The petition lacks merit.
Petitioners are mistaken that it is only the POEA Standard Employment Contract that must be considered in determining Lobusta's disability. In Palisoc v. Easways Marine, Inc.,25 we said that whether the Labor Code’s provision on permanent total disability applies to seafarers is already a settled matter. In Palisoc, we cited the earlier case of Remigio v. National Labor Relations Commission26 where we said (1) that the standard employment contract for seafarers was formulated by the POEA pursuant to its mandate under Executive Order No. 24727 “to secure the best terms and conditions of employment of Filipino contract workers and ensure compliance therewith,” and “to promote and protect the well-being of Filipino workers overseas”; (2) that Section 29 of the 1996 POEA Standard Employment Contract itself provides that all rights and obligations of the parties to the contract, including the annexes thereof, shall be governed by the laws of the Republic of the Philippines, international conventions, treaties and covenants where the Philippines is a signatory; and (3) that even without this provision, a contract of labor is so impressed with public interest that theCivil Code expressly subjects it to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.28
In affirming the Labor Code concept of permanent total disability, Remigio further stated:
Thus, the Court has applied the Labor Code concept of permanent total disability to the case of seafarers. InPhilippine Transmarine Carriers v. NLRC, seaman Carlos Nietes was found to be suffering from congestive heart failure and cardiomyopathy and was declared as unfit to work by the company-accredited physician. The Court affirmed the award of disability benefits to the seaman, citing ECC v. Sanico, GSIS v. CA, and Bejerano v. ECC that “disability should not be understood more on its medical significance but on the loss of earning capacity. Permanent total disability means disablement of an employee to earn wages in the same kind of work, or work of similar nature that [he] was trained for or accustomed to perform, or any kind of work which a person of [his] mentality and attainment could do. It does not mean absolute helplessness.” It likewise citedBejerano v. ECC, that in a disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one’s earning capacity.
The same principles were cited in the more recent case of Crystal Shipping, Inc. v. Natividad. In addition, the Court cited GSIS v. Cadiz and Ijares v. CA that “permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body.”
x x x x
These facts clearly prove that petitioner was unfit to work as drummer for at least 11-13 months – from the onset of his ailment on March 16, 1998 to 8-10 months after June 25, 1998. This, by itself, already constitutes permanent total disability. x x x29
In Vergara v. Hammonia Maritime Services, Inc.,30 we also said that the standard terms of the POEA Standard Employment Contract agreed upon are intended to be read and understood in accordance with Philippine laws, particularly, Articles 191 to 193 of the Labor Code, as amended, and the applicable implementing rules and regulations in case of any dispute, claim or grievance.
Thus, the CA was correct in applying the Labor Code provisions in Lobusta’s claim for disability benefits. The Labor Arbiter erred in failing to apply them.
Article 192(c)(1) under Title II, Book IV of the Labor Code, as amended, reads:
ART. 192. Permanent total disability. – x x x
x x x x
(c) 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 x
Section 2(b), Rule VII of the Implementing Rules of Title II, Book IV of the Labor Code, as amended, or the Amended Rules on Employees’ Compensation Commission (ECC Rules), reads:
Sec. 2. Disability. – x x x
(b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided for in Rule X of these Rules.
x x x x
Section 2, Rule X of the ECC Rules reads:
SEC. 2. 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 any time 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.
x x x x
According to Vergara,31 these provisions of the Labor Code, as amended, and implementing rules are to be read hand in hand with the first paragraph of Section 20(B)(3) of the 2000 POEA Standard Employment Contract which reads:
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 disabilityas 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.
x x x x
As we outlined above, 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.32
To be sure, there is one Labor Code concept of permanent total disability, as stated in Article 192(c)(1) of the Labor Code, as amended, and the ECC Rules. We also note that the first paragraph of Section 20(B)(3) of the 2000 POEA Standard Employment Contract was lifted verbatim from the first paragraph of Section 20(B)(3) of the 1996 POEA Standard Employment Contract, to wit:
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.
Applying the foregoing considerations, we agree with the CA that Lobusta suffered permanent total disability. On this point, the NLRC ruling was not in accord with law and jurisprudence.
Upon repatriation, Lobusta was first examined by the Pulmonologist and Orthopedic Surgeon on May 22, 1998. The maximum 240-day (8-month) medical-treatment period expired, but no declaration was made that Lobusta is fit to work. Nor was there a declaration of the existence of Lobusta’s permanent disability. On February 16, 1999, Lobusta was still prescribed medications for his lumbosacral pain and was advised to return for reevaluation. May 22, 1998 to February 16, 1999 is 264 days or 6 days short of 9 months.
On Lobusta’s other ailment, Dr. Roa’s clinical summary also shows that as of December 16, 1999, Lobusta was still unfit to resume his normal work as a seaman due to the persistence of his symptoms. But neither did Dr. Roa declare the existence of Lobusta’s permanent disability. Again, the maximum 240-day medical treatment period had already expired. May 22, 1998 to December 16, 1999 is 19 months or 570 days. In Remigio, unfitness to work for 11-13 months was considered permanent total disability. So it must be in this case. And Dr. David’s much later report that Lobusta “ought not to be considered fit to return to work as an Able Seaman” validates that his disability is permanent and total as provided under the POEA Standard Employment Contract and the Labor Code, as amended.
In fact, the CA has found that Lobusta was not able to work again as a seaman and that his disability is permanent “as he has been unable to work since 14 May 1998 to the present or for more than 120 days.” This period is more than eight years, counted until the CA decided the case in August 2006. On the CA ruling that Lobusta’s disability is permanent since he was unable to work “for more than 120 days,” we have clarified in Vergara that this “temporary total disability period may be extended up to a maximum of 240 days.”
Thus, we affirm the award to Lobusta of US$60,000 as permanent total disability benefits, the maximum award under Section 30 and 30-A of the 1996 POEA Standard Employment Contract. We also affirm the award of US$2,060 as sickness allowance which is not contested and appears to have been accepted by the parties.
On the matter of attorney’s fees, under Article 220833 of the Civil Code, attorney’s fees can be recovered in actions for recovery of wages of laborers and actions for indemnity under employer’s liability laws. Attorney’s fees are also recoverable when the defendant’s act or omission has compelled the plaintiff to incur expenses to protect his interest.34 Such conditions being present here, we affirm the award of attorney’s fees, which we compute as US$3,103 or 5% of US$62,060.
x x x."