G.R. No. 255889 , July 26, 2023
LEONARDO L. JUSTO, PETITIONER, VS. TECHNOMAR CREW MANAGEMENT CORP., TECHNOMAR SHIPPING, INC., AND TERESITA B. MALAGIOK, RESPONDENTS.

FACTS

Petitioner Leonardo L. Justo was hired as a cook by respondent Technomar Crew Management Corp. On March 27, 2018, he was declared fit to work. In the first week of June 2018, while working, a cargo hold fell directly above the galley, producing a loud metallic sound. This caused a high-tune ringing in his right ear, blurring of vision, and headache. He was medically attended to in Sweden and France, diagnosed with a perforated right eardrum, and advised surgery. He was repatriated on July 22, 2018. The company-designated doctor, after a series of treatments including a right ear tympanoplasty on August 17, 2018, issued a disability assessment of Grade 11 (one-half loss of hearing in one ear) on November 7, 2018. On December 7, 2018, the same doctor issued a final medical report declaring Leonardo “Fit to Resume Sea Duties.” Leonardo refused to sign the certificate of fitness. He consulted his own doctor, Dr. Danilo Q. Reyno, who declared him totally and permanently disabled on January 14, 2019, citing severe hearing loss in the left ear and moderate loss in the right, which would be aggravated by workplace noise. Through counsel, Leonardo requested a third-doctor referral from respondents on January 17, 2019, but claimed they did not reply. He then filed a Notice to Arbitrate. Respondents countered that they were willing to refer the case to a third doctor, as shown in conference minutes where they submitted proposed guidelines, but coordination failed as Leonardo’s side could not be reached. The Panel of Voluntary Arbitrators (PVA) ruled in favor of Leonardo, granting total and permanent disability benefits, moral and exemplary damages, and attorney’s fees. The Court of Appeals reversed this decision.

ISSUE

Whether the Court of Appeals erred in reversing the PVA Decision and in not finding petitioner Leonardo L. Justo entitled to total and permanent disability benefits.

RULING

The Supreme Court GRANTED the Petition. The Decision and Resolution of the Court of Appeals were REVERSED and SET ASIDE. The Decision of the Panel of Voluntary Arbitrators dated September 27, 2019, was REINSTATED with MODIFICATION, deleting the awards of moral and exemplary damages.
The Court held that the company-designated doctor’s “fit to work” assessment was issued beyond the 120/240-day period allowed for assessment under the Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC) and relevant jurisprudence. The illness occurred in June 2018, and the final assessment was issued on December 7, 2018, which was beyond 240 days from the initial medical treatment. Consequently, Leonardo was deemed permanently and totally disabled.
The Court further ruled that the conflicting findings of the company-designated doctor (fit to work) and the seafarer’s personal doctor (totally and permanently disabled) necessitated a referral to a third doctor. The obligation to initiate this referral rests on the employer. The Court found that respondents failed to properly initiate this process. While they submitted proposed guidelines during arbitration conferences, this was not a direct response to Leonardo’s formal written request sent months earlier. The employer’s inaction following the seafarer’s submission of a contrary medical opinion constrains the Court to rule in favor of the seafarer.
On the disability, the Court agreed with the PVA that the nature and severity of Leonardo’s hearing loss—requiring a hearing aid as a palliative measure—rendered him incapable of performing his duties as a seafarer, especially in a noisy ship environment, thus constituting total and permanent disability.
However, the Court deleted the awards of moral and exemplary damages, finding no clear evidence of bad faith on the part of the respondents in handling the claim. Attorney’s fees were upheld under Article 2208(8) of the Civil Code, as the action is based on an employer’s liability law.