G.R. No. 166580; February 8, 2007
PRUDENTIAL SHIPPING and MANAGEMENT CORPORATION and ZENITH SHIPPING INVESTMENT, LTD., Petitioners, vs. EMERLINDA A. STA. RITA, for herself and in behalf of RENE A. STA. RITA, Respondent.

FACTS

Petitioners hired Virgilio Sta. Rita as an oiler. During his contract, he was diagnosed with an umbilical hernia and was repatriated on March 8, 2000. Upon arrival, company-designated physicians performed a successful herniorrhaphy. During this procedure, liver cirrhosis was also discovered. After recovery and several post-operation check-ups, Virgilio executed a “Certificate of Fitness for Work” on June 20, 2000, releasing his employers from all claims. Petitioners paid his sick wages. Virgilio died on March 18, 2001, nearly a year after his repatriation, due to complications from hepatocellular carcinoma (liver cancer).
Respondents, Virgilio’s heirs, filed a complaint for death compensation benefits under the POEA Standard Employment Contract. The Labor Arbiter ruled in their favor, finding that the nature of his employment aggravated his condition. The NLRC reversed, holding that death benefits were not due as Virgilio died after his employment was terminated. The Court of Appeals reinstated the Labor Arbiter’s decision, prompting this petition.

ISSUE

Whether the heirs of the deceased seafarer are entitled to death compensation benefits under the POEA Standard Employment Contract when the seafarer died almost one year after his employment was terminated upon medical repatriation.

RULING

The Supreme Court granted the petition and reinstated the NLRC decision, ruling that respondents were not entitled to death benefits. The legal logic hinges on the precise application of the POEA contract’s temporal requirement for compensability. Under Section 18 of the contract, the employer is liable for death benefits if the seafarer dies during the term of employment from any cause. The contract further provides that employment is terminated upon the seafarer’s repatriation for medical reasons.
Virgilio was repatriated on March 8, 2000, which terminated his employment contract. His death occurred on March 18, 2001, long after this termination. Therefore, his death did not occur “during the term of his contract” as strictly required by the governing contract. The Court emphasized that while the contract is construed liberally in favor of seafarers, its clear provisions must be applied. The cause of death (liver cancer) was also distinct from the illness for which he was repatriated (umbilical hernia), and there was no substantial evidence presented that the work conditions aggravated the liver condition. Consequently, with the employment relationship already severed, the obligation to pay death benefits under the POEA contract did not arise.