JUANITO A. GARCIA and ALBERTO J. DUMAGO, petitioners, vs.
PHILIPPINE Labor Arbiter shall thereafter motu proprio issue the writ, and, with the new rules in
AIRLINES, INC., respondent.
Labor Law; Wages; A dismissed employee whose case was favorably decided by the
Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which
is immediately executory—unless there is a restraining order, it is ministerial upon
the Labor Arbiter to implement the order of reinstatement and it is mandatory on the
employer to comply therewith.—A dismissed employee whose case was favorably
decided by the Labor Arbiter is entitled to receive wages pending appeal upon
reinstatement, which is immediately executory. Unless there is a restraining order, it
is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is
mandatory on the employer to comply therewith.
Same; Reinstatement; It settles the view that the Labor Arbiter‘s order of
reinstatement is immediately executory and the employer has to either re-admit them
to work under the same terms and conditions prevailing prior to their dismissal, or to
reinstate them in the payroll, and that failing to exercise the options in the alternative,
employer must pay the employee‘s salaries.—The Court reaffirms the prevailing
principle that even if the order of reinstatement of the Labor Arbiter is reversed on
appeal, it is obligatory on the part of the employer to reinstate and pay the wages of
the dismissed employee during the period of appeal until reversal by the higher court.
It settles the view that the Labor Arbiter‘s order of reinstatement is immediately
executory and the employer has to either re-admit them to work under the same
terms and conditions prevailing prior to their dismissal, or to reinstate them in the
payroll, and that failing to exercise the options in the alternative, employer must pay
the employee‘s salaries.
Same; Same; While reinstatement pending appeal aims to avert the continuing threat
or danger to the survival or even the life of the dismissed employee and his family, it
does not contemplate the period when the employer-corporation itself is similarly in a
judicially monitored state of being resuscitated in order to survive.—While
reinstatement pending appeal aims to avert the continuing threat or danger to the
survival or even the life of the dismissed employee and his family, it does not
contemplate the period when the
_______________
employer-corporation itself is similarly in a judicially monitored state of being
resuscitated in order to survive.
Same; Writ of Execution; The new National Labor Relations Commission (NLRC)
Rules of Procedure, which took effect on January 7, 2006, now require the employer
to submit a report of compliance within ten (10) calendar days from receipt of the
Labor Arbiter‘s decision, disobedience to which clearly denotes a refusal to reinstate—
the employee need not file a motion for the issuance of the writ of execution since the
place, there is hardly any difficulty in determining the employer‘s intransigence in
immediately complying with the order.—The new NLRC Rules of Procedure, which
took effect on January 7, 2006, now require the employer to submit a report of
compliance within 10 calendar days from receipt of the Labor Arbiter‘s decision,
disobedience to which clearly denotes a refusal to reinstate. The employee need not
file a motion for the issuance of the writ of execution since the Labor Arbiter shall
thereafter motu proprio issue the writ. With the new rules in place, there is hardly any
difficulty in determining the employer‘s intransigence in immediately complying with
the order.
Same; Corporate Rehabilitation; Had there been no need to rehabilitate, respondent
may have opted for actual physical reinstatement pending appeal to optimize the
utilization of resources—then again, though the management may think this wise, the
rehabilitation receiver may decide otherwise, not to mention the subsistence of the
injunction on claims.—There are legal effects arising from a judicial order placing a
corporation under rehabilitation. Respondent was, during the period material to the
case, effectively deprived of the alternative choices under Article 223 of the Labor
Code, not only by virtue of the statutory injunction but also in view of the interim
relinquishment of management control to give way to the full exercise of the powers
of the rehabilitation receiver. Had there been no need to rehabilitate, respondent may
have opted for actual physical reinstatement pending appeal to optimize the
utilization of resources. Then again, though the management may think this wise, the
rehabilitation receiver may decide otherwise, not to mention the subsistence of the
injunction on claims.
CAPITOL MEDICAL CENTER, INC. and DR. THELMA NAVARETTE-CLEMENTE,
petitioners, vs. DR. CESAR E. MERIS, respondent.
Certiorari; Pleadings and Practice; Procedural Rules and Technicalities; The province
of a special civil action for certiorari under Rule 65, no doubt the appropriate mode of
review by the Court of Appeals of the NLRC decision, is limited only to correct errors
of jurisdiction or grave abuse of discretion; In light of the merits of a party‘s claim, the
relaxation of procedural technicality to give way to substantive determination of a
case to observe the interest of justice is warranted.—The province of a special civil
action for certiorari under Rule 65, no doubt the appropriate mode of review by the
Court of Appeals of the NLRC decision, is limited only to correct errors of jurisdiction
or grave abuse of discretion amounting to lack or excess of jurisdiction. In light of the
merits of Dr. Meris‘ claim, however, the relaxation by the appellate court of
procedural technicality to give way to a substantive determination of a case, as this
Court has held in several cases, to subserve the interest of justice, is in order.
Same; For the factual finding of the NLRC which affirm those of the Labor Arbiter to
be accorded respect, if not finality, the same must be sufficiently supported by
evidence on record.—Capitol argues that the factual findings of the NLRC, particularly
when they coincide with those of the Labor Arbiter, as in the present case, should be
accorded respect, even finality. For factual findings of the NLRC which affirm those of
the Labor Arbiter to be accorded respect, if not finality, however, the same must be
sufficiently supported by evidence on record. Where there is a showing that such
findings are devoid of support, or that the judgment is based on a misapprehension of
facts, the lower tribunals‘ factual findings will not be upheld.
Labor Law; Social Justice; Work is a necessity that has economic significance
deserving legal protection.—Work is a necessity that has economic significance
deserving legal protection. The social justice and protection to labor provisions in the
Constitution dictate so.
Same; Management Prerogatives; Dismissals; Closure of Establishments; The right to
close operation of an establishment or undertaking is one of the authorized causes in
terminating employment of workers, the only limitation being that the closure must
not be for the purpose of circumventing the provisions on termination of employment
embodied in the Labor Code.—Employers are also accorded rights and privileges to
assure their self-determination and independence and reasonable return of capital.
This mass of privileges comprises the so-called management prerogatives. Although
they may be broad and unlimited in scope, the State has the right to determine
whether an employer‘s privilege is exercised in a manner that complies with the legal
requirements and does not offend the protected rights of labor. One of the rights
accorded an employer is the right to close an establishment or undertaking. The right
to close the operation of an establishment or undertaking is explicitly recognized
under the Labor Code as one of the authorized causes in terminating employment of
workers, the only limitation being that the closure must not be for the purpose of
circumventing the provisions on termination of employment embodied in the Labor
Code.
Same; Same; Same; Same; Words and Phrases; The phrase ―closures or cessation of
operations establishment or undertaking‖ includes a partial or total closure
cessation.—The phrase ―closures or cessation of operations of establishment or
undertaking‖ includes a partial or total closure or cessation. x x x Ordinarily, the
closing of a warehouse facility and the termination of the services of employees there
assigned is a matter that is left to the determination of the employer in the good faith
exercise of its management prerogatives. The applicable law in such a case is Article
283 of the Labor Code which permits ‗closure or cessation of operation of an
establishment or undertaking not due to serious business losses or financial reverses,‘
which, in our reading includes both the complete cessation of operations and the
cessation of only part of a company‘s business. (Emphasis supplied)
Same; Same; Same; Same; It would indeed be stretching the intent and spirit of the
law if a court were to unjustly interfere in management prerogative to close or cease
its business operation just because said business operation or undertaking is not
suffering from any loss—the right to close establishment or undertaking may be
justified on grounds other than business losses; The ultimate test of the validity of
closure or cessation of establishment or undertaking is that it must be bona fide in
character.—The phrase ―closures or cessation x x x not due to serious business losses
or financial reverses‖ recognizes the right of the employer to close or cease his
business operations or undertaking even if he is not suffering from serious business
losses or financial reverses, as long as he pays his employees their termination pay in
the amount corresponding to their length of service. It would indeed be stretching the
intent and spirit of the law if a court were to unjustly interfere in management‘s
prerogative to close or cease its business operations just because said business
operation or undertaking is not suffering from any loss. As long as the company‘s
exercise of the same is in good faith to advance its interest and not for the purpose of
defeating or circumventing the rights of employees under the law or a valid
agreement, such exercise will be upheld. Clearly then, the right to close an
establishment or undertaking may be justified on grounds other than business losses
but it cannot be an unbridled prerogative to suit the whims of the employer. The
ultimate test of the validity of closure or cessation of establishment or undertaking is
that it must be bona fide in character. And the burden of proving such falls upon the
employer.
Same; Dismissals; Reinstatements; Strained Relationship Doctrine; Reinstatement is
not feasible in case of a strained employer-employee relationship or when the work or
position formerly held by the dismissed employee no longer exists.—Reinstatement,
however, is not feasible in case of a strained employer-employee relationship or when
the work or position formerly held by the dismissed employee no longer exists, as in
the instant case. Dr. Meris is thus entitled to payment of separation pay at the rate of
one (1) month salary for every year of his employment, with a fraction of at least six
(6) months being considered as one(1) year, and full backwages from the time of his
dismissal from April 30, 1992 until the expiration of his term as Chief of ISU or his
mandatory retirement, whichever comes first.
Same; Same; Damages; The award of damages cannot be sustained solely on the
premise that the employer fired his employee without just cause or due process—
additional facts must be pleaded and proven to warrant the grant of moral damages
under the Civil Code.—The award by the appellate court of moral damages, however,
cannot be sustained, solely upon the premise that the employer fired his employee
without just cause or due process. Additional facts must be pleaded and proven to
warrant the grant of moral damages under the Civil Code, such as that the act of
dismissal was attended by bad faith or fraud, or was oppressive to labor, or done in a
manner contrary to morals, good customs, or public policy; and of course, that social
humiliation, wounded feelings, grave anxiety, etc., resulted therefrom. Such
circumstances, however, do not obtain in the instant case. More specifically on bad
faith, lack of it is mirrored in Dr. Clemente‘s offer to Dr. Meris to be a consultant of
Capitol, despite the abolition of the ISU. There being no moral damages, the award of
exemplary damages does not lie.
PHIlLIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC, petitioner, vs. HON.
FRANKLIN M. DRILON as Secretary of Labor and Employment, and TOMAS D.
ACHACOSO, as Administrator of the Philippine Overseas Employment
Administration, respondents.
Constitutional Law; Labor Laws: Deployment Ban of Female Domestic Helper;
Concept of Police Power.—The concept of police power is well-established in this
jurisdiction. It has been defmed as the "state authority to enact legislation that may
interfere with personal liberty or property in order to promote the general welfare."
As defined, it consists of (1) an imposition of restraint upon liberty or property, (2) in
order to foster the common good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-comprehensive embrace. "Its
scope, ever-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuring the greatest benefits."
Same; Same; Same; Same; Police power constitutes an implied limitation on the Bill
ofRights.—It constitutes an implied limitation on the Bill of Rights. According to
Fernando, it is "rooted in the conception that men in organizing the state and
imposing upon its governxnent limitations to safeguard constitutional rights did not
intend thereby to enable an individual citizen or a group of citizens to obstruct
unreasonably the enactment of such salutary measures calculated to ensure
communal peace, safety, good order, and welfare." Significantly, the Bill of Rights
itself does not purport to be an absolute guaranty of individual rights and liberties
"Even liberty itself, the greatest of all rights, is not unrestricted license to act
according to one's will." It is subject to the far more overriding demands and
requirements of the greater number.
Same; Same; Same; Equality before the law under the Constitution; Requirements ofa
valid classification, satisfied.—The petitioner has shown no satisfactory reason why
the contested measure should be nullified. There is no question that Department
Order No. 1 applies only to "female contract workers," but it does not thereby make an
undue discrimination between the sexes. It is well-settled that "equality before the
law" under the Constitution does not import a perfect identity of rights among all men
and women. It admits of classifications, provided that (1) such classiflcations rest on
substantial distinctions; (2) they are germane to the purposes of the law; (3) they are
not confined to existing conditions; and (4) they apply equally to all members of the
same class. The Court is satisfied that the classification made—the preference for
female workers—rests on substantial distinctions.
Same; Same; Same; Valid Discrimination between female and male contract workers
under Department OrderNo. l,justified.—The same, however, cannot be said of our
male workers. In the first place, there is no evidence that, except perhaps for isolated
instances, our men abroad have been afflicted with an identical predicament. The
petitioner has proffered no argument that the Government should act similarly with
respect to male workers. The Court, of course, is not impressing some male
chauvinistic notion that men are superior to women. What the Court is saying is that
it was largely a matter of evidence (that women domestic workers are being ill-treated
abroad in massive instances) and not upon some fanciful or arbitrary yardstick that
the Government acted in this case. It is evidence capable indeed of unquestionable
demonstration and evidence this Court accepts. The Court cannot, however, say the
same thing as far as men are concerned. There is simply no evidence to justify such an
inference. Suffice it to state, then, that insofar as classification are concerned, this
Court is content that distinctions are borne by the evidence. Discrimination in this
case is justified.
Same; Same; Same; Department Order No. 1 does not impair the right to travel.—The
consequence the deployment ban has on the right to travel does not impair the right.
The right to travel is subject, among other things, to the requirements of "public
safety, "as may be provided by law." Department Order No. 1 is a valid
implementation of the Labor Code, in particular, its basic policy to "afford protection
to labor," pursuant to the respondent Department of Labor's rulemaking authority
vested in it by the Labor Code. The petitioner assumes that it is unreasonable simply
because of its impact on the right to travel, but as we have stated, the right itself is not
absolute. The disputed Order is a valid qualification thereto.
Same; Same; Same; No merit in the contention that Department Order No. 1
constitutes an invalid exercise of legislative power since the Labor Code itselfvests the
DOLE with rule-making powers.—Neither is there merit in the contention that
Department Order No. 1 constitutes an invalid exercise of legislative power. It is true
that police power is the domain of the legislature, but it does not mean that such an
authority may not be lawfully delegated. As we have mentioned, the Labor Code itself
vests the Department of Labor and Employment with rule-making powers in the
enforcement whereof.
Same; Same; Same; "Protection to Labor" does not signify the promotion
ofemployment alone.—Trotection to labor" does not signify the promotion of
einployment alone. What concerns the Constitution more paramountly is that such an
employment be above all, decent, just, and humane. It is bad enough that the country
has to send its sons and daughters to strange lands because it cannot satisfy their
employment needs at home. Under these circumstances, the Government is duty-
bound to insure that our toiling expatriates have adequate protection, personally and
economically, while away from home. In this case, the Government has evidence, an
evidence the petitioner cannot seriously dispuce, of the lack or inadequacy of auch
protection, and as part of its duty, it has precisely ordered an indefinite ban on
deployment.
Same; Same; Same; Non-impairment clause must yield to the demands and
necessities of State's power of regulation to provide a decent living to its citizens.—
The petitioner's reliance on the Constitutional guaranty of worker participation "in
policy and decisionmaking processes affecting their rights and benefits" is not
welltaken. The right granted by this provision, again, must submit to the demands
and necessities of the State's power of regulation. The nonimpairment clause of the
Constitution, invoked by the petitioner, must yield to the loftier purposes targetted by
the Government. Freedom of contract and enterprise, like all other freedoms, is not
free from restrictions, more so in this jurisdiction, where laissez faire has never been
fully accepted as a controlling economic-way of life. This Court understands the grave
implications the questioned Order has on the business of recruitment. The concern of
the Government, however, is not necessarily to maintain profits of business firms. In
the ordinary sequence of events, it is profits that suffer as a result of Government
regulation. The interest of the State is to provide a decent living to its citizens. The
Government has convinced the Court in tbis case that this is its intent. We do not find
the impugned Order to be tainted witb a grave abuse of discretion to warrant the
extraordinary relief prayed for.
GIL CAPILI and RICARDO CAPILI, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, National Capital Region (First Division), BENIGNO SANTOS,
DELFIN YUSON, LUISITO SANTOS, URSINO BASISTER, RICARDO REYES,
JOSELITO SANTOS, JORGE BINUYA and NICOLAS MULINGBAYAN, respondents.
Labor Law; Separation Pay; An employee who is dismissed for cause after appropriate
proceedings in compliance with the due process requirements is not entitled to an
award of separation pay.—A reading of Art. 279 in relation to Art. 282 of the Labor
Code reveals that an employee who is dismissed for cause after appropriate
proceedings in compliance with the due process requirements is not entitled to an
award of separation pay. Under Arts. 283 and 284 of the same Code, separation pay is
authorized only in cases of dismissals due to any of these reasons: (a) installation of
labor saving devices; (b) redundancy; (c) retrenchment; (d) cessation of the
employer‘s business; and, (e) when the employee is suffering from a disease and his
continued employment is prohibited by law or is prejudicial to his health and to the
health of his co-employees. However, separation pay shall be allowed as a measure of
social justice in those cases where the employee is validly dismissed for causes other
than serious misconduct or those reflecting on his moral character, but only when he
was illegally dismissed.
Same; Same; The common denominator of those instances where payment of
separation pay is warranted is that the employee was dismissed by the employer.—
The common denominator of those instances where payment of separation pay is
warranted is that the employee was dismissed by the employer. In the instant case
there was no dismissal at all. Respondent NLRC affirmed the factual findings of the
Labor Arbiter that there was only a misunderstanding between petitioners and private
respondents which caused the latter to stop reporting for work. If the Labor Arbiter
ordered reinstatement it should not be construed as relief proceeding from illegal
dismissal; instead, it should be considered as a declaration or affirmation that private
respondents may return to work because they were not dismissed in the first place,
and they should be happy that their employers are accepting them back. This could be
the reason why complainants asked only for separation pay—not for reinstatement—
in their complaint before the Labor Arbiter.
Same; Same; There is no legal basis for separation pay, even if the relations are
strained, when there is no illegal dismissal.—The award of separation pay cannot be
justified solely because of the existence of ―strained relations‖ between the employer
and the employee. It must be given to the employee only as an alternative to
reinstatement emanating from illegal dismissal. When there is no illegal dismissal,
even if the relations are strained, separation pay has no legal basis.
Same; Same; ―Strained Relations‖ Doctrine; The doctrine on ―strained relations‖
cannot be applied indiscriminately since every labor dispute almost invariably results
in ―strained relations.‖—Besides, the doctrine on ―strained relations‖ cannot be
applied indiscriminately since every labor dispute almost invariably results in
―strained relations‖; otherwise, reinstatement can never be possible simply because
some hostility is engendered between the parties as a result of their disagreement.
That is human nature.
Same; The constitutional policy of providing full protection to labor is not intended to
oppress or destroy management.—The constitutional policy of providing full
protection to labor is not intended to oppress or destroy management. The
commitment of this Court to the cause of labor does not prevent us from sustaining
the employer when it is in the right, as in this case.
Same; Separation Pay; Reinstatement; Where the complainants pray only for an
award of separation pay, they foreclose reinstatement as a relief.—When respondents
filed their complaint, and taking account of the allegations therein, they foreclosed
reinstatement as a relief, since they prayed only for an award of separation pay. This
is confirmed in their appeal to the NLRC where they prayed for a modification of the
decision of the Labor Arbiter, from reinstatement without back wages to payment of
three (3) years back wages and separation pay equivalent to one (1) month salary for
every year of service. It is therefore clear that respondents never desired to be
reinstated. This being so, the Court cannot order them to return to work. If private
respondents voluntarily chose not to return to work anymore they must be considered
as having resigned from their employment. This is without prejudice however to the
willingness of both parties to continue with their former contract of employment or
enter into a new one whenever they so desire.
CORAZON JAMER and CRISTINA AMORTIZADO, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION, ISETANN DEPARTMENT STORE and/or
JOHN GO, respondents.
Labor Law; Certiorari; Motion for Reconsideration; The Court notes petitioners‘
inexcusable failure to move for the reconsideration of respondent NLRC‘s decision.—
At the outset, the Court notes petitioners‘ inexcusable failure to move for the
reconsideration of respondent NLRC‘s decision. Thus, the present petition suffers
from a procedural defect that warrants its outright dismissal. While in some
exceptional cases we allowed the immediate recourse to this Court, we find nothing
herein that could warrant an exceptional treatment to this petition which will justify
the omission.
Same; Same; Same; A motion for reconsideration is an adequate remedy, hence
certiorari proceedings will not prosper.—Likewise, a motion for reconsideration is an
adequate remedy; hence certiorari proceedings, as in this case, will not prosper. Rule
65, Section 1 of the Rules of Civil Procedure, as amended, clearly provides that:
―When any tribunal, board or officer exercising judicial or quasi-judicial functions has
acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, x x x‖
Same; Same; Certiorari will lie only if there is no appeal or any other plain, speedy
and adequate remedy in the ordinary course of law against the acts of respondent.—
The unquestioned rule in this jurisdiction is that certiorari will lie only if there is no
appeal or any other plain, speedy and adequate remedy in the ordinary course of law
against the acts of respondent. In the case at bench, the plain and adequate remedy
referred to in Rule 65, Section 1, is a motion for reconsideration of the challenged
decision and the resolution thereof, which was expected to provide an adequate and a
more speedy remedy than the present petition for certiorari.
Same; Same; Grave abuse of discretion is committed when the judgment is rendered
in a capricious, whimsical, arbitrary or despotic manner.—In asserting that there was
grave abuse of discretion, petitioners advert to alleged variances in the factual
findings of the Labor Arbiter and the respondent NLRC. This is inept and erroneous.
Firstly, errors of judgment, as distinguished from errors of jurisdiction, are not within
the province of a special civil action for certiorari. Secondly, a careful reading of the
records of this case would readily show that if there is any error by public respondent
in its analysis of the facts and its evaluation of the evidence, it is not of such a degree
as may be stigmatized as a grave abuse of discretion. Grave abuse of discretion is
committed when the judgment is rendered in a capricious, whimsical, arbitrary or
despotic manner. An abuse of discretion does not necessarily follow just because there
is a reversal by the NLRC of the decision of the Labor Arbiter. Neither does the mere
variance in the evidentiary assessment of the NLRC and that of the Labor Arbiter
would, as a matter of course, so warrant another full review of the facts. The NLRC‘s
decision, so long as it is not bereft of support from the records, deserves respect from
the Court.
Same; Same; An error of judgment that the court may commit in the exercise of its
jurisdiction is not correctible through the original special civil action of certiorari.—
We must once more reiterate our much repeated but not well-heeded rule that the
special civil action for certiorari is a remedy designed for the correction of errors of
jurisdiction and not errors of judgment. The rationale for this rule is simple. When a
court exercises its jurisdiction an error committed while so engaged does not deprive
it of the jurisdiction being exercised when the error is committed. If it did, every error
committed by a court would deprive it of its jurisdiction and every erroneous
judgment would be a void judgment. This cannot be allowed. The administration of
justice would not countenance such a rule. Consequently, an error of judgment that
the court may commit in the exercise of its jurisdiction is not correctible through the
original special civil action of certiorari.
Same; Dismissal; Substantial evidence exists to warrant the finding that petitioners
were validly dismissed for just cause and after observance of due process.—On the
merits, we find and so hold that substantial evidence exists to warrant the finding that
petitioners were validly dismissed for just cause and after observance of due process.
Same; Same; The requirements for the lawful dismissal of an employee by his
employer are two-fold: the substantive and the procedural.—Under the Labor Code, as
amended, the requirements for the lawful dismissal of an employee by his employer
are two-fold: the substantive and the procedural. Not only must the dismissal be for a
valid or authorized cause as provided by law (Articles 282, 283 and 284, of the Labor
Code, as amended), but the rudimentary requirements of due process, basic of which
are the opportunity to be heard and to defend himself, must be observed before an
employee may be dismissed.
Same; Same; The NLRC did not act with grave abuse of discretion in declaring that
petitioners were legally dismissed from employment.—The NLRC, therefore, did not
act with grave abuse of discretion in declaring that petitioners were legally dismissed
from employment. The failure of petitioners to report to management the
aforementioned irregularities constitute ―fraud or willful breach of the trust reposed
in them by their employer or duly authorized representative‖—one of the just causes
in terminating employment as provided for by paragraph (c), Article 282 of the Labor
Code, as amended.
Same; Same; The law, in protecting the rights of the employees, authorizes neither
oppression nor self-destruction of the employer.—In other words, petitioners‘
admissions in their sworn statements, together with the other documentary evidences
on record, constituted breach of trust on their part which justifies their dismissal.
Private respondents Isetann Department Store and Mr. John Go cannot be compelled
to retain employees who are clearly guilty of malfeasance as their continued
employment will be prejudicial to the formers‘ best interest. The law, in protecting the
rights of the employees, authorizes neither oppression nor self-destruction of the
employer.
Same; Same; Social Justice; Social justice ceases to be an effective instrument for the
―equalization of the social and economic forces‖ by the State when it is used to shield
wrongdoing.—The cause of social justice is not served by upholding the interest of
petitioners in disregard of the right of private respondents. Social justice ceases to be
an effective instrument for the ―equalization of the social and economic forces‖ by the
State when it is used to shield wrongdoing. While it is true that compassion and
human consideration should guide the disposition of cases involving termination of
employment since it affects one‘s source or means of livelihood, it should not be
overlooked that the benefits accorded to labor do not include compelling an employer
to retain the services of an employee who has been shown to be a gross liability to the
employer. It should be made clear that when the law tilts the scale of justice in favor
of labor, it is but a recognition of the inherent economic inequality between labor and
management. The intent is to balance the scale of justice; to put the two parties on
relatively equal positions. There may be cases where the circumstances warrant
favoring labor over the interests of management but never should the scale be so tilted
if the result is an injustice to the employer, Justicia remini regarda est (Justice is to be
denied to none).
Same; Same; Loss of confidence is a valid ground for dismissing an employee and
proof beyond reasonable doubt of the employee‘s misconduct is not required to
dismiss him on this charge.—Thus, this Court has held time and again, in a number of
decisions, that: ―Loss of confidence is a valid ground for dismissing an employee and
proof beyond reasonable doubt of the employee‘s misconduct is not required to
dismiss him on this charge. It is sufficient if there is ‗some basis‘ for such loss of
confidence or if the employer has reasonable ground to believe or to entertain the
moral conviction that the employee concerned is responsible for the misconduct and
that the nature of his participation therein rendered him absolutely unworthy of the
trust and confidence demanded by his position.‖
Same; Same; Denials are weak forms of defenses, particularly when they are not
substantiated by clear and convincing evidence.—We are convinced that the NLRC did
not commit grave abuse of discretion in evaluating the evidence. Petitioners merely
denied the charges against them. Denials are weak forms of defenses, particularly
when they are not substantiated by clear and convincing evidence. The petitioners‘
failure to satisfactorily explain the cash shortages, for which sums they are
responsible, given their respective positions in respondent company, is enough reason
to warrant their dismissal on the ground of loss of confidence. They cannot place the
burden on somebody else given the factual circumstances of this case.
Same; Same; In cases of dismissal for breach of trust and confidence, proof beyond
doubt of the employees‘ misconduct is not required; It is sufficient that the employer
had reasonable ground to believe that the employees and responsible for the
misconduct which renders him unworthy of the trust and confidence demanded by
their position.—We reiterate the rule that in cases of dismissal for breach of trust and
confidence, proof beyond doubt of the employees‘ misconduct is not required. It is
sufficient that the employer had reasonable ground to believe that the employees are
responsible for the misconduct which renders him unworthy of the trust and
confidence demanded by their position. In the case at hand, it cannot be doubted that
respondents succeeded in discharging its burden of proof.
Same; Same; Due Process; The law requires that the employer must furnish the
worker sought to be dismissed with two (2) written notices before termination may be
validly effected.—As regards to the second requisite, the law requires that the
employer must furnish the worker sought to be dismissed with two (2) written notices
before termination may be validly effected: first, a notice apprising the employee of
the particular acts or omission for which his dismissal is sought and, second, a
subsequent notice informing the employee of the decision to dismiss him.
Same; Same; Same; The essence of due process is simply an opportunity to be heard,
or as applied to administrative proceedings, an opportunity to explain one‘s side or an
opportunity to seek a reconsideration of the action or ruling complained of.—It is a
well-established rule that the essence of due process is simply an opportunity to be
heard, or as applied to administrative proceedings, an opportunity to explain one‘s
side or an opportunity to seek a reconsideration of the action or ruling complained of.
It is evident from the records, that herein petitioners were given all the opportunities
to defend themselves and air their side before the Committee on Discipline, having
been notified by respondent Isetann‘s Human Resources Division Manager, Teresita
A. Villanueva, on August 2, 1990 through letters individually sent to them. However,
when the petitioners were confronted with reports of the anomalies, they offered no
explanation or theory which could account for money lost in their possession. Hence,
the company had no other alternative but to terminate their employment.
CMS ESTATE, INC., petitioner, vs. SOCIAL SECURITY SYSTEM and SOCIAL
SECURITY COMMISSION, respondents.
Constitutional Law; Social Security Act; The Social Security Law was enacted to
implement the general welfare clause of the Constitution.—The Social Security Law
was enacted pursuant to the policy of the government ―to develop, establish gradually
and perfect a social security system which shall be suitable to the needs of the people
throughout the Philippines, and shall provide protection against the hazards of
disability, sickness, old age and death‖. (Sec. 2, RA 1161, as amended). It is thus clear
that said enactment implements the general welfare mandate of the Constitution and
constitutes a legitimate exercise of the police power of the State.
Same; Same; The SSS Law is not part of the taxation system.—The taxing power of the
State is exercised for the purpose of raising revenues. However, under our Social
Security Law, the emphasis is more on the promotion of the general welfare. The Act
is not part of our Internal Revenue Code nor are the contributions and premiums
therein dealt with and provided for, collectible by the Bureau of Internal Revenue. The
funds contributed to the System belong to the members who will receive benefits, as a
matter of right, whenever the hazards provided by the law occur.
Same; Same; It is the employer and not the business that is subject to compulsory SSS
coverage.—Prior to its amendment, Sec. 9 of the Act provides that before an employer
could be compelled to become a member of the System, he must have been in
operation for at least two years and has at the time of admission at least six
employees. It should be pointed out that it is the employer, either natural, or juridical
person, who is subject to compulsory coverage and not the business. If the intention
of the legislature was to consider every venture of the employer as the basis of a
separate coverage, an express provision to that effect could have been made.
Unfortunately, however, none of that sort appeared provided for in the said law.
Social Security Act; Once an employer is covered in a particular line of business, he is
covered automatically also with respect to any other line of business.—Should each
business venture of the employer be considered as the basis of the coverage, an
employer with more than one line of business but with less than six employees in
each, would never be covered although he has in his employ a total of more than six
employees which is sufficient to bring him within the ambit of compulsory coverage.
This would frustrate rather than foster the policy of the Act. The legislative intent
must be respected. In the absence of an express provision for a separate coverage for
each kind of business, the reasonable interpretation is that once an employer is
covered in a particular kind of business, he should be automatically covered with
respect to any new line of business he may subsequently undertake even under a new
name. Any interpretation which would defeat rather than promote the ends for which
the Social Security Act was enacted should be eschewed.
Same; Employers automatically covered by SSS upon start of his business.—Petitioner
contends that the Commission cannot indiscriminately combine for purposes of
coverage two distinct and separate businesses when one has not yet been in operation
for more than two years thus rendering nugatory the period of stabilization fixed by
the Act. This contention lacks merit since the amendatory law, RA 2658, which was
approved on June 18, 1960, eliminated the two-year stabilization period as employers
now become automatically covered immediately upon the start of the business.
Same; Labor Law; A person is not an independent contractor where he only manages
a particular business belonging to another.—Petitioner further submits that Eufracio
Rojas is an independent contractor who engages in an independent business of his
own consisting of the operation of the timber concession of the former. Rojas was
appointed as operations manager of the logging concession; he has no power to
appoint or hire employees; as the term implies, he only manages the employees and it
is petitioner who furnishes him the necessary equipment for use in the logging
business; and he is not free from the control and direction of his employer in matters
connected with the performance of his work. These factors clearly indicate that Rojas
is not an independent contractor but merely an employee of petitioner; and should be
entitled to the compulsory coverage of the Act.
PHILIPPINE BLOOMING MILLS Co., INC. (As Employer), and FRANCISCO TONG
(As Assistant General Manager) and Attorney-in-Fact of SUSUMU SONODA, SENJI
TANAKA, TAKASHIKO KUMAMOTO, HITOSHI NAKAMURA, TETSUO KODU,
(Employees), petitioners and appellants, vs. SOCIAL SECURITY SYSTEM,
respondent and appellee.
Constitutional Law; Social Security System; Membership therein is not the result of a
contractual agreement but a legal imposition.—Membership in the Social Security
System is not the result of a bilateral, consensual agreement where the rights and
obligations of the parties are defined by and subject to their will. Republic Act 1161
requires compulsory coverage of employers and employees under the system. It is
actually a legal imposition on said employers and employees, designed to provide
security to the working men. Membership in the Social Security System is, therefore,
in compliance with a lawful exercise of the police power of the State, to which the
principle of nonimpairment of the obligation of contract is not a proper defense.
Same; Statutes; Effectivity of laws; Amended rules take effect upon approval by the
President.—Under Article 2 of the New Civil Code, the date of publication of laws in
the Official Gazette is material for the purpose of determining their effectivity, only if
the statutes themselves do not so provide. When the original Rules and Regulations of
the Social Security System specifically provide that any amendment thereto
subsequently adopted by the Commission, shall take effect on the date of its approval
by the President, the delayed publication of the amended rules in the Official Gazette
did not affect the date of their effectivity, which is January 14, 1958, when they were
approved by the President.
IN RE PETITION FOR EXEMPTION FROM COVERAGE BY THE SOCIAL
SECURITY SYSTEM. ROMAN CATHOLIC ARCHBISHOP OF MANILA, petitioner-
appellant, vs. SOCIAL SECURITY COMMISSION, respondent-appellee.
Social security; Scope of coverage.—The coverage of the Social Security Law is
predicated on the existence of an employer-employee relationship of more or less
permanent nature and extends to employment of all kinds except those expressly
excluded.
Statutes; Ejusdem generis.—The rule of ejusdem generis applies only where there is
uncertainty. It is not controlling where there the plain purpose and intent of the
lawmaking body would thereby be hindered and defeated.
Same; Social security; "Employer" includes charitable and religious organizations.—
The rule of ejusdem generis does not apply to the definition of the term "employer" in
the Social Security Law. That definition is sufficiently comprehensive as to include
religious and charitable institutions or entities, not organized for profit. It includes
the Catholic Charities and all religious and charitable institutions and organizations
directly or indirectly operated by the Roman Catholic Archbishop of Manila.
Same; Statutes; Effect of exception and amendment.—The inclusion of religious and
charitable institutions, not organized for profit, within the definition of the term
"employer" in the Social Security Law is shown by the circumstance that said
institutions are not included in the exception contained in said definition and by the
fact that, while in the original law, services performed for religious and charitable
institutions were expressly excluded from the coverage of the law, in the amendment,
that portion of the law was deleted.
Same; Social Security Law and Industrial Peace Act contrasted.—The rule, that the
Industrial Peace Act applies only to industry and occupation for purposes of profit
and gain, is not applicable to the Social Security Law because the Industrial Peace Act
expressly limits its application to commercial, industrial or agricultural
establishments or enterprises.
Constitutional law; Social Security System involves private funds.—The inclusion of
religious organizations within the coverage of the Social Security Law does not violate
the constitutional prohibition against the application of public funds for the use,
benefit or support of any priest employed by a religious organization. The funds
contributed to the Social Security System are not public funds but funds belonging to
the members which are merely held in trust by the Government. Even assuming that
said funds are impressed with a public character, nevertheless, their payment as
retirement, death or disability benefits would not violate the said constitutional
prohibition since such payment would be made to the priest, not because he is a priest
but because he is an employee.
Religious organizations; Freedom to disseminate religious information; Social
security; Purpose; Constitutional mandate.—The inclusion of religious organizations
within the coverage of the Social Security Law would not impair their right to
disseminate religious information. Their monthly contributions, together with the
employees' contributions, are intended for the protection of said employees against
the hazards of disability, sickness, old age and death, This is in line with the
constitutional mandate to promote social justice to insure the wellbeing and economic
security of all the people.
INVESTMENT PLANNING CORPORATION OF THE PHILIPPINES, petitioner-
appellant, vs. SOCIAL SECURITY SYSTEM respondent-appellee.
Social Security; ―Employee‖; Requisites.—The three requirements under Sec. 8(d) of
the Social Security Act in order to be classified as an ―employee‖ are (1) The person
must perform services for an ―employer‖ in which either or both mental and physical
efforts are used; (2) The person must receive compensation for such services; and (3)
There is an employer-employee relationship.
Same; Employer-employee relationship; Control test.—There is an ―employer-
employee relationship‖ when the ―employer‖ controls or has reserved the right to
control the ―employee‖ not only as to the result of the work to be done but also as to
the means and methods by which the same is to be accomplished.
Same; Commission agents are not ―employees‖; Case at bar.—Petitioner's registered
representatives are. not required to report (for work) at any time; they do not have to
devote their time exclusively to or work solely for petitioner; the time and the effort
they spend in their work depend entirely upon their own will and initiative; they are
not required to account for their time nor submit a record of their activities; they
shoulder their own selling expenses as well as transportation; and they are paid their
commission based on a certain percentage of their sales. Are petitioner's registered
representatives employees within the meaning of the Social Security Act? Held: The
work of petitioner's agents or registered representatives more nearly approximates
that of an independent contractor than that of an employee. The latter is paid for the
labor he performs, that is, for the acts of which such labor consists; the former is paid
for the result thereof. There is nothing in the contract between petitioner and its
registered representatives which would indicate that the latter are under the control
of the former in respect of the means and methods they employ in the performance of
their work. The fact that for certain specified causes the relationship may be
terminated by (e.g. failure to meet the annual quota of sales, inability to make any
sales production during a six-month period, conduct detrimental to petitioner, etc.)
does not mean that such control exists, for the causes of termination thus specified
have no relation to the means and methods of work that are ordinarily required of or
imposed upon employees.
HERALD DELIVERY CARRIERS UNION (PAFLU) and PHILIPPINE ASSOCIATION
OF FREE LABOR UNIONS (PAFLU), petitioners, vs. HERALD PUBLICATION,INC.,
respondent.
Industrial Peace Act; Collective bargaining; Duty of both labor and manage mint to
carry en negotiation leading to collective contract in utmost good faith.—The
Industrial Peace Act specifically provides that ―it shall be the duty of an employer and
the representative of his employees to bargain collectively in accordance with the
provisions of this Act. Such duty to bargain collectively means the performance of the
mutual obligation to meet and confer promptly and expeditiously and in good faith,
for the purpose of negotiating an agreement with respect to wages, hours, and/or
other terms and conditions of employment, and of executing a written contract
incorporating such agreement if requested by either party, or for the purpose of
adjusting any grievances or question arising under such agreement, but such duty
does not compel any party to agree to a proposal or to make concession.‖ The literal
language of the above section should be adhered to.
Same; Same; Mutual consultation between labor and management and peaceful
accomodation of conflicting interests.— Nor did the adoption of a new method of
distribution, even on the assumption that it was prompted solely ―by economy,
efficiency and simplicity of operations,‖ justify the private respondent‘s refusal to
abide by a clear statutory duty. Precisely, the fact that thereby a number of workers
would as a result stand to lose their job unless absorbed by the new distributors ought
to have led private respondent to take the matter up with the petitioner-labor unions.
Same; Same; Failure on the part of management to yield obedience to the law‘s
command that it should bargain in good faith; Effect of.—―The duty to bargain
imposes on the parties during the term of their agreement the mutual obligation ‗to
meet and confer promptly and expeditiously and in good faith x x x for the purpose of
adjusting any grievances or question arising under such agreement‘ and a violation of
this obligation is, by section 4 (a) (6) and (b) (13), an unfair labor practice.‖
Same; Same; Employees separated from service entitled to reinstatement and
backwages; Effect where circumstances render impossible reinstatement; Case at
bar.—An unfair labor practice having been committed, the separation of the members
of the petitioner-labor unions from the service by private respondent is contrary to
law. They would have been entitled then to reinstatement. Judicial notice can be
taken of the fact, however, that private respondent had ceased operations as of
September 23, 1972, after the declaration of martial law. That would bar
reinstatement. There is still its responsibility though for back wages. Private
respondent is liable for three months backpay for such workers laid off or separated
from the service as a result of the unfair labor practice.
Constitutional Law; Present Constitution seeks to guarantee security of tenure.—The
present Constitution is much more explicit. With the express reference to security of
tenure, a novel feature in the present Charter, it can hardly be denied that at the very
least, labor is to be informed of any projected move on the part of management even if
included within its prerogative, the effect of which is to render nugatory what the
Constitution seeks to guarantee.
AGAPITA PAJARILLO, ET AL., petitioners-appellants, vs. SoCIAL SECURITY
SYSTEM, respondent-appellee.
Social Security System Act; Exemptions of joint ventures from its coverage.—In a joint
venture where a boat-owner supplies the boat and its equipment, while the pilot and
crew members contribute the corresponding labor, and the parties get specific shares
in the catch for their respective contributions to the venture, there is no employer-
employee relationship established between the boat-owner and the pilot and
crewmembers. Clearly, therefore, the boat-owner is exempted from the coverage of
the Social Security System.
OSIAS I. CORPORAL, SR., PEDRO TOLENTINO, MANUEL CAPARAS, ELPIDIO
LACAP, SIMPLICIO PEDELOS, PATRICIA NAS, and TERESITA FLORES,
petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, LAO ENTENG
COMPANY, INC. and/or TRINIDAD LAO ONG, respondents.
Administrative Law; Evidence; Appeals; The Supreme Court has long settled that it
will not uphold erroneous conclusions unsupported by substantial evidence.—This
case is an exception to the general rule that findings of facts of the NLRC are to be
accorded respect and finality on appeal. We have long settled that this Court will not
uphold erroneous conclusions unsupported by substantial evidence. We must also
stress that where the findings of the NLRC contradict those of the labor arbiter, the
Court, in the exercise of its equity jurisdiction, may look into the records of the case
and re-examine the questioned findings.
Labor Law; Employer-Employee Relationship; Barber Shops; Even the sharing of
proceeds for every job of barbers in a barber shop does not mean they were not
employees of the company.—The Labor Arbiter‘s findings that the parties were
engaged in a joint venture is unsupported by any documentary evidence. It should be
noted that aside from the selfserving affidavit of Trinidad Lao Ong, there were no
other evidentiary documents, nor written partnership agreements presented. We have
ruled that even the sharing of proceeds for every job of petitioners in the barber shop
does not mean they were not employees of the respondent company.
Same; Independent Contractors; Labor-Only Contracting; Words and Phrases;
―Independent Contractor,‖ Explained.—An independent contractor is one who
undertakes ―job contracting,‖ i.e., a person who (a) carries on an independent
business and undertakes the contract work on his own account under his own
responsibility according to his own manner and method, free from the control and
direction of his employer or principal in all matters connected with the performance
of the work except as to the results thereof, and (b) has substantial capital or
investment in the form of tools, equipment, machineries, work premises, and other
materials which are necessary in the conduct of the business.
Same; Employer-Employee Relationship; Elements.—Did an employee-employer
relationship exist between petitioners and private respondent? The following
elements must be present for an employer-employee relationship to exist: (1) the
selection and engagement of the workers; (2) power of dismissal; (3) the payment of
wages by whatever means; and (4) the power to control the worker‘s conduct, with the
latter assuming primacy in the overall consideration.
Same; Same; Control Test; The power to control refers to the existence of the power
and not necessarily to the actual exercise thereof.—Private respondent claims it had
no control over petitioners. The power to control refers to the existence of the power
and not necessarily to the actual exercise thereof, nor is it essential for the employer
to actually supervise the performance of duties of the employee. It is enough that the
employer has the right to wield that power. As to the ―control test,‖ the following facts
indubitably reveal that respondent company wielded control over the work
performance of petitioners, in that: (1) they worked in the barber shop owned and
operated by the respondents; (2) they were required to report daily and observe
definite hours of work; (3) they were not free to accept other employment elsewhere
but devoted their full time working in the New Look Barber Shop for all the fifteen
(15) years they have worked until April 15, 1995; (4) that some have worked with
respondents as early as in the 1960‘s; (5) that petitioner Patricia Nas was instructed
by the respondents to watch the other six (6) petitioners in their daily task. Certainly,
respondent company was clothed with the power to dismiss any or all of them for just
and valid cause. Petitioners were unarguably performing work necessary and
desirable in the business of the respondent company.
Same; Same; Social Security; It is no longer true that membership in Social Security
System is predicated on the existence of an employee-employer relationship since the
policy is now to encourage even the selfemployed dressmakers, manicurists and
jeepney drivers to become Social Security System members; It is unlikely that a
company would report certain persons as its workers, pay their Social Security System
premium as well as their wages if it were not true that they were indeed its
employees.— While it is no longer true that membership to SSS is predicated on the
existence of an employee-employer relationship since the policy is now to encourage
even the self-employed dressmakers, manicurists and jeepney drivers to become SSS
members, we could not agree with private respondents that petitioners were
registered with the Social Security System as their employees only as an
accommodation. As we have earlier mentioned private respondent showed no proof to
their claim that petitioners werethe ones who solely paid all SSS contributions. It is
unlikely that respondents would report certain persons as their workers, pay their SSS
premium as well as their wages if it were not true that they were indeed their
employees.
Same; Management Prerogatives; Closure of Establishment; An employer may adopt
policies or changes or adjustments in its operations to insure profit to itself or protect
investment of its stockholders, and in the exercise of such management prerogative,
the employer may merge or consolidate its business with another, or sell or dispose all
or substantially all of its assets and properties which may bring about the dismissal or
termination of its employees in the process.—We agree with the labor arbiter that
there was sufficient evidence that the barber shop was closed due to serious business
losses and respondent company closed its barber shop because the building where the
barber shop was located was sold. An employer may adopt policies or changes or
adjustments in its operations to insure profit to itself or protect investment of its
stockholders. In the exercise of such management prerogative, the employer may
merge or consolidate its business with another, or sell or dispose all or substantially
all of its assets and properties which may bring about the dismissal or termination of
its employees in the process.
SOCIAL SECURITY SYSTEM, petitioner, vs. THE COURT OF APPEALS and
CONCHITA AYALDE, respondents.
Social Security System; Employer-Employee Relationship; It is a well-settled doctrine
that the existence of an employer-employee relationship is ultimately a question of
fact—At the outset, we reiterate the well-settled doctrine that the existence of an
employer-employee relationship is ultimately a question of fact. And while it is the
general rule that factual issues are not within the province of the Supreme Court, said
rule is not without exception. In cases, such as this one, where there are conflicting
and contradictory findings of fact, this Court has not hesitated to scrutinize the
records to determine the facts for itself. Our disquisition of the facts shall be our guide
as to whose findings are supported by substantial evidence.
Same; Same; Elements.—The mandatory coverage under the SSS Law (Republic Act
No. 1161, as amended by PD 1202 and PD 1636) is premised on the existence of an
employer-employee relationship, and Section 8(d) defines an ―employee‖ as ―any
person who performs services for an employer in which either or both mental and
physical efforts are used and who receives compensation for such services where there
is an employer-employee relationship.‖ The essential elements of an employer-
employee relationship are: (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal; and (d) the power of control with
regard to the means and methods by which the work is to be accomplished, with the
power of control being the most determinative factor.
Same; Same; Payrolls: Where the veracity of the alleged documents as payrolls are
doubtful considering that the laborers named therein never affixed their signatures to
show that they actually received the amounts indicated corresponding to their names,
the fact that a particular laborer‘s name does not appear in the payrolls is no proof
that he did not work in the workplace.—To our mind, these documents are not only
sadly lacking, they are also unworthy of credence. The fact that Tana‘s name does not
appear in the payrolls for the years 1975, 1976 and part of 1978 and 1979, is no proof
that he did not work in Hda. B70 in the years 1961 to 1974, and the rest of 1978 and
1979. The veracity of the alleged documents as payrolls are doubtful considering that
the laborers named therein never affixed their signatures to show that they actually
received the amounts indicated corresponding to their names. Moreover, no record
was shown pertaining to Hda. B-15-M, where Tana was supposed to have worked.
Even Ayalde admitted that she hired Tana as ―arador‖ and sometimes as laborer
during milling in Hda. B-15-M. In light of her incomplete documentary evidence,
Ayalde‘s denial that Tana was her employee in Hda. B-70 or Hda. B-15-M must fail.
Same; Same; Same: The testimonies of other laborers who did not waver in their
assertion on certain facts of another laborer‘s employment prevail over the incomplete
and inconsistent documentary evidence of the employer; Where the employer-
employee relationship was sufficiently proved by testimonial evidence, the absence of
time sheet, time record or payroll becomes inconsequential.—These witnesses did not
waver in their assertion that while Tana was hired by Ayalde as an ―arador‖ on
―pakyaw‖ basis, he was also paid a daily wage which Ayalde‘s overseer disbursed every
fifteen (15) days. It is also undisputed that they were made to acknowledge receipt of
their wages by signing on sheets of ruled paper, which are different from those
presented by Ayalde as documentary evidence. In fine, we find that the testimonies of
Margarita Tana, Agaton Libawas and Aurelio Tana prevail over the incomplete and
inconsistent documentary evidence of Ayalde. In the parallel case of Opulencia Ice
Plant and Storage v. NLRC, the petitioners argued that since Manuel P. Esita‘s name
does not appear in the payrolls of the company it necessarily means that he was not
an employee. This Court held: ―Petitioners further argue that ―complainant miserably
failed to present any documentary evidence to prove his employment. There was no
timesheet, pay slip and/or payroll/cash voucher to speak of. Absence of these material
documents are necessarily fatal to complainant‘s cause.‘ We do not agree. No
particular form of evidence is required to prove the existence of an employer-
employee relationship. Any competent and relevant evidence to prove the relationship
may be admitted. For, if only documentary evidence would be required to show that
relationship, no scheming employer would ever be brought before the bar of justice,
as no employer would wish to come out with any trace of the illegality he has authored
considering that it should take much weightier proof to invalidate a written
instrument. Thus, as in this case where the employer-employee relationship between
petitioners and Esita was sufficiently proved by testimonial evidence, the absence of
time sheet, time record or payroll has become inconsequential.‖
Same; Same, Same; The employer is duty-bound to keep faithful and complete
records of his or her business affairs, not the least of which would be the salaries of
the workers.—The testimonial evidence of the claimant and her witnesses constitute
positive and credible evidence of the existence of an employer-employee relationship
between Tana and Ayalde. As the employer, the latter is duty-bound to keep faithful
and complete records of her business affairs, not the least of which would be the
salaries of the workers. And yet, the documents presented have been selective, few
and incomplete in substance and content. Consequently, Ayalde has failed to convince
us that, indeed, Tana was not her employee.
Same; Same; Same; If a laborer was a mere ―pakyaw‖ worker or independent
contractor, then there would be no reason for the employer to allow him and his
family to live inside the latter‘s property for free.—It is indubitable, therefore, that
Tana worked continuously for Ayalde, not only as ―arador‖ on ―pakyaw‖ basis, but as a
regular farmhand, doing back-breaking jobs for Ayalde‘s business. There is no shred
of evidence to show that Tana was only a seasonal worker, much less a migrant
worker. All witnesses, including Ayalde herself, testified that Tana and his family
resided in the plantation. If he was a mere ―pakyaw‖ worker or independent
contractor, then there would be no reason for Ayalde to allow them to live inside her
property for free. The only logical explanation is that he was working for most part of
the year exclusively for Ayalde, in return for which the latter gratuitously allowed
Tana and his family to reside in her property.
Same; Same; Same; Just because a worker was, for short periods of time, hired on
―pakyaw‖ basis does not necessarily mean that he was not employed to do other tasks
for the remainder of the year.—The Court of Appeals, in finding for Ayalde, relied on
the claimant‘s and her witnesses‘ admission that her husband was hired as an
―arador‖ on ―pakyaw‖ basis, but it failed to appreciate the rest of their testimonies.
Just because he was, for short periods of time, hired on ―pakyaw‖ basis does not
necessarily mean that he was not employed to do other tasks for the remainder of the
year. Even Ayalde admitted that Tana did other jobs when he was not hired to plow.
Consequently, the conclusion culled from their testimonies to the effect that Tana was
mainly and solely an ―arador‖ was at best a selective appreciation of portions of the
entire evidence. It was the Social Security Commission that took into consideration all
the documentary and testimonial evidence on record.
Same; Same; Same; Power of Control; The power of control refers merely to the
existence of the power—it is not essential for the employer to actually supervise the
performance of duties of the employee, as it is sufficient that the former has a right to
wield the power.—A closer scrutiny of the records, however, reveals that while Ayalde
herself may not have directly imposed on Tana the manner and methods to follow in
performing his tasks, she did exercise control through her overseer. Be that as it may,
the power of control refers merely to the existence of the power. It is not essential for
the employer to actually supervise the performance of duties of the employee; it is
sufficient that the former has a right to wield the power. Certainly, Ayalde, on her own
or through her overseer, wielded the power to hire or dismiss, to check on the work,
be it in progress or quality, of the laborers. As the owner/lessee of the plantations, she
possessed the power to control everyone working therein and everything taking place
therein.
Same; Same; Same; Independent Contractors; When a worker possesses some
attributes of an employee and others of an independent contractor, which make him
fall within an intermediate area, he may be classified under the category of an
employee when the economic facts of the relations make it more nearly one of
employment than one of independent business enterprise with respect to the ends
sought to be accomplished.—Under the circumstances, the relationship between
Ayalde and Tana has more of the attributes of employer-employee than that of an
independent contractor hired to perform a specific project. In the case of Dy Keh Beng
v. International Labor, we cited our long-standing ruling in Sunripe Coconut Products
Co. v. Court of Industrial Relations, to wit: ―When a worker possesses some attributes
of an employee and others of an independent contractor, which make him fall within
an intermediate area, he may be classified under the category of an employee when
the economic facts of the relations make it more nearly one of employment than one
of independent business enterprise with respect to the ends sought to be
accomplished.‖
Same; Same; Same; A farm laborer who has worked exclusively for a sugar plantation
for eighteen (18) years is entitled to compulsory coverage under the Social Security
Law, whether his service was continuous or broken.—The Court of Appeals also erred
when it ruled, on the alternative, that if ever Tana was an employee, he was still
ineligible for compulsory coverage because he was not paid any regular daily wage
and he did not work for an uninterrupted period of at least six months in a year in
accordance with Section 8(j) (I) of the Social Security Law. There is substantial
testimonial evidence to prove that Tana was paid a daily wage, and he worked
continuously for most part of the year, even while he was also occasionally called on to
plow the soil on a ―pakyaw‖ basis. As a farm laborer who has worked exclusively for
Ayalde for eighteen (18) years, Tana should be entitled to compulsory coverage under
the Social Security Law, whether his service was continuous or broken.
BEN STA. RITA, petitioner, vs. THE COURT OF APPEALS, THE PEOPLE OF THE
PHILIPPINES and THE SOCIAL SECURITY SYSTEM, respondents.
Appeals; The right to appeal is a statutory right and a party who seeks to avail of the
right must comply with the rules.—It is well-settled in our jurisdiction that the right to
appeal is a statutory right and a party who seeks to avail of the right must comply with
the rules. These rules, particularly the statutory requirement for perfecting an appeal
within the reglementary period laid down by law, must be strictly followed as they are
considered indispensable interdictions against needless delays and for orderly
discharge of judicial business. Petitioner‘s failure to seasonably file the Petition and
its failure to comply with the aforequoted Circulars of the Court necessitate the denial
of the Petition.
Social Security Law; Criminal Procedure; Pleadings and Practice; The information is
sufficient where it clearly states the designation of the offense by the statute and the
acts or omissions complained of as constituting the offense.—The Court agrees with
the CA that the Information filed against petitioner was sufficient as it clearly stated
the designation of the offense by the statute, i.e. violation of the Social Security Law,
and the acts or omissions complained of as constituting the offense, i.e., petitioner‘s
failure to remit his contributions to the SSS. The CA found that there is prima facie
evidence to support the allegations in the Information and to warrant the prosecution
of petitioner.
Same; Labor Law; Overseas Contract Workers; Seamen; The Memorandum of
Agreement between the Social Security System and the Department of Labor and
Employment providing for coverage of Filipino seafarers by the SSS is not an
implementing rule or regulation of the Social Security Commission which is subject to
approval of the President—the Agreement relates simply to the administrative
convenience of the two agencies of government.—What the Memorandum of
Agreement did was to record the understanding between the SSS on the one hand and
the DOLE on the other hand that the latter would include among the provisions of the
Standard Contract of Employment required in case of overseas employment, a
stipulation providing for coverage of the Filipino seafarer by the SSS. The
Memorandum of Agreement is not an implementing rule or regulation of the Social
Security Commission which, under Section 4(a) abovequoted, is subject to the
approval of the President. Indeed, as a matter of strict law, the participation of the
SSS in the establishment by the DOLE of a uniform stipulation in the Standard
Contract of Employment for Filipino seafarers was not necessary; the Memorandum
of Agreement related simply to the administrative convenience of the two (2) agencies
of government.
Same; Same; Same; Same; Section 8(j)(5) of R.A. No. 1161, as amended, simply
defines the term ―employment‖ and does not in any way relate to the scope of
coverage of the Social Security System.—Moreover, the Court finds no merit in
petitioner‘s contention that Section 8 (j) (5) of R.A. No. 1161, as amended, absolutely
exempts Filipino seafarers on board foreign vessels from the coverage of the SSS
statute. Section 8 (j) (5) simply defines the term ―employment‖ and does not in any
way relate to the scope of coverage of the Social Security System. That coverage is,
upon the other hand, set out in Section 9 of R.A. No. 1161 as amended, which defines
the scope of SSS coverage.
Same; Same; Same; Same; The extension of the coverage of the Social Security System
to Filipino seafarers arises by virtue of the assent given in the contract of employment
signed by the employer and seafarer.—Thus, the Standard Contract of Employment to
be entered into between foreign shipowners and Filipino seafarers is the instrument
by which the former express their assent to the inclusion of the latter in the coverage
of the Social Security Act. In other words, the extension of the coverage of the Social
Security System to Filipino seafarers arises by virtue of the assent given in the
contract of employment signed by employer and seafarer; that same contract binds
petitioner Sta. Rita or B. Sta. Rita Company, who is solidarily liable with the foreign
shipowners/employers.
Same; Same; Same; Same; Foreign shipowners and manning agencies had generally
expressed their conformity to the inclusion of Filipino seafarers within the coverage of
the Social Security Act.—It may be noted that foreign shipowners and manning
agencies had generally expressed their conformity to the inclusion of Filipino
seafarers within the coverage of the Social Security Act even prior to the signing of the
DOLE-SSS Memorandum of Agreement.
Same; Same; Same; Same; Protection to Labor; By extending the benefits of the Social
Security Act to Filipino seafarers on board foreign vessels, the individual employment
agreements entered into with the stipulation for such coverage contemplated in the
DOLE-SSS Memorandum of Agreement merely give effect to the constitutional
mandate to the State to afford protection to labor.—It is, finally, worthy of special note
that by extending the benefits of the Social Security Act to Filipino seafarers on board
foreign vessels, the individual employment agreements entered into with the
stipulation for such coverage contemplated in the DOLE-SSS Memorandum of
Agreement, merely give effect to the constitutional mandate to the State to afford
protection to labor whether ―local or overseas.‖ Nullification of the SSS stipulation in
those individual employment contracts, through nullification of the Memorandum of
Agreement, constituted serious reversible error on the part of the trial court. That
petitioner should seek to deprive his countrymen of social security protection after his
foreign principal had agreed to such protection, is cause for dismay and is to be
deplored.
Constitutional Law; Criminal Procedure; Double Jeopardy; Reinstatement of a
criminal case does not violate the right against double jeopardy where the dismissal of
the information by the trial court had been effected at the instance of the accused.—
The Court of Appeals properly held that the reinstatement of the criminal case against
petitioner did not violate his right against double jeopardy since the dismissal of the
information by the trial court had been effected at his own instance. There are only
two (2) instances where double jeopardy will attach notwithstanding the fact that the
case was dismissed with the express consent of the accused. The first is where the
ground for dismissal is insufficiency of evidence for the prosecution; and the second is
where the criminal proceedings have been unreasonably prolonged in violation of the
accused‘s right to speedy trial. Neither situation exists in the case at bar. There is no
legal impediment to the reinstatement of Criminal Case No. Q-92-35426 against
petitioner Sta. Rita.
POBLETE CONSTRUCTION Co., petitioner, vs. JUDITH ASIAIN, SOCIAL
SECURITY COMMISSION and BENITO MACRHON, in his capacity as Sheriff of
Rizal, respondents.
Employer and employee; Social Security; Employer's duty to report employee's name,
etc. to Social Security System.—It is the duty of the employer to "report immediately
to the System" the employee's name, age, civil status, occupation, salary and
dependents. Compliance with this duty does not depend upon the employee's
willingness to give his share of the contribution. Section 24 of the Social Security Act
is mandatory, to such an extent, that if the employee should die or become sick or
disabled without the report having been made by the employer, the latter is liable for
an amount equivalent to the benefits to which the employee would have been entitled
had such report been made.
Same; The term "claims" in Section 5(a) of Social Security Act includes claim for
"damages" under Section 24 thereof.—Section 5(a) of the Social Security Act provides
that "the filing, determination and settlement of claims shall be governed by the rules
and regulations promulgated by the Commission"; and the rules and regulations thus
promulgated state that "the effectivity of membership in the System, as well as the
final determination and settlement of claims, shall be vested in the Commission." the
term "claims" is broad enough to include a claim for "damages" under Section 24.
Otherwise, an employer could nullify the jurisdiction of the Commission by the simple
expedient of not making a report as required by said Section.
Same; Collection of employee's share is duty imposed by law on the employer.—The
collection of the employee's share is a duty imposed by law, and his unwillingness to
have it deducted from his salary does not excuse the employer's failure to make the
report required under Section 24 of" the law.
UNITED CHRISTIAN MISSIONARY SOCIETY, UNITED CHURCH BOARD FOR
WORLD MlNISTERS, BOARD OF FOREIGN MlSSION OF THE REFORMED
CHURCH IN AMERICA, BOARD OF MlSSION OF THE EVANGELICAL UNITED
PRESBYTERIAN CHURCH, COMMISSION OF ECUMENICAL MISSION ON
RELATIONS OF THE UNITED PRESBYTERIAN CHURCH, petitioners, vs. SOCIAL
SECURITY COMMISSION and SOCIAL SECURITY SYSTEM, respondents.
Welfare legislation; Social Security Act; Social Security Commission; Powers;
Commission has no power to condone 3% penalty per month for late payment of
premium remittances.—The plain text and intent of the pertinent provisions of the
Social Security Act clearly show that the Social Security Commission has no
discretionary authority of condoning, waiving or relinquishing the 3% penalty per
month for late payment of premium remittances.
Same; Same; Same; Same; Section 22(a) of the Social Security Act does not give
Commission discretion in enforcement of 3% penalty for late payment of premium
remittances, Section 22 (a) of the Social Security Act gives no discretion or alternative
in the enforcement of the law's mandate that the employer who fails to comply with
his legal obligation to remit the premiums to the System within the prescribed period
shall pay a penalty of three per cent (3%) per month. The prescribed penalty is
evidently of a punitive character, provided by the legislature to assure that employers
do not take lightly the State's exercise of the police power in the implementation of
the Republic's declared policy "to develop, establish gradually and perfect a social
security system which shall be suitable to the needs of the people throughout the
Philippines and to provide protection to employers against the hazards of disability,
sickness, old age and death.
Same; Same; Remittance of premiums; Effect of good faith or bad faith in delayed
remittance of premiums.—Good faith or bad faith is irrelevant for purposes of
assessment and collection of the 3% penalty per month for delayed remittance of
premiums, since the law makes no distinction between an employer who professes
good reasons for delaying the remittance of premiums and another who deliberately
disregards the legal duty imposed upon him to make such remittance. From the
moment the remittance of premiums due is delayed, the penalty immediately attaches
to the delayed premium payments by force of law.
Same; Same; Social Security Commission; Powers; Power of Commission under
Section 4 of the Act to "perform such other acts as it may deem appropriate for the
proper enforcement of this Act" does not include power to condone penalty for
delayed payment of premiums.—While the Commission inder Section 4(1) is
empowered to "perform such other acts as it may deem appropriate for the proper
enforcement of this Act," nowhere in the law is it mentioned that it has authority to
condone the penalty for late payment of premiums. Section 4 of the Act precisely
enumerates the powers of the Commission. Nowhere from said powers of the
Commission may it be shown that the commission is granted expressly or by
implication the authority to condone penalties imposed by the Act.
Same; Same; Same; Same; By nature of funds of System, Commission cannot legally
perform any acts affecting it, including condonation of penalties.—The funds
contributed to the System by compulsion of law are funds belonging to the members
which are merely held in trust by the government. Being a mere trustee of the funds of
the System which actually belong to the members, Commission cannot legally
perform any acts affecting the same, including condonation of penalties, that would
diminish the property rights of the owners and beneficiaries of such funds without an
express or specific authority therefor.
Statutory construction; Where language of law is clear.—Where the language of the
law is clear and the intent of the legislature is equally plain, there is no room for
interpretation and construction of the statute.
Political law; Public officers; Duty to enforce laws; Effect of erroneous application of
law.—Erroneous application and enforcement of the law by public officers do not
block subsequent correct application of the statute and that the Government is never
estopped by mistake or error on the part of its agents.
MANUEL H. SANTIAGO, ET AL., petitioners, vs. COURT OF APPEALS and SOCIAL
SECURITY SYSTEM, respondents.
Social Security System; Agency; An employer is not an agent of SSS on the matter of
remittance of an employee‘s installments on his loan.—It should be noted from the
above-quoted rule that it is the borrower who expressly authorizes his employer and
subsequent employers to deduct from his salary the installments due on his salary
loan. The employer then remits the installments due to the System in accordance with
rules that the System has laid down. The employer, in so deducting the installment
payments from the borrower, does so upon the latter‘s authorization. The employer is
merely the conduit for remitting the premiums for reasons of administrative
convenience and expediency in order that SSS members may be served efficiently and
expeditiously. No contract of agency, in the legal sense, therefore may be said to exist
between the employer and the System.
Same; Same; Fact that employer is given by SSS P0.07 for every P10.00 collected on
loans does not make it an agent of SSS.—The entitlement to the collection fee by the
employer neither makes the latter the agent of the System. The fee was devised to
encourage employers to be prompt in the remittance of their collections to the
System.
Same; Same; Same.—To rule otherwise would be to open the door for unscrupulous
employers to circumvent the law by not remitting their collections of salary loans
installment payments from employees since, anyway, the System would credit them
with what they had paid to the Employer even though the latter fails to remit them to
the System.
Same; Same; By express provision of the Social Security Act, failure of employer to
remit the employees‘ SSS premiums cannot prejudice the employee. Hence,
employees are entitled to be credited their unremitted SSS contributions together
with all privileges appurtenant thereto, except loans.—Clearly, if the employer
neglects to pay the premium contributions, the System may proceed with the
collection in the same manner as the Bureau of Internal Revenue in case of unpaid
taxes. Plainly, too, notwithstanding non-remittance by employers of the premium
contributions, covered employees are entitled to the benefits of the coverage, such as
death, sickness, retirement, and permanent disability benefits. These benefits
continue to be enjoyed by the employees by operation of law and not, as petitioners
allege, because the premium contributions and salary loan installment payments have
already became the money of the System upon payment by the employees to the
employer. It should be remembered that funds contributed to the System by
compulsion of law are funds belonging to the members, which are merely held in trust
by the government. The mentioned benefits, however, do not include the salary loan
privileges that member-employees apply for. The System may or may not grant those
loans pursuant to its rules and regulations. The salary loans are not covered by law
but by contract between the System as lender, and the private employee, as borrower.
Same; Same; Three per cent (3%) penalty on employer for unremitted premiums is a
penalty and does not make employer an agent of SSS.—Contrary to petitioners‘
contention, the penalty of 3% per month imposed on the employer, if any premium
contribution is not paid to the System, prescribed by Section 22 of the Act from the
date the contribution falls due until paid, does not necessarily make the employer the
agent of the System. The prescribed penalty is intended to exact compliance by the
employer. It is evidently of a punitive character to assure that employers do not take
lightly the State‘s exercise of the police power in the implementation of the Republic‘s
declared policy to develop, establish gradually, and perfect a Social Security System
which shall be suitable to the needs of the people throughout the Philippines and to
provide protection to employees against the hazards of disability, sickness, old age,
and death.
GAUDENCIO T. CENA, petitioner, vs. THE CIVIL SERVICE COMMISSION and THE
HON. PATRICIA A. STO. TOMAS, in her capacity as Chairman of the Civil Service
Commission, respondents.
Public Officers; Retirement Law; Civil Service Law; GSIS; Government employee who
has reached compulsory retirement age but who has less than 15 years service can
continue to serve the government even beyond one year.—Being remedial in
character, a statute creating a pension or establishing retirement plan should be
liberally construed and administered in favor of the persons intended to be benefited
thereby. The liberal approach aims to achieve the humanitarian purposes of the law in
order that the efficiency, security and well-being of government employees may be
enhanced (Bautista vs. Auditor General, 104 Phil. 428; Ortiz vs. Commission on
Elections, G.R. No. L-78957, June 28, 1988, 162 SCRA 812).
Same; Same; Same; Same.—In resolving the question whether or not to allow a
compulsory retiree to continue in the service to complete the 15-year service, there
must be present an essential factor before an application under Section 11 par. (b) of
P.D. 1146 may be granted by the employer or government office concerned. In the
case of officials of the Judiciary, the Court allows a making up or compensating for
lack of required age or service only if satisfied that the career of the retiree was
marked by competence, integrity, and dedication to the public service (Re: Gregorio
Pineda, supra). It must be so in the instant case.
Same; Same; Same; Statute; Administrative Law; An administrative circular of the
Civil Service Commission cannot limit the governing retirement law, P.D. 1146, on
extension of service of employees who reach age 65.—The governing retirement law in
the instant case is P.D. 1146 otherwise known as the ―Revised Government Service
Insurance Act of 1977.‖ The rule on limiting to only one (1) year the extension of
service of an employee who has reached the compulsory retirement age of 65 years,
but has less than 15 years of service under Civil Service Memorandum Circular No. 27
s. 1990, cannot likewise be accorded validity because it has no relation to or
connection with any provision of P.D. 1146 supposed to be carried into effect. The rule
was an addition to or extension of the law, not merely a mode of carrying it into effect.
The Civil Service Commission has no power to supply perceived omissions in P.D.
1146.
Same; Same; Same; Employee, age 65 with only 11 years service, may opt to continue
in government to complete 15-year service requirement for old-age life pension at
100% of salary.—Section 12 par. (b) of P.D. 1146 does not apply to the case of herein
petitioner Cena, because he opted to continue in the service to complete the 15-year
service requirement pursuant to Section 11 par. (b) of P.D. 1146. The completion of the
15-year service requirement under Section 11 par. (b) partakes the nature of a
privilege given to an employee who has reached the compulsory retirement age of 65
years, but has less than 15 years of service. If said employee opted to avail of said
privilege, he is entitled to the benefits of the old-age pension. On the other hand, if the
said employee opted to retire upon reaching the compulsory retirement age of 65
years although he has less than 15 years of service, he is entitled to the benefits
provided for under Section 12 of P.D. 1146, i.e. a cash equivalent to 100% of his
average monthly compensation for every year of service.
Same; Same; Same; Malacañang Circular No. 65 dated June 14, 1988 applies only to
employees age 65 who have rendered 15-year service whose services are sought to be
extended.—Finally, in view of the aforesaid right accorded under Section 11, par. (b) of
P.D. 1146, petitioner Cena should not be covered by Memorandum Circular No. 65
issued by then Executive Secretary Catalino Macaraig on June 14, 1988.
Memorandum Circular No. 65 allowing retention of service for only six (6) months for
―extremely meritorious reasons‖ should apply only to employees or officials who have
reached the compulsory retirement age of 65 years but who, at the same time, have
completed the 15-year service requirement for retirement purposes. It should not
apply to employees or officials who have reached the compulsory retirement age of 65
years, but who opted to avail of the old-age pension under par. (b), Section 11 of P.D.
1146, in which case, they are allowed, at the discretion of the agency concerned, to
complete the 15-year service requirement.
DIONISIO M. RABOR, petitioner, vs. CIVIL SERVICE COMMISSION, respondent.
Civil Service Commission; Administrative Law; Test of a Valid Subordinate
Legislation; Statutory Construction; In subordinate, delegated rule-making by
administrative agencies, all that may be reasonably demanded is a showing that the
delegated legislation consisting of administrative regulations are germane to the
general purposes projected by the governing or enabling statute.—Clearly, therefore,
Cena when it required a considerably higher degree of detail in the statute to be
implemented, went against prevailing doctrine. It seems clear that if the governing or
enabling statute is quite detailed and specific to begin with, there would be very little
need (or occasion) for implementing administrative regulations. It is, however,
precisely the inability of legislative bodies to anticipate all (or many) possible detailed
situations in respect of any relatively complex subject matter, that makes subordinate,
delegated rule-making by administrative agencies so important and unavoidable. All
that may be reasonably demanded is a showing that the delegated legislation
consisting of administrative regulations are germane to the general purposes
projected by the governing or enabling statute. This is the test that is appropriately
applied in respect of Civil Service Memorandum Circular No. 27, Series of 1990, and
to this test we now turn.
Same; Same; Retirement; The extension of service of government retirees who have
reached sixty-five years of age is an area that is covered by both P.D. 1146 and the
Administrative Code of 1987.—We consider that the enabling statute that should
appropriately be examined is the present Civil Service law—found in Book V, Title I,
Subtitle A, of Executive Order No. 292 dated 25 July 1987, otherwise known as the
Administrative Code of 1987—and not alone P.D. No. 1146, otherwise known as the
―Revised Government Service Insurance Act of 1977.‖ For the matter of extension of
service of retirees who have reached sixty-five (65) years of age is an area that is
covered by both statutes and not alone by Section 11 (b) of P.D. No. 1146. This is
crystal clear from examination of many provisions of the present civil service law.
Same; Same; Same; The physiological and psychological processes associated with
ageing in human beings are in fact related to the efficiency and quality of the service
that may be expected from individual persons.—We find it very difficult to suppose
that the limitation of permissible extensions of service after an employee has reached
sixty-five (65) years of age has no reasonable relationship or is not germane to the
foregoing provisions of the present Civil Service Law. The physiological and
psychological processes associated with ageing in human beings are in fact related to
the efficiency and quality of the service that may be expected from individual persons.
Same; Same; Same; Civil Service Memorandum Circular No. 27, Series of 1990, more
specifically par. 1 thereof, is valid and effective, and the doctrine in Cena v. Civil
Service Commission, 211 SCRA 179 (1992), is modified accordingly.—Our conclusion
is that the doctrine of Cena should be and is hereby modified to this extent: that Civil
Service Memorandum Circular No. 27, Series of 1990, more specifically paragraph (1)
thereof, is hereby declared valid and effective. Section 11 (b) of P.D. No. 1146 must,
accordingly, be read together with Memorandum Circular No. 27. We reiterate,
however, the holding in Cena that the head of the government agency concerned is
vested with discretionary authority to allow or disallow extension of the service of an
official or employee who has reached sixty-five (65) years of age without completing
fifteen (15) years of government service; this discretion is, nevertheless, to be
exercised conformably with the provisions of Civil Service Memorandum Circular No.
27, Series of 1990.
LYDIA M. PROFETA, petitioner, vs. HON. FRANKLIN M. DRILON, in his capacity as
Executive Secretary, Office of the President of the Philippines, respondent.
Retirement Law; A pension is not a gratuity but rather a form of deferred
compensation for services performed.—To a public servant, a pension is not a gratuity
but rather a form of deferred compensation for services performed and his right to it
commences to vest upon his entry into the retirement system and becomes an
enforceable obligation in court upon fulfillment of all conditions under which it is to
be paid. Similarly, retirement benefits receivable by public employees are valuable
parts of the consideration for entrance into and continuation in public office or
employment. They serve a public purpose and a primary objective in establishing
them is to induce competent persons to enter and remain in public employment and
render faithful and efficient service while so employed.
Same; Retirement laws liberally interpreted in favor of the retiree.—Retirement laws
are liberally interpreted in favor of the retiree because their intention is to provide for
his sustenance and hopefully even comfort, when he no longer has the stamina to
continue earning his livelihood. The liberal approach aims to achieve the
humanitarian purposes of the law in order that the efficiency, security and well-being
of government employees maybe enhanced.
Same; Government Service Insurance System; It is the GSIS which has the original
and exclusive jurisdiction to determine whether a member is qualified or not to avail
of the old-age pension benefit under P.D. 1146 based on its computation of a
member‘s years of service with the government.—We hold that it is the GSIS which
has the original and exclusive jurisdiction to determine whether a member is qualified
or not to avail of the old-age pension benefit under P.D. 1146,based on its
computation of a member‘s years of service with the government. The computation of
a member‘s service includes not only full time but also part time and other services
with compensation as may be included under the rules and regulations prescribed by
the System.
SUSAN NICDAO CARIÑO, petitioner, vs. SUSAN YEE CARIÑO, respondent.
Civil Law; Family Code; Marriages; Property; For purposes other than remarriage, no
judicial action is necessary to declare a marriage an absolute nullity.—Under Article
40 of the Family Code, the absolute nullity of a previous marriage may be invoked for
purposes of remarriage on the basis solely of a final judgment declaring such previous
marriage void. Meaning, where the absolute nullity of a previous marriage is sought to
be invoked for purposes of contracting a second marriage, the sole basis acceptable in
law, for said projected marriage to be free from legal infirmity, is a final judgment
declaring the previous marriage void. However, for purposes other than remarriage,
no judicial action is necessary to declare a marriage an absolute nullity. For other
purposes, such as but not limited to the determination of heirship, legitimacy or
illegitimacy of a child, settlement of estate, dissolution of property regime, or a
criminal case for that matter, the court may pass upon the validity of marriage even
after the death of the parties thereto, and even in a suit not directly instituted to
question the validity of said marriage, so long as it is essential to the determination of
the case. In such instances, evidence must be adduced, testimonial or documentary, to
prove the existence of grounds rendering such a previous marriage an absolute
nullity. These need not be limited solely to an earlier final judgment of a court
declaring such previous marriage void.
Same; Same; Same; Same; Court is clothed with sufficient authority to pass upon the
validity of the two marriages in this case, as the same is essential to the determination
of who is rightfully entitled to the subject ―death benefits‘‘ of the deceased.—It is clear
therefore that the Court is clothed with sufficient authority to pass upon the validity of
the two marriages in this case, as the same is essential to the determination of who is
rightfully entitled to the subject ―death benefits‖ of the deceased.
Same; Same; Same; Same; A valid marriage license is a requisite of marriage, and the
absence thereof, subject to certain exceptions, renders the marriage void ab initio.—
Under the Civil Code, which was the law in force when the marriage of petitioner
Susan Nicdao and the deceased was solemnized in 1969, a valid marriage license is a
requisite of marriage, and the absence thereof, subject to certain exceptions, renders
the marriage void ab initio.
Same; Same; Same; Same; Considering that the two marriages are void ab initio, the
applicable property regime would not be absolute community or conjugal partnership
of property, but rather, be governed by the provisions of Articles 147 and 148 of the
Family Code on ―Property Regime of Unions Without Marriage.‖—Accordingly, the
declaration in the instant case of nullity of the previous marriage of the deceased and
petitioner Susan Nicdao does not validate the second marriage of the deceased with
respondent Susan Yee. The fact remains that their marriage was solemnized without
first obtaining a judicial decree declaring the marriage of petitioner Susan Nicdao and
the deceased void. Hence, the marriage of respondent Susan Yee and the deceased is,
likewise, void ab initio. One of the effects of the declaration of nullity of marriage is
the separation of the property of the spouses according to the applicable property
regime. Considering that the two marriages are void ab initio, the applicable property
regime would not be absolute community or conjugal partnership of property, but
rather, be governed by the provisions of Articles 147 and 148 of the Family Code on
―Property Regime of Unions Without Marriage.‖
Same; Same; Same; Same; Under Article 148 of the Family Code, the properties
acquired by the parties through their actual joint contribution shall belong to the co-
ownership.—Under Article 148 of the Family Code, which refers to the property
regime of bigamous marriages, adulterous relationships, relationships in a state of
concubine, relationships where both man and woman are married to other persons,
multiple alliances of the same married man,—x x x In this property regime, the
properties acquired by the parties through their actual joint contribution shall belong
to the co-ownership. Wages and salaries earned by each party belong to him or her
exclusively. Then too, contributions in the form of care of the home, children and
household, or spiritual or moral inspiration, are excluded in this regime.
JESUS D. AGUJA, petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM,
et al., respondents.
Labor Law; Employees‘ Compensation; Work-connected injury; The injury caused on
the left eye of petitioner is considered as work-connected, hence, compensable.—
Clearly, from the above findings, the petitioner‘s left eye is indeed gradually losing
vision. The left eye was found to be burned which only goes to show that the present
condition can be traced back to the accident which occurred in April, 1979 and no
other. There is no showing that there was any supervening event which may have
caused the blindness of the left eye. Undeniably, the injury was caused by the
splashing of muriatic acid while the janitor was cleaning the government building‘s
toilet. This accident not only blinded the right eye but also ―compromised‖ the left
eye. According to the medical certificate issued in 1985, a pterygium was already
growing on the nasal side of the left eye. In such a case, the injury caused on the left
eye is considered as work-connected; hence, compensable.
Same; Same; Same; Total Disability; Total disability does not mean a state of absolute
helplessness, but disablement of an employee to earn wages in the same kind of work
or a 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 attachments could do.—A person‘s
disability might not emerge at one precise moment in time but rather over a period of
time (See Jimenez v. ECC, G.R. No. 79193, November 28, 1989, En Banc Minute
Resolution). It is possible that an injury which at first was considered to be temporary
may later on become permanent or one who suffers a partial disability becomes totally
and permanently disabled from the same cause as in the case at bar. Unfortunately,
the petitioner‘s permanent disability has further deteriorated affecting also the vision
of his left eye. The aggravation of petitioner‘s condition arose from the same injury or
disability. The petitioner was compelled to retire from work on account of the
blindness of his right eye. With the gradual loss of vision of his left eye, it would even
be more difficult, if not impossible for the petitioner to be gainfully employed now. As
stated in numerous cases, ―total disability does not mean a state of absolute
helplessness, but disablement of an employee to earn wages in the same kind of work
or a 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 attachments could do. (Abaya v.
ECC, 176 SCRA 507 [1989]; Orlino v. ECC, G.R. No. 85015, March 29, 1990 En Banc
Minute Resolution, Marcelino v. Seven Up Bottling Co. 47 SCRA 343 [1972]; Landicho
v. WCC and Canlubang Sugar Estate, 89 SCRA 147 [1979]) To deny the petitioner, the
benefits prayed for would certainly be contrary to the liberal and compassionate spirit
of the law as embodied in Article 4 of the New Labor Code (Lazo v. ECC, 186 SCRA
569 [1990].
GOVERNMENT SERVICE INSURANCE SYSTEM, Cebu City Branch, petitioner, vs.
MILAGROS O. MONTESCLAROS, respondent.
Government Service Insurance System (GSIS); Pensions; Definition of ―Dependent‖;
Under P.D. No. 1146 the primary beneficiaries are (1) the dependent spouse until such
spouse remarries and (2) the dependent children.—Under PD 1146, the primary
beneficiaries are: (1) the dependent spouse until such spouse remarries, and (2) the
dependent children. The secondary beneficiaries are the dependent parents and
legitimate descendants except dependent children. The law defines dependent as ―the
legitimate, legitimated, legally adopted, acknowledged natural or illegitimate child
who is unmarried, not gainfully employed, and not over twenty-one years of age or is
over twenty-one years of age but physically or mentally incapacitated and incapable of
self-support.‖ The term also includes the legitimate spouse dependent for support on
the member, and the legitimate parent wholly dependent on the member for support.
Same; Same; In a pension plan where employee participation is mandatory, the
prevailing view is that the employees have contractual or vested rights in the pension
where the pension is part of the terms of employment.—In a pension plan where
employee participation is mandatory, the prevailing view is that employees have
contractual or vested rights in the pension where the pension is part of the terms of
employment. The reason for providing retirement benefits is to compensate service to
the government. Retirement benefits to government employees are part of emolument
to encourage and retain qualified employees in the government service. Retirement
benefits to government employees reward them for giving the best years of their lives
in the service of their country.
Same; Same; Due Process; Where the employee retires and meets the eligibility
requirements, he acquires a vested right to benefits that is protected by the due
process clause; No law can deprive such person of his pension rights without due
process of law that is without notice and opportunity to be heard.—Where the
employee retires and meets the eligibility requirements, he acquires a vested right to
benefits that is protected by the due process clause. Retirees enjoy a protected
property interest whenever they acquire a right to immediate payment under pre-
existing law. Thus, a pensioner acquires a vested right to benefits that have become
due as provided under the terms of the public employees‘ pension statute. No law can
deprive such person of his pension rights without due process of law, that is, without
notice and opportunity to be heard.
Same; Same; Same; A widow‘s right to receive pension following the demise of her
husband is also part of the husband‘s contractual compensation.—In addition to
retirement and disability benefits, PD 1146 also provides for benefits to survivors of
deceased government employees and pensioners. Under PD 1146, the dependent
spouse is one of the beneficiaries of survivorship benefits. A widow‘s right to receive
pension following the demise of her husband is also part of the husband‘s contractual
compensation.
Constitutional Law; Equal Protection of the Law; A statute based on reasonable
classification does not violate the constitutional guaranty of the equal protection of
the law; Requirements for a Valid and Reasonable Classification.—A statute based on
reasonable classification does not violate the constitutional guaranty of the equal
protection of the law. The requirements for a valid and reasonable classification are:
(1) it must rest on substantial distinctions; (2) it must be germane to the purpose of
the law; (3) it must not be limited to existing conditions only; and (4) it must apply
equally to all members of the same class. Thus, the law may treat and regulate one
class differently from another class provided there are real and substantial differences
to distinguish one class from another.
Same; Same; Same; The proviso in question does not satisfy these requirements.—The
proviso discriminates against the dependent spouse who contracts marriage to the
pensioner within three years before the pensioner qualified for the pension. Under the
proviso, even if the dependent spouse married the pensioner more than three years
before the pensioner‘s death, the dependent spouse would still not receive
survivorship pension if the marriage took place within three years before the
pensioner qualified for pension. The object of the prohibition is vague. There is no
reasonable connection between the means employed and the purpose intended. The
law itself does not provide any reason or purpose for such a prohibition.
GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. FERNANDO P. DE
LEON, respondent.
Civil Procedure; Courts have the discretion to relax the rules of procedure in order to
protect substantive rights and prevent manifest injustice to a party.—GSIS contends
that respondent‘s petition for mandamus filed before the CA was procedurally
improper because respondent could not show a clear legal right to the relief sought.
The Court disagrees with petitioner. The CA itself acknowledged that it would not
indulge in technicalities to resolve the case, but focus instead on the substantive
issues rather than on procedural questions. Furthermore, courts have the discretion
to relax the rules of procedure in order to protect substantive rights and prevent
manifest injustice to a party.
Same; Strict and rigid application of rules which would result in technicalities that
tend to frustrate rather than to promote substantial justice must always be avoided.—
The Court has allowed numerous meritorious cases to proceed despite inherent
procedural defects and lapses. Rules of procedure are mere tools designed to facilitate
the attainment of justice. Strict and rigid application of rules which would result in
technicalities that tend to frustrate rather than to promote substantial justice must
always be avoided.
Same; The inflexible rule in our jurisdiction is that social legislation must be liberally
construed in favor of the beneficiaries; Retirement laws are liberally construed and
administered in favor of the persons intended to be benefited, and all doubts are
resolved in favor of the retiree to achieve their humanitarian purpose.—The inflexible
rule in our jurisdiction is that social legislation must be liberally construed in favor of
the beneficiaries. Retirement laws, in particular, are liberally construed in favor of the
retiree because their objective is to provide for the retiree‘s sustenance and, hopefully,
even comfort, when he no longer has the capability to earn a livelihood. The liberal
approach aims to achieve the humanitarian purposes of the law in order that
efficiency, security, and well-being of government employees may be enhanced.
Indeed, retirement laws are liberally construed and administered in favor of the
persons intended to be benefited, and all doubts are resolved in favor of the retiree to
achieve their humanitarian purpose.
Same; Retirement; Presidential Decree (PD) No. 1146 specifically mandates that a
retiree is entitled to monthly pension for life.—It must be emphasized that P.D. No.
1146 specifically mandates that a retiree is entitled to monthly pension for life. As this
Court previously held: Considering the mandatory salary deductions from the
government employee, the government pensions do not constitute mere gratuity but
form part of compensation.
Retirement; Retirement benefits are a form of reward for an employee‘s loyalty and
service to the employer, and are intended to help the employee enjoy the remaining
years of his life, lessening the burden of having to worry about his financial support or
upkeep.—Retirement benefits are a form of reward for an employee‘s loyalty and
service to the employer, and are intended to help the employee enjoy the remaining
years of his life, lessening the burden of having to worry about his financial support or
upkeep. A pension partakes of the nature of ―retained wages‖ of the retiree for a dual
purpose: to entice competent people to enter the government service; and to permit
them to retire from the service with relative security, not only for those who have
retained their vigor, but more so for those who have been incapacitated by illness or
accident.
Same; Government Service Insurance System (GSIS); It is well to remind Government
Service Insurance System (GSIS) of its mandate to promote the efficiency and welfare
of the employees of our government, and to perform its tasks not only with
competence and proficiency but with genuine compassion and concern.—A final note.
The Court is dismayed at the cavalier manner in which GSIS handled respondent‘s
claims, keeping respondent in the dark as to the real status of his retirement benefits
for so long. That the agency tasked with administering the benefits of retired
government employees could so unreasonably treat one of its beneficiaries, one who
faithfully served our people for over 40 years, is appalling. It is well to remind GSIS of
its mandate to promote the efficiency and welfare of the employees of our
government, and to perform its tasks not only with competence and proficiency but
with genuine compassion and concern.
JUANITA NITURA, petitioner, vs. EMPLOYEES' COMPENSATION COMMISSION
and GOVERNMENT SERVICE INSURANCE SYSTEM (PHILIPPINE ARMY),
respondents.
Labor Law; Workmen‘s Compensation; Death Benefits; Compensable Injury; Liberal
attitude in favor of employee.—While the presumption of compensability and the
theory of aggravation under the Workmen‘s Compensation Act may have been
abandoned under the New Labor Code, it is significant that the liberality of the law in
general in favor of the working man still subsists. As an official agent charged by law
to implement social justice guaranteed and secured by the Constitution, the ECC
should adopt a liberal attitude in favor of the employee in deciding claims for
compensability especially where there is some basis in the facts for inferring a work
connection with the incident. This kind of interpretation gives meaning and substance
to the compassionate spirit of the law as embodied in Article 4 of the New Labor Code
which states that ―all doubts in the implementation and interpretation of the
provisions of the Labor Code including its implementing rules and regulations should
be resolved in favor of labor.‖ The policy then is to extend the applicability of the
decree (P.D. 626) to as many employees who can avail of the benefits thereunder,
which includes protection to employees for a reasonable period of time prior to or
after working hours and for a reasonable distance before reaching or after leaving the
work premises.
Same; Same; Same; Concept of ―work place‖ applied to soldier in active duty.—The
concept of a ―work place‖ referred to cannot always be literally applied to a soldier in
active duty status, as if he were a machine operator or a worker in an assembly line in
a factory or a clerk in a particular fixed office, A soldier must go where his company is
stationed (Hinoguin v. ECC, 172 SCRA 350 [1990]). In the case at bar, Pfc. Nitura‘s
station was at Basagan, Katipunan, Zamboanga del Norte. But then his presence at
the site of the accident was with the permission of his superior officer having been
directed to go to Barangay San Jose, Dipolog City. In carrying out said directive, he
had to pass by the hanging bridge which connects the two places. As held in the
Hinoguin case (supra.), a place where soldiers have secured lawful permission to be at
cannot be very different, legally speaking, from a place where they are required to go
by their commanding officer.
Same; Same; Same; Same; Drunkenness of deceased as defense against grant of
compensation.—With regard respondents‘ contention that the claim is precluded by
the fact that the deceased was drunk and acted with notorious negligence, it has been
held that even if it could be shown that a person drank intoxicating liquor it is
incumbent upon the person invoking drunkenness as a defense to show that said
person was extremely drunk. This is so because a person may take as much as several
bottles of beer or several glasses of hard liquor and still remain sober and unaffected
by the alcoholic drink. Thus, intoxication which does not incapacitate the employee
from following his occupation is not sufficient to defeat the recovery of compensation,
although intoxication may be a contributory cause to his injury. It must be shown that
the intoxication was the proximate cause of death or injury and the burden of proof
lies on him who raises drunkenness as a defense.
Same; Same; Same; Same; Notorious negligence, defined.—Notorious negligence has
been defined as something more than mere or simple negligence or contributory
negligence; it signifies a deliberate act of the employee to disregard his own personal
safety. Disobedience to rules, orders, and/or prohibition does not in itself constitute
notorious negligence, if no intention can be attributed to the injured to end his life
(Luzon Stevedoring Corporation v. WCC, 105 SCRA 675 [1981]) reiterating Paez v;
WCC, 7 SCRA 588 [1963]).
PERUTA LOPEZ, petitioner, vs. EMPLOYEES COMPENSATION COMMISSION,
GOVERNMENT SERVICE INSURANCE SYSTEM, DEPARTMENT OF EDUCATION
CULTURE & SPORTS, respondents.
Employees Compensation; Death Benefits; Death of petitioner‘s husband is service
connected even if it happened during the summer vacation.—The death of petitioner‘s
husband is service-connected even if it happened during the summer vacation. He
was still under the employ of the government and there still existed an employer-
employee relationship although teachers do not report for duty during that period.
Same; Same; For an injury to be compensable it is not important that the cause
therefor shall have taken place within the place of employment.—For an injury to be
compensable it is not important that the cause therefor shall have taken place within
the place of employment. As long as the worker acted within the purview of his
employment, performing an act reasonably necessary or incidental thereto, the injury
sustained by reason thereof falls within the protection of the law regardless of the
place of injury.
ZAIDA G. RARO, petitioner, vs. EMPLOYEES‘ COMPENSATION COMMISSION and
GOVERNMENT SERVICE INSURANCE SYSTEM (Bureau of Mines and Geo-
Sciences), respondents.
Labor Law; Labor Standards; Disability Benefits; State Insurance Fund; A claimant
for disability benefits must prove that his illness was caused by employment and the
risk of contracting the same was increased by his working conditions.—–The law, as it
now stands requires the claimant to prove a positive thing—–that the illness was
caused by employment and the risk of contracting the disease is increased by the
working conditions. To say that since the proof is not available, therefore, the trust
fund has the obligation to pay is contrary to the legal requirement that proof must be
adduced. The existence of otherwise non-existent proof cannot be presumed.
Same; Same Same; Same; Unless it be shown that a particular form of cancer is
caused by specific working conditions, it cannot be concluded that it was the
employment which increased the risk of contracting the disease.—–In Navalta v.
Government Service Insurance System (G.R. No. 46684, April 27, 1988) this Court
recognized the fact that cancer is a disease of still unknown origin which strikes
people in all walks of life, employed or unemployed. Unless it be shown that a
particular form of cancer is caused by specific working conditions (e.g. chemical
fumes, nuclear radiation, asbestos dust, etc.) we cannot conclude that it was the
employment which increased the risk of contracting the disease.
NORMA ORATE, petitioner, vs. COURT OF APPEALS, EMPLOYEES‘
COMPENSATION COMMISSION, SOCIAL SECURITY SYSTEM (MANILA BAY
SPINNING MILLS, INC.), respondents.
Labor Law; Employees‘ Compensation; The law as it now stands requires the claimant
to prove a positive thing—that the illness was caused by employment and the risk of
contracting the disease is increased by the working conditions.—On November 1,
1974, the Workmen‘s Compensation Act was repealed by the Labor Code (Presidential
Decree No. 442). On December 27, 1974, Presidential Decree No. 626 (which took
effect on January 1, 1975) was issued. It extensively amended the provisions of Title
II, Book IV of the Labor Code on Employees‘ Compensation and State Insurance
Fund. The law as it now stands requires the claimant to prove a positive thing—that
the illness was caused by employment and the risk of contracting the disease is
increased by the working conditions. It discarded, among others, the concepts of
―presumption of compensability‖ and ―aggravation‖ and substituted a system based
on social security principles. The present system is also administered by social
insurance agencies—the Government Service Insurance System and Social Security
System—under the Employees‘ Compensation Commission. The intent was to restore
a sensible equilibrium between the employer‘s obligation to pay workmen‘s
compensation and the employee‘s right to receive reparation for work-connected
death or disability.
Same; Same; Nature of the Employees‘ Compensation Scheme and the State
Insurance Fund.—In Sarmiento v. Employees‘ Compensation Commission, et al., we
explained the nature of the new employees‘ compensation scheme and the State
Insurance Fund, as follows—The new law establishes a state insurance fund built up
by the contributions of employers based on the salaries of their employees. The
injured worker does not have to litigate his right to compensation. No employer
opposes his claim. There is no notice of injury nor requirement of controversion. The
sick worker simply files a claim with a new neutral Employees‘ Compensation
Commission which then determines on the basis of the employee‘s supporting papers
and medical evidence whether or not compensation may be paid. The payment of
benefits is more prompt. The cost of administration is low. The amount of death
benefits has also been doubled. On the other hand, the employer‘s duty is only to pay
the regular monthly premiums to the scheme. It does not look for insurance
companies to meet sudden demands for compensation payments or set up its own
funds to meet these contingencies. It does not have to defend itself from spuriously
documented or long past claims. The new law applies the social security principle in
the handling of workmen‘s compensation. The Commission administers and settles
claims from a fund under its exclusive control. The employer does not intervene in the
compensation process and it has no control, as in the past, over payment of benefits.
The open ended Table of Occupational Diseases requires no proof of causation. A
covered claimant suffering from an occupational disease is automatically paid
benefits. Since there is no employer opposing or fighting a claim for compensation,
the rules on presumption of compensability and controversion cease to have
importance. The lopsided situation of an employer versus one employee, which called
for equalization through the various rules and concepts favoring the claimant, is now
absent. . . .
Same; Same; In workmen‘s compensation cases, the governing law is determined by
the date when the claimant contracted the disease; Where the claim for compensation
benefit was filed after the effectivity of P.D. No. 626 without any showing as to when
the disease intervened, the presumption is that the disease was contracted after the
effectivity of P.D. No. 626.—In workmen‘s compensation cases, the governing law is
determined by the date when the claimant contracted the disease. An injury or illness
which intervened prior to January 1, 1975, the effectivity date of P.D. No. 626, shall be
governed by the provisions of the Workmen‘s Compensation Act, while those
contracted on or after January 1, 1975 shall be governed by the Labor Code, as
amended by P.D. No. 626. Corollarily, where the claim for compensation benefit was
filed after the effectivity of P.D. No. 626 without any showing as to when the disease
intervened, the presumption is that the disease was contracted after the effectivity of
P.D. No. 626. In the case at bar, petitioner was found to be positive for breast cancer
on March 22, 1995. No evidence, however, was presented as to when she contracted
said ailment. Hence, the presumption is that her illness intervened when P.D. No. 626
was already the governing law.
Same; Same; Cancer; The ―presumption of compensability‖ and ―aggravation‖ under
the Workmen‘s Compensation Act cannot be applied to a worker‘s claim for
compensation benefit arising from breast cancer under a claim made pursuant to P.D.
No. 626.—Clearly therefore, the ―presumption of compensability‖ and ―aggravation‖
under the Workmen‘s Compensation Act cannot be applied to petitioner‘s claim for
compensation benefit arising from breast cancer. We are not experts in this field to
rule that the onset of her breast carcinoma occurred prior to January 1, 1975, or
almost twenty years ago. Hence, the provisions of the Labor Code govern. For breast
carcinoma and resulting disability to be compensable, the claimant must prove, by
substantial evidence, either of two things: (a) that the sickness was the result of an
occupational disease listed under Annex ―A‖ of the Rules on Employees‘
Compensation; or (b) if the sickness is not so listed, that the risk of contracting the
disease was increased by the claimant‘s working conditions. There is no dispute that
cancer of the breast is not listed as an occupational disease under Annex ―A‖ of the
Rules on Employees‘ Compensation. As such, petitioner has the burden of proving, by
substantial evidence, the causal relationship between her illness and her working
conditions.
Same; Same; Same; Evidence; Bare allegations and vague excerpts on cancer do not
constitute such evidence that a reasonable mind might accept as adequate to support
the conclusion that there is a causal relationship between an employee‘s illness and
her working conditions.—Substantial evidence means such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. In the case at bar,
petitioner argued before the SSS and the ECC that her job as machine operator, which
required lifting of heavy objects increased the risk of her contracting breast
carcinoma. In addition, she contended that her job in the winding department
exposed her to cancer-causing dyes used in coloring threads. In support thereof, she
cited the following: Some industrial chemicals create a cancer hazard for people who
work with them. Such chemicals include aniline dyes, arsenic, asbestos, chromium
and iron compounds, lead, nickel, vinyl chloride, and certain products of coal, lignite,
oil shale, and petroleum. Unless industrial plants carefully control the use of such
chemicals, excessive amounts may escape or be released into the environment. The
chemicals then create a cancer hazard for people in surrounding areas. (World Book
Encyclopedia, Vol. 3, 1992 ed., p. 119) Regrettably, however, said bare allegations and
vague excerpts on cancer do not constitute such evidence that a reasonable mind
might accept as adequate to support the conclusion that there is a causal relationship
between her illness and her working conditions. Awards of compensation cannot rest
on speculations and presumptions. The claimant must prove a positive proposition. A
perusal of the records reveals that there is no evidence that she was indeed exposed to
dyes. Even assuming that she was dealing directly with chemicals, there is no proof
that the company where she worked did not implement measures to control the
hazards occasioned by the use of such chemicals.
Same; Same; Same; Cancer is a disease that strikes people in general—the nature of a
person‘s employment appears to have no relevance; It is not also correct to say that all
disability or death resulting from all kinds of cancer are not compensable.—Indeed,
cancer is a disease that strikes people in general. The nature of a person‘s employment
appears to have no relevance. Cancer can strike a lowly paid laborer or a highly paid
executive or one who works on land, in water, or in the deep bowels of the earth. It
makes no difference whether the victim is employed or unemployed, a white collar
employee or a blue collar worker, a housekeeper, an urban dweller or a resident of a
rural area. It is not also correct to say that all disability or death resulting from all
kinds of cancer are not compensable. There are certain cancers which are reasonably
considered as strongly induced by specific causes. Heavy doses of radiation as in
Chernobyl, USSR, cigarette smoke over a long period for lung cancer, certain
chemicals for specific cancers, and asbestos dust, among others, are generally
accepted as increasing the risks of contracting specific cancers. What the law requires
for others is proof. This was not satisfied in the instant case.
Same; Same; Same; While the Court sustains the worker‘s claim that it is the Labor
Code that applies to her case, it is nonetheless constrained to rule that under the same
code, her disability is not compensable; Compassion for the victims of diseases not
covered by law ignores the need to show a greater concern for the trust fund to which
the tens of millions of workers and their families look to for compensation whenever
covered accidents, diseases and deaths occur.—While we sustain petitioner‘s claim
that it is the Labor Code that applies to her case, we are nonetheless constrained to
rule that under the same code, her disability is not compensable. Much as we
commiserate with her, our sympathy cannot justify an award not authorized by law. It
is well to remember that if diseases not intended by the law to be compensated are
inadvertently or recklessly included, the integrity of the State Insurance Fund is
endangered. Compassion for the victims of diseases not covered by law ignores the
need to show a greater concern for the trust fund to which the tens of millions of
workers and their families look to for compensation whenever covered accidents,
diseases and deaths occur. This stems from the development in the law that no longer
is the poor employee still arrayed against the might and power of his rich corporate
employer, hence the necessity of affording all kinds of favorable presumptions to the
employee. This reasoning is no longer good policy. It is now the trust fund and not the
employer which suffers if benefits are paid to claimants who are not entitled under the
law.
MAXIMO DE LA TORRE (Husband) and GERTRUDES DE LA TORRE (Deceased),
petitioners, vs. EMPLOYEES‘ COMPENSATION COMMISSION and GOVERNMENT
SERVICE INSURANCE SYSTEM (Ministry of Education & CULTURE), respondents.
Labor Law; Workmen‘s Compensation; Workmen‘s Compensation Act; Where the
deceased contracted hypertension way back in 1950, the cause of action accrued as
early as 1950 and the governing law is the Workmen‘s Compensation Act.—Since the
illness, essential hypertension, of the deceased Gertrudes de la Torre, was noted way
back in 1950 and developed to its advanced stage during the time she was already out
of the service, her cause of action, thus, accrued as early as 1950. Consequently, the
governing law to petitioners‘ claim is the Workmen‘s Compensation Act, which was
then enforced in 1950, and not the New Labor Code. This Court repeatedly held in a
long line of cases, the most recent of which is the case of Poral vs. ECC (131 SCRA 602
[1984]), that the governing law in the prosecution of a cause of action which has
accrued prior to the effectivity of a new law shall be the law enforced at the time of the
accrual of said cause of action.
Same; Same; Same; Presumption of compensability of illness; Employee relieved of
burden to show causation; Employer has the burden to establish the contrary by
substantial evidence; Case at bar.—Under the Workmen‘s Compensation Act, it is a
rule that when a sickness supervenes during employment, it is to be presumed that it
either arose out of, or was at least aggravated by the nature and conditions of work
(Villaviaje vs. Marinduque Mining and Industrial Corp., 132 SCRA 622 [1984]). The
employee is, thus, relieved of the burden to show causation (Monsale vs. Republic of
the Philippines, 80 SCRA 448 [1977]). It is the burden of the employer to establish the
contrary by substantial evidence, otherwise, the presumption of compensability
becomes conclusive (Ceniza vs. ECC, 118 SCRA 137 [1982]). It is indisputable that
when the deceased joined the government service at an early age of 21 years, she was
in good health; and it was only after 17 years of strenuous teaching did she become
hypertensive in 1950. It is, thus, presumed that her essential hypertension, which
supervenes during her employment, either arose out of, or was at least aggravated by
the nature and conditions of her work; and since the records is bereft of evidence to
show the contrary, such presumption becomes conclusive.
Same; Same; Same; Recognition by Supreme Court of the strenuous job performed by
public school teachers.—This Court has previously recognized that public school
teachers perform strenuous job, thus: ―We are well aware of the fact that only a
handful of public elementary school teachers are fortunate enough to be assigned in
urban areas where the working conditions are comparatively much better than those
in the rural areas. A large majority of public elementary school teachers, as in the case
of the petitioner, work in remote places such as sitios and barrios under poor working
conditions. Thus, the daily task of conducting classes (normally composed of 40 to 50
pupils in urban areas and up to 70 pupils in rural areas) in an atmosphere that is, by
any standard, not conducive to learning becomes even more physically taxing to the
teachers. Tremendous amount of paper work during and after office hours (from
correcting examination papers, assignments, school projects and reports to writing
lesson plans and the computation and recording of grades) can be very physically
draining especially to the senior members of the teaching profession such as the
petitioner. Such and other related school activities of a teacher, aggravated by
substandard, if not adverse, working conditions, give rise to increased tension, if not
emotional and psychological disturbance on the part of the teachers. This is especially
true in the case of public elementary school teachers whose pupils, being of tender age
and immature, need to be disciplined and to be taught good manners and right
conduct, as well as to be assisted in their formal school lessons.

Same; Same; Same; Main consideration for compensability of illness is that the
essential hypertension of the deceased was contracted during and by reason of her
employment, not after her retirement.—As heretofore stated, the deceased contracted
her essential hypertension during her employment and not five years after her
retirement. The fact that the essential hypertension of the deceased got worse at the
time she was already out of service is without moment. The main consideration for its
compensability is that her essential hypertension was contracted during and by
reason of her employment; and any non-work related factor that contributed to its
aggravation is immaterial.

Same; Same; Same; Prescription; Ten-year prescriptive period for claims falling
under the Workmen‘s Compensation Act.—In the case of Javier vs. ECC (123 SCRA
735), We reiterated the settled doctrine that claims falling under the scope of the
Workmen‘s Compensation Act has a 10-year prescriptive period.