Company Doctor's Assessment Upheld in Seafarer Disability Claims

The Supreme Court's 2014 decision in OSG Shipmanagement Manila, Inc. v. Pellazar clarified a recurring problem in maritime labor disputes: whose medical assessment controls when a seafarer's own doctor disagrees with the company doctor. The ruling matters because it reinforces the contractual procedure for resolving conflicting disability ratings and confirms that the mere lapse of the 120-day treatment period does not automatically entitle a seafarer to permanent total disability benefits.

The Injury and the Conflicting Diagnoses

Joselito Pellazar worked as an oiler aboard the M/T Delphina. On November 12, 2005, while on duty, a solid iron pipe struck his right hand. He received treatment in Brazil and was medically repatriated on November 26, 2005.

Upon returning to Manila, Pellazar reported to the company-designated physicians. He underwent x-rays, therapy, surgery to remove a pin from his fifth digit, and consultations with an orthopedic specialist and a physiatrist. After months of treatment ending in August 2006, the company doctors issued a Grade 10 disability rating for loss of grasping power in the hand.

Pellazar then consulted his own physician, Dr. Raul Sabado, who certified him as permanently unfit for sea duty. Pellazar filed a complaint for permanent total disability benefits under the parties' Collective Bargaining Agreement, claiming US$75,000.00.

The Rulings Below

The Labor Arbiter ruled in Pellazar's favor, awarding full disability benefits. On appeal, the National Labor Relations Commission (NLRC) modified the award, holding that Pellazar was entitled only to the Grade 10 rating equivalent of US$10,075.01. The NLRC gave more weight to the company doctors, who had treated Pellazar for months, over Dr. Sabado, who examined him only once.

The Court of Appeals reversed the NLRC. It held that permanent total disability is determined not by disability gradings but by the number of days the disability lasts, citing Article 192 of the Labor Code and the 120-day rule from Wallem Maritime Services, Inc. v. NLRC. The appellate court reinstated the Labor Arbiter's award.

The Supreme Court's Ruling

The Supreme Court granted the employers' petition and reinstated the NLRC decision. Two points stand out.

First, the 120-day period is not automatic. Citing Vergara v. Hammonia Maritime Services, the Court explained that the seafarer is on temporary total disability during treatment, which may extend up to a maximum of 240 days if further medical attention is required. The mere lapse of 120 days does not by itself warrant permanent total disability benefits. Entitlement is governed by Philippine law and by the contract between the parties, particularly the POEA Standard Employment Contract (POEA-SEC) and the CBA.

Second, conflicting assessments must go to a third doctor. Under Section 20(B) 3 of the POEA-SEC, if a doctor appointed by the seafarer disagrees with the company-designated physician's assessment, a third doctor may be agreed upon jointly by the employer and the seafarer, and that doctor's decision is final and binding on both parties. The CBA contained a similar provision.

Because Pellazar consulted Dr. Sabado without informing the manning agency and never referred the conflicting findings to a third doctor, he breached his contractual obligation. Following Philippine Hammonia v. Dumadag, the Court held that the company-designated physician's assessment prevails in such a situation.

The Court also noted that while the company doctor's findings are not binding on courts and labor tribunals, the NLRC did not gravely abuse its discretion in relying on them. The Grade 10 rating rested on extensive evaluation and treatment, while Dr. Sabado examined Pellazar only once.

Since the company doctors never certified Pellazar as permanently unfit for further sea service, he could not claim the full US$75,000.00 under the CBA. He was entitled only to the Grade 10 rating equivalent. The award of attorney's fees was also removed, as the employers had the right to deny the claim.

Practical Takeaways

• A seafarer who disagrees with the company-designated physician's assessment must raise the conflict through the third-doctor procedure in the POEA-SEC and the applicable CBA; failing to do so generally leaves the company doctor's rating standing.
• The lapse of the 120-day treatment period does not automatically convert a partial disability into a permanent total disability; the 240-day extension and the contractual schedule of benefits must be considered.
• The company-designated physician's findings are not absolutely binding on courts, but they carry weight when supported by prolonged treatment and specialist evaluation.
• A one-time consultation with a physician of one's own choosing, without more, is unlikely to outweigh the assessment of doctors who treated the seafarer over several months.
• Full disability benefits under a CBA may require a certification of permanent unfitness for sea service, not merely a disability rating below a certain threshold.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.