G.R. No. 167678 ; June 22, 2010
SOUTHEASTERN SHIPPING and SOUTHEASTERN SHIPPING GROUP, LTD., Petitioners, vs. FEDERICO U. NAVARRA, JR., Respondent.

FACTS

Petitioners hired Federico U. Navarra, Jr. as a seafarer under successive contracts, the last of which was approved on January 21, 1998, for a period of 56 days. While on board the vessel in March 1998, Federico complained of a sore throat, fever, and developed a neck mass. He was repatriated to the Philippines on March 30, 1998, upon the contract’s expiration. Subsequent medical examinations in June 1998 diagnosed him with Hodgkin’s Lymphoma. On September 6, 1999, Federico filed a complaint for disability benefits. During the pendency of the case, he died on April 29, 2000. His widow substituted him, converting the claim to one for death benefits.
The Labor Arbiter dismissed the complaint, ruling the illness was not compensable. The National Labor Relations Commission (NLRC) reversed, awarding death compensation, allowances, and burial expenses. The Court of Appeals affirmed the NLRC, holding the claim had not prescribed and that death benefits were due even though Federico died after his contract expired, as the cause of death was the illness for which he was repatriated.

ISSUE

The issues are: (1) whether the claim for death benefits had prescribed; (2) whether Hodgkin’s Disease is a compensable illness; and (3) whether petitioners are liable for death benefits when the seafarer died after the term of his employment contract.

RULING

The Supreme Court partly granted the petition. On prescription, the Court ruled the claim was not barred. While the Standard Employment Contract provides a one-year prescriptive period from the seafarer’s medical repatriation, this conflicts with Article 291 of the Labor Code, which prescribes money claims from employer-employee relations within three years from accrual. In case of conflict, the law prevails. Federico’s cause of action accrued upon his diagnosis in June 1998, and the complaint filed in September 1999 was well within the three-year period.
However, the Court denied the claim for death benefits. For death benefits to be compensable under the POEA Standard Employment Contract, the seafarer’s death must occur during the term of the contract. Federico died on April 29, 2000, approximately 25 months after his contract ended on March 30, 1998. Furthermore, the claimant failed to substantiate that the Hodgkin’s Disease was work-related or aggravated by his working conditions. The medical report during his employment indicated only an Acute Respiratory Tract Infection. While the Court construes contracts liberally in favor of seafarers, compensation cannot be awarded based on surmises. Absent proof that the illness was contracted or aggravated during the contract term, the claim must fail.