REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF LABOR AND EMPLOYMENT

NATIONAL LABOR RELATIONS COMMISSION
NATIONAL CAPITAL REGION
QUEZON CITY

XXX
Complainant-Appellee,

-versus- NLRC-NCR-XXX

XXX
Respondents-Appellants.

x------------------------------------------------------x

MEMORANDUM ON APPEAL

Respondents-Appellants, through counsel, unto this Honorable Commission, respectfully

appeal the Decision rendered by the Honorable Labor Arbiter XXX n 22 August 2008 a copy of

which was received by Respondents-Appellants on 05 September 2008. The last day for the

period to appeal is on 15 XXX. Inasmuch as the instant Memorandum on Appeal is filed not later

than 15 XX, the same should be considered as filed on time.

STATEMENT OF THE CASE

The instant case originated from a Complaint filed by XXX (the “Appellee”), against

XXX (collectively called the “Appellants”) for payment of total permanent disability benefits,

balance of illness allowance, reimbursement of medical expenses, moral and exemplary damages

and 10% attorney’s fees, due to an illness which seaman XXX allegedly suffered while working

on board the vessel “MV XXXNATI” (hereinafter referred to as the “Vessel”).

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After the parties had filed their respective Position Papers and subsequent pleadings, the

Labor Arbiter rendered the assailed decision on 22 August 2008, the dispositive portion of which

reads:

“WHEREFORE, premises considered, judgment is hereby rendered

Ordering the respondents, jointly and severally, to pay the complainant permanent
disability benefits in the amount of XXX or its peso equivalent at the time of
payment.

All other claims are DISMISSED.”

A copy of the Decision is marked and attached herewith as Annex “A”, and made an

integral part hereof.

Appellants respectfully submit that the aforesaid decision is erroneous for being contrary

to the evidence and the law, which, if not corrected, would cause grave and irreparable damage

or injury to the Appellants.

Appellants likewise file herewith a Surety Bond and the Official Receipt of payment of

the appeal fee, in compliance with the requirements of Section 6 Rule VI of the New Rules of

Procedure, as amended by Resolution No. XXX series of 2002.

STATEMENT OF FACTS

On 12 February 2007, the Appellee XXXX was engaged by the XXX Shipmanagement

Co., Inc., for and in behalf of XXX., S.A., as a seafarer for the position of Third Mate on board

the vessel XX. A copy of the employment contract between the Appellants and Appellee is

attached to the Appellant’s Position Paper as Annex “1”.

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On 05 June 2007, Appellee lost consciousness and collapsed while performing his

ordinary functions as a XXX. He was brought to a physician in China and was initially

diagnosed with chronic stomachache and hypertension. His blood pressure was noted at 140/90.

He was advised to take medications but was thereafter declared fit to work. A copy of the

medical report is attached to the Appellant’s Position Paper as Annex “2”. Consequently, he was

repatriated on 18 July 2007. As soon he arrived in the Philippines, he was initially examined by

Dr. XXX in the University of XXX Dalta xxxenter where he had a cranial CT scan. He was

diagnosed with Acute Myocardial Infarction and was given medication by the said physician. A

copy of the Medical Certificate signed by Dr. XXX is attached to the Appellee’s Position Paper

as Annex “3”. He was thereafter referred to NGC Medical Clinic for further medical treatment.

He was examined by a cardiologist and underwent a 24 Hour Holter Monitoring for further

evaluation of his condition. After several medical examinations, the final diagnosis of Dr. XXX

the company-designated physician, confirmed that Appellee is suffering from myocardial

infarction with hypertension. Copies of the Medical Reports of Dr. XXXz are attached to the

Appellee’s Position Paper as Annexes “4” to “8”.

SOLE ISSUE

I.

WHETHER OR NOT THE LABOR ARBITER SERIOUSLY ERRED IN

FINDING THAT COMPLAINANT-APPELLEE IS ENTITLED TO

DISABILITY BENEFITS AMOUNTING TO SIXTY THOUSAND U.S.

DOLLARS (US$ 60,000.00).

DISCUSSIONS / ARGUMENTS
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Appellee is not entitled to the total

permanent disability benefits in the
amount of US xxX.00

In the Disputed Decision, the Labor Arbiter ruled that Appellee is entitled to permanent

disability benefits amounting to SIXTY THOUSAND US DOLLARS (US$XXX). However, the

facts and the pieces of evidence adduced in the instant case do not support the conclusion arrived

at by the Labor Arbiter in the disputed Decision.

It is not disputed by the Appellants that Appellee is suffering from Myocardial Infarction

as assessed by the company designated physician. However, Appellants would like to emphasize

that Appellee’s illness could not have been brought about by the nature of his work as a

TXXMate. As such, Respondents could not legally be made liable to him for disability benefits.

There is no legal basis for the award of US$XXX.00 representing full permanent

disability benefits. The fact that the illness of the Appellee may last more than 120 days is not

ground to immediately conclude that he is entitled to full permanent disability benefits. 1 It was

stated by the Supreme Court that POEA Standard Employment Contract does not measure

number of days in terms of disability but by gradings only, provided that the illness is work-

related. (Crystal Shipping, Inc. and/or A/S Stein Line Bergen vs. Deo P. Natividad, [G.R. No.

154798 February 12, 2007]). In other words, even if the illness lasted longer than 120 days, it

does not necessarily follow that the seafarer is entitled to total permanent disability benefits.

Hence, it is respectfully submitted that the Honorable Labor Arbiter should not have granted

Appellee’s claim for full permanent disability benefits simply because the illness lasted for 120

days.

The Honorable Labor Arbiter in page 7 of the disputed Decision held that:

1
Page 8 of the Decision.
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“(Complainant) Respondents argue that the illness to be compensable need

not only be incurred during the term of the contract but should also be work-
related and/or has reasonable connection with the employee’s work. This Office
disagrees.” (emphasis supplied)

Thereafter, the case of Sealanes Marine Services Inc. vs. NLRC was cited, to wit:

“The compensability of the illness of seamen need not be dependent upon

whether it is work connected or not as it is sufficient that it was contracted
DURING THE TERM OF THE EMPLOYMENT CONTRACT.”

With all due respect, the Honorable Labor Arbiter committed grave error in holding that

it was sufficient that the illness was contracted during the term of the contract. Moreover, the

Sealanes ruling is no longer good case law. It was a case decided on October 5, 1990, under the

old POEA Standard Employment Contract which did not require that the illness be work-related

to be compensable. The Appellants would like to point out that the Honorable Arbiter

obviouslyoverlooked the fact that the prevailing Standard Employment Contract at present, as

distinguished from the previous POEA Standard Employment Contract requires that the illness to

be compensable for for purposes of disability benefits, must comply with the twin requirements

of :a0 the illness must be work related or caused by the working environment of the Seafarer.;

and b) the illness occurs during the term of the contract of employment. These requirements are

stated in Section 20 (B) thereof.

Section 20 (B) of the Standard Employment Contract provides that:

SECTION 20. COMPENSATION AND BENEFITS

B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS

The liabilities of the employer when the seafarer suffers work-related injury or
illness during the term of his contract are as follows:

xxx xxx xxx

3. 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 post-
employment medical examination by a company-designated physician within
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three working days upon his return except when he is physically incapacitated to
do so, in which case, a written notice to the agency within the same period is
deemed as 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.

xxx xxx xxx

6. In case of permanent total or partial disability of the seafarer

caused by either injury or illness the seafarer shall be compensated in accordance
with the schedule of benefits enumerated in Section 32 of this Contract.
Computation of his benefits arising from an illness or disease shall be governed
by the rates and the rules of compensation applicable at the time the illness or
disease was contracted. (emphasis added)

A reading of the above-cited provision reveals that the entitlement of disability benefits becomes

a matter of right only if “the seafarer suffers work-related injury or illness during the term

of his contract.” In other words, only when the seafarer's illness is categorized as work-related

does the liability of the employer to pay disability benefits to the former arise.

The Honorable Labor Arbiter, in his Decision faults the Appellants' company-designated

physician for not having given any disability rating for the illness suffered by the Appellee. 2

Precisely, no disability grading was given because the illness was not work related.

The Standard Employment Contract defines a work-related illness as follows:

“Definition of Terms. For purposes of this contract, the following

terms are defined as follows:

xxx xxx xxx

1. Work-Related Illness – 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.” (emphasis supplied)

2
Page 8 of the Decision.
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The Standard Employment Contract unequivocally states that “[f]or 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.
(emphasis added).

The afore-quoted section also states, in particular, that a cardio-vascular disease maybe

deemed work-related if any of the following conditions is met:

(a) If the heart disease was known to have been present during
employment, there must be proof that an acute exacerbation
was clearly precipitated by the unusual strain by reasons of
the nature of his work.

(b) The strain of work that brings about an acute attack must be
sufficient severity and must be followed within 24 hours by
the clinical signs of a cardiac insult to constitute casual
relationship.

(c) If a person who was apparently asymptomatic before being

subjected to strain at work showed signs and symptoms of
cardiac injury during the performance of his work and such
symptoms and signs persisted, it is reasonable to claim a
casual relationship.

Appellants had presented overwhelming evidence to establish that the illness of the

Appellee is not work-related. All of which were disregarded by the Honorable Labor Arbiter. As

a Third Mate, his duties were laid down in Safety Management Manual under Company

Organisation Responsibilities and Authority of the Foreign Principal3.

3
Annex “9” of Appellants' Position Paper.
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a. Assist the Second Officer in maintaining navigational

publications up to date as instructed by the Master. Normally,
the Third Officer corrects lists of lights volumes.

b. Check and where necessary replace safety equipment, under

the direction of the Chief Officer.

c. Supervise, under Master’s Chief Officer’s directions, deck,

crew activities. (e.g. mooring, receiving stores.

d. Carry out watchkeeping duties and take appropriate actions

in conformity with all relevant regulations and operational
needs.

e. Carry out ad hoc assignments from the Chief Officer

designed to develop experience in the job and potential for
developments.

f. Handle communications on GMDSS ships under Master's

supervision.

It is clear from the foregoing that Appellee's task on the vessel focused primarily on

oversight, supervision and monitoring. On 05 June 2007, or less than three (3) months into his

contract, when he lost consciousness, he was performing his ordinary functions as a XXX. The

logbook entries from 02 June to 05 June 2007 were attached as Annexes “10” to “13” of the

Appellants' Position Paper. As if these were not enough, the Letter of Information 4 signed by

Capt. MoXXs, the Master of the Vessel showed that Appellee collapsed while he was checking,

signing and stamping Safety Management System (SMS) documents. Another Report 5 signed by

Capt. MXXXs indicated that he was never assigned duties other than those he was obliged to as a

Third Officer and that there was no unusual operation carried out which Appellee was actively

and physically involved in where work was carried out for strenuous hours. It cannot be said that

the Appellee's illness was brought about or caused by the stress arising from his work.

Otherwise, the Second Mate, First Mate and the Master of the Vessel would have suffered the

same illness as the Appellee who had the same functions. Yet, it was only the Appellee who

became sick. Proof that the duties of the work did not have anything to do with the Appellee's

illness

4
Annex “14” of the Appellants' Position Paper.
5
Annex “15” of the Appellants' Position Paper.
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The POEA Standard Employment Contract is a contract agreed upon voluntarily by the

Appellee and the Appellants. It is a cardinal rule in the interpretation of contracts that if the

terms of the contract are clear and leave no doubt upon the intention of the contracting parties,

the literal meaning of its stipulation shall control (Article 1370 of the New Civil Code). This has

been applied in interpreting the POEA Standard Employment Contract in the case of German

Marine Agencies, Inc. v. NLRC (350 SCRA 629). The Supreme Court held in that case that:

“(i)n order to claim disability benefits under the Standard Employment Contract,
it is the company-designated physician who must proclaim that the seaman
suffered a permanent disability, whether total or partial, due to either injury or
illness, during the term of the latter’s employment. There is no provision
requiring accreditation by the POEA of such physician. In fact, aside from their
own gratuitous allegations, petitioners are unable to cite a single provision in the
said contract in support of their assertions or to offer any credible evidence to
substantiate their claim. If accreditation of the company-designated physician
was contemplated by the POEA, it would have expressly provided for such a
qualification, by specifically using the term accreditation in the Standard
Employment Contract, to denote its intention.”

It was indeed unfortunate that the Appellee was stricken with this serious illness.

However, though this illness was diagnosed during the term of his employment with the

Appellants, it does not necessarily follow that the Appellants are liable to Appellee for disability

benefits. The Appellee was engaged by the Appellants for a nine (9) month contract, but barely

four (4) months after boarding the vessel he was repatriated for health reasons. Surely, the illness

of the Appellee could not have been acquired over such a short period of time. The development

of the illness could not have certainly happened within those few short months that the Appellee

was under the employ of the Appellants.

It is respectfully submitted that it was error on the part of this Honorable Commission to

conclude that just because a disease is included in the list of illness under Section 32 it is

conclusively presumed as work-related and that the burden is upon the employer to prove that

the working conditions stated under Section 32-A did not exist and the illness of the Appellee is

not compensable. Such conclusion cannot be read in Section 32-A. On the contrary, a reading of
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the aforesaid section puts burden on the Appellee to prove that the conditions provided in the

aforementioned section has been satisfied. The opening phrase of Section 32-A states that “for an

occupational disease and the resulting disability or death to be compensable, all of the following

conditions must be satisfied. By using the phrase to be compensable, it clearly gives the reader

the impression that there is a duty to prove compensability. Hence, it is the Appellee's burden to

prove compensability and not the Respondent's.

To support the above-conclusion that it was the Appellee's burden to prove

compensability the Supreme Court has held, in the cases of Rino vs. Employees' Compensation

Commission, et. al. (331 SCRA 596) and Sante vs. Employees' Compensation Commission (174

SCRA 596), that “ a claimant must submit such proof as would constitute a reasonable basis for

concluding that the conditions of employment of the deceased caused the ailment or aggravated

the risk of contracting the same. The evidence must be real and substantial and not merely

apparent; for the duty to prove work-causation or work aggravation imposed by existing law is

real, not merely apparent”. No less than the Supreme Court, in fact, stated clearly in the recent

case of Petroleum Shipping Limited v. National Labor Relations Commission (G.R. No. 148130,

June 16, 2006) that in order to hold the employers liable to the employee for disability benefits,

the employee must present concrete proof that he acquired or contracted the injury or illness,

which resulted to his disability, during the term of his contract. In view of this level of proof laid

down by the Supreme Court in the afore-cited decisions, mere allegations of the Appellee are

insufficient to support the findings that he is entitled to the disability benefits. The Honorable

Labor Arbiter has anchored its decision to award full permanent disability from the mere fact

that the disability of the Appellee has incurred sickness while his employment contract is

effective.

The only evidence presented by the Appellee is the Medical XXXXno who treated the

Appellee only once. Dr. Magno in the said certificate indicated that “low exertional activities

allowed”. This statement contradicts Appellee's entitlement to total permanent disability benefit
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since nowhere in the certificate did Dr. Magno declare that Appellee’s illness was total and

permanent nor did she give a disability assessment of Grade 1. Appellee’s resort to his personal

doctor is self-serving and without basis. He did this unilaterally and without the consent of the

Appellants. The findings of Appellee’s own doctor are at most, biased and self-serving, at the

very least unreliable. As such, it deserves no credence whatsoever.

Section 20 (B)(3) of the POEA Standard Employment Contract succinctly states that:

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 added)

Based on the above-cited provision, Appellee should have requested for a third medical

examination and assessment to be made by an independent doctor jointly chosen by both parties

when his self-appointed doctor disagreed with the assessment of the company-designated physi-

cian. This Appellee failed to do.

Furthermore, a cursory reading of Section 20 (B) of the POEA Standard Contract clearly

shows that no other physician may initially establish the degree of a seafarer’s disability

EXCEPT the company-designated physician.

The Appellants are not the insurers of the seafarer's health. Therefore, they cannot be

held liable for every illness of the seafarer. Such illness should fall clearly within the bounds of

the POEA Standard Employment Contract for the Appellants to be liable for the illness of the

Appellee. The POEA Standard Employment Contract was not designed for the protection of the

seafarer only but also for the protection of the employer from unjust claims. In view of the fact

the circumstances surrounding the illness of Appellee failed to satisfy the conditions for

compensability under the POEA Standard Employment Contract, the Respondents-Appellants

should be absolved from paying disability compensation to him.

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PRAYER

WHEREFORE, it is respectfully prayed of this Honorable Commission that judgment be

rendered reversing and setting aside the Decision of XXX and a new one issued dismissing the

instant case for lack of merit.

Other reliefs just and equitable under the premises are likewise prayed for.

City of XXX Quezon XXX 2008.

XXX Royale
120 L.P. XXX Manila
By:

XXXXX

COPY FURNISHED:

LABOR XXX St.

Quezon City

ATTY. XXX
Manila

EXPLANATION

Pursuant to Section 15, Rule VII of the Rules of Procedure of the National Labor
Relations Commission, undersigned counsel respectfully manifests that copies of the foregoing
Memorandum of Appeal were filed with the National Labor Relations Commissions and served
on the parties by registered mail in lieu of personal service due to distance and time constraint.

XXX
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