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NFD INTERNATIONAL MANNING AGENTS v. ESMERALDO C. ILLESCAS

FACTS:

The case involves a petition for review on certiorari filed by petitioners NFD International Manning Agents, Inc. and Barber Ship Management, Ltd. The facts of the case are as follows: Respondent Illescas entered into a contract of employment with petitioner NFD International Manning Agents, Inc. for nine months. He was employed as a Third Officer of M/V Shinrei with a basic monthly salary of US$854.00. While on board the vessel, respondent was ordered to carry 25 fire hydrant caps, resulting in an injury to his back. He informed the ship captain and sought medical treatment. Despite the initial tolerable pain, respondent's condition worsened and he was eventually repatriated to the Philippines. Medical examinations revealed that he had sustained partial permanent disability. Respondent then demanded the payment of disability benefit from petitioners, leading to the filing of the complaint with the NLRC. The case revolves around the compensation entitlement of a seafarer, Esmeraldo C. Illescas, who suffered permanent partial disability during the term of his employment. Esmeraldo claimed that under the Collective Bargaining Agreement (CBA) between his union and the petitioners, he is entitled to a higher disability benefit of US$90,000.00. The petitioners argued that the POEA Standard Contract for Seafarers governs the case and does not provide for the same level of disability benefit. The Labor Arbiter ruled in favor of Esmeraldo, ordering the petitioners to pay him disability benefits, sickness allowance, and attorney's fees. The NLRC modified the decision, awarding disability benefits under the POEA Standard Contract for Seafarers instead. The NLRC also deleted the award for sickness allowance based on a letter from the petitioners. International Manning Agents, Inc. informed Pandiman Philippines, Inc. that the respondent's illness allowance had been processed and remitted to his bank account. The NLRC presumed the payment of the sickness allowance as the respondent did not dispute the letter. The NLRC also deleted the attorney's fees awarded to the respondent. Respondent's motion for reconsideration was denied by the NLRC. Respondent then filed a special civil action for certiorari with the Court of Appeals, which granted the petition and ordered the private respondents to pay the respondent US$90,000. The appellate court held that the respondent's disability resulted from an accident and that the Labor Arbiter correctly applied the relevant provision of the CBA in awarding the disability benefit.

ISSUES:

  1. Whether or not the disability suffered by respondent was caused by an accident.

  2. Whether or not the disability is compensable under the CBA.

  3. Whether or not respondent is entitled to attorney's fees.

  4. Whether the respondent's disability was the result of an accident.

  5. Whether the respondent's disability is compensable under the CBA.

  6. Whether the respondent is entitled to disability compensation under the collective bargaining agreement (CBA).

  7. Whether or not respondent Esmeraldo C. Illescas is entitled to disability benefits.

  8. Whether or not respondent is entitled to attorney's fees.

RULING:

  1. The Court of Appeals ruled that respondent's disability resulted from an accident as the injury was unforeseen and happened without any fault on his part. The Court cited Jarco Marketing v. Court of Appeals which defined an accident as an unforeseen event in which no fault or negligence attaches to the defendant.

  2. The Court of Appeals declared that the Labor Arbiter correctly applied Article 13 of the CBA in awarding respondent disability benefits in the amount of US$90,000. It held that the NLRC acted with grave abuse of discretion in disregarding the CBA.

  3. The Court of Appeals justified the award of attorney's fees under Article 111 of the Labor Code and Article 2208 of the Civil Code, as respondent was forced to litigate and has incurred expenses to protect his right and interest.

  4. The Court held that the respondent's disability was not the result of an accident. The injury was sustained by the respondent from carrying a heavy basketful of fire hydrant caps, which resulted in his disability. The injury cannot be considered an accident because it occurred while the respondent was performing his duties and carrying heavy objects. Carrying heavy objects can potentially cause back injuries, which makes the injury not unusual under the circumstances and not synonymous with the term "accident" as defined by various sources.

  5. Although the respondent's disability was not caused by an accident, it is still compensable under the CBA. The CBA provides that a seafarer/officer who is disabled as a result of any injury and is assessed as less than 50% permanently disabled, but permanently unfit for further service at sea in any capacity, shall be entitled to 100% compensation. In this case, the respondent's disability was assessed to be less than 50% permanently disabled by both the company-designated doctor and the respondent's independent doctor. Therefore, the respondent is entitled to 100% compensation under the CBA.

  6. Yes, the respondent is entitled to disability compensation. The Court agrees with the findings of respondent's independent doctor that he is unfit to work in any capacity as a seaman. Therefore, the respondent is entitled to disability benefit in the amount of US$90,000.00 under the CBA.

  7. Respondent Esmeraldo C. Illescas is entitled to disability benefits in the amount of US$90,000.00.

  8. Respondent is entitled to attorney's fees in the amount of US$1,000.00.

PRINCIPLES:

  • An accident refers to an unforeseen event in which no fault or negligence attaches to the defendant. It is a fortuitous circumstance, event, or happening, happening without any human agency or if happening wholly or partly through human agency, an event which under the circumstances is unusual or unexpected. (Jarco Marketing v. Court of Appeals)

  • The terms and conditions of a Collective Bargaining Agreement (CBA) are binding on both the employer and the employee and are considered part of the law between the parties. (Labor Arbiter)

  • Attorney's fees may be awarded when the party to a case is compelled to incur expenses to protect his rights and interests, and said party is forced to litigate or incur expenses to enforce his rights due to the unjustified act or omission of the opposing party. (Article 111, Labor Code; Article 2208, Civil Code)

  • A disability can be considered compensable even if it is not caused by an accident, as long as it meets the criteria set by the CBA.

  • The degree of disability is determined by a doctor appointed by the company, but the claimant can dispute the findings by consulting another doctor, whose report will be evaluated based on its inherent merit.

  • Carrying heavy objects can potentially cause back injuries, which cannot be considered accidents.

  • A seafarer/officer who is assessed as less than 50% permanently disabled but permanently unfit for further service at sea in any capacity is entitled to 100% compensation (CBA).

  • The award of attorney's fees is justified when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest (Article 2208 of the Civil Code).

  • The Court has upheld the award of attorney's fees in addition to disability benefits in previous cases involving seamen-claimants (HFS Philippines, Inc. v. Pilar and Iloreta v. Philippine Transmarine Carriers, Inc.).

  • The entitlement to disability benefits must be determined based on the provisions of the employment contract or the applicable law.

  • The grant of attorney's fees is subject to the discretion of the court based on the circumstances of the case and the applicable laws.