CASE DIGEST : BSM Crew Service Centre Phils., Inc. and Bernhard Schulte Shipmanagement (Cyprus) Ltd. v. Renato Llanita G.R. No. 214578, July 6, 2021 GAERLAN

 

FACTS

Renato Llanita was employed by BSM Crew Service Centre Phils., Inc., acting for Bernhard Schulte Shipmanagement (Cyprus) Ltd., as a seafarer under a Philippine Overseas Employment Administration Standard Employment Contract (POEA-SEC). During the course of his employment aboard the vessel MV Lissy Schulte, Llanita sustained serious injuries after a boiler explosion. He was immediately repatriated to the Philippines for medical treatment and rehabilitation under the care of the company-designated physician.

Upon his arrival, Llanita underwent continuous medical examinations and treatment. Within the period prescribed under the POEA-SEC and the applicable labor rules, the company-designated physician issued a final medical assessment declaring that Llanita suffered a Grade 10 disability for one injury and 50% of Grade 14 disability for another. The physician concluded that although Llanita had sustained permanent impairments, these did not amount to permanent and total disability under the POEA schedule. Llanita, however, consulted his own physician, who opined that he was no longer fit to resume sea duties.

Llanita filed a complaint before the Labor Arbiter seeking permanent and total disability benefits. The Labor Arbiter and later the National Labor Relations Commission (NLRC) ruled that he was entitled only to the disability compensation corresponding to the disability grading issued by the company-designated physician. On certiorari, however, the Court of Appeals (CA) reversed the NLRC and awarded Llanita full permanent and total disability benefits, reasoning that he had remained unable to work for more than 120 days.

BSM and its principal elevated the case to the Supreme Court through a Petition for Review on Certiorari under Rule 45, arguing that the CA disregarded the POEA-SEC and prevailing jurisprudence by automatically treating Llanita's disability as permanent and total merely because he was unable to work for more than 120 days. The Court was thus called upon to interpret the rules governing disability compensation for seafarers under the Labor Code, the POEA Standard Employment Contract, and relevant jurisprudence.

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ISSUE

Whether Llanita was entitled to permanent and total disability benefits despite the company-designated physician's timely assessment that he suffered only a Grade 10 disability and 50% of Grade 14 disability under the POEA Standard Employment Contract.

Whether the Court of Appeals erred in disregarding the findings of the Labor Arbiter and the NLRC and in concluding that Llanita became permanently and totally disabled solely because he was unable to work for more than 120 days.

Whether the disability benefits due a seafarer should be determined by the disability grading under the POEA-SEC or by the mere lapse of the 120-day period from repatriation.

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HELD

The Supreme Court GRANTED the petition and REVERSED the Court of Appeals. It reinstated the rulings of the Labor Arbiter and the NLRC, holding that Llanita was entitled only to the disability compensation corresponding to the disability grades assessed by the company-designated physician. The Court emphasized that under the POEA Standard Employment Contract (POEA-SEC), the company-designated physician has the primary duty to determine the seafarer's medical condition and disability grading, provided the assessment is made within the periods allowed by law. Since the physician issued a final assessment within the allowable period, that assessment controlled the determination of disability benefits.

The Court reiterated the doctrine laid down in Elburg Shipmanagement Phils., Inc. v. Quiogue, Jr., which clarified the 120/240-day rule. The lapse of 120 days does not automatically entitle a seafarer to permanent and total disability benefits. The company-designated physician may extend the treatment period up to 240 days when further medical treatment is justified, provided a final assessment is issued within that period. Permanent and total disability arises only when no valid assessment is issued within the prescribed period or when the final assessment itself declares the disability to be permanent and total. Because Llanita received a timely final assessment, the CA erred in relying solely on the expiration of 120 days.

The Court likewise held that the Court of Appeals improperly overturned the factual findings of the NLRC. Findings of fact of labor tribunals are accorded great respect and finality when supported by substantial evidence. Under Rule 65 of the Rules of Court, the CA may reverse the NLRC only upon a clear showing of grave abuse of discretion. In this case, the NLRC's findings were fully supported by the medical evidence on record, and no grave abuse was shown. Consequently, the CA exceeded the proper scope of judicial review in substituting its own factual findings for those of the labor tribunals.

Accordingly, the Supreme Court reinstated the award of partial disability benefits based on the disability grading under the POEA-SEC. The decision reaffirmed that disability compensation for seafarers is determined by the timely and valid medical assessment of the company-designated physician, subject to the procedures under the POEA-SEC and prevailing jurisprudence. It also clarified that the 120-day rule is not an automatic basis for awarding permanent and total disability benefits, and that the 240-day period may validly apply when further treatment is medically necessary.