Update on 120 day rule in Filipino personal injury cases

10 June 2008

The Philippine Labor Code states that a disability lasting continuously for more than 120 days should be considered total and permanent disability. In the Crystal Shipping (October 2005) and Remigio (April 2006) cases, the Philippine Supreme Court ruled that seafarers are subject to the Labor Code concept of permanent disability. Hence, in each of those two cases seafarers who were unable to perform their customary work for more than 120 days were awarded the maximum compensation for permanent disability of USD 60,000.
However, shipowner interests argued that the Labor Code 120 day rule should not apply to seafarers claims, which are governed by the Philippines Overseas Employment Agency (POEA) Standard Employment Contract.  And, in February 2007, the Supreme Court issued a resolution which clarified that the degree of disability in POEA claims should be determined by medical assessment, rather than number of days incapacity.   However, the resolution was not always applied subsequently by the National Labor Relations Commission (NLRC - the principal forum for determining seafarers claims) and, as a result, Owners remained at risk of rulings that the USD 60,000 maximum compensation was payable, even where the medical evidence showed that the seafarer was not permanently disabled.
However, attorneys Del Rosario & Del Rosario have reported three recent NLRC decisions which correctly follow the Supreme Courts resolution. Accordingly, Del Rosario & Del Rosario are hopeful that future awards under the POEA will apply consistently the medical gradings evaluated under the seafarers employment terms.
Further advice on this issue and detailed reports on the recent NLRC decisions are available on the Del Rosario & Del Rosario website, which can be accessed by clicking here