In Splash Philippines, Inc. vs. Ronulfo G. Ruizo, the Supreme Court ruled that a seafarer who abandons treatment with a company-designated physician forfeits his right to disability benefits under the POEA-SEC (Philippine Overseas Employment Administration Standard Employment Contract). The Court emphasized that compliance with the POEA-SEC’s medical examination and assessment procedures is crucial for seafarers seeking disability compensation. This decision highlights the importance of adhering to contractual obligations and medical protocols in maritime employment, impacting the rights and responsibilities of both seafarers and employers in disability claims.

When a Seafarer’s Health Journey Hits a Snag: Who Bears the Cost?

The case arose from a complaint filed by Ronulfo Ruizo, a chief cook on the vessel M/V Harutamou, against Splash Philippines, Inc. and its principal, Taiyo Sangyo Trading and Marine Service, Ltd. Ruizo sought disability compensation, damages, and attorney’s fees, claiming he was unable to work due to a kidney ailment he developed while on duty. After being repatriated to the Philippines, he was examined and treated by a company-designated physician, Dr. Nicomedes Cruz. However, Ruizo later consulted his own doctor and filed a complaint without completing the prescribed treatment with the company physician. The central legal question revolved around whether Ruizo’s failure to complete the treatment and obtain a disability assessment from the company-designated physician precluded his claim for disability benefits.

The Labor Arbiter (LA) and the National Labor Relations Commission (NLRC) initially dismissed Ruizo’s complaint, citing his abandonment of medical treatment. The Court of Appeals (CA), however, reversed these rulings, awarding Ruizo permanent total disability compensation based on the 120-day rule and a supposed collective bargaining agreement (CBA). The petitioners then elevated the case to the Supreme Court, arguing that the CA erred in applying the 120-day rule and in recognizing a CBA that was not properly substantiated. The Supreme Court’s analysis hinged on the proper interpretation and application of the POEA-SEC, which governs the employment terms of Filipino seafarers.

Building on this framework, the Supreme Court emphasized that the 120-day rule, often invoked in maritime compensation cases, should not be applied rigidly without considering the specific context of the employment contract and relevant regulations. The Court cited Vergara v. Hammonia Maritime Services, Inc., clarifying that a permanent total disability declaration after the initial 120 days cannot be a general rule for all cases. This necessitates a careful examination of the seafarer’s employment contract, any applicable CBA, and the prevailing Philippine laws and rules. The Supreme Court underscored the significance of Section 20(B)3 of the POEA-SEC, which stipulates that the employer is liable only for the disability assessed by the company-designated physician.

“In every maritime disability compensation claim, it is important to bear in mind that under Section 20(B)3 of the POEA-SEC, in the event a seafarer suffers a work-related injury or illness, the employer is liable only for the resulting disability that has been assessed or evaluated by the company-designated physician. If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the employer and the seafarer whose decision shall be final and binding on both parties.”

The Court also referenced Section 20(B)6 of the POEA-SEC, which addresses compensation in cases of permanent total or partial disability. This provision states that the seafarer shall be compensated according to the schedule of benefits applicable at the time the illness or disease was contracted. Considering these provisions, the Supreme Court found no basis for awarding permanent total disability benefits to Ruizo, as he failed to comply with the required medical assessment procedures outlined in the POEA-SEC. His decision to discontinue treatment with the company-designated physician and consult his own doctor without a final assessment was a critical factor in the Court’s decision.

The Supreme Court further highlighted that while Ruizo underwent initial examination and treatment with Dr. Cruz, he prematurely ended these sessions and missed a crucial medical procedure, extracorporeal shockwave lithotripsy (ESWL), which could have improved his condition. Ruizo’s explanation for not returning for further treatment was deemed inconsistent with the doctor’s report, which indicated that Ruizo did not return for the scheduled procedure. The LA’s observation that Ruizo was aware of the possibility of being declared fit to work after treatment further undermined his claim for disability benefits. This awareness, the LA noted, suggested that Ruizo was attempting to claim disability benefits prematurely, displaying indifference to the treatment process.

“If there was persistence of right kidney stone and a schedule of repeat ultrasound then how can complainant rightfully claim that he is done with the consultation with the company doctor…complainant is aware that there is a possibility that he may be declared fit to work after treatment…disability benefits could not be awarded in the instant case because complainant’s inability to work and persistence of his kidney ailment may be said to be attributable to his own willful refusal to undergo treatment.”

The absence of a disability assessment by Dr. Cruz, due to Ruizo’s non-compliance, was a critical deficiency in his claim. As the Court emphasized in Philippine Hammonia Ship Agency, Inc., etc., et al. v. Eulogio V. Dumadag, compliance with the POEA-SEC procedures is mandatory for seafarers seeking disability benefits. This non-compliance was compounded by Ruizo’s premature filing of the complaint while still undergoing treatment and his subsequent consultation with Dr. Vicaldo without informing the agency or Dr. Cruz. This sequence of events bolstered the conclusion that Ruizo abandoned his treatment and was primarily motivated by obtaining disability benefits, as opposed to genuinely seeking medical recovery.

Moreover, the Supreme Court addressed the compensation system provided by the POEA-SEC, which is often overlooked in maritime compensation cases. Section 32 of the POEA-SEC provides a schedule of disability compensation, in conjunction with Section 20(B)6. The Court noted that the focus on the 120-day rule often overshadows the importance of disability grading, as per Section 32. In this case, Dr. Vicaldo assessed Ruizo with an Impediment Grade VII (41.8%), yet the CA awarded full disability compensation of US$100,000.00 based on a questionable CBA. This underscored the need to seriously observe the schedule of disability compensation under Section 32 of the POEA-SEC, aligning with the Court’s clarification in Crystal Shipping that the POEA-SEC measures disability by gradings, not merely by the number of days.

Finally, the Supreme Court questioned the existence and applicability of the CBA cited by the CA. Ruizo initially submitted only a one-page unsigned copy of the CBA and later provided a complete copy that lacked the employer’s name. Furthermore, the submitted CBA was for the year 2004, which had already expired when Ruizo signed his POEA contract in 2005. The Court concluded that even if the CBA existed, it could not serve as a valid basis for awarding disability benefits to Ruizo, given the procedural deficiencies and his failure to comply with the POEA-SEC requirements. In conclusion, the Supreme Court found merit in the petition, setting aside the CA’s decision and dismissing Ruizo’s complaint for lack of merit.

FAQs

What was the key issue in this case?	The key issue was whether a seafarer who abandoned treatment with a company-designated physician could claim disability benefits under the POEA-SEC. The Court emphasized the importance of following the POEA-SEC guidelines.
What is the 120-day rule in maritime compensation cases?	The 120-day rule refers to the period within which a company-designated physician must assess a seafarer’s disability. However, the Supreme Court clarified that this rule should not be applied rigidly without considering the specific context and the seafarer’s compliance with medical procedures.
What is the role of the company-designated physician under the POEA-SEC?	Under the POEA-SEC, the employer is liable for a seafarer’s disability only after the degree of disability has been established by the company-designated physician. If the seafarer consults another physician, any disagreement must be resolved by a third doctor.
What happens if a seafarer refuses to undergo treatment with the company-designated physician?	If a seafarer refuses to undergo treatment with the company-designated physician, they may forfeit their right to disability benefits. Compliance with medical protocols is essential for a successful claim.
What is the significance of Section 32 of the POEA-SEC?	Section 32 of the POEA-SEC provides a schedule of disability compensation based on disability gradings. The Court highlighted the importance of considering these gradings in determining the appropriate level of compensation.
What evidence is required to prove the existence of a CBA in a disability claim?	To prove the existence of a CBA, a complete and signed copy of the agreement must be presented. The document should clearly identify the employer and be valid during the period of the seafarer’s employment.
How does the POEA-SEC define permanent total disability?	The POEA-SEC measures disability by gradings, and any item in the schedule classified under Grade 1 constitutes total and permanent disability. Other gradings indicate only temporary total disability.
What should a seafarer do if they disagree with the assessment of the company-designated physician?	If a seafarer disagrees with the assessment of the company-designated physician, they should consult their own physician and seek a third, jointly agreed-upon doctor to make a final and binding decision.

The Supreme Court’s decision in this case underscores the critical importance of adhering to the procedures and requirements outlined in the POEA-SEC for seafarers seeking disability benefits. Compliance with medical examination protocols and the completion of treatment plans are essential for a successful claim. The ruling serves as a reminder to both seafarers and employers to fulfill their contractual obligations and follow established guidelines in resolving disability claims.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: SPLASH PHILIPPINES, INC. VS. RONULFO G. RUIZO, G.R. No. 193628, March 19, 2014