Seafarers' claims to be delayed by placing awards in Escrow

 Manning agencies are pushing for the inclusion of  an escrow provision in the proposed Magna Carta which  is a mere dilatory tactic in the execution of the seafarers’  monetary awards.

 The provision  in essence aimed to amend the labor code that will have significant impact on labor claims governing the immediately “final and executory” nature of decisions issued by National Labor Relations Commission (NLRC) and the National Conciliation and Mediation Board (NCMB).  

The manning agencies resurrected what ANGKLA Partylist  earlier  filed  as House Bill  No. 5430 on February 2015 during the 16^th Congress   wherein the proceeds of execution shall be deposited in an escrow account with an escrow agent designated by the NLRC  or the NCMB.    

The seafarer  will wait for longer years before they receive the NLRC/NCMB  award , mostly  for cases involving monetary claims for  disability and death benefits, illegal dismissal as well as unpaid or underpayment of salaries and wages. 

The manning agencies echoed ANGKLA’s rationale for the earlier Bill to ensure the restitution of monetary awards in case the appropriate appellate court annuls or partially or totally reverses the monetary judgment award.

The proceeds shall remain in escrow until such time the finality of the decision issued by the appropriate appellate court is obtained..

The proceeds shall only be released after issuance of an entry of judgment by the appropriate appellate court and upon issuance by the NLRC or the NCMB, after motion of the proper party, of an order authorizing the release of proceeds of execution.

ANGKLA pointed out that the amendment is proper as the problem of the immediately “final and executory” nature of decisions gains greater relevance considering the following factors: (a) the complainant will insist on the execution of the NLRC or NCMB decision despite the appeal; (b) even if the appellate courts overturn or modify the NLRC or NCMB decision, there is little hope of recovering anything through restitution; (c) more legal costs and expenses will be incurred in pursuing the case through the appellate courts and in applying for restitution of the judgment award. 

Every labor dispute is a David and Goliath situation  as it  involves two opposing parties:  the worker on one side and the management on the other.  

Constantly exposed to fluctuating temperatures caused by variant harsh weather conditions, the risks of his getting killed, injured or ill are high. 

When he sustains injury, illness or lose his life, seldom does he receive full compensation provided under the law because his employer does not hesitate to harness its immense resources to limit its liability. 

Labor litigation takes years before it reaches the Supreme Court.

 In cases of seafarers with medical conditions, some incur huge debts to sustain their medication while others die before the decision by the Supreme Court is released. 

Due to the longer years that they have to wait, without any leverage in prosecuting his monetary claims, chances are, the seafarer bows to the demand of his employer to either drop his claim or accept a small settlement. 

The scenario under said provision  will be analogous to situations described by the  Supreme Court where "the judgment becomes illusory. (Corona v. CA, ,343 SCRA 512) 

The Supreme Court lamented that   the claimant "has grown old with the case. He fears he may no longer be in this world when the case is finally decided." (Borja vs.  CA, 196 SCRA 847)  The prevailing party might  be unable to enjoy  the judgment award  after the lapse of time, considering the tactics of the adverse party who may have no recourse but to delay. (Intramuros Tennis Club, Inc. v. PTA,341 SCRA 90)

In cases of execution pending appeal, the Supreme Court underscored that " the law itself has laid down a compassionate policy which, once more, vivifies and enhances the provisions of the 1987 Constitution on labor and the working man.  These duties and responsibilities of the State are imposed not so much to express sympathy for the workingman as to forcefully and meaningfully underscore labor as a primary social and economic force, which the Constitution also expressly affirms with equal intensity. Labor is an indispensable partner for the nation's progress and stability" ( Aris Inc. vs. NLRC, 200 SCRA 246) 

If the provision  that aims to delay in execution will be included, the proposed  Magna Carta   becomes a tool of oppression and inequity to the prejudice of  the seafarer.

In the end, such legislative act runs in contradiction to the constitutional provision  that says "the State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare." (Art. II, Sec. 18, Constitution, 1987.). 

 (Atty. Gorecho heads the seafarers’ division of the  Sapalo Velez Bundang Bulilan  law offices. For comments, email info@sapalovelez.com, or call 09175025808 or 09088665786)

Timeliness of the third doctor referral in seafarer’s cases

The POEA Contract does not require a specific period within the parties in a case involving a seafarer’s disability claims may seek the opinion of a third doctor.  They may do so even during the mandatory conference before the labor tribunals.

          This was the recent ruling of the Supreme Court in the case of Ilustricimo vs. NYK-Fil Shipmanagement (G.R. No. 237487 June 27, 2018) that involved a seafarer that was diagnosed with bladder cancer.

          The court ruled that the company-designated doctors’ assessment is not always binding in cases of non-referral to a third doctor of disability claims of seafarers.

          Legal issues on compliance with the third doctor referral procedure is based on Section 20(A) (3) of the POEA-Standard Employment Contract which provides that if a doctor appointed by the seafarer disagrees with the assessment of the company-designated doctor, a third doctor may be agreed jointly between the employer and the seafarer, and the third doctor’s decision shall be final and binding on both parties.

          Referral to a third doctor became a mandatory procedure as a consequence of the POEA contract provision that the company-designated doctor’s assessment should prevail in case of non-observance of the third doctor referral provision in the contract.  Stated otherwise, the company can insist on its disability rating even against the contrary opinion by another doctor, unless the seafarer expresses his disagreement by asking for a referral to a third doctor who shall make his or her determination and whose decision shall be final and binding on the parties.

          The Supreme Court downplayed the employer’s argument that the seafarer’s failure to communicate his separate medical certification prior to the filing of the complaint not only constitutes a breach of his contractual obligations under the POEA contract, but also renders the complaint premature and is a ground for the dismissal of his claim for disability benefits.

          The Court in said case held that the employers do not deny receiving the seafarer’s letter despite their insistence that he failed to activate the third doctor provision.

          Infact, employers repeatedly insisted that the letter was not meant to dispute the company-designated doctor’s assessment, but rather to inform them that petitioner needed continued medical assistance.  On the assumption that the seafarer indeed “belatedly” informed the employer of the opinion of his second doctor and his intent to refer his case to a third doctor, the fact remains that they have been notified of suchintent.

          The instant Ilustricimo vs. NYK-Fil case emphasized that the POEA Contract does not require as specific period within which the parties may seek the opinion of a third doctor, and they may do so even during the mandatory conference before the labor tribunals.   

          Accordingly, upon being notified of the seafarer’s intent to dispute the company doctor’s findings, whether prior or during the mandatory conference, the burden to refer the case to a third doctor has shifted to the respondents.

          Informerly Inc. Shipmanagement Incorporated vs. Rosales (438 SCRA 30) reiterated that when the seafarer challenges the company doctor’s assessment made by his own doctor, the seafarer shall so signify and the company thereafter carries the burden of activating the third doctor provision:

          This, the employers failed to do so, and the seafarer cannot be faulted for the non-referral.

          Consequently, the company-designated doctors’ assessment is not binding.

          (Atty. Gorecho heads the seafarers’ division of the Sapalo Velez Bundang Bulilan Law Offices. For comments, email info@sapalovelez.com, or call 0917-502-5808 or 0908-866-5786).

Credibility of findings of company doctors

The findings of the  company-designated physician  do not always  bind the courts in determining the merits of compensation cases filed Filipino  seafarers.  

In most seafarer cases for disability or death benefits claims, one of the arguments often raised by the companies  or the insurance correspondents    is that they are not liable to pay benefits by pointing to the medical reports of the company-designated physician that the seafarer’s illness is not work-connected, that he is fit to work or that the compensation is limited to a lower amount based on a low disability grading.  They point out that   the POEA mandated that  the seafarer’s disability can only be assessed by the company-designated physician considering that the latter had the time and the opportunity to constantly monitor the health and physical condition of the seafarer

In the recent case of Magsaysay vs. Oliver Buenaventura ( G.R. No. 195878. January 10, 2018),   the seafarer  met an accident wherein  a mooring winch crushed his right hand. As a result, he suffered a fracture of the right first metacarpal bone and open fracture of the right second metacarpal  bone, which required  emergency  surgical procedures  both done in Japan and  he was later  medically repatriated. After six months, the company doctor declared him fit to work after undergoing conservative management, continuous rehabilitation physiotheraphy, and occupational therapy. He filed a case for disability benefits.

The Supreme Court denied the claims  for disability benefits of the seafarer as it stressed that  failure to refer the conflicting findings between the company-designated physician and the seafarer's physician of choice grants the former's medical opinion more weight and probative value  over the latter.

Nevertheless, the Supreme Court noted that it does not mean that the judicial bodies  should adopt it hook, line and sinker as it may be set aside if it is shown that the diagnosis of the company-designated physician  is attended with clear bias, has no scientific basis or are not supported by the medical records of the seafarer. 

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The Court also pointed out in a case that “their findings cannot be taken as gospel truth” due to the proliferation of obviously biased company doctors whose loyalty rests completely upon the company they serve and these “are palpably self-serving and biased in favor of petitioners and certainly could not be considered independent”(Wallem vs.NLRC 318 SCRA 623,  United Philippine Lines, Inc. and/or Holland America Line, Inc., vs. Francisco D. Beseril, 487 SCRA 249).

Dubious Certificate of Fitness in disability claims

The Supreme Court warned companies from issuing dubious Certificate of Fitness which it described as “a ploy that aims to take advantage of the worker’s lack of sufficient legal knowledge and his desperate circumstances”

The Supreme Court ruled in favor of a young seafarer who sought payment of permanent total disability benefits for contracting bipolar disorder during his employment, an  illness that  was declared  work-related and aggravated by the harsh treatment he received from the ship officers (Career Shipmanagement vs. Eduardo Godinez, G.R. No. 206826, October 2, 2017)

The supreme Court emphasized the circumstances on how the alleged Certificate of Fitness for Work was  executed by the seafarer (during the medication process)   and was used by the company to serve as proof of his state of health in an effort to deny his claims for total disability benefits.

            

The  court considered  the seafarer’s  declaration as  not competent since he  is not a trained physician,  and it cannot take the place of the company-designated physician’s assessment required by law and the POEA contract

The Court warns against the continued use of underhanded tactics that undermine the interests of labor, damages the integrity of the legal profession, mock the judicial process as a whole, and insult the intelligence of the Court.  In prosecuting a client’s case, the Court reminded the company’s counsels that there are multiple ways of securing victory, other than through fabrication, prevarication, and guile.

The manner in which the seafarer  was dealt with in the proceedings, the Court emphasized,  evinces a perverse attempt to evade liability by fabricating evidence and utilizing objectionable and oppressive means and schemes to secure victory.  It constitutes an affront, not only to the Court, but to all honest workingmen earning a living through hard work and risking their lives for their families.

In a related case,     the fact that a Certification of Fitness was executed, it should no also t be considered as a bar in seafarer’s availment of second medical opinion from his personal doctor and later to seek relief from a legal forum.

               To adopt and paraphrase  the Supreme Court’s wisdom in Mercury Drug vs. Dayao, ( 202 Phil 424) , the company’s  contention that its employees fully understood what they signed when they executed the Certificate of Fitness  and that they should be bound by their voluntary commitment's is anachronistic in this time and age. The worker  is  at a disadvantage insofar as the contractual relationship is  concerned. Workers in our country do not have the luxury or freedom of  refusing to sign a Certificate of Fitness even when some terms and conditions of employment are not only onerous and inequitous but illegal. It is precisely because of this situation that the framers of the Constitution embodied the provisions on social justice (Section 6, Article II) and protection to labor (Section 9, Article II) in the Declaration of Principles And State Policies. It is pursuant to these constitutional mandates that the courts are ever vigilant to protect the rights of workers who are places in contractually disadvantageous positions and who sign waivers or provisions contrary to law and public policy.

 In labor jurisprudence, it is well-established that quitclaims and/or complete releases executed by the employees do not estop them from pursuing their claims arising from the unfair labor practice of the employer. The basic reason for this is that such quitclaims and/or complete releases are against public policy and, therefore, null and void. The acceptance of termination pay does not divest a laborer of the right to prosecute his employer for unfair labor practice acts. [3]

In the Cariño vs. ACCFA case (L-19808, Sept. 29, 1966, 18 SCRA 183)  , the Supreme Court  said "acceptance of those benefits would not amount to estoppel. The reason is plain. Employer and employee, obviously, do not stand on the same footing. The employer drove the employee to the wall. The latter must have to get hold of money. Because, out of job, he had to face the harsh necessities of life. He thus found himself in no position to resist money proffered. His, then, is a case of adherence, not of choice. One thing sure, however, is that petitioners did not relent their claim. They pressed it. They are deemed not to have waived any of their rights. Renuntiatio non praesumitur."

 In More Maritime Agencies, Inc. vs. NLRC (366 Phil. 646, 653-654), the Court ruled 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. Quitclaims executed by the employees are thus commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the worker's legal rights, considering the economic disadvantage of the employee and the inevitable pressure upon him by financial necessity. Thus, it is never enough to assert that the parties have voluntarily entered into such a quitclaim. There are other requisites, to wit: (a) that there was no fraud or deceit on the part of any of the parties; (b) that 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.

This principle was utilized In the case of Var-orient  Shipping  Co. vs. Flores (October 6, 2010 G.R. No. 161934  when  the Supreme Court took cognizance of the illegality of the Certification of Fitness to Work.   It noted that the Receipt and Quitclaim executed by the seafarer  lacks the elements of voluntariness and free will and, therefore, does not absolve employers  from liability in paying him the sickness wages and other monetary claims. A perusal of the provisions of the Receipt and Quitclaim shows that seafarer  would be releasing and discharging the employers  from all claims, demands, causes of action, and the like 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 and perfect health. These stipulations clearly placed the seafarer  in a disadvantageous position vis-á-vis the employers .

The certificate of fitness to work executed by a seafarer  cannot prevail in the labor  cases since the worker,  untrained in the medical arts, is not in possession of sufficient knowledge to expertly asses his true and correct health status. For while a person can assess his general health, he cannot do so with respect to his medical condition which undoubtedly require a trained man learned in the medical arts, to properly diagnose and treat. It could not be said that a layman possess the requisite level of knowledge and expertise which took years of learning and experience for a trained cardiologist to acquire.  Therefore,    the  act of preying upon the ignorance of the petitioner must not be countenanced by our labor courts

Moreover,  it must be stressed that the POEA SEC recognizes the right of seafarers to seek a second opinion to contest the certification issued by the company doctor, in this case, the “fit to work” certification. To insist that the seafarer is barred from seeking opinion is tantamount to a violation of the POEA SEC’s terms and conditions. 

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[3] Cariño vs. ACCFA, L-19808, Sept. 29, 1966, 18 SCRA 183; Philippine Sugar Institute vs. CIR, L-13475, Sept. 29, 1960, 109 Phil. 452; Mercury Drug Co. vs. CIR, L-23357, April 30, 1974, 56 SCRA 694, 704.

Assumption of liability not a defense

The  original manning agency cannot  claim that it will  be exempted from liability because it is no longer the manning agency responsible to the dismissed seafarers since  the new manning agencies  had executed Affidavits of Assumption of Responsibility.

In Section 1 of Rule II of the POEA Rules and Regulations, it states that:

Section 1. Requirements for Issuance of License. Every applicant for license to operate a private employment agency or manning agency shall submit a written application together with the following requirements:

x x x

             f. A verified undertaking stating that the applicant:

x x x

(3) Shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract; including but not limited to payment of wages, death and disability compensation and repatriation.

Accordingly, despite the execution of the Affidavits of Assumption of Responsibility by other manning agencies, the original manning agency  cannot exempt itself from all the claims and liabilities arising from the implementation of the contract executed between the said original manning agency  and the seafarers. It is very clear from the above-cited provisions of the Rules and Regulations of the POEA that the manning agency shall assume joint and solidary liability with the employer.Joint and solidary liability is meant to assure aggrieved workers of immediate and sufficient payment of what is due them. The reason for this ruling was given by this Court in the 1988 case of Catan v. National Labor Relations Commission ( 160 SCRA 691, 695)  which is reproduced in part below:

This must be so, because the obligations covenanted in the recruitment [manning] agreement entered into by and between the local agent and its foreign principal are not coterminus with the term of such agreement so that if either or both of the parties decide to end the agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Otherwise, this will render nugatory the very purpose for which the law governing the employment of workers for foreign jobs abroad was enacted.

Also, according to Section 10, paragraph 2 of Republic Act No. 8042, the agency which deployed the employees whose employment contract were adjudged illegally terminated, shall be jointly and solidarily liable with the principal for the money claims awarded to the aforesaid employees. 

The Affidavits of Assumption of Responsibility, though valid as between  the original manning agency and the other two manning agencies, are not enforceable as against the respondents because the latter were not parties to those agreements. The provisions of the POEA Rules and Regulations are clear enough that the manning agreement extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Hence, despite the execution of the aforementioned affidavits,  the original manning agency  cannot exempt itself from the liabilities and responsibilities towards the seafarers.

( SKIPPERS UNITED PACIFIC, INC., and J.P. SAMARTZSISMARITIME ENTERPRISES CO., S.A., vs. JERRY MAGUAD and PORFERIO CEUDADANO,  G.R. No. 166363,  August 15, 2006) 

Third doctor opinion rule in seafarer's compensation claims

In the event of disagreement on the services of the third doctor, the seafarer has the right to institute a complaint  for disability benefits directly before the National Labor Relations Commission (NLRC)  or the National Conciliation and Mediation Board (NCMB)

This is the ruling of the Supreme Court in  the recent case of Reynaldo Sunit vs. OSM (G.R. No. 2230, February 27, 2017) . The language of the POEA-Standard Employment Contract (SEC)  is clear in that both the seafarer and the employer must mutually agree to seek the opinion of a third doctor. In many instances, the  NLRC/ NCMB and appeal courts dismiss the compensation claims of seafarers for alleged “non-compliance” with the third doctor opinion rule.

During his employment, the seafarer  fell from the vessel's tank approximately 4.5 meters high and suffered a broken right femur. He was diagnosed to have suffered "Fractured, Right Femur; SIP Intramedullary Nailing, Right Femur." The seafarer was repatriated on October 6, 2012. After undergoing medical treatment, the company-designated doctor issued an interim Grade 10 disability on January 13, 2013. The seafarer  was then issued with a final Grade 10 disability by the company-designated doctor on February 15, 2013. Prior to the February 15, 2013 assessment, the seafarer  consulted the opinion of a second doctor, Dr. Garduce, who recommended a Grade 3 disability.

Both parties then consulted a third doctor to assess the seafarer's degree of disability, who assessed seafarer with a Grade 9 partial disability on February 17, 2014, 499 days from his repatriation. In addition to the partial disability grading, Dr. Bathan likewise assessed the seafarer  as unfit to work and recommended him to undergo further rehabilitation.

The parties do not dispute that seafarer's injury was work-related and that he is entitled to disability compensation. The disagreement, however, lies on the degree of disability and amount of benefits that petitioner is entitled.

A final and definite disability assessment is necessary in order to truly reflect the true extent of the sickness or injuries of the seafarer and his or her capacity to resume work as such. Otherwise, the corresponding disability benefits awarded might not be commensurate with the prolonged effects of the injuries suffered.

The Supreme Court recapitulated the procedural requisites under the rules and established jurisprudence where the parties opt to resort to the opinion of a third doctor:

First, according to the POEA-SEC  and as established by Vergara,26 when a seafarer sustains a work-related illness or injury while on board the vessel, his fitness or unfitness for work shall be determined by the company­ designated physician.

Second, if the seafarer disagrees with the findings of the company doctor, then he has the right to engage the services of a doctor of his choice. If the second doctor appointed by the seafarer disagrees with the findings of the company doctor, and the company likewise disagrees with the findings of the second doctor, then a third doctor may be agreed jointly between the employer and the seafarer, whose decision shall be final and binding on both of them.

It must be emphasized that the language of the POEA-SEC is clear in that both the seafarer and the employer must mutually agree to seek the opinion of a third doctor. In the event of disagreement on the services of the third doctor, the seafarer has the right to institute a complaint with the LA or NLRC.

Third, despite the binding effect of the third doctor's assessment, a dissatisfied party may institute a complaint with the LA to contest the same on the ground of evident partiality, corruption of the  third  doctor,  fraud, other undue means,lack of basis to support the assessment, or being contrary to law or settled jurisprudence.

Permanent disability is defined as the inability of a worker to perform his job for more than 120 days (or 240 days, as the case may be), regardless of whether or not he loses the use of any part of his body. Total disability, meanwhile, means the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainments could do.

As the seafarer  was actually unable to work even after the expiration of the 240-day period and there was no final and conclusive disability assessment made by the third doctor on his medical condition, it would be inconsistent to declare him as merely permanently and partially disabled. It should be stressed that a total disability does not require that the employee be completely disabled, or totally paralyzed.  In disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one's earning capacity