G.R. No. 168560; January 28, 2008
KLAVENESS MARITIME AGENCY, INC., and TORVALD KLAVENESS CO., A/S, petitioners, vs. BENEFICIARIES OF THE LATE SECOND OFFICER ANTHONY S. ALLAS, represented by CHERYL Z. ALLAS, respondents.

FACTS

Second Officer Anthony S. Allas was employed by petitioner Klaveness Maritime Agency under successive contracts from 1990 to 1999. During his last contract, he experienced symptoms of painful urination, which a company physician preliminarily treated as a urinary tract infection. After his contract ended on September 20, 1999, Allas consulted a private urologist and was diagnosed with urinary bladder cancer, for which he underwent surgery in January 2000. He was subsequently declared medically unfit for re-employment by the company physician. Allas’s condition deteriorated, and he died on March 5, 2001, from cardio-respiratory arrest secondary to metastatic bladder cancer.
His heirs filed a claim for death benefits under the POEA Standard Employment Contract. The Labor Arbiter and the National Labor Relations Commission (NLRC) dismissed the claim, ruling that death did not occur during the term of his employment contract and that the illness was not proven to be work-related. The Court of Appeals reversed, holding that compensability should cover an illness that led to death, provided the illness occurred during the contract term, and that there was a likelihood the disease was contracted while on board.

ISSUE

Whether the heirs of a seafarer are entitled to death benefits under the POEA Standard Employment Contract when the seafarer’s death occurs after the termination of the employment contract.

RULING

No. The Supreme Court granted the petition and reversed the Court of Appeals, reinstating the NLRC’s dismissal of the claim. The Court strictly interpreted Section 20(A) of the POEA Standard Contract, which explicitly states that compensation for death is payable “in case of work-related death of the seafarer during the term of his contract.” The provision establishes two indispensable conditions for compensability: first, the death must be work-related, and second, it must occur during the term of the contract. Both conditions are conjunctive; the absence of one disqualifies the claim.
The legal logic is anchored on the plain meaning of the contract. Allas died more than one and a half years after his contract ended. Therefore, the second condition—death during the term—was unequivocally not met. The Court rejected the appellate court’s liberal interpretation, emphasizing that while labor contracts are construed in favor of labor, this does not justify disregarding the contract’s clear and unambiguous terms. The Court also noted that the heirs failed to substantiate the work-relatedness of the illness, as bladder cancer is not listed as an occupational disease under the contract without proof that the seafarer’s specific working conditions increased the risk of contracting it. The PEME’s “fit to work” declaration is not a guarantee of perfect health but a assessment of fitness for duty at that time.