AGRARIAN REFORM AND SOCIAL LEGISLATION | ATTY.
JOSE GLENN CAPANAS | EH408 2016-2017 | FINALS
REPUBLIC ACT 8282 (SSS)
Jurisdiction; dacion en pago implementation
Any dispute arising under RA 8282 with respect to coverage, benefits,
contributions and penalties thereon or any other matter related thereto, shall
be cognizable by the Commission, and any case filed with respect thereto shall
be heard by the Commission, or any of its members, or by hearing officers duly
authorized by the Commission and decided within twenty (20) days after the
submission of the evidence. The filing, determination and settlement of
disputes shall be governed by the rules and regulations promulgated by the
Commission.
SSS v. Atlantic Gulf
As held by the Court of Appeals, the claims of good faith and absence of
criminal intent for the petitioners' acknowledged non-remittance of the
respondents' contributions deserve scant consideration. The violations charged
in this case pertain to the SSS Law, which is a special law. As such, it belongs
to a class of offenses known as mala prohibita.
Which body has jurisdiction to entertain a controversy arising from the non-
implementation of a dacion en pago agreed upon by the parties as a means of
settlement of private respondents' liabilities?
From the allegations of respondents' complaint, it readily appears that there is
no longer any dispute with respect to respondents' accountability to the SSS.
Respondents had, in fact, admitted their delinquency and offered to settle them
by way of dacion en pago subsequently approved by the SSS in Resolution No.
270-s. 2001
The controversy lies in the non-implementation of the approved and agreed
dacion en pago on the part of the SSS. As such, respondents filed a suit to
obtain its enforcement which is, doubtless, a suit for specific performance and
one incapable of pecuniary estimation beyond the competence of the
Commission.
Social Security Commission
Composed of the Secretary of Labor and Employment or his duly designated
undersecretary, the SSS president and seven (7) appointive members, three
(3) of whom shall represent the workers’ group, at least one of whom shall be
a woman; three (3), the employers’ group, at least one (1) of whom shall be a
woman; and one (1), the general public whose representative shall have
adequate knowledge and experience regarding social security, to be appointed
by the President of the Philippines.
To carry out the purposes of this Act, the Social Security System, hereinafter
referred to as ‘SSS’, a corporate body, with principal place of business in Metro
Manila, Philippines is created.
The System shall be directed and controlled by the SSC.
Any dispute arising under RA 8282 with respect to coverage, benefits,
contributions and penalties thereon or any other matter related thereto, shall
be cognizable by the Commission, and any case filed with respect thereto shall
be heard by the Commission, or any of its members, or by hearing officers duly
authorized by the Commission and decided within twenty (20) days after the
submission of the evidence. The filing, determination and settlement of
disputes shall be governed by the rules and regulations promulgated by the
Commission.
Court Review
The decision of the Commission upon any disputed matter may be reviewed
both upon the law and the facts by the Court of Appeals. For the purpose of
such review, the procedure concerning appeals from the Regional Trial Court
shall be followed as far as practicable and consistent with the purposes of this
Act. Appeal from a decision of the Commission must be taken within fifteen
(15) days from notification of such decision. If the decision of the Commission
involves only questions of law, the same shall be reviewed by the Supreme
Court. No appeal bond shall be required. The case shall be heard in a summary
manner, and shall take precedence over all cases, except that in the Supreme
Court, criminal cases wherein life imprisonment or death has been imposed by
the trial court shall take precedence. No appeal shall act as a supersedeas or a
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stay of the order of the Commission unless the Commission itself, or the Court
of Appeals or the Supreme Court, shall so order.
Criminal offenses for violations of the law are within the jurisdiction
of the regular courts.
Weekly stipends or excess in service surplus; e-e
Republic v. Asiapro
Respondent Asiapro, as a cooperative, is composed of owners-members. Its
primary objectives are to provide savings and credit facilities and to develop
other livelihood services for its owners-members.
In the discharge of the aforesaid primary objectives, respondent cooperative
entered into several Service Contracts with Stanfilco — a division of Dole
Philippines, Inc. and a company based in Bukidnon. The owners-members do
not receive compensation or wages from the respondent cooperative. Instead,
they receive a share in the service surplus which the respondent cooperative
earns from different areas of trade it engages in, such as the income derived
from the said Service Contracts with Stanfilco. The owners-members get their
income from the service surplus generated by the quality and amount of
services they rendered, which is determined by the Board of Directors of the
respondent cooperative.
In order to enjoy the benefits under the Social Security Law of 1997, the
owners-members of the respondent cooperative who were assigned to Stanfilco
requested the services of the latter to register them with petitioner SSS as self-
employed and to remit their contributions as such
SSS sent a letter to Asiapro that based on the Service Contracts it executed
with Stanfilco, respondent cooperative is actually a manpower contractor
supplying employees to Stanfilco and for that reason, it is an employer of its
owners-members working with Stanfilco. Thus, respondent cooperative should
register itself with petitioner SSS as an employer and make the corresponding
report and remittance of premium contributions in accordance with the Social
Security Law
ATTY:
You have a cooperative registered CBA. And the cooperative has owners and
member. This cooperative has a contract with a Stanfilco and because they
have this service contract, owners-members were giving services to Stanfilco
and in return StanfilCo will pay the cooperative and the Board will thereafter
declare, we call it shares in the service surplus. And the owners-members are
paid by the board out of the income that the cooperative earned. So that was
there arrangement.
They call it wage. They don’t call it salary. Now, it reached a point where the
cooperative realized that it’s good that our members should register with SSS.
They have the intention to register that our owner-members are self-employed.
SSS said no. You are not to register as self-employed because your cooperative
is the employer and the owner-members are the employees.
Because of that there was a dispute. And it reached Supreme Court.
Project employees
Chua v. CA
The mandatory coverage of RA 1161, as amended, is premised on the existence
of an employer-employee relationship.
In this case, private respondents are employees of Chua, Chua have control
over the results of the work done, as well as the means and methods by
which the same were accomplished.
xxx regardless of the nature of their employment, whether it is regular or
project, private respondents, are subject of the compulsory coverage under the
SSS law, their employment not falling under the exceptions provided by
the law. This rule is in accord with the Court’s ruling in Luzon Stevedoring
Corp. vs. SSS to the effect that all employees, regardless of tenure, would
qualify for compulsory membership in the SSS, except those classes of
employees contemplated in Section 8 (j) of Social Security Act.
AGRARIAN REFORM AND SOCIAL LEGISLATION | ATTY. JOSE GLENN CAPANAS | EH408 2016-2017 | FINALS
The underlined phrase means that when you look at SS Law, there are
employments which are covered and therefore employer must report and
employee must be reported. There are also employments which are not
covered under the SS law. These are the exceptions. It is provided in Section
8 (j).
(j) Employment. — Any service performed by an employee for his employer,
except —
1. Agricultural labor when performed by a share or leasehold tenant
or worker who is not paid any regular daily wage or base pay and
who does not work for an uninterrupted period of at least six months
in a year; (As amended by Sec. 4, R.A. 2658)
2. Domestic service in a private home;
3. Employment purely casual and not for the purposes of occupation
or business of the employer;
4. Service performed by an individual in the employ of his son,
daughter, or spouse, and service performed by a child under the age
of twenty-one years in the employ of his parents;
5. Service performed on or in connection with an alien vessel by an
employee if he is employed when such vessel is outside the
Philippines;
6. Service performed in the employ of the Philippine Government or
an instrumentality or agency thereof;
7. Service performed in the employ of a foreign government or
international organization, or their wholly-owned instrumentality:
Provided, however, That his exemption notwithstanding, any foreign
government, international organization, or their wholly-owned
instrumentality employing workers in the Philippines or employing
Filipinos outside of the Philippines may enter into an agreement with
the Philippine Government for the inclusion of such employees in
the SSS except those already covered by their respective civil service
retirement systems: Provided, further, That the terms of such
agreement shall conform with the provisions of this Act on coverage
and amount of payment of contributions and benefits: Provided,
finally, That the provisions of this Act shall be supplementary to any
such agreement. (As amended by Sec. 1, R.A. 3839; Sec. 3, RA
4857; and Sec. 5, P.D. No. 735, S-1975)
8. Such other services performed by temporary employees who may
be excluded by regulation of the Commission. Employees of bona
fide independent contractors shall not be deemed employees of the
employer engaging the services of said contractors. (As amended
by Sec. 5, P.D. No. 735, S-1975)
So based on this, according to Atty. C’s opinion, when you are given a question
of whether a person is an employee under SS Law and therefore that person
should be reported for compulsory coverage, you look at the exceptions. If that
person does not fall under the exceptions then you apply the law in SSS - All
employees regardless of the nature of their employment are covered.
Case digest: Chua v. CA
On 20 August 1985, private respondents filed a Petition with the SSC for SSS
coverage and contributions against petitioner Reynaldo Chua, owner of Prime
Mover Construction Development, claiming that they were all regular
employees of the petitioner in his construction business.
Private respondents claimed that they were assigned by petitioner in his various
construction projects continuously in the following capacity: masons,
carpenters and fine graders, in petitioner's various construction projects.
Private respondents alleged that they were illegally dismissed and that
petitioner did not report them to the SSS for compulsory coverage in flagrant
violation of the Social Security Act.
Petitioner: respondents were not regular employees, but project employees
whose work had been fixed for a specific project or undertaking the completion
of which was determined at the time of their engagement, thus, not entitled to
coverage under the SSS.
SSC ruled in favor of private respondents. CA affirmed.
2 | UNIVERSITY OF SAN CARLOS
Issue: Whether private respondents were entitled to compulsory SSS coverage.
Ruling: Yes. Well-settled is the rule that the mandatory coverage of Republic
Act No. 1161, as amended, is premised on the existence of an employer-
employee relationship.
There is no dispute that private respondents were employees of petitioner.
Petitioner himself admitted that they worked in his construction projects,
although the period of their employment was allegedly co-terminus with their
phase of work. Even without such admission from petitioner, the existence of
an employer-employee relationship between the parties can easily be
determined by the application of the "control test," the elements of which are
enumerated above. It is clear that private respondents are employees of
petitioner, the latter having control over the results of the work done, as well
as the means and methods by which the same were accomplished. Suffice it to
say that regardless of the nature of their employment whether it is regular or
project, private respondents are subject of the compulsory coverage under the
SSS Law, their employment not falling under the exceptions provided by the
law. This rule is in accord with the Court's ruling in Luzon Stevedoring Corp. v.
SSS to the effect that all employees, regardless of tenure, would qualify for
compulsory membership in the SSS, except those classes of employees
contemplated in Section 8 (j) of the Social Security Act.
Despite the insistence of petitioner that they were project employees, the facts
show that as masons, carpenters and fine graders in petitioner's various
construction projects, they performed work which was usually necessary and
desirable to petitioner's business which involves construction of roads and
bridges.
Moreover, while it may be true that private respondents were initially hired for
specific projects or undertakings, the repeated re-hiring and continuing need
for their services over a long span of time — the shortest being two years and
the longest being eight — have undeniably made them regular employees. This
Court has held that an employment ceases to be co-terminus with specific
projects when the employee is continuously rehired due to the demands of the
employer's business and re-engaged for many more projects without
interruption.
In Chua vs. CA, the question of whether these laborers assigned in the
construction projects are compulsorily covered by SS Law. SC ruled that they
do not fall under the exceptions; they are covered regardless of the nature of
their employment thus the SC found that they performed work which was
usually necessary and desirable.
This one is the element of the first exception which is purely casual employment
therefore the work to be performed is NOT necessary and desirable to the
business. Even if you are a regular employee, seasonal employee or project
employee, pursuant to Chua, if you don’t fall under the exception thus you
apply the rule that ALL EMPLOYEES, REGARDLESS OF THE NATURE OF
EMPLOYMENT IS COVERED.
Farm workers; e-e
Gapayao v. Pulo
Farm workers generally fall under the definition of seasonal employees. We
have consistently held that seasonal employees may be considered as regular
employees. Regular seasonal employees are those called to work from time to
time. The nature of their relationship with the employer is such that during the
off season, they are temporarily laid off; but reemployed during the summer
season or when their services may be needed. They are in regular employment
because of the nature of their job, and not because of the length of time they
have worked.
A reading of the records reveals that the deceased was indeed a farm worker
who was in the regular employ of petitioner. From year to year, starting January
1983 up until his death, the deceased had been working on petitioner’s land by
harvesting abaca and coconut, processing copra, and clearing weeds. His
employment was continuous in the sense that it was done for more than one
harvesting season. Moreover, no amount of reasoning could detract from the
fact that these tasks were necessary or desirable in the usual business of
petitioner.
AGRARIAN REFORM AND SOCIAL LEGISLATION | ATTY. JOSE GLENN CAPANAS | EH408 2016-2017 | FINALS
Taxi driver engaged on boundary basis
There is employer-employee relationship in boundary system
Villamaria v. CA
The owner of a sole proprietorship, which assembled passenger jeepneys,
engaged a driver in 1997 to drive one of his jeepneys. A boundary system
contract was entered into, wherein the driver would remit to the owner P450.00
per day as boundary and keep the remaining earnings for himself. The
agreement included detailed instructions on the execution of the driver’s driving
such as the route, working attire, usage and maintenance of the vehicle, and
customer service guidelines. An agreement to buy the jeepney was also entered
into. The driver made a downpayment of P10,000.00 and promised to give a
daily installment of P550.00 for a period of four years.
Although the driver failed to pay the daily installments, he was allowed to
continue driving the jeepney until the owner decided to enforce contract
penalties in January 2000. As a consequence of the breach, the owner got the
jeepney and barred the driver from driving it.
Following this, the driver filled a complaint for illegal dismissal against the
owner. According to the driver, the contract with the owner of the jeepney was
an employee-employer relationship, which had been wrongfully terminated as
there were no sufficient grounds for dismissal. The owner denied the existence
of an employer-employee relationship and argued that the relationship between
the two was solely a leasing relationship.
The National Labor Relations Commission dismissed the case for lack of merit.
The Court of Appeals (CA) however ruled that the relationship between the two
was that of an employer and employee. The fundamental prerequisite of an
employer-employee relationship is not dependent on the possibility of dismissal
or form of payment. Rather, its existence can be solely based on the presence
of control over the means and method of the employee’s work. In a boundary
system, the directives given to the drivers were such a means of control.
The Supreme Court (SC) affirmed the CA ruling that an employer-employee
relationship existed and explained the mechanisms behind a boundary system
– of the employer;
The boundary system is a scheme by an owner/operator engaged in
transporting passengers as a common carrier to primarily govern the
compensation of the driver, that is, the latter’s daily earnings are remitted to
the owner/operator less the excess of the boundary which represents the
driver’s compensation. Under this system, the owner/operator exercises control
and supervision over the driver. It is unlike a lease of chattels where the lessor
loses complete control over the chattel leased but the lessee is still ultimately
responsible for the consequences of its use. The management of the business
is still in the hands of the owner/operator, who, being the holder of the
certificate of the public convenience, must see to it that the driver follows the
route prescribed by the franchising and regulatory authority, and the rules
promulgated with regard to the business operations. The fact that the driver
does not receive fixed wages but only the excess of the “boundary” given to
the owner/operator is not sufficient to change the relationship between them.
Indubitably, the driver performs activities which are usually necessary or
desirable in the usual business or trade of the owner/operator.
The SC reiterated National Labor Union v. Dinglasan which distinctly identifies
the boundary system to be an employer-employee relationship as opposed to
a lessor-lessee relationship. It also provided other supporting analogies, found
in Magboo v. Bernardo and Lantaco, Sr. v. Llamas, to highlight that an
employer-employee relationship likewise existed in relationships between an
auto-calesa owner/operator and driver, a bus owner/operator and conductor,
and a taxi owner/operator and driver.
They (taxi drivers) are EE just like jeepney drivers are EE to their operators.
Even if they receive "boundary basis" compensation there is still an ER-EE
relationship. The method of fixing compensation is not determinative of an EE-
ER relationship. As long as the ER exercises the right to control (not necessarily
actual control), there is EE-ER relationship.
Labor only contracting.
Labor-only contracting shall refer to an arrangement where the contractor
merely recruits, supplies or places workers to perform a job, work or service
for the principal, and the following elements are present:
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1. The contractor does not have substantial capital or investments in the form
of tools, equipment, machines, work premises, among others, and the
employees recruited and placed are performing activities that are usually
necessary or desirable to the operation of the company, or directly related to
the main business of the principal within a definite or predetermined period,
regardless of whether such job, work or service is to be performed within or
outside the premises of the principal; or
2. The contractor does not exercise the right to control over the performance
of the work of the employee.
You can avail the benefits and be a member under SSS law if there exist an
employer- employee relationship. In labor only contractor, there could exist an
employer- employee relationship between the contractor- employee and the
principal. The principal is bound to register the contractor employee under the
SSS law, and pay its contribution. The principal has power of control to the
contractor employees and not the labor only contractor because the latter is
only an agent of the principal.
Independent contractors and principal do not have employer- employee
relationship because the principal has no power to control the means and tools
in making the job done. The principal is only concerned on the result. However,
they can be a member of SSS under the category of self- employed depending
on their wage earned.
Both do not have substantial capitalization. Under the Labor Code, two (2)
elements must exist for a finding of labor-only contracting: (a) the person
supplying workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises,
among others, and (b) the workers recruited and placed by such persons are
performing activities directly related to the principal business of such employer.
Employment services not covered: purely casual
1. Purely casual employment and not for the purpose of occupation or business
2. Service performed on or in connection with an alien vessel by an employee
if he is employed when such vessel is outside the Philippines;
3. Service performed in the employ of the Philippine Government or
instrumentality or agency thereof;
4. Service performed in the employ of a foreign government or international
organization, or their wholly-owned instrumentality, unless, there is an
agreement with the Philippine Government for the inclusion of such employee
in the SSS;
5. Such other services performed by temporary and other employees which
may be excluded by regulation of the Commission. Employees of bona fide
independent contractors shall not be deemed employees of the employer
engaging the services of said contractors.
Mansal v. Go-Checo
When an employee suffers personal injury from any accident arising out of and
in the course of his employment . . . his employer shall pay compensation . . .
As to the finding of the court that the employment of the appellant was merely
casual, because it was not continuous, it was already held by us that it is not
the continuity of employment that renders the employer responsible but
whether the work of the laborer is part of the business or occupation of the
employer. In order that an employer may not be responsible for any injury to
a laborer it is necessary that the “employment is purely casual and is not for
the purposes of the occasion or business of the employer.”
Casual means occasional, coming without regularity. The work is purely casual
when it is not a part of the business in which the employer is engaged.
It will be noted that in order that an employer may not be responsible for an
injury to a laborer it is necessary that the "employment is purely casual and is
not for the purposes of the occupation or business of the employer." Casual
means occasional, coming without regularity. The work is purely casual when
it is not a part of the business in which the employer is engaged. The clause
"is not for the purposes of the occupation or business of the employer"
complements and explains the term "purely casual". In a sawmill, for example,
AGRARIAN REFORM AND SOCIAL LEGISLATION | ATTY. JOSE GLENN CAPANAS | EH408 2016-2017 | FINALS
if a power unit running the mill gets out of order and a mechanic is contracted
to fix the engine, the work of the mechanic would be considered as purely
casual, because the reparation of the mill is not the actual work or business of
the sawmill but the sawing of lumber. But the piling up of lumber is work
directly connected with the business of a lumber yard. Lumber must be sorted
and piled up in groups according to sizes to facilitate handling and sale. The
piling up of lumber is, therefore, an ordinary part of the work in a lumber yard.
In a sawmill, for example, if a power unit running the mill gets out of order and
a mechanic is contracted to fix the engine, the work of the mechanic would be
considered as purely casual because the preparation of the mill is not the actual
work or business of the same sawmill but the sawing lumber. But the piling up
of lumber is work directly connected with the business of a lumber yard.
Lumber must be sorted and piled up in groups according to sizes to facilitate
handling and sale. The piling up of lumber is, therefore, an ordinary part of
work in a lumber yard.”
Definition of “employer”
(c) Employer- Any person, natural or juridical, domestic or foreign, who carries
on in the Philippines any trade, business, industry, undertaking, or activity of
any kind and uses the services of another person who is under his orders as
regards the employment, except the Government and any of its political
subdivisions, branches or instrumentalities, including corporations owned or
controlled by the Government: Provided, That a self-employed person shall be
both employee and employer at the same time.
Sickness benefit – number of days that can be paid
A daily cash allowance paid for the number of days a member is unable to work
due to sickness or injury. The amount is equivalent to 90% of the member’s
average daily salary credit
Requirements:
1. He is unable to work due to sickness or injury and confined either in a
hospital or at home for at least 4 days; (sickness or injury may not be related
to the work unlike EC which requires that it must be because of the work.)
2. He has paid at least 3 months of contributions within the 12-month period
immediately before the semester of sickness/injury.
(In computing, exclude the semester of sickness. A semester refers to two
consecutive quarters ending in the quarter of sickness. A quarter refers to three
consecutive months ending March, June, September or December.)
3. He has used up all company sick leave with pay; and
4. He has notified the employer or SSS, if separated, voluntary or self-
employed.
(Notify employer within 5 calendar days after start of sickness/injury and
employer must notify SSS within 5 days after receipt of notification. Notice is
not required if member’s confinement is in hospital or member got sick while
working or within company premises.)
How do you compute?
Average daily salary credit. You get the highest monthly salary ÷ 180 × number
of days the employee is sick.
For example: SSS member gets sick in October 2006 for 20 days.
The semester of sickness would be from July 2006 to December
2006.
The 12-month period would be from July 2005 to June 2006 (where
the six highest monthly salary credits will be chosen).
In no case shall the daily sickness benefit be paid longer than one hundred
twenty (120) days in one (1) calendar year, nor shall any unused portion of the
one hundred twenty (120) days of sickness benefit granted under this section
be carried forward and added to the total number of compensable days
allowable in the subsequent year.
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Effect of failure or delay in notification
1. If employees notify beyond period, confinement shall be deemed to have
started not earlier than the fifth day.
2. If employer notifies beyond period, employer shall be reimbursed only for
each day of confinement starting from the 10th calendar day immediately
preceding the date of notification to SSS.
3. If employee notified the employer but the latter failed to notify SSS,
employer shall have no right to recover the daily sickness allowance advanced.
Prescribed period in filing a claim of a member confined in hospital/home:
1. For hospital, claim for benefit must be filed within 1 year from last day of
confinement;
2. For home, 1 year from start of illness.
Failure to file the claim within the prescribed period will result to denial of claim.
Maternity leave benefit
It is a daily cash allowance granted to female member who was unable to work
due to childbirth or miscarriage. Not necessary that female is legally married.
It is equivalent to 100% of member’s average daily salary credit multiplied by
60 days for normal delivery or miscarriage, 78 days for caesarian section
delivery.
Qualifications for entitlement:
1. She has paid at least three monthly contributions within the 12-month period
immediately preceding the semester of her childbirth or miscarriage
2. She has given the required notification of her pregnancy through her
employer if employed, or to SSS if separated, voluntary or self-employed.
For example: SSS member gives birth in December 2006.
a. The semester of contingency would be from July 2006 to December 2006.
b. The 12-month period before the semester of contingency would be from July
2005 to June 2006.
Deliveries covered:
Only for the first four deliveries or miscarriages shall be paid starting May 24,
1997 (effectivity of RA 8282)
Notice required:
As soon as pregnancy is confirmed, member must notify immediately employer
or SSS, if unemployed, etc. and probable date of childbirth at least 60 days
from date of conception. Employer must in turn notify SSS after receipt of
notification. Failure to observe the rule may result in denial.
Can a member apply for sickness benefit if she has been paid maternity benefit?
No, because as a rule, no member can be entitled to two benefits for the same
period.
Who determines EE?
Since the existence of an employer-employee relationship between the
respondent cooperative and its owners-members was put in issue and
considering that the compulsory coverage of the SSS Law is predicated on the
existence of such relationship, it behooves the petitioner SSC to determine if
there is really an employer-employee relationship that exists between the
respondent cooperative and its owners-members.
The question on the existence of an employer-employee relationship is not
within the exclusive jurisdiction of the National Labor Relations Commission
(NLRC). Article 217 of the Labor Code enumerating the jurisdiction of the Labor
Arbiters and the NLRC provides that:
ART. 217. JURISDICTION OF LABOR ARBITERS AND THE COMMISSION. — (a)
xxx xxx xxx
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other claims, arising from
employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with a claim for reinstatement.
AGRARIAN REFORM AND SOCIAL LEGISLATION | ATTY. JOSE GLENN CAPANAS | EH408 2016-2017 | FINALS
Although the aforesaid provision speaks merely of claims for Social Security, it
would necessarily include issues on the coverage thereof, because claims are
undeniably rooted in the coverage by the system. Hence, the question on the
existence of an employer-employee relationship for the purpose of determining
the coverage of the Social Security System is explicitly excluded from the
jurisdiction of the NLRC and falls within the jurisdiction of the SSC which is
primarily charged with the duty of settling disputes arising under the Social
Security Law of 1997.
In determining the existence of an employer-employee relationship, the
following elements are considered: (1) the selection and engagement of the
workers; (2) the payment of wages by whatever means; (3) the power of
dismissal; and (4) the power to control the worker's conduct, with the latter
assuming primacy in the overall consideration. The most important element is
the employer's control of the employee's conduct, not only as to the result of
the work to be done, but also as to the means and methods to accomplish.
All elements are present in this case.
First. It is expressly provided in the Service Contracts that it is the respondent
cooperative which has the exclusive discretion in the selection and engagement
of the owners-members as well as its team leaders who will be assigned at
Stanfilco.
Second. The weekly stipends or the so-called shares in the service surplus given
by the respondent cooperative to its owners-members were in reality wages,
as the same were equivalent to an amount not lower than that prescribed by
existing labor laws, rules and regulations, including the wage order applicable
to the area and industry; or the same shall not be lower than the prevailing
rates of wages. It cannot be doubted then that those stipends or shares in the
service surplus are indeed wages, because these are given to the owners-
members as compensation in rendering services to respondent cooperative's
client, Stanfilco
Third. It is also stated in the above-mentioned Service Contracts that it is the
respondent cooperative which has the power to investigate, discipline and
remove the owners-members and its team leaders who were rendering services
at Stanfilco.
Fourth. It is the respondent cooperative which has the sole control over the
manner and means of performing the services under the Service Contracts with
Stanfilco as well as the means and methods of work. Also, the respondent
cooperative is solely and entirely responsible for its owners-members, team
leaders and other representatives at Stanfilco.
Effect of final judgment at NLRC on EE
Co v. People
Petitioner was charged criminally by claimed employees for violation of SS Law
for non-remittance of contributions. Prior to criminal case, a final decision of
NLRC held that the claimed employees were independent contractors and not
employees. Petitioner filed a motion to quash.
SC ruled that the mandatory coverage of RA1161, as amended is premised on
the existence of an employer-employee relationship. The final and executory
NLRC decision (to the effect that the respondent spouses were not employees
of petitioner) was binding on this criminal case for violation of RA 1161, as
amended. Accordingly, the RTC committed grave abuse of discretion when it
refused to grant petitioner’s motion to quash the information.
SSC v. Rizal Poultry and Livestock Association
Whether res judicata applies so as to preclude the SSC from resolving anew
the existence of employer-employee relationship, which issue was previously
determined in the NLRC case?
Res judicata in the concept of “conclusiveness of judgment in the NLRC case
pertaining to a finding of an absence of employer-employee relationship
between Angeles and respondents is conclusive on the SSC case.
Contingencies covered
1. Retirement
2. Separation
3. Unemployment
5 | UNIVERSITY OF SAN CARLOS
4. Disability
5. Survivorship
6. Death (Life Insurance and Funeral)
The hazards of disability, sickness, maternity, old-age, death and other
contingencies resulting in loss of income or financial burden
Benefits where employer advances
1. Advance SS and EC sickness benefits once approved by SSS
2. Advance SS maternity benefits due
3. File for reimbursement for all legally advanced sickness and maternity
benefits
Claims under Labor Code vis-à-vis SSS
Ortega v. SSC
Claims under the Labor Code for compensation and under the Social Security
Law for benefits are not the same as to their nature and purpose.
On the one hand, the pertinent provisions of the Labor Code govern
compensability of work-related disabilities or when there is loss of income due
to work-connected or work-aggravated injury or illness.
On the other hand, the benefits under the Social Security Law are intended to
provide insurance or protection against the hazards or risks of disability,
sickness, old age or death, inter alia, irrespective of whether they arose from
or in the course of the employment.
And unlike under the Social Security Law, a disability is total and permanent
under the Labor Code if as a result of the injury or sickness the employee is
unable to perform any gainful occupation for a continuous period exceeding
120 days regardless of whether he loses the use of any of his body parts.
Compulsory coverage; when effective
Compulsory coverage is based upon the existence of employer-employee
relationship.
Coverage of employees
a. A private employee who is not over 60 years old
b. A household-helper earning at least P1,000 a month is covered starting Sept.
1, 1993.
A household-helper is any person who renders domestic or household services
exclusively to a household employer such driver, gardener, cook, governess,
and other similar occupations.
c. A Filipino seafarer upon the signing of the standard contract or employment
between the seafarer and the manning agency which, together with the foreign
ship owner, act as employers.
d. An employee of a foreign government, international organization or their
wholly-owned instrumentality based in the Philippines, which entered into an
administrative agreement with the SSS for the coverage of its Filipino workers.
Coverage of Employers
a. An employer, or any person who uses the services of another person in
business, trade, industry or any undertaking.
1. A social, civil, professional, charitable and other non-profit
organization which hire the services of employees are considered
“employers”.
b. A foreign government, international organization or its wholly-owned
instrumentality such as embassy in the Philippines, may enter into an
administrative agreement with the SSS for the coverage of its Filipino
employees.
Coverage of Self-Employed Persons
A self-employed person, regardless of trade, business or
occupation, with an income of at least P1,000 a month and not over 60 years
old, should register with the SSS. Included but not limited to are the following
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self-employed persons: self-employed professionals; business partners, single
proprietors and board directors; actors, actresses, directors, scriptwriters and
news correspondents who do not fall with the term “employee”; professional
athletes, coaches, trainers and jockeys; farmers and fisherfolks; and workers
in the informal sector such cigarette vendors, watch-your-car-boys, hospitality
girls, among others.
Effectivity of Coverage
1. For an employee – on the first day of employment
2. For an employer – on the first day the employer hires employee/s.
a.Employer is given 30 days from date of employment to report the
employee for coverage to SSS.
3. For self-employed – upon payment of first valid contribution, in case of initial
coverage.
What if the employer did not report the employee on the first day? Does it
mean that the coverage will start on the day the employer reports the employee
for the coverage?
NO, it will start in the 1st day of employment. If the employer did
not pay the in the SSS, what SSS would do is file a case against the employer.
Appeal from SSC
9) How Appeal Taken (R VII, S. 2)– Rule specified
To the Court of Appeals – Rule 43 (by petition for review)
To the Supreme Court – Rule 45 (appeal on certiorari)
Court Review. – The decision of the Commission upon any disputed matter may
be reviewed both upon the law and the facts by the Court of Appeals. For the
purpose of such review, the procedure concerning appeals from the Regional
Trial Court shall be followed as far as practicable and consistent with the
purposes of this Act. Appeal from a decision of the Commission must be taken
within fifteen (15) days from notification of such decision. If the decision of the
Commission involves only questions of law, the same shall be reviewed by the
Supreme Court. No appeal bond shall be required. The case shall be heard in
a summary manner, and shall take precedence over all cases, except that in
the Supreme Court, criminal cases wherein life imprisonment or death has been
imposed by the trial court shall take precedence. No appeal shall act as a
supersedeas or a stay of the order of the Commission unless the Commission
itself, or the Court of Appeals or the Supreme Court, shall so order.
Ordinary Appeal vs. Petition for Review
Ordinary appeal – governs only in the courts of law (by notice of appeal under
Rule 41)
Petition for review – you have to make a pleading. You state the parties, facts,
arguments etc. and file it with the Court of Appeals. It is an original petition.
When there is a claim filed in the SSS, nobody is allowed to get
attorney’s fees. It was prohibited. It is only allowed if there is a hearing
at the SSC. So if it is only branch or region, you are not allowed. In fact, you
will be penalized for exacting attorney’s fees. It is allowed in SSC only up to
10% and only if there is an award. No advance of attorney’s fees.
Beneficiaries; primary beneficiaries
The legal beneficiaries of a member are:
Primary beneficiaries
1. Legally married dependent spouse until he or she remarries;
“Until he/she remarries” is not defined by the SS Law but Atty. C’s
opinion that the principle in GSIS regarding the application will also apply in
SSS. In GSIS, if there is a remarriage benefit is cut out because the surviving
spouse is not anymore dependent on the deceased member.
2. Dependent legitimate, legitimated or legally adopted and illegitimate
children.
6 | UNIVERSITY OF SAN CARLOS
These two are primary beneficiaries.
If single, benefits will go to dependent parents who are considered secondary
beneficiaries.
In absence of both primary and secondary, any other person designated by
member.
In absence of primary, secondary and person designated, the legal heirs are
entitled.
If no legal heirs, then the State.
SSC v. Azote
The existence of two Form E-4s designating, on two different dates, two
different women as his spouse is already an indication that only one of them
can be the legal spouse. As can be gleaned from the certification issued by the
NSO, there is no doubt that Edgardo married Rosemarie in 1982. Edna cannot
be considered as the legal spouse of Edgardo as their marriage took place
during the existence of a previously contracted marriage. For said reason, the
denial of Edna's claim by the SSC was correct. It should be emphasized that
the SSC determined Edna's eligibility on the basis of available statistical data
and documents on their database as expressly permitted by Section 4 (b) (7)
of R.A. No. 8282.
Extent of the required “dependency”
(1) The legal spouse entitled by law to receive support from the member;
(2) The legitimate, legitimated or legally adopted, and illegitimate child who is
unmarried, not gainfully employed, and has not reached twenty-one (21) years
of age, or if over twenty-one (21) years of age, he is congenitally or while still
a minor has been permanently incapacitated and incapable of self-support,
physically or mentally; and
(3) The parent who is receiving regular support from the member.
Gainful occupation
Revised IRR of GSIS Act of 1997 (2010)
Rule I:
“1.23. GAINFUL OCCUPATION- Ant productive activity that provides income of
at least equal to the prevailing minimum compensation of government
employees.”
GAINFUL EMPLOYMENT
Defined as any productive activity that provides he member with income at
least equal to the minimum compensation of government employees (IRR, Sec.
1. 17)
Signey v. SSS
(Who is entitled to the social security benefits of a Social Security System (SSS)
member who was survived not only by his legal wife, but also by two common-
law wives with whom he had six children?)
In the case at bar, the existence of a prior subsisting marriage between the
deceased and Editha is supported by substantial evidence. Petitioner, who has
fully availed of her right to be heard, only relied on the waiver of Editha and
failed to present any evidence to invalidate or otherwise controvert the
confirmed marriage certificate registered under LCR Registry No. 2083 on 21
November 1967. She did not even try to allege and prove any infirmity in the
marriage between the deceased and Editha.
SSC found (affirmed by CA and SC) based on the SSS field investigation report
that even if Editha was the legal wife, she was not qualified to the death
benefits since she herself admitted that she was not dependent on her
deceased husband for support inasmuch as she was cohabiting with a certain
Aquilino Castillo.
Resolving the determinative question of who between petitioner and the
illegitimate children of the deceased are the primary beneficiaries lawfully
entitled to the social security benefits accruing by virtue of the latter's death,
CA held that based on Section 8 (e) of R.A. No. 8282, a surviving spouse
claiming death benefits as a dependent must be the legal spouse. Petitioner's
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presentation of a marriage certificate attesting to her marriage to the deceased
was futile, according to the appellate court, as said marriage is null and void in
view of the previous marriage of the deceased to Editha as certified by the
Local Civil Registrar of Cebu City.
The appellate court also held that the law is clear that for a child to be qualified
as dependent, he must be unmarried, not gainfully employed and must not be
21 years of age, or if over 21 years of age, he is congenitally or while still a
minor has been permanently incapacitated and incapable of self-support,
physically or mentally. And in this case, only the illegitimate children of the
deceased with Gina namely, Ginalyn and Rodelyn, are the qualified beneficiaries
as they were still minors at the time of the death of their father. Considering
petitioner is disqualified to be a beneficiary and the absence of any legitimate
children of the deceased, it follows that the dependent illegitimate minor
children of the deceased should be entitled to the death benefits as primary
beneficiaries.
Whoever claims entitlement to the benefits provided by law should establish
his or her right thereto by substantial evidence. Since petitioner is disqualified
to be a beneficiary and because the deceased has no legitimate child, it follows
that the dependent illegitimate minor children of the deceased shall be entitled
to the death benefits as primary beneficiaries. The SSS Law is clear that for a
minor child to qualify as a "dependent,“ the only requirements are that he/she
must be below 21 years of age, not married nor gainfully employed.
SC:
In this case, the minor illegitimate children Ginalyn and Rodelyn were born on
13 April 1996 and 20 April 2000, respectively. Had the legitimate child of the
deceased and Editha survived and qualified as a dependent under the SSS Law,
Ginalyn and Rodelyn would have been entitled to a share equivalent to only
50% of the share of the said legitimate child. Since the legitimate child of the
deceased predeceased him, Ginalyn and Rodelyn, as the only qualified primary
beneficiaries of the deceased, are entitled to 100% of the benefits.
SSS v. Delos Santos
The obvious conclusion then is that a wife who is already separated de facto
from her husband cannot be said to be "dependent for support" upon the
husband, absent any showing to the contrary. Conversely, if it is proved that
the husband and wife were still living together at the time of his death, it would
be safe to presume that she was dependent on the husband for support, unless
it is shown that she is capable of providing for herself.
Respondent herself admits that she left the conjugal abode on two (2) separate
occasions, to live with two different men. The first was in 1965, less than one
year after their marriage, when she contracted a second marriage to Domingo
Talens. The second time she left Antonio was in 1983 when she went to the
US, obtained a divorce, and later married an American citizen.
In fine, these uncontroverted facts remove her from qualifying as a primary
beneficiary of her deceased husband.
SSS v. Favila
Teresa averred that when Florante died on February 1, 1997, his pension
benefits under the SSS were given to their only minor child at that time,
Florante II, but only until his emancipation at age 21. Believing that as the
surviving legal wife she is likewise entitled to receive Florante's pension
benefits, Teresa subsequently filed her claim for said benefits before the SSS.
The SSS, however, denied the claim.
Is Teresa a primary beneficiary in contemplation of the Social Security Law as
to be entitled to death benefits accruing from the death of Florante?
According to the SS Law, it is plain that for a spouse to qualify as a primary
beneficiary under paragraph (k) thereof, he/she must not only be a legitimate
spouse but also a dependent as defined under paragraph (e), that is, one who
is dependent upon the member for support. Here, there is no question that
Teresa was Florante's legal wife. What is at point, however, is whether Teresa
is dependent upon Florante for support in order for her to fall under the term
"dependent spouse" under Section 8 (k) of RA 1161. Aside from Teresa's bare
allegation that she was dependent upon her husband for support and her
misplaced reliance on the presumption of dependency by reason of her valid
and then subsisting marriage with Florante, Teresa has not presented sufficient
evidence to discharge her burden of proving that she was dependent upon her
7 | UNIVERSITY OF SAN CARLOS
husband for support at the time of his death. She could have done this by
submitting affidavits of reputable and disinterested persons who have
knowledge that during her separation with Florante, she does not have a known
trade, business, profession or lawful occupation from which she derives income
sufficient for her support and such other evidence tending to prove her claim
of dependency. While we note from the abovementioned SSS Memorandum
that Teresa submitted affidavits executed by Napoleon Favila and Josefina
Favila, same only pertained to the fact that she never remarried nor cohabited
with another man.
Consent of SSS on filing of criminal action
Is the consent of SSS required before any criminal case may be filed?
No, because Section 28 (i) states that a “criminal action arising from
a violation of the provisions of this Act may be commenced by the SSS or the
employee concerned either under this Act or in appropriate cases under the
Revised Penal Code.” (An option)
Lack of criminal intent and good faith as defenses
Tan v. Ballena
In answer to criminal complaint for violation of SS law, petitioners interposed
the defenses of lack of criminal intent and good faith as their failure to remit
was brought about by alleged economic difficulties, and they have already
agreed to settle their obligations with the SSS through a memorandum of
agreement to pay in installments.
SC: As held by the Court of Appeals, the claims of good faith and absence of
criminal intent for the petitioners' acknowledged non-remittance of the
respondents' contributions deserve scant consideration. The violations charged
in this case pertain to the SSS Law, which is a special law. As such, it belongs
to a class of offenses known as mala prohibita.
Prescriptive period
Sec. 22 (b), 2nd par.
“The right to institute the necessary action against the employer
may be commenced within twenty (20) years from the time the delinquency is
known or the assessment is made by the SSS, or from the time the benefit
accrues, as the case may be.”
Sickness Benefit
Prescribed period in filing a claim of a member confined in hospital/home: For
hospital, claim for benefit must be filed within 1 year from last day of
confinement; For home, 1 year from start of illness.
Failure to file the claim within the prescribed period will result to
denial of claim.
Disability Benefit
10 years from the date of occurrence of disability
Is a director liable?
Garcia v. SSS
(SSC found Garcia, the sole surviving director of Impact Corporation, petitioner
herein, liable for unremitted SSS contributions)
Issue is whether petitioner, as the only surviving director of Impact
Corporation, can be made solely liable for the corporate obligations of Impact
Corporation pertaining to unremitted SSS premium contributions and penalties
therefore.
Petitioner challenges the finding of the Court of Appeals that under Section 28
(f) of the Social Security Law, a mere director or officer of an employer
corporation, and not necessarily a "managing" director or officer, can be held
liable for the unpaid SSS premium contributions.
Section 28 (f) of the Social Security Law provides the following:
(f) If the act or omission penalized by this Act be committed by an
association, partnership, corporation or any other institution, its managing
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head, directors or partners shall be liable to the penalties provided in this Act
for the offense.
SC: This Court though finds no need to resort to statutory construction. Section
28 (f) of the Social Security Law imposes penalty on:
(1) the managing head;
(2) directors; or
(3) partners, for offenses committed by a juridical person
The said provision does not qualify that the director or partner should likewise
be a "managing director" or "managing partner.“ The law is clear and
unambiguous.
Although a corporation once formed is conferred a juridical personality separate
and distinct from the persons comprising it, it is but a legal fiction introduced
for purposes of convenience and to subserve the ends of justice. The concept
cannot be extended to a point beyond its reasons and policy, and when invoked
in support of an end subversive of this policy, will be disregarded by the courts.
Managing head
Mendoza v. People
The Information against petitioner reads:
xxx xxx xxx
That sometime during the month of August 1998 to July 1999, in
the City of Iligan, Philippines, and within the jurisdiction of this
Honorable Court, the said accused, being then the proprietor of
Summa Alta Tierra Industries, Inc., duly registered employer with
the Social Security System (SSS), did then and there willfully,
unlawfully and feloniously fail and/or refuse to remit the SSS
premium contributions in favor of its employees amounting to
P421,151.09
to the prejudice of his employees.
Contrary to and in violation of Sec. 22(a) and (d) in relation to
Sec. 28 of Republic Act No. 8282, as amended.
The term "managing head" in Section 28 (f) is used, in its broadest connotation,
not to any specific organizational or managerial nomenclature. To heed
petitioner's reasoning would allow unscrupulous businessmen to conveniently
escape liability by the creative adoption of managerial titles.
Upon Motion for Reconsideration
RA No. 9903 (Social Security Condonation Law) creates two classifications of
employer’s delinquent in remitting the SSS contributions of their employees:
(1) those delinquent employers who pay within the six (6)-month period (the
former group), and (2) those delinquent employers who pay outside of this
availment period (the latter group). Waiver of accrued penalties: derived from
the last proviso of Section 4 of RA No. 9903.
The dispositive portion provides:
The Court AFFIRMS the petitioner's conviction for violation of Section 22(a) and
(d), in relation to Section 28 of RA 8282, and the petitioner petitioner is thus
sentenced to an indeterminate prison term of four (4) years and two (2) months
of prision correccional, as minimum, to twenty (20) years of reclusion temporal,
as maximum. In light of Section 4 Republic Act No. 8282, and the, the
petitioner's liability for accrued penalties is considered WAIVED. Considering
the circumstances of the case, the Court transmits the case to the Chief
Executive, through the Department of Justice, and RECOMMENDS the grant of
executive clemency to the petitioner.
Novation
SSS v. DOJ
Facts: The Martels were charged by the Prosecutor’s Office with nonremittance
of SSS contributions. At first, they offered a parcel of land. However, later on,
they offered computer-related services.
The Court held that novation was inapplicable in this case. This Court first
recognized the possibility of applying the concept of novation to criminal cases
in People v. Nery, involving a case for Estafa. In that case, the Court observed
that although novation is not one of the means recognized by the Revised Penal
Code to extinguish criminal liability, it may "prevent the rise of criminal liability
8 | UNIVERSITY OF SAN CARLOS
or to cast doubt on the true nature of the original basic transaction," provided
the novation takes place before the filing of the Information with the trial court.
Thus, novation has been invoked to reverse convictions in cases where an
underlying contract initially defined the relation of the parties such as the
contract in sale on commission in Estafa cases or the contract in sale of goods
in cases of violation of the Trust Receipts Law. Further, the party invoking
novation must prove that the new contract did indeed take effect.
REPUBLIC ACT 8291 (GSIS)
Jurisdiction
27.1. The GSIS shall have original and exclusive jurisdiction to settle any
dispute arising under Republic Act No. 8291, Commonwealth Act No. 186, as
amended, including its implementing rules and regulations, policies and
guidelines, and other laws administered by the GSIS with respect to:
27.1.1. Coverage of government agencies and employees;
27.1.2. Entitlement of members to the following benefits under
these Rules:
a. Separation benefits
b. Unemployment or involuntary separation benefits c.
Retirement benefits
d. Disability benefits
e. Survivorship benefits
f. Funeral benefits
g. Life Insurance benefits
27.1.3. Collection and payment of contributions;
27.1.4. Housing loans and all its related policies, procedures and
guidelines; 27.1.5. Optional Life Insurance and Pre-Need Benefits;
27.1.6. Criminal actions arising from this Act; and
27.1.7. Any other matter related to any or all of the foregoing which
is necessary for their determination.
Who are covered? Are judges covered?
Compulsory for all employees:
1. Appointive or elective
2. Whether temporary, casual, permanent or contractual w/ e-e
relationship
(so those under job orders are not covered)
3. Who are receiving basic pay or salary but not per diems, honoraria
or allowances; and
4. Who have not reached the compulsory retirement age of 65 yrs.
Who are not covered?
1. Employees who have separate retirement schemes under special
laws and are therefore covered by their respective retirement laws,
such as the members of the Judiciary, Constitutional Commissions,
and other similarly situated government officials;
Judges and Justices are only covered for purposes of life
insurance but beyond that they are not covered.
2. Uniformed members of AFP & PNP including BJMP;
3. Those who are not receiving basic pay or salary (for example
Barangay Officials)
4. Contractuals who have no employer and employee relationship
with the agencies they serve
5.Services as a consultant (compensation is in the form of honoraria;
their payment is not fixed)
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Who is a dependent legitimate child?
Who are dependents?
(a) the legitimate spouse dependent for support;
(b) any legitimate, legitimated and/or legally adopted child,
including any illegitimate child, who is unmarried, not
gainfully employed, who has not attained the age of
majority, or being at the age of majority but incapacitated
and incapable of self-support due to a mental or physical
defect acquired prior to age of majority; and
(c) the parents who are dependent upon the member for support.
New benefits
Unemployment benefit
The benefit is paid when a permanent employee is involuntarily separated from
the service as a result of the abolition of his office or position usually resulting
from reorganization.
Who is eligible?
Permanent employee who has paid 12 monthly contributions.
Duration of benefit – depends on length of service; ranges from 2 mos. to a
maximum of 6 mos.
Equivalent of benefit – 50% of the average monthly compensation
Options – Those who have more than 15 years service may either avail of
retirement or separation benefits as the case may be.
Primary beneficiaries in case of survivorship
Those granted to surviving and qualified beneficiaries of the deceased member
or pensioner to cushion them against the adverse economic, psychological and
emotional loss resulting from the death of a wage earner or pensioner.
Who are eligible?
1. If at time of death, a member was in the service and has rendered at least
3 years of service (primary beneficiaries to receive survivorship pension plus
cash payment; secondary beneficiaries or legal heirs entitled to cash payment)
2. If at time of death, a member was in the service with less than 3 years
service or was separated from the service with at least 3 years of service and
has paid 36 monthly contributions within the 5-year period immediately
preceding his death or has paid a total of at least 180 monthly contributions
prior to death (primary beneficiaries to receive survivorship pension
plus cash payment; secondary beneficiaries or legal heirs entitled to cash
payment)
Primary Beneficiaries
The legitimate spouse, until he/she remarries, and the dependent
children.
(In the IRR, it includes Cohabitation or common law relationship. While SSS is
silent on this matter.)
Secondary Beneficiaries
1. The dependent parents; and
2. The legitimate descendants
Separation benefit
A cash payment of 18 times the basic monthly pension at time of separation
and a life pension to start at the age of 60 will be given to those who separate
from the service with at least 15 years of service and are below 60 years of
age.
(Under PD 1146, separated member will have to wait until he is 60 years of
age to receive any separation benefit)
9 | UNIVERSITY OF SAN CARLOS
Who is eligible?
1. Rendered at least 3 years, but less than 15 years
(cash payment equivalent to 100% of Average Monthly
Compensation for every year of service payable upon reaching 60
or upon separation, whichever comes later if not receiving monthly
pension from permanent total disability)
2. Rendered at least 15 years & who is below 60 at time of
resignation/separation
(cash payment equivalent to 15 times the basic Monthly Pension
payable upon separation plus monthly pension starting 60)
IRR, Rule II, Sec. 2.5, 1997:
Member separated for cause (for example: dismissal)
Automatically forfeited, unless terms of resignation or separation
provide otherwise
Member separated not for cause
Shall continue to be member & entitled subject to qualification &
other prescription
Entitlement to personal contributions
Lledo v. Lledo
SC dismissed for the service Atty. Cesar V. Lledo, former branch clerk of court
of the RTC of QC, Brach 94. Cesar’s wife, Carmeleta, had filed and
administrative case against him, charging the latter with immorality,
abandonment and conduct unbecoming a public official.
During the investigation, it was established that Cesar had left his family to live
with another woman with whom be aldo begot children. He faild to provide
support for his family.
Dispositive portion says:
“WHEREFORE, Cesar V. Lledo, barch clerk of RTC, Barch 94, QC, is
hereby DISMISSED from the service, with forfeiture of all retirement
benefits and leave credits and with prejudice to reemployment in any
branch or instrumentality of the government, including any
government-owned or controlled corporation. This case is REFERRED
to the IBP Board of Governors pursuant to Sec. 1 of Rule 139-B of
the Rules of Court.”
ISSUE: May a government employee, dismissed from the service for cause, be
allowed to recover the personal contributions he paid to the GSIS?
SC: Sec. 11 (d) of CA 186, as amended, continues to govern case of employees
dismissed for cause and their claims for the return of their personal
contributions. The said law provides:
II- Retirement Insurance benefit
Xxx xxx xxx
“(d) Upon dismissal for cause or on voluntary separation, he shall
be entitled only to his own premiums and voluntary deposits, if any,
plus interest of 3% per annum, compounded monthly.”
GSIS laws are in the nature of social legislation, to be liberally construed in
favor of the government employees. The money subject to the instant request
consists of personal contributions made by the employee, premiums paid
in anticipation of benefits expected upon retirement. The occurrence of
contingency, i.e., his dismissal from the service prior to reaching retirement
age, should not deprive him of the money that belongs to him from the
outset. To allow forfeiture of these personal contributions in favor of the GSIS
would condone undue enrichment.
Pursuant to the foregoing discussion, Cesar is entitled to the return of his
premiums and voluntary deposits if any, with interest of 3% per
annum, compounded monthly.
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COA disallowance
GSIS v. COA
Issue: Whether the COA disallowances, representing loyalty and service cash
awards of the respondents as well as housing allowances in excess of that
approved by the COA, could be legally deducted from their retirement benefits.
Sec. 39. Exemption from Tax, Legal Process and Lien.-
xxx xxx xxx
The funds and/or the properties referred to herein as well as the
benefits, sums or monies corresponding to the benefits under this
Act shall be exempt from attachment, garnishment,
execution, levy or other processes issued by the courts,
quasi-judicial agencies or administrative bodies including
Commission on Audit disallowances and from all financial obligations
of the members, including his pecuniary accountability arising from
or causes or occasioned by his exercise or performance of his official
functions or duties, or incurred relative to or in connection with his
position or work except when his monetary liability, contractual or
otherwise, is in favor of the GSIS.
SC: It is clear from the provision that COA disallowances cannot be
deducted from the benefits under RA 8291, as the same are explicitly made
exempt by law from such deductions. Retirement benefits cannot be diminished
by COA disallowances in view of the clear mandate of the foregoing provision.
It is a basic rule in statutory construction that if a statute is clear, plain and
free from ambiguity, it must be given its literal meaning and applied without
interpretation. This is what is known as plain-meaning rule or verbal egis.
GSIS interpretation of Section 39 that COA disallowances have become
monetary liabilities of respondents to the GSIS and therefore fall under the
exception stated in the law is wrong. No interpretation of the said provision is
necessary given the clear language of the statute. A meaning that does not
appear nor is intended or reflected in the very language of the statute cannot
be placed therein by construction.
Thus, “monetary liability in favor of GSIS” refers to indebtedness of the
member to the System other than those which fall under the categories
of pecuniary accountabilities exempted under the law. Such liability
may include unpaid social insurance premiums and balances on loans
obtained by the retiree from the System, which do not arise in the
performance of his duties and are not incurred relative to his work. The general
policy, as reflected in our retirement laws and jurisprudence, is to exempt
benefits from all legal processes or liens, but not from outstanding obligations
of the members to the System. This is to ensure maintenance of the GSIS’ fund
reserves in order to guarantee fulfillment of all its obligations under RA 8291.
Prescriptive Period?
4 years from date of contingency except life & retirement benefits
which do not prescribe.
Which body of GSIS vested with Quasi-Judicial Functions?
Board of Trustees
Section 39
SEC. 39. Exemption from Tax, Legal Process and Lien. - It is hereby declared
to be the policy of the State that the actuarial solvency of the funds of the GSIS
shall be preserved and maintained at all times and that contribution rates
necessary to sustain the benefits under this Act shall be kept as low as possible
in order not to burden the members of the GSIS and their employers. Taxes
imposed on the GSIS tend to impair the actuarial solvency of its funds and
increase the contribution rate necessary to sustain the benefits of this Act.
Accordingly, notwithstanding any laws to the contrary, the GSIS, its assets,
revenues including all accruals thereto, and benefits paid, shall be exempt from
all taxes, assessments, fees, charges, or duties of all kinds. These exemptions
shall continue unless expressly and specifically revoked and any assessment
against the GSIS as of the approval of this Act are hereby considered paid.
Consequently, all laws, ordinances, regulations, issuances, opinions or
jurisprudence contrary to or in derogation of this provision are hereby deemed
repealed, superseded and rendered ineffective and without legal force and
effect.
10 | U N I V E R S I T Y O F S A N C A R L O S
Moreover, these exemptions shall not be affected by subsequent laws to the
contrary unless this section is expressly, specifically and categorically revoked
or repealed by law and a provision is enacted to substitute or replace the
exemption referred to herein as an essential factor to maintain or protect the
solvency of the fund, notwithstanding and independently of the guaranty of the
national government to secure such solvency or liability.
The funds and/or the properties referred to herein as well as the benefits, sums
or monies corresponding to the benefits under this Act shall be exempt from
attachment, garnishment, execution, levy or other processes issued by the
courts, quasi-judicial agencies or administrative bodies including Commission
on Audit (COA) disallowances and from all financial obligations of the members,
including his pecuniary accountability arising from or caused or occasioned by
his exercise or performance of his official functions or duties, or incurred
relative to or in connection with his position or work except when his monetary
liability, contractual or otherwise, is in favor of the GSIS.
Security guards’ money claims
GSIS v. NLRC
Facts: Security Guards of a security agency assigned to GSIS Tacloban Branch.
There a labor case – money claims. There was a judgment against the agency
of the security guards and GSIS. GSIS does not want to pay the money claims
contending Section 39 of RA 8291 exempting GSIS Funds from execution.
SC: The fact there was not actual direct e-e relationship does not absolve GSIS
from the liability. GSIS became the indirect employer of the security guards
pursuant to labor law. So jointly and severally liable.
On the matter of exemption, charter should not be used to evade its liabilities
to its employees, even to its indirect employees, as mandated by the Labor
Code.
REPUBLIC ACT 7699 (PORTABILITY LAW)
When applicable?
A member of GSIS who does not qualify for old age and other benefits by
reason of non-fulfillment of the required period of service may be able to qualify
for such benefits by making use of the period during which he rendered services
to a private employer and for which contributions were paid to SSS. This is
allowed under RA 7699 (approved May 1, 1994)
The Act instituted a limited portability scheme in the GSIS and SSS by totalizing
the workers’ creditable services or contributions in each of the Systems.
Portability of benefits, portability law, limited portability scheme and totalization
of benefits.
Under the law, it talks about two systems, GSIS and SSS. You can be a member
of GSIS or SSS who does not qualify by reason of non-fulfilment of the required
period of service, they may able to qualify by making use of the period during
which he rendered service to an employer and when he was a member of SSS.
It can also apply vice versa.
Gamogamo v. PNOC
Facts: Petitioner worked with DOH and served for 14 years of service. After
that, he worked in PNOC and then after working for several years, PNOC was
privatized. According to petitioner, there is a mandate under RA 7699, that his
period of years in DOH shall be tacked in or shall be added with the number of
years with PNOC.
SC: The totalization of service credits was resorted to only when the retiree did
not qualify for benefits in either or both the Social Security System of GSIS. In
this case, petitioner’s 14 years of service with the DOH may not remain
uncompensated because it may be recognized by the GSIS pursuant to Section
12 of the Government Service Insurance Act of 1977, as may be determined
by the GSIS. Since petitioner may be entitled to some benefits from the GSIS,
he cannot avail of the benefits under RA 7699.
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No mandate because you are only allowed of you are not entitled to receive
benefits under one system. But according to the SC, it mentioned Section 12
on Separation Benefit. At least 3 years, less than 50. At least 15, Less than 60
yo. There are two choices. If you have 14 years of service, it may be recognized
by GSIS saying that you will be entitled with the separation benefit. And since
you are entitled with separation benefit, RA7699 will not apply.
Portability – refers to transfer of funds for the benefit and account of a worker
who transfers from one system to the other (RA 7699, Sec. 2 [b]).
There is no actual transfer. They only get certification and present it. So there
is no actual transfer.
Totalization – refers to the process of adding up the periods of creditable
services or contributions in each of the Systems for purposes of eligibility and
computation of benefits. For purposes of totalization, overlapping periods of
membership shall be considered once only (Sec. 3)
It means that if you are already eligible in that particular system, that will not
apply.
Overlapping period – refers to the period during which a worker contributes
simultaneously to GSIS and SSS.
Maybe there was a time that you worked for the government and you had a
contribution with SSS, the law however says that this overlapping will only apply
once.
When is totalization resorted to?
The totalization of service credits is only restored to when the retiree does not
qualify for benefits in either or both of the systems.
If a person is qualified to receive benefits granted by GSIS if such right has not
yet been exercised, then this principle does not apply.
Can justices and judges avail of the portability scheme?
NO. They have different retirement. Their coverage in GSIS is only
LIFE INSURANCE.
PD 442 (LABOR CODE); PD 626 (ECC)
Presumption of Compensability
The Act works upon the presumption of compensability (means that if the injury
or disease arose out of and in the course of employment, it is presumed that
the claim for compensation falls within the provisions of the law). Meaning, the
employee need not present any proof of causation. It is the employer who
should prove that the illness or injury did not arise out of or in the course of
the employment.
Presumption of compensability was abandoned by present Labor Code,
substituted by system based on social security
Purpose of the new system is to restore a sensible equilibrium between
employer’s obligation to pay workmen’s compensation and the employee’s right
to receive reparation for work-connected death or disability
PD 626 further amended Title II of Book IV on the ECC and State Insurance
Fund of the Labor Code of the Philippines
The law abandoned the presumption of compensability and the theory of
aggravation under the Workmen’s Compensation Act (if the sickness or ailment
is aggravated by the employee’s work, employer is liable for the consequent
compensation thereof)
Reason for abandonment?
System based on social security system – purpose of this innovation 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.
11 | U N I V E R S I T Y O F S A N C A R L O S
Present Rules
For the sickness and resulting disability or death to be compensable, the
claimant must prove that:
a. the sickness must be the result of an occupational disease listed
under Annex “A” of the Rules on Employees’ Compensation, or
b. the risk of contracting the disease was increased by the claimant’s
working conditions.
If the claimant’s illness or disease is not included on the said Annex “A”, then
he is entitled to compensation only if he can prove that the risk of contracting
the illness or disease was increased by his working conditions
Theory of Aggravation
All that the Workmen’s Compensation Act requires to entitle claimants to its
benefits is a showing that the nature of the deceased's work and duties did
aggravate his illness as in this case.
Doctrine of Occupational Disease
The disease sickness or illness, to be compensable must be the result of an
occupational disease listed under Annex “A”.
Occupational Diseases
The diseases listed in Annex “A” are presumed to be work-related but not every
death resulting therefrom automatically entitles a claimant to death benefits.
Annex “A” requires that, for the statutory presumption of causal relation to
arise, it must be established beforehand that the listed disease was contracted
under certain working conditions.
For an occupational disease and the resulting disability or death to be
compensable, all of the following condition must be satisfied:
1. The employee’s work must involve the risks described herein;
2. The disease was contracted as a result of the employee’s
exposure to the described risks;
3. The disease was contracted within a period of exposure and under
such other factors necessary to contract it;
4. There was no notorious negligence on the part of the employee.
Theory of Increased Risk
If the disease, sickness or illness is not listed in Annex “A”, the claimant, for
purposes of showing its compensability, should proffer proof that the risk of
contracting the disease was increased by his working conditions.
Art. 203, Labor Code (Prohibition against demand or charge for fee);
compare with SSS
Article 203, Labor Code: “No agent, attorney or other person pursuing or in
charge of the preparation or filing of any claim for benefit under this Title shall
demand or charge for his services any fee and any stipulation to the contrary
shall be null and void. The retention or deduction of any amount from any
benefit granted under this Title for the payment of fees for such services is
prohibited. Violation of a provision of this Article shall be punished by a fine of
not less than five hundred pesos not more than five thousand pesos, or
imprisonment for not less than six months nor more than one year or both, at
the discretion of the court.”
SECTION 17. Fee of Agents, Attorneys, etc., SSS — No agent, attorney or other
person in charge of the preparation, filing or pursuing any claim for benefit
under this Act shall demand or charge for his services any fee, and any
stipulation to the contrary shall be null and void. The retention or deduction of
any amount from any benefit granted under this Act for the payment of fees
for such services is prohibited: Provided, however, That any member of the
Philippine Bar who appears as counsel in any case heard by the Commission
shall be entitled to attorney's fees not exceeding ten percent (10%) of the
benefits awarded by the Commission, which fees shall not be payable before
the actual payment of the benefits, and any stipulation to the contrary shall be
null and void. Any violation of the provisions of this Section shall be punished
by a fine of not less than five hundred pesos (P500.00) nor more than five
AGRARIAN REFORM AND SOCIAL LEGISLATION | ATTY. JOSE GLENN CAPANAS | EH408 2016-2017 | FINALS
thousand pesos (P5,000.00), or imprisonment for not less than six (6) months
nor more than one (1) year, or both, at the discretion of the court.
Same prohibition on the SSS but allows not more than 10% of
benefits awarded for a lawyer who appears as a counsel in a case
heard by SSC.
Meaning of “accident”
Accident – unforeseen for which the injured party is not legally responsible.
Arising out of employment – upon consideration of all circumstances, a causal
connection between the conditions under which the conditions under which the
work is required to be performed and resulting injury; refers to origin or cause
of accident v. “in the course of” which refers to time, place and circumstances
under which accident takes place.
ECC Board Resolution No. 12-03-08
(DECLARING THE COMPENSABILITY OD DEATH OF AN EMPLOYEEE DUE TO
ASSUALT WHEN THE SAME OCCURRED IN THE COURSE OF THE PERFOMANCE
OF OFFICIAL FUCNTIONS NOTWHITSTANDING THE FACT THAT THE MOTIVE
ISPERSONAL IN NATURE)
To declare the compensability of death of an employee due to assault
notwithstanding the fact the motive us persona in nature if the same occurred
in any of the following situations, in addition to those provided under Item II
of Circular No. 03-709 dated 22 July 2009:
1. The Employee was at his assigned/designated workplace, or at a place where
his work requires him to be;
2. The employee was executing an order from employer regardless of the time
and pace of the incident, or in the performance of his official functions; or
3. The employee was “going to or coming from” his workplace, subject to the
existing guidelines of the same.
ECC Board Resolution No. 14-02-15
(COMPENSABILITY OF INJURIES OR DEATH OF THE SOLDIERS AND
POLICEMEN WHEN RESPONDING TO A CRIME OF SITUATION WHEN THEY
ARE NOT AT THEIR ASSIGNED POST.)
To declare the compensability of injuries and its resulting disability or death,
sustained by the soldiers and policemen when responding to a crime situations
or when performing their sworn duties as law enforcers while they are not at
their assigned posts.
ECC Board Resolution No. 15-04-15
(DELCARING THE COMPENSABILITY OF INJURIES SUSTAINED BY EMPLOYEE
AT PLACES OF RECREATION WITHIN THE EMPLOYER’S PREMISES)
To declare the compensability of injuries sustained by employees on the places
of recreation within the premises of the employer, within an allowed period;
Paragraph 6.1 of Board Resolution No. 93-08-0068, dated August 5, 1993, is
hereby modified or amended to read as follows:
Personal Comfort Doctrine
6.1 Acts performed by an employee
a. Within the time and space limits of his employment to minister to
personal comfort such as satisfaction of his thirst, hunger or other
demands
b. While on the places of recreation within the employer’s premises,
or
c. To protect himself from extreme temperature in a place within
the employer’s premises,
Shall be deemed incidental to his employment and injuries which the
employee suffered in the performance of such acts shall be
considered compensable and arising out of and in the course of
employment.
12 | U N I V E R S I T Y O F S A N C A R L O S
ECC Board Resolution No. 15-01-20
(ADVISORY ON THE DEFINITION OF MISSING PERSONS UDNER EC BOARD
RESOLUTION NO. 14-07-20)
Advisory is issued in relation to the implementation of Board Resolution No. 14-
70-20 (“Guidelines on the Grant of EC benefits due to Calamity or Fatal Event
Amending for this Purpose Paragraph 5 of Board Resolution No. 93-08-0068”):
The following are the series of events which should be considered in the grant
of EC benefits:
1. The word “missing” refers to unknown fate or there is no trace of
whereabouts of a worker, employee and uninformed personnel while he/she is
in the performance of his/her duties during calamities or fatal events.
2. The worker employee or uninformed personnel was not seen or heard from
after the lapse of four years from occurrence of the incident.
3. The disappearance of the worker, employee or uninformed personnel gives
rise to presumption of death.
4. The death of the worker, employee or uninformed personnel arises out of
and in the course of the employment.
ECC Board Resolution No. 10-03-45
When a claimant filed a claim for disability of death benefits before the Systems
either under SSS or GSIS, the claim for the same benefits under EC should be
considered filed
The filing of disability or death benefits either under the SSS or GSIS within 3
years from the time the cause of action accrued would stop the running of the
prescriptive period under P.D. 626
EC claim must be filed within 3 years from:
1. In case of sickness-time when the employee was unable to report for work
2. Injury-time of the accident
3. Death-date of death
ECC Board Resolution No. 11-04-10
[SETTING THE RECKONING DATE OF THE THREE-YEAR PRESCRIPTIVE
PERIOD IN THE EVALUATION OF EMPLOYEES' COMPENSATION CLAIMS FOR
PERMANENT TOTAL DISABILITY (PTD)]
In the case of ECC vs. Sanico, the Supreme Court held that:
1. "Permanent total disability means disablement of an employee to earn wages
in the same kind of work, or work of similar nature that he was trained for or
accustomed to perform, or any kind of work which a person of [his] mentality
and attainment could do. It does not mean absolute helplessness;
2. "In disability compensation, it is not the injury which is compensated, but
rather it is the incapacity to work resulting in the impairment of one's earning
capacity;
3. "The prescriptive period for filing compensation claims should be reckoned
from the time the employee lost his earning capacity, i.e., terminated from
employment, due to his illness and not when the same first became manifest."
This Commission RESOLVES that the prescriptive period for filing
compensation claims should be reckoned from the time the employee
lost his earning capacity.
ECC Board Resolution No. 12-01-02
(DECLARING THE COMPENSABILITY OF INJURIES AND ITS RESULTING
DISABILITY OR DEATH SUSTAINED BY STAY-IN LOCAL EMPLOYEES WITHIN
THE QUARTERS FURNISHED BY THE EMPLOYERS)
"Bunkhouse Rule" - ". . . where the employee is required to stay in the premises
or in quarters furnished by the employer, injuries sustained therein are in the
course of employment regardless of the time the same occurred."
This Commission RESOLVES AS IT IS HEREBY RESOLVED, to declare the
compensability of injuries, and its resulting disability or death, sustained by
stay-in local employees in their quarters regardless of the time of its occurrence
except when the disability or death was occasioned by the employee's
intoxication, willful intention to injure or kill himself or another, or notorious
negligence as provided under Article 172 of PD 626, as amended.
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Note: Basic postulates
1. Abandonment of the presumption of compensability and the theory of
aggravation under the Workmen’s Compensation Act
2. For the sickness and resulting disability or death to be compensable, and the
claimant must prove either of two things: a) that the sickness was the result of
an occupational disease listed under Annex “A” of the Rules on Employee’s
Compensation; b) if the sickness is not so listed, that the risk of contracting the
disease was increased by the claimant’s working conditions.
Compensability: GSIS v CA; Alano v ECC; Lorenzo v GSIS; GSIS v
Capacite
GSIS v. CA
In this case, Osteosarcoma is not listed as an occupational disease in the
Amended Rules on Employees' Compensation. Hence, it is supposed to be upon
the claimant or private respondents to prove by substantial evidence that the
risk of contracting Osteosarcoma was increased by the working conditions of
the late Abraham. Substantial evidence means such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. The records
show that Abraham failed to present evidence to establish that the
development of his ailment was traceable to his working conditions in the
Philippine Navy, the now defunct Philippine Constabulary and the PNP. Further,
private respondents' allegation in their petition for review with the CA that
Abraham, as a rifleman in the Philippine Navy, may have been exposed to
elements like a virus which could have contributed to his ailment does not
satisfy the requirement of substantial evidence. The rule is that awards of
compensation cannot rest on speculations and presumptions as the claimant
must prove a positive thing. The application of the rules would mean that
absent any proof that the risk of contracting the ailment was increased by the
working conditions of the late Abraham, private respondents would not be
entitled to compensation.
Considering, however, that it is practically undisputed that under the present
state of science, the proof referred by the law to be presented by the deceased
private respondent claimant was unavailable and impossible to comply with,
the condition must be deemed as not imposed.
Before the amendment, the law simply did not allow compensation for the
ailment of respondent. It is under this set-up that the Raro case was decided.
However, as the ECC decision noted, the law was amended and now "the
present law on compensation allows certain diseases to be compensable if it is
sufficiently proven that the risk of contracting is increased by the working
conditions." It, therefore, now allows compensation subject to requirement of
proving by sufficient evidence that the risk of contracting the ailment is
increased by the working conditions.
As earlier noted, however, in the specific case of respondent, the requirement
is impossible to comply with, given the present state of scientific knowledge.
The obligation to present such as an impossible evidence must, therefore, be
deemed void. Respondent, therefore, is entitled to compensation, consistent
with the social legislation's intended beneficial purpose.
Alano v. ECC
The deceased was waiting for a bus to the school where she works as a
principal. However, while waiting, she was bumped by a minivan that resulted
to her death. The petitioner alleges that the deceased's accident has "arisen
out of or in the course of her employment." The respondent Commission
reiterates its views and contends that the present provision of law on
employment injury is different from that provided in the old Workmen's
Compensation Act (Act 3428) and is "categorical in that the injury must have
been sustained at work while at the workplace, or elsewhere while executing
an order from the employer." We rule in favor of the petitioner. It is not
disputed that the deceased died while going to her place of work. She was at
the place where, as the petitioner puts it, her job necessarily required her to
be if she was to reach her place of work on time. There was nothing private or
personal about the school principal's being at the place of the accident. She
was there because her employment required her to be there.
13 | U N I V E R S I T Y O F S A N C A R L O S
Lorenzo v. GSIS
The wife of the deceased died due to cardiorespiratory arrest due to terminal
leukemia. Petitioner, being the surviving spouse, claimed for Employees’
Compensation death benefits from the GSIS. It was denied on the ground that
the GSIS Medical Evaluation and Underwriting Department found Rosario’s
ailments and cause of death as a non-occupational disease contemplated under
P.D. 626, as amended.
Sickness, as defined under Article 167 (1) of the Labor Code refers to “any
illness definitely accepted as an occupational disease listed by the Employees’
Compensation Commission, or any illness caused by employment, subject to
proof that the risk of contracting the same is increased by working conditions.
It is well to stress that the principles of "presumption of compensability" and
"aggravation" found in the old Workmen's Compensation Act is expressly
discarded under the present compensation scheme. As illustrated in the said
Raro case, the new principle being applied is a system based on social security
principle; thus, the introduction of "proof of increased risk." As further declared
therein:
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.
GSIS v. Capacite
The deceased was a DAR employee who died of lung cancer. The CA justified
the compensability of her disease by saying that Elma had been exposed to
voluminous dusty records and other harmful substances that aggravated her
respiratory disease.
While item 17, Annex "A" of the Amended Rules of Employee's Compensation
considers lung cancer to be a compensable occupational disease, it likewise
provides that the employee should be employed as a vinyl chloride worker or a
plastic worker. In this case, however, Elma did not work in an environment
involving the manufacture of chlorine or plastic, for her lung cancer to be
considered an occupational disease. There was, therefore, no basis for the CA
to simply categorize her illness as an occupational disease without first
establishing the nature of Elma's work. Both the law and the implementing rules
clearly state that the given alternative conditions must be satisfied for a disease
to be compensable.
Limitation to compensability
Section 1. Limitation – No compensation shall be allowed to the employee or
his dependents when injury, sickness, disability or death was occasioned by
any of the following:
1. His intoxication
2. His willful attention to injure or kill himself or another; or
3. His notorious negligence.
Intoxication – person’s condition in being under the influence of liquor or
prohibited drugs to the extent that his accts, words or conduct are impaired
visibly as to prevent him from physically and mentally engaging in the duties
of his employment
Notorious negligence – something more than mere or simple negligence;
deliberate act to disregard own personal safety
GSIS v. Angel
When the law upon the facts, we conclude that the death of Sgt. Angel did not
result from an accident which is compensable under PD 626. It was not on the
contrary occasioned by an intentional or designed act which removes the
resulting death from the coverage of the State Insurance Fund. It is unexpected
that the discussion below by the GSIS, the ECC and the Court of Appeals,
veered away from the indispensable antecedent that the death must because
b accident and instead, focused on the requirement that the death must arise
out of or in the course of employment. Such that, the ECC denied
compensability because:
“Clearly the deceased was not performing his official duties at the
time of the incident. On the contrary, he was investigated regarding
his alleged involvement on a pilferage/gunrunning case when he was
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found dead in his cell, an activity which is foreign and unrelated to
his employment as a soldier. Thus, the protective mantle of the law
cannot be extended to him as the documents appear bereft of any
showing to justify causal connection between the death and his
employment.”
Coverage formula — "arising out of" and "in the course of
employment"; 24-hour-duty doctrine
"Arising out of"
upon consideration of all circumstances, a causal connection between the
condition under which the work is required to be performed and resulting
injury, refers to the origin or cause of the accident
“In the course of employment"
refers to time, place and circumstances under which the accident takes place.
24-hour-duty doctrine
The concept of workplace cannot always be literally to a soldier on active status
whom for all intents and purposes, is on a 24 hour official duty status, subject
to military discipline and law and call of his superior officers at all times, except
when he is on vacation leave status; this doctrine should not be sweepingly
applied to all acts and circumstances but only those which, although not on
official line of duty, are nonetheless basically police service in character
Valeriano v. ECC
The Court ruled that petitioner’s injuries and consequent disability were not
work-connected and thus not compensable. Petitioner was not able to
demonstrate solidly how his job as a firetruck driver was related to the injuries
he had suffered. That he sustained the injuries after pursuing a purely personal
and social function – having dinner with some friends – is clear from the records
of the case. His injuries were not acquired at his work place; nor were they
sustained while he was performing an act within the scope of his employment
or in pursuit of an order of his superior. The Court also ruled that the 24-hour
duty doctrine cannot be applied to petitioner’s case because he was neither at
his assigned work place nor in pursuit of the orders of his superiors when he
met an accident. But the more important justification for the Court’s stance is
that he was not doing an act within his duty and authority as a firetruck driver,
or any other act of such nature, at the time he sustained his injuries.
Can a claim for benefit be defeated by the mere fact of separation
from service?
GSIS v. Cuanang
(Teacher – Cardio Pulmonary Arrest with Acute Myocardial Infarction as the
antecedent cause, and Bronchial Asthma and Hypertension as underlying
causes)
SC: In the instant case, the wife of the respondent died a year after her
retirement. Clearly, the period between her retirement and demise was less
than one year. Indeed, if a death which occurred almost four and one half years
after retirement was held to be within the coverage of the death benefits under
PD 626, as in the Manuzon case, with more reason should a death which
occurred within one year after retirement be considered as covered under the
same law. A claim for benefits for such death cannot defeated by mere fact of
separation from service.
Degree of proof required under PD 626 was satisfied, i.e., “such relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion.” Probability and not ultimate degree of certainty is the test of proof
in compensation proceedings.
In the case at bar, the under substantial evidence came from the expert opinion
of Dr. Arsenio A. Esteras Jr., a Diplomate in Internal Medicine who issued the
Death Certificate
Aquino v. SSS
(Grocery Man US Navy – congestive heart failure)
SC: Congestive heart failure is not included. Hence, petitioner should have
shown proof that the working conditions in the commissary where her husband
worked aggravated the risk of contracting the ailment. Petitioner should have
14 | U N I V E R S I T Y O F S A N C A R L O S
adduced evidenced of a reasonable connection between the work of her
deceased husband and he cause of his death, or that the progression of the
disease was brought about largely by the conditions in her husband’s job as
grocery man at the commissary store. Failing in this aspect, we are constrained
to rule that her husband’s illness which eventually caused his demise was not
compensable.
In addition, granting petitioner’s claim will set a bad precedent considering that
23 years elapsed from the time her husband stopped working at the
commissary store up to the time he died. If we were to grant it, we might
unduly burden the funds of the ECC and jeopardize it with a flood of
unsubstantiated claims. Besides, the court cannot remain oblivious to the
possibility that, within that 23-year period, other factors intervened to cause
the death of petitioner’s husband. Petitioner was thus under an even greater
compulsion to proffer evidence to negate this possibility and establish the
casual connection between her husband’s work and his death. The 23-year gap
between his separation from employment in 1977 and his death in 2000 was a
gaping hole in petitioner’s claim.
Jacang v. SSS
(Janitor – Takayasu’s disease)
SC: Takayasu’s Disease is not listed as an occupational disease. But it is
scientifically linked to PTB, a listed occupational disease.
Thus, even if the “Takayasu’s Disease” is not listed, perhaps for being rare and
still mysterious, there can be no question that being associated with PTB which
is a listed occupational disease, the depth of petitioner’s husband is
compensable under Annex A of the Amended Rules on Employees
Compensation.
Any doubt on this matter has to be interpreted in favor of the employee,
considering that PD 626 is a social legislation. In this case, enough substantial
evidence has been shown to convince us that the surviving spouse of the
deceased worker is entitled to compensation under said PDP 626, because the
records show his ailment and death have been associated with PTB, a listed
compensable disease.
Bunao v. SSS
(Marine Engineer – Hepatic Encephalopathy, Renal Cell Cancer)
SC: There is no dispute that renal cell cancer is not listed as an occupational
disease under Annex “A” of the Rules on Employee’s Compensation. As such,
petitioner has the burden of proving by substantial evidence, the causal
relationship between her husband’s illness and his working conditions.
Substantial evidence means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.
For petitioner’s claim to prosper, she must submit such proof as would
constitute a reasonable basis for concluding either that the conditions of Artus’s
employment caused the ailment or that such working conditions had
aggravated the risk of contracting that ailment.
Petitioner alleged that the deceased marine engineer was exposed to leaded
petrol and petroleum products that contain various chemicals like hydrogen,
benzene and lead which are health hazards because of their carcinogenicity.
She claims that most of these chemicals precipitate disease, kidney cancer and
liver cancer.
Unfortunately, such bare allegations and vague excerpts on cancer do not
constitute such evidence that a reasonable mind might accept as adequate to
support a conclusion that there is indeed a causal relationship between the
illness of the deceased and his working conditions. Awards of compensation
cannot rest on speculations and presumptions. The claimant must prove a
positive proposition.
There is no showing that the progression of the disease was brought about
largely by the conditions in Artus’s job. Petitioner did not present medical
history, records or physician’s report in order to substantiate her claim that the
working conditions on board the vessels M/T Palawan, M/T Guimaras and M/T
Buenavista increased the risk of contracting renal cell cancer.
AGRARIAN REFORM AND SOCIAL LEGISLATION | ATTY. JOSE GLENN CAPANAS | EH408 2016-2017 | FINALS

Castor-Garupa v. ECC To emphasize, there is disability whether there is permanent or

(Government Physician – End Stage Renal Disease secondary to Chronic
Glomerulonephritis)
SC: Inasmuch as petitioner’s disease was not listed as an occupational disease,
it is incumbent upon her to adduce substantial proof that would show that the
nature of her employment or working conditions increased the risk of end stage
renal disease was caused by a streptococcal infection. She attached the
Physician’s certification and the Employer’s Certification which clearly
established that she suffered hypertension as early as 1994 and displayed
sudden loss of appetite, edema and general fatigue in 1998 consistent with
symptoms of chronic glomerulonephritis.
Petitioner is a practicing doctor in a public rural hospital from January 1, 1979
until she underwent a kidney transplant on March 11 1999. As a doctor who
was in direct contract with patients, she was more exposed to all kinds of germs
and bacteria, thus increasing the risk of contracting glomerulonephritis. Given
the nature of her work, and considering further that the resident physician work
for extended hours, the likelihood of petitioner being infected by the
streptococcus bacterium is, without a doubt, increased. We thus find the
probability of petitioner contracting chronic glomerulonephritis in her
workstation has been substantiated.
temporary under SS dependent upon the body parts/system
involved. Without taking into consideration whether the employee
has is earning/ was performing gainful employment.
Under EC Law, if there is a particular body part injured, there is a
corresponding number of months that the employee will fail to
perform gainful employment
So the key point/element under EC to reckon the 3 year prescriptive
period is when the time the employee lost his earning capacity (the
time when he was terminated) without referring to the body part or
system injured/ suffered (there must be a relation between the
disease and the loss of earning capacity or termination)
Defenses against EC Claims
1. Not work connected or not occupational
2. Limitation to compensability
a. His intoxication
b. His willful attention to injure or kill himself or another; or
c. His notorious negligence

“Parents” as beneficiaries 3. No notice was giver to employer, Art. 212 of LC

Bartolome v SSS
In the same vein, the term “parents” in the phrase “dependent parents” in the
afore-quoted Article 167 (j) of the Labor Code is use and ought to be taken in
its general sense and cannot be unduly limited to “legitimate parents” as what
the ECC did. The phrase “dependent parents” should, therefore, include all
parents, whether legitimate or illegitimate and whether by nature or by
adaption. When the law does not distinguish, one should not distinguish.
Plainly, “dependent parents” are parents, whether legitimate or illegitimate,
biological or adoption, who are in need of support or assistance.
ARTICLE 212. Notice of Sickness, Injury or Death. 153 — Notice of
sickness, injury or death shall be given to the employer by the
employee or by his dependents or anybody on his behalf within five
days from the occurrence of the contingency. No notice to the
employer shall be required if the contingency is known to the
employer or his agents or representatives.
4. Prescription

Prescriptive period;
Prescriptive period
Art. 201: 3 years from time to time the cause of action accrued.

Where to file? SSS for private and GSIS for public

When a cause of action accrues? From date of occurrence of the contingency

ECC v. Sanico (GR. 134028, Dec. 17, 1999)

Prescription not to be reckoned with PTB became known but from time
employee lost his earning capacity (terminated from job due to illness)

Important:
Prescriptive period
Under SSS, 20 years; then 10 years if disability. Under the SS Law, the
20 year period does not cover criminal action

Under GSIS, 4 years; except life insurance or retirement benefits

Under EC, 3 years.

In Lo v. CA which emphasized the reckoning point of the 20-year prescriptive

period, SC said it should be reckoned from the discovery of the delinquency.

The 3-year prescriptive period under the EC

Art 201: 3 years from the cause of action accrued (from the date of the
occurrence of the contingency)

ECC v. Sanico – prescription not to be reckoned when Pulmonary TB

became known but from time employee lost his earning capacity
(terminated due to illness)

Emphasizing this because this is connected under SSS. The case of

Ortega v. CA where the SC made a distinction between disability
falling under SS law and disability under labor code (EC Law)

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