5/28/2020
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On September 28, 2004 petitioner Magsaysay paid the deficiency award of
US$30,000.00 in full and final settlement of Chin’s disability compensation claim. On
February 26, 2007, however, the Labor Arbiter rendered a Decision ordering it to pay
Chin: a) P19,279.75 as reimbursement for medical expenses; b) US$147,026.43 as
loss of future wages; c) P200,000.00 as moral damages; d) P75,000.00 as exemplary
damages; and e) 10% of the total award as attorney’s fees.
On November 25, 2008 the NLRC modified the Labor Arbiter’s Decision by deleting the
awards of loss of future wages and moral and exemplary damages for lack of factual
and legal bases. On appeal, the CA reversed the NLRC’s Decision and ordered the
reinstatement of the Labor Arbiter’s Decision, hence, this petition.
The Issue Presented
The key issue in this case is whether or not the CA erred in affirming the Labor Arbiter’s
award of loss of future earnings on top of his disability benefits as well as awards of
moral and exemplary damages and attorney’s fees.
Ruling of the Court
Respondent Chin contends that the petition should be dismissed on the ground of res
judicata in that the CA’s Decision in CA-G.R. SP 67803 authorized the determination of
Chin’s other monetary claims. The additional award to him of actual, compensatory,
moral and exemplary damages as well as attorney’s fees was a determination of those
other claims. These awards, he claims, can no longer be disturbed.
But res judicata applies to second actions involving substantially the same parties, the
same subject matter, and cause or causes of action.[3] Here, there is no second action
to speak of since the subsequent awards were merely the result of a remand from the
CA for the Labor Arbiter to determine the amounts to which Chin is entitled to receive
aside from the full US$60,000.00 permanent total disability compensation.
Definitely, the Labor Arbiter’s award of loss of earning is unwarranted since Chin had
already been given disability compensation for loss of earning capacity. An additional
award for loss of earnings will result in double recovery. In a catena of cases,[4] the
Court has consistently ruled 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. Disability, therefore, is not
synonymous with “sickness” or “illness.” What is compensated is one’s incapacity to
work resulting in the impairment of his earning capacity.[5]
Moreover, the award for loss of earning lacks basis since the Philippine Overseas
Employment Agency (POEA) Standard Contract of Employment (POEA SCE), the
governing law between the parties, does not provide for such a grant. What Section
20, paragraph (G) of the POEA SCE provides is that payment for injury, illness,
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