39. SOUTH COTABATO COMMUNICATIONS CORPORATION and GAUVAIN J.

BENZONAN, petitioners, vs. HON. PATRICIA STO. TOMAS, Secretary of Labor and
Employment, ROLANDO FABRIGAR, MERLYN VELARDE, VINCE LAMBOC,
FELIPE GALINDO, LEONARDO MIGUEL, JULIUS RUBIN, EDEL RODEROS,
MERLYN COLIAO, and EDGAR JOPSON, respondents.
G.R. No. 217575. June 15, 2016.

The Secretary of Labor, or any of his or her authorized representatives, is granted visitorial
and enforcement powers for the purpose of determining violations of, and enforcing, the
Labor Code and any labor law, wage order, or rules and regulations issued pursuant thereto.
The DOLE in the exercise of its visitorial and enforcement power somehow has to make a
determination of the existence of an employer-employee relationship. Such determination,
however, cannot be coextensive with the visitorial and enforcement power itself.

Facts:

DOLE conducted a Complaint Inspection at the premises of DXCP Radio Station, which is
owned by petitioner South Cotabato Communications Corporation. The inspection yielded a
finding of violation of labor standards provisions of the Labor Code involving the nine (9)
private respondents, such as:chanRoblesvirtualLawlibrary
1. Underpayment of Wages
2. Underpayment of 13th Month Pay
3. Non-payment of the five (5) days Service Incentive Leave Pay
4. Non-payment of Rest Day Premium Pay
5. Non-payment of the Holiday Premium Pay
6. Non-remittance of SSS Contributions
7. Some employees are paid on commission basis aside from their allowance

DOLE issued a Notice of Inspection Result directing petitioner corporation and/or its president,
petitioner Gauvain J. Benzonan (Benzonan), to effect restitution and/or correction of the alleged
violations within five (5) days from notice. Due to petitioners' failure to comply with its
directive, the DOLE scheduled a Summary Investigation. However, petitioners failed to appear.
Thus, in an Order by the DOLE Regional Director directed petitioners to pay private respondents
the total amount of P759,752. The petitioners appealed to the Secretary of Labor, raising two
grounds: (1) denial of due process; and (2) lack of factual and legal basis of the assailed Order.

The Secretary of Labor affirmed the findings of the DOLE Regional Director on the postulate
that petitioners failed to question, despite notice of hearing, the noted violations or to submit any
proof of compliance therewith.

The CA upheld the Secretary of Labor, holding that petitioners cannot claim denial of due
process, their failure to present evidence being attributed to their negligence.

Issue:
Whether an employer-employee relationship had sufficiently been established between the
parties as to warrant the assumption of jurisdiction by the DOLE and issuance of the May 20,
2004 and November 8, 2004 Orders.

Held:

NO. The determination as to whether such employer-employee relationship was established

requires an examination of facts. In labor cases, as in other administrative and quasi-judicial
proceedings, the quantum of proof necessary is substantial evidence, or such amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion.

In determining the existence of an employer-employee relationship, Bombo Radyo specifies the

guidelines or indicators used by courts, i.e., (1) the selection and engagement of the employee;
(2) the payment of wages; (3) the power of dismissal; and (4) the employer's power to control the
employee's conduct. The Secretary of Labor, or any of his or her authorized representatives, is
granted visitorial and enforcement powers for the purpose of determining violations of, and
enforcing, the Labor Code and any labor law, wage order, or rules and regulations issued
pursuant thereto. The DOLE in the exercise of its visitorial and enforcement power somehow has
to make a determination of the existence of an employer-employee relationship. Such
determination, however, cannot be coextensive with the visitorial and enforcement power itself.
Indeed, such determination is merely preliminary, incidental and collateral to the DOLE'S
primary function of enforcing labor standards provisions. The determination of the existence of
employer-employee relationship is still primarily lodged with the NLRC.

As can be gleaned from the Order, the Regional Director merely noted the discovery of
violations of labor standards provisions in the course of inspection of the DXCP premises. No
such categorical determination was made on the existence of an employer-employee relationship
utilizing any of the guidelines set forth. In a word, the Regional Director had presumed, not
demonstrated, the existence of the relationship. Of particular note is the DOLE'S failure to show
that petitioners exercised control over private respondents' conduct in the workplace. The power
of the employee to control the work of the employee, or the control test, is considered the most
significant determinant of the existence of an employer-employee relationship.

Neither did the Orders of the Regional Director and Secretary of Labor state nor make reference
to any concrete evidence to support a finding of an employer-employee relationship and justify
the monetary awards to private respondents. Substantial evidence, such as proofs of employment,
clear exercise of control, and the power to dismiss that prove such relationship and that
petitioners committed the labor laws violations they were adjudged to have committed, are
absent in this case. Furthermore, the Orders dated May 20, 2004 and November 8, 2004 do not
even allude to the substance of the interviews during the inspection that became the basis of the
finding of an employer-employee relationship.

Mere allegation, without more, is not evidence and is not equivalent to proof. Hence, the
existence of employer-employee relationship was not established in the case at bar.
WHEREFORE, the petition is GRANTED. The Decision dated November 28, 2014 and
Resolution dated March 5, 2015 of the Court of Appeals in CA-G.R. SP No. 00179-MIN are
accordingly REVERSED and SET ASIDE. The Order of the then Secretary of Labor and
Employment dated November 8, 2004 denying petitioners' appeal and the Order of the Regional
Director, DOLE Regional Office No. XII, dated May 20, 2004, are ANNULLED, without
prejudice to whatever right or cause of action private respondents may have against petitioners.

SO ORDERED.chanroblesvirtuallawlibrary
63. JOLO'S KIDDIE CARTS/ FUN4KIDS/ MARLO U. CABILI vs. EVELYN A.
CABALLA and ANTHONY M. BAUTISTA

FACTS:

Respondents filed a complaint5 for illegal dismissal, underpayment of salaries/wages and 13th
month pay, non-payment of overtime pay, holiday pay, and separation pay, damages against
petitioners before the NLRC. Respondents and Colisao alleged that petitioners hired them as
staff members in the latter's business; Caballa and Bautista were assigned to man petitioners'
stalls in SM Bacoor and SM Rosario in Cavite, respectively, while Colisao was assigned in
several SM branches, the most recent of which was in SM North EDSA.7 They claimed that they
were never paid the monetary value of their unused service incentive leaves, 13th month pay,
overtime pay, and premium pay for work during holidays; and that when petitioners found out
that they inquired from the DOLE about the prevailing minimum wage rates, they were
prohibited from reporting to their work assignment without any justification.9

Petitioners denied dismissing respondents and Colisao, and maintained that they were the ones
who abandoned their work.11 They likewise maintained that they paid respondents and Colisao
their wages and other benefits in accordance with the law and that their money claims were
bereft of factual and legal bases.12

The LA dismissed the case insofar as Colisao is concerned for failure to prosecute.14 However,
the LA ruled in favor of respondents, and accordingly, ordered petitioners to solidarily pay them.
The LA found that respondents' adequate substantiation of their claim that they were no longer
given any work assignment and were not allowed to go anywhere near their respective
workstations, coupled with petitioners' failure to prove abandonment, justifies the finding that
respondents were indeed dismissed without just cause nor due process.16

Aggrieved, petitioners appealed17 to the NLRC which modified the LA ruling, finding no illegal
dismissal nor abandonment of work. Accordingly, the NLRC ordered petitioners to reinstate
respondents to their former or substantially equivalent positions without loss of seniority rights
and privileges; deleted the awards for payment of backwages, separation pay.

Dissatisfied, petitioners directly filed a petition for certiorari25 before the CA.The CA denied the
petition due to petitioners' failure to file a motion for reconsideration before the NLRC prior to
the filing of a petition for certiorari before the CA. Petitioners moved for reconsideration,28 but
the same was denied; hence, this petition.30

ISSUE: 1. Whether or not respondents are illegally dismissed.

2. Whether or not respondents are entitled to their money claims.

RULING:

1. NO. In cases of illegal dismissal, the employer bears the burden of proof to prove that the
termination was for a valid or authorized cause. But before the employer must bear the burden of
proving that the dismissal was legal, the employees must first establish by substantial evidence
 that indeed they were dismissed. If there is no dismissal, then there can be no question as to the
legality or illegality thereof.

As defined under established jurisprudence, abandonment is the deliberate and unjustified refusal
of an employee to resume his employment. To constitute abandonment, however, there must be a
clear and deliberate intent to discontinue one's employment without any intention of returning. In
this regard, two elements must concur: (1) failure to report for work or absence without valid or
justifiable reason; and (2) a clear intention to sever the employer-employee relationship, with the
second element as the more determinative factor and being manifested by some overt acts. It has
been ruled that the employer has the burden of proof to show a deliberate and unjustified refusal
of the employee to resume his employment without any intention of returning.

Respondents failed to prove their allegation that petitioners dismissed them from work, as there
was no indication as to how the latter prevented them from reporting to their work stations; or
that the petitioners made any overt act that would suggest that they indeed terminated
respondents' employment.48 In the same vein, petitioners failed to prove that respondents
committed unequivocal acts that would clearly constitute intent to abandon their employment.
More importantly, respondents' filing of a complaint for illegal dismissal negates any intention
on their part to sever their employment relations with petitioners.

In this regard, jurisprudence provides that in instances where there was neither dismissal by the
employer nor abandonment by the employee, the proper remedy is to reinstate the employee to
his former position but without the award of backwages.

1. YES. As for respondents' money claims for holiday pay, wage differential, and 13th month pay,
the NLRC properly observed that petitioners failed to show that payment has been made. As
such, they must be held liable for the same. It is well-settled that "with respect to labor cases, the
burden of proving payment of monetary claims rests on the employer, the rationale being that the
pertinent personnel files, payrolls, records, remittances and other similar documents - which will
show that overtime, differentials, service incentive leave and other claims of workers have been
paid - are not in the possession of the worker but in the custody and absolute control of the
employer."

WHEREFORE, the petition is PARTLY GRANTED. The Resolutions dated July 28, 2016 and
February 22, 2017 of the Court of Appeals in CA-G.R. SP No. 146460 are hereby SET
ASIDE. Accordingly, the Decision dated April 28, 2016 of the National Labor Relations
Commission is AFFIRMED with MODIFICATION, ordering petitioners Jolo's Kiddie
Carts/Fun4Kids/Marlo U. Cabili to pay:

a) Respondent Evelyn A. Caballa the amounts of ₱15,623.00 as holiday pay, ₱75,156.12 as wage
differential, and ₱10,608.00 as 13th month pay, plus attorney's fees amounting to ten percent
(10%) of the aforesaid monetary awards. Further, said amounts shall then earn legal interest at
the rate of six percent (6%) per annum from the finality of the Decision until fully paid; and

b) Respondent Anthony M. Bautista the amounts of ₱15,623.00 as holiday pay, ₱74,480.12 as

wage differential, and ₱10,608.00 as 13th month pay, plus attorney's fees amounting to ten
percent (10%) of the aforesaid monetary awards. Further, said amounts shall then earn legal
interest at the rate of six percent (6%) per annum from the finality of the Decision until fully
paid.

Finally, the Temporary Restraining Order dated May 26, 2017 issued in relation to this case is
hereby LIFTED. The Decision dated April 28, 2016 of the National Labor Relations
Commission in NLRC NCR Case No. 03-03168-15 (NLRC LAC No. 02-000701-16), as
modified, shall be implemented in accordance with this Decision.

SO ORDERED.
 65. HONDA PHILS., INC., petitioner, vs. SAMAHAN NG MALAYANG
MANGGAGAWA SA HONDA, respondent.
G.R. No. 145561 June 15, 2005 YNARES-SANTIAGO, J.:

FACTS:

The case stems from the Collective Bargaining Agreement (CBA) forged between Honda and the
Samahan ng Malayang Manggagawa sa Honda (Union) which contained provisions regarding
the 13th month pay and 4th month pay of employees as well as the grant of financial assistance
to covered employees for not less than 100% of basic pay. The said CBA is effective until 2000.

In late 1998, the parties started re-negotiations for the fourth and fifth years of the CBA. Such
talks bogged down, then the Union filed a Notice of Strike on the ground of Bargaining
Deadlock. Honda then filed a Notice of Lockout. DOLE Secretary Laguesma assumed
jurisdiction over the labor dispute and ordered the parties to cease and desists from committing
acts that would aggrieve the situation - both complied.

The Union, on 1999, filed a second Notice of Strike on the ground of unfair labor practice
alleging that Honda contracted work to the detriment of the workers. The Union went on strike
and picketed the premises of Honda. DOLE Acting Secretary Joson Jr., assumed jurisdiction
over the case and certified the same to the NLRC for compulsory arbitration. The striking
employeees were ordered to return to work.

November 1999, the management of Honda issued a memorandum announcing its new
computation of the 13th and 14th month pay to be granted to all its employees whereby the 31-
day long strike shall be considered as unworked days for the purpose of computing the benefits.
The Union opposed the pro-rated computation. Honda sought the opinion of the Bureau of
Working Conditions on the issues who then agreed to the pro-rated computation of the payment.

The matter was brought to the grievance machinery but when it was still unresolved it was
submitted for voluntary arbitration - where Voluntary Arbitrator Javen invalidated the pro-rated
computation. The matter was filed for review with the Court of Appeals - who dismissed such
for lack of merit.

ISSUE:
Whether the pro-rated computation is valid and lawful

RULING:
Yes

A collective bargaining agreement refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all other terms and
conditions of employment in a bargaining unit. As in all contracts, the parties in a CBA may
establish such stipulations, clauses, terms and conditions as they may deem convenient provided
these are not contrary to law, morals, good customs, public order or public policy. Thus, where
the CBA is clear and unambiguous, it becomes the law between the parties and compliance
therewith is mandated by the express policy of the law.

Honda wanted to implement a pro-rated computation of the benefits based on the "no work, no
pay" rule. According to them, the phrase "present practice" as mentioned in the CBA refers to the
manner and requisites with respect to the payment of the bonuses. The Union, however, insists
that the CBA provisions relating to the implementation of the 13th month pay necessarily relate
to the computation of the same.

A cursory reading of the provisions will show that they did not state categorically whether the
computation of the 13th month pay, 14th month pay and the financial assistance would be based
on one full month’s basic salary of the employees, or pro-rated based on the compensation
actually received. The arbitrator thus properly resolved the ambiguity in favor of labor as
mandated by Article 1702 of the Civil Code.

Presidential Decree No. 851, otherwise known as the 13th Month Pay Law, which required all
employers to pay their employees a 13th month pay, was issued to protect the level of real wages
from the ravages of worldwide inflation. Under the Revised Guidelines on the Implementation
of the 13th month pay issued on November 16, 1987, the salary ceiling of P1,000.00 under P.D.
No. 851 was removed. It further provided that the minimum 13th month pay required by law shall
not be less than one-twelfth (1/12) of the total basic salary earned by an employee within a
calendar year.

The "basic salary" of an employee for the purpose of computing the 13th month pay shall include
all remunerations or earnings paid by his employer for services rendered but does not include
allowances and monetary benefits which are not considered or integrated as part of the regular or
basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime
premium, night differential and holiday pay, and cost-of-living allowances.

For employees receiving regular wage, we have interpreted "basic salary" to mean, not the
amount actually received by an employee, but 1/12 of their standard monthly wage multiplied by
their length of service within a given calendar year.

The revised guidelines also provided for a pro-ration of this benefit only in cases of resignation
or separation from work. As the rules state, under these circumstances, an employee is entitled to
a pay in proportion to the length of time he worked during the year, reckoned from the time he
started working during the calendar year. Considering the foregoing, the computation of the 13th
month pay should be based on the length of service and not on the actual wage earned by the
worker. In the present case, there being no gap in the service of the workers during the calendar
year in question, the computation of the 13th month pay should not be pro-rated but should be
given in full.

More importantly, it has not been refuted that Honda has not implemented any pro-rating of the
13th month pay before the instant case. Honda did not adduce evidence to show that the 13th
month, 14th month and financial assistance benefits were previously subject to deductions or pro-
rating or that these were dependent upon the company’s financial standing.
The underlying principle for the grant of this benefit. It is primarily given to alleviate the plight
of workers and to help them cope with the exorbitant increases in the cost of living. To allow the
pro-ration of the 13th month pay in this case is to undermine the wisdom behind the law and the
mandate that the workingman’s welfare should be the primordial and paramount consideration.
What is more, the factual milieu of this case is such that to rule otherwise inevitably results to
dissuasion, if not a deterrent, for workers from the free exercise of their constitutional rights to
self-organization and to strike in accordance with law.
81. LIGHT RAIL TRANSIT AUTHORITY, petitioner, vs. BIENVENIDO R. ALVAREZ,
CARLOS S. VELASCO, ASCENCION A. GARGALICANO, MARLON E. AGUINALDO,
PETRONILO T. LEGASPI, BONIFACIO A. ESTOPIA, ANDRE A. DELA MERCED,
JOSE NOVIER D. BAYOT, ROLANDO AMAZONA and MARLINO HERRERA,
respondents.
G.R. No. 188047. November 28, 2016.

Being an indirect employer, LRTA is solidarily liable with METRO in accordance with Article
109 of the Labor Code. The fact that there is no actual and direct employer-employee
relationship between LRTA and private respondents does not absolve the former from liability
for the latter's monetary claims. The owner of the project is not the direct employer but merely
an indirect employer, by operation of law, of his contractor's employees.

FACTS:

LRTA is a government-owned and controlled corporation created by virtue of Executive Order

No. 603, for the purpose of the construction, operation, maintenance, and/or lease of light rail
transit system in the Philippines. Private respondents are former employees of Meralco Transit
Organization, Inc. (METRO).

METRO and LRTA entered into an agreement called "Agreement for the Management and
Operation of the Light Rail Transit System" (AMO-LRTS) for the operation and management of
the light rail transit system. LRTA shouldered and provided for all the operating expenses of
METRO. Also, METRO signed a Collective Bargaining Agreement (CBA) with its employees
wherein provisions on wage increases and benefits were approved by LRTA's Board of
Directors.

However, the Commission on Audit (COA) nullified and voided the AMO-LRTS. To resolve the
issue, LRTA decided to acquire METRO by purchasing all of its shares of stocks. METRO, thus,
became a wholly-owned subsidiary of LRTA. Since then, METRO has been renamed to Metro
Transit Organization, Inc. Also, by virtue of the acquisition, LRTA appointed the new set of
officers, from chairman to members of the board, and top management of METRO. LRTA and
METRO declared and continued the implementation of the AMO-LRTS and the non-interruption
of employment relations of the employees of METRO. They likewise continued the
establishment and funding of the Metro, Inc. Employees Retirement Plan which covers the past
services of all METRO regular employees from the date of their employment. They confirmed
that all CBAs remained in force and effect. LRTA then sanctioned the CBA's of the union of
rank and file employees and the union of supervisory employees.

The METRO general manager (who was appointed by LRTA) announced in a memorandum that
its board of directors approved the severance/resignation benefit of METRO employees at one
and a half (1 1/2) months salaries for every year of service.

Thereafter, the union of rank and file employees of METRO declared a strike over a retirement
fund dispute. By virtue of its ownership of METRO, LRTA assumed the obligation to update the
Metro, Inc. Employees Retirement Fund with the Bureau of Treasury. A few months later, LRTA
stopped the operation of METRO. METRO's Board of Directors approved the release and
payment of the first fifty percent (50%) of the severance pay to the displaced METRO
employees, including private respondents, who were issued certifications of eligibility for
severance pay along with the memoranda to receive the same.

LRTA earmarked an amount of P271,000,000.00 for the severance pay of METRO employees in
its approved corporate budget for the year 2002. However, METRO only paid the first fifty
percent (50%) of the severance pay of private respondents.

Private respondents repeatedly and formally asked LRTA, being the principal owner of METRO,
to pay the balance of their severance pay, but to no avail. Thus, they filed a complaint before the
Arbitration Branch of the NLRC.

LA ruled in favor of private respondents.

NLRC dismissed METRO's appeal for failure to file the required appeal bond. Therefore, the
NLRC ruled that the appealed Decision of the LA (as regards METRO) is declared final and
executory. In the same Resolution, the NLRC sustained the Decision of the LA in toto, and
therefore dismissed LRTA's appeal for lack of merit.

The CA denied LRTA's petition. First, the CA ruled that since LRTA failed to comply with the
mandatory appeal bond, it lost its right to appeal. Consequently, the LA's ruling already became
final and executory.

ISSUE:

Whether or not the LRTA jointly and severally liable for private respondents' money claims.

HELD:

YES. The same factual setting and issues raised in this case also obtained in Light Rail Transit
Authority v. Mendoza. In that case, the Court ruled that LRTA is solidarily liable for the
remaining fifty percent (50%) of the respondents' separation pay. The doctrine of stare decisis
warrants the dismissal of the case. The rule of stare decisis is a bar to any attempt to re-litigate
the same issue where the same questions relating to the same event have been put forward by
parties similarly situated as in a previous case litigated and decided by a competent court. Thus,
the Court's ruling in Mendoza regarding LRTA's solidary liability for respondents' monetary
claims arising from the very same AMO-LRTS which private respondents sought to enforce in
the proceedings a quo applies to the present case.

In Mendoza, the Court upheld the jurisdiction of the labor tribunals over LRTA, citing Philippine
National Bank v. Pabalan: By engaging in a particular business thru the instrumentality of a
corporation, the government divests itself pro hac vice of its sovereign character, so as to render
the corporation subject to the rules of law governing private corporations. Hence, LRTA must
submit itself to the provisions governing private corporations, including the Labor Code, for
having conducted business through a private corporation, in this case, METRO.

In this case, LRTA's contractual commitments with METRO and its employees arose out of its
business relations with METRO which is private in nature. Such private relation was not
changed notwithstanding the subsequent acquisition by LRTA of full ownership of METRO and
take-over of its business operations at LRT.

In addition, under Article 107 of the Labor Code, an indirect employer is "any person,
partnership, association or corporation which, not being an employer, contracts with an
independent contractor for the performance of any work, task, job or project." On the other hand,
Article 109 on solidary liability, mandates that "every employer or indirect employer shall be
held responsible with his contractor or subcontractor for any violation of any provisions of this
Code. For purposes of determining the extent of their civil liability under this Chapter, they shall
be considered as direct employers."

In applying the above-mentioned articles, being an indirect employer, LRTA is solidarily liable
with METRO in accordance with Article 109 of the Labor Code. The fact that there is no actual
and direct employer-employee relationship between LRTA and private respondents does not
absolve the former from liability for the latter's monetary claims. The owner of the project is not
the direct employer but merely an indirect employer, by operation of law, of his contractor's
employees.

WHEREFORE, the Petition is DENIED. The Decision dated February 20, 2009 of the Court of
Appeals in CA-G.R. SP No. 103278 is AFFIRMED.
 116. LEONIS NAVIGATION CO., INC. AND WORLD MARINE PANAMA S.A. v.
EDUARDO C. OBRERO AND MERCEDITA P. OBRERO. G.R. No. 192754, September
07, 2016. JARDELEZA, J.

Facts: Petitioner Leonis Navigation Company, Inc. (LNCI), for and on behalf of its foreign
principal co-petitioner World Marine Panama S.A. (World Marine), hired Obrero as a messman
onboard M/V Brilliant Arc in October 2003. The governing contract between the parties was the
2000 Philippine Overseas Employment Agency-Standard Employment Contract (POEA-SEC).
This was the fourth time that LNCI, for and on behalf of World Marine, hired Obrero since 2000.
Obrero was deployed onboard M/V Brilliant Arc in February 2004. In October 2004, Obrero's
crewmates observed him acting strangely, his normal manner changed and that he was unable to
sleep well and could no longer perform his daily tasks and showed signs "of abnormality towards
his daily gestures especially to the crew and other things."

Upon the vessel's arrival at Tubarao, Brazil, Obrero was seen by Dr. Jose Carlos Soares Da Silva
(Dr. Da Silva) and was confined in a psychiatric clinic for a month in Victoria, Brazil. He was
later diagnosed with "bipolar disturbance (acute phase)" and given appropriate medications. Dr.
Da Silva recommended Obrero's repatriation upon his discharge. Dr. Nicomedes Cruz (Dr.
Cruz), the company-designated physician, examined Obrero shortly after he arrived in the
Philippines. Dr. Cruz initially diagnosed him with major depression and referred him to a
psychiatrist. Obrero was confined at the Manila Doctors Hospital and his diagnosis was updated
to "schizophreniform disorder." Dr. Cruz issued a certification upon the request of LNCI's
counsel stating that "schizophreniform disorder appears to be related to abnormalities in the
structure and chemistry of the brain, and appears to have strong genetic links" and "categorically
speaking schizophreniform disorder is not work-related." Thus, LNCI refused to pay
Obrero's total disability benefits.

Obrero filed a complaint with the NLRC claiming that he is entitled to total disability benefits
because he has previously been declared fit to work by LNCI, following a rigid pre-employment
medical examination (PEME), and, therefore, his worsening mental state was work-related.
LNCI denied this, maintaining that his illness is not work-related as declared by Dr. Cruz.

Obrero also sought the opinion of a psychiatrist, Dr. Salceda and diagnosed Obrero as suffering
from "psychotic disorder, not otherwise specified." Dr. Salceda noted that although Obrero was
initially able to cope with the rigors and stress of his occupation, his coping abilities were
eventually taxed "as he was continuously exposed to the adverse situation of repeatedly being at
sea for prolonged periods of time." Additionally, he was not able to handle the stress of being
demoted from seaman to messman as a result of the discovery of his color blindness.

Labor Arbiter (LA): favor of LNCI and dismissed the complaint and completely accepted Dr.
Cruz's opinion that Obrero's illness was not work-related. On appeal, the NLRC reversed the
LA's findings. It noted that seafaring is a very stressful occupation and that, even if genetics were
a factor in the development of Obrero's illness, "the inherent stress of a seafarer's work has
undoubtedly triggered Obrero's condition."
LNCI appealed to CA but sustained the NLRC, it explained the nature of a work-related injury,
that "compensability does not depend on whether the injury or disease was pre-existing at the
time of the employment but rather if the disease or injury is work-related or aggravated his
condition. It is indeed safe to presume that, at the very least, the arduous nature of employment
had contributed to the aggravation of the injury, if indeed it was pre-existing at the time of
employment.
CA disagreed with Dr. Cruz's assessment that schizophreniform disorder is categorically not
work-related because in at least two cases the Court allowed compensation for such disorder. It
also noted that the opinion of Dr. Cruz was nothing more than a "cryptic comment" which failed
to elaborate on how he arrived at his finding. The CA subsequently denied LNCI's motion for
reconsideration.
Hence, this petition for review.

Issues: Whether or not Obrero’s illness is work-related?

Ruling: Yes, OEA-SEC defines a work-related injury as "injury(ies) resulting in disability or
death arising out of and in the course of employment," and a work-related illness as "any
sickness resulting to disability or death as a result of an occupational disease listed under Section
32-A of this Contract with the conditions set therein satisfied."
For illnesses not mentioned under Section 32, the POEA-SEC creates a disputable presumption
in favor of the seafarer that these illnesses are work-related. The claimant-seafarer must still
prove by substantial evidence that his work conditions caused or at least increased the risk of
contracting the disease because awards of compensation cannot rest entirely on bare assertions
and presumptions. In order to establish compensability of a non-occupational disease, reasonable
proof of work-connection is sufficient—direct causal relation is not required. Thus, probability,
not the ultimate degree of certainty, is the test of proof in compensation proceedings.

Here, we agree with the CA and NLRC that Obrero has successfully proved that his illness was
work-related. Taken together, Dr. Salceda's diagnosis and Obrero's previous unremarkable stints
as a seaman reasonably support the conclusion that his work environment increased his risk of
developing or triggering schizophrenia. Obrero's demotion to messman—which is inherently
work-related and was conveniently ignored by LNCI in its pleadings—appears to be the event
that precipitated his mental disorder. Prior to this, he was able to accomplish his tasks without
any issue as an ordinary seaman (OS) from January 20, 2000 to February 3, 2001, and as an able
seaman (AB) from August 12, 2001 to June 27, 2002 and May 14, 2003 to June 11, 2003. It was
only after he was deployed as messman onboard M/V Brilliant Arc that he began experiencing
sleep interruptions and started having persecutory delusions, ultimately leading to the erratic
behavior detailed in the Master Report. Applying the standard of substantial evidence, i.e., that
amount of relevant evidence which a reasonable mind might accept as adequate to support a
conclusion, we find Dr. Salceda's explanation—that Obrero's prolonged stint at sea eventually
taxed his coping abilities which rendered him incapable of handling the stress of being
demoted—to be reasonable and highly probable. Stressful life events are identified as one of the
risk factors in most etiological models of schizophrenia, with many studies reporting an excess
of stressful life events in the few weeks prior to the onset of psychotic and affective disorders.
Therefore, it is possible that work-related stress may precipitate the disorder—contrary to the
statement of Dr. Cruz.
Courts are not bound by the assessment of the company-designated physician and the seafarer is
given the freedom of choosing his own medical specialist. The Court is not precluded from
awarding disability benefits on the basis of the medical opinion of the seafarer's physician.
Indeed, to create a sweeping rule that the findings of the company-designated physicians are
conclusive would do great injustice to the constitutional protection afforded to laborers.

WHEREFORE, the petition is DENIED. The Decision dated October 13, 2009 and
Resolution dated July 2, 2010 of the Court of Appeals in CA-G.R. SP No. 108214 are
AFFIRMED.
 117. ELMER A. APINES, Petitioner, v. ELBURG SHIPMANAGEMENT PHILIPPINES,
INC., AND/OR DANILO F. VENIDA, Respondents
G.R. No. 202114, November 09, 2016 REYES, J.

FACTS:
On September 11, 2007, Apines boarded ETAL's ship, M/V Bandar TBN Trans Gulf, for an
eight-month engagement as bosun.

Apines claimed that sometime in the third week of September, a British surveyor was on board
the ship to inspect the cargo hold. Captain Castañares and Chief Mate Llevares instructed Apines
to put an apparatus on the top tank of the cargo hold to check for possible leaks – he promptly
complied. On his way up from the cargo hold, he accidentally stepped on scattered iron ore
pellets causing his left knee to strongly hit the steel railings of the ladder, and for him to slip and
fall.

According to Apines, despite a sprain and swollen ankle, he was able to stand up and walk.
When the pain eventually became intolerable, Apines informed Capt. Castañares about his
condition. Apines was given analgesics. However, his request to be brought to the nearest port
for medical attention remained unheeded since the ship was still on voyage. Further, whenever
the ship reached a port, Apines was assigned as a crane driver.

Apines consulted an orthopedic surgeon named Dr. George when the ship reached the Port of
Bahrain. The medical report stated the symptoms as pain on the left knee but was concluded to
fit to work. Apined then again requested for a medical check up when they reached Jubail,
Saudia Arabia. Dr. Hussain then issued a medical report that Apines was fit to work but need to
"rest for couple of days".

Apines claimed that the pain in the left knee worsened so he requested for repatriation.

On Capt. Castañares' e-mail sent to ESPI it was stated that for a week, Apines had been unable to
work due to severe pain on his left knee. Per request, Apines had a medical check up and the
doctor diagnosed Apines to be suffering from arthritis. Apines insisted that it was not merely
arthritis, but the doctor was not able to determine any other ailment. Consequently, the doctor
assessed Apines to be fit for sea duty. However, due to the worsening pain and inability to work,
Apines requested to be promptly sent home to be able to consult with a doctor on his own
account. Thus, Capt. Castañares sought Apines' repatriation to be arranged even if there was still
no reliever to take the latter's place.

ESPI, however, denied that Apines had an accidental injury while on board the ship.

Apines disembarked from the ship on February 7, 2008. The next day, Apines reported to ESPI's
office. Teresa Mendoza conducted an exit interview. The Crew De-briefing Checklist signed by
Apines also indicated that his disembarkation was "for medical grounds (on his own request).
ESPI claimed that it referred Apines to a company-designated doctor, but the latter consulted his
own physicians instead.
On the other hand, Apines alleged that when he reported to ESPI's office right after his
repatriation, Mendoza and Angela Padre informed him that since he was declared fit to work, no
assistance can be offered to him. Moreover, his unpaid salaries shall be offset against the cost of
his airfare ticket in returning to Manila. Apines, explained that he sought repatriation to undergo
Magnetic Resonance Imaging (MRI) and obtain medical treatment pursuant to the
recommendations of the doctors in Bahrain and Saudi Arabia. ESPI, however, stood its ground in
denying to provide Apines with assistance.

Apines felt aggrieved by ESPI's lack of support, but his primary concern then was to obtain
prompt medical attention. Upon his inquiry, ESPI referred him to Metropolitan Hospital, which
at that time had no MRI machine. Apines thereafter proceeded to Chinese General Hospital
where he underwent MRI scanning under the supervision of Dr. Celestina L. Cejoco.

Apines also consulted Dr. Leh an orthopedic surgeon in CGH. The Medical Certificate issued by
Dr. Leh indicated that Apines had "degenerative osteoarthritis" and "medial meniscal tear" in
his left knee. Dr. Leh assessed that Apines "may return to work after 30 [to] 45 days," but "needs
continued medical treatment for osteoarthritis."

On June 6, 2008, Apines filed before the National Labor Relations Commission (NLRC) a
Complain for total and permanent disability benefits, reimbursement of medical, hospital and
transportation expenses, moral and exemplary damages, sickness allowance, attorney's fees and
legal interest.

Several conferences were held, but the parties failed to arrive at any settlement.

Labor Arbiter (LA) dismissed Apines' complaint citing, among other reasons, that it is not
enough for Apines to allege and prove that his injury was work-related he must likewise allege
and prove compliance with the mandatory reporting requirement.

NLRC reversed the decision, and entitled Apines to the total and permanent disability benefits
and sickness allowance.

Court of Appeals reversed the NLRC explaining that Apines was unable to establish his
allegation that he suffered an injury on board the vessel by reason of an accident.

ISSUE:
Whether the CA erred in denying to grant Apines total and permanent disability benefits despite
his clear inability to resume performance of active sea duties within 120 days from repatriation

RULING:
Yes. Apines is entitled to the total and permanent disability benefits.

While no record of the injury was reflected in the ship's logbook and other documents, there are
substantial evidence to support the conclusion that Apines, in fact, figured in an accident while
he was on board. First was the medical report of Dr. George and Dr. Hussain indicating that
Apines had pain and swelling for months prior to the consultation. Second was his repatriation
where in his exit interview he claimed that he slipped on board and hit his knee on the steel
railings. Third was his discharge summary from the hospital for the meniscectomy, wherein Dr.
Dizon confirmed the prior diagnosis of both Dr. George and Dr. Hussain.

In the herein assailed decision, the CA declared that Apines "conveniently subjected himself to
medical assistance of his own choice solely because Metropolitan Hospital was unable to
conduct the MRI." The CA also stated that "there is nothing on record to show that [Apines]
intended to submit himself to a medical evaluation by the company-designated physician."

Indeed, the records do not show that Apines consulted a company-designated doctor either for a
post-employment medical assessment or treatment. However, there is likewise no substantial
evidence conclusively, proving that Apines was in fact referred to a company-designated
physician. Besides, after suffering for about five months with an untreated injury on board
ETAL's ship, securing the services of CGH for the MRI scanning was not a matter of
convenience, but of necessity. Apines merely wanted to obtain prompt medical attention, but was
repeatedly given the runaround by the respondents even after repatriation.

Admittedly, Apines failed to offer documentary proofs of the respondents' denial to assist him in
his medical needs. However, Apines cannot be faulted for the said lack since the custody of the
documents, if there were any at all, pertains more to the respondents. It would be illogical to
impose upon Apines the burden to prove with documentary evidence the negative fact that he
was not referred to a company-designated doctor.

In Interorient Maritime Enterprises, Inc., et al. v. Remo, the Court emphatically ruled that "the
absence of a post-employment medical examination cannot be used to defeat respondent's claim
since the failure to subject the seafarer to this requirement was not due to the seafarer's fault but
to the inadvertence or deliberate refusal of petitioners."

The Supreme Court finds that Apines' failure to comply with the 72-hour reportorial requirement
for the conduct of a post-employment medical examination under the 2nd paragraph of Section
20(B)(3) of the 2000 POEA-SEC cannot result in the automatic forfeiture of his disability
benefits.

Island Overseas Transport Corporation/Pine Crest Shipping Corporation/Capt. Emmanuel L.

Regio v. Armando M. Beja, on the other hand, is instructive anent when a seafarer may be
exempt from compliance with the procedure laid down in the 3rd paragraph of Section 20(B)(3)
on the requirement of consultation with a third doctor: "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 had nothing to contest and the law steps in to conclusively characterize his
disability as total and permanent.

Having sustained an accidental injury on board the vessel, Apines is entitled to disability
benefits.
At the outset, it bears noting that Apines filed his Complaint before the NLRC on June 6, 2008,
121 days from his repatriation. Before that date, no disability rating of any kind had been issued
by the respondents.

In Beja, the Court clarified that [I]f the maritime compensation complaint was filed prior to
October 6, 2008, the rule on the 120-day period, during which the disability assessment should
have been made in accordance with Crystal Shipping, Inc. v. Natividad, that is, the doctrine then
prevailing before the promulgation of Vergara on October 6, 2008, stands; if, on the other hand,
the complaint was filed from October 6, 2008 onwards, the 240-day rule applies.

Apines filed his Complaint on June 6, 2008. Hence, the 120-day period rule stands. Due to
ESPI's failure to issue a disability rating within the 120-day period, the presumption of Apines'
entitlement to total and permanent disability benefits arose.

In Apines' case, his Medial Meniscus Tear was left undiagnosed and untreated for almost five
months from the time he had sustained an accidental injury. It took another five months from his
repatriation before he underwent arthroscopic meniscectomy. Apines cannot be faulted for the
delay. The Court takes judicial notice of the long queues in governmental hospitals. The Court
also finds it logical that without any financial assistance for medical expenses lent by ESPI, it
took Apines sometime to save up for what the surgical procedure required.

The possibility that Apines' Medial Meniscal Tear triggered the onset of osteoarthritis cannot be
discounted. Under Section 32-A(16)(b) of the 2000 POEA-SEC, for osteoarthritis to be
considered as an occupational disease, the same must have been contracted in any occupation
involving minor or major injuries to the joint. Apines' case falls within the qualification.

Due to ESPI's failure or refusal to issue a medical rating within 120 days from repatriation, in
legal contemplation, Apines' disability is conclusively presumed to be total and permanent.
Besides, in the Court's mind, it is enough that Apines obtained medical certificates and copies of
hospital records whenever he consulted with his doctors and underwent medical procedures.

In disability compensation claims, "what is important is that [the seafarer] was unable to
perform his customary workfor more than 120 days which constitutes permanent total
disability," since "an award of a total and permanent disability benefit would be germane to the
purpose of the benefit, which is to help the employee in making ends meet at the time when he is
unable to work."

In sum, the Court finds favor in Apines' claims for total and permanent disability benefits,
sickness allowance and attorney's fees. The NLRC's judgment award to Apines in the total
amount of US$69,080.00, which the respondents' had conditionally satisfied, is in order.
 120. STATUS MARITIME CORPORATION, AND ADMIBROS SHIPMANAGEMENT
CO., LTD. v. RODRIGO C. DOCTOLERO
G.R. No. 198968, January 18, 2017, Third Division, BERSAMIN, J.

While the fact that Doctolero suffered the disability during the term of his contract was
undisputed, it was evident that he had filed his complaint for disability benefits before the
company-designated physician could determine the nature and extent of his disability, or before
even the lapse of the initial 120-day period. With Doctolero still undergoing further tests, the
company-designated physician had no occasion to determine the nature and extent of his
disability upon which to base Doctolero's "fit to work" certification or disability grading.

Facts:

On July 28, 2006, Status Maritime, acting for and in behalf of Admibros as its principal, hired
Doctolero as Chief Officer on board the vessel M/V Dimitris Manios II for a period of nine
months with a basic monthly salary of US$1,250.00. Doctolero underwent the. required. Pre-
Employment Medical Examination (PEME) prior to his embarkation, and was declared "fit to
work." He boarded the vessel in August 2006.

On October 28, 2006, while M/V Dimitris Manios II was in Mexico, Doctolero experienced
chest and abdominal pains. He was brought to a medical clinic in Vera Cruz, Mexico. When no
clear diagnosis could be made, he resumed work on board the vessel. In the evening of the same
day, however, he was brought to Clinic San Luis, also in Mexico, because he again complained
of abdominal pains. He was then diagnosed to be suffering from "Esophago-Gastritis-
Duodenitis." The attending physician, Dr. Jorge Hernandez Bustos, recommended his
repatriation.

On October 29, 2006, Doctolero again experienced difficulty of breathing while waiting for his
return flight schedule. He informed the ship's agent of his condition and requested assistance, but
the latter extended no assistance to him. Thus, he, by himself, went to the Hospitales Nacionales,
where he was admitted. He paid the hospital bills amounting to MXN$7,032.17 on his
own. Upon discharge, he sought assistance from the Philippine Embassy until his repatriation to
the Philippines in the second week of November 2006.

On November 16, 2006, the company-designated physician evaluated Doctolero's condition and
found normal upper gastro-intestinal endoscopy and negative H. pylori test.6 Doctolero was
recommended for several other tests that were, however, not administered.

On January 22, 2007, on account of the illness suffered while working on board the M/V
Dimitris Manios II, Doctolero filed in the NLRC his complaint demanding payment of total and
permanent disability benefits, reimbursement of medical and hospital expenses, sickwage
allowance, moral and exemplary damages, and legal interest on his claims.

Issue:
Whether or not Doctolero is entitled to claim permanent and total disability benefits from the
petitioners.

Ruling:

NO. Permanent and total disability is defined m Article 1 98(c)(1) of the Labor Code, to wit:

xxxx
(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 for in the Rules.

The relevant rule is Section 2, Rule X, of the Rules and Regulations implementing Book
IV of the Labor Code, which states:

Period of entitlement. - (a) The income benefit shall be paid beginning the Jirst day of
such disability. If caused by an injury or sickness it shall not be paid longer than 120
consecutive clays 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 anytime 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.

These provisions have to be read together with the POEA-SEC, whose Section 20(3)
states:

Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness
allowance equivalent to his basic wage until he is declared fit to work or the degree of
permanent disability has been assessed by the company-designated physician but in no
case shall this period exceed one hundred twenty (120) days.

Applying the aforementioned provisions, we find the filing of the respondent's claim to be
premature.

In order for a seafarer's claim for total and permanent disability benefits to prosper, any of the
following conditions should be present:

(a) The company-designated physician failed to issue a declaration as to his fitness to engage
in sea duty or disability even after the lapse of the 120-day period and there is no
indication that further medical treatment would address his temporary total disability,
hence, justify an extension of the period to 240 days;
(b) 240 days had lapsed without any certification issued by the company designated
physician;

(c) The company-designated physician declared that he is fit for sea duty within the 120-day
or 240-day period, as the case may be, but his physician of choice and the doctor chosen
under Section 20-8(3) of the POEA-SEC are of a contrary opinion;

(d) The company-designated physician acknowledged that he is partially permanently

disabled but other doctors who he consulted, on his own and jointly with his employer,
believed that his disability is not only permanent but total as well;

(e) The company-designated physician recognized that he is totally and permanently

disabled but there is a dispute on the disability grading;

(f) The company-designated physician determined that his medical condition is not
compensable or work-related under the POEA-SEC but his doctor-of-choice and the third
doctor selected under Section 20-B(3) of the POEA-SEC found otherwise and declared
him unfit to work;

(g) The company-designated physician declared him totally and permanently disabled but the
employer refuses to pay him the corresponding benefits; and

(h) The company-designated physician declared him partially and permanently disabled
within the 120-day or 240-day period but he remains incapacitated to perform his usual
sea duties after the lapse of said periods.16

While the fact that Doctolero suffered the disability during the term of his contract was
undisputed, it was evident that he had filed his complaint for disability benefits before the
company-designated physician could determine the nature and extent of his disability, or before
even the lapse of the initial 120-day period. With Doctolero still undergoing further tests, the
company-designated physician had no occasion to determine the nature and extent of his
disability upon which to base Doctolero's "fit to work" certification or disability grading.
Consequently, the petitioners correctly argued that Doctolero had no cause of action for
disability pay and sickness allowance at the time of the filing of his complaint.
 127. MAUNLAD TRANS INC., CARNIVAL CRUISE LINES AND/OR AMADO
CASTRO, vs. GABRIEL ISIDRO G.R. No. 222699, July 24, 2017 (J. Tijam)
FACTS:
Petitioner Maunlad Trans Inc., for and in behalf of its foreign principal, Carnival Cruise
Lines, hired respondent Gabriel Isidro as bartender with a basic salary of US$350, exclusive of
overtime and other benefits, for a period of 6 months. On July 27, 2009, respondent boarded the
vessel "M/S Miracle".
Sometime in November 2009, respondent figured in an accident while lifting heavy food
provisions. When his right knee became swollen and he experienced pain, respondent reported
his situation to the ship's physician for medical examination. Respondent's condition was
diagnosed as "Right Knee Synovitis, Meniscal, Chondromalacia". He was given medication and
was advised by the physician that he can continue working. He was then referred to the South
Miami Hospital for further medication; however, the medication administered to him proved
ineffective at improving his condition. Thus, on December 14, 2009, he was referred to the
Jackson North Medical Center where he underwent a series of examinations and treatment. After
his treatment, respondent went back to work. However, respondent began experiencing skin
rashes on his right leg which later on spread to his left lower extremity, and to both his upper
extremity and trunk by the last week of January 2010. These skin eruptions were diagnosed by
the ship's physician as "psoriasis". Respondent was given medications and was advised to get
dermatologic consultation upon completion of his contract.
On February 12,2010, he was ordered repatriated to the Philippines. Respondent arrived
on February 16, 2010.Three days after his repatriation, respondent was admitted as an out-patient
at the Metropolitan Medical Center and was attended to by the company-designated doctor, Dr.
Cruz-Balbon. On his initial evaluation respondent's knee synovitis was not mentioned in his past
medical history. Respondent was instead referred to a dermatologist who opined that respondent
has "psoriaris vulgaris" based on clinical history and physical examination. Respondent was
advised to come back for re-evaluation.
During his follow-up examination, respondent's psoriatic lesions on both lower
extremities were noted to still be erythematous. He was advised to continue his medications and
to come back on April 7, 2010. Still, there was no mention that respondent complained of a knee
injury.
Respondent was referred to a cardiologist for evaluation of his blood pressure elevations.
The test results, however, showed to be normal. The respondent was again seen by a
dermatologist, the latter recommended a temporary discontinuation of his medication and a
repeat of his biopsy. Respondent was advised to come back for a repeat of laboratory tests and
re-evaluation. Again, during these examinations, there was no mention that respondent
complained of his knee injury.
On June 28, 2010, respondent was reported to have been cleared cardiac wise and the
psoriatic lesions on both legs have decreased in size and redness. On July 20, 2010, or 121 days
from his initial examination on February 19, 2010, less erythema was noted on respondent's
psoriatic lesions on his right leg.
While he was still undergoing medical treatment by the company¬-designated doctor,
respondent sought the opinion of a private doctor, Dr. Jacinto of the Sta. Teresita General
Hospital. Dr. Jacinto assessed him to be suffering from "psoriasis, chondromalacia (medial
femoral candy/tibial plateaus) right, grade II irifury medial collateral ligament right knee, sprain,
medial head of gastrocnemus with hemarthrosus." Respondent was advised to undergo MRI and
surgery. Dr. Jacinto also found respondent unfit to go back to work. For these reasons,
respondent filed a complaint in July 2010 before the Labor Arbiter for full disability benefits.
Because respondent claimed full disability benefits by reason of his knee injury and
psoriasis, petitioners allegedly offered to conduct a laboratory examination on the respondent to
verify his knee injury but the latter did not accede.
On October 11, 2010, or 226 days after the initial referral to the company-designated
doctor on February 19, 2010, the attending dermatologist, Dr. Mary Belly Gan-Chao, issued a
disability grading of "Grade 12 for slight residual or disorder".
LA: The Labor Arbiter (LA) issued his Decision finding respondent to be entitled to
compensation equivalent to Grade 12 disability grading, or in the amount of US$5,225 and 10%
attorney's fees.
NLRC: Consequently, respondent appealed to the NLRC which granted the appeal and
modified the LA's award by granting full disability compensation benefits. Respondents are
ordered to pay complainant the amount of US$60,000.00 and attorney's fees in the amount of
US$6,000.00.
CA: Upon denial of petitioners' motion for reconsideration, the case was elevated to the
CA on certiorari. The CA denied the petition for certiorari. The CA held that respondent's knee
injury was made known to petitioners, as respondent was in fact treated for such ailment while
on board the vessel. The CA further noted that Dr. Cruz-Balbon was cognizant of respondent's
knee injury since the latter noted the existing skin rashes on his right leg that spread to his lower
and upper extremities and on his trunk. Nevertheless, the CA held that it is not the injury per se
which should be compensated but the respondent's incapacity to work. The CA held that
respondent is permanently and totally disabled because his impairment or loss of earning
capacity exceeded the maximum of 240 days. The CA disregarded the issuance of a disability
grading by the company--designated physician on the 223rd day for having been haphazardly
issued without the benefit of a thorough physical examination.
Petitioners' motion for reconsideration was similarly denied by the CA. Hence, it resorted
to the instant petition.
ISSUE:
Whether or not the respondent is entitled to full and permanent disability benefits.
RULING:
No. The Court ruled in the negative and, instead find that respondent in this case is
entitled only to partial disability compensation equivalent to Grade 12 as certified to by the
company-designated physician.
The respondent failed to discharge his burden of proving entitlement to full and
permanent disability benefits for his alleged knee injury. In a case of claims for disability
benefits, the onus probandi falls on the seafarer as claimant to establish his claim with the right
quantum of evidence; and as such, it cannot rest on mere speculations, presumptions or
conjectures.
Petitioners cannot be held liable for the alleged knee injury suffered by respondent. While
the facts, as found by the CA and the NLRC, point to the existence of a knee injury which
respondent suffered in November 2009, during the term of his employment contract and while on
board the vessel, such knee injury was not the ailment complained of by respondent upon
repatriation to the Philippines and is, likewise, not the illness for which he was given medical
treatment. In fact, upon termination of his six-month contract, respondent was advised to consult
a dermatologist for his skin eruptions which he started experiencing in December 2009 and
which worsened by the last week of January 2010.
That respondent did not complain of, and was not treated for, the alleged knee injury is
evident from the medical reports submitted by the company-designated physician detailing the
progress of respondent's skin condition. The only instance when respondent's alleged knee injury
again surfaced after repatriation was when respondent consulted his doctor of choice, Dr. Jacinto.
But even then, the Court cannot lend credence to the certification issued by Dr. Jacinto in the
manner and faith accorded thereto by the CA. For one, Dr. Jacinto examined respondent only
once and only after four months have passed from his repatriation. For another, despite the
alleged recommendation that respondent undergo an MRI and surgery, the record does not show
that said procedures were ever conducted on respondent.
The respondent is entitled to a disability grading of 12 as certified to by the company-
designated physician for his psoriasis. Here, the findings of the company¬ designated doctor,
together with a dermatologist, who periodically treated respondent for months and monitored his
condition, deserve greater evidentiary weight than the single medical report of respondent's
doctor of choice.
Despite the foregoing, the CA treated respondent's ailment as one rendering him
permanently and totally disabled because the disability grading of the company-designated
physician was released only on the 223rd day upon repatriation. Such reasoning is an unjustified
departure from the application of the 120-day and the maximum 240-day rule found in the
implementing rules of the Labor Code, as amended and as explained in the seminal case of
Vergara v. Hammonia Maritime Services, Inc. Since Vergara was promulgated in 2008 and the
complaint a quo was filed by respondent in 2010, the maximum 240-day rule applies if the
extension is due to the fact that the seaman required further medical attention.
In this case, respondent's medical treatment lasted more than 120 days but less than 240
days, after which the company-designated doctor gave respondent a final disability grading of
Grade 12 under the POEA schedule of disabilities. Clearly, before the maximum 240-day
medical treatment period expired, respondent was issued a final disability Grade 12 which is
merely permanent and partial disability, since under Section 32 of the POEA-SEC, only those
classified under Grade 1 are considered permanent and total disability. Also, We do not agree
with the CA's observation that said disability grading was haphazardly issued. As noted, the
disability grading was issued well-within the maximum period allowed and only after a period
and thorough examination of the respondent. Given this, the summary disregard by the CA of the
grading issued by the company¬-designated physician within the maximum 240-day period is
obviously not in accord with the law and jurisprudence.
Finally, the Court find merit in the petitioners' contention that respondent is not entitled
to attorney's fees in the absence of bad faith on petitioners' part. All along, petitioners offered the
compensation equivalent to a disability grading of 12 under the POEA-SEC and it was
respondent who unjustifiably refused to accept the same. Lacking bad faith on petitioners' part,
the award of attorney's fee is unwarranted.
WHEREFORE, the petition is GRANTED. The Decision dated October 15, 2015 and
Resolution dated January 22, 2016 of the Court of Appeals in CA-G.R. SP No. 122148 which
affirmed the ruling of the National Labor Relations Commission finding petitioners liable to pay
permanent and total disability benefits in the amount of US$60,000 and 10% attorney's fee in
favor of respondent Gabriel Isidro are REVERSED and SET ASIDE.
 Petitioners Maunlad Trans Inc., and Carnival Cruise Lines are ordered to jointly and
severally pay respondent Gabriel Isidro the amount of US$5,225 or its equivalent amount in
Philippine currency at the time of payment, representing permanent and partial disability
benefits.
 129. GRIEG PHILIPPINES, INC., GRIEG SHIPPING GROUP AS, and/or MANUEL F.
ORTIZ, Petitioners vs. MICHAEL JOHN M. GONZALES, Respondent

G.R. No. 228296 July 26, 2017 LEONEN, J.:

FACTS:

On April 20, 2013, Gonzales was deployed to the general cargo vessel Star Florida after he was
re-hired for a nine (9)-month contract - his third contract with Grieg. Gonzales' employment
contract was covered by the Associated Marine Officers' and Seaman's Union of the Philippines
Collective Bargaining Agreement. Before being deployed, Gonzales underwent Pre-Employment
Medical Examination and was certified to be fit for sea duty.

In August 2013, while aboard Star Florida, Gonzales was advised to take paracetamol and to rest
after he experienced "shortness of breath, pain in his left leg, fatigue, fever and headaches." A
week later, Gonzales sought medical attention in South Korea after he experienced the same
symptoms. With his medical tests showing normal results, he was given medications and sent
back to work in Star Florida. The following month, his past symptoms returned with the added
symptom of black tarry stools. Gonzales was confined in a hospital in Indonesia where he was
initially diagnosed with "pancytopenia suspect a plastic anemia." Gonzales was declared unfit for
sea duty and was repatriated.

Gonzales was admitted at the Metropolitan Medical Center after his medical repatriation. The
company physicians diagnosed him with acute promyelocytic leukemia. They opined that
Gonzales' leukemia was not work-related; although, for humanitarian reasons, Grieg continued to
pay for his treatment. Grieg claimed that Gonzales suddenly stopped consulting the company
physicians. Gonzales denied this, stating that he informed Grieg that he can't attend the
scheduled appointment on April 28, 2014 because he was still raising money to travel from his
hometown to Manila.

Gonzales claimed that his request to reschedule his appointment was granted, and thus, was
surprised with the notification that Grieg had discontinued his treatment. Gonzales sought a
second opinion from an independent physician, Dr. Emmanuel Trinidad, who certified that his
leukemia was work-related.

After his disability claimed were refused, Gonzales filed a complaint against Grieg before the
Labor Arbiter - who found that Gonzales' leukemia was work-related. NLRC affirmed that Labor
Arbiter's decision.

Court of Appeals likewise upheld the NLRC decision stating that "ith the inclusion of leukemia
among the occupational diseases in Section 32-A of the Philippine Overseas Employment
Administration-Standard Employment Contract, the burden of proving that it was work-related
was no longer with the employee. Instead, the employer must prove otherwise-that Gonzales'
leukemia was not work-related. The Court of Appeals opined that Grieg failed in this regard"

ISSUE:
Whether the NLRC erred in awarding Gonzales' claim for disability benefits and attorney's fees

RULING:
No.

The 2000 Philippine Overseas Employment Administration-Standard Employment Contract

defines work-related illness as "any sickness resulting to disability or death as a result of an
occupational disease listed under Section 32-A of this Contract with the conditions set therein
satisfied."

To substantiate his claim that he contracted acute promyelocytic leukemia, a form of acute
myeloid leukemia,due to his job, Gonzales has provided his functions as an Ordinary Seaman
aboard Star Florida. Among others, his tasks included removing rust accumulations and
refinishing affected areas of the ship with chemicals and paint to retard the oxidation process.
This meant that he was frequently exposed to harmful chemicals and cleaning aids which may
have contained benzene.Furthermore, Star Florida transported chemicals, which could have also
contributed to Gonzales' leukemia

Gonzales likewise has presented the results of his Molecular Cytogenetic Report, which showed
that his leukemia was not genetic in nature.

When it comes to compensability of illnesses, it is not necessary that the nature of the
employment is the sole reason for the seafarer's illness. Magsaysay Maritime Services v. Lauret
reiterated the rule on compensability of illnesses:

Settled is the rule that for illness to be compensable, it is not necessary that the nature of
the employment be the sole and only reason for the illness suffered by the seafarer. It is
sufficient that there is a reasonable linkage between the disease suffered by the employee
and his work to lead a rational mind to conclude that his work may have contributed to
the establishment or, at the very least, aggravation of any pre-existing condition he might
have had.

Gonzales was able to satisfy the conditions under Section 32-A and establish a reasonable
linkage between his job as an Ordinary Seaman and his leukemia. He has submitted his official
job description,40 which involved constant exposure to chemicals. It is also not disputed that he
contracted leukemia only while he was onboard Star Florida since he was certified to be fit for
sea duty prior to boarding and his leukemia was not genetic in nature.

Both labor tribunals found sufficient evidence to support Gonzales' claim of work-related illness.
 132. SHARPE SEA PERSONNEL, INC., MONTE CARLO SHIPPING,
and MOISES R. FLOREM JR. v. MACARIO MABUHAY JR.
G.R. No. 206113, November 6, 2017, Third Division, LEONEN, J.

The failure of company-designated physicians to arrive at a final and definite assessment of a

seafarer’s fitness to work or level of disability within the prescribed periods means that the
seafarer shall be deemed to be totally and pe1manently disabled.

Facts:

Macario G. Mabunay entered into a contract of employment with Sharp Sea on March 23, 2009.
He was hired as an oiler aboard the vessel M/V Larissa for a period of 9 months. Mabunay
boarded the vessel on April 14, 2009. The following day, he met an accident while cleaning the
engine room. He has since suffered pain and numbness in his back. On April 23, 2009, he was
allowed to have a medical check-up in Nanjing, China where his attending physician declared
him unfit to work. Mabunay was medically repatriated on April 29, 2009.

Sharpe Sea then asked Mabunay to report to Dr. Cruz, the company-designated physician, for his
treatment. He underwent a series of procedures concluding with his discharge from the hospital
December 5, 2009. Mabunay then filed, on January 21, 2010, a case against Sharpe Sea for
reimbursement of medical expenses, payment of total disability benefits, and attorney’s fees.

He also consulted two other orthopedics who both diagnosed him as not fit to work. He
submitted their findings to support his claim for total disability benefits. Sharpe Sea, however,
claimed that Mabunay was only assessed with a disability rating of Grade 8, but presented no
evidence.

The Labor Arbiter ruled in favor of Mabunay and and rejected Sharpe Sea’s claim that he was
only entitled to a disability rating of Grade8 as it was not supported by evidence. The NLRC, on
appeal, affirmed the ruling of the Labor Arbiter. On MR, however, the NLRC, modified its
decision on the basis of a medical report by Dr. Cruz dated August 18, 2009, which was only
submitted on MR, supporting Sharpe Sea’s claim that Mabunay was only entitled to a disability
rating of Grade 8. Mabunay filed a Petition for Certiorari with the CA, which held that Sharpe
Sea failed to adequately explain the belated submission of the medical report.

Issue:

Whether or not Mabunay is entitled to total and permanent disability benefits.

Ruling:

YES. Mabunay is entitled to total and permanent disability benefits. Sharpe Sea repeatedly
claimed in the proceedings before the Labor Arbiter and the NLRC that Mabunay has a disability
rating of Grade 8 yet failed to produce evidence. Sharpe Sea, however, managed to produce the
medical report which they attached to their MR. There was no explanation on why this piece of
evidence was only submitted after 2 years. Manning and shipping companies are in a better
position in accessing, preserving, and presenting their evidence.

Moreover, the medical report signed by Dr. Cruz was only an interim disability rating. Citing
Magsaysay Maritime Corp vs Cruz, the Court held that a company-designated physician is
expected to issue a definite assessment within a period of 120 or 240 days from medical
repatriation. Interim ratings are not considered as definite assessments as they are only initial
prognoses.

The company-designated physicians failed to issue either a fit-to-work certification or a final

disability rating within the prescribed period. Thus, Mabunay’s disability is deemed total and
permanent.
141. ALFREDO MALLARI MAGAT, Petitioner, v. INTERORIENT MARITIME
ENTERPRISES, INC., INTERORIENT MARITIME ENTERPRISE LIBERIA FOR
DROMON E.N.E. AND JASMIN P. ARBOLEDA, Respondent.

G.R. No. 232892, April 04, 2018 PERALTA, J.

FACTS:
Magat has started work with Interorient Maritime Enterpises, Inc. (Interorient) as an Able
Seaman on board different vessels since March 2007. On May 2011, he was again employed on
board the vessel MT North Star for a period of nine (9) months. He underwent a Pre--
Employment Medical Examination (PEME) as a requisite for his latest employment and was
certified "fit to work," thus, he was deployed on July 1, 2011.

Part of his job was to paint the ship's pump room and due to poor ventilation, he claimed that he
was able to inhale residues and vapors coming from the paint and thinner that he used. As such,
he suffered shortness of breath and chest pains, which he claimed to have reported to the Chief
mate but was just told to rest. When his conditions improved he continued his work until he
completed his contract.

Upon repatriation, he reported immediately to the company and asked for a referral to the
company's physician for a medical examination but was ignored. He was then asked by the
company to execute an Offsigner's Data Slip indicating that he did not experience any illness or
injury during his employment on board and manisfested his willingness to join the vessel again
after 3 months. However due to episodes of chest pains he went to veteran's Memorial Medical
Center for consultation, he was attended by Dr. Casision who advised him to rest and prescribing
certain medication.

After resting and taking the medication, he re-applied with the company and was recommended
for PEME. The result of petitioner's tests revealed that he had the "Hypertension controlled with
maintenance medication; Dilated Cardiomyopathy; R/out ischemic etiology; Renal parenchymal
calcification bilateral; Suggest coronaryangiogram." Magat,was not deployed due to the said
findings.

He filed a complaint for payment of permanent disability benefits and other money claims
against respondent company on September 25, 2013 claiming that as certified by his own
physician, he developed a cardiovascular disease, which is listed as an occupational disease
under Section 32-A of the Philippine Overseas Employment Administration- Standard
Employment Contract (POEA-SEC).

He claimed that his illness was brought about by his poor diet, exposure to harmful chemicals
and stressful work environment on board the vessel. He added that prior to his last employment,
he underwent and passed his PEME without any indication that he was suffering from any heart
disease. He also contended that considering his physician's assessment of Grade 1 disability, he
should be declared totally and permanently incapacitated to resume his duties and thus entitled to
total and permanent disability benefits.
Labor Arbiter ruled in favor of Magat, that his job as able bodied seaman had contributed even in
a small degree to the development of his cardiovascular disease. It was also ruled that the fact
that he signed- off from MT North Star due to "completion of contract" does not bar recovery of
his disability claims considering that he aptly established reasonable causation of his
cardiovascular disease and his work as able bodied seaman.

NLRC upheld LA's decision, but the Court of Appeals reversed it stating that Magat's allegations
do not suffice to discharge the required quantum of proof of compensability.

ISSUE:
Whether Magat's illness is compensable

RULING:
Yes.

The POEA-SEC defines a work-related injury as "injury(ies) resulting in disability or death

arising out of and in the course of employment," and a work-related illness as "any sickness
resulting to disability or death as a result of an occupational disease listed under Section 32-A of
this Contract with the conditions set therein satisfied." For illnesses not mentioned under Section
32, the POEA-SEC creates a disputable presumption in favor of the seafarer that these illnesses
are work-related. Notwithstanding the presumption, the claimant- seafarer must still prove by
substantial evidence that his work conditions caused or at least increased the risk of contracting
the disease.

A careful review of the findings of the NLRC and the CA shows that petitioner was able to meet
the required degree of proof that his illness is compensable as it is work-connected. The findings
of the Labor Arbiter and the NLRC clearly show how petitioner acquired or developed his illness
during the term of his contract.

The work assigned to Magat, poor diet, advanced age, the stressful nature of his employment,
and repeated hiring of his services, would all lead to the conclusion that the work of petitioner as
Able Seaman caused or contributed even to a small degree to the development or aggravation of
his heart disease. In determining whether a disease is compensable, it is enough that there exists
a reasonable work connection. It is sufficient that the hypothesis on which the workmen's claim
is based is probable since probability, not certainty is the touchstone.

The CA also ruled that petitioner failed to submit himself to the mandatory post-employment
medical examination within three (3) days from his arrival in the Philippines and neither was
there any indication that he was physically incapacitated to do so. Magat, on the other hand,
claims that it was the respondents who failed to refer him to a company-designated physician for
medical treatment. It must be remembered, however, that "while the mandatory reporting
requirement obliges the seafarer to be present for the post-employment medical examination,
which must be conducted within three (3) working days upon the seafarer's return, it also poses
the employer the implied obligation to conduct a meaningful and timely examination of the
seafarer."
The absence of a medical assessment issued by the company physician within three days from
the arrival of petitioner would result only to the forfeiture of his sickness allowance and nothing
more. In fact, the law that requires the 3-day mandatory period recognizes the right of a seafarer
to seek a second medical opinion and the prerogative to consult a physician of his choice.
Therefore, the provision should not be construed that it is only the company-designated
physician who could assess the condition and declare the disability of seamen. The provision
does not serve as a limitation but rather a guarantee of protection to overseas workers.