G.R. No. 237063 July 24, 2019
FRANCIVIEL DERAMA SESTOSO, Petitioner, vs. UNITED PHILIPPINE LINES, INC., CARNIVAL CRUISE LINES, FERNANDINO T. LISING, Respondents.

FACTS

Petitioner Franciviel Derama Sestoso was hired as a Team Headwaiter. On October 31, 2014, while cleaning a dining table, he felt a sharp pain in his right knee. An MRI revealed a complex tear of the medial meniscus and degenerative joint changes. He completed his contract and was repatriated on February 13, 2015. The company-designated physician, Dr. Mylene Cruz-Balbon, treated him and referred him to an orthopedic surgeon, Dr. William Chuasuan, Jr., who suggested a Grade 10 disability rating and recommended surgery. Dr. Cruz-Balbon issued a final diagnosis in July 2015 but did not provide a final disability rating or a certificate of fitness to work. Medical treatment ceased on June 26, 2015.
Petitioner consulted an independent physician, Dr. Victor Gerardo E. Pundavela, who assessed him as partially and permanently disabled. The Labor Arbiter awarded only Grade 10 benefits. The NLRC reversed, awarding total and permanent disability benefits, ruling that the company physician’s failure to issue a final assessment within 240 days rendered the disability permanent and total. The Court of Appeals reinstated the Labor Arbiter’s decision, holding the illness was pre-existing and not compensable, thus making the 120/240-day rule inapplicable.

ISSUE

Did the Court of Appeals commit reversible error in denying the award of total and permanent disability benefits?

RULING

Yes. The Supreme Court reversed the Court of Appeals and reinstated the NLRC’s award of total and permanent disability benefits. The legal logic centers on the application of the 240-day rule for disability assessment under the POEA-SEC. An illness is compensable if it is work-related, and a pre-existing condition does not automatically bar compensation if aggravated by the work. Here, the company-designated physician failed to issue a final and definite disability assessment within the 240-day period, which extended from repatriation (February 13, 2015) until the last medical report (July 28, 2015). The July 28 documents contained a diagnosis but no final disability grading or declaration of fitness, leaving petitioner’s condition unresolved.
This failure legally transformed petitioner’s disability into a permanent and total one, entitling him to the corresponding benefits. The Court emphasized that the duty to issue a final assessment within the statutory period rests on the company-designated physician. The absence of such an assessment, coupled with petitioner’s continued inability to work as a seafarer, warrants the conclusion of total and permanent disability. Respondents were ordered to jointly and severally pay petitioner US$60,000.00 as disability benefits, plus attorney’s fees and legal interest.