G.R. No. 204307 . June 06, 2018
ORIENT HOPE AGENCIES, INC. AND/OR ZEO MARINE CORPORATION, PETITIONERS, V. MICHAEL E. JARA, RESPONDENT.

FACTS

Respondent Michael E. Jara was hired as an engine cadet by petitioner Orient Hope Agencies, Inc. for its principal, Zeo Marine Corporation. On July 12, 2007, the vessel M/V Orchid Sun sank, causing Jara to sustain fractures in his left ulna and left fibula. He was treated in Oman, repatriated, and admitted to a Manila hospital on August 3, 2007. He underwent two knee operations in August 2007 and January 2008. Jara filed a complaint for permanent total disability benefits on March 6, 2008. On May 29, 2008, the company-designated physician issued a medical report stating Jara’s suggested disability grading was Grade 11, based on his last check-up on March 17, 2008. The Labor Arbiter and the National Labor Relations Commission awarded benefits based on this Grade 11 assessment.

ISSUE

Whether the Court of Appeals correctly awarded Jara permanent and total disability benefits instead of the Grade 11 disability benefits assessed by the company-designated physician.

RULING

Yes, the Court of Appeals was correct. The Supreme Court affirmed the award of permanent and total disability benefits. The legal logic hinges on the failure of the company-designated physician to issue a final and definitive assessment within the periods mandated by law and jurisprudence. While the 120-day period for assessment can be extended to 240 days if further medical treatment is required, the physician must issue a final assessment within this extended period. Here, Jara was repatriated on August 3, 2007. The medical report dated May 29, 2008, was issued 299 days later, well beyond the 240-day maximum period. Critically, this report was not a final assessment but merely a “suggested disability grading” based on a check-up from over two months prior (March 17, 2008). It did not declare Jara fit to work or state a definitive, conclusive disability grade. Consequently, the failure to give a final assessment within 240 days legally transformed Jara’s temporary total disability into a permanent and total one. His inability to work for more than 240 days, coupled with the nature of his knee injury which impeded his return to sea duties, justified the award of full disability benefits under the Collective Bargaining Agreement. The petitioners’ argument that the 240-day period was not exceeded, as treatment supposedly ended in March, was rejected because no final assessment was rendered at that time.