Labor Code: Book I — Pre-Employment; Title I — Recruitment and Placement of Workers (September 5, 2023)

Chapter 1 - General Provisions

Art. 12. Statement of objectives. It is the policy of the State:

• To promote and maintain a state of full employment through improved manpower training, allocation and utilization;
• To protect every citizen desiring to work locally or overseas by securing for him the best possible terms and conditions of employment; 
• To facilitate and regulate the movement of workers in conformity with the national interest;
• To regulate the employment of aliens, including the establishment of a registration and/or work permit system;
• To strengthen the network of public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers, locally and overseas, to serve national development objectives;
• To insure careful selection of Filipino workers for overseas employment in order to protect the good name of the Philippines abroad.
• To facilitate a free choice of available employment by persons seeking work in conformity with the national interest;

Republic Act No. 8042, Migrant Workers and Overseas Filipino Act of 1995

• It redefines the policy of overseas employment and establishes a higher standard of protection and promotion of the welfare of:
• migrant workers, 
• their families, and 
• of overseas Filipinos in distress. 
• It declares that the State does not promote overseas employment as a means to sustain economic growth and national development.
• Instead, the State shall continuously create local employment opportunities and promote the equitable distribution of wealth and the benefits of development. 
• The ultimate aim is local instead of foreign employment.
• It requires certain guarantee of protection for the overseas workers before they are deployed. 
• For instance, the receiving country should have signed a multi-nation document affording protection to migrant workers or an agreement with the Philippine government protecting the rights of overseas Filipino workers.

Note: Not a policy of the State to promote overseas employment but to afford protection of overseas employees.

Republic Act No. 10022, Amending Migrant Workers and Overseas Filipino Act of 1995

• Department of Foreign Affairs to certify to the POEA the specific provisions of law that protect migrant workers in the receiving country. 
• Extension of the government's protective mechanism to overseas Filipinos, "whether regular/documented or irregular/undocumented." 
• The definition itself of "overseas Filipino worker" is expanded to refer to a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a citizen or on board a vessel navigating the foreign seas other than a government ship used for military or non-commercial purposes or on an installation located offshore or on the high seas; to be used interchangeably with migrant worker.

Art. 13 will be discussed along with Illegal Recruitment.

Art. 13. Definitions.

1. “Worker” means any member of the labor force, whether employed or unemployed.
2. “Recruitment and placement” refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for a fee, employment to two or more persons shall be deemed engaged in recruitment and placement.
3. “Private fee-charging employment agency” means any person or entity engaged in recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both.
4. “License” means a document issued by the Department of Labor authorizing a person or entity to operate a private employment agency.
5. “Private recruitment entity” means any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or employers.
6. “Authority” means a document issued by the Department of Labor authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity.
7. “Seaman” means any person employed in a vessel engaged in maritime navigation.
8. “Overseas employment” means employment of a worker outside the Philippines.
9. “Emigrant” means any person, worker or otherwise, who emigrates to a foreign country by virtue of an immigrant visa or resident permit or its equivalent in the country of destination.

• Article 13(b) "recruitment and placement"
• Applies to both local and overseas employment. 
• Enumerates 11 activities categorized as recruitment and placement. 
1. canvassing,
2. enlisting
3. contracting
4. transporting
5. utilizing
6. hiring
7. procuring workers
8. referrals, 
9. contract services
10. promising
11. advertising for employment, locally or abroad, whether for profit or not.
• Any such activity done by any person without the required license from the Bureau of Local Employment or the Philippine Overseas Employment Administration is punishable as illegal recruitment.

Art. 14. Employment promotion. 

The Secretary of Labor shall have the power and authority:

1. To organize and establish new employment offices in addition to the existing employment offices under the Department of Labor as the need arises;
2. To organize and establish a nationwide job clearance and information system to inform applicants registering with a particular employment office of job opportunities in other parts of the country as well as job opportunities abroad;
3. To develop and organize a program that will facilitate occupational, industrial and geographical mobility of labor and provide assistance in the relocation of workers from one area to another; and
4. To require any person, establishment, organization or institution to submit such employment information as may be prescribed by the Secretary of Labor.

Note: Powers of Secretary of Labor not limited to Art. 14.

Art. 15. Bureau of Employment Services.

The Bureau of Employment Services shall be primarily responsible for developing and monitoring a comprehensive employment program. It shall have the power and duty:

1. To formulate and develop plans and programs to implement the employment promotion objectives of this Title;
2. To establish and maintain a registration and/or licensing system to regulate private sector participation in the recruitment and placement of workers, locally and overseas, and to secure the best possible terms and conditions of employment for Filipino contract workers and compliance therewith under such rules and regulations as may be issued by the Minister of Labor;
3. To formulate and develop employment programs designed to benefit disadvantaged groups and communities;
4. To establish and maintain a registration and/or work permit system to regulate the employment of aliens;
5. To develop a labor market information system in aid of proper manpower and development planning;
6. To develop a responsive vocational guidance and testing system in aid of proper human resources allocation; and
7. To maintain a central registry of skills, except seamen.

The regional offices of the Ministry of Labor shall have the original and exclusive jurisdiction over all matters or cases involving employer-employee relations including money claims, arising out of or by virtue of any law or contracts involving Filipino workers for overseas employment except seamen: Provided, That the Bureau of Employment Services may, in the case of the National Capital Region, exercise such power, whenever the Minister of Labor deems it appropriate. The decisions of the regional offices of the Bureau of Employment Services, if so authorized by the Minister of Labor as provided in this Article, shall be appealable to the National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The decisions of the National Labor Relations Commission shall be final and inappealable. (Superseded by Exec. Order 797, May 1, 1982).

 

The Minister of Labor shall have the power to impose and collect fees based on rates recommended by the Bureau of Employment Services. Such fees shall be deposited in the National Treasury as a special account of the General Fund, for the promotion of the objectives of the Bureau of Employment Services, subject to the provisions of Section 40 of Presidential Decree No. 1177.

E.O. No. 797 (1982)

• Created Bureau of Local Employment 
• Promotion of employment opportunities is the crucial task
• Created the Philippine Overseas Employment Administration
• Consolidated the overseas employment functions of the BES as well as those of the:
• Overseas Employment Development Board (OEDB) under Article 17, and 
• National Seamen Board (NSB) under Article 20.

Q: Jurisdiction of POEA? Administrative issues and Disciplinary Action.

    

Art. 16. Private recruitment. Except as provided in Chapter II of this Title, no person or entity other than the public employment offices, shall engage in the recruitment and placement of workers.

General Rule: No person or entity other than the public employment offices, shall engage in the recruitment and placement of workers.

Exception: Article 25 allows the private sector to participate in the recruitment and placement of workers either local or overseas.

• A license from the Bureau of Local Employment or the POEA is required. 
• Only a Filipino may be issued such license.

The following entities are authorized to recruit and place workers for local and overseas 

employment:

1. Public employment offices (PESO)
2. Private employment agencies
3. Shipping or manning agents or representatives 
4. Philippine Overseas Employment Administration (POEA)
5. Construction contractors if authorized to operate by DOLE and the Construction Industry Authority
6. Members of the diplomatic corps, although hirings done by them have to be processed through the POEA
7. Other persons or entities as may be authorized by the DOLE Secretary

Art. 17. Overseas Employment Development Board. 

An Overseas Employment Development Board is hereby created to undertake, in cooperation with relevant entities and agencies, a systematic program for overseas employment of Filipino workers in excess of domestic needs and to protect their rights to fair and equitable employment practices. It shall have the power and duty:

1. To promote the overseas employment of Filipino workers through a comprehensive market promotion and development program;
2.  To secure the best possible terms and conditions of employment of Filipino contract workers on a government-to-government basis and to ensure compliance therewith;
3. To recruit and place workers for overseas employment on a government-to-government arrangement and in such other sectors as policy may dictate; and
4. To act as secretariat for the Board of Trustees of the Welfare and Training Fund for Overseas Workers.

Art. 18. Ban on direct-hiring. No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps, international organizations and such other employers as may be allowed by the Secretary of Labor is exempted from this provision.

General Rule: Ban on direct-hiring

Exemption: Name Hirees

Name Hirees

• Individual workers who are able to secure contracts for overseas employment on their own efforts and representation without the assistance or participation of any recruitment agency. 
• Their hiring, nonetheless, has to be processed through the POEA.
• Also called "contracted worker" should register with the POEA by submitting the following documents: 
• Employment contract; 
• Valid passport;
• Employment visa or work permit, or equivalent document; 
• Certificate of medical fitness; and 
• Certificate of attendance to the required employment orientation/ briefing.

Q: Rationale of the rule?

    Afford protection from abuses.

    Termination of Name Hirees?

    Why are there Minimum Provisions on Overseas Employee Contract?

Art. 19. Office of Emigrant Affairs.

(a) Pursuant to the national policy to maintain close ties with Filipino migrant communities and promote their welfare as well as establish a data bank in aid of national manpower policy formulation, an Office of Emigrant Affairs is hereby created in the Department of Labor. The Office shall be a unit at the Office of the Secretary and shall initially be manned and operated by such personnel and through such funding as are available within the Department and its attached agencies. Thereafter, its appropriation shall be made part of the regular General Appropriations Decree.

(b) The office shall, among others, promote the well-being of emigrants and maintain their close link to the homeland by:

1. serving as a liaison with migrant communities;
2. provision of welfare and cultural services;
3. promote and facilitate re-integration of migrants into the national mainstream;
4. promote economic; political and cultural ties with the communities; and
5. generally to undertake such activities as may be appropriate to enhance such cooperative links.

B.P. Blg. 79

• Replaced the Office of Emigrant Affairs with the Commission on Filipinos Overseas. 

Art. 20. National Seamen Board.

(a) A National Seamen Board is hereby created which shall develop and maintain a comprehensive program for Filipino seamen employed overseas. It shall have the power and duty:

1. To provide free placement services for seamen;
2. To regulate and supervise the activities of agents or representatives of shipping companies in the hiring of seamen for overseas employment and secure the best possible terms of employment for contract seamen workers and secure compliance therewith;
3. To maintain a complete registry of all Filipino seamen.

(b) The Board shall have original and exclusive jurisdiction over all matters or cases including money claims, involving employer-employee relations, arising out of or by virtue of any law or contracts involving Filipino seamen for overseas employment. The decisions of the Board shall be appealable to the National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The decisions of the National Labor Relations Commission shall be final and unappealable.

Employment: Local or Overseas

1974 Three employment-administering agencies:

1. Bureau of Employment Services (BES)
• regulate local and overseas recruitment/placement. 
2. Overseas Development Board (OEDB)
• regulate overseas employment. 
3. National Seamen Board (NSB)
• regulate overseas employment of seafarers.

Current employment-administering agencies:

1. Bureau of Local Employment (BLE)
• regulate local employment.
• DOLE-BLE Rules
2. Philippine Overseas Employment Administration (POEA)
• regulate overseas employment, either sea-based or land-based. 
• DOLE-POEA Rules
• Migrant Workers and Overseas Filipino Act of 1995

Philippine Overseas Employment Administration (POEA) and its Jurisdiction

• Created by E.O. No. 797 (May 1, 1982)
• E.O. No. 247 (1987) reorganized the POEA and gave it original and exclusive jurisdiction over all cases
• including money claims, arising out of any law or contract involving Filipino workers in overseas employment, including seamen. 
• R.A. No. 8042 (June 7, 1995) this jurisdiction over employer-employee relations cases has been transferred to the NLRC.
• POEA retains its jurisdiction over:
• All cases which are administrative in character, involving or arising  out of violations of rules and regulations relating to licensing and registration of recruitment and employment agencies or entities; and 
• Disciplinary action cases and other special cases which are administrative in character, involving employers, principals, contracting partners and Filipino migrant workers. 

Appeal

• POEA decisions on cases within its jurisdiction are appealable
• ❌ NLRC 
• ❌ Court of Appeals
• ✅Secretary of Labor
•  Secretary's appellate jurisdiction is part of its power of supervision and control recognized in the Revised Administrative Code of 1987

Selective Deployment

• R.A. No. 8042 requires certain guarantee of protection in country destinations of OFWs. 
• The government recognizes the following as guarantees of the receiving country for the protection of overseas Filipino workers: 

1. It has existing labor and social laws protecting the rights of workers, including migrant workers; 
2. It is a signatory to and/or a ratifier of multilateral conventions, declarations or resolutions relating to the protection of workers, including migrant workers; and 
3. It has concluded a bilateral agreement or arrangement with the government on the protection of the rights of overseas Filipino Workers

• Provided, That the receiving country is taking positive concrete measures to protect the rights of the migrant workers in furtherance of any of the guarantees under subparagraphs (a), (b) and (c) hereof. 
• In the absence of a clear showing that any of the aforementioned guarantees exists in the country of destination of the migrant workers, no permit of deployment shall be issued by the Philippine Overseas Employment Administration (POEA).
• The Department of Foreign Affairs, through its foreign posts, shall issue a certification to the POEA, specifying therein the pertinent provisions of the receiving country's labor/social law, or the convention/declaration/resolution, or the bilateral agreement/arrangement which protect the rights of migrant workers.
• The members of the POEA Governing Board who actually voted in favor of an order allowing the deployment of migrant workers without any of the aforementioned guarantees shall suffer the penalties of removal or dismissal from service with disqualification to hold any appointive public office for five (5) years, Further, the government official or employee responsible for the issuance of the permit or for allowing the deployment of migrant workers in violation of this section and in direct contravention of an order by the POEA Governing Board prohibiting deployment shall be meted the same penalties in this section.
• In pursuit of the national interest or when public welfare so requires, the POEA Governing Board, after consultation with the Department of Foreign Affairs, may, at any time, terminate or impose a ban on the deployment of migrant workers.

Minimum Provisions of POEA-SEC (Standard Employment Contract)

POEA Revised Rules and Regulations 2016 (Sec. 135): Minimum provisions for employment contracts.

1. Complete name and address of the employer/company;
2. Position and jobsite of the Overseas Filipino Worker;
3. Basic monthly salary, including benefits and allowances and mode of payment. The salary shall not be lower than the prescribed minimum wage in the host country or prevailing minimum wage in the National Capital Region of the Philippines, whichever is higher;
4. Food and accommodation or the monetary equivalent which shall be commensurate to the cost of living in the host country, or off-setting benefits;
5. Commencement and duration of contract;
6. Free transportation from and back to the point of hire, or off-setting benefits, and free inland transportation at the jobsite or off-setting benefits;
7. Regular work hours and day off;
8. Overtime pay for services rendered beyond the regular working hours, rest daysand holidays;
9. Vacation leave and sick leave for every year of service;
10. Free emergency medical and dental treatment;
11. Just/valid/authorized causes for termination of the contract or of the services of the workers, taking into consideration the customs, traditions, norms, mores, practices, company policies and the labor laws and social legislations of the host country;
12. Settlement of disputes;
13. Repatriation of worker in case of imminent danger due to war, calamity, and other analogous circumstances, at the expense of employer; and
14. In case of worker’s death/repatriation of Overseas Filipino Workers human remains and personal belongings, at the expense of the employer.

• Freedom to Stipulate.
• Parties to overseas employment contract are allowed to stipulate other terms and conditions and other benefits. 
• These benefits should be over and above the minimum requirements. 
• Said benefits shall not be contrary to law, public policy and morals. 
• Disclosure of Terms and Conditions of Employment. 
• The licensed recruitment agency shall, prior to the signing of the employment contract, inform the Overseas Filipino Workers of their rights and obligations, and disclose the full terms and conditions of employment. The licensed recruitment agency shall likewise ensure that the Overseas Filipino Workers is provided with a copy of the POEA-approved contract, to give the Overseas Filipino Worker ample opportunity to examine the same. 

Employment Benefits for Disability or Death

• The POEA Standard Employment Contract for Seafarers provides for employment benefits such as disability benefit and death benefit. 
• Disability benefit is granted if the worker suffers an injury or illness which is work-related and which occurred during the term of the seafarer's contract. 
• The benefit is governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted. 
• To classify whether the disability is partial or total and temporary or permanent, the court has ruled that the definitions in the POEA contract have to be harmonized with relevant provisions of the Labor Code and the Amended Rules on Employment Compensation (AREC). 
• Article 192(c) of the Labor Code provides that temporary total disability lasting continuously for more than 120 days, except  as otherwise provided in the AREC, shall be deemed total and permanent. 

Vergara vs. Hammonia (October 6, 2008): The Supreme Court harmonized the POEA SEC with the Labor Code and the AREC provisions. 

• Jesus E. Vergara was hired by respondent Hammonia Maritime Services, Inc. He was assigned to work on board the vessel British Valour as a pumpman under contract for 9 months starting on April 15, 2000.
• In August 2000, he complained to the Ship Captain that he was seeing black dots and hairy figures floating in front of his right eye. His condition developed into a gradual visual loss. When he consulted a physician in Texas, he was advised to see an ophthalmologist when he returned home to the Philippines.
• He was sent home on September 5, 2000 for medical treatment. The company-designated physician referred the petitioner to an ophthalmologist.
• On January 31, 2001, the ophthalmologist pronounced the petitioner fit to resume his seafaring duties. Claiming that he continued to experience gradual visual loss despite the treatment, he sought a second opinion from another ophthalmologist who gave the opinion that the petitioner was not fit to work as a pumpman because the job could precipitate the resurgence of his former condition.
• WoN the NLRC and CA were legally correct when they refused to recognize any disability because the petitioner had already been declared fit to resume his duties. YES.
•  A temporary total disability only becomes permanent when so declared by the company physician within the periods he is allowed to do so, or upon the expiration of the maximum 240-day medical treatment period without a declaration of either fitness to work or the existence of a permanent disability. 
• In the present case, while the initial 120-day treatment or temporary total disability period was exceeded, the company-designated doctor duly made a declaration well within the extended 240-day period that the petitioner was fit to work. Viewed from this perspective, both the NLRC and CA were legally correct when they refused to recognize any disability because the petitioner had already been declared fit to resume his duties. In the absence of any disability after his temporary total disability was addressed, any further discussion of permanent partial and total disability, their existence, distinctions and consequences, becomes a surplusage that serves no useful purpose.

Article 192(c)(1) of the Labor Code provides that:

x x x 

The following disabilities shall be deemed total and permanent:

(1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided in the Rules;

x x x

The rule referred to - Rule X, Section 2 of the Rules and Regulations implementing Book IV of the Labor Code - states:

Period of entitlement. - 

(a) The income benefit shall be paid beginning on the first day of such disability. 

If caused by an injury or sickness it shall not be paid longer than 120 consecutive days except where such injury or sickness still requires medical attendance beyond 120 days but not to exceed 240 days from onset of disability in which case benefit for temporary total disability shall be paid. 

However, the System may declare the total and permanent status at anytime after 120 days of continuous temporary total disability as may be warranted by the degree of actual loss or impairment of physical or mental functions as determined by the System. 

These provisions are to be read hand in hand with the POEA Standard Employment Contract whose Section 20 (3) states:

Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one hundred twenty (120) days.

As these provisions operate, the seafarer, upon sign-off from his vessel, must report to the company-designated physician within three (3) days from arrival for diagnosis and treatment.

For the duration of the treatment but in no case to exceed 120 days, the seaman is on temporary total disability as he is totally unable to work.

He receives his basic wage during this period until he is declared fit to work or his temporary disability is acknowledged by the company to be permanent, either partially or totally, as his condition is defined under the POEA Standard Employment Contract and by applicable Philippine laws.

If the 120 days initial period is exceeded and no such declaration is made because the seafarer requires further medical attention, then the temporary total disability period may be extended up to a maximum of 240 days, subject to the right of the employer to declare within this period that a permanent partial or total disability already exists.

The seaman may of course also be declared fit to work at any time such declaration is justified by his medical condition.

Q: Work-related?

    Presumption of work-related?

 Carcedo vs. Maine (April 15, 2015)

• Dario A. Carcedo was hired as Chief Officer by Maine Marine Philippines, Inc. for its foreign principal Misuga Kajun Co., Ltd.
• Carcedo's foot was wounded due to his safety shoes. He continued working after receiving antibiotics. His condition worsened when he slid down the deck and bumped his right foot. He developed severe pain, fever, and headache.
• Carcedo was treated at Yoshino Hospital in Japan, diagnosed with an open fracture of the right major toe bone with suspicion of sepsis, and repatriated.
• He underwent medical treatment in the Philippines, including amputation of the right big toe. Dr. Nicomedez Cruz, the company-designated physician, assessed an 8% disability rating.
• Carcedo filed a complaint for total and permanent disability benefits and other damages.
• WoN Carcedo is entitled to full disability compensation. YES.
• His discharge from the hospital was 137 days from repatriation. Following the Court’s rulings in Vergara and Kestrel, since Carcedo required further medical treatments beyond the 120 day period, his total and temporary disability was extended. The company-designated physician then had until 240 days from repatriation to give the final assessment.
• Here, the company-designated physician failed to give a definitive impediment rating of Carcedo’s disability beyond the extended temporary disability period, after the 120-day period but less than 240 days. By operation of law, therefore, Carcedo’s total and temporary disability lapsed into a total and permanent disability. Carcedo’s disability is deemed total and permanent due to the lack of a final disability assessment and of a certification of fitness for sea service from Dr. Cruz. Carcedo is entitled to full disability compensation. As a senior officer at the time he was injured, at 100% degree of disability, Carcedo is entitled to US$148,500.00.49.

Status Maritime vs. Doctolero (January 18, 2017)

• Status Maritime hired Rodrigo Doctolero as Chief Officer on board the vessel M/V Dimitris Manios II for a period of nine months.
• While Doctolero was on board, he experienced chest and abdominal pains. He was brought to a medical clinic in Vera Cruz, Mexico and no clear diagnosis was made then he resumed work on board the vessel. However, in the evening of the same day he complained again of abdominal pain, which he was brought to Clinic San Luis in Mexico, and he was diagnosed from “Esophago-Gastritis-Duodenitis”. Based on the assessment of the attending physician, Dr, Jorge Hernandez Bustor recommended for his repatriation.
• Doctolero filed a complaint in the (NLRC) National Labor Relation Commission demanding the petitioner for payment of total and permanent disability benefits, reimbursement of hospital expenses, sick wage allowance, moral and exemplary damages and legal interest on his claims, on account of illness suffered while working on board.
• The Labor Arbiter dismissed the complaint for lack of merit and the initial diagnosis of gastro-duodenitis was not listed as an occupational illness in the POEA-SEC and no evidence that shows such illness is aggravated by the working conditions on board of the vessel.
• WoN Doctolero is entitled to claim the permanent and total disability benefits from the petitioner. NO.
• Upon its re-evaluation of the records, therefore, the Court concludes that the CA's findings in favor of entitling Doctolero to permanent and total disability benefits were erroneous. While the fact that Doctolero suffered the disability during the term of his contract was undisputed, it was evident that he had filed his complaint for disability benefits before the company-designated physician could determine the nature and extent of his disability, or before even the lapse of the initial 120-day period. With Doctolero still undergoing further tests, the company-designated physician had no occasion to determine the nature and extent of his disability upon which to base Doctolero's "fit to work" certification or disability grading. Consequently, the petitioners correctly argued that Doctolero had no cause of action for disability pay and sickness allowance at the time of the filing of his complaint.

Guadalquiver vs. Sea Power Shipping (2019)

• Ruel L. Guadalquiver was hired by Sea Power Shipping Enterprise, Inc. to work as an Able Seaman.He reported experiencing lower back pain after lifting a heavy object while on duty in November 2012. He consulted a doctor in Egypt in August 2013, who diagnosed him with osteoarthritis.
• Petitioner was medically repatriated on September 2013, and underwent treatment with the company-designated doctor, who diagnosed him with lumbo-sacral muscle strain but recommended physical therapy. After undergoing therapy and showing improvement, the doctor assured petitioner that he could be given a fit-to-work certification.
• Petitioner sought a second opinion from his personal doctor, who declared him unfit for his previous occupation on February 13, 2014.
• Petitioner filed a complaint for permanent and total disability benefits and reimbursement of medical expenses against his employer.
• WoN the Petitioner is entitled to permanent and total disability benefits. NO
• The period of 120 days from repatriation is the duration within which the employer is to determine the fitness of the seafarer to work or to ascertain the degree of his disability; in such case where the seafarer remains in need of medical attention, the 120-day period may be extended to a maximum period of 240 days within which the company-designated doctor must make a definite declaration on the fitness to work or the degree of the disability of the seafarer. A seafarer is thus considered permanently and totally disabled when so declared by the company-designated doctor within the period of 120 or 240 days, as the case may be; or after the lapse of 240 days without any declaration being issued by the company-designated physician.
• Petitioner's cause of action had not yet accrued considering that the 240-day period had not yet lapsed and the company-designated doctor still had a remaining period within which to give his definitive assessment on the medical condition or the fitness of petitioner to return to work.

Scanmar Maritime Services, Inc. and Crown Shipmanagement, Inc. v. Celestino M. Hernandez, Jr.

• Celestino M. Hernandez, Jr. entered into a nine-month contract as an Able Seaman with petitioners Scanmar Maritime Services, Inc., and Crown Shipmanagement, Inc.
• During his employment, respondent experienced pain in his inguinal area and pelvic bone, which later radiated to his right scrotum and right medial thigh. He was medically repatriated to the Philippines on February 6, 2010, after being found unfit for normal duties.
• The company-designated physician diagnosed him with Epididymitis and Varicocele and recommended Varicocelectomy, which was successfully performed on March 26, 2010.
• Respondent continuously reported to the company-designated physician for treatment and evaluation and was advised to refrain from strenuous activities.
• Respondent filed a complaint for permanent disability benefits, damages, and attorney's fees on July 20, 2010, claiming that he had been unable to earn wages for almost a year due to his work-related illness.
• Petitioners argued that respondent's illness was not work-related and that he was not declared permanently and totally disabled.
• WoN the respondent is entitled to permanent and total disability benefits. NO
• A seafarer may be allowed to pursue an action for total and permanent disability benefits in any of the following conditions:
1. the company-designated physician failed to issue a declaration as to his fitness to engage in sea duty or disability even after the lapse of the 120-day period and there is no indication that further medical treatment would address his temporary total disability, hence, justify an extension of the period to 240 days;
2. 240 days had lapsed without any certification being issued by the company-designated physician;
3. the company-designated physician declared that he is fit for sea duty within the 120-day or 240-day period, as the case may be, but his physician of choice and the doctor chosen under Section 20-B(3) of the POEA-SEC are of a contrary opinion; 
4. the company-designated physician acknowledged that he is partially permanently disabled but other doctors who he consulted, on his own and jointly with his employer, believed that his disability is not only permanent but total as well;
5. the company-designated physician recognized that he is totally and permanently disabled but there is a dispute on the disability grading;
6. the company-designated physician determined that his medical condition is not compensable or work-related under the POEA-SEC but his doctor-of-choice and the third doctor selected under Section 20-B(3) of the POEA-SEC found otherwise and declared him unfit to work; 
7. the company-designated physician declared him totally and permanently disabled but the employer refuses to pay him the corresponding benefits; and
8. the company-designated physician declared him partially and permanently disabled within the 120-day or 240-day period but he remains incapacitated to perform his usual sea duties after the lapse of the said periods.
• After the lapse of 120 days from the date of repatriation, respondent's treatment still continued; thus, the 240-day extension period was justified. At the time respondent filed 162 days since repatriation and without a definite assessment from the company-designated physician, respondent's condition could not be considered permanent and total.
• In this case, respondent filed his complaint for total and permanent disability benefits while he was still considered to be temporarily and totally disabled; while the company-designated physician was still in the process of assessing his condition and determining whether he was still capable of performing his usual sea duties; and when the 240-day period had not yet lapsed. From the foregoing, it is evident that respondent's complaint was prematurely filed. His cause of action for total and permanent disability benefits had not yet accrued.

Kestrel Shipping Co., Inc. vs. Francisco Munar

• Kestrel Shipping, Inc., on behalf of its principal Atlantic Manning, Ltd., and respondent Francisco Munar entered into a six-month employment contract designating Munar as a pump man for M/V Southern Unity.
• After assisting in lifting a heavy ship anchor windlass motor, Munar experienced severe pain in his lumbar region, which led to limping. Munar was admitted to a hospital in South Africa where his lumbar spine's degenerative changes were diagnosed, and he received medical treatment.
• Munar's condition did not improve significantly, and he was later repatriated to the Philippines. He continued to undergo medical treatment, including surgery for herniated disc and physical therapy.
• Munar filed a complaint for total and permanent disability benefits on April 17, 2007, claiming that his disability rendered him unfit for any gainful employment.
• WoN the respondent is entitled to permanent and total disability benefits. NO
• In Vergara v. Hammonia Maritime Services, Inc., this Court read the POEA-SEC in harmony with the Labor Code and the AREC in interpreting in holding that: 
• (a) the 120 days provided under Section 20-B(3) of the POEA-SEC is the period given to the employer to determine fitness to work and when the seafarer is deemed to be in a state of total and temporary disability; 
• (b) the 120 days of total and temporary disability may be extended up to a maximum of 240 days should the seafarer require further medical treatment; 
• and (c) a total and temporary disability becomes permanent when so declared by the company-designated physician within 120 or 240 days, as the case may be, or upon the expiration of the said periods without a declaration of either fitness to work or permanent disability and the seafarer is still unable to resume his regular seafaring duties. 
• Considering that the 240-day period had not yet lapsed when the NLRC was asked to intervene, Munar’s complaint is premature and no cause of action for total and permanent disability benefits had set in. While beyond the 120-day period, Dr. Chua’s medical report dated May 3, 2007 was issued within the 240-day period.
• (If the seafarer filed his or her case for disability benefits before October 6, 2008 (the date the Court promulgated its ruling in Vergara), the 120-day rule shall apply. However, if the case was filed after October 6, 2008, as in this case, the 240-day rule elucidated in Vergara must be considered.)

Q: Rule on the Conflicting Rules of Doctors:

    Requirement for third-doctor. Mutually approved prior to the employment. (Scanmar)

Derama Sestoso v. United Philippine Lines

• Franciviel Derama Sestoso was hired by United Philippine Lines as a Team Headwaiter on board M/V Carnival Inspiration for a 6-month contract.
• While cleaning a dining table, the petitioner experienced a sharp pain in his right knee. He underwent an MRI in California, which revealed a complex tear of the medial meniscus and degenerative joint changes, as well as a previous knee surgery.
• Despite the pain, the petitioner continued to work until the end of his contract.
• Upon returning to the Philippines, he was examined by company-designated physician and referred to orthopedic surgeon who recommended surgery and assigned a disability rating of Grade 10 for stretching of knee ligaments.
• The petitioner sought further treatment from another orthopedic, who assessed him as partially and permanently disabled/unfit to work as a seafarer. 
• Respondents argued that the petitioner's knee pain was a pre-existing illness and offered Grade 10 disability benefits as goodwill..
• The Court of Appeals ruled that the petitioner's illness was pre-existing and not compensable, and the 240-day window did not apply.
• WoN the respondent is entitled to permanent and total disability benefits. YES
• Notably, during the 120-day period within which the company-designated physician is expected to arrive at a definitive disability assessment, the seafarer shall be deemed on temporary total disability and shall receive his basic wage until he is declared fit to work or his temporary disability is acknowledged by the company-designated physician to be permanent, either partially or totally, as defined under the 2010 POEA-SEC and by applicable Philippine laws. However, if the 120-day period is exceeded and no definitive declaration is made because the seafarer requires further medical attention, then the temporary total disability period may be extended up to a maximum of 240 days, subject to the right of the employer to declare within this period that a permanent partial or total disability already exists. But before the employer may avail of the allowable 240-day extended treatment period, the company-designated physician must perform some significant act to justify the extension of the original 120-day period. Otherwise, the law grants the seafarer the relief of permanent total disability benefits due to such non-compliance. If this significant act is performed and an extension was duly made, the obligation of the company-designated physician to issue a final assessment is nevertheless retained, albeit in this instance may be discharged within the extended period of not exceeding 240 days reckoned from the seafarer's repatriation. The consequence for non-compliance within the extended period of the required assessment is likewise the ipso jure grant to the seafarer of permanent and total disability benefits, regardless of any justification.
• Here, the records are bereft of any showing that the company-designated physician gave petitioner a final and definite disability rating within the 120/240 days prescribed/ The company-designated physician then had until two hundred forty (240) days from repatriation within which to issue his final assessment of disability on petitioner. As it was, the company-designated physician failed to do so. Verily, by operation of law, petitioner's disability became total and permanent for which he is entitled to the corresponding benefits.

Note: The extension of the period must be justified. 

Pastor v. Bibby Shipping Philippines, Inc. (November 19, 2018)

Limited Liability Rule, Death Benefit of Seafarer

Phil-Nippon Kyoei Corp v. Rosalia Gudelosao (July 13, 2016)

• Phil-Nippon Kyoei Corp, a domestic shipping corporation, purchased the vessel "MV Mahlia" in Japan in February 2003.The vessel was hired for a one-month conduction voyage from Japan to the Philippines, and crewmembers, including Edwin C. Gudelosao and Virgilio A. Tancontian, were hired through a manning agency.
• A marine insurance policy was obtained for the vessel, including personal accident policies for the crewmembers.
• The vessel sank in Japanese waters in February 2003 due to extreme weather, resulting in the deaths six Filipino crewmembers.
• As required by POEA standard employment contract, they were each covered by a personal accident policy for an equivalent of more than P3 million
• The heirs of Gudelosao and Tancontian filed complaints for death benefits and damages against various parties, including the shipping corporation and the insurance company.
• WoN the limited liability rule applies in favor of petitioner. NO.
• This rule essentially absolves the shipowner from civil liability if, in cases of:
• collision, 
• the vessel sank and therefore was abandoned, 
• or in cases arising from negligent or illicit acts of the captain. 
• The limited liability rule is not absolute and is without exceptions. It does not apply in cases: 
• where the injury or death to a passenger is due either to the fault of the shipowner, or to the concurring negligence of the shipowner and the captain;
• where the vessel is insured; and 
• in workmen's compensation claims.
• The limited liability rule found in the Code of Commerce is inapplicable in a liability created by statute to compensate employees and laborers, or the heirs and dependents, in cases of injury received by or inflicted upon them while engaged in the performance of their work or employment.
•  Akin to the death benefits under the Labor Code, these benefits under the POEA-SEC are given when the employee dies due to a work-related cause during the term of his contract. 

Q: Why? As provided in POEA-SEC.

Employee-employer relationship between seafarer and hiring company? YES. As exemption to overseas workers which relationships are governed by contracts, (necessary to have minimum provisions), seafarers are governed by Labor Code.

Conformance to International Rate

Wallen Shippings, Inc. v. Ministry of Labor (1991)

Q: What are the rights of the Seafarer if contract was prematurely terminated?

• Entitled to his salaries for the unexpired portion of his contract,
• Reimbursement of his placement fee with interest of 12 percent per year

Q: What is the legal interest in the Philippines? 6%

Q: Is the reimbursement still 12%? Why? Statutory provisions.

Q: Period to file money claims for OFW. Three years.

Q: Dismissal due to demand of higher pay, in accordance with the country where the cruise ship passed. Is it illegal? Yes. As provided by Minimum Provisions of Contract.

Q: Receiving wage that is half of what is in the contract despite being higher that minimum wage in the Philippines. Is it legal? No. As provided by Minimum Provisions of Contract. Any provision which diminishes the Minimum Provision is invalid.

Protection of OFWs: Lex Loci Contractus

Dagasdas v. Grand Placement

EAW may apply to an OFW

GBMLT Manpower Services (July 6, 2015)

Tenure: Overseas Seafarese are Contratual Employees

Domestic Seafares may be Permanent

D.O. No. 231

Millares and Lagada v. NLRC (July 29, 2002)

Premature Termination of Contract

Asian Center (October 12, 1998)

Three-month's pay under RA 8042 and RA 10022 Unconstitutionally Reiterated

Serrano v. Gallant Maritime Services (March 24, 2009)