When the Company Doctor's Disability Rating Becomes Binding on Seafarers

The injury is not in dispute. What a seafarer does after receiving the company doctor's disability rating often decides how much he recovers. In Oriental Shipmanagement Co., Inc. v. Ocangas (G.R. No. 226766, September 27, 2017), the Supreme Court held that a disability assessment issued by the company-designated physician within the prescribed treatment period is binding when the seafarer ignores the remedy that the POEA Standard Employment Contract (POEA-SEC) provides.

The seafarer's injury and the company's assessment

William Ocangas was hired as a pumpman for a nine-month contract. On July 12, 2012, while lifting the cover of a ballast pump for inspection, he suffered a broken spine, lower back pain, and numbness in his lower extremities. He was repatriated on September 4, 2012 and referred to the company's accredited physicians at the Marine Medical Services of the Metropolitan Medical Center.

He was diagnosed with disc protrusions and lumbar spondylosis and underwent treatment under company-designated physicians. On January 23, 2013, Dr. William Chuasuan declared him to have reached maximum medical cure with a Grade 11 disability — one-third loss of lifting power — entitling him to US$7,465 under the POEA-SEC Schedule of Benefits.

The conflicting medical opinions

Ocangas filed a complaint for permanent total disability benefits on January 24, 2013 — one day after the company's assessment. Two months later, he consulted Dr. Marcelino Cadag, who diagnosed a herniated nucleus pulposus with nerve root compression and declared him unfit for sea duty.

The Labor Arbiter awarded US$100,000 in permanent total disability benefits plus attorney's fees, ruling that the company-designated physician does not have the exclusive prerogative to assess a seafarer's disability. The NLRC reversed, holding that the Grade 11 assessment stood and that the mere lapse of 120 days does not automatically entitle a seafarer to total disability benefits. The Court of Appeals reinstated the Labor Arbiter's award, relying on the old Crystal Shipping rule that inability to work for more than 120 days constitutes permanent total disability.

The 120-day and 240-day rules

The Supreme Court reversed the Court of Appeals. It clarified that the 120-day rule from Crystal Shipping, Inc. v. Natividad applies only to complaints filed before October 6, 2008. For complaints filed on or after that date — as in this case — the 240-day rule from Splash Philippines, Inc. v. Ruizo and Vergara v. Hammonia Maritime Services, Inc. governs.

Under the POEA-SEC and the Vergara framework, a seafarer is on temporary total disability upon repatriation. The company-designated physician has 120 days, extendable to 240 days if further medical attention is needed, to declare the seafarer fit to work or assess a permanent disability. If no declaration is made within those periods, the seafarer is conclusively presumed totally and permanently disabled.

Here, the company physician issued the Grade 11 assessment only 141 days after repatriation — well within the 240-day period. The Court held that the assessment was therefore binding.

The procedure a seafarer must follow

Section 20(A) of the POEA-SEC gives a seafarer who disagrees with the company physician a clear remedy: consult a physician of his own choice. If that physician's findings conflict with the company's assessment, the parties may jointly refer the matter to a third doctor, whose decision is final and binding on both parties.

Ocangas did not take this route. He filed his complaint without any supporting medical certificate, and only obtained his own physician's opinion two months later. The Court held that this failure was fatal: it deprived the employer of the chance to refute the findings and to avail of the third-doctor mechanism. The company physician's rating thus became conclusive.

The Court also stressed that the company-designated physician monitored the seafarer from repatriation onward, acquiring detailed familiarity with his condition, and that this carries weight against a physician who examined him only later.

Practical takeaways

• A seafarer who disagrees with the company-designated physician must consult his own doctor and, if the findings conflict, proceed to a third doctor jointly chosen by the parties. Skipping this step can make the company's rating final.
• The applicable period is 120 days, extendable to 240 days for complaints filed on or after October 6, 2008. The old 120-day rule applies only to earlier cases.
• The lapse of the treatment period does not by itself entitle a seafarer to total disability benefits when the company physician issued a valid assessment within that period.
• The company-designated physician's assessment is respected unless properly challenged under the POEA-SEC procedure.
• The POEA-SEC is read liberally in favor of seafarers, but the agreed procedure and the employer's rights are also enforced.

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