Paulino Ungos III

Lawyer | Law Professor | Author

Tag: 2022-02

  • Regardless of the Cause of Repatriation

    Reynaldo entered into a three-month employment contract to work as an oiler with Maritime Management Services (Maritime Management), through its agent, Southeast Asia Shipping Corp. (SEASCORP). Before deployment, he underwent his pre-employment medical examination and was certified to be fit for sea duty. On January 30, 2010, Reynaldo boarded the M/V BP Pioneer.

    Reynaldo narrated that on March 29, 2010, he was carrying spare parts needed for his repair of the ship’s generators when the ship swayed due to big waves. This caused him to bend and nearly fall to his knees.

    Reynaldo claimed that he soon felt excruciating pain in his scrotal/inguinal area, including pain and numbness in his left leg to his foot. Despite this, he continued to carry the parts and repaired the generator until he was relieved by another oiler. After his duty, Reynaldo went to his cabin and took a pain reliever. He then went to the ship’s clinic to have himself checked by the doctor on board. In the Report of Illness by the ship’s doctor, the latter diagnosed Reynaldo to have epididymorchitis and advised him to rest until further observation since it may just be due to tiredness. The doctor also ruled out hernia and trauma.

    On May 19, 2010, Reynaldo visited the ship’s doctor and informed the latter that he still feels pain during prolonged standing or while walking, with numbness of his lower extremity. However, the doctor concluded that this was normal considering his age and just advised to take pain relievers.

    Upon the expiration of his contract on May 25, 2010, Reynaldo disembarked the vessel at the port of Takoradi, Ghana and was repatriated back to the Philippines. Believing that the pain in his scrotal/inguinal area was normal and, as the doctor had advised, Reynaldo took a complete rest for about a month.

    Eventually, SEASCORP called him for possible deployment. He was sent to Merita Diagnostic Clinic (Merita), the company-accredited clinic, for his pre-employment medical examination.

    During his examination, Reynaldo informed the doctor about the injury sustained while on board the M/V BP Pioneer. Thus, the doctor asked him to get an x-ray of his scrotal/inguinal area and lumbar spine.

    On July 30, 2010, Reynaldo also underwent Magnetic Resonance Imaging (MRI) of the Lumbo-Sacral Spine. It was found that Reynaldo had spondylolisthesis, among others.

    On August 26, 2010, Reynaldo consulted two doctors who advised him to have surgery for his spondylolisthesis. Reynaldo found the procedure costly.

    Reynaldo approached SEASCORP to request for financial assistance. However, his request was denied.

    Reynaldo thus filed a complaint against his employer before the National Labor Relations Commission and claimed for permanent total disability benefits, moral and exemplary damages, and attorney’s fees.

    The Office of the Labor Arbiter found that Reynaldo suffered an injury while performing his duties as an oiler. Being a work-related injury, it held that it must be compensable.

    On the other hand, the said Office found that the mandatory three-day reporting requirement for a post-employment examination under the Philippine Overseas Employment Administration Standard Employment Contract (POEA SEC) did not apply in the case of Reynaldo because he was repatriated not because of a medical condition but due to the expiration of his contract.

    The Office of the Labor Arbiter thus ruled in favor of Reynaldo and required the employer to pay Reynaldo his permanent total disability compensation plus attorney’s fees.

    The National Labor Relations Commission reversed and set aside the Decision of the Office of the Labor Arbiter and dismissed Reynaldo’s complaint for lack of merit.

    According to the Commission, the injury suffered by Reynaldo that was reflected on record was the discomfort on his scrotal and inguinal area. His assertion that he suffered an injury while on board and felt pain on his left leg to his foot was unsupported by evidence.

    The Commission added that a seafarer who claims to be medically infirm must be examined by the company-designated physician within three days from repatriation. The failure of Reynaldo to report within the mandatory period without justifiable cause resulted in the forfeiture of his right to claim compensation and disability benefits under the POEA-SEC.

    The Court of Appeals denied Reynaldo’s petition in view of his failure to comply with the mandatory reporting requirement under the POEA-SEC. Such failure resulted in the forfeiture of his right to claim compensation and benefits.

    Reynaldo elevated his case to the Supreme Court.

    Was Reynaldo entitled to permanent total disability benefits?

    The Supreme Court ruled in the negative.

    The Court reiterated settled jurisprudence that in order to claim compensability under the POEA-SEC, it is required that the seafarer must have:

    • suffered a work-related illness or injury during the term of his contract; and
    • submitted himself to a mandatory post-employment medical examination within three (3) working days upon his arrival.

    The purpose of the three-day mandatory reporting requirement is to enable the company-designated physician to ascertain if the seafarer’s injury or illness is work-related. After that period, there would be difficulty in ascertaining the real cause of the illness. To ignore the rule would set a precedent with negative repercussions because it would open the floodgates to a limitless number of seafarers claiming disability benefits. It would certainly be unfair to the employer who would have difficulty determining the cause of a claimant’s illness considering the passage of time. In such a case, the employers would have no protection against unrelated disability claims.

    In the present case, the Court found that Reynaldo was repatriated due to the expiration of his contract. The Court stated that regardless of the cause of his repatriation, he was required to submit himself to a post-employment medical examination by the company-designated physician within three working days upon his return in order to ascertain if he was really suffering from a work-related injury or illness. Reynaldo may only be excused from such requirement if he was physically incapacitated to do so. The Court stressed that this was not Reynaldo’s situation.

    The Court equally found that Reynaldo complained of pain in the scrotal/inguinal area while on board which is why the initial diagnosis by the ship doctor was epididymorchitis.

    On the other hand, the Court noted that aside from his bare assertion, Reynaldo proffered no evidence establishing that he felt pain or numbness on his lower extremities while on board or that the ship doctor concluded that he contracted spondylolisthesis. According to the Court, it was only in July 2010, or after his repatriation, that the said findings were made by a doctor, which was well-beyond the three-day mandatory reporting period.

    The Court stated that while it commiserated with Reynaldo’s plight, non-compliance with the requirements set forth in the POEA-SEC had rendered it difficult to ascertain if his injury or illness was work-related.

    The Court accordingly denied Reynaldo’s claim for permanent total disability benefits.

    Further reading:

    • Cabatan v. Southeast Asia Shipping Corp., G.R. No. 219495, February 28, 2022.

  • But the OFW Directly Communicated with the Principal and without the Knowledge of Its Agent

    SRL International Manpower Agency (SRL) posted a job opening for its principal, Akkila Co. Ltd. UAE/Al Salmeen Trading Est. (Akkila), for a certain project in Qatar.

    Pedro sent an application to Akkila, through SRL. In July 2010, SRL received word from Akkila that the latter was interested in hiring Pedro as Project Manager. Afterwards, SRL forwarded Pedro’s documents to Akkila for the processing of his employment visa.

    Akkila soon furnished Pedro an “Offer of Employment” for a two (2) year engagement without the approval of the Philippine Overseas Employment Administration (POEA). Akkila and Pedro directly contacted each other and the latter was able to depart for the United Arab Emirates (UAE) on October 14, 2010 using a visit visa instead of an employment visa.

    On March 24, 2011, Akkila asked Pedro to return to the Philippines with an instruction to apply for deployment anew under an employment visa and with the condition that he should return 10 days after its processing.

    In April 2011, Pedro returned to the Philippines and started processing his next deployment under new “Contract of Employment,” with the assistance of SRL

    Pedro underwent a medical examination with SRL’s accredited clinic, Seamed Medical Clinic (Seamed), to assess his fitness for work. However, Seamed found that Pedro had Uncontrolled Diabetes Mellitus Type II and declared him unfit for work. This finding was reflected in a Medical Certificate dated May 10, 2011.

    SRL disclosed such finding to Akkila and informed the latter that if it was still interested, it should send a waiver indicating its willingness to hire Pedro notwithstanding his unfitness for work.

    Akkila replied that it had a strict qualification not to hire an applicant who is not fit for work. Subsequently, in a letter dated May 22, 2011, Akkila informed Pedro that he cannot be hired due to medical reasons.

    In the case of SRL International Manpower Agency v. Yarza, the Supreme Court resolved three issues:

    First: Was the “Offer of Employment” furnished by Akkila to Pedro valid?

    The Supreme Court stated that since employment contracts of Overseas Filipino Workers are perfected in the Philippines, and following the principle of lex loci contractus (the law of the place where the contract is made), such contracts are governed primarily by the Labor Code of the Philippines and its implementing rules and regulations.

    The Court added that the laws generally apply even to employment contracts of Overseas Filipino Workers since the Constitution explicitly provides that the State shall afford full protection to labor, whether local or overseas. Thus, even if a Filipino is employed abroad, he or she is entitled to security of tenure, among other constitutional rights. Security of tenure remains even if employees, particularly the Overseas Filipino Workers, work in a different jurisdiction.

    Furthermore, the Court also stated that under the Labor Code of the Philippines, employers hiring Overseas Filipino Workers may only do so through entities authorized by the Secretary of the Department of Labor and Employment. The Court continued that unless the employment contract of an Overseas Filipino Worker is processed through the POEA, the same does not bind the concerned Overseas Filipino Worker because if the contract is not reviewed by the POEA, certainly the State has no means of determining the suitability of foreign laws to our overseas workers.

    In the present case, the Court found that the “Offer of Employment” was perfected when Pedro agreed to the same while he was still in the Philippines.

    However, the Court found that the “Offer of Employment” ran contrary to the Constitution and the law and was not approved by the POEA. Specifically, the Court found that the “Offer of Employment”, although stating that the rules and regulations found in UAE’s labor laws should apply, contained stipulations contrary to the policies of the Philippines concerning labor contracts and security of tenure.

    With these findings, the Court declared the “Offer of Employment” invalid.

    Second: Did an employer-employee relationship exist between Akkila and Pedro.

    The Court ruled in the affirmative. Notwithstanding the invalidity of the “Offer of Employment,” the Court ruled that an employer-employee relationship existed between Akkila and Pedro.

    According to the Court, absent a valid employment contract, the following elements of the four fold test should be considered:

    • selection and engagement of the employee;
    • payment of wages;
    • power of dismissal; and
    • the employer’s power to control the employee’s conduct.

    The Court reiterated that the most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. However, the power of control refers merely to the existence of the power, and not to the actual exercise thereof. No particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. However, a finding that such relationship exists must still rest on some substantial evidence.

    In the present case, the Court found:

    • For the first element, Akkila, through the participation of SRL, selected and engaged the services of Pedro, precisely because he was deployed through a visit visa under Akkila’s instruction and endorsement.
    • For the second element, Akkila did not deny that it paid Pedro’s wages with the “Offer of Employment” as reference.
    • Regarding the third element, Akkila had the power to dismiss Pedro. In fact, it did so when it issued the termination letter dated May 22, 2011.
    • Lastly, on the fourth element, Akkila had control over Pedro’s work conduct, which included the means and methods he would employ to produce the results required by the company.

    In addition, the Court took into consideration the fact that Akkila did not show proof that it took no part in directing Pedro’s job output. In particular, Akkila did not appeal the finding of employer-employee relationship before the Court of Appeals. Hence, the Court bound Akkila by such conclusion.

    Third: Was Pedro illegally dismissed from employment?

    With the existence of the employer-employee relationship, the Court ruled that Akkila should accord Pedro due process, both substantial and procedural, before terminating his employment.

    The Court stated that to comply with substantive due process, Pedro can only be dismissed for a just or authorized cause, the absence of which renders his dismissal illegal.

    In the present case, it was found that Akkila dismissed the services of Pedro on the ground of disease, under Article 299 [284] of the Labor Code of the Philippines. The said provision essentially provides that “an employer would be authorized to terminate the services of an employee found to be suffering from any disease if the employee’s continued employment is prohibited by law or is prejudicial to his health or to the health of his fellow employees.”

    The Court further stated that to be considered valid, the dismissal on the ground of disease must satisfy two requisites:

    • the employee suffers from a disease which cannot be cured within six months and his/her continued employment is prohibited by law or prejudicial to his/her health or to the health of his/her co-employees, and
    • a certification to that effect must be issued by a competent public health authority.

    In the present case, record showed Akkila’s decision to inform Pedro that he could not be hired due to medical reasons. However, the Court found that Akkila failed to present any certification from a competent public health authority citing that Pedro’s disease not could be cured within six months, or that his employment was prejudicial to his health or that of his co-employees. Said the Court, absent this certification, Akkila failed to comply with Article 299 [284] of the Labor Code of the Philippines as well as applicable regulations. For the Court, Pedro’s dismissal was not based on a valid cause.

    Furthermore, the Court found that Akkila did not accord Pedro procedural due process. Record showed that Akkila unilaterally dismissed him by simply issuing a letter dated May 22, 2011. Additionally, Akkila sent this termination letter after it already issued a “new” Contract of Employment dated April 15, 2011 to him. Clearly, Akkila, after discovering that Pedro was deemed unfit for work due to diabetes, sought to immediately sever ties with him.

    The Court accordingly ruled that Pedro was illegally dismissed from employment.

    On the relief granted, the Court stated that even with the invalid “Offer of Employment”, the existence of an employer-employee relationship between Akkila and Pedro, as well as the illegality of his dismissal, entitled him to claim for the payment of his salaries for the unexpired portion of his contract.

    In this regard, the Court also found it proper to award moral and exemplary damages under prevailing jurisprudence which allows the migrant worker to claim such damages in connection with the employment contract or as provided by law. Moreover, the Court awarded Pedro attorney’s fees at the rate of ten percent (10%) under Article 2208 of the Civil Code of the Philippines.

    The Court stressed that the liability of Akkila and SRL was solidary, under Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995, as amended.

    Further reading:

    • SRL International Manpower Agency v. Yarza, Jr., G.R. No. 207828, February 14, 2022.