is a petition for review on certiorari1 assailing the 10 March' 2015 Decision2 and the 6 October 2015 Resolution3 of the Court of Appeals in CA-G.R. SP No. 130102. The Facts Respondent Pacific Ocean Manning, Inc. (Pacific) is a corporation organized and existing under Philippine law which is licensed to engage in the recruitment and deployment of Filipino seafarers for vessels traveling through international waters.4 On 7 February 2011, petitioner Mon C. Anuat (Anuat) was hired by Pacific as an able seaman on board the vessel M/V Satigny for a period of nine (9) months with a basic monthly salary of US$662.00.5 Pacific and Anuat entered into a Philippine Overseas Employment Administration (POEA) standard employment contract on the same date.6 Prior to his deployment as an able seaman, Anuat was subjected to a pre-employment medical examination by Pacific's company-designated physician and was declared by the physician as "Fit for Sea Duty."7 On 10 February 2011, Anuat departed from the Philippines to join M/VSatigny in Norfolk, United States.8 On 19 May 2011, Anuat had an accident during unloading operations in the port of Cabello, Venezuela.9 Anuat fell down the vessel's deck while he was connecting the crane hook to the vessel's grab which was located at a high position.

Anuat suffered injuries on his neck, back and knee. 10 Anuat was brought by an ambulance to a hospital in Venezuela where he was diagnosed to have sustained head injury, whiplash injury, and trauma in his left knee. Anuat was confined in the hospital until 21 May 2011 and was advised by the hospital physician to continue treatment in the Philippines.

Anuat was declared by the hospital physician as unfit to resume his work as a seaman. 11 Thus, Anuat was medically repatriated to the Philippines on 22 May 2011. 12 Upon Anuat's arrival on 24 May 2011, Anuat was referred to Dr. Nicomedes Cruz (Dr. Cruz), Pacific's company-designated physician, at NGC Medical Specialist Clinic.

13 In a medical report dated 15 July and 22 July 2011, Dr. Cruz recommended that Anuat undergo a Magnetic Resonance Imaging (MRI) on his spine and left knee. 14 On 1 August 2011, Anuat's MRI examination results showed that Anuat's lumbosacral spine still suffered from "disc dessication and mild loss of height at LS-S 1 with associated annular tear/fissure." 15 Anuat's MRI examination on 2 August 2011 also showed that his left knee still suffered from an "[i]nferior surface tear involving the body and posterior horn of the medial meniscus."

16 In a medical report17 dated 22 September 2011, Dr. Cruz found that Anuat still suffered from a blunt traumatic injury in his back, muscular spasm of the cervical muscle, swelling and medial meniscus tear in his left knee. Dr. Cruz recommended that Anuat undergo surgery to repair his left knee and was advised to come back on 30 September 2011. However, Anuat did not return for his doctor's visit on 30 September 2011.

Anuat claimed that after surgery and despite a month of physical therapy his condition did not improve and he continued to suffer pain in his left knee. Anuat claimed that due to his injuries he could no longer work as an able seaman. Hence, on 26 October 2011, Anuat filed a Complaint18 with the Labor Arbiter for total and permanent disability benefits, reimbursement of medical expenses, sickness allowance, damages and attorney's fees against Pacific.

19 In a Position Paper20 dated 12 March 2012, Anuat alleged that the injuries he sustained during his employment contract with Pacific were undoubtedly work-connected.

Anuat claimed that since his spinal and knee injuries constantly caused him pain and limited his ability to lift objects and to stand while carrying heavy loads, he was no longer capable of performing his work as an able seaman. Anuat contended that he was entitled to total permanent disability benefits since more than 120 days have already lapsed after he was medically repatriated on 22 May 2011.21 In a Position Paper22 dated 19 March 2012, Pacific contended that Anuat's claim for total permanent disability benefits was not supported by law. Pacific claimed that the standard in measuring the disability of a seafarer must depend on the disability grading issued by the company-designated physician.

Pacific alleged that Anuat was only entitled to partial permanent disability since the company-designated physician determined that Anuat only suffered from a disability of "Grade 10" and "Grade 11." Pacific alleged that the basis of the "Grade 10"

and "Grade 11" rating was a medical report dated 26 October 2011 and Pacific claimed that the medical report was annexed to its Position Paper as "Annex 11."23 Finally, Pacific contended that Anuat was not entitled to attorney's fees because Pacific was not remiss in fulfilling its obligations with Anuat and did not act in bad faith. 24 In a Reply25 dated 10 April 2012, Anuat contended that the "Grade 10"

assessment made by the company-designated physician is baseless and arbitrary. Anuat alleged that Pacific falsely claimed that "Annex 11" of Pacific's position paper contained a medical report dated 26 October 2011 which stated the "Grade 10"

and "Grade 11" assessment of the company-designated physician.26 Anuat claimed that total and permanent disability does not mean that an employee must be totally paralyzed. What is necessary is that the injury must be such that the employee cannot pursue his usual work.

Moreover, Anuat contended that total disability is permanent if it lasts continuously for more than 120 days.27 Anuat asserted that more than 120 days have already elapsed from the day he was medically repatriated. Hence, he was already entitled to total and permanent disability benefits. In a Reply28 dated 10 April 2012, Pacific contended that the existence of permanent disability is not determined by the lapse of the number of days but the standard in measuring must depend on the disability grading issued by the company-designated physician.

Pacific claimed that the loss of earning capacity alone does not automatically equate to maximum disability benefits under the law. The Ruling of the Labor Arbiter In a Decision29 dated 24 September 2012, the Labor Arbiter granted total and permanent disability benefits to Anuat. The Labor Arbiter held that permanent disability refers to the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body.

What determines entitlement to permanent disability is the inability to work for more than 120 days. The fact that Anuat was still undergoing physical rehabilitation and was not able to seek gainful employment after 120 days shows that he suffered a total and permanent disability. The Labor Arbiter ruled that it does not matter whether the company designated-physician assessed Anuat to have suffered a "Grade 10"

and "Grade 11" disability rating since it is undisputed that Anuat was unable to work for more than 120 days. In determining the value of total permanent disability benefits, the Labor Arbiter applied the schedule of disability benefits of the POEA standard employment contract which amounted to US$60,000.00.

The Labor Arbiter held that the provisions of the collective bargaining agreement (CBA) did not apply since there is no substantial evidence that Pacific and Anuat were privy to the CBA.30 The Labor Arbiter denied Anuat's claim for moral and exemplary damages and attorney's fees because the Labor Arbiter found that there was no evidence showing bad faith or malice on the part of Pacific. The dispositive portion of the Labor Arbiter's Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering Respondents to pay Complainant total and permanent disability grading of "1" or a total of US$ 60,000.00 pursuant to the POEA Standard Employment Contract. Other claims for damages and attorney's fees are dismissed for lack of merit. SO ORDERED.31 On 22 October 2012, Anuat filed a Memorandum of Partial Appeal32 with the National Labor Relations Commission (NLRC). Anuat claimed that the CBA should apply in the determination of the amount of total and permanent disability and that attorney's fees should likewise be awarded because he was compelled to litigate and incur expenses for litigation.33 On 22 October 2012, Pacific filed its Memorandum of Appeal34 with the NLRC. However, Pacific paid the required appeal fees only on 27 November 2012. The Ruling of the NLRC In a Resolution35 dated 31 January 2013, the NLRC granted Anuat's Memorandum of Partial Appeal and modified the Labor Arbiter's Decision. The NLRC held that the CBA applies in the determination of Anuat's total and permanent disability benefits. The NLRC held that both Pacific and Anuat acknowledged in their position papers and reply the existence of the CBA and its application to Anuat's disability claim. The NLRC ruled that total and permanent disability benefits shall be awarded to an employee if the temporary total disability lasts for more than 120 days. The 120-day period may only be extended to 240 days when there is a finding by the company-designated physician within 120 days that such injury or sickness still requires medical treatment beyond 120 days.36 The NLRC held that there was no declaration by Pacific's company-designated physician within 120 days that Anuat's injury required further medical treatment to justify another extension of 120 days, a total of 240 days.37 The NLRC considered Pacific's appeal filed on 22 October 2012 as not perfected since Pacific paid the required appeal fees only on 27 November 2012 which is more than 10 days beyond the reglementary period of appeal, counted from 11 October 2012, the date Pacific received the decision of the Labor Arbiter. The NLRC held that the rules provide that a notice of appeal filed without the required appeal fees does not stop the running of the period for perfecting an appeal. The dispositive portion of the NLRC Resolution states: WHEREFORE, the herein appeal of the complainant is hereby declared with merit, while that of the [r]espondents is hereby DISMISSED as NOT PERFECTED or for lack of merit. The assailed Decision of Labor Arbiter Jonalyn M. Gutierrez dated September 24, 2012 is hereby MODIFIED in that [r]espondents are hereby ordered to pay [c]omplainant: 1. Disability benefits -US$89,000.00 2. 10% attorney's fees - 8,900.00