OSG Ship Management v.

Pellazar
G.R. No. 198367
August 6, 2014
FACTS: This case involves respondent Joselito Pellagra, an oiler in the vessel MIT Delphina,
who filed a complaint for permanent total disability benefits and damages against
petitioners, local manning agent of CF Sharp Crew Management (CF Sharp) and its President
Rochathe principal employer of which is OSG Ship Management (UK). Pellagra was
deployed to M/T Delphina on July 3, 2005 under an employment contract for 8 months. On
November 2005, while on duty, his right hand was injured after it was struck by a solid iron
pipe. He was given medical attention in Brazil and was subsequently medically repatriated.
Upon arrival in Manila, Pellazar reported to OSG Manila and referred to the companydesignated physicians Dr. De Guzman and Dr. Banaga. Respondents working diagnosis was
complex fracture, distal part of 5th finger, right hand post-casting. He continued to report
to the company-designated physicians until Agust 2006. After an x-ray examination, he went
through therapy sessions and referred to an orthopedic speciality and physiatrist. He also
underwent surgery. The company-designated physician gave Pellagra Grade 10 disability
rating for loss of grasping power for large objects between fingers and palm of one hand.
However, on September 2006, Pellazar consulted a physician of his choice, Dr. Sabado of the
Dagupan Orthopedic Center who diagnosed loss of grasping power of 5th finger, loss of
opposition between finger and thumb and ankylosis of the 5th finger and certified that he
was permanently unfit for any sea duty. In addition, the doctor certification claimed that
despite the lapse of 120 days and the fact that he underwent maximum medical care he was
still unfit for work, thus, this complaint.
Petitioner denied liability and alleged that the provision of the CBA of the Associated
Marine Officers and Seamens Union of the Philippines (AMOSUP) must be followed and
required a seafarer with a complaint to follow the grievance procedure. That Pellagra failed
to submit their claim to a voluntary arbitrator or panel of arbitrators. They argued that he
was not entitled to disability compensation higher than what was provided under a Grade 10
disability ratingas this was the company-designated physicians assessment. A grade 10
disability is compensated 10,075.00 PHP under POEA-Standard Employment Contract (POEASEC).
The Labor Arbiter Darlucio favored Pellagra and awarded him permeant total
disability benefits of 75,000 USD paid jointly and severally of OSG Manila, OSG Uk,
Ravanopoulus and M/T Delphina. Upon appeal, NLRC reversed the decision and ruled only an
award of 10,075.01 PHP which is equivalent to a Grade 10 disabilityloss of grasping power
for large objects between fingers and palm of a handin accordance to the disability rating
given to him by company physicians.
After an MR was filed by respondent. the CA reversed the NLRC and affirmed the LA
decision. It stressed that permeant total disability is not determined by gradings but the
number of days the disability lasted pursuant to Art. 192 of the Labor Code which states that
total and permanent disability consists of a continuous period of more than 120 days.
ISSUE: Whether or not the CA erred in ruling that there was permanent and total disability
of Pellazar according to the evidence and circumstance of the caseYes, the CA erred.
HELD: The CA erred in its findings.
(1) Disability benefits is a matter of contract and law. Mere lapse of the 120 day period does
not warrant payment of permanent total disability. The material statuary provision are Article
191 and 193 of the Labor Code and its Rules and Regulations. By contract, Department
Order NO. 4, series of 2000 of the DOLE and the CBA bind the seams and his employer. In
Vergara v. Hammonia, the court interpreted the legal and contractual provision in relation to
the kind of disability such that the entitlement of disability is governed not by the period of
disability per se but by the specific provisions. Pellazar continued to undergo medical

treatment under the company physicians until he was finally given a Grade 10 disabiltiy in
August 2006. Under the CA and POEA-SEC it is the company-designated physician who shall
determine seafarers disability of fitness to work.
(2) There was noncompliance with the procedure under the POEA-SEC and CBA. Under the
POEA-SEC and AMOSUP/IMEC CBA, the degree of disability arising from a work-connected
injury or illness a seafarer or his fitness to work shall be assessed by the companydesignated physician to make employer liable. Cite Section 20(B)3. Pellazar was medically
repatriated and underwent extensive medical examinations until his injury was classified as
a Grade 10 disability. Controversy arose when Pellagra consulted the physician of his choice
that led to this conflict. Since there is conflict between the findings of the doctors in the
assessment, the matter should have been referred to a third doctor for final determination.
Since Pellazar failed to inform the agency that he would be consulting Dr. Sabado, he should
suffer the consequences.
(3) Company-designted physicians findings, although not binding on the Court, generally
prevails over other medical finding. In this case, the company-designateds had ample basis
in their findings because of the extensive evaluation and treatment of Pellazarincluding a
specialist and physiatrist. Dr. Sabado only examined him once and treated him for a few
hours. It is also peculiar that Pellazar came all the way from Antipolo where he resides to
Dagupan City where Dr. Sabado practices.
(4) Not entitled to full disability benefits. Since company-designated physicians gave
Pellagra only a Grade 10 disabilityand not permanent total disabilityhe cannot be
entitled to full disability benefits of 75,000 PHP under the CBA. Cite Section 20.1.5. He is
only entitled to 10,075.01 USD as a Grade 10 disability pursuant to POEA-SEC.
GRANTED