Paulino Ungos III

Lawyer | Law Professor | Author

Category: Social Legislation

  • Consequences of Deliberate Concealment

    Magno alleged that on November 13, 2014, he was hired by Goodwood Ship Management, Pte., Ltd., through its agent, Trans-Global Maritime Agency, Inc., as Oiler on board MT G.C. Fuzhou for a period of nine months. He stated that after he was declared fit for sea duty in his pre-employment medical examination, he boarded the vessel on November 15, 2014.

    Magno narrated that on January 25, 2015, he suddenly felt severe chest pain, accompanied by dizziness and weakness while carrying out his duties. He was made to endure his condition until his repatriation on May 18, 2015. Upon arrival in the Philippines, he was referred to the employer-company’s designated physician. From May 20, 2015, he was subjected to various tests and treatment for coronary artery disease. After five months of treatment, the company-designated physician discontinued his treatment. Consequently, he consulted his personal cardiologist, who concluded that the nature and extent of his illness rendered him permanently and totally unfit to work as a seaman. Thus, on January 19, 2016, he filed a complaint for disability benefits, medical expenses, damages and attorney’s fees against his employer.

    For its part, the employer retorted that Magno denied having a history of high blood pressure or any kind of heart disease when he ticked the “No” box opposite “High Blood Pressure” and “Heart Disease Vascular/Chest Pain” under the section, Medical History in his Pre-Employment Medical Examination (PEME). The employer stated that it was on May 17, 2015, that Magno complained of back and chest pains, with difficulty of breathing and easy fatigability, and was thereafter medically repatriated. During his treatment by the company-designated physician sometime in September 2015, Magno disclosed that he was diagnosed, as early as 2009, with coronary artery disease, for which he underwent Percutaneous Coronary Intervention of the left anterior descending artery. The company-designated physicians later stopped his treatment, prompting him to file a complaint for the payment of permanent total disability benefits.

    The Office of the Labor Arbiter ruled in favor of Magno and awarded him permanent total disability benefits. Said Office considered the company-designated physician’s continuation of Magno’s treatment despite his belated disclosure of his existing coronary artery disease as an instance of employer’s waiver of its right to deny liability for disability benefits. According to the Office of the Labor Arbiter, such treatment constituted an implied admission of compensability and work-relatedness of Magno’s lingering cardio-vascular illness. The Office of the Labor Arbiter further found that the company-designated physician failed to issue a final assessment of Magno’s illness or fitness to work, which failure deemed Magno totally and permanently disabled.

    On appeal, the National Labor Relations Commission affirmed the Office of the Labor Arbiter’s ruling because Magno’s illness occurred within the duration of his contract, and his treatment lasted for more than 120 days. For the Commission, the award of permanent total disability benefits was justified.

    The employer then filed a petition for certiorari with the Court of Appeals, which dismissed the petition.

    Thus, the employer sought recourse before the Supreme Court, alleging that the Court of Appeals committed serious errors of law in upholding the Commission’s Decision. The employer insisted that Magno was not entitled to permanent and total disability benefits and his other monetary claims because of deliberate concealment of his coronary artery disease.

    For his part, Magno maintained entitlement to permanent total disability benefits since his illness was work-related and had contributed to the development of his condition that resulted in his disability.

    Is Magno entitled to permanent total disability benefits?

    The Supreme Court ruled that Magno is not entitled to permanent total disability benefits. The Court of Appeals erred in upholding the decision of the National Labor Relations Commission.

    The Court started by stating that entitlement of seafarers on overseas work to disability benefits is a matter governed, not only by medical findings, but by law and by contract. The Court stated that the material statutory provisions are Articles 197 to 199 of the Labor Code of the Philippines in relation to Section 2 (a), Rule X of the Amended Rules on Employee Compensation. By contract, the Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC), the parties’ collective bargaining agreement, if any, and the employment agreement between the seafarer and the employer are pertinent.

    The Court pointed out that Section 20, paragraph E of the POEA-SEC clearly provides that “[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.” The Court said that such rule seeks to penalize seafarers who conceal information to pass the pre-employment medical examination. It even makes such concealment a just cause for termination.

    Under the POEA-SEC, there is a “pre-existing illness or condition” if prior to the processing of the POEA contract, any of the following is present:

    • the advice of a medical doctor on treatment was given for such continuing illness or condition; or
    • the seafarer has been diagnosed and has knowledge of such illness or condition but failed to disclose it during the pre-employment medical examination, and such cannot be diagnosed during such examination.

    In the present case the Court found that:

    • In his September 18, 2014 PEME, Magno indicated that he was not suffering from any medical condition likely to be aggravated by service at sea or which may render him unfit for sea service;
    • Magno also indicated in the PEME that he did not have a history of heart disease/vascular/chest pain, high blood pressure, or that he underwent treatment for any ailment and was taking any medication; and
    • He signed the PEME certificate acknowledging that he had read and understood and was informed of the contents of such certificate.

    However, the Court further found a medical report issued by the company-designated physician, dated September 17, 2015, which stated therein Magno’s disclosure of a history of coronary artery disease for which he underwent percutaneous coronary intervention of the left anterior descending artery in 2009.

    With this disclosure, the Court declared that Magno had obscured his pre-existing cardiac ailment, and such concealment thus disqualified him from disability benefits notwithstanding the medical attention extended by the company-designated physician upon his repatriation.

    The Court discussed that even if the misrepresentation was discovered during Magno’s treatment with the company-designated physician, the same was immaterial and could not have canceled out his deception.

    The Court reiterated that a PEME is generally not exploratory in nature, nor is it a totally in-depth and thorough examination of an applicant’s medical condition. It does not reveal the real state of health of an applicant, and does not allow the employer to discover any and all pre-existing medical condition with which the seafarer is suffering and for which he may be taking medication. The PEME is nothing more than a summary examination of the seafarer’s physiological condition and is just enough for the employer to determine his fitness for the nature of the work for which he is to be employed.

    Since the PEME is not exploratory, the Court emphasized that its failure to reveal or uncover Magno’s ailments cannot shield him from the consequences of his deliberate concealment. In this regard, the “fit to work” declaration in the PEME cannot be a conclusive proof to show that he was free from any ailment prior to his deployment.

    For knowingly concealing his history of coronary artery disease during the PEME, Magno committed fraudulent misrepresentation which unconditionally barred his right to receive any disability compensation from his employer.

    The Court added that even if it were to disregard Magno’s fraudulent misrepresentation, his claim would still fail.

    Coronary artery disease, which is subsumed under cardio-vascular disease, and hypertension are listed as occupational diseases under item 11, Section 32-A of the POEA-SEC.

    However, before such disease to be compensable, a seafarer must establish concurrence of the following conditions enumerated in the first paragraph of Section 32-A of the POEA-SEC:

    • The seafarer’s work must involve the risk described therein;
    • The disease was contracted as a result of the seafarer’s exposure to the described risks;
    • The disease was contracted within a period of exposure and under such other factors necessary to contract it; and
    • There was no notorious negligence on the part of the seafarer.

    Relevant thereto, the Court reiterated prevailing jurisprudence in that the table of illnesses and the corresponding nature of employment in Section 32-A only provides the list of occupational illnesses. However, even if the illness may be considered as work-related for having been specified in the table, the seafarer is still not exempted from providing proof of the conditions under the first paragraph of Section 32-A in order for the occupational illnesses complained of to be considered as compensable. Whoever claims entitlement to benefits provided by law should establish his right thereto by substantial evidence which is more than a mere scintilla; it is real and substantial, and not merely apparent. Further, while in compensation proceedings in particular, the test of proof is merely probability and not ultimate degree of certainty, the conclusion of the courts must still be based on real evidence and not just inference and speculations.

    In the present case, the Court found that Magno failed to present sufficient evidence to show how his working conditions contributed to or aggravated his illness. According to the Court, the general statements in his Position Paper were not validated by any written document or other proof. Neither was any expert medical opinion presented regarding the cause of his condition.

    The Court expounded that although Magno suffered from coronary artery disease, a cardiovascular illness under item 11 of Section 32-A of the POEA-SEC, the conditions for compensability under the same section were not present since Magno did not present any proof of the required conditions to demonstrate that his illness is work-related and, therefore, compensable. Specifically, Magno failed to discharge his burden to prove the risks involved in his work, that his illness was contracted as a result of his exposure to the risks within the period of exposure and under such other factors necessary to contract it, and that he was not notoriously negligent. The Court thus ruled that Magno was not entitled to permanent total disability benefits.

    In deciding against the seafarer in this case, the Court emphasized that the constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers, as justice is for the deserving and must be dispensed within the light of established facts, the applicable law, and existing jurisprudence. The Court said that its commitment to the cause of labor is not a lopsided undertaking. The Court concluded by stating that such commitment cannot and does not prevent it from sustaining the employer when it is in the right.

    Further reading:

    • Trans-Global Maritime Agency, Inc. v. Utanes, G.R. No. 236498, September 16, 2020.

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  • Admitted the Due Issuance of the Certification

    The accused here were charged with one (1) count of violation of the Migrant Workers and Overseas Filipinos Act of 1995, alongside ten (10) counts of estafa. With regard to the charge relating to the Migrant Workers and Overseas Filipinos Act of 1995, they were specifically accused of illegal recruitment in large scale when they conspired to

    • represent themselves to have the capacity to contract, enlist and transport workers for employment as factory workers in Korea and Italy;
    • recruit and promise employment/job placement abroad to the complainants in the case; and
    • accordingly collect and receive money from them without first securing the required license and authority from relevant government authorities.

    One of the accused (named Sagisag) countered that he was merely an administrative assistant of the agency, which, in turn, was owned by his co-accused. Sagisag alleged that he met the complainants when they purchased plane tickets for Korea, and he claimed that it was his co-accused who received the payments for the tickets, and that he was merely instructed to issue provisional receipts for the payments. Sagisag further denied conspiring with his co-accused to misrepresent and promise work in South Korea in exchange for money. He said that whenever he accepted money from the complainants, he merely did so in behalf of his co-accused De Guzman, and that in cases when he accepted money on his own behalf, he did so on the understanding that the money was for the payment of the tuition fee for the Korean language classes he conducted.

    After trial, the Regional Trial Court found the accused guilty beyond reasonable doubt of the crime of illegal recruitment in large scale, in addition to the finding of guilt beyond reasonable doubt to three (3) counts of estafa. The trial court ruled that the prosecution sufficiently established that the two elements of illegal recruitment concurred, namely:

    • that Sagisag did not have the required license or authority to engage in the recruitment and placement of workers, and
    • that Sagisag nevertheless undertook a recruitment and placement activity as defined under Article 13 (b) of the Labor Code of the Philippines, or otherwise any prohibited practice under Article 34 of the same Code.

    Specifically, it found that the first element was established by no less than the POEA Certification dated October 7, 2008 that Sagisag and his co-accused were not licensed or otherwise authorized to recruit workers for overseas employment.

    This finding was affirmed by the Court of Appeals. Sagisag went to the Supreme Court.

    The issue that reached the Court was whether the lower courts erred in convicting Sagisag.

    The Court began by stating that an illegal recruiter may be held liable for the crimes of illegal recruitment committed in large scale and estafa without risk of being put in double jeopardy, for as long as the accused has been so charged under separate Informations. Here, record showed that Sagisag was separately charged for illegal recruitment in large scale and estafa. For the Court, Sagisag was properly prosecuted simultaneously for both crimes.

    With regard to illegal recruitment, the Court stated that it is committed by a person who: undertakes any recruitment activity defined under Article 13 (b) or any prohibited practice enumerated under Articles 34 and 38 of the Labor Code of the Philippines; and does not have a license or authority to lawfully engage in the recruitment and placement of workers. It is committed in large scale when it is committed against three or more persons individually or as a group.

    Together with the Migrant Workers and Overseas Filipinos Act of 1995, the law governing illegal recruitment is the Labor Code of the Philippines which, under Article 13 (b) thereof defines recruitment and placement as “any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not x x x.” The same Code also defines and punishes illegal recruitment, under Articles 38 and 39.

    According to the Court, to prove illegal recruitment, two elements must be shown, namely:

    • the person charged with the crime must have undertaken recruitment activities, or any of the activities enumerated in Article 34 of the Labor Code of the Philippines, as amended; and
    • said person does not have a license or authority to do so.

    In this regard, the Court said that it is not the issuance or signing of receipts for the placement fees that makes a case for illegal recruitment, but rather the undertaking of recruitment activities without the necessary license or authority.

    The Court then added that to establish that the offense of illegal recruitment was conducted in a large scale, it must be proven that the accused:

    • engaged in acts of recruitment and placement of workers defined under Article 13 (b) or in any prohibited activities under Article 34 of the Labor Code of the Philippines;
    • has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of a license or an authority to recruit and deploy workers, either locally or overseas; and
    • commits the unlawful acts against three or more persons, individually or as a group.

    The Court mentioned that all three elements have been established beyond reasonable doubt.

    In the present case, the Court found that the accused engaged in recruitment and placement activities without the requisite authority, and were therefore properly charged with illegal recruitment.

    The Court considered the attack of Sagisag on the admissibility of the POEA Certification which stated that he had no authority or license to recruit for overseas employment, since said document was not authenticated in court by the signatory thereto. However, such attack was not found to be meritorious, for record showed that the parties, which included Sagisag, had stipulated on the veracity and probative import of the POEA Certification. The Court stated that accused Sagisag may not now turn back on the stipulations and then question the admissibility of a crucial document, the due issuance of which he stipulated and agreed on.

    The Court also found without merit Sagisag’s reliance on the Equipoise Rule, which provides that where the evidence in a criminal case is evenly balanced, the constitutional presumption of innocence tilts the scales in favor of the accused. The Court pointed out that the rule was inapplicable to the case of Sagisag because, contrary to his submission, the evidence submitted and evaluated by both lower courts mounted high against his denial and ineffective and uncorroborated feigning of innocence. The total evidence presented by both parties, said the Court, was asymmetrical, with the prosecution’s submissions indubitably demonstrating Sagisag’s guilt.

    The Court accordingly affirmed the conviction of Sagisag.

    Further reading:

    • People v. Bautista, G.R. No. 218582, September 3, 2020.

  • PTSD and Claims for Disability Benefits

    On 30 October 2013, the seafarer entered into a 7-month employment contract with Anglo-Eastern (ANTWERP), NV, through its agent, Anglo-Eastern Crew Management Philippines (Anglo-Eastern Crew), Inc., to work as a Messman aboard the M/V Mineral Water. On 23 February 2014, the seafarer boarded the vessel.

    The seafarer claimed that sometime in June 2014, he was sexually harassed by the chief officer of the vessel during the course of his employment. He also claimed that the chief officer also threatened to kill him upon learning that he filed a complaint against the latter before the ship captain. After the incident, the seafarer opted for voluntary repatriation and was able to return to the Philippines on 12 July 2014.

    On 24 November 2014 the seafarer consulted his personal doctor, a clinical psychologist, who diagnosed him with Post Traumatic Stress Disorder (PTSD). The diagnosis of this doctor was verified by another doctor, who concluded that the seafarer cannot return to his job as a seafarer.

    Due to his illness, the seafarer requested for compensation from Anglo-Eastern Crew. However, his request remained unheeded.

    On 2 March 2015, the seafarer filed a complaint for constructive dismissal, sexual harassment and maltreatment. In addition, he prayed for the payment of disability benefits, damages and attorney’s fees since he claims to have been rendered permanently and totally disabled due to his post-traumatic stress disorder from his unfortunate experience onboard the vessel.

    The Office of the Labor Arbiter awarded the salaries of the seafarer for the unexpired portion of his employment contract because of the finding that the seafarer was forced to repatriate himself due to the hostile environment brought about by the filing of the complaint. The Office of the Labor Arbiter also awarded him moral damages for the mental torture that he endured and exemplary damages to dissuade such incident from further occurring. It also granted the claim for attorney’s fees since the seafarer was constrained to avail the services of a lawyer.

    When the case reached the Supreme Court, the seafarer insisted on his entitlement to disability benefits. However, the Court denied his claim for said benefits. The Court ruled:

    To support his claim for disability benefits, petitioner presented a psychiatric report and a medical certificate. These documents only prove that he was diagnosed with PTSD, prescribed to take medication, and recommended for psychotherapy sessions. However, there was no disability grading.

    The medical certificate states that “[a]t this point in time he cannot return to his work as a seafarer.” This statement is not sufficient for this court to conclude that petitioner is permanently and totally disabled to work as a seafarer. It does not instruct us how petitioner’s PTSD is work-related or work-aggravated. It also does not tell us whether petitioner underwent psychotherapy sessions, as recommended by his physicians. Assuming that petitioner underwent psychotherapy sessions and took his prescribed medication, no evidence was presented showing how he responded to treatment.

    It is established that petitioner suffered some form of injury, but the pieces of evidence he submitted are not sufficient to convince this Court that he has been rendered permanently and totally disabled. Thus, this Court is precluded from awarding disability benefits, not because of his non-compliance with the 3-day reportorial requirement, but because there is barely any evidence to support the claim for disability benefits.

    Further reading:

    • Toliongco v. Court of Appeals, G.R. No. 231748, July 8, 2020.

  • Foreign Doctor Who Provided Urgent Care — a Company-Designated Physician?

    On 7 August 2015, the seafarer entered into a 9-month employment contract with Beks Gemi Isletmeciligi Ve Ticaret A.S. through its agent, Status Maritime Corporation, to work as a fitter.

    Before boarding the vessel, the seafarer underwent a pre-employment medical examination and was declared fit to work.

    On 25 March 2016, the seafarer’s shoulder snapped and was dislocated while he was allegedly lifting a heavy object. He was repatriated and recommended for surgical repair after being diagnosed with recurrent left shoulder dislocation.

    Immediately after repatriation, the seafarer reported to Status Maritime, which referred him to the company-designated physician. Although the company-designated physician initially recommended that the seafarer undergo an MRI, Status Maritime disapproved of the procedure and rejected the seafarer’s sickness allowance claim.

    The seafarer then consulted his personal doctor. After undergoing an MRI, the seafarer was diagnosed with “Rotator cuff tear (Supraspinatus), left shoulder.” Said personal doctor declared him permanently disabled and “unfit to work” as a seafarer.

    On 16 June 2016, the seafarer filed a complaint for permanent total disability benefits before the Office of the Labor Arbiter.

    The Office of the Labor Arbiter found that when the seafarer underwent pre-employment medical examination, he misrepresented that he was not suffering from any illness. However, when he was diagnosed abroad, he admitted to a certain Dr. Selvarajah that it was already his third time to sustain a left shoulder dislocation and that two episodes occurred before he boarded the vessel.

    The Office of the Labor Arbiter added that even if the seafarer did not conceal his medical history, he still could not claim disability benefits because his injury was not work-related. While his condition manifested onboard, the seafarer failed to show the connection of his injury to the nature of his work as a fitter. For his failure to present substantial evidence that his work condition caused or aggravated his injury, the seafarer was accordingly denied his claim for disability benefits.

    When the case reached the Supreme Court, the seafarer asserted the following:

    • No diagnosis was made by a company-designated physician. Dr. Selvarajah, a foreign doctor, was not a company-designated physician and, therefore, not qualified to make conclusive findings. The failure of a company-designated physician to give a definite medical finding after the period set under the POEA Standard Employment Contract renders his disability permanent and total.
    • He did not willfully conceal his medical condition during his pre-employment medical examination. He merely forgot to disclose his medical history and, being a layman without medical background, thought there was no need to disclose this information.
    • There was a presumption of fitness which was uncontroverted by evidence.
    • His medical condition should have been detected during the pre-employment medical examination because it was an apparent and external injury. Status Maritime was estopped because it had all the opportunity to screen him for the injury.

    Did Status Maritime comply with its obligation to refer the seafarer to a company-designated physician?

    The requirement of a post-employment medical examination can be gleaned in the provisions of Section 20 (A) of the POEA Standard Employment Contract.1SECTION 20. Compensation and Benefits. —

    A. Compensation and Benefits for 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) The employer shall continue to pay the seafarer his wages during the time he is on board the ship;

    2) 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.

    3) 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.

    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.

    For this purpose, 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.

    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.

    4) Those illnesses not listed in Section 32 of this Contract are disputably presumed as work-related.

    Jurisprudence teaches that the conduct of the post-employment medical examination is a reciprocal obligation shared by the seafarer and the employer. The seafarer is obliged to submit to an examination within 3 working days from his or her arrival, and the employer is correspondingly obliged to conduct a meaningful and timely examination of the seafarer.2Ebuenga v. Southfield Agencies, Inc., G.R. No. 208396, March 14, 2018.

    This post-employment medical examination is primarily conducted by the company-designated physician.3Orient Hope Agencies, Inc. v. Jara, G.R. No. 204307 , June 6, 2018. However, to be reliable, the assessment or findings of the company-designated physician must be “complete and definite to give the proper disability benefits to seafarers.” When the employer refuses to comply with its obligation to have the seafarer examined, the seafarer may rely on the medical findings of his or her chosen doctor.4Ebuenga v. Southfield Agencies, Inc., G.R. No. 208396, March 14, 2018. Between a non-existent medical assessment of a company-designated physician and the medical assessment of the seafarer’s doctor of choice, the latter evidently stands.5Dionio v. ND Shipping Agency and Allied Services, Inc., G.R. No. 231096, August 15, 2018.

    In the present case, the Supreme Court found that the seafarer went to Status Maritime immediately after arriving in the Philippines. However, when he requested a medical diagnosis of his condition, Status Maritime refused to subject him to a post-employment medical examination. This compelled the seafarer to go to a doctor of his choice. As noted above, this personal doctor declared him permanently disabled and “unfit to work” as a seafarer.

    On the other hand, the Court ruled that Dr. Selvarajah’s diagnosis could not be considered as that rendered by a company-designated physician. This is because a strict reading of the POEA Standard Employment Contract requires that the company-designated physician be the one to diagnose the seafarer upon repatriation.

    The Court further stated that even if the rules were to be applied liberally, the assessment of Dr. Selvarajah could not be considered thorough, final, and definitive, as it was merely for the seafarer’s urgent medical care. In Dr. Selvarajah’s medical report, there was no showing that he conducted tests to arrive at a proper diagnosis. In fact, he even recommended for the seafarer to undergo further tests to determine the extent of the injury. Furthermore, Dr. Selverajah’s report explicitly stated that it was not meant for any medicolegal proceedings, that it should not be used as a reference in any court hearing and that it does not support any compensation claim. The provisional nature of Dr. Selvarajah’s diagnosis was further supported by his act of recommending that the seafarer see an orthopedic surgeon for further assessment.

    The Court thus ruled that when there is no post-employment medical examination by a company-designated physician, the evaluation of the seafarer’s personal doctor is considered by law as binding between the parties. The refusal of Status Maritime to submit the seafarer to a medical examination was a contravention of its responsibility under the POEA Standard Employment Contract. Thus, the Court upheld the permanent disability rating of the seafarer’s personal doctor.

    Was the seafarer qualified to claim disability benefits?

    Despite the conclusion of his personal doctor, the Supreme Court declared that the seafarer was disqualified from claiming disability benefits on the ground of fraudulent concealment.

    Section 20 (E) of the POEA Standard Employment Contract states that “[a] seafarer who knowingly conceals a pre-existing illness or condition” is disqualified from claiming compensation and benefits.6The provision reads:

    SECTION 20. Compensation and Benefits. — x x x

    E. 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. (Emphasis supplied)

    In the present case, the Court found that the seafarer knowingly concealed his history of shoulder dislocation. According to the Court, the seafarer had two instances of left shoulder dislocation prior to his employment — once in June 2015 and another in July 2015. Knowing that he had this recurring condition, the seafarer should have disclosed this fact during his pre-employment medical examination. This non-disclosure was apparent in his medical certificate, wherein he answered “no” to the question “Is applicant suffering from any medical condition likely to be aggravated by service at sea or to render the seafarer unfit for service. . .?”

    The Court further stated that the seafarer could not bank on the fact that he was cleared during the pre-employment medical examination. Jurisprudence dictates that this examination is not exploratory in nature and employers are not burdened to discover any and all pre-existing medical condition of the seafarer during its conduct. Pre-employment medical examinations are only summary examinations. They only determine whether seafarers are fit to work and does not reflect a comprehensive, in-depth description of the health of an applicant. This is precisely why Section 20 (E) mandates the seafarer to disclose his or her medical history during the pre-employment medical examination.7Status Maritime Corp. v. Spouses Delalamon, G.R. No. 198097, July 30, 2014, 740 PHIL 175-200; Philman Marine Agency, Inc. v. Cabanban, G.R. No. 186509, July 29, 2013, 715 PHIL 454-483

    According to the Court, intentional concealment of a pre-existing illness or injury is a ground for disqualification for compensation and benefits under the POEA Standard Employment Contract. While the laws give ample protection to our seafarers, this protection does not condone fraud and dishonesty.

    In the present case, the seafarer could not feign ignorance and downplay the concealment of his medical condition. The seafarer knew that he had a recurring shoulder dislocation and never denied this fact. Hence, his disability claim was not granted.

    Further reading:

    • Clemente v. Status Maritime Corp., G.R. No. 238933, July 1, 2020.

  • Recurrence of Lumbar Problem from a Previous Employment

    On 22 August 2012, the seafarer entered into a 7-month employment contract with WSM Ltd., through its agent, WSBM, Inc., to work as a third engineer on board the vessel M/V NOCC Puebla. On 5 September 2012, the seafarer boarded the said vessel.

    The seafarer alleged that sometime in March 2013, he felt pain on his back while conducting maintenance works. He said that the pain was so severe that he fell on his knees. He added that although he was given pain relievers, he was advised to be medically repatriated for further examination.

    The seafarer was repatriated on 28 March 2013 and was seen by the company-designated physician. He was diagnosed to have S/P Laminotomy, L4 Bilateral Interspinous Process Decompression Coflex. He was advised to regularly consult with the specialists for the monitoring of his condition. He also underwent out-patient rehabilitation sessions at the Metropolitan Medical Center.

    On 9 July 2013, the company-designated physician issued a letter addressed to a co-specialist, stating that the seafarer’s prognosis was guarded and that the latter had already reached his maximum medical improvement. Consequently, the company-designated physician gave the seafarer a disability grading of 8 or 2/3 loss of lifting power of the trunk. Despite this, the company-designated physician still advised the seafarer to continue with his medications and rehabilitation. The seafarer was also directed to see the co-specialist sometime in May 2014.

    On 5 June 2014, the seafarer independently consulted his personal doctor. On 21 July 2014, said personal doctor issued a Medical Certificate, stating that the seafarer’s disability was total and the cause of injury was work-related/work-aggravated, thus, declaring the seafarer unfit to go back to work as a seafarer. This prompted the seafarer to file a complaint for total and permanent disability benefits against his employer.

    In denying liability for total and permanent disability benefits, the employer countered that the seafarer’s condition was merely brought about by the recurrence of his lumbar problem from his previous employment, for which he had already claimed total and permanent disability benefits from his previous employer.

    Can the seafarer be granted his claim of total and permanent disability benefits?

    Yes.

    The Court emphasized the requirement of a final and definite disability assessment within the 120-day or 240-day period.1

    As to the extent of compensability, the entitlement of an overseas seafarer to disability benefits is governed by the law, the employment contract, and the medical findings in accordance with the rules.

    By law, the seafarer’s disability benefits claim is governed by Articles 191 to 193, Chapter VI of the Labor Code, in relation to Rule X, Section 2 of the Implementing Rules and Regulations (IRR) of the Labor Code. Article 192 (c) (1) of the Labor Code provides:

    Art. 192. Permanent total disability. x x x

    C. 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 in the Rules;

    xxx xxx xxx

    Rule VII, Section 2 (b) of the Amended Rules on Employees’ Compensation also provides:

    (b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided for in Rule X of these Rules.

    The exception to the 120-day rule repeatedly cited above is Rule X of the Implementing Rules and Regulations (IRR) of Book IV of the Labor Code, specifically Section 2 thereof which states:

    Section 2. Period of entitlement. — (a) The income benefit shall be paid beginning on the first day of such disability. If caused by an injury or sickness it shall not be paid longer than 120 consecutive days except where such injury or sickness still requires medical attendance beyond 120 days but not to exceed 240 days from onset of disability in which case benefit for temporary total disability shall be paid. However, the System may declare the total and permanent status at any time after 120 days of continuous temporary total disability as may be warranted by the degree of actual loss or impairment of physical or mental functions as determined by the System.

    By contract, it is governed by the employment contract which the seafarer and his employer/local manning agency executes prior to employment, and the applicable POEA-SEC that is deemed incorporated in the employment contract. In this case, the parties executed the contract of employment on August 22, 2012, thus, the 2010 POEA-SEC is applicable. Relevant provision of Section 20 (A) thereof provides:

    SECTION 20. COMPENSATION AND BENEFITS —

    A COMPENSATION AND BENEFITS FOR 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:

    xxx xxx xxx

    6 In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 32 of his Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted.

    The disability shall be based solely on the disability gradings provided under Section 32 of this Contract, and shall not be measured or determined by the number of days a seafarer is under treatment or the number of days in which sickness allowance is paid.

    By the medical findings, the assessment of the company-designated doctor generally prevails, unless the seafarer disputes such assessment by exercising his right to a second opinion by consulting a physician of his choice, in which case, the medical report issued by the latter shall also be evaluated by the labor tribunal and the court, based on its inherent merit. In case off disagreement in the findings of the company-designated doctor and the seafarer’s personal doctor, the parties may agree to jointly refer the matter to a third doctor whose decision shall be final and binding on them.

    The Court had the occasion to summarize the rules above-cited regarding the company-designated physician’s duty to issue a final medical assessment on the seafarer’s disability grading to determine the extent of compensation:

    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.

     According to the Court, such kind of assessment is neccessary under the rules to truly reflect the true extent of the sickness or injuries of the seafarer and his capacity to resume to work as such.2Pastor v. Bibby Shipping Philippines, Inc., G.R. No. 238842, November 19, 2018 Otherwise, the corresponding disability benefits awarded might not be commensurate with the prolonged effects of the injuries suffered.3Sunit v. OSM Maritime Services, Inc., G.R. No. 223035, February 27, 2017, 806 PHIL 505-524

    In the present case, the Court found that although the company-designated physician subjected the seafarer to a series of medications and rehabilitation, he failed to give any definite disability assessment.

    The Court pointed out that the Grade 8 disability rating given by the company-designated physician could not be considered as the complete, definite, and final medical assessment contemplated by the rules, as such assessment was merely addressed to another specialist, who still advised the seafarer to continue with his medications and rehabilitation. The Court further found that:

    • Up to May 2014, the seafarer was still ordered to see the said specialist for re-evaluation
    • The seafarer’s treatment lasted for over a year, evidencing that his condition remained unresolved.
    • The company-designated physician’s prognosis on the seafarer’s condition was guarded in that the outcome of his illness was in doubt.

    The Court added that the employer could not rely on Section 20 (A) (6) of the 2010 POEA-SEC which states that “[t]he disability shall be based solely on the disability gradings provided under Section 32 of this contract, and shall not be measured or determined by the number of days a seafarer is under treatment or the number of days in which sickness allowance is paid.” According to the Court, before the disability gradings under Section 32 should be considered, the disability ratings should be properly established and contained in a valid and timely medical report of a company-designated physician or the third doctor agreed upon by the parties. In other words, the periods prescribed by the rules should still be complied with. Thus, the foremost consideration of the courts should be to determine whether the medical assessment or report of the company-designated physician was complete and appropriately issued; otherwise, the medical report shall be set aside and the disability grading contained therein cannot be seriously appreciated.4Olidana v. Jebsens Maritime, Inc., G.R. No. 215313, October 21, 2015, 772 PHIL 234-251 The Court reiterated that no final and complete assessment was given in this case.

    The Supreme Court ruled that with this failure of the company-designated physician to issue a complete, definite, and final medical assessment, the seafarer’s disability, under legal contemplation, is deemed total and permanent.5Pastor v. Bibby Shipping Philippines, Inc., G.R. No. 238842, November 19, 2018

    Further reading:

    • Wilhelmsen Smith Bell Manning, Inc. v. Villaflor, G.R. No. 225425, January 29, 2020.

  • An Assessment Reflective of the Seafarer’s Medical Condition

    On 25 March 2015, the seafarer entered into an 8-month employment contract with SSA, PTE. LTD., through its agent, MSM, Inc. to work as a cabin stewardess in the vessel Viking Mimir. She boarded the vessel and commenced her work on 15 May 2015.

    The seafarer alleged that on 17 July 2015, she assisted in the unloading of luggage of departing passengers and in retrieving boxes of mattresses and bedsheets from the laundry section to the state rooms. She then felt pain in her back while in the middle of replacing the mattresses. When the pain did not subside the following day, she went to see the ship’s doctor and was given pain relievers. She was allowed to continue her work, but the pain persisted and became unbearable after almost 2 weeks of continuous duty.

    She further alleged that she was able to visit a hospital in Hungary on 23 July 2015, where she was diagnosed to have lower back pain and muscle strain. Despite having been prescribed pain relievers, her back pain worsened. She was able to have an X-ray and MRI on her back in Germany on 29 July 2015. There, she was suspected to have lumbar spine problem. She was prescribed with medicines to alleviate the pain and advised to have a thorough check-up.

    As she was unable to receive further check up, her condition deteriorated and her mobility was seriously impaired after 2 months of heavy manual labor. Thus, when the vessel arrived in Austria on 21 September 2015, she was sent to a hospital. She was found to have serious back pain and was advised to be repatriated and undergo physiotherapy.

    She was finally repatriated on 24 September 2015 and was able to visit the company-designated physician. She underwent various laboratory examinations the results of which revealed that she was suffering from back pain and Lumbago. She was advised to undergo physical therapy sessions and continue her medications.

    She claimed that despite treatment and therapy, she was not able to recover from her back pain.

    On 1 December 2015, the company-designated doctor cleared the seafarer from the cause of her repatriation despite her failure to recover, declared that her Lumbago was resolved, discontinued her treatment, and ignored her plea to continue medical treatment.

    The seafarer stated that this constrained her to consult her personal doctor (an orthopedic specialist). Upon advice of said doctor, she underwent MRI on her thorax and lumbar spine on 4 February 2016 and was prescribed pain relievers. On 10 March 2016, her personal doctor issued a Certification declaring her “permanently UNFIT in any capacity to resume her sea duties as a Sea woman.”

    Without observing the third doctor referral provision in the POEA-SEC, the seafarer filed a complaint for total and permanent disability benefits against her employer.

    Was the seafarer entitled to payment of total permanent disability benefit despite her failure to observe the third-doctor referral provision in the POEA-SEC?

    Yes.

    The Supreme Court stated that the POEA-SEC provides for the procedure to be followed in case there is a divergence in medical findings between the company-designated physician and the seafarer’s personal doctor. Under Section 20 (A) (3) of the 2010 POEA-SEC, “[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.” The provision refers to the declaration of fitness to work or the degree of disability. It presupposes that the company-designated physician came up with a valid, final and definite assessment as to the seafarer’s fitness or unfitness to work before the expiration of the 120-day or 240-day period. The company can insist on its disability rating even against a contrary opinion by another doctor, unless the seafarer signifies his intent to submit the dispute assessment to a third physician. The duty to secure the opinion of a third doctor belongs to the employee asking for disability benefits. He must actively or expressly request for it.1Hernandez v. Magsaysay Maritime Corp., G.R. No. 226103, January 24, 2018. This referral to a third doctor has been held to be a mandatory procedure2INC Shipmanagement, Inc. v. Rosales, G.R. No. 195832, October 1, 2014, 744 PHIL 774-790 and the seafarer’s non-compliance with the conflict-resolution procedure results in the affirmance of the fit-to-work certification of the company-designated physician.3Philippine Hammonia Ship Agency, Inc. v. Dumadag, G.R. No. 194362, June 26, 2013, 712 PHIL 507-524

    The Court, however, stressed that non-compliance with the third doctor referral does not automatically make the diagnosis of the company-designated physician conclusive and binding on the courts. The Court has previously held that, “if the findings of the company-designated physician are clearly biased in favor of the employer, then courts may give greater weight to the findings of the seafarer’s personal physician. Clear bias on the part of the company-designated physician may be shown if there is no scientific relation between the diagnosis and the symptoms felt by the seafarer, or if the final assessment of the company-designated physician is not supported by the medical records of the seafarer.”4C.F. Sharp Crew Management, Inc. v. Castillo, G.R. No. 208215, April 19, 2017, 809 PHIL 180-206 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 has nothing to contest and the law steps in to conclusively characterize his disability as total and permanent.5Kestrel Shipping Co., Inc. v. Munar, G.R. No. 198501, January 30, 2013, 702 PHIL 717-738

    In the present case, the Court found that the medical report of the company-designated physician failed to state a definite assessment of the seafarer’s fitness or unfitness to work, or to give a disability rating of her injury. According to the Court, the report lacked substantiation on the medical condition of the seafarer concerning her fitness to return to the type of work she was performing at the time of her injury. Furthermore, the report showed that the seafarer has not fully recovered from her injury as she “was advised to continue home exercises and that pain was foreseen to improve with time” and since she had to undergo “15 Physical Therapy Sessions.” The Court construed such statements as an admission from the company-designated physician that the pain experienced by the seafarer was still subsisting and that it was thru the passage of time that it was expected to improve.

    On the other hand, the Court considered the medical report issued by the seafarer’s personal doctor, and found that this doctor gave an explanation on the nature, cause, effects, and possible treatment of the injury sustained by the seafarer. The Court pointed out that the medical report of the company-designated physician merely described the MRI of the Lumbosacral spine as “unremarkable,” while the report of the personal doctor on the MRI of the Thoraco-Lumbar Spine (Non-Contrast) conducted on the seafarer, contained the following impression: “L4-L5: Mild bilateral neural foraminal narrowing due to disc bulge; L5-S1: Mild bilateral neural foraminal narrowing due to disc bulge and facet hypertrophy; Facet arthrosis and ligamentum flavum hypertrophy; Mild lumbar curvature to the right may be positional versus mild lumbar dextroscoliosis; Small non-specific pelvic fluid; Small uterine myomas.” The Court found that consistent with the result of the said MRI, the seafarer’s personal doctor explained that:

    “The significance of this posterior bulge of the degenerated disc is that this is the area where the nerves run that supply the extremities. This patient has been complaining of back pain. The vast majority of patients responded well to non-surgical treatment though. Probably the most important of which is time, that is to say, that no matter what is done, most cases of acute back and neck pain slowly resolve if given enough time to get better. x x x If a long term and more permanent result are desired however, she should refrain from activities producing torsional stress on the back and those that require repetitive bending and lifting. Things Ms. Briones is expected to do as a Sea woman.”

    The Court, thus, viewed the assessment of the personal doctor as exhaustive and more reflective of the seafarer’s medical condition especially so since both medical reports acknowledged the passage of time as a key factor in resolving the back pain experienced by Briones.

    The Court clarified that a total disability does not require that the employee be completely disabled, or totally paralyzed, for what is necessary is that the injury must be such that the employee cannot pursue his or her usual work and earn from it. It added that a total disability is considered permanent if it lasts continuously for more than 120 days, as what is crucial is whether the employee who suffers from disability could still perform his work notwithstanding the disability he incurred.6Talaroc v. Arpaphil Shipping Corp., G.R. No. 223731, August 30, 2017, 817 PHIL 598-618

    Further reading:

    • Multinational Ship Management, Inc. v. Briones, G.R. No. 239793, January 27, 2020.

  • Invalid Addendum

    Norly M. Baybayan (Baybayan) was hired by Wacoal through its agent, petitioner Prime Stars, for a contract period of 24 months or two years, with a monthly salary of NT$15,840.00. However, he soon discovered that he was only paid NT$9,000.00 a month. Upon inquiry, he was informed that an amount of NT$4,000.00 was being deducted from his salary for expenses for his board and lodging. Since he still had debts to pay back home, he finished the contract and returned to the Philippines on 19 May 2009. He then instituted a complaint for underpayment of salaries and the reimbursement of his transportation expenses against petitioners Prime Star and Peralta.

    Michelle V. Beltran (Beltran) was hired by Avermedia, through its agent, petitioner Prime Stars, as an “operator” who assembles TV boxes and USBs. Her contract duration was for two years with a monthly salary of NT$17,280.00. She was deployed on 22 June 2008. After a year, she was abruptly and unceremoniously dismissed by her supervisor and was immediately repatriated to the Philippines on 3 July 2009. Beltran then instituted a complaint for illegal dismissal and sought for the payment of salaries for the unexpired portion of her contract, the refund of her repatriation expenses, plus damages and attorney’s fees against the petitioners.

    Petitioners denied that Baybayan was underpaid as his payslips for the months of March and April 2009 indicated that he received a monthly salary of NT$17,280.00 during his employment with Wacoal. Petitioners explained that Baybayan signed an Addendum to the Employment Contract (Addendum), which authorized the deduction of the amount of NT$4,000.00 as payment for his monthly food and accommodation. In the same Addendum, Baybayan was apprised that the transportation expenses for his round trip tickets from the Philippines to Taiwan shall be at his own expense. Petitioners further explained that these were supported by Baybayan’s sworn statement, Written Acknowledgment, Foreign Worker’s Affidavit Regarding Expenses Incurred for Entry into the Republic of China to Work and the Wage and Salary and Overseas Contract Worker’s Questionnaire.

    With respect to Beltran, petitioners contended that it was Beltran who voluntarily preterminated her contract for personal reasons. According to petitioners, Beltran approached them and expressed her intent to return to the Philippines, as evidenced by her handwritten statement which she duly signed on 4 July 2009. Petitioners add that the handwritten statement was supported by her sworn statement, written acknowledgment, Foreign Worker’s Affidavit, and Overseas Contract Worker’s Questionnaire.

    The issues of illegal dismissal, salary differentials, transportation expenses, damages, attorney’s fees and liability of petitioner Peralta were elevated to the Supreme Court.

    RULING:

    Beltran did not voluntarily preterminate her employment contract. She was illegally dismissed.

    The Supreme Court found that petitioners’ complete reliance on Beltran’s alleged voluntary execution of the Mutual Contract Annulment Agreement and the Worker Discontinue Employment Affidavit to support the claim that Beltran voluntarily preterminated her contract was unavailing. This was because her supposed resignation was inconsistent with her filing of the complaint for illegal dismissal.

    Furthermore, the Court found the wordings of Beltran’s relinquishment of her contract of employment ambiguous and doubtful. The burden of proving that Beltran voluntary preterminated her contract fell upon petitioners as the employer. Petitioners failed to discharge such burden despite their claim that the latter resigned.

    Specifically, the Court found it highly unlikely that Beltran would just quit even before the end of her contract after all the expenses she incurred and still needed to settle and the sacrifices she went through in seeking financial upliftment. According to the Court, it was incongruous for Beltran to simply give up her work, return home, and be unemployed once again given that so much time, effort, and money have already been invested to securing her employment abroad and enduring the tribulations of being in a foreign country, away from her family.

    Beltran was accordingly awarded her salaries for the unexpired portion of her employment contract.

    Baybayan and Beltran should be granted salary differentials and refund of transportation expenses.

    Paragraph (i) of Article 34 of the Labor Code of the Philippines prohibits the substitution or alteration of employment contracts approved and verified by the Department of Labor and Employment from the time of the actual signing thereof by the parties up to and including the period of expiration of the same without the approval of the said Department.

    Furthermore, Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, explicitly prohibits the substitution or alteration to the prejudice of the worker of employment contracts already approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the said Department.

    In the present case, petitioners admitted that the employment contracts of Baybayan and Beltran were indeed amended, but posited that the Addendum, while apparently did not appear to contain any indication of Philippine Overseas Employment Administration approval, actually contained provisions which have been approved by the Philippine Overseas Employment Administration through Baybayan and Beltran’s Foreign Worker’s Affidavits.

    The Supreme Court did not agree.

    According to the Court, the clear and categorical language of the law imposes upon foreign principals minimum terms and conditions of employment for land-based overseas Filipino workers, which include basic provisions for food, accommodation and transportation. The licensed recruitment agency shall also, prior to the signing of the employment contract, inform the overseas Filipino workers of their rights and obligations, and disclose the full terms and conditions of employment, and provide them with a copy of the Philippine Overseas Employment Administration-approved contract, to give them ample opportunity to examine the same.

    Article IV of Baybayan and Beltran’s Employment Contract, in relation to Section 2, Rule 1, Part V of the Philippine Overseas Employment Administration Rules and Regulations Governing the Recruitment and Employment of Land-based Overseas Workers,1“Section 2. Minimum Provisions of Employment Contract. — Consistent with its welfare and employment facilitation objectives, the following shall be considered minimum requirements for contracts of employment of land-based workers:

    x x x

    b. Free transportation to and from the worksite, or offsetting benefit;

    c. Free food and accommodation, or offsetting benefit;”     provided Baybayan and Beltran with:

    • free food and accommodation for the duration of the contract
    • an economy class air ticket from the country of origin to Taiwan
    • a ticket back to the country of origin upon completion of the contract.

    Furthermore, it was stated therein that an employment contract cannot be altered or modified without the prior approval of the Philippine Overseas Employment Administration.

    In the present case, the Addendum required Baybayan and Beltran shoulder their food and accommodation and transportation fare.

    Although the Court recognized the fact that the parties may stipulate on other terms and conditions of employment as well as other benefits, such stipulations should not violate the minimum requirements required by law as these would be disadvantageous to the employee. Section 3, Rule 1, Part V of the Philippine Overseas Employment Administration Rules and Regulations Governing the Recruitment and Employment of Land-based Overseas Workers states:

    “Section 3. Freedom to Stipulate. — Parties to overseas employment contracts are allowed to stipulate other terms and conditions and other benefits not provided under these minimum requirements; provided the whole employment package should be more beneficial to the worker than the minimum; provided that the same shall not be contrary to law, public policy and morals, and provided further, that Philippine agencies shall make foreign employers aware of the standards of employment adopted by the Administration.”

    The Court found that the minimum provisions for employment of Baybayan and Beltran were not met, and that there was diminution of their benefits which were already guaranteed by law and granted in their favor under their Philippine Overseas Employment Administration-approved contracts of employment.

    Accordingly, the Court ruled that the Addendum, absent the approval of the Philippine Overseas Employment Administration, was declared invalid for being contrary to law and public policy.

    Baybayan and Beltran should be awarded moral and exemplary damages and attorney’s fees.

    This was because the acts of the petitioners were evidently tainted with bad faith. Petitioners’ failure to comply with the stipulations on the Philippine Overseas Employment Administration-approved employment contracts constituted an act oppressive to labor and more importantly, contrary to law and public policy. Petitioners even tried to justify the execution and validity of the Addendum and cloak the latter as legal and binding through Baybayan and Beltran’s execution of Foreign Worker’s affidavits. According to the Court, petitioners’ circumvention of labor laws and the intentional diminution of employee’s benefits to land-based overseas workers were indicative of petitioners’ exercise of bad faith and fraud in their dealings with Filipino workers.

    With regard to Beltran’s dismissal from employment, the Court found nothing “voluntary” in putting words into Beltran’s own mouth in the guise of her handwritten statement of resignation. Petitioners’ attempt to demonstrate voluntariness should fail since “cooperate” was more of an imposition coming from the employer rather than from a disadvantaged overseas employee. The Court considered the execution of the documents plainly oppressive and violative of Beltran’s security of tenure.

    The Court accordingly awarded Baybayan and Beltran moral and exemplary damages to allay the sufferings they experienced and by way of example or correction for public good, respectively.

    Peralta should be solidarily liable with Prime Stars.

    Section 10 of Republic Act No. 8042 mandates solidary liability among the corporate officers, directors, partners and the corporation or partnership for any claims and damages that may be due to the overseas workers, viz.:

    “Section 10. Monetary Claims. — x x x The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages.”

    Further Reading:

    • Prime Stars International Promotion Corp. v. Baybayan, G.R. No. 213961, January 22, 2020.

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  • But She Went Home for Personal Reasons

    On 7 November 2010, Hazel entered into a 2-year employment contract with Kuwait by Al-Masiya, through its agent, Saad Mutlaq Al Asmi Domestic Staff Recruitment Office (Saad Mutlaq)/Al Dakhan Manpower where she to work as a domestic helper with a monthly salary of US$400.00.

    Hazel arrived in Kuwait on 8 November 2010. Due to disagreement in the working conditions, Hazel’s employment with her first and second employers did not succeed. Her employment with her third employer also did not succeed as the latter could not obtain a working visa for her.

    On 16 December 2010, Hazel went to the Philippine Embassy where she related her employment problems to a Labor Attaché in Kuwait who offered to help them.

    On 5 January 2011, Hazel left the Philippine Embassy after a certain Mr. Mutlaq offered to give her a job at a chocolate factory. However, this chocolate factory turned out to be inexistent.

    Then, the employees of Al Rekabi, an employment agency, told her that they would be bringing her to Hawally at night. She refused to take the trip as it was cold and drizzling. She then attempted to report the matter to the Labor Attaché using her cellular phone, but the employees of Al Rekabi confiscated it. Mr. Hassan, the Manager of Al Rekabi, did not accede to her request to postpone the trip to the following day. It came to a point where Mr. Hassan scolded Hazel and forced her to make a written admission that her employers treated her well.

    Sometime after 6 January 2011, Hazel was brought to the office of Al Rekabi at Salmiya. On an unspecified date thereafter, at around 7:00 p.m., two men offered her a job at a restaurant in front of the main office of the agency. She accepted the offer. However, instead of being brought to a restaurant in Hawally, where she was supposed to work, Hazel was taken to a flat where she was told to apply makeup and wear attractive and sexy clothes. Another man joined them. Hazel was then told that she would be brought to her place of work. However, she was instead taken to an unlighted area which had buildings but no restaurant or coffee shop signboards. At the area, she saw another man walking. After recognizing that the man was an employee of Al Rekabi, she asked him to bring her to the main office of the agency. She was able to leave at around 11:00 p.m. when the three other men agreed to release her.

    On 7 February 2011, Hazel was asked to affix her signature on a letter that she copied purportedly showing that she admitted having preterminated her contract of employment and that she no longer had any demandable claim as she was treated well. Hazel’s execution of this letter of resignation was made as a precondition to the release of her passport and plane ticket which were in the possession of petitioners.

    Hazel arrived in the Philippines on 12 February 2011 and thereafter filed a complaint for constructive dismissal against her employer.

    In response to Hazel’s complaint, the employers filed a motion to dismiss on 11 May 2011, alleging that on 7 February 2011, Hazel executed an Affidavit of Quitclaim and Desistance, Sworn Statement, and Receipt and Quitclaim before the Assistant Labor Attaché in Kuwait, where she allegedly stated that she voluntarily agreed to release her employers from all her claims arising from her employment abroad. They also presented her handwritten statement where she expressed that her cause for terminating her employment was her own personal reasons.

    Was Hazel constructively dismissed from employment?

    The Supreme Court stated that in cases of constructive dismissal, the impossibility, unreasonableness, or unlikelihood of continued employment leaves an employee with no other viable recourse but to terminate his or her employment. “An employee is considered to be constructively dismissed from service if an act of clear discrimination, insensibility or disdain by an employer has become so unbea[r]able to the employee as to leave him or her with no option but to forego his or her continued employment.” From this definition, it can be inferred that various situations, whereby the employer intentionally places the employee in a situation which will result in the latter’s being coerced into severing his ties with the former, can result in constructive dismissal.1Torreda v. Investment and Capital Corporation of the Philippines, G.R. No. 229881, September 5, 2018 and Agcolicol, Jr. v. Casiño, G.R. No. 217732, June 15, 2016.

    The Court found that the circumstances of the present case strongly indicated that Hazel was constructively dismissed.

    First, Hazel’s foreign employer never secured a working visa for her, in violation of the categorical requirement for an employer’s accreditation with the Philippine Overseas Employment Agency.

    Second, Hazel was not properly paid in accordance with the terms of her employment contract. During her 3-month stay, she was only paid US$227.75 instead of the stipulated pay of US$400 per month.

    Third, Hazel was not assigned to a permanent employer abroad for the entire contractual period of 2 years. Upon her arrival in Kuwait, she was consistently promised job placements which were found to be inexistent. The Court found it clear that the foreign employer intended to use Hazel as an entertainer of some sort in places of ill repute; and she would have fallen victim to human trafficking “[w]ere it not for some favorable providence.”

    Finally, Hazel was made to copy and sign a prepared resignation letter and this was made as a condition for the release of her passport and plane ticket.

    For the Court, it was logical for Hazel to consider herself constructively dismissed. since the impossibility, unreasonableness, or unlikelihood of continued employment has left her with no other viable recourse but to terminate her employment. The Court further stated:

    Our overseas workers belong to a disadvantaged class. Most of them come from the poorest sector of our society. Their profile shows they live in suffocating slums, trapped in an environment of crimes. Hardly literate and in ill health, their only hope lies in jobs they find with difficulty in our country. Their unfortunate circumstance makes them easy prey to avaricious employers. They will climb mountains, cross the seas, endure slave treatment in foreign lands just to survive. Out of despondence, they will work under sub-human conditions and accept salaries below the minimum. The least we can do is to protect them with our laws.

    On that note, the Court reminds petitioners to observe common decency and good faith in their dealings with their unsuspecting employees, particularly in undertakings that ultimately lead to waiver of workers’ rights. The Court will not renege on its duty to protect the weak against the strong, and the gullible against the wicked, be it for labor or for capital. The Court scorns petitioners’ reprehensible conduct. As employers, petitioners are bound to observe candor and fairness in their relations with their hapless employees.

    Further reading:

    • Al-Masiya Overseas Placement Agency, Inc. v. Viernes, G.R. No. 216132, January 22, 2020.

  • Exemption from Payment of Commissioners’ Fees

    In Land Bank of the Philippines v. Heirs of Sanchez1G.R. No. 214902, January 22, 2020, the Supreme Court ruled that the Land Bank of the Philippines is exempt from paying the costs of the suit under Section 1, Rule 142 of the Rules of Court,2Section 1 of Rule 142 provides: Section 1. Costs ordinarily follow results of suit. — Unless otherwise provided in these rules, costs shall be allowed to the prevailing party as a matter of course but the court shall have power, for special reasons adjudge that either party shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be allowed against the Republic of the Philippines unless otherwise provided by law. since it is an instrumentality performing a governmental function in agrarian reform proceedings charged with the disbursement of public funds. Since the Land Bank of the Philippines is performing a governmental function in an agrarian reform proceeding, it is exempt from payment of costs of suit, including commissioners’ fees, as it is considered part of costs of suit.3Land Bank of the Phils. v. Rivera, G.R. No. 182431, November 17, 2010, 649 PHIL 575-589; Land Bank of the Phils. v. Gonzalez, G.R. No. 185821, June 13, 2013, 711 PHIL 98-121; Land Bank of the Phils. v. Ibarra, G.R. No. 182472, November 24, 2014, 747 PHIL 691-702; and Land Bank of the Philippines v. Baldoza, G.R. No. 221571, July 29, 2019.

    The Court also applied Section 12, Rule 67 of the Rules of Court, which states:

    Sec. 12. Costs, by whom paid. — The fees of the commissioners shall be taxed as a part of the costs of the proceedings. All costs, except those of rival claimants litigating their claims, shall be paid by the plaintiff, unless an appeal is taken by the owner of the property and the judgment is affirmed, in which event the costs of the appeal shall be paid by the owner.

    Based on the said provision, the Court added that the Land Bank of the Philippines is not liable to pay for commissioners’ fees considering that the Heirs of Sanchez were the plaintiffs or the ones who initiated the complaint for determination of just compensation before the Special Agrarian Court.

    Further reading:

    • Land Bank of the Philippines v. Heirs of Sanchez, G.R. No. 214902, January 22, 2020.

  • But Are You a De Jure Tenant?

    Lutero Romero (Lutero) owned property by virtue of an approved homestead application in 1967. Although ownership of the said property was subject of a legal dispute involving Lutero and his siblings, the Supreme Court eventually declared Lutero the true and lawful owner of the property in De Romero v. Court of Appeals1G.R. No. 109307, November 25, 1999, 377 PHIL 189-202.

    After the Court’s Decision in De Romero v. Court of Appeals became final and executory, the Heirs of Lutero filed a Motion for the Issuance of a Writ of Execution before the Regional Trial Court (RTC) on 10 March 2003. On 16 June 2003, the RTC issued a Writ of Execution. However, the implementation of the writ was held in abeyance because Crispina Sombrino (Sombrino) filed a Motion for Intervention, alleging that she was a tenant of the subject property. After due hearing and deliberation, the RTC ordered the implementation of the writ. Sombrino was consequently ousted from the subject property.

    Sombrino then filed a Complaint against the Heirs of Lutero for Illegal Ejectment and Recovery of Possession before the Office of the Provincial Agrarian Reform Adjudicator. At the heart of Sombrino’s claim of tenancy was her allegation that the parents of Lutero installed her as tenant in 1952.

    The consistent ruling of the Provincial Agrarian Reform Adjudicator, the Department of Agrarian Reform Adjudication Board, and the Court of Appeals on the said complaint was that an agricultural leasehold tenancy relation existed between Sombrino and the Heirs of Lutero because the supposed original landowners of the subject property, i.e., parents of Lutero, allegedly entered into a tenancy agreement with Sombrino in 1952. Said ruling viewed the following pieces of evidence as proof of the existence of said tenancy relation:

    • Affidavits of certain persons stating that Sombrino occupied the subject property; and
    • Acknowledgment Receipts pertaining to payment of irrigation and fees to a sister of Lutero.

    According to said tribunals, Lutero and, subsequently, his heirs should also be bound by this leasehold relation and respect Sombrino’s tenancy rights.

    Did an agricultural leasehold tenancy relationship exist between Sombrino and the Heirs of Lutero?

    The Supreme Court ruled that no agricultural leasehold tenancy relationship existed between them.

    According to the Court, an agricultural leasehold tenancy exists “when a person who, either personally or with the aid of labor available (from) members of his immediate farm household, undertakes to cultivate a piece of agricultural land susceptible of cultivation by a single person together with members of his immediate farm household, belonging to or legally possessed by, another in consideration of a fixed amount in money or in produce or in both.”2Section 4, Agricultural Tenancy Act of the Philippines, Republic Act No. 1199, as amended by Republic Act No. 2263

    The Court also reiterated established jurisprudence:

    The existence of a tenancy relation is not presumed, as the following indispensable elements must be proven in order for a tenancy agreement to arise:

    • the parties are the landowner and the tenant or agricultural lessee;
    • the subject matter of the relationship is an agricultural land;
    • there is consent between the parties to the relationship;
    • the purpose of the relationship is to bring about agricultural production;
    • there is personal cultivation on the part of the tenant or agricultural lessee; and
    • the harvest is shared between the landowner and the tenant or agricultural lessee.

    The absence of any of the requisites does not make an occupant, cultivator, or a planter a de jure tenant which entitles him to security of tenure under existing tenancy laws.3Heirs of Cadeliña v. Cadiz, G.R. No. 194417, November 23, 2016, 800 PHIL 668-679

    However, if all the aforesaid requisites are present and an agricultural leasehold relation is established, the same shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized by the Court for causes herein provided.4Section 7, Code of Agrarian Reforms In case of death or permanent incapacity of the agricultural lessor, the leasehold shall bind the legal heirs.

    Since a tenancy relationship cannot be presumed, an assertion that one is a tenant does not automatically give rise to security of tenure. Nor does the sheer fact of working on another’s landholding raise a presumption of the existence of agricultural tenancy. One who claims to be a tenant has the onus to prove the affirmative allegation of tenancy.5Soliman v. Pampanga Sugar Development Co., G.R. No. 169589, June 16, 2009, 607 PHIL 209-227 Hence, substantial evidence is needed to establish that the landowner and tenant came to an agreement in entering into a tenancy relationship.

    In the present case, the Court found that Sombrino failed to provide sufficient evidence that there was, in the first place, an agricultural leasehold tenancy agreement entered into by herself and the parents of Lutero.

    According to the Court, the joint affidavit of Sarillo Bacalso and Neil Ocopio revealed that Sombrino allegedly hired them in several occasions as planters, mud boat operators and thresher operators and that Sombrino occupied and cultivated the subject property at some point in time. The Court stressed that such document in no way confirmed that Sombrino’s presence on the land was based on a tenancy relationship as “[m]ere occupation or cultivation of an agricultural land does not automatically convert the tiller into an agricultural tenant recognized under agrarian laws.”6Heirs of Quilo v. Development Bank of the Philippines – Dagupan Branch, G.R. No. 184369, October 23, 2013, 720 PHIL 414-426 The Court thus said that self-serving statements regarding supposed tenancy relations are not enough to establish the existence of a tenancy agreement.7Soliman v. Pampanga Sugar Development Co., G.R. No. 169589, June 16, 2009, 607 PHIL 209-227

    Furthermore, the Court found that the Affidavit of the Barangay Agrarian Reform Committee (BARC) Chairman deserved scant consideration since the said chairman was not the proper authority to make such determination. The Court emphasized that certifications issued by administrative agencies and/or officials concerning the presence or the absence of a tenancy relationship are merely preliminary or provisional and are not binding on the courts,8Soliman v. Pampanga Sugar Development Co., G.R. No. 169589, June 16, 2009, 607 PHIL 209-227 and have little evidentiary value without any corroborating evidence.9Reyes v. Heirs of Floro, G.R. No. 200713, December 11, 2013, 723 PHIL 755-775 The Court said that there should be independent evidence establishing the consent of the landowner to the relationship.10Caluzor v. Llanillo, G.R. No. 155580, July 1, 2015, 762 PHIL 353-370

    With respect to acknowledgment receipts presented by Sombrino showing the payment of irrigation fees and rentals to Lutero’s sibling, the Court declared such pieces of documentary evidence insufficient for the said receipts merely established that, at most, Sombrino entered into an arrangement with Lutero’s sister and not with their parents.

    The Court continued that assuming that it even existed, the supposed tenancy agreement was invalid as it was not entered into with the true and lawful landowner of the subject property.

    According to the Court, tenancy relationship can only be created with the consent of the true and lawful landowner who is the owner, lessee, usufructuary or legal possessor of the land. It cannot be created by the act of a supposed landowner, who has no right to the land subject of the tenancy, much less by one who has been dispossessed of the same by final judgment.11Cunanan v. Aguilar, G.R. No. L-31963, August 31, 1978, 174 PHIL 299-314

    In the present case, the Court doubted the existence of the alleged agricultural tenancy agreement because of the undisputed fact that Lutero’s father died sometime in 1948, and it was, thus, impossible for Lutero’s father to have instituted Sombrino as tenant of the subject property.

    With the absence of the first essential requisite of an agricultural tenancy relationship, i.e., that the parties to the agreement are the true and lawful landholders and tenants, the Court ruled that Sombrino was not a de jure tenant entitled to security of tenure under existing tenancy laws.

    In sum, the Court ruled that security of tenure may be invoked only by de jure tenants. Security of tenure may not be invoked by those who are not true and lawful tenants but became so only through the acts of a supposed landholder who had no right to the landholdings. Tenancy relation can only be created with the consent of the landholder who is either the owner, lessee, usufructuary or legal possessor of the land.

    Further reading:

    • Romero v. Sombrino, G.R. No. 241353, January 22, 2020.

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