G.R. No. 190161 October 13, 2014
ANITA N. CANUEL, for herself and on behalf of her minor children, namely: CHARMAINE, CHARLENE, and CHARL SMITH, all surnamed CANUEL, Petitioners, vs. MAGSAYSAY MARITIME CORPORATION, EDUARDO U. MANESE, and KOTANI SHIPMANAGEMENT LIMITED, Respondents.

FACTS

Nancing R. Canuel was hired by respondent Magsaysay Maritime Corporation as Third Assistant Engineer for its foreign principal, respondent Kotani Shipmanagement Limited, on July 14, 2006, for a period of twelve months. He commenced work on July 19, 2006. On February 20, 2007, he figured in an accident while performing his duties on board the vessel, injuring the right side of his body. He was diagnosed with “bilateral closed traumatic hemothorax” in Shanghai, China on March 5, 2007, and was medically repatriated on March 24, 2007. He was admitted to Manila Doctor’s Hospital and eventually died on April 25, 2007. The death certificate indicated the immediate cause of death as acute respiratory failure, with lung metastasis and r/o bone cancer as antecedent and underlying causes, respectively. Petitioners, Nancing’s widow and minor children, filed a complaint for death benefits before the NLRC. The Labor Arbiter ruled in favor of petitioners, awarding death benefits, damages, and attorney’s fees. The NLRC affirmed the LA’s decision but deleted the award for sickness allowance and burial benefits as these were already paid. The Court of Appeals reversed the NLRC, dismissing the complaint, citing the case of Klaveness Maritime Agency, Inc. v. Beneficiaries of the Late Second Officer Anthony S. Allas, which held that death after the termination of the contract is not compensable, even if caused by the same illness that prompted repatriation.

ISSUE

Whether or not the Court of Appeals committed reversible error in holding that the NLRC committed grave abuse of discretion in granting petitioners’ complaint for death benefits.

RULING

The Supreme Court ruled that the CA committed reversible error. The Court granted the petition, reversed the CA Decision and Resolution, and reinstated the NLRC Decision with modifications. The Court held that for death benefits to be compensable under the 2000 POEA-SEC, the seafarer’s death must be (1) work-related and (2) occur during the term of the employment contract. The Court found both requirements satisfied. First, Nancing’s death was work-related as it resulted from a work-related injury (the accident on February 20, 2007) that arose out of and in the course of his employment. Second, his death occurred during the term of his employment. The Court rejected the application of the Klaveness doctrine, clarifying that in Klaveness, the seafarer was repatriated due to the completion of his contract, not due to illness or injury. In contrast, Nancing was medically repatriated due to a work-related injury. Under Section 18(C) of the 2000 POEA-SEC, the employer’s liability for a work-related injury or illness causing the seafarer’s death continues even after the termination of the employment contract, provided the death occurs within 120 days from the date of repatriation. Since Nancing died on April 25, 2007, which was within 120 days from his repatriation on March 24, 2007, his death is deemed to have occurred during the term of his employment. The Court also held that the cause of death (acute respiratory failure) was directly linked to the work-related injury (traumatic hemothorax), making it compensable. The award of moral and exemplary damages was deleted for lack of basis, but the award of attorney’s fees was sustained. Respondents were ordered to pay petitioners US$50,000 as death benefits, US$7,000 for each of the three minor children, and 10% of the total award as attorney’s fees.