CASE DIGEST : ROSELL R. ARGUILLES v. WILHELMSEN SMITH BELL MANNING GR No. 254586, Jul 10, 2023 GAERLAN

FACTS : Petitioner was hired by respondents as an Ordinary Seaman aboard M/V Toronto for a six-month contract after being declared fit for sea duty. While playing basketball with fellow crew members during his free time on board the vessel, he sustained a left ankle injury, later diagnosed as a high-grade Achilles tendon tear, and was medically repatriated to the Philippines. He underwent surgery, rehabilitation, and physical therapy under the care of the company-designated physicians. Claiming that his treatment was discontinued without a final assessment of his condition, petitioner consulted an independent physician who declared him permanently unfit for sea duty. After respondents refused to pay disability benefits, petitioner filed a complaint before the NLRC, asserting that his injury was work-related and that the absence of a final disability assessment within the prescribed period entitled him to permanent and total disability benefits under the parties' Collective Bargaining Agreement (CBA). Respondents countered that the injury was not work-related because it occurred while petitioner was playing basketball during his leisure time and further claimed that the company-designated physician had declared him fit to work. The Labor Arbiter ruled in petitioner's favor and awarded permanent and total disability benefits, damages, and attorney's fees. On appeal, the NLRC initially affirmed petitioner's entitlement to disability compensation but reduced the amount of the award, finding only partial disability. Upon motions for reconsideration, respondents belatedly submitted a medical note allegedly declaring petitioner fit to work, prompting the NLRC to reverse its earlier ruling and dismiss the complaint on the ground that the injury was not work-related. The Court of Appeals affirmed the NLRC's dismissal, holding that petitioner's injury was not compensable, prompting petitioner to elevate the case to the Supreme Court.

ISSUE : WON the NLRC is correct

HELD : The Supreme Court granted the petition. It held that petitioner's injury was work-related and compensable because it occurred during the term of his employment while he was on board the vessel. Recreational activities such as playing basketball are recognized and encouraged under the governing Collective Bargaining Agreement and international standards, making them incidental to a seafarer's employment. Applying the Bunkhouse Rule and the Personal Comfort Doctrine, the Court ruled that injuries sustained during employer-sanctioned recreational activities aboard the vessel remain within the course of employment, absent proof that they resulted from the seafarer's willful or negligent misconduct. The Court further held that respondents failed to issue a valid final medical assessment within the mandatory 120/240-day period, causing petitioner's disability to become permanent and total by operation of law. The purported "fit-to-work" certification was rejected for being belatedly submitted and insufficient as a final medical assessment. Accordingly, the Court reinstated the Labor Arbiter's award of US$90,000.00 as permanent and total disability benefits, imposed 6% annual interest from finality of judgment until full payment, and held respondents, including the corporate officers of the local manning agency, jointly and severally liable.