Friday, November 18, 2016

Improper Quitclaim



        


  Can the receipt by a seafarer of an amount less than the sickness wages and reimbursement of medical expenses he is entitled to be valid?  The Honorable Supreme Court categorically answered this question in the negative in the case of Varorient Shipping Co., Inc. and Asia Maritime Co., Ltd. vs. Gil A. Flores (646 Phil. 570).
            In the cited case, the seafarer was hired by his employers in April 1997 as Chief Officer to work onboard a foreign vessel.
            Just two months from the time he boarded his ship, he experienced a shooting pain on his right foot.  After being declared “not fit to work” by the doctor who attended to him abroad, he was repatriated to the Philippines in June 1997.
            His employers’ company-designated physician found him to be suffering from “large disc herniation with nerve root compression and edema,” and thus, was recommended for confinement for two weeks for physical therapy and medications.
            If unresolved, surgical decompression was suggested.  Unfortunately, his employers refused to grant him continued medical assistance.  He then sued, demanding medical treatment and seeking reimbursement of his medical and hospital expenses as well as payment of sickness wages, disability compensation, and damages.
            The Labor Arbiter dismissed his complaint, noting among others, that he was declared “fit to work” not only by the Philippine General Hospital which he chose, but also by the Employees Compensation Commission to which his condition was endorsed by the Arbiter.
            The Receipt and Quitclaim he executed in favor of his employers wherein he considered the sum of US$1,010.00 as full payment of his salaries and benefits was also held to be valid by the Arbiter.
            The NLRC reversed the decision of the Arbiter, except for the issued of disability compensation, and found the seafarer to be entitled to sickness wages equivalent to 120 days (US$4,800.00 less the US$1,010.00 he already received) and free medical and hospital treatment in accordance with the Standard Employment Contract.
            The Court of Appeals affirmed the NLRC decision with minor modification.
            The Supreme Court likewise affirmed the Court of Appeals’ decision and ruled that the employers were remiss in giving continuous treatment for the seafarer.  The High Court clarified that the seafarer should be reimbursed the cost of the prescribed medicines he purchased and the surgical expenses he incurred.
            As for the Receipt and Quitclaim signed by the seafarer, the High Court explained that the elements of voluntariness and free will are lacking and do not absolve the employers from the liability of paying him the sickness wages and other monetary claims.
            Citing More Maritime Agencies, Inc. v. NLRC (366 Phil 646 (1999), the Court said that the law does not consider as valid any agreement to receive less compensation than what a worker is entitled to recover nor prevent him from demanding benefits to which he is entitled.
            It is never enough to assert that the parties have voluntarily entered into such a quitclaim.  The following must likewise exist: (a) there was no fraud or deceit on the part of any of the parties, (b) the consideration of the quitclaim is credible and reasonable; and (c) that the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law.

            The Court recognized that the Receipt and Quitclaim show that the seafarer would be releasing his employers from all claims in an all-encompassing manner, including the fact that he had not contracted or suffered any illness or injury in the course of his employment and that he was discharged in good health, which stipulations placed the seafarer in a disadvantageous position vis-à-vis his employers.   

*article written by SVBB Senior Partner Atty. Augusto Bundang originally published at Tinig ng Marino (March to April 2011 issue) 

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