[2014V718] Remedios Yap vs Rover Maritime Services Corp

[2014V718] REMEDIOS O. YAP, PETITIONER, VS. ROVER MARITIME SERVICES CORPORATION, MR. RUEL BENISANO AND/OR UCO MARINE CONTRACTING W.L.L., RESPONDENTS.


G.R. No. 198342
2014 Aug 13
3rd Division
Labor > Labor Standards > Benefits

D E C I S I O N

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision[1] and Resolution,[2] dated June 6, 2011 and August 23, 2011, respectively, of the Court of Appeals (CA) in CA-G.R. SP No. 114417 which reversed the Decision[3] and Resolution,[4] dated January 29, 2010 and March 25, 2010, respectively, of the National Labor Relations Commission (NLRC) in NLRC LAC No. (OFW-M) 04-000292-08.

The antecedent facts are as follows:

The deceased, Dovee M. Yap, was a seafarer who had been employed by respondents Rover Maritime Services Corporation, its foreign principal, UCO-Marine Contracting W. L. L., and Ruel Benisano, in various capacities under different contracts of employment continuously for a period of ten (10) years.[5] In his last contract with respondents, dated July 15, 2005, he was hired as Third Mate on board vessel UCO XX for a period of one (1) year with a basic monthly salary of Six Hundred Dollars (US$600.00).[6] He boarded the vessel on July 23, 2005.

On July 23, 2006, the last day of Dovee Yap's contract, he met an accident. While inspecting a lifeboat, he slipped and hit his back on the steel lifeboat ladder.[7] He was brought to a hospital in Bahrain and was confined thereat for two (2) weeks.[8]

On August 17, 2006, Dovee Yap was repatriated to the Philippines. On August 19, 2006, he was admitted at the Doctors Medical Center in Iloilo City for three (3) weeks for further treatment. Sometime later, Dovee Yap was again confined at the (Iloilo) Western Visayas Medical Center, with the diagnosis of "squamous cell carcinoma of the lungs with metastasis to the spine and probably the brain."[9]

On July 17, 2007, Dovee Yap filed against respondents a complaint for permanent disability benefits, sick wages, reimbursement of hospital, medical, and doctor's expenses, actual, moral and exemplary damages, and attorney's fees.[10]

On August 19, 2007 or during the pendency of the case, Dovee Yap died of "Multiple Organ Failure Secondary To Pulmonary Squamous Cell CA With Distant Metastasis (Brain and Bone) And Obstructive Pneumonia Secondary To Electrolyte Imbalance Secondary To Gastric Ulcer Secondary To S/P Radio Therapy." His widow, Remedios O. Yap, substituted him as party-complainant and the claim for disability benefits was then converted into a claim for death benefits.[11]

On February 28, 2008, the Labor Arbiter dismissed the Complaint for lack of merit in the following manner:

Be that as it may, it is clear that Dovee M. Yap did not die due to an illness which is the consequence of his slipping on the steel ladder but died of totally different diseases which are diagnosed as Pott's disease/tuberculosis, pneumonia and squamous cell carcinoma, which did not manifest during his employment with the Respondents.

x x x x

It appears in this case that the injury suffered by Dovee M. Yap was not the proximate cause of his death, therefore, not work-related and that the death did not arise during the term of the contract of Dovee M. Yap, but more than one (1) year after.

In order to be compensable, it is not necessary that the death occurred during the effectivity of the contract provided the death was a natural result of an illness or injury that the seafarer incurred while on board the vessel, and during the effectivity of his contract. These circumstances are not obtaining in the instant case, Dovee M. Yap was repatriated on a finished contract and not on medical grounds as there was no recommendation by the doctors in Bahrain who treated him when he slipped on the ladder that he would undergo further treatment due to his fall.[12]

In its Decision[13] dated January 29, 2010, however, the NLRC reversed the Labor Arbiter's Decision and ordered respondents to pay petitioner the death benefits she claimed. According to the NLRC, the accident that Dovee Yap encountered was the proximate cause of his death, to wit:

We agree with the Complainant that the accident of her husband Dovee Yap on July 23, 2006 was the proximate cause of his illness and eventual death. It was not disputed that Yap, prior to his last deployment in July 2005, passed through the required pre-medical examination and was declared fit to work. In his ten years of employment with Respondents, there was no showing that he was afflicted with T.B. or any other illness as he passed all the required pre-medical examinations. We conclude, therefore, that the injury he sustained in the July 23, 2006 accident triggered his pulmonary illness and, therefore, his death should be compensable following the liberal interpretation of the employment contracts that all doubts shall be resolved in favor of labor.[14]

Upon denial by the NLRC of its Motion for Reconsideration, respondents appealed to the CA via Petition for Certiorari alleging that the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in awarding the death benefits to petitioner. On June 6, 2011, the CA reversed the ruling of the NLRC in its Decision,[15] the pertinent portions of which read:

In the instant case, it is undisputed that the death of Dovee Yap occurred when he was no longer in the employ of petitioners. His one-year contract of employment expired on 23 July 2006. Be that as it may, it can also be said that his employment ceased upon his repatriation to the Philippines on 17 August 2006. Consequently, when Dovee Yap died on 19 August 2007, more than a year had already lapsed from the expiration of his contract of employment; thus, it can no longer be said that Dovee Yap was an employee of petitioners. Accordingly, his beneficiaries are not entitled to the death benefits under the Standard Employment Contract for Seafarers.

x x x x

x x x In this case, private respondent failed to adduce substantial evidence that the injury sustained by her deceased husband was the proximate cause of his death. x x x Verily, We find no causal connection between this illness and the accidental slip. Absent a post-medical examination or its equivalent to show that the disease of which Dovee Yap died was contracted during his employment or that his working conditions increased the risk of contracting the aforesaid ailment, the petitioners cannot be made liable for death compensation.

Aggrieved, petitioner filed a Motion for Reconsideration reiterating the argument that Dovee Yap can still be considered "in the employment of the company at the time of his death" pursuant to Article 26.3, in relation to Articles 22 and 23 of their Collective Bargaining Agreement (CBA),[16] which provides:

26.3 For the purpose of this clause, a seafarer shall be regarded as "in the employment of the company" for as long as the provisions of Articles 22 and 23 apply and provided the death is directly attributable to sickness or injury that caused the seafarer's employment to be terminated in accordance with Article 19.1 b).

x x x x

Article 22: Medical Attention

22.1 A seafarer shall be entitled to immediate medical attention when required.

22.2 A seafarer who is hospitalized abroad owing to sickness or injury shall be entitled to medical attention (including hospitalization) at the Company's expense for as long as such attention is required or until the seafarer is repatriated to the port of engagement, whichever is the earlier.

22.3 A seafarer repatriated to their port of engagement, unfit as a result of sickness or injury, shall be entitled to medical attention (including hospitalization) at the Company's expense.

a. In the case of sickness, for up to 130 days after repatriation, subject to the submission of satisfactory medical reports.

b. In the case of injury, for as long as medical attention is required or until a medical determination is made in accordance with clause 25.2 concerning permanent disability.

22.4 Proof of continued entitlement to medical attention shall be by submission of satisfactory medical reports, endorsed.

Article 23: Sick Pay

23.1 When a seafarer is landed at any port because of sickness or injury payment of their basic wages shall continue until they have been repatriated at the Company's expense as specified in Article 20.

23.2 Thereafter the seafarers shall be entitled to sick pay at the rate equivalent to their basic wage while they remain sick up to a maximum of 130 days.

23.3 However, in the event of incapacity due to an accident the basic wages shall be paid until the injured seafarer has been cured or until a medical examination is made in accordance with clause 25.2 concerning permanent disability.

23.4 Proof of continued entitlement to sick pay shall be by submission of satisfactory medical reports, endorsed, where necessary, by a Company-appointed doctor. If a doctor appointed by or on behalf of the seafarer disagrees with the assessment, a third doctor may be nominated jointly between the Company and the Union and the decision of this doctor shall be final and binding on the parties.[17]

The CA, however, rejected this view considering that Dovee Yap's death resulting from cancer of the lungs with metastasis to the spine and brain cannot be said to have been directly attributable to his accident on the ship.[18] In addition, the applicability of Articles 22 and 23 relating to medical attention and sick pay no longer applies since Dovee Yap had already been repatriated at the time of his death.[19]

Hence, the present petition.

Petitioner invokes the following grounds to support its petition:

I.

THE COURT OF APPEALS COMMITTED BLATANT ERROR, GRAVE ABUSE OF DISCRETION AND ARBITRARINESS WHEN IT REVERSED THE DECISION AND FINDINGS OF FACT OF THE NATIONAL LABOR RELATIONS COMMISSION.

II.

THE COURT OF APPEALS COMMITTED BLATANT ERROR, GRAVE ABUSE OF DISCRETION AND ARBITRARINESS WHEN IT DISREGARDED THE CLEAR PROVISIONS OF DOVEE YAP'S COLLECTIVE BARGAINING AGREEMENT (CBA) WHICH CLEARLY PROVIDES THAT HIS DEATH IS COMPENSABLE AS IT IS DIRECTLY ATTRIBUTABLE TO THE INJURY THAT CAUSED HIS EMPLOYMENT TO BE TERMINATED.

III.

THE DECISION OF THE COURT OF APPEALS IS CONTRARY TO THE BENEVOLENT PROVISIONS OF DOVEE YAP'S CBA AND EVIDENCE ADDUCED ON RECORDS, CONSISTENT WITH RELEVANT JURISPRUDENCE PROMULGATED BY THIS HONORABLE COURT.

IV.

PETITIONER WILL SUFFER IRREPARABLE INJUSTICE IF THE DECISION OF THE COURT OF APPEALS WILL NOT BE RECTIFIED BY THIS HONORABLE COURT.

In essence, the issue to be resolved is whether or not the petitioner is entitled to compensation for the death of her husband, Dovee Yap.

We rule in the negative.

The terms and conditions of a seafarer's employment, including claims for death and disability benefits, is a matter governed, not only by medical findings, but by the contract he entered into with his employer and the law which is deemed integrated therein.[20] For as long as the stipulations in the contract are not contrary to law, morals, public order, or public policy, they have the force of law between the parties.[21]

Paragraph 2 of the Contract of Employment between petitioner's husband and respondents states that the terms and conditions of Department of Labor and Employment (DOLE) Order No. 4, Series of 2000, as amended by Philippine Overseas Employment Administration (POEA) Memorandum Circular No. 9, Series of 2000, entitled the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On Board Ocean-Going Vessels (POEA Standard Employment Contract), shall be strictly and faithfully observed.[22] Said issuances provide a set of minimum requirements acceptable to the government for the employment of Filipino seafarers on board ocean-going vessels.[23]

Section 20 (A) of the POEA Standard Employment Contract provides:

SECTION 20. COMPENSATION AND BENEFITS

A. COMPENSATION AND BENEFITS FOR DEATH

1. In the case of work-related death of the seafarer during the term of his contract, the employer shall pay his beneficiaries the Philippine Currency equivalent to the amount of Fifty Thousand US dollars (US$50,000) and an additional amount of Seven Thousand US dollars (US$7,000) to each child under the age of twenty-one (21) but not exceeding four (4) children, at the exchange rate prevailing during the time of payment.

x x x x

4. The other liabilities of the employer when the seafarer dies as a result of work-related injury or illness during the term of employment are as follows:

a. The employer shall pay the deceased's beneficiary all outstanding obligations due the seafarer under this Contract.

b. The employer shall transport the remains and personal effects of the seafarer to the Philippines at employer's expense except if the death occurred in a port where local government laws or regulations do not permit the transport of such remains. In case death occurs at sea, the disposition of the remains shall be handled or dealt with in accordance with the master's best judgment. In all cases, the employer/master shall communicate with the manning agency to advice (sic) for disposition of seafarer's remains.

c. The employer shall pay the beneficiaries of the seafarer the Philippines currency equivalent to the amount of One Thousand US dollars (US$1,000) for burial expenses at the exchange rate prevailing during the time of payment.[24]

Pursuant to the aforequoted provision, and a long line of jurisprudence[25] explaining the same, in order for the beneficiaries of a seafarer to be entitled to death compensation from the employer, it must be proven that the death of the seafarer (1) is work-related; and (2) occurred during the term of his contract.

It is an oft-repeated rule that whoever claims entitlement to the benefits provided by law should establish his right thereto by no less than substantial evidence.[26] Substantial evidence is more than a mere scintilla. It must reach the level of relevant evidence as a reasonable mind might accept as sufficient to support a conclusion.[27] The evidence must be real and substantial, and not merely apparent; for the duty to prove work-causation or work-aggravation imposed by law is real and not merely apparent.[28] As such, the burden to prove entitlement to death benefits lies on the petitioner.[29]

A perusal of the records would reveal that petitioner failed to prove by substantial evidence that the death of her husband occurred during the term of his employment contract and that the cause of death was work-related.

First, it is clear from the evidence presented that petitioner's husband did not pass away during the term of his employment. His contract of employment with respondents expired on July 23, 2006 whereas his death occurred more than a year thereafter or on August 19, 2007. As the CA noted, even if it is said that his employment ceased upon his repatriation to the Philippines on August 17, 2006, the fact remains that his death took place long after the expiration of his employment.[30]

Second, petitioner failed to adduce proof that the death of Dovee Yap was work-related. We have consistently ruled that unless there is substantial evidence showing that: (a) the cause of the seaman's death was reasonably connected to his work; or (b) the sickness/ailment for which he died is an accepted occupational disease; or (c) his working conditions increased the risk of contracting the disease for which he died, death compensation benefits cannot be awarded.[31]

To substantiate her claim for death compensation, petitioner presented the accident report of the vessel's captain, the referral form of the Qatar Petroleum Medical Service Department indicating that an X-Ray was conducted on Dovee Yap, the medical report of the attending physician of Iloilo Medical Center containing an account of the tests conducted on him and their respective findings, the consultation report of the radiologist of Iloilo Doctor's Hospital showing the condition of Yap's spine, and his certificate of death, among others.[32] These documents, however, exhibit nothing more than Dovee Yap's condition at the time the tests were conducted after his repatriation, the fact of his accidental slip on board the vessel and of his eventual death. Regrettably, explanations as to the causal correlation among them are lacking. While the evidence presented bear results of his "slightly enhancing hypointense lesions, with vertebral body compression," "multiple mass lesions in the brain," and "squamous cell carcinoma of the lungs with metastasis to the spine and probably to the brain," there is no established link connecting Dovee Yap's accidental slip to the lung cancer and pneumonia that killed him. Without competent evaluation and interpretation by medical experts on how the findings actually relate to the facts surrounding the case, we cannot just automatically conclude that his death was a product of his accident on board the ship.

It may be recalled that Dovee Yap was brought to a hospital in Bahrain and was confined thereat for two (2) weeks. Had there been any indication during said confinement of his cancer of the lungs or pneumonia which caused his death, petitioner should have at least submitted a report thereof from the Bahrain hospital. Unfortunately, other than the accident report and referral form depicting illegible, handwritten statements, there is no other record or documentation which will show any symptom of Dovee Yap's illness during his employment on board the vessel. The pertinent medical reports submitted were issued after Yap had already disembarked from the vessel. Moreover, as the CA noted, Dovee Yap did not even submit himself to the mandatory post-employment medical examination within three (3) days from his arrival in the Philippines.[33] Neither was there any indication that he was physically incapacitated to do so. To ignore this mandatory rule would certainly be unfair to the employer who would have difficulty determining the cause of a claimant's illness considering the passage of time.[34] It is, therefore, difficult to say that Dovee Yap acquired or developed lung cancer or pneumonia as a result of his work in the vessel.

Neither can it be said that Dovee Yap's working conditions increased the risk of contracting the disease for which he died. We have ruled in the past that petitioner need not show a direct causal connection as positive propositions on employment factors like age, position, actual work, dietary provisions, exposure to substances, and possibility of recovery may suffice.[35] We, however, find no evidence on record nor allegation in the pleadings showing how Dovee Yap's working conditions involved exposure to the risks of contracting cancer of the lungs or pneumonia.

In addition, while Dovee Yap's pneumonia may be listed as an occupational disease under Section 32-A of the POEA Standard Employment Contract,[36] petitioner's failure to comply with its conditions bars the award of death compensation benefits. The pertinent provisions of said Contract provide:

SECTION 32-A OCCUPATIONAL DISEASES

For an occupational disease and the resulting disability or death to be compensable, all of the following conditions must be satisfied:

1. The seafarer's work must involve the risks described herein;

2. The disease was contracted as a result of the seafarer's exposure to the described risks;

3. The disease was contracted within a period of exposure and under such other factors necessary to contract it;

4. There was no notorious negligence on the part of the seafarer.

The following diseases are considered as occupational when contracted:

OCCUPATIONAL DISEASES

xxx xxx xxx

13. Pneumonia. All of the following conditions must be met: a. There must be an honest and definite history of wetting and chilling during the course of employment and also, of injury to the chest wall with or without rib fracture, or inhalation of noxious gases, fumes and other deleterious substances in the place of work.

b. There must be direct connection between the offending agent or event and the seafarer's illness.

c. The signs of consolidation should appear soon (within a few hours) and the symptoms of initial chilling and fever should at least be 24 hours after the injury or exposure.

d. The patient must manifest any of the following symptoms within a few days of the accident: (1) severe chill and fever; (2) headache and pain, agonizing in character, in the side of the body; (3) short, dry, painful cough with blood-tinged expectoration; and (4) physical signs of consolodation, with finerales.[37]

As mentioned previously, apart from the accident report and referral form presented during the term of Yap's employment, petitioner submitted no other evidence to establish compliance with the requirements enumerated above. Thus, respondents cannot be held liable for death compensation on the basis of Section 32-A.

It must be further noted that the NLRC granted petitioner's claim for death compensation essentially because prior to his last deployment, Dovee Yap passed the required pre-employment medical examination and was declared fit to work.[38] It ruled that "in his ten years of employment with respondents, there was no showing that he was afflicted with T.B. or any other illness as he passed all the required pre-employment medical examinations." On this premise, the NLRC concluded that the injury he sustained in the July 23, 2006 accident triggered his pulmonary illness.

We are not persuaded. The mere fact that Dovee Yap was declared fit to work in his pre-medical examinations for the past ten (10) years of his employment does not necessarily follow that his pulmonary illness and cancer of the lungs was brought about by the accident he encountered. We have repeatedly ruled that the pre-employment medical examination is not exploratory in nature.[39] It was not intended to be a totally in-depth and thorough examination of an applicant's medical condition. It merely determines whether one is "fit to work" at sea or "fit for sea service," and does not reveal the real state of health of an applicant. Thus, the "fit to work" declaration in Yap's pre-employment medical examination cannot be a conclusive proof to show that he was free from any ailment prior to his deployment.[40]

We are neither convinced by petitioner's argument that by virtue of Article 26.3 in relation to Articles 22 and 23 of the CBA, her husband may still be considered as "in the employment of the company." First of all, there is doubt as to whether the parties are actually covered under the CBA since, as respondents point out, not only is the same unsigned by the parties concerned, but petitioner did not present any proof to indicate Dovee Yap's membership in the particular union covered therein. Note that the maritime company identified in the CBA is not even the respondents but a certain "Interorient Navigation Company Ltd."[41] Second, even assuming that the CBA is applicable in this case, Dovee Yap still cannot be considered as in the employment of the company. The provisions relied upon by petitioner require that the seafarer has not been repatriated or if so, that his death is directly attributable to the sickness or injury that caused him to be medically repatriated. But there is nothing in the records which will indicate that Dovee Yap was repatriated by reason of his illness. More importantly, as we have already discussed, there is no showing that Dovee Yap's death is directly attributable to the accident he encountered on the vessel.

While the accident may have led petitioner's husband to seek medical attention which resulted in the discovery of his pneumonia and cancer of the lungs, it cannot be hastily assumed that it was likewise the cause of his disease. Indeed, one's predisposition to develop cancer is affected not only by one's work, but also by many factors outside of one's working environment. In the absence of substantial evidence, Dovee Yap's accidental slip on board the vessel cannot be automatically believed to have increased his risk of contracting lung cancer.[42]

Hence, while it is true that labor contracts are impressed with public interest and that the provisions of the POEA Standard Employment Contract must be construed logically and liberally in favor of Filipino seamen in the pursuit of their employment on board ocean-going vessels, still the rule is that justice is in every case for the deserving, to be dispensed with in the light of established facts, the applicable law, and existing jurisprudence.[43]

WHEREFORE, premises considered, the instant petition is DENIED. The Decision and Resolution, dated June 6, 2011 and August 23, 2011, respectively, of the Court of Appeals in CA-G.R. SP No. 114417 are hereby AFFIRMED.

SO ORDERED.

Velasco, Jr., (Chairperson), Villarama, Jr.,* Mendoza, and Leonen, JJ., concur.

September 4, 2014

N O T I C E OF J U D G M E N T

Sirs/Mesdames:

Please take notice that on ___August 13, 2014___ a Decision, copy attached herewith, was rendered by the Supreme Court in the above-entitled case, the original of which was received by this Office on September 4, 2014 at 2:15 p.m.

Very truly yours, (SGD) WILFREDO V. LAPITAN Division Clerk of Court

* Designated Acting Member, per Special Order No. 1691 dated May 22, 2014.

[1] Penned by Associate Justice Manuel M. Barrios, with Associate Justices Mario L. GuariƱa III and Apolinario D. Bruselas, Jr., concurring; Annex "A" to Petition, rollo, pp. 40-48.

[2] Annex "B" to Petition, id. at 49-52.

[3] Per Commissioner Nieves E. Vivar-De Castro, with Presiding Commissioner Benedicto R. Palacol and Isabel G. Panganiban-Ortiguerra, concurring; CA rollo, pp. 44-56.

[4] Id. at 40-43.

[5] Rollo, pp. 41-42.

[6] CA rollo, p. 96.

[7] Id. at 99.

[8] Id.

[9] Rollo, p. 42.

[10] Id.

[11] Id.

[12] CA rollo, pp. 67-68.

[13] Id. at 44-56.

[14] Id. at 52-53.

[15] Supra note 1.

[16] CA rollo, pp. 45-47.

[17] Id. at 104-125. (Emphasis ours; citations omitted)

[18] Rollo, p. 51.

[19] Id.

[20] Sy v. Philippine Transmarine Carriers, Inc., G.R. No. 191740, February 11, 2013, 690 SCRA 202, 210; Nisda v. Sea Serve Maritime Agency, G.R. No. 179177, July 23, 2009, 593 SCRA 668, 693.

[21] Crew and Ship Management International, Inc. v. Soria, G.R. No. 175491, December 10, 2012, 687 SCRA 491, 501, citing Southeastern Shipping Group, Ltd. v. Navarra, Jr., G.R. No. 167678, June 22, 2010, 621 SCRA 361, 369.

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[22] CA rollo, p. 96.

[23] Department Order No. 4, series of 2000, as amended by Memorandum Circular No. 9, series of 2000.

[24] Id. (Emphasis ours)

[25] Medline Management, Inc. v. Roslinda, G.R. No. 168715, September 15, 2010, 630 SCRA 471, 480, citing Southeastern Shipping Group, Ltd. v. Navarra, Jr., supra note 21, at 369; Klaveness Maritime Agency, Inc. v. Beneficiaries of the Late Second Officer Anthony S. Allas, 566 Phil. 579, 585 (2008), citing Gau Sheng Phils., Inc. v. Joaquin, 481 Phil. 222 (2004), and Prudential Shipping and Management Corporation v. Sta. Rita, 544 Phil. 94 (2007).

[26] Wallem Maritime Services, Inc. v. Tanawan, G.R. No. 160444, August 29, 2012, 679 SCRA 255, 269, citing Cootaoco, v. MMS Phil. Maritime Services, Inc., G.R. No. 184722, March 15, 2010, 615 SCRA 529, 545.

[27] Sea Power Shipping Enterprises, Inc. v. Salazar, G.R. No. 188595, August 28, 2013, 704 SCRA 233, 246.

[28] Panganiban v. Tara Trading Shipmanagement, Inc., G.R. No. 187032, October 18, 2010, 633 SCRA 353, 365-366.

[29] Manota v. Avantgarde Shipping Corporation, G.R. No. 179607, July 24, 2013, 702 SCRA 61, 71.

[30] Rollo, p. 45.

[31] Spouses Aya-Ay, Sr. v. Arpaphil Shipping Corp., 516 Phil. 628, 639 (2006), citing Gau Sheng Phils., Inc. v. Joaquin, supra note 25, at 234.

[32] CA rollo, pp. 99-102.

[33] Rollo, p. 46.

[34] Jebsens Maritime, Inc. v. Undag, G.R. No. 191491, December 14, 2011, 662 SCRA 670, 679.

[35] Sea Power Shipping Enterprises, Inc. v. Salazar, supra note 27, at 249, citing Spouses Aya-ay, Sr. v. Arpaphil Shipping Corp., supra note 31, at 641.

[36] Department Order No. 4, series of 2000, as amended by Memorandum Circular No. 9, series of 2000.

[37] Id.

[38] CA rollo, pp. 44-56.

[39] Magsaysay Maritime Corporation v. NLRC, G.R. No. 186180, March 22, 2010, 616 SCRA 362, 378 and Ortega v. Court of Appeals 576 Phil. 601, 610 (2008), citing NYK-FIL Ship Management, Inc. v. NLRC, 534 Phil. 725, 739 (2006).

[40] Id.

[41] CA rollo, p. 118.

[42] Klaveness Maritime Agency, Inc. v. Beneficiaries of the Late Second Officer Anthony S. Allas, supra note 25, at 589.



[43] Sy v. Philippine Transmarine Carriers, Inc., supra note 20, at 213, citing Panganiban v. Tara Trading Shipmanagement, Inc., supra note 28, at 369.

[2015V103] Veritas Maritime and/or Erickson Marquez vs Ramon Gepanaga

[2015V103] VERITAS MARITIME CORPORATION AND/OR ERICKSON MARQUEZ, PETITIONERS, VS. RAMON A. GEPANAGA, JR., RESPONDENT.

G.R. No. 206285, 2nd Division, 2015 Feb 4

Labor > Labor Standards > Benefits

D E C I S I O N

MENDOZA, J.:

Before this Court is a petition for review on certiorari[1] assailing the September 17, 2012 Decision[2] and the March 14, 2013 Resolution[3] of the Court of Appeals (CA), in CA-G.R. SP No. 115186, which stemmed from a claim for permanent disability benefits, sickness allowance, damages, and attorney's fees, filed by respondent Ramon A. Gepanaga, Jr. (Gepanaga) against petitioner Veritas Maritime Corporation (Veritas), and its president, petitioner Erickson Marquez (Marquez), before the National Labor Relations Commission (NLRC).

In the August 27, 2009 Decision[4] of Labor Arbiter Fe S. Cellan (LA), the complaint filed by Gepanaga was dismissed for lack merit. On appeal, the NLRC reversed the ruling of the LA and declared Gepanaga to be suffering from permanent total disability. The NLRC, thus, ordered Veritas and Marquez to compensate him in the amount of $89,100.00 or its Philippine Peso equivalent.[5] After their motion for reconsideration was denied by the NLRC in its June 28, 2010 Resolution,[6] Veritas and Marquez filed a petition for certiorari[7] with the CA.

The CA, while affirming the findings and conclusions of the NLRC, modified its disposition and made the obligation to pay disability benefits to Gepanaga the sole responsibility of Veritas.[8] Veritas attempted to seek reconsideration but its effort was rebuffed.[9]

Hence, this petition.

The Facts:

It appears that on March 11, 2008, Gepanaga entered into a contract of employment with Veritas, for and in behalf of St. Paul Maritime Corporation, to work on board the vessel M.V. Melbourne Highway as Wiper Maintenance for six (6) months.[10] By executing the contract of employment, the parties agreed to be bound by the provisions of Philippine Overseas Employment Administration Standard Employment Contract (POEA-SEC), as well as the IBF-JSU AMOSUP IMMAJ collective bargaining agreement (CBA).[11]

As Gepanaga was able to complete his contract with no incident, the parties mutually agreed to extend his tenure as Wiper Maintenance. What happened shortly thereafter was what sparked the current controversy.

On November 28, 2008, while Gepanaga was doing maintenance work, his middle finger got caught between the cast metal piston liners of the diesel generator. He was then given first aid on board the vessel and was later brought to a hospital in Omaezaki, Japan. In the hospital, Gepanaga was diagnosed with "open fracture of [the] distal phalanx, left middle finger."[12] He was repatriated on December 3, 2008.

On December 4, 2008, Gepanaga reported right away to the clinic of Dr. Nicomedez G. Cruz (Dr. Cruz), the company-designated physician. After Gepanaga was referred to the orthopedic surgeon of his clinic, Dr. Cruz concurred in the initial findings of doctors in Japan that Gepanaga was suffering from a "[c]rushing injuring with fracture distal phalanx left middle finger."[13] After a series of medical treatments, Dr. Cruz noted that Gepanaga no longer suffered the pain in the affected area and that his "grip is good and functional." Dr. Cruz thus issued his medical report, dated March 4, 2009, declaring that Gepanaga was "cleared fit to go back to work."[14]

Unconvinced that he had fully recovered from his injury, Gepanaga filed a complaint[15] against Veritas, Marquez and "K" Line Ship Management, Inc., claiming that the latter is the foreign principal of Veritas and owner of the M.V. Melbourne Highway.[16]

Several days after filing his complaint, Gepanaga sought the opinion of Dr. Edmundo A. Villa (Dr. Villa) of the Sogod District Hospital in Leyte. That same day, Dr. Villa gave his medical report finding that Gepanaga suffered from "permanent disability due to old compound fracture of the 3rd left phalanx/middle finger-left."[17] Thus, when Gepanaga filed his position paper,[18] he included Dr. Villa's report to support his contention that the injuries he had sustained while on board the M.V. Melbourne rendered him permanently unfit to work.

Ruling of the Labor Arbiter

On August 27, 2009, the LA dismissed the complaint for lack of merit. Finding the evaluation of the company-designated physician, Dr. Cruz, more credible than the findings of Dr. Villa, the LA opined that because he was the one who attended to Gepanaga from his repatriation until he was declared fit to work, Dr. Cruz was in the best position to make the evaluation of Gepanaga's true state of health. Moreover, the LA denied the claim for sick wages allowance after it found that as early as March 4, 2009, Gepanaga was already cleared to return to work. For lack of substantial evidence, the LA also denied Gepanaga's claims for reimbursement of his medical expenses, for damages and attorney's fees.

Ruling of the NLRC

As stated above, in its February 10, 2010 Decision, the NLRC found merit in Gepanaga's claim and reversed the decision of the LA. It opined that the assessment of the company-designated physician should not be binding in determining the true condition of Gepanaga, considering that he was chosen, engaged and remunerated by Veritas and, as such, was likely to advance and serve its interests. Dr. Villa, on the other hand, was a government physician, and the NLRC gave credence to his medical assessment of Gepanaga's condition.

The NLRC also noted that the allegation that Gepanaga was covered by the CBA was never refuted, and, thus, awarded him $89,100.00 in accordance with its provisions.

Both parties sought reconsideration. The NLRC denied the motion of Veritas but granted Gepanaga's claim for attorney's fees.

Ruling of the Court of Appeals

In finding no grave abuse of discretion on the part of the NLRC, the CA held that Gepanaga indeed suffered from permanent disability as he was unable to perform his customary work as seaman for more than 120 days. According to the CA, although the Certification from Dr. Cruz was issued 91 days after his repatriation on December 3, 2008, there was no categorical evidence to show that he was able to resume his job after the crushing injury which resulted in the fracture of the distal phalanx left middle finger.

The CA agreed with the NLRC that the terms of the CBA should govern in determining the liabilities of the parties. Citing Article 27 of the CBA, the CA opined that the CBA did not prohibit a second medical opinion, and it even allowed the nomination of a third physician in case of disagreement between the assessment of the company-designated physician and the personal physician of the seafarer. Finding that Veritas failed to avail of a third doctor, the CA ruled that the NLRC did not err in construing that it is not only the findings of the company-designated physician that should control in determining the fitness and/or degree of disability of Gepanaga.

As the NLRC did, the CA concluded that Gepanaga suffered from permanent total disability as a result of his injuries. It was undisputed that because of the injury he sustained, Gepanaga lost the gripping power of his left hand and he was unable to return to his usual work as a seaman for a period of more than 120 days. The CA noted that despite the treatment and assessment of the company-designated physician, the injury sustained did not show any appreciable improvement as diagnosed by an independent physician; and that the independent assessment of Dr. Villa showed that the treatment he received failed to restore the ability of the injured finger to its normal function. With such handicap, the CA found that it would not be possible for Gepanaga to perform his work as a seaman.

The CA, however, pointed out that the NLRC failed to disclose the basis for the personal liability of Marquez. In its evaluation, the CA found that there was no categorical evidence to show that Marquez acted maliciously or in bad faith and, therefore, should not be made personally liable for the payment of the disability benefits.

Veritas and Marquez sought reconsideration but to no avail.

Hence, this petition.

In their petition, petitioners insist that Gepanaga is not entitled to permanent disability benefits, since he was declared "fit to work" by the company after receiving treatment from the day he was repatriated on December 3, 2008 to March 4, 2009 for a total of 91 days. Citing the Court's ruling in Vergara v. Hammonia Maritime Services, Inc.[19] (Vergara), the petitioners argue that Gepanaga's alleged inability to work after the lapse of 120 days from the time he suffered his injury does not automatically entitle him to the grant of permanent and total disability benefits.[20]

The petitioners also insist that they are not liable to pay attorney's fees since their denial of Gepanaga's claims was done in good faith and based on valid grounds. They point to the fact that almost immediately upon the repatriation of the respondent, they referred him to the company-designated physician for examination and treatment. They add that they also shouldered Gepanaga's medical expenses without raising any issue.[21]

Position of the Respondent

Maintaining the correctness of the decision of the CA, Gepanaga asserts that he was entitled to claim for permanent total disability benefits because his personal physician established that he was not fit to work. He claims that the award of attorney's fees was warranted as he was compelled to litigate to enforce his claims.

The Court's Ruling

The evidentiary records favor the petitioners.

In order to provide a clear-cut set of rules in resolving the ubiquitous conflict between the seafarer and his employer for claims of permanent disability benefits, the Court in Vergara, stated that the Department of Labor and Employment (DOLE), through the POEA, had simplified the determination of liability for work-related death, illness or injury in the case of Filipino seamen working in foreign ocean-going vessels. Every seaman and vessel owner (directly or represented by a local manning agency) are required to execute the POEA-SEC as a condition sine qua non prior to the deployment of the seaman for overseas work. The POEA-SEC is supplemented by the CBA between the owner of the vessel and the covered seaman.

In this case, the parties entered into a contract of employment in accordance with the POEA-SEC. They also agreed to be bound by the CBA. Thus, in resolving whether Gepanaga is entitled to disability compensation, the Court will be guided by the procedures laid down in the POEA-SEC and the CBA.

Section 20(B)(3) of the POEA-SEC provides:

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.

For this purpose, the seafarer shall submit himself to a postemployment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to so, in which case, a written notice to the agency within the same period is deemed a compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits.

If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctor's decision shall be final and binding on both parties.

[Emphasis supplied]

The CBA between the petitioners and the respondent states that:

20.1.3.2 The degree of disability which the employer, subject to this Agreement, is liable to pay shall be determined by a doctor appointed by the Employer. If a doctor appointed by the seafarer and his Union disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the Seafarer and his Union, and the third doctor's decision shall be final and binding on both parties. The copy/ies of the medical certificate and other relevant medical reports shall be made available by the Company to the seafarer.

[Emphasis supplied]

Interpreting an almost identical provision of the CBA, the Court ruled, in the recent case of Philippine Hammonia Ship Agency, Inc. v. Dumadag[22] (Dumadag), that a seafarer's non-compliance with the mandated procedure under the POEA-SEC and the CBA militates against his claims. In Dumadag, the Court explained:

The POEA-SEC and the CBA govern the employment relationship between Dumadag and the petitioners. The two instruments are the law between them. They are bound by their terms and conditions, particularly in relation to this case, the mechanism prescribed to determine liability for a disability benefits claim. In Magsaysay Maritime Corp. v. Velasquez, the Court said: "The POEA Contract, of which the parties are both signatories, is the law between them and as such, its provisions bind both of them." Dumadag, however, pursued his claim without observing the laid-out procedure. He consulted physicians of his choice regarding his disability after Dr. Dacanay, the company-designated physician, issued the fit-to-work certification for him. There is nothing inherently wrong with the consultations as the POEA-SEC and the CBA allow him to seek a second opinion. The problem only arose when he pre-empted the mandated procedure by filing a complaint for permanent disability compensation on the strength of his chosen physician's opinions, without referring the conflicting opinions to a third doctor for final determination.

x x x x

The filing of the complaint constituted a breach of Dumadag's contractual obligation to have the conflicting assessments of his disability referred to a third doctor for a binding opinion. The petitioners could not have possibly caused the non-referral to a third doctor because they were not aware that Dumadag secured separate independent opinions regarding his disability. Thus, the complaint should have been dismissed, for without a binding third opinion, the fit-to-work certification of the company-designated physician stands, pursuant to the POEA-SEC and the CBA. As it turned out, however, the LA and the NLRC relied on the assessments of Dumadag's physicians that he was unfit for sea duty, and awarded him permanent total disability benefits.

We find the rulings of the labor authorities seriously flawed as they were rendered in total disregard of the law between the parties - the POEA-SEC and the CBA - on the prescribed procedure for the determination of disability compensation claims, particularly with respect to the resolution of conflicting disability assessments of the company-designated physician and Dumadag's physicians, without saying why it was disregarded or ignored; it was as if the POEA-SEC and the CBA did not exist. This is grave abuse of discretion, considering that, as labor dispute adjudicators, the LA and the NLRC are expected to uphold the law. For affirming the labor tribunals, the CA committed the same jurisdictional error.

As we earlier stressed, Dumadag failed to comply with the requirement under the POEA-SEC and the CBA to have the conflicting assessments of his disability determined by a third doctor as was his duty. He offered no reason that could have prevented him from following the procedure. Before he filed his complaint, or between July 19, 2007, when he came home upon completion of his contract, and November 6, 2007, when Dr. Dacanay declared him fit to work, he had been under examination and treatment (with the necessary medical procedures) by the company specialists. All the while, the petitioners shouldered his medical expenses, professional fees and costs of his therapy sessions. In short, the petitioners attended to his health condition despite the expiration of his contract. We, therefore, find it puzzling why Dumadag did not bring to the petitioners' attention the contrary opinions of his doctors and suggest that they seek a third opinion.

Whatever his reasons might have been, Dumadag's disregard of the conflict-resolution procedure under the POEA-SEC and the CBA cannot and should not be tolerated and allowed to stand, lest it encourage a similar defiance. We stress in this respect that we have yet to come across a case where the parties referred conflicting assessments of a seafarer's disability to a third doctor since the procedure was introduced by the POEA-SEC in 2000 - whether the Court's ruling in a particular case upheld the assessment of the company-designated physician, as in Magsaysay Maritime Corporation v. National Labor Relations Commission (Second Division) and similar other cases, or sustained the opinion of the seafarer's chosen physician as in HFS Philippines, Inc. v. Pilar, cited by the CA, and other cases similarly resolved. The third-doctor-referral provision of the POEA-SEC, it appears to us, has been honored more in the breach than in the compliance. This is unfortunate considering that the provision is intended to settle disability claims voluntarily at the parties' level where the claims can be resolved more speedily than if they were brought to court.

Given the circumstances under which Dumadag pursued his claim, especially the fact that he caused the non-referral to a third doctor, Dr. Dacanay's fit-to-work certification must be upheld. In Santiago v. Pacbasin Ship Management, Inc., the Court declared: "[t]here was no agreement on a third doctor who shall examine him anew and whose finding shall be final and binding. x x x [T]his Court is left without choice but to uphold the certification made by Dr. Lim with respect to Santiago's disability."

On a different plane, Dumadag cannot insist that the "favorable" reports of his physicians be chosen over the certification of the company-designated physician, especially if we were to consider that the physicians he consulted examined him for only a day (or shorter) on four different dates between December 5, 2007 and April 13, 2008. Moreover, we point out that they merely relied on the same medical history, diagnoses and analyses provided by the company-designated specialists. Under the circumstances, we cannot simply say that their findings are more reliable than the conclusions of the company-designated physicians. [23]

[Emphases and underscoring supplied]

As in Dumadag, Gepanaga failed to observe the prescribed procedure of having the conflicting assessments on his disability referred to a third doctor for a binding opinion. Consequently, the Court applies the following pronouncements laid down in Vergara:

The POEA Standard Employment Contract and the CBA clearly provide that when a seafarer sustains a work-related illness or injury while on board the vessel, his fitness or unfitness for work shall be determined by the company-designated physician. If the physician appointed by the seafarer disagrees with the company-designated physician's assessment, the opinion of a third doctor may be agreed jointly between the employer and the seafarer to be the decision final and binding on them.

Thus, while petitioner had the right to seek a second and even a third opinion, the final determination of whose decision must prevail must be done in accordance with an agreed procedure. Unfortunately, the petitioner did not avail of this procedure; hence, we have no option but to declare that the company-designated doctor's certification is the final determination that must prevail. [24] x x x.

[Emphases supplied]

Indeed, for failure of Gepanaga to observe the procedures laid down in the POEA-SEC and the CBA, the Court is left without a choice but to uphold the certification issued by the company-designated physician that the respondent was "fit to go back to work."

Petitioner's Claim for Benefits Was Premature

Actually, Gepanaga's filing of his claim was premature. The Court has held that a seafarer may have basis to pursue an action for total and permanent disability benefits, if any of the following conditions is 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-B(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.[25]

In this case, when Gepanaga filed his complaint with the arbitration office on March 25, 2009, he had yet to consult his own physician, Dr. Villa. Indeed, the Court has observed that when Gepanaga filed his complaint, he was armed only with the belief that he had yet to fully recover from his injured finger because of the incident that occurred on board the M.V. Melbourne Highway. It was only on June 9, 2009, a few days before he filed his position paper on June 15, 2009, that Gepanaga sought the services of Dr. Villa.

It bears pointing out that even worse than the case in Dumadag, Gepanaga's personal physician examined him for only one (1) day, that is, on June 9, 2009, two and a half months (2 1/2) after he had filed his claim for permanent disability benefits. Furthermore, the medical certificate issued by Dr. Villa after examining the respondent failed to state the basis of his assessment and conclusion of permanent disability, more than three (3) months after the respondent was declared fit to work by Dr. Cruz, the company-designated physician.

Let it be stressed that the seafarer's inability to resume his work after the lapse of more than 120 days from the time he suffered an injury and/or illness is not a magic wand that automatically warrants the grant of total and permanent disability benefits in his favor.[26] Both law and evidence must be on his side.

For these reasons, and without sufficient evidence to support the respondent's ancillary claims for sick wages, damages and attorney's fees, the same are denied.

WHEREFORE, the petition is GRANTED. The September 17, 2012 Decision and the March 14, 2013 Resolution of the Court of Appeals in CA-G.R. SP No. 115186 are REVERSED and SET ASIDE. The respondent's complaint for permanent disability benefits, sickness allowance, damages and attorney's fees is dismissed for lack of merit.

SO ORDERED.

Carpio, (Chairperson), Velasco, Jr.,* Del Castillo, and Leonen, JJ., concur.

* Designated Acting member in lieu of Associate Justice Arturo D. Brion, per Special Order No. 1910, dated January 12, 2015.

=
enjoy Jurisprudence with UtakPinoy.Com
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[1] Rollo, pp. 25-366.

[2] Penned by Associate Justice Eduardo B. Peralta, Jr., with Associate Justices Vicente S.E. Veloso and Jane Aurora C. Lantion concurring; id. at 11-19.

[3] Id. at 21.

[4] Id. at 235-241.

[5] Id. at 102-110.

[6] Id. at 112-114.

[7] Id. at 62-100.

[8] Id. at 11-19.

[9] Id. at 21.

[10] CA rollo, pp. 115-116.

[11] Id. at 116.

[12] Id. at 117.

[13] Id. at 88.

[14] Id. at 94.

[15] Id. at 67-68.

[16] Id. at 95.

[17] Id. at 118.

[18] Id. at 95-121.

[19] Vergara v. Hammonia Maritime Services, Inc., 588 Phil. 895, 908-909 (2008).

[20] Rollo, pp. 30-37.

[21] Id. at 37-39.

[22] G.R. No. 194362, June 26, 2013, 700 SCRA 53.

[23] Id. at 65-68.

[24] Vergara v. Hammonia Maritime Services, Inc., supra note 19, at 914.

[25] C.F. Sharp Crew Management, Inc. v. Taok, G.R. No. 193679, July 18, 2012, 677 SCRA 296, 315.



[26] Millan v. Wallem, G.R. No. 195168, November 12, 2012, 685 SCRA 225, 231.

[2015V69] Flor Dayo vs Status Maritime Corp and/or NAFTO Trade Shipping Commercial

[2015V69] FLOR G. DAYO, PETITIONER, VS. STATUS MARITIME CORPORATION AND/OR NAFTO TRADE SHIPPING COMMERCIAL S.A., RESPONDENTS.

G.R. No. 210660, 2nd Division, 2015 Jan 21

Labor > Labor Standards > Benefits

D E C I S I O N

LEONEN, J.:

This resolves the Petition for Review on Certiorari[1] filed by petitioner Flor G. Dayo, assailing the Decision[2] of the Court of Appeals in CA-G.R. SP No. 118406. The Court of Appeals affirmed the Decision of the National Labor Relations Commission, which reversed the Decision of the Labor Arbiter.[3]

Eduardo P. Dayo (Eduardo) was hired by Status Maritime Corporation for and on behalf of Nafto Trade Shipping Commercial S.A. He was hired as a bosun on board the "MV Naftocement 1" for a period of 10 months, with a monthly salary of US$500.00. Prior to embarkation, he underwent a pre-employment medical examination and was declared fit to work.[4]

Eduardo embarked on June 8, 2008.[5] On September 5, 2008, he "experienced severe pain on his hips and both knees, and total body weakness."[6] He was given medical attention in Bridgetown, Barbados, where he was diagnosed with hypertension.[7] He was repatriated on September 7, 2008.[8]

The next day, Eduardo went to Status Maritime Corporation's office, but he was informed that it was waiting for Nafto Trade Shipping Commercial S.A.'s notification. He was also told that he could seek medical attention and that his expenses would be reimbursed. On September 9, 2008, he went to the Lucena United Doctors Hospital. Dr. Olitoquit, Eduardo's private physician, found the results of his 2D echocardiogram as normal.[9]

Eduardo repeatedly requested for medical assistance, but it was only in November 2008 when he was referred to a company-designated physician. Dr. Bolanos of the Metropolitan Hospital diagnosed him with diabetes mellitus.[10]

Status Maritime Corporation stopped giving Eduardo medical assistance in February 2009. He died on June 11, 2009 due to cardiopulmonary arrest. Flor G. Dayo (Flor), Eduardo's wife, requested for death benefits to no avail. Thus, she filed a complaint.[11]

On the other hand, Status Maritime Corporation alleges that Eduardo was examined by the company-designated physician on September 24, 2008. His medical history showed that he had been suffering from diabetes mellitus and hypertension since the 1990s.[12] He underwent an electromyography and nerve conduction velocity (EMG-NCV) testing, and the results showed that he had diffused "sensimotor polyneuropathy as seen in diabetes mellitus."[13] He was also examined by a neurologist and an orthopedic surgeon.[14] The company-designated physician noted that the illness was pre-existing.[15]

In January 2009, the company-designated physician assessed that Eduardo's polyneuropathy secondary to diabetes mellitus was not work-related.[16]

The Labor Arbiter ruled in favor of Flor and awarded death benefits, burial expenses, and attorney's fees.[17] The dispositive portion of the Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering respondents jointly and severally liable:

1) To pay complainant the amount of US$50,000.00, or its equivalent in Philippine Peso at the prevailing rate of exchange at the time of actual payment, representing the death benefits of the late Eduardo P. Dayo;

2) To pay complainants the amount of US$1,000.00, or its equivalent in Philippine Peso at the prevailing rate at the time of actual payment, representing the burial expenses;

3) To pay complainant the amount equivalent to ten (10%) percent of the total judgment award, as and for attorney's fees;

Other monetary claims are dismissed for lack of merit.

SO ORDERED.[18]

Status Maritime Corporation appealed to the National Labor Relations Commission.[19] In the Decision dated September 30, 2010, the National Labor Relations Commission First Division reversed the Labor Arbiter's Decision and held that:

WHEREFORE, premises considered, the appeal of respondents is GRANTED. Thus, the appealed Decision is hereby REVERSED and SET ASIDE, and another one entered DISMISSING the instant complaint for lack of merit.

SO ORDERED.[20]

Flor filed a Motion for Reconsideration, but it was denied by the National Labor Relations Commission in the Resolution dated December 30, 2010.[21] She then filed a Petition for Certiorari before the Court of Appeals, arguing that her husband died from a work-related illness, thus, it was grave abuse of discretion for the National Labor Relations Commission to reverse the Labor Arbiter's ruling.[22] The Court of Appeals denied the petition, ruling that since Eduardo died after the term of his contract with Status Maritime Corporation, "his beneficiaries are not entitled to the death benefits[.]"[23]

The Court of Appeals cited GSIS v. Valenciano[24] where this court held that "diabetes mellitus is not an occupational disease[.]"[25] The Court of Appeals also cited Section 32-A of the 2000 Philippine Overseas Employment Administration Amended Standard Terms and Conditions that does not list diabetes mellitus as an occupational disease.[26]

Eduardo died after the term of his contract with Status Maritime Corporation. It was clear then that his beneficiaries were not entitled to death benefits.[27] In addition, the Court of Appeals held that Flor failed to substantiate her allegation that Eduardo's illness and cause of death were work-related.[28] A portion of the Court of Appeals Decision states:

Time and again, we have ruled that self-serving and unsubstantiated declarations are insufficient to establish a case before quasi-judicial bodies where the quantum of evidence required to establish a fact is substantial evidence. Often described as more than a mere scintilla, substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Thus, in the absence of substantial evidence, working conditions cannot be presumed to have increased the risk of contracting the disease.

. . . .

WHEREFORE, the premises considered, the Petition is hereby DENIED. The Decision dated 30 September 2010 of the National Labor Relations Commission (NLRC) and its Resolution dated 30 December 2010 are AFFIRMED in toto.

SO ORDERED.[29] (Citations omitted)

Flor moved for the reconsideration[30] of the Court of Appeals Decision that was denied in the Resolution[31] dated December 12, 2013.

Petitioner filed this Petition for Review on Certiorari, arguing that the Court of Appeals erred in denying her Petition, considering that Eduardo's death was brought about by a work-related illness.[32]

In deciding a Rule 45 Petition for Review on Certiorari of a Court of Appeals Decision in a Rule 65 Petition for Certiorari, this court is limited to determining whether the Court of Appeals was correct in establishing the presence or absence of grave abuse of discretion.[33] Thus, the proper issue in this case is whether the Court of Appeals correctly determined that there was no grave abuse of discretion on the part of the National Labor Relations Commission when it denied petitioner Flor G. Dayo's claim for death benefits.

To support her claim for death benefits, petitioner cites Section 20(A), paragraphs (1) and (4) of the 2000 Philippine Overseas Employment Administration Standard Employment Contract (POEA SEC)[34] which state that:

Section 20. Compensation and Benefits

A. Compensation and Benefits for Death

1. In case of work-related death of the seafarer, during the term of his contract the employer shall pay his beneficiaries the Philippine Currency equivalent to the amount of Fifty Thousand US dollars (US$50,000) and an additional amount of Seven Thousand US dollars (US$7,000) to each child under the age of twenty-one (21) but not exceeding four (4) children, at the exchange rate prevailing during the time of payment.

. . . .

4. The other liabilities of the employer when the seafarer dies as a result of work-related injury or illness during the term of employment are as follows:

a. The employer shall pay the deceased's beneficiary all outstanding obligations due the seafarer under this Contract.

b. The employer shall transport the remains and personal effects of the seafarer to the Philippines at employer's expense except if the death occurred in a port where local government laws or regulations do not permit the transport of such remains. In case death occurs at sea, the disposition of the remains shall be handled or dealt with in accordance with the master's best judgment. In all cases, the employer/master shall communicate with the manning agency to advise for disposition of seafarer's remains.

c. The employer shall pay the beneficiaries of the seafarer the Philippines [sic] currency equivalent to the amount of One Thousand US dollars (US$1,000) for burial expenses at the exchange rate prevailing during the time of payment.

Petitioner also points out that prior to embarkation, Eduardo was given a "fit to work" certification. Yet, he was repatriated due to hypertension. Therefore, his illness was contracted on board the vessel, and his death should be compensated by his employer even though he died after the term of his contract.[35]

On the other hand, respondents argue that the Court of Appeals' ruling was correct since Eduardo died after the term of his contract.[36] His illness, diabetic polyneuropathy secondary to diabetes, is not included in the list of occupational diseases.[37] Petitioner failed to show the causation between Eduardo's work and illness leading up to his death.[38] Petitioner did not even refute the findings of the company-designated physician.[39]

The Court of Appeals found that there was no grave abuse of discretion on the part of the National Labor Relations Commission when it denied the claim for death benefits since Eduardo died after the term of his contract. The Court of Appeals also explained that:

[u]nder the Amended POEA Contract, the important requirement of work-relatedness was incorporated. The incorporation of the work-related provision has made essential causal connection between a seafarer's work and the illness upon which the claim of disability is predicated upon.

. . . .

It should be emphasized that it is petitioner who has the burden of evidence to prove that the illness for which she anchors her present claim for her husband's disability benefits is work-related.[40]

In this case, petitioner does not dispute the fact that her husband died after the term of his contract. Instead, she emphasizes that her husband died due to a work-related illness. Petitioner also argues that:

[she] was not merely faking [her] husband's disability. The Medical Records cannot lie and he was seen by a doctor abroad regarding his illness which eventually [brought] about his death.[41]

Petitioner cites Section 20(A), paragraphs (1) and (4) to support her claim for death benefits. She also cites the second paragraph of Section 20(B) to support her claim for reimbursement of medical and transportation expenses.[42]

The 2000 POEA SEC 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."[43]

The facts of this case indicate that the physician in Barbados diagnosed Eduardo with hypertension.[44] He underwent 2D echocardiogram at the Lucena United Doctors Hospital, and the results were interpreted by Dr. Olitoquit as normal.[45] When Eduardo was examined by the company-designated physician, he admitted that he had been suffering from diabetes mellitus and hypertension since the 1990s.[46] This shows that his illness was pre-existing. His cause of death was cardiopulmonary arrest.[47]

The 2000 POEA SEC recognizes that the list of illnesses under Section 32 is not exhaustive. In Sea Power Shipping Enterprises, Inc. v. Salazar,[48] this court explained that:

[u]nlike Section 20(A), Section 32-A of the POEA Contract considers the possibility of compensation for the death of the seafarer occurring after the termination of the employment contract on account of a work-related illness. But, for death under this provision to be compensable, the claimant must fulfill the following:

1. The seafarer's work must involve the risks describe herein;

2. The disease was contracted as a result of the seafarer's exposure to the described risks;

3. The disease was contracted within a period of exposure and under such other factors necessary to contract it;

4. There was no notorious negligence on the part of the seafarer.[49]

Magsaysay Maritime Services v. Laurel[50] also recognized that the nature of employment can possibly aggravate a pre-existing illness. However, the causation between the nature of employment and the aggravation of the illness must still be proven before compensation may be granted.

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.[51] (Citation omitted)

Petitioner was unable to fulfill these requirements. She did not allege how the nature of Eduardo's work as a bosun[52] contributed to the development or the aggravation of his illness. Further, he himself admitted that he had diabetes and hypertension prior to his embarkation. Considering that diabetes mellitus is not listed as an occupational disease under the 2000 POEA SEC and considering that petitioner did not prove how Eduardo's occupation contributed to the development of his illness, no error can be attributed to the Court of Appeals when it affirmed the National Labor Relations Commission's Decision and Resolution.

Petitioner further argues that respondents should not be absolved from any liability simply because Eduardo died after the term of his contract.[53]

Indeed, it is quite possible that a work-related illness may progress at a slow pace such that a seafarer's death will happen beyond the term of the employment contract. In such cases, the provisions of the POEA SEC should not limit the rights of seafarers to be compensated.

The concurring opinion in Interorient Maritime Enterprises, Inc. v. Creer III[54] discussed that:

[t]he Philippine Overseas Employment Administration or POEA regulations require certain provisions to be put in the employment contract. Necessarily, it prescribes a procedure that finds a balance of interest in both the amount and the process for recovery of compensation as a result of occupational hazards suffered by the seafarer. The cause of action in such recovery is based on contract inclusive of both statutory and regulatory provisions impliedly included in it.

While this may be the theory pursued in practice, substantive law still allows recovery of damages for injuries suffered by the seafarer as a result of a tortious violation on the part of the employer. This may be on the basis of the provisions of the Civil Code as well as special laws. These special laws may relate, among others, to environmental regulations and requirements to ensure the reduction of risks to occupational hazards both for the seafarer and the public in general. In such cases, the process for recovery should not be constrained by contract.[55]

However, petitioner did not allege facts that would sway this court to grant the Petition. She did not present evidence to show how Eduardo's diabetes mellitus was aggravated by his work and how his illness caused his death. On the contrary, petitioner's allegations further convinced this court that the Court of Appeals did not err in its Decision. A portion of the Petition for Review reads:

12.3 In the case at bar, it bears to stress that Mr. Dayo was certified as "fit to work" based on a pre-employment medical examination. He was deployed on 8 June 2008 and was repatriated on 7 September 2008 due to HYPERTENSION. Upon his arrival in the Philippines, respondents refused to provide Mr. Dayo medical assistance. But due to his critical condition, Mr. Dayo went to Lucena United Doctors Hospital for medical evaluations. He was advi[sed] to undergo [a] series of medical and laboratory tests. Thereafter, Dr. Olitoquit, Mr. Dayo's attending physician, came up with a conclusion that: "NORMAL LEFT VENT[R]ICULAR DIMENSION WITH ADEQUATE WALL MOTION AND CONTRACTILITY; NORMAL LEFT AND RIGHT ATRIA, RIGHT VENTRICLE, MAIN PULMONARY ARTERY AND AORTIC ROOT DIMENSION'S [sic]. STRUCTURALLY NORMAL TRICUSPID, PULMONIC, MITRAL AND AORTIC VALVE. CONCLUSION: NORMAL 2D ECHO-CARDIOGRAM STUDY."[56]

From petitioner's allegations, it is clear that Eduardo's physician found him to have a "normal 2D echocardiogram study."[57] This disproves petitioner's allegation that Eduardo's illness and death were work-related.

Regarding Eduardo's "fit to work" certification, this court has previously ruled that the pre-employment medical examination (PEME) is not exploratory and while:

[t]he PEME merely determines whether one is "fit to work" at sea or "fit for sea service," it does not state the real state of health of an applicant. In short, the "fit to work" declaration in the respondent's PEME cannot be a conclusive proof to show that he was free from any ailment prior to his deployment. Thus we held in NYK-F[il] Ship Management, Inc. v. NLRC:[58]

While a PEME may reveal enough for the petitioner (vessel) to decide whether a seafarer is fit for overseas employment, it may not be relied upon to inform petitioners of a seafarer's true state of health. The PEME could not have divulged respondent's illness considering that the examinations were not exploratory.[59]

While we commiserate with petitioner, this petition must be denied for failure to show any reversible error on the part of the Court of Appeals. It is true that labor contracts are construed in favor of the employee. However, the facts of this case and the applicable laws show that the grant of death benefits cannot be justified.

WHEREFORE, this court resolves to deny the Petition. The assailed Court of Appeals Decision and Resolution are hereby AFFIRMED.

SO ORDERED.

Carpio, (Chairperson), Velasco, Jr.,* Del Castillo, and Mendoza, JJ., concur.

* Designated acting member per S.O. No. 1910 dated January 12, 2015.

=== go premium with UtakPinoy.Com ===

[1] Rollo, pp. 2-21.

[2] Id. at 25-37. The Decision was penned by Associate Justice Socorro B. Inting and concurred in by Associate Justices Jose C. Reyes, Jr. (Chair) and Mario V. Lopez of the Ninth Division.

[3] Id. at 29-30 and 37.

[4] Id. at 25-26.

[5] Id. at 26.

[6] Id.

[7] Id.

[8] Id.

[9] Id. at 26-27.

[10] Id. at 27.

[11] Id. at 27-28.

[12] Id. at 28.

[13] Id.

[14] Id.

[15] Id. at 28-29.

[16] Id. at 29.

[17] Id.

[18] Id.

[19] Id. at 30.

[20] Id.

[21] Id.

[22] Id. at 32.

[23] Id. at 33.

[24] 521 Phil. 253, 260 (2006) [Per J. Ynares-Santiago, First Division].

[25] Rollo, p. 35.

[26] Id. at 34-35.

[27] Id. at 33.

[28] Id. at 36.

[29] Id. at 36-37.

[30] Id. at 40-45.

[31] Id. at 38-39. The Resolution was penned by Associate Justice Socorro B. Inting and concurred in by Associate Justices Jose C. Reyes, Jr. (Chair) and Mario V. Lopez of the Former Ninth Division.

[32] Id. at 10.

[33] J. Brion, dissenting opinion in Abbott Laboratories, Phils., et al. v. Alcaraz, G.R. No. 192571, April 22, 2014 4-5 [Per J. Perlas-Bernabe, En Banc].

[34] Rollo, p. 10.

[35] Id. at 11-13.

[36] Id. at 60.

[37] Id. at 63.

[38] Id.

[39] Id. at 67.

[40] Id. at 35.

[41] Id. at 14.

[42] Id. at 18.

[43] 2000 POEA Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean Going Vessels, Definition of Terms, par. (12). This definition was amended by POEA Memorandum Circular No. 10 (2010).

[44] Rollo, p. 26.

[45] Id. at 27.

[46] Id. at 28.

[47] Id. at 27.

[48] G.R. No. 188595, August 28, 2013, 704 SCRA 233 [Per C.J. Sereno, First Division].

[49] Id. at 246.

[50] G.R. No. 195518, March 20, 2013, 694 SCRA 225 [Per J. Mendoza, Third Division].

[51] Id. at 242.

[52] See Woods Hole Oceanographic Institution, Safety Management Manual, sec. 7.2.1. 3 (visited January 20, 2015). A bosun performs several functions on board a ship such as, but not limited to, keeping the Chief Mate updated on all ship matters, supervising unlicensed personnel "in the sanitation and maintenance of deck department spaces, decks, tools, equipment and associated gear," and giving assistance in training crew members.

[53] Rollo, p. 14.

[54] G.R. No. 181921, September 17, 2014 [Per J. Del Castillo, Second Division].

[55] J. Leonen, concurring opinion in Interorient Maritime Enterprises, Inc. v. Creer III, G.R. No. 181921, September 17, 2014 3 [Per J. Del Castillo, Second Division].

[56] Rollo, p. 14.

[57] Id.

[58] 534 Phil. 725, 739 (2006) [Per J. Carpio Morales, Third Division].



[59] Quizora v. Denholm Crew Management (Philippines), Inc., G.R. No. 185412, November 16, 2011, 660 SCRA 309, 322 [Per J. Mendoza, Third Division], citing Magsaysay Maritime Corporation v. National Labor Relations Commission (Second Division), 630 Phil. 352, 367 (2010) [Per J. Brion, Second Division]. See also The Estate of Posedio Ortega v. Court of Appeals, 576 Phil. 601, 610 (2008) [Per J. Tinga, Second Division] and Status Maritime Corporation v. Spouses Delalamon, G.R. No. 198097, July 30, 2014 11 [Per J. Reyes, First Division].

[2014V647] NUWHRAIN-APL-IUF vs Philippine Plaza Holdings

[2014V647] NATIONAL UNION OF WORKERS IN HOTEL RESTAURANT AND ALLIED INDUSTRIES (NUWHRAIN-APL-IUF), PHILIPPINE PLAZA CHAPTER, PETITIONER, VS. PHILIPPINE PLAZA HOLDINGS, INC., RESPONDENT.

G.R. No. 177524
2014 July 23
2nd Division

Labor > Labor Standards > Service Charge

D E C I S I O N

BRION, J.:

We resolve the petition for review on certiorari,[1] challenging the January 31, 2007 decision[2] and the April 20, 2007 resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No. 93698.

This CA decision reversed the July 4, 2005 decision[4] of the National Labor Relations Commission (NLRC) in NLRC NCR CA No. 031977-02 (NLRC NCR-30-05-02011-01) that in turn, reversed and set aside the April 30, 2002 decision[5] of the Labor Arbiter (LA).

The LA dismissed the complaint for non-payment of service charges filed by petitioner National Union of Workers in Hotel Restaurant and Allied Industries (NUWHRAIN-APL-IUF), Philippine Plaza Chapter (Union).

The Factual Antecedents

The Union is the collective bargaining agent of the rank-and-file employees of respondent Philippine Plaza Holdings, Inc. (PPHI).

On November 24, 1998, the PPHI and the Union executed the "Third Rank-and-File Collective Bargaining Agreement as Amended"[6] (CBA). The CBA provided, among others, for the collection, by the PPHI, of a ten percent (10%) service charge on the sale of food, beverage, transportation, laundry and rooms. The pertinent CBA provisions read:

SECTION 68. COLLECTION. The HOTEL shall continue to collect ten percent (10%) service charge on the sale of food, beverage, transportation, laundry and rooms except on negotiated contracts and special rates. [Emphasis supplied]

SECTION 69. DISTRIBUTION. The service charge to be distributed shall consist of the following:

Effective Food & Beverage Room, Transportation & valet 1998 95% 100% 1997 95% 100%

The distributable amount will be shared equally by all HOTEL employees, including managerial employees but excluding expatriates, with three shares to be given to PPHI Staff and three shares to the UNION (one for the national and two for the local funds) that may be utilized by them for purposes for which the UNION may decide.

These provisions merely reiterated similar provisions found in the PPHI-Union's earlier collective bargaining agreement executed on August 29, 1995.[7]

On February 25, 1999, the Union's Service Charge Committee informed the Union President, through an audit report (1st audit report),[8] of uncollected service charges for the last quarter of 1998 amounting to ?2,952,467.61. Specifically, the audit report referred to the service charges from the following items: (1) "Journal Vouchers;" (2) "Banquet Other Revenue;" and (3) "Staff and Promo." The Union presented this audit report to the PPHI's management during the February 26, 1999 Labor Management Cooperation Meeting (LMCM).[9] The PPHI's management responded that the Hotel Financial Controller would need to verify the audit report.

Through a letter dated June 9, 1999,[10] the PPHI admitted liability for P80,063.88 out of the P2,952,467.61 that the Union claimed as uncollected service charges. The PPHI denied the rest of the Union's claims because: (1) they were exempted from the service charge being revenues from "special promotions" (revenue from the Westin Gold Card sales) or "negotiated contracts" (alleged revenue from the Maxi-Media contract); (2) the revenues did not belong to the PPHI but to third-party suppliers; and (3) no revenue was realized from these transactions as they were actually expenses incurred for the benefit of executives or by way of good-will to clients and government officials.

During the July 12, 1999 LMCM,[11] the Union maintained its position on uncollected service charges so that a deadlock on the issue ensued. The parties agreed to refer the matter to a third party for the solution. They considered two options - voluntary arbitration or court action - and promised to get back to each other on their chosen option.

In its formal reply (to the PPHI's June 9, 1999 letter) dated July 21, 1999 (2nd audit report),[12] the Union modified its claims. It claimed uncollected service charges from: (1) "Journal Vouchers - Westin Gold Revenue and Maxi-Media" (F&B and Rooms Barter); (2) "Banquet and Other Revenue;" and (3) "Staff and Promo."

On August 10, 2000, the Union's Service Charge Committee made another service charge audit report for the years 1997, 1998 and 1999 (3rd audit report).[13] This 3rd audit report reflected total uncollected service charges of P5,566,007.62 from the following entries: (1) "Journal Vouchers;" (2) "Guaranteed No Show;" (3) "Promotions;" and (4) "F & B Revenue." The Union President presented the 3rd audit report to the PPHI on August 29, 2000.

When the parties failed to reach an agreement, the Union, on May 3, 2001, filed before the LA (Regional Arbitration Branch of the NLRC) a complaint[14] for non-payment of specified service charges. The Union additionally charged the PPHI with unfair labor practice (ULP) under Article 248 of the Labor Code, i.e., for violation of their collective bargaining agreement.

In its decision[15] dated April 30, 2002, the LA dismissed the Union's complaint for lack of merit. The LA declared that the Union failed to show, by law, contract and practice, its entitlement to the payment of service charges from the entries specified in its audit reports (specified entries/transactions).

The LA pointed out that Section 68 of the CBA explicitly requires, as a precondition for the distribution of service charges in favor of the covered employees, the collection of the 10% service charge on the "sale of food, beverage, transportation, laundry and rooms;" at the same time, the provision exempts from its coverage "negotiated contracts" and "special rates" that the LA deemed as non-revenue generating transactions involving "food, beverage, transportation, laundry and rooms." The Union failed to prove that the PPHI collected 10% service charges on the specified entries/transactions that could have triggered the PPHI's obligation under this provision.

Particularly, the LA pointed out that, first, the only evidence on record that could have formed the basis of the Union's claim for service charges was the PPHI's admission that, as a matter of policy, it has been charging, collecting and distributing to the covered employees 10% service charge on the fifty percent (50%) of the total selling price of the "Maxi-Media F & B" and on the "Average House" rate of the "Maxi-Media Rooms." And it did so, notwithstanding the fact that the "Maxi-Media F & B and Rooms Barter" is a "negotiated contract" and/or "special rate" that Section 68 explicitly excludes from the service charge coverage.

Second, while the PPHI derived revenues from the sale of the Westin Gold Cards (Westin Gold Revenue), the PPHI did not and could not have collected a 10% service charge as these transactions could not be considered as sale of food, beverage, transportation, laundry and rooms that Section 68 contemplates.

Third, the "Staff and Business Promotion and Banquet" entry refers to the expenses incurred by the PPHI's Marketing Department and Department Heads and Hotel executives either as part of their perks or the PPHI's marketing tool/public relations. These are special rates that are essentially non-revenue generating items.

Fourth, the "Backdrop" entry refers to services undertaken by third parties payment for which were made of course to them; hence, this entry/transaction could not likewise be considered as sale of services by PPHI for which collection of the 10% service charge was warranted.

Lastly, the LA equally brushed aside the Union's claim of ULP declaring that the PPHI was well within its legal and contractual right to refuse payment of service charges for entries from which it did not collect any service charge pursuant to the provision of their CBA.

The NLRC's ruling

In its decision[16] of July 4, 2005, the NLRC reversed the LA's decision and considered the specified entries/transactions as "service chargeable." As the PPHI failed to prove that it paid or remitted the required service charges, the NLRC held the PPHI liable to pay the Union P5,566,007.62 representing the claimed uncollected service charges for the years 1997, 1998 and 1999 per the 3rd audit report.

The PHHI went to the CA on a petition for certiorari[17] after the NLRC denied its motion for reconsideration.[18]

The CA's ruling

The CA granted the PPHI's petition in its January 31, 2007 decision.[19] It affirmed the LA's decision but ordered the PPHI to pay the Union the amount of P80,063.88 as service charges that it found was due under the circumstances. The CA declared that no service charges were due from the specified entries/transactions; either these constituted "negotiated contracts" and "special rates" that Section 68 of the CBA explicitly excludes from the coverage of service charges, or they were cited bases that the Union failed to sufficiently prove.

The CA pointed out that: one, the "Westin Gold Card Revenues" entry involved the sale, not of food, beverage, transportation, laundry and rooms, but of a "contractual right" to be charged a lesser rate for the products and services that the Hotel and the stores within it provide. At any rate, the PPHI charges, collects and distributes to the covered employees the CBA-agreed service charges whenever any Westin Gold Card member purchases food, beverage, etc. Two, the "Maxi-Media F & B and Rooms and Barter" entry did not involve any sale transaction that Section 68 contemplates. The CA pointed out that the arrangement[20] between the PPHI and Maxi-Media International, Inc. was not one of sale but an innominate contract of facio ut des, i.e., in exchange for the professional entertainment services provided by Maxi-Media, the Hotel agreed to give the former P2,800,000.00 worth of products and services. The CA added that this agreement falls under "negotiated contracts" that Section 68 explicitly exempts. Three, the sale of "Gift Certificates" does not involve the CBA-contemplated "sale of food, beverage, etc." Four, the Union failed to show the source of its computations for its "Guaranteed No Show" and "F & B Revenue" claims. Five, the "Business Promotions" entry likewise did not involve any sale; these were part of the PPHI's business expenses in the form of either signing benefits for the PPHI's executives or as marketing tool used by the PPHI's marketing personnel to generate goodwill. And six, the Union's claims for service charges that the PPHI allegedly collected prior to May 3, 1998 or three years before the Union filed its complaint on May 3, 2001 had already prescribed per Article 291 of the Labor Code.

The Union filed the present petition after the CA denied its motion for reconsideration[21] in the CA's April 20, 2007 resolution.[22]

The Petition

The Union argues that the CA clearly misapprehended and misappreciated, with grave abuse of discretion, the facts and evidence on record. It maintains that the specified entries/transactions are revenue based transactions which, per Section 68 and 69 of the CBA, clearly called for the collection and distribution of a 10% service charge in favor of the covered employees.

Particularly, the Union argues that: (1) the "Westin Gold Cards" serve not only as a discount card but also as a "pre-paid" card that provide its purchasing members complimentary amenities for which the Hotel employees rendered services and should, therefore, had been subjected to the 10% service charge; (2) the PPHI failed to prove that it had paid and distributed to the covered employees the service charge due on the actual discounted sales of food, beverage, etc., generated by the "Westin Gold Cards;" (3) the Hotel employees likewise rendered services whenever the Maxi-Media International, Inc. consumed or availed part of the P2,800,000.00 worth of goods and services pursuant to its agreement with the PPHI; (4) the "Maxi-Media" discounts should be charged to the PPHI as part of its expenses and not the Union's share in the service charges; (5) the PPHI has a separate budget for promotions, hence the "Business Promotions" entry should likewise had been subjected to the 10% service charge; (6) the sale of "Gift Certificates," recorded in the PPHI's "Journal Vouchers" as "other revenue/income," constituted a revenue transaction for which service charges were due; (7) the PPHI admitted that service charges from "Guaranteed No Show" were due; and (8) it properly identified through reference numbers the uncollected service charges from "Food and Beverage Revenue." The Union contends that in refusing to collect and remit the CBA-mandated service charges that the PPHI insists were non-revenue transactions falling under "Negotiated Contracts" and/or "Special Rates," the PPHI, in effect, contravened the employees' rights to service charges under the law and the CBA.

The Union also contends that the term "Negotiated Contracts" should be applied to "airline contracts" only that they (the Union and the PPHI) intended when they executed the CBA. It points out that at the time the CBA was executed, the PPHI had an existing agreement with Northwest Airlines to which the term "Negotiated Contracts" clearly referred to.

Further, the Union argues that its claim for unpaid services charges for the year 1997 and part of 1998 had not yet prescribed. Applying Article 1155 of the Civil Code in relation to Article 291 of the Labor Code, the Union points out that the running of the prescriptive period for the filing of its claim was interrupted when it presented to the PPHI its 1st audit report during the February 26, 1999 LMCM and when the PPHI admitted the service charges due to the Union in the PPHI's June 9, 1999 letter.

The Union additionally argues that the PPHI failed to conform to the generally accepted accounting standards when it reclassified the revenue items as expense items.

Finally, the Union contends that the PPHI's refusal, despite repeated demands, to distribute the unremitted service charges and recognize its right to service charges on the specified entries; the PPHI's deliberate failure to disclose its financial transactions and audit reports; and the PPHI's reclassification of the revenues into expense items constitute gross violation of the CBA that amounts to what the law considers as ULP.

The Case for the Respondent

The PPHI primarily counters, in its comment,[23]that the Union's call for the Court to thoroughly re-examine the records violates the Rule 45 proscription against questions of facts. The PPHI points out that Rule 45 of the Rules of Court under which the petition is filed requires that only questions of law be raised. In addition, the factual findings of the LA that had been affirmed by the CA deserve not only respect but even finality.

On the petition's merits, the PPHI argues that the specified entries/transactions for which the Union claims service charges: (1) were not revenue generating transactions; (2) that did not involve a sale of food, beverage, rooms, transportation or laundry; and/or (3) were in the nature of negotiated contracts and special rates that Section 68 of the CBA specifically excepts from the collection of service charges. Correlatively, Article 96 of the Labor Code requires the collection of service charges as a condition precedent to its distribution or payment. Thus, as no service charges were collected on the specified entries/transactions that the CBA expressly excepts, the Union's claim for unpaid service charges clearly had no basis.

To be precise, the PPHI points out that, first, the sale per se of the "Westin Gold Cards" did not involve a sale of food, beverage, etc. that Section 68 of the CBA contemplates. The discounted sales of food, beverage, etc. to Westin Gold Card holders, on the other hand, had already been subjected to service charges inclusive of the discount, i.e., computed on the gross sales of food, beverage, etc. to the card holders, and which service charges it had already distributed to the covered employees. Second, its agreement with Maxi-Media involved an exchange or barter transaction, i.e., its food and Hotel services in exchange for Maxi-Media's entertainment services that did not generate income. This agreement likewise falls under "Negotiated Contracts" that Section 68 clearly excepts. And, in any case, it had already collected, and distributed to the covered employees, the service charges on the food, beverage, etc. that Maxi-Media consumed based on the monthly average rate of the rooms and on the 50% rate of the price of the consumed food and beverage. Third, the Union failed to prove its claims for uncollected service charges from "Guaranteed No Show" and "Business Promotions." Fourth, the "Food and Beverage other Revenue" entry refers to the PPHI's transactions with external service providers the payment for whose services could not be considered as the PPHI's revenue. Fifth, the sale per se of the "Gift Certificates" also did not involve the Section 68-contemplated sale of food, beverage, etc. and the Union failed to prove that the presented Gift Certificates had actually been consumed, i.e., used within the Hotel premises for food, beverage, etc. And sixth, it had never been its practice to collect service charges on the specified entries/transactions that could have otherwise resulted in what the Union considers as "partial abolition of service charges" when it refused to collect service charges from them.

The PPHI also disputes what it considers as the Union's strained interpretation of the CBA exception of "Negotiated Contracts" as applicable to airline contracts only. It points out that the clear wordings of Section 68 of the CBA plainly show the intent to except, in a general and broad sense, "Negotiated Contracts" and "Special Rates" as to include the "Westin Gold Cards" and "Maxi-Media" barter agreement. The PPHI additionally argues that the CBA's exception of "Negotiated Contracts" and "Special Rates" from the collection of service charges does not violate Article 96 of the Labor Code. It points out that Article 96 merely provides for the minimum percentage distribution, between it (the PPHI) as the employer and the Hotel's covered employees, of the collected service charges which their CBA more than satisfied. It also points out that Article 96 does not prohibit the exception of certain transactions from the coverage and/or collection of service charges that it (as the employer) and the Union (in behalf of the covered Hotel employees) had voluntarily and mutually agreed on in their CBA. And in fact, the Union's refusal to recognize these clear and express exceptions constituted a violation of their agreement.

Further, the PPHI maintains that the Union's claim for the alleged uncollected service charges for the year 1997 and the early months of 1998 had already prescribed per Article 291 of the Labor Code.

Finally, the PPHI points out that the issue in this case is not whether service charges had been paid. Rather, the clear issue is whether or not service charges should have been collected (and distributed to the covered employees) for the specified entries/transactions that the LA and the CA correctly addressed and which the NLRC clearly missed as it rendered a decision without any factual or legal basis.

The Court's Ruling

We find the petition unmeritorious.

Preliminary considerations: jurisdictional limitations of the Court's Rule 45 review of the CA's Rule 65 decision in labor cases; the Montoya ruling and factual-issue-bar-rule

In a petition for review on certiorari under Rule 45 of the Rules of Court, we review the legal errors that the CA may have committed in the assailed decision, in contrast with the review for jurisdictional errors that we undertake in an original certiorari action. In reviewing the legal correctness of the CA decision in a labor case taken under Rule 65 of the Rules of Court, we examine the CA decision in the context that it determined the presence or the absence of grave abuse of discretion in the NLRC decision before it and not on the basis of whether the NLRC decision, on the merits of the case, was correct. In other words, we proceed from the premise that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. Within this limited scope of our Rule 45 review, the question that we ask is: Did the CA correctly determine whether the NLRC committed grave abuse of discretion in ruling on the case?[24]

In addition, the Court's jurisdiction in a Rule 45 petition for review on certiorari is limited to resolving only questions of law. A question of law arises when the doubt or controversy exists as to what law pertains to a particular set of facts; and a question of fact arises when the doubt or controversy pertains to the truth or falsity of the alleged facts.[25]

The present petition essentially raises the question - whether the Union may collect from the PPHI, under the terms of the CBA, its share of the service charges. This is a clear question of law that falls well within the Court's power in a Rule 45 petition.

Resolution of this question of law, however, is inextricably linked with the largely factual issue of whether the specified entries/transactions fall within the generally covered sale of food, beverage, transportation, etc. from which service charges are due or within the CBA excepted "Negotiated Contracts" and "Special Rates." It also unavoidably requires resolution of another factual issue, i.e., whether the Union's claim for service charges collected for the year 1997 and the early months of 1998 had already prescribed. As questions of fact, they are proscribed by our Rule 45 jurisdiction; we generally cannot address these factual issues except to the extent necessary to determine whether the CA correctly found the NLRC in grave abuse of discretion in granting the Union's claim for service charges from the specified entries/transactions.

The jurisdictional limitations of our Rule 45 review of the CA's Rule 65 decision in labor cases constrain us to deny the present petition for clear lack of legal error in the CA's decision. Our consideration of the facts taken within this limited scope of our factual review power, convinces us that grave abuse of discretion attended the NLRC's decision. At what point and to what extent the NLRC gravely abused its discretion is the matter we shall discuss below.

The NLRC's patently erroneous appreciation of the real issue in the present controversy, along with the facts and the evidence, amounted to grave abuse of discretion

In granting the Union's claim, the NLRC simply declared that the PPHI "has not shown any proof that it paid or remitted what is due to the Union and its members" and concluded that the specified entries/transactions were "service chargeable." This NLRC conclusion plainly failed to appreciate that it involved only the alleged uncollected service charges from the specified entries/transactions. The NLRC likewise, in the course of its ruling, did not point to any evidence supporting its conclusion.

In deciding as it did, the NLRC patently proceeded from the wrong premise, i.e., that the PPHI did not at all distribute to the Hotel's covered employees their share in the collected service charges. It likewise erroneously assumed that all the specified entries/transactions were subject to service charges and that the PPHI collected service charges from them as its ruling was patently silent on this point. The NLRC also erroneously assumed that each and every transaction that the PPHI entered into was subject to a service charge.

What the NLRC clearly and conveniently overlooked was the underlying issue of whether service charges are due from the specified entries/transactions, i.e., whether the specified entries/transactions are covered by the CBA's general-rule provisions on the collection of service charges or whether they are excepted because they fall within the excepted "Negotiated Contracts" and "Special Rates" or simply did not involve a "sale of food, beverage, etc." from which service charges are due. This understanding of this case's real issue is an indispensable requisite in the proper resolution of the controversy and a task that the NLRC, as a tribunal exercising quasi-judicial power, must perform with circumspection and utmost diligence. The patent failure led to its manifestly flawed conclusions that were belied by the underlying facts. By so doing, the NLRC acted outside the clear contemplation of the law.[26]

Accordingly, we affirm the CA's decision to be legally correct as it correctly reversed the NLRC decision for grave abuse of discretion.

Nature of a CBA; rules in the interpretation of CBA provisions

A collective bargaining agreement, as used in Article 252 (now Article 262)[27] of the Labor Code, is a contract executed at the request of either the employer or the employees' exclusive bargaining representative with respect to wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievances or questions under such agreement.[28] Jurisprudence settles that a CBA is the law between the contracting parties who are obliged under the law to comply with its provisions.[29]

As a contract and the governing law between the parties, the general rules of statutory construction apply in the interpretation of its provisions. Thus, if the terms of the CBA are plain, clear and leave no doubt on the intention of the contracting parties, the literal meaning of its stipulations, as they appear on the face of the contract, shall prevail.[30] Only when the words used are ambiguous and doubtful or leading to several interpretations of the parties' agreement that a resort to interpretation and construction is called for.[31]

No service charges were due from the specified entries/transactions; they either fall within the CBA-excepted "Negotiated Contracts" and "Special Rates" or did not involve "a sale of food, beverage, etc."

The Union anchors its claim for services charges on Sections 68 and 69 of the CBA, in relation with Article 96 of the Labor Code. Section 68 states that the sale of food, beverage, transportation, laundry and rooms are subject to service charge at the rate of ten percent (10%). Excepted from the coverage of the 10% service charge are the so-called "negotiated contracts" and "special rates."

Following the wordings of Section 68 of the CBA, three requisites must be present for the provisions on service charges to operate: (1) the transaction from which service charge is sought to be collected is a sale; (2) the sale transaction covers food, beverage, transportation, laundry and rooms; and (3) the sale does not result from negotiated contracts and/or at special rates.

In plain terms, all transactions involving a "sale of food, beverage, transportation, laundry and rooms" are generally covered. Excepted from the coverage are, first, non-sale transactions or transactions that do not involve any sale even though they involve "food, beverage, etc." Second, transactions that involve a sale but do not involve "food, beverage, etc." And third, transactions involving "negotiated contracts" and "special rates" i.e., a "sale of food, beverage, etc." resulting from "negotiated contracts" or at "special rates;" non-sale transactions involving "food, beverage, etc." resulting from "negotiated contracts" and/or "special rates;" and sale transactions, but not involving "food, beverage, etc.," resulting from "negotiated contracts" and "special rates."

Notably, the CBA does not specifically define the terms "negotiated contracts" and "special rates." Nonetheless, the CBA likewise does not explicitly limit the use of these terms to specified transactions. With particular reference to "negotiated contracts," the CBA does not confine its application to "airline contracts" as argued by the Union. Thus, as correctly declared by the CA, the term "negotiated contracts" should be read as applying to all types of negotiated contracts and not to "airlines contracts" only. This is in line with the basic rule of construction that when the terms are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall prevail. A constricted interpretation of this term, i.e., as applicable to "airlines contracts" only, must be positively shown either by the wordings of the CBA or by sufficient evidence of the parties' intention to limit its application. The Union completely failed to provide support for its constricted reading of the term "negotiated contracts," either from the wordings of the CBA or from the evidence.

In reversing the NLRC's ruling and denying the Union's claim, the CA found the specified entries/transactions as either falling under the excepted negotiated contracts and/or special rates or not involving a sale of food, beverage, etc. Specifically, it considered the entries "Westin Gold Cards Revenue" and "Maxi Media Barter" to be negotiated contracts or contracts under special rates, and the entries "Business Promotions" and "Gift Certificates" as contracts that did not involve a sale of food, beverage, etc. The CA also found no factual and evidentiary basis to support the Union's claim for service charges on the entries "Guaranteed No show" and "F & B Revenue."

Our consideration of the records taken under our limited factual review power convinces us that these specified entries/transactions are indeed not subject to a 10% service charge. We thus see no reason to disturb the CA's findings on these points.

The PPHI did not violate Article 96 of the Labor Code when they refused the Union's claim for service charges on the specified entries/transactions

Article 96 of the Labor Code provides for the minimum percentage distribution between the employer and the employees of the collected service charges, and its integration in the covered employees' wages in the event the employer terminates its policy of providing for its collection. It pertinently reads: Art. 96. Service Charges.

x x x In case the service charge is abolished, the share of the covered employees shall be considered integrated in their wages.

This last paragraph of Article 96 of the Labor Code presumes the practice of collecting service charges and the employer's termination of this practice. When this happens, Article 96 requires the employer to incorporate the amount that the employees had been receiving as share of the collected service charges into their wages. In cases where no service charges had previously been collected (as where the employer never had any policy providing for collection of service charges or had never imposed the collection of service charges on certain specified transactions), Article 96 will not operate.

In this case, the CA found that the PPHI had not in fact been collecting services charges on the specified entries/transactions that we pointed out as either falling under "negotiated contracts" and/or "special rates" or did not involve a "sale of food, beverage, etc." Accordingly, Article 96 of the Labor Code finds no application in this case; the PPHI did not abolish or terminate the implementation of any company policy providing for the collection of service charges on specified entries/transactions that could have otherwise rendered it liable to pay an amount representing the covered employees' share in the alleged abolished service charges.

The Union's claim for service charges for the year 1997 and the early months of 1998 could not have yet prescribed at the time it filed its complaint on May 3, 2001; Article 1155 of the Civil Code applies suppletorily to Article 291 of the Labor Code

Article 291 (now Article 305)[32] of the Labor Code states that "all money claims arising from employer-employee relations x x x shall be filed within three (3) years from the time the cause of action accrued; otherwise, they shall forever be barred." [Emphasis supplied]

Like other causes of action, the prescriptive period for money claims under Article 291 of the Labor Code is subject to interruption. And, in the absence of an equivalent Labor Code provision for determining whether Article 291's three-year prescriptive period may be interrupted, Article 1155 of the Civil Code[33] may be applied. Thus, the period of prescription of money claims under Article 291 is interrupted by: (1) the filing of an action; (2) a written extrajudicial demand by the creditor; and (3) a written acknowledgment of the debt by the debtor.

In the present petition, the facts indisputably showed that as early as 1998, the Union demanded, via the 1st audit report, from the PPHI the payment and/or distribution of the alleged uncollected service charges for the year 1997. From thereon, the parties went through negotiations (LCMC) to settle and reconcile on their respective positions and claims.

Under these facts - the Union's written extrajudicial demand through its 1st audit report and the successive negotiation meetings between the Union and the PPHI - the running of the three-year prescriptive period under Article 291 of the Labor Code could have effectively been interrupted. Consequently, the Union's claims for the alleged uncollected service charges for the year 1997 could not have yet prescribed at the time it filed its complaint on May 3, 2001.

This non-barring effect of prescription, notwithstanding (i.e., that the running of the three-year prescriptive period had effectively been interrupted - by the Union's written extrajudicial demand on the PPHI), the CA, as it affirmed the LA, still correctly denied the Union's claims for the alleged uncollected and/or undistributed service charges on the specified entries/transactions for the year 1997 and the early part of 1998. As the CA found and discussed in its decision, and with which we agree as amply supported by factual and legal bases, the nature of these specified entries/transactions as either excepted from the collection of service charges or not constituting a "sale of food, beverage, etc.," and the Union's failure to support its claims by sufficient evidence warranted, without doubt, the denial of the Union's action.

In sum, we find the CA's denial of the Union's claim for service charges from the specified entries/transactions legally correct and to be well supported by the facts and the law. The CA correctly reversed for grave abuse of discretion the NLRC's decision.

WHEREFORE, in light of these considerations, we hereby DENY the petition. We AFFIRM the decision dated January 31, 2007 and resolution dated April 20, 2007 of the Court of Appeals in CA-G.R. Sp No. 93698.

SO ORDERED.

Carpio, (Chairperson), Del Castillo, Perez, and Perlas-Bernabe, JJ., concur.

[1] Rollo, pp. 14-89.

[2] Penned by Associate Justice Vicente Q. Roxas and concurred in by Associate Justices Josefina Guevarra-Salonga and Ramon R. Garcia, id. at 91-106.

[3] Id. at 108.

[4] Penned by Commissioner Angelita A. Gacutan, id. at 525-538.

[5] Penned by Labor Arbiter Renaldo O. Hernandez, id. at 728-749.

[6] Id. at 896-898.

[7] Id. at 898.

[8] Id. at 565.

[9] Id. at 566-567.

[10] Id. at 568-570.

[11] Id. at 549-552.

[12] Id. at 575-576.

[13] Id. at 790.

[14] Id. at 553-554.

[15] Supra note 5.

[16] Supra note 4.

[17] Id. at 473-519.

[18] Rollo, pp. 879-895.

[19] Supra note 2.

[20] Memorandum of Agreement dated June 17, 1998, rollo, pp. 616-624.

[21] Rollo, pp. 109-171.

[22] Supra note 3.

[23] Rollo, pp. 995-1080.

[24] Montoya v. Transmed Manila Corporation, G.R. No. 183329, August 27, 2009, 597 SCRA 334, 342-343.

[25] See Baguio Central University v. Gallente, G.R. No. 188267, December 2, 2013.

[26] Gonzales v. Solid Cement Corporation, G.R. No. 198423, October 23, 2012, 684 SCRA 344. See also Aldovino, Jr. v. Commission on Elections, G.R. No. 184836, December 23, 2009, 609 SCRA 234; and Pecson v. Commission on Elections, G.R. No. 182865, December 24, 2008, 575 SCRA 634.

[27] As directed by Republic Act No. 10151, entitled "An Act Allowing the Employment of Night Workers, thereby Repealing Articles 130 and 131 of Presidential Decree Number Four Hundred Forty-Two, as Amended, Otherwise known as The Labor Code of the Philippines," approved on June 21, 2011, the Labor Code articles beginning with Article 130 are renumbered.

Article 252 (256) of the Labor Code reads: Art. 252. MEANING OF THE DUTY TO BARGAIN COLLECTIVELY

The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. [28] Davao Integrated Port Stevedoring Services v. Abarquez, G.R. No. 102132, March 19, 1993, 220 SCRA 197, 204.

[29] Goya, Inc. v. Goya, Inc. Employees Union-FFW, G.R. No. 170054, January 21, 2013, 689 SCRA 1, 15-16, citing TSPIC Corporation v. TSPIC Employees Union (FFW), G.R. No. 163419, February 13, 2008, 545 SCRA 215, 225.

[30] PNCC Skyway Traffic Management and Security Division Workers Organization (PSTMSDWO) v. PNCC Skyway Corporation, G.R. No.171231, February 17, 2010, 613 SCRA 28, 45; Goya, Inc. v. Goya, Inc. Employees Union-FFW, supra, note 29, at 16.

[31] United Kimberly-Clark Employees Union-Philippine Transport General Workers' Organization (UKCEU-PTGWO) v. Kimberly-Clark Philippines, Inc., G.R. No. 162957, March 6, 2006, 519 Phil. 176, 191; Honda Philippines, Inc. v. Samahan ng Malayang Manggagawa sa Honda, G.R. No. 145561, June 15, 2005, 499 Phil. 174, 180.

[32] As directed by Republic Act No. 10151, entitled "An Act Allowing the Employment of Night Workers, thereby Repealing Articles 130 and 131 of Presidential Decree Number Four Hundred Forty-Two, as Amended, Otherwise known as The Labor Code of the Philippines," approved on June 21, 2011, the Labor Code articles beginning with Article 130 are renumbered.

[33] Article 1155 of the Civil Code reads:



ART. 1155. The prescription of actions is interrupted when they are filed before the Court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor. 

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