G.R. No. 218115 & 218170, January 27, 2021
PAL Maritime Corporation, Norwest Management Co. (PTE) Ltd. Singapore/ Sonrisa N. David, Petitioners, vs. Darwin D. Dalisay, Respondent. [ G.R. No. 218115 ]; Darwin D. Dalisay, Petitioner, vs. PAL Maritime Corporation, Norwest Management Co. (PTE) Ltd., and/ or Sonrisa N. David, Respondents. [G.R. No. 218170]

FACTS

In 2012, respondent Darwin D. Dalisay applied for shipboard employment with petitioner PAL Maritime Corporation. During his Pre-Employment Medical Examination (PEME), he declared only a past “Varicocoelectomy” operation and no history of other ailments, and was declared fit to work. He was hired as an able seaman and deployed on November 28, 2012. Shortly after, while lifting heavy provisions, he experienced sharp lower back pain. He was repatriated on December 10, 2012, and diagnosed by the company-designated physician with “low back pain secondary to Disc Protrusion L4-L5 and L5-S1.” On March 8, 2013, PAL Maritime discovered that Dalisay had previously filed and won a claim for permanent total disability benefits for low back pain against a former employer in 2008, receiving US$60,000. PAL Maritime then discontinued his medical treatment due to alleged malicious concealment of this pre-existing illness. Dalisay filed a complaint for permanent total disability benefits, sickness allowance, damages, and attorney’s fees. The Labor Arbiter dismissed the complaint, citing fraudulent misrepresentation under the POEA-SEC. The NLRC reversed, awarding disability benefits, sickness allowance, and attorney’s fees, finding Dalisay had an “honest belief” he was healed. The Court of Appeals partly granted PAL Maritime’s petition, disqualifying Dalisay from disability benefits due to deliberate concealment but retaining the awards for sickness allowance and attorney’s fees, reasoning his work contributed to his illness. Both parties sought partial reconsideration; Dalisay’s subsequent petition (G.R. No. 218170) was denied by the Supreme Court. Thus, only PAL Maritime’s petition ( G.R. No. 218115 ), assailing the award of sickness allowance and attorney’s fees, was submitted for decision.

ISSUE

Whether a seafarer who deliberately conceals a pre-existing illness during the PEME is entitled to sickness allowance and attorney’s fees.

RULING

No. The Supreme Court granted PAL Maritime’s petition, reversing the Court of Appeals and reinstating the Labor Arbiter’s decision dismissing the complaint. The Court held that a seafarer guilty of fraudulent concealment in the PEME is disqualified from claiming “any compensation and benefits” under Section 20(E) of the 2010 POEA-SEC, which unequivocally includes sickness allowance. The Court rejected the CA’s reasoning that the seafarer’s work contributed to his illness, emphasizing that the disqualification is absolute and not subject to a contributory-work test. The award of attorney’s fees was also deleted, as there was no evidence of bad faith on the part of the employer in invoking the seafarer’s concealment as a defense. The seafarer’s act of concealment breached the fundamental principle of good faith in contracts, and allowing benefits would constitute unjust enrichment.