STRUGGLING WITH A JUDICIAL CUT-AND-PASTE

(SICKNESS BENEFITS BEYOND 12O DAYS)

Benedict Guirey Kato
Labor Arbiter
Law Professor, Bar Reviewer
Online Bar Review Lecturer, MCLE Lecturer
Author

The Situation
POEA Memorandum Circular No. 10, or the 2010 POEA-SEC for
seafarers, limits sickness allowance to 120 days (Par. 3, Sec. 20-A).
However, Magsaysay Maritime Corp. v. NLRC, G.R. No. 191903, 19 June 2013,
requires employers to pay beyond 120 days. The basis is Sec. 2, Rule X,
Book IV of the Omnibus Rules Implementing the Labor Code (ORILC).
The POEA-SEC has been re-written by the Supreme Court twice or so,
it appears.
Footnotes 32 and 42: Bases of Two Rewrites in 2013
POEA Memorandum Circular No. 10 (Amended Standard Terms and
Conditions Governing the Overseas Employment of Filipino Seafarers On
Board Ocean-Going Vessels), otherwise known as the 2010 POEA-SEC,
provides as follows:
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 companydesignated 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.

underscoring supplied.)

(Par. 3, Sec. 20-A;

The clear provision of regulatory law to the contrary notwithstanding,

the Supreme Court in 2013 Magsaysay, supra., directed payment of 197 sick
days as follows:
In light of these considerations, Capoys claim for
permanent total disability benefits must necessarily fail.
However, since it is undisputed that Capoy still needed medical
treatment beyond the initial 120 days from his repatriation it
lasted for 197 days as found by the CA he is entitled, under the
rules,42 to the income benefit for temporary total disability during
the extended period or for one hundred ninety-seven (197) days.
This benefit must be paid to him. (Underscoring supplied.)
Footnote 42 is Sec. 2, Rule X, Book IV of the Omnibus Rules
Implementing the Labor Code (ORILC), infra.
This is not the first rewrite so far as the POEA-SEC. It bears recall that
Justice Brion rewrote Par. 3, Sec. 20-A

in 2013

to make mandatory what

was clearly an optional provision in regard the use of a third physician

(Philippine Hammonia Ship Agency , Inc. v. Eulogio Dumadag, G.R. No.
19432, 26 June 2013). A basic rule in statutory construction, Plain Meaning
Rule, is to avoid interpretation where the law is clear. However, despite the
very clear letter of Par. 3, Sec. 20-A, the Supreme Court held as follows:
As we earlier stressed, Dumadag failed to comply with the
requirement under the POEA-SEC and the CBA to have the
conflicting assessments of his disability determined by a third
doctor as was his duty.32
x
x
x
Whatever his reasons might have been, Dumadags
disregard of the conflict-resolution procedure under the POEASEC and the CBA cannot and should not be tolerated and allowed

to stand, lest it encourage a similar defiance. We stress in this

respect that we have yet to come across a case where the
parties referred conflicting assessments of a seafarers disability
to a third doctor since the procedure was introduced by the
POEA-SEC in 2000 whether the Courts ruling in a particular
case upheld the assessment of the company-designated
physician, as in Magsaysay Maritime Corporation v. National
Labor Relations Commission (Second Division) 33 and similar other
cases, or sustained the opinion of the seafarers chosen
physician as in HFS Philippines, Inc. v. Pilar,34 cited by the CA,
and other cases similarly resolved. The third-doctor-referral
provision of the POEA-SEC, it appears to us, has been honored
more in the breach than in the compliance.
(Emphasis
copied.)

Footnote 32

is

Par. 1, Sec. 1-B of the POEA-SEC which reads as

follows:
x
B.

Duties of the Seafarer:

1.
To faithfully comply with and observe the terms
and conditions of this contract, violation of which shall be subject
to disciplinary action pursuant to Sec. 33 of this contract.
x
x
x
The question begged by the ruling is apparent:

Is submission to

third physician the seafarers sole duty considering that Par. 3, Sec. 20-A of
the 2010 POEA-SEC actually provides that:

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 doctors decision shall be
final and binding on both parties. (Underscoring supplied.)
Making above provision mandatory, as did Justice Brion,
legislation.

The option

it gives is clearly a

is judicial

take it or leave it matter.

Assuming it imposes a duty, there is no doubt that it makes both parties

mutual obligors-obligees of each other. Of course, the Supreme Court went

on to explain that the seafarers non- disclosure of his doctors assessment
deprived his employer of the opportunity to insist on the observance of the
third physician provision. But even this makes an unwarranted assumption,
viz., that Par. 1, Sec. 1-B in relation to Par. 3, Sec. 20-A creates an exception
to the confidentiality of medical information

and other

patients rights

guaranteed by the WMA Declaration of Lisbon on the Rights of the Patient,

among others.

The Power of the POEA to Promulgate the Seafarers SEC

Executive Order No. 797 provides as follows:
SEC. 4. There is hereby created a Philippine Overseas
Employment Administration
(a) The governing Board of the Administration , as hereinunder
provided, shall promulgate the necessary rules and
regulations to govern the exercise of the adjudicatory
functions of the Administration.
In turn, the 2003 POEA Rules and Regulations Governing Overseas
Employment provides:
x

PART IV
Employment Standards
Rule 1
Formulation of Standard Employment Contracts
SECTION 1. Standard Employment Contracts. The
Administration, thru tripartite consultation involving seafarers

and the private sector, shall determine, formulate and establish

minimum separate and distinct standard employment contracts
for seafarers in accordance with accepted international standards
and maritime practice.
x

It goes without saying that only the POEA, the seat of regulatory
power, can modify the Seafarers SEC. Hence, the following development in
case law is cause for alarm:

Case Digest
Magsaysay Maritime Corp. v. NLRC
G.R. No. 191903, 28 June 2013
Facts:
Capoy was medically repatriated on 31 August 2005 due to
a spine condition. On arrival, he was referred to the companydesignated physician for examination and treatment.
underwent surgery and physical

He then

therapy until 17 March 2006.

He was scheduled to return on 6 April 2006. He did not. Instead,

he filed his complaint for disability compensation and sickness
allowance on 19 January 2006.
Core Issues Resolved:
(1)Whether or not Capoy was entitled to disability benefits: and
(2)Whether or not Capoy was entitled to sickness allowance.
Held:
In resolution of the first, it was held that Capoy abandoned
his treatment; hence, he was not entitled to disability benefits.

In resolution of the second, the Supreme Court held that

Capoy was entitled to sickness allowance. However, it extended
the 120- day mandatory limit as follows:
However, since it is undisputed that Capoy
still needed medical treatment beyond the initial 120
days from his repatriation it lasted for 197 days as
found by the CA he is entitled, under the rules,42 to
the income benefit for temporary total disability
during the extended period or for one hundred
ninety-seven (197) days. This benefit must be paid to
him. (Underscoring supplied.)

The Magsaysay extension, if it may be called so, was justified by the

Supreme Court with Sec. 2, Rule X, Book IV of the ORILC which provides:
Sec. 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[.] (Emphasis copied.)

Upon closer examination, however, aforequoted ORILC provision

pertains to sickness benefits under the Social Security Act and Government
Service Insurance Act ( R.A. 8282 and R.A. 9182, respectively). The term
System is no other than either the Social Security System or Government
Service Insurance System. Therefore, if a seafarer has a voluntary SSS

coverage then

the ORILC provision may be applied since it

pertains to the SSS.

specifically

At this juncture, attention must be invited to the

distinction between sickness allowance under the POEA-SEC and sickness

allowance under R.A. 8282. The first is an obligation directly imposed on the
employer. In contrast, the second is a shifted obligation, i.e., it is the State
Insurance Fund which answers to the sick member. As to why this distinction
should require attention at all, it appears that Sec. 2, Rule X, Book IV of the
ORILC was loosely used in total disregard of said distinction.
To clarify, the POEA-SEC imposes on the employer a direct
to

pay sickness allowance to the

fullest extent.

obligation

In contrast, R.A. 8282

simply imposes on the employer the obligation to contribute to the SSS fund
from which sickness allowance shall be paid. Hence, the employer does not
pay the benefit beyond his contributions.

It is the State Insurance Fund

which guarantees to the member full compensation. This said, the POEA-SEC
imposes the more onerous obligation.

Since the obligation is of that nature,

it cannot be made more onerous by loosely applying the ORILC provision

without violating the employers right not to be deprived of property without
due process of law. Due process, where an extension is needed, should be in
the form of an amendment to the 2010 POEA-SEC, e.g., cutting the ORILC
provision and pasting it on the POEA-SEC.

However, only the seat of

regulatory power can do this. In other words, the Supreme Court cannot do
the cut-and-paste for the POEA. But it did; hence, the Magsaysay extension
is a judicial cut-and-paste.

Stated differently, it is an unwarranted criss-

crossing of rules.
Sec. 4, Art. VIII, 1987 Philippine Constitution
What could be wrong with the Magsaysay extension under the pen of
Justice Brion of the Second Division of the Supreme Court?

In Transocean Ship Management (Phils.), Inc. v. Inocencio B. Vedad

(vice versa), G.R. Nos. 194490-91, 20 March 2013, the Third Division of the
Supreme Court held as follows:
Inocencio entitled to sickness allowance.
Inocencio got ill with what appeared to be tonsillitis while
on board MV lnvicta, for which he was treated at a foreign port
where the ship docked. His malady still continued despite the
treatment as he was, in fact, repatriated before the end of his 1
0-month contract on medical grounds.
With the foregoing facts and the application of the abovequoted pertinent POEA-SEC provisos, it is abundantly clear that
Inocencio is entitled to receive sickness allowance from his
repatriation for medical treatment, which is equivalent to his
basic wage for a period not exceeding 120 days or four months.
(Underscoring supplied.)

Notably, both Magsaysay and Transocean are decisions of different

divisions of the Supreme Court. There is no gainsaying that one is superior
to the other based on which is the later decision. In the first place, time
alone does not make one division brighter than the other. To the question of
whether Magsaysay has modified Transocean and other rulings of like import,
Art. VIII of the Constitution supplies the answer as follows:

Section 4.

1. The Supreme Court shall be composed of a Chief Justice and

fourteen Associate Justices. It may sit en banc or in its discretion,
in division of three, five, or seven Members. Any vacancy shall be
filled within ninety days from the occurrence thereof.

2. All cases involving the constitutionality of a treaty, international

or executive agreement, or law, which shall be heard by the
Supreme Court en banc, and all other cases which under the
Rules of Court are required to be heard en banc, including those
involving the constitutionality, application, or operation of
presidential decrees, proclamations, orders, instructions,
ordinances, and other regulations, shall be decided with the
concurrence of a majority of the Members who actually took part
in the deliberations on the issues in the case and voted thereon.

3. Cases or matters heard by a division shall be decided or resolved

with the concurrence of a majority of the Members who actually
took part in the deliberations on the issues in the case and voted
thereon, and in no case without the concurrence of at least three
of such Members. When the required number is not obtained, the
case shall be decided en banc: Provided, that no doctrine or
principle of law laid down by the court in a decision rendered en
banc or in division may be modified or reversed except by the
court sitting en banc. (Underscoring supplied.)

On another note, sickness allowance is different from disability benefit.

Better yet, it is paid separately.

Actually, even before Justice Brion

effectively transferred Sec. 2, Rule X, Book IV of the

ORILC from the

backyard of R.A 8282 and R.A 9182 to the porch of the POEA-SEC, he first
transferred it from the disability pay provision to the sickness pay provision
of the Labor Code. Indeed, there was a double criss-cross in the name of
harmony of rules. Regrettably, employers cannot be expected to submit to
any reasonless destruction of legal boundaries.
Concluding Words
Suffice to note that the present state of

jurisprudence on seafarers

money claims showcases a body of rulings in contact and conflict with one

another. Hence, one tasked to resolve an issue has before him a menu of
rulings to choose from. Quite akwardly, his

environment is

akin to a

restaurant environment. Thus, adjudication boils down to better choice of

case law. If so, there may be no wrong decisions just better or worse. This
lecturer humbly submits that a decision, recommendation, or advice based
on Transocean
clinical look.

is the better one.

Hence,

Magsaysay should be given a

When in Vergara the Supreme

stretched

120 to

240 for

purposes of disability compensation, it forgot to similarly extend 120 to 240

for purposes of sickness allowance. Hence, Magsaysay

appears to be a

belated judicial cure to judicial amnesia. The problem is Par. 3, Sec. 20-A
of the 2010 POEA-SEC expressly restricts sickness allowance to 120 days
only.
In parting, Magsaysay Maritime Corp. v. NLRC showcases a misplaced
judicial cut-and-paste. If the 120 days must be extended, it should be for
trade-off purposes only, e.g., to get the seafarer to formally agree to an
extension of his treatment in cases where the company-designated physician
is about to let the 120-day period expire without an assessment.
Prudence

dictates that Magsaysay Maritime Corp. v. NLRC

never be given in the Bar examination in Labor Law.

Quezon City, 10 April 2015.

should