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Loue Mutia case: SC ruling grants seaman’s $100,000 disability claims

SC ruling grants seaman’s $100,000 disability claims
Kathleen de Villa July 02, 2023

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MANILA, Philippines — The Supreme Court has ruled that employers cannot deny a worker his disability pay even if he had not disclosed a preexisting illness that was later determined to have been unrelated to injuries that he suffered while on the job and had impaired his capacity to work.

The high court said on Friday that it ordered a manning agency and a foreign shipping line to pay a Filipino seafarer at least $100,000 in disability benefits after he was laid off for being unfit to work due to a spinal cord injury and vision problems he developed while on duty.

The June 27 ruling made public on Friday afternoon supported the disability claims of Loue Mutia, who worked as an assistant cook on the Norwegian Jade, a Bahamas-flagged cruise ship owned by Norwegian Cruise Line Holdings Inc. (NCL), where he was deployed by the Filipino-owned manning company C.F. Sharp Crew Management Inc.

The 14-page unanimous ruling by the five-member Second Division of the high court overturned separate decisions by the Court of Appeals (CA) and the National Labor Relations Commission (NLRC) rejecting Mutia’s disability benefit claims after suffering injuries while at work.

In its ruling, the Supreme Court pointed out that a preexisting illness, which was an ear ailment in the case of Mutia, referred to a “continuing illness or condition” diagnosed during the pre-employment medical exam.

But it noted that “there was no proof that Mutia’s ear infection still persisted” at the time of the exam and that its only finding was a “mild hearing loss.”

It also held that the “unrelatedness of Mutia’s prior ear illness and his present medical conditions negated an intent to profit from the concealment.”
Work-related injuries

The manning company also failed to establish that Mutia’s earlier ear infection aggravated his current medical illnesses, which included desiccation with an annular tear in the lower portion of the spine, multiple sclerosis, and blurred vision, it added.

When the “concealed illness” is not connected to a work-related injury or illness, the worker must be able to claim disability benefits, the high court said.

“A contrary interpretation would lead to an absurd situation where employers are absolved from liability arising from a work-related illness or injury even if they are negligent in their duties, leaving seafarers disadvantaged,” it said.

According to the court, Mutia was first injured while on board the vessel on Oct. 13, 2013, when he was transferring 50 kilograms of chicken meat into a trolley, which suddenly moved, forcing him to support the full weight of the meat. He felt “a snap on his back … felt weak” before falling on the floor.

His second injury was to his eyes when he accidentally dropped a kilo of chicken seasoning into a pot of boiling soup. Hot liquid splattered on his face, making him lose his balance and fall to the floor.

It was only after this that he was allowed to undergo a checkup and medical exams.

On Nov. 4, 2014, he was sent back home to the Philippines where he saw an orthopedic surgeon and went through a series of tests and therapies from December 2013 to March 2014.

The company stopped shouldering the cost of Mutia’s medical bills after nearly three months of medical treatment. The results of his magnetic resonance imaging (MRI) scan were also never released to Mutia.
NLRC complaint

On July 9, 2014, Mutia filed a complaint in the NLRC for permanent total disability benefits, moral and exemplary damages and attorney’s fees against C.F. Sharp and NCL after he became “incapacitated” for more than 120 days.

He also cited the failure of the company doctor “to make a definitive assessment” of his medical condition.

His employers denied his disability benefits on the ground that he concealed his ear infection as a preexisting illness in his medical exam before he was hired.

In October 2015, the NLRC’s labor arbiter granted Mutia’s claim for disability benefits and attorney’s fees but junked the moral and exemplary damages.

This was reversed by the NLRC on Jan. 29, 2016, saying that “all preexisting illnesses or conditions” are covered “with no exception” by the Standard Employment Contract (SEC) for seafarers crafted in 2010 by the Philippine Overseas Employment Administration (POEA).
Elevated to CA

The seafarer brought his case to the CA, which threw out his claims in a decision on Jan. 10, 2018. This led him to file a petition in the Supreme Court.

“Certain conditions must be met before a seafarer can be barred from claiming disability benefits due to concealment of preexisting illnesses,” the Supreme Court said in a statement on Friday.

The high court cited the SEC for seafarers crafted by the POEA, forerunner of the Department of Migrant Workers, in laying down the three conditions before an employer was freed from liability for a seafarer’s injury or illness.

“In the case of Mutia, the court found that all the three conditions were not met,” the high court pointed out.

The three conditions cited by the high court were: the seafarer was aware he had an illness that had been diagnosed prior to his employment which he did not disclose to his employer and which could not be diagnosed during a pre-employment medical exam; the seafarer intentionally concealed the illness or injury; and the concealed preexisting illness or injury has a causal or reasonable connection with the illness or injury suffered during the seafarer’s contract.

“In the absence of these conditions, the employers remain liable for work-related injury or illness consistent with their duties to provide a seaworthy ship and to take precautions to avoid the seafarer’s accident,” the Supreme Court said.

In ruling in favor of Mutia, the Supreme Court’s Second Division ordered C.F. Sharp and its foreign principal, NCL, to pay his total and permanent disability benefit amounting to $100,000, equivalent to the peso value at the time of the payment and as provided by the collective bargaining agreement between the company and its workers.

On top of this, the high court directed the payment of 10 percent of attorney’s fees and a legal interest of 6 percent imposed on the monetary awards until they are fully paid to Mutia.

The court said the employers must also ensure that the workplace is “conducive [to] the promotion and protection of the health of the seafarers” in accordance with the Maritime Labor Convention.

The decision was authored by Justice Mario Lopez. The other members of the Second Division, which is chaired by Senior Associate Justice Marivic Leonen, are Justices Amy Lazaro-Javier, Jhosep Lopez, and Antonio Kho Jr.