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GSIS CASES

CONSTRUCTION OF RETIREMENT BENEFIT

G.R. No. 186560 November 17, 2010

GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,


vs.
FERNANDO P. DE LEON, Respondent.

NACHURA, J.:

Respondent Fernando P. de Leon retired as Chief State Prosecutor of the Department of


Justice (DOJ) in 1992, after 44 years of service to the government. He applied for
retirement under Republic Act (R.A.) No. 910, invoking R.A. No. 3783, as amended by
R.A. No. 4140, which provides that chief state prosecutors hold the same rank as judges.
The application was approved by GSIS. Thereafter, and for more than nine years,
respondent continuously received his retirement benefits, until 2001, when he failed to
receive his monthly pension.3

Respondent learned that GSIS cancelled the payment of his pension because the
Department of Budget and Management (DBM) informed GSIS that respondent was not
qualified to retire under R.A. No. 910; that the law was meant to apply only to justices
and judges; and that having the same rank and qualification as a judge did not entitle
respondent to the retirement benefits provided thereunder. Thus, GSIS stopped the
payment of respondent’s monthly pension.4

Respondent wrote GSIS several letters but he received no response until November 9,
2007, when respondent received the following letter from GSIS:

Dear Atty. De Leon:

This is in response to your request for resumption of pension benefit.

It appears that you retired under Republic Act No. 910 in 1992 from your position as
Chief State Prosecutor in the Department of Justice. From 1992 to 2001, you were
receiving pension benefits under the said law. Beginning the year 2002, the Department
of Budget and Management through then Secretary Emilia T. Boncodin already refused
to release the funds for your pension benefit on the ground that Chief State Prosecutors
are not covered by R.A. 910. This conclusion was later on affirmed by Secretary Rolando
G. Andaya, Jr. in a letter dated 6 June 2006.

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In view of these, you now seek to secure benefits under Republic Act No. 660 or any
other applicable GSIS law.

We regret, however, that we cannot accede to your request because you have chosen to
retire and in fact have already retired under a different law, Republic Act No. 910, more
than fifteen (15) years ago. There is nothing in the GSIS law which sanctions double
retirement unless the retiree is first re-employed and qualifies once again to retire under
GSIS law. In fact, Section 55 of Republic Act No. 8291 provides for exclusivity of benefits
which means that a retiree may choose only one retirement scheme available to him to
the exclusion of all others.

Nonetheless, we believe that the peculiarities of your case is a matter that may be jointly
addressed or threshed out by your agency, the Department of Justice, and the
Department of Budget and Management.

Very truly yours,

(signed)

CECIL L. FELEO
Senior Vice President
Social Insurance Group5

Respondent then filed a petition for mandamus before the CA, praying that petitioner
be compelled to continue paying his monthly pension and to pay his unpaid monthly
benefits from 2001. He also asked that GSIS and the DBM be ordered to pay him
damages.6

In the assailed October 28, 2008 Decision, the CA resolved to grant the petition, to wit:

WHEREFORE, the petition is GRANTED. The GSIS is hereby ordered to pay without delay
petitioner Atty. Fernando de Leon, his monthly adjusted pension in accordance with
other applicable law not under RA 910. It is also ordered to pay the back pensions which
should also be adjusted to conform to the applicable law from the time his pension was
withheld.

SO ORDERED.7

The CA found that GSIS allowed respondent to retire under R.A. No. 910, following
precedents which allowed non-judges to retire under the said law. The CA said that it
was not respondent’s fault that he was allowed to avail of the benefits under R.A. No.

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910; and that, even if his retirement under that law was erroneous, respondent was,
nonetheless, entitled to a monthly pension under the GSIS Act. The CA held that this
was not a case of double retirement, but merely a continuation of the payment of
respondent’s pension benefit to which he was clearly entitled. Since the error in the
award of retirement benefits under R.A. 910 was not attributable to respondent, it was
incumbent upon GSIS to continue defraying his pension in accordance with the
appropriate law which might apply to him. It was unjust for GSIS to entirely stop the
payment of respondent’s monthly pension without providing any alternative sustenance
to him.8

The CA further held that, under R.A. No. 660, R.A. No. 8291, and Presidential Decree
(P.D.) No. 1146, respondent is entitled to a monthly pension for life. He cannot be
penalized for the error committed by GSIS itself. Thus, although respondent may not be
qualified to receive the retirement benefits under R.A. No. 910, he is still entitled to a
monthly pension under R.A. No. 660, P.D. No. 1146, and R.A. No. 8291.9

Petitioner GSIS is now before this Court, assailing the Decision of the CA and the
Resolution denying its motion for reconsideration.

GSIS admits that respondent received monthly pensions from August 1997 until
December 2001. Thereafter, the DBM refused to remit the funds for respondent’s
pension on the ground that he was not entitled to retire under R.A. No. 910 and should
have retired under another law, without however specifying which law it was.10 It
appears that the DBM discontinued the payment of respondent’s pension on the basis
of the memorandum of the Chief Presidential Legal Counsel that Chief Prosecutors of
the DOJ are not entitled to the retirement package under R.A. No. 910.

Because of the discontinuance of his pension, respondent sought to convert his


retirement under R.A. No. 910 to one under another law administered by
GSIS.11 However, this conversion was not allowed because, as GSIS avers, R.A. No. 8291
provides that conversion of one’s retirement mode on whatever ground and for
whatever reason is not allowed beyond one year from the date of retirement.

GSIS assails the CA’s Decision for not specifying under which law respondent’s
retirement benefits should be paid, thus making it legally impossible for GSIS to comply
with the directive.12 It then raises several arguments that challenge the validity of the
appellate court’s decision.

GSIS argues, first, that the CA erred in issuing a writ of mandamus despite the absence
of any specific and clear right on the part of respondent, since he could not even specify
the benefits to which he is entitled and the law under which he is making the claim.13

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Second, GSIS alleges that it had refunded respondent’s premium payments because he
opted to retire under R.A. No. 910, which it does not administer. Thus, GSIS posits that
the nexus between itself and respondent had been severed and, therefore, the latter
cannot claim benefits from GSIS anymore.14

Third, GSIS contends that the CA erred in concluding that respondent would not be
unjustly enriched by the continuation of his monthly pension because he had already
benefited from having erroneously retired under R.A. No. 910. GSIS points out that it
had refunded respondent’s premium contributions. When the Chief Presidential Legal
Counsel concluded that respondent was not entitled to retire under R.A. No. 910, it was
implicit recognition that respondent was actually not entitled to the ₱1.2 million lump
sum payment he received, which he never refunded.15

Fourth, GSIS points out that the CA erred in concluding that respondent was not seeking
conversion from one retirement mode to another. It reiterates that R.A. No. 8291
expressly prohibits conversion beyond one year from retirement. To compel GSIS to
release respondent’s retirement benefits despite the fact that he is disqualified to
receive retirement benefits violates R.A. No. 8291, and would subject its officials to
possible charges under R.A. No. 3019, the Anti-Graft and Corrupt Practices Act.

Fifth, GSIS contends that respondent is not entitled to the retirement benefits under R.A.
No. 8291 because, when he retired in 1992, the law had not yet been enacted. The
retirement laws administered by GSIS at that time were R.A. No. 660, R.A. No. 1616, and
P.D. No. 1146.

Lastly, GSIS argues that the writ of mandamus issued by the CA is not proper because it
compels petitioner to perform an act that is contrary to law.

Respondent traverses these allegations, and insists that he has a clear legal right to
receive retirement benefits under either R.A. No. 660 or P.D. No. 1146.16 He claims that
he has met all the conditions for entitlement to the benefits under either of the two
laws.17 Respondent contends that the return of his contributions does not bar him from
pursuing his claims because GSIS can require him to refund the premium contributions,
or even deduct the amount returned to him from the retirement benefits he will
receive.18 He also argues that resumption of his monthly pension will not constitute
unjust enrichment because he is entitled to the same as a matter of right for the rest of
his natural life.19

Respondent accepts that, contrary to the pronouncement of the CA, he is not covered
by R.A. No. 8291. He, therefore, asks this Court to modify the CA Decision, such that
instead of Section 13 of R.A. No. 8291, it should be Section 12 of P.D. No. 1146 or

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Section 11 of R.A. No. 660 to be used as the basis of his right to receive, and the
adjustment of, his monthly pension.

Furthermore, respondent argues that allowing him to retire under another law does not
constitute "conversion" as contemplated in the GSIS law. He avers that his application
for retirement under R.A. No. 910 was duly approved by GSIS, endorsed by the DOJ, and
implemented by the DBM for almost a decade. Thus, he should not be made to suffer
any adverse consequences owing to the change in the interpretation of the provisions
of R.A. No. 910. Moreover, he could not have applied for conversion of his chosen
retirement mode to one under a different law within one year from approval of his
retirement application, because of his firm belief that his retirement under R.A. No. 910
was proper – a belief amply supported by its approval by GSIS, the favorable
endorsement of the DOJ, and its implementation by the DBM.20

The petition is without merit.

Initially, we resolve the procedural issue.

GSIS contends that respondent’s petition for mandamus filed before the CA was
procedurally improper because respondent could not show a clear legal right to the
relief sought.

The Court disagrees with petitioner. The CA itself acknowledged that it would not
indulge in technicalities to resolve the case, but focus instead on the substantive issues
rather than on procedural questions.21 Furthermore, courts have the discretion to relax
the rules of procedure in order to protect substantive rights and prevent manifest
injustice to a party.

The Court has allowed numerous meritorious cases to proceed despite inherent
procedural defects and lapses. Rules of procedure are mere tools designed to facilitate
the attainment of justice. Strict and rigid application of rules which would result in
technicalities that tend to frustrate rather than to promote substantial justice must
always be avoided.22

Besides, as will be discussed hereunder, contrary to petitioner’s posture, respondent has


a clear legal right to the relief prayed for. Thus, the CA acted correctly when it gave due
course to respondent’s petition for mandamus.

This case involves a former government official who, after honorably serving office for
44 years, was comfortably enjoying his retirement in the relative security of a regular
monthly pension, but found himself abruptly denied the benefit and left without means

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of sustenance. This is a situation that obviously cries out for the proper application of
retirement laws, which are in the class of social legislation.

The inflexible rule in our jurisdiction is that social legislation must be liberally construed
in favor of the beneficiaries.23 Retirement laws, in particular, are liberally construed in
favor of the retiree24 because their objective is to provide for the retiree’s sustenance
and, hopefully, even comfort, when he no longer has the capability to earn a livelihood.
The liberal approach aims to achieve the humanitarian purposes of the law in order that
efficiency, security, and well-being of government employees may be
enhanced.25 Indeed, retirement laws are liberally construed and administered in favor of
the persons intended to be benefited, and all doubts are resolved in favor of the retiree
to achieve their humanitarian purpose.26

In this case, as adverted to above, respondent was able to establish that he has a clear
legal right to the reinstatement of his retirement benefits.

In stopping the payment of respondent’s monthly pension, GSIS relied on the


memorandum of the DBM, which, in turn, was based on the Chief Presidential Legal
Counsel’s opinion that respondent, not being a judge, was not entitled to retire under
R.A. No. 910. And because respondent had been mistakenly allowed to receive
retirement benefits under R.A. No. 910, GSIS erroneously concluded that respondent
was not entitled to any retirement benefits at all, not even under any other extant
retirement law. This is flawed logic.

Respondent’s disqualification from receiving retirement benefits under R.A. No. 910
does not mean that he is disqualified from receiving any retirement benefit under any
other existing retirement law.

The CA, however, incorrectly held that respondent was covered by R.A. No. 8291. R.A.
No. 8291 became a law after respondent retired from government service. Hence,
petitioner and even respondent agree that it does not apply to respondent, because the
law took effect after respondent’s retirement.

Prior to the effectivity of R.A. No. 8291, retiring government employees who were not
entitled to the benefits under R.A. No. 910 had the option to retire under either of two
laws: Commonwealth Act No. 186, as amended by R.A. No. 660, or P.D. No. 1146.

In his Comment, respondent implicitly indicated his preference to retire under P.D. No.
1146, since this law provides for higher benefits, and because the same was the latest
law at the time of his retirement in 1992.27

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Under P.D. No. 1146, to be eligible for retirement benefits, one must satisfy the
following requisites:

Section 11. Conditions for Old-Age Pension.

(a) Old-age pension shall be paid to a member who:

(1) has at least fifteen years of service;

(2) is at least sixty years of age; and

(3) is separated from the service.

Respondent had complied with these requirements at the time of his retirement. GSIS
does not dispute this. Accordingly, respondent is entitled to receive the benefits
provided under Section 12 of the same law, to wit:

Section 12. Old-Age Pension.

(a) A member entitled to old-age pension shall receive the basic monthly pension for life
but in no case for a period less than five years: Provided, That, the member shall have
the option to convert the basic monthly pensions for the first five years into a lump sum
as defined in this Act: Provided, further, That, in case the pensioner dies before the
expiration of the five-year period, his primary beneficiaries shall be entitled to the
balance of the amount still due to him. In default of primary beneficiaries, the amount
shall be paid to his legal heirs.

To grant respondent these benefits does not equate to double retirement, as GSIS
mistakenly claims. Since respondent has been declared ineligible to retire under R.A. No.
910, GSIS should simply apply the proper retirement law to respondent’s claim, in
substitution of R.A. No. 910. In this way, GSIS would be faithful to its mandate to
administer retirement laws in the spirit in which they have been enacted, i.e., to provide
retirees the wherewithal to live a life of relative comfort and security after years of
service to the government. Respondent will not receive --- and GSIS is under no
obligation to give him --- more than what is due him under the proper retirement law.

It must be emphasized that P.D. No. 1146 specifically mandates that a retiree is entitled
to monthly pension for life. As this Court previously held:

Considering the mandatory salary deductions from the government employee, the
government pensions do not constitute mere gratuity but form part of compensation.

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In a pension plan where employee participation is mandatory, the prevailing view is that
employees have contractual or vested rights in the pension where the pension is part of
the terms of employment. The reason for providing retirement benefits is to
compensate service to the government. Retirement benefits to government employees
are part of emolument to encourage and retain qualified employees in the government
service. Retirement benefits to government employees reward them for giving the best
years of their lives in the service of their country.

Thus, where the employee retires and meets the eligibility requirements, he acquires a
vested right to benefits that is protected by the due process clause. Retirees enjoy a
protected property interest whenever they acquire a right to immediate payment under
pre-existing law. Thus, a pensioner acquires a vested right to benefits that have become
due as provided under the terms of the public employees’ pension statute. No law can
deprive such person of his pension rights without due process of law, that is, without
notice and opportunity to be heard.28

It must also be underscored that GSIS itself allowed respondent to retire under R.A. No.
910, following jurisprudence laid down by this Court.

One could hardly fault respondent, though a seasoned lawyer, for relying on petitioner’s
interpretation of the pertinent retirement laws, considering that the latter is tasked to
administer the government’s retirement system. He had the right to assume that GSIS
personnel knew what they were doing.

Since the change in circumstances was through no fault of respondent, he cannot be


prejudiced by the same.1avvphi1 His right to receive monthly pension from the
government cannot be jeopardized by a new interpretation of the law.

GSIS’ argument that respondent has already been enormously benefited under R.A. No.
910 misses the point.

Retirement benefits are a form of reward for an employee’s loyalty and service to the
employer, and are intended to help the employee enjoy the remaining years of his life,
lessening the burden of having to worry about his financial support or upkeep. A
pension partakes of the nature of "retained wages" of the retiree for a dual purpose: to
entice competent people to enter the government service; and to permit them to retire
from the service with relative security, not only for those who have retained their vigor,
but more so for those who have been incapacitated by illness or accident.29

Surely, giving respondent what is due him under the law is not unjust enrichment.

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As to GSIS’ contention that what respondent seeks is conversion of his retirement mode,
which is prohibited under R.A. No. 8291, the Court agrees with the CA that this is not a
case of conversion within the contemplation of the law. The conversion under the law is
one that is voluntary, a choice to be made by the retiree. Here, respondent had no
choice but to look for another law under which to claim his pension benefits because
the DBM had decided not to release the funds needed to continue payment of his
monthly pension.

Respondent himself admitted that, if the DBM had not suspended the payment of his
pension, he would not have sought any other law under which to receive his benefits.
The necessity to "convert" was not a voluntary choice of respondent but a circumstance
forced upon him by the government itself.

Finally, GSIS would like this Court to believe that because it has returned respondent’s
premium contributions, it is now legally impossible for it to comply with the CA’s
directive.

Given the fact that respondent is ineligible to retire under R.A. No. 910, the refund by
GSIS of respondent’s premium payments was erroneous. Hence, GSIS can demand the
return of the erroneous payment or it may opt to deduct the amount earlier received by
respondent from the benefits which he will receive in the future. Considering its
expertise on the matter, GSIS can device a scheme that will facilitate either the
reimbursement or the deduction in the most cost-efficient and beneficial manner.

The foregoing disquisition draws even greater force from subsequent developments.
While this case was pending, the Congress enacted Republic Act No. 10071,30 the
Prosecution Service Act of 2010. On April 8, 2010, it lapsed into law without the
signature of the President,31 pursuant to Article VI, Section 27(1) of the Constitution.32

Section 24 of R.A. No. 10071 provides:

Section 24. Retroactivity. - The benefits mentioned in Sections 14 and 16 hereof shall be
granted to all those who retired prior to the effectivity of this Act.

By virtue of this express provision, respondent is covered by R.A. No. 10071. In addition,
he is now entitled to avail of the benefits provided by Section 23, that "all pension
benefits of retired prosecutors of the National Prosecution Service shall be automatically
increased whenever there is an increase in the salary and allowance of the same position
from which he retired."

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Respondent, as former Chief State Prosecutor, albeit the position has been renamed
"Prosecutor General,"33should enjoy the same retirement benefits as the Presiding
Justice of the CA, pursuant to Section 14 of R.A. No. 10071, to wit:

Section 14. Qualifications, Rank and Appointment of the Prosecutor General. - The
Prosecutor General shall have the same qualifications for appointment, rank, category,
prerogatives, salary grade and salaries, allowances, emoluments, and other privileges,
shall be subject to the same inhibitions and disqualifications, and shall enjoy the same
retirement and other benefits as those of the Presiding Justice of the Court of Appeals
and shall be appointed by the President.34

Furthermore, respondent should also benefit from the application of Section 16 of the
law, which states:

Section 16. Qualifications, Ranks, and Appointments of Prosecutors, and other


Prosecution Officers. – x x x.

Any increase after the approval of this Act in the salaries, allowances or retirement
benefits or any upgrading of the grades or levels thereof of any or all of the Justices or
Judges referred to herein to whom said emoluments are assimilated shall apply to the
corresponding prosecutors.

Lastly, and most importantly, by explicit fiat of R.A. No. 10071, members of the National
Prosecution Service have been granted the retirement benefits under R.A. No. 910, to
wit:

Section 25. Applicability. - All benefits heretofore extended under Republic Act No. 910,
as amended, and all other benefits that may be extended by the way of amendment
thereto shall likewise be given to the prosecutors covered by this Act.

Hence, from the time of the effectivity of R.A. No. 10071, respondent should be entitled
to receive retirement benefits granted under R.A. No. 910.

Consequently, GSIS should compute respondent’s retirement benefits from the time the
same were withheld until April 7, 2010 in accordance with P.D. No. 1146; and his
retirement benefits from April 8, 2010 onwards in accordance with R.A. No. 910.

A final note. The Court is dismayed at the cavalier manner in which GSIS handled
respondent’s claims, keeping respondent in the dark as to the real status of his
retirement benefits for so long. That the agency tasked with administering the benefits
of retired government employees could so unreasonably treat one of its beneficiaries,

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one who faithfully served our people for over 40 years, is appalling. It is well to remind
GSIS of its mandate to promote the efficiency and welfare of the employees of our
government, and to perform its tasks not only with competence and proficiency but
with genuine compassion and concern.

WHEREFORE, the foregoing premises considered, the Decision dated October 28, 2008
and the Resolution dated February 18, 2009 of the Court of Appeals in CA-G.R. SP No.
101811 are hereby AFFIRMED WITH MODIFICATION. Government Service Insurance
System is ORDERED to (1) pay respondent’s retirement benefits in accordance with P.D.
No. 1146, subject to deductions, if any, computed from the time the same were withheld
until April 7, 2010; and (2) pay respondent’s retirement benefits in accordance with R.A.
No. 910, computed from April 8, 2010 onwards.

In order that respondent may not be further deprived of his monthly pension benefits,
this Decision is IMMEDIATELY EXECUTORY.

SO ORDERED.

DEFINITION OF PERMANENT DISABILITY

G.R. No. 154798 October 20, 2005

CRYSTAL SHIPPING, INC., and/or A/S STEIN LINE BERGEN, Petitioners,


vs.
DEO P. NATIVIDAD, Respondent.

QUISUMBING, J.:

For review on certiorari are the Resolutions1 dated July 2, 2002 and August 15, 2002 of
the Court of Appeals in CA-G.R. SP No. 71293 which denied petitioners’ motion for
extension of time to file a petition for certiorari and their motion for reconsideration,
respectively.

Petitioner A/S Stein Line Bergen, through its local manning agent, petitioner Crystal
Shipping, Inc., employed respondent Deo P. Natividad as Chief Mate of M/V Steinfighter
for a period of ten months.2 Within the contract period, respondent complained of
coughing and hoarseness and was brought to shore for examination. He was diagnosed
with "swelling neck and lymphatic glands right side in neck", declared unfit for duty, and
advised to see an ear-nose-throat specialist.3 He was repatriated to Manila on August
18, 1998.

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Shortly after his arrival, respondent was referred to ClinicoMed Inc., the company-
designated clinic, for check-up and later thoroughly examined at the Manila Doctors
Hospital. He was diagnosed with "papillary carcinoma, metastatic to lymphoid tissue
consistent with thyroid primary" and "reactive hyperplasis, lymph node". On September
11, 1998, he underwent a total thyroidectomy with radial neck dissection. After the
operation, respondent developed chest complications and pleural effusion, and had to
undergo a thoracenthesis operation. On the basis of all these, his attending physician
diagnosed him permanently disabled with a grade 9 impediment, with grade 1 as the
most serious.4

A second opinion by Marine Medical Services and Metropolitan Hospital attending


physician, Dr. Robert D. Lim, likewise concurred that respondent was disabled with a
grade 9 impediment.5 Under the care of Dr. Lim, respondent underwent various
treatments, one of which was the radioactive iodine therapy at the Philippine General
Hospital. While his treatment with Dr. Lim was ongoing, respondent sought the opinion
of Dr. Efren R. Vicaldo, who opined that he was totally and permanently disabled for
labor with a grade 1 impediment.6 On February 22, 1999, respondent underwent a
whole body scan which revealed no trace of radio iodine on his body to indicate
metastasis or residual thyroid tissue. The attending physician, Dr. Wilson D. Lim,
confirmed the earlier assessments of disability with a grade 9 impediment.7

All expenses incurred in respondent’s examination and treatments were shouldered by


the petitioners. Respondent was also paid the allowable illness allowances,
commensurate to a grade 9 impediment.

On June 25, 1999, petitioners offered US$13,060 as disability benefits which respondent
rejected. Respondent claimed that he deserves to be paid US$60,000 for a grade 1
impediment. Failing to reach an agreement, respondent filed, with the Regional
Arbitration Branch (RAB), a complaint for disability benefits, illness allowance, damages
and attorney’s fees.

The Labor Arbiter ruled for respondent and ordered petitioners to pay respondent
US$60,000 as disability benefits, ₱100,000 as moral damages, and ten percent of the
total monetary award as attorney’s fees.

On appeal, the National Labor Relations Commission (NLRC) initially reversed the ruling
of the RAB on the ground that findings of the company-designated doctors were
binding, as stipulated in the Philippine Overseas Employment Agency (POEA) Standard
Employment Contract.8 However, upon respondent’s motion for reconsideration, citing
jurisprudence that findings of company-designated doctors are self-serving, the NLRC
affirmed the ruling of the RAB with respect only to the award of disability benefits.

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Petitioners seasonably filed a motion for extension of time to file their petition for
certiorari with the Court of Appeals. On July 2, 2002, the appellate court denied the
motion on the ground that pressure of work is not a compelling reason for the grant of
an extension.

In view of the foregoing, petitioner’s motion for extension is DENIED and the instant
case is DISMISSED.

SO ORDERED.9

Prior to the receipt of the appellate court’s denial, petitioners filed the petition. It was
noted without action in view of the July 2, 2002 Resolution.10 Subsequently, petitioners
moved for reconsideration of the resolution, but it was denied.11

Hence, this appeal by certiorari…

XXXXXXX

On the substantive issue, petitioners assert that the NLRC erred when it said that
findings of company-designated doctors are self-serving. They point out that there were
three doctors who came up with the same findings. They argue that these findings were
more credible than the findings of respondent’s doctor. In addition, petitioners claim
that the award of a grade 1 impediment/disability benefit was wrong considering that
respondent subsequently gained employment as chief mate of another vessel.

In resolving the merits of the case, we find pertinent Section 30 of the POEA
Memorandum Circular No. 55, Series of 1996,21 which provides the schedule of disability
or impediment for injuries suffered and illness contracted. The particular illness of the
respondent is not within those enumerated. But, the same provision supplies us with the
guideline that any item in the schedule classified under grade 1 constitutes total and
permanent disability.

Permanent disability is the inability of a worker to perform his job for more than 120
days, regardless of whether or not he loses the use of any part of his body.22 As gleaned
from the records, respondent was unable to work from August 18, 1998 to February 22,
1999, at the least, or more than 120 days, due to his medical treatment. This clearly
shows that his disability was permanent.

Total disability, on the other hand, means the disablement of an employee to earn
wages in the same kind of 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 attainments could

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do.23 It does not mean absolute helplessness. 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.24

Although the company-designated doctors and respondent’s physician differ in their


assessments of the degree of respondent’s disability, both found that respondent was
unfit for sea-duty due to respondent’s need for regular medical check-ups and
treatment which would not be available if he were at sea. There is no question in our
mind that respondent’s disability was total.

Petitioners tried to contest the above findings by showing that respondent was able to
work again as a chief mate in March 2001.25 Nonetheless, this information does not alter
the fact that as a result of his illness, respondent was unable to work as a chief mate for
almost three years. It is of no consequence that respondent was cured after a couple of
years. The law does not require that the illness should be incurable. What is important is
that he was unable to perform his customary work for more than 120 days which
constitutes permanent total disability.26 An award of a total and permanent disability
benefit would be germane to the purpose of the benefit, which is to help the employee
in making ends meet at the time when he is unable to work.

WHEREFORE, the petition is DENIED for lack of merit. The Resolutions dated July 2, 2002
and August 15, 2002 of the Court of Appeals in CA-G.R. SP No. 71293, as well as the
Resolution dated April 9, 2002 of the National Labor Relations Commission in NLRC NCR
CA No. 23333-2000 are AFFIRMED.

Costs against petitioners.

SO ORDERED.

DISABILITY

G.R. No. 154093 July 8, 2003

GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner,


vs.
LEO L. CADIZ, respondent.

YNARES-SANTIAGO, J.:

Permanent total disability does not mean a state of absolute helplessness, but means
disablement of an employee to earn wages in the same kind of work, or work of similar

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nature, that he was trained for, or any work which a person of similar mentality and
attainment could do.1

Assailed in this petition for review is the decision2 of the Court of Appeals in CA-G.R. SP
No. 63521, which set aside the decision of the Employees’ Compensation Commission
and granted respondent’s claim for permanent total disability compensation benefits.

The undisputed facts are as follows: respondent Leo L. Cadiz was appointed as a
Provincial Guard of Negros Oriental on July 1, 1968. On March 16, 1974, he entered the
police service and was promoted to several ranks until he became a Police Major. In
1991, he was absorbed by the Philippine National Police (PNP), with a rank of Police
Chief Inspector. On July 17, 1992, respondent’s rank was adjusted to Police Chief
Superintendent, the position he held until his retirement on March 19, 1999 at the age
of 55.3

The medical records of respondent revealed that on October 11, 1996, he suffered a
heart attack and was hospitalized at the San Carlos Planters Hospital, San Carlos City. He
was transferred to the Siliman University Medical Center where he was diagnosed to be
suffering from "AF with CHF Class 1-E T/A Sec. to Cardio embolic Sec. to AF, Chronic
CAD,"4 a heart ailment. Thereafter, respondent was also admitted at the Negros Oriental
Provincial Hospital for chest pain, palpitation and abnormal beats – "HP..., AF, CHF Class
I; Hypercholesterolemia."5Consequently, he applied for early retirement due to "an
ailment causing [paralysis of the] left hand and [slurred] speech…rendering him unfit to
discharge further his duties and responsibilities as a police officer."6 Dr. Silahis Rosario, a
cardiologist and attending physician of respondent, testified before the National Police
Commission that the latter’s ailment is unstable angina and chronic atriol fibrillation,
which means a chronic irregularity of the heart causing a congestive heart failure.7 After
its own examination of respondent, the Medical and Dental Service, PNP, declared him
"UNFIT FOR POLICE SERVICE".8 Hence, on March 19, 1999, he was retired from service
and granted permanent total disability benefits.9

Subsequently, respondent filed a disability claim with the GSIS, attaching to his
application his service record and PNP General Order No. 641, stating that respondent
retired from the PNP due to a permanent total disability.10 On November 25, 1999, Dr.
Gervillana B. Estrada, Medical Officer of GSIS, Dumaguete City, approved the claim and
granted respondent permanent total disability benefits starting March 19, 1999, and
temporary total disability benefits from October 12, 1996 to November 22, 1996.11

The Medical Service Group of GSIS, Pasay City, however, directed Dr. Estrada to revise
her recommendation, thus – "[k]indly revise your medical recommendation based on
our criteria for granting of disability. Based on your physical examination (8/23/99) done

Page 15 of 38
the degree of claimant’s disability, does not satisfy the criteria for PTD. We are returning
these claim for re-evaluation under PD 626."12

On January 29, 2000, Dr. Estrada modified her recommendation by retaining


respondent’s temporary total disability benefits from October 12, 1996 to November 22,
1996, but downgrading the permanent total disability benefits to compensation
equivalent to 8 months permanent partial disability benefits from March 19,
1999.13 Respondent moved for reconsideration of the evaluation but the same was
denied.

On appeal by respondent, the Employees’ Compensation Commission (ECC) affirmed


the findings of the GSIS. Hence, respondent filed a petition with the Court of Appeals
which, on June 21, 2002, rendered a decision setting aside the decision of the ECC and
granting respondent’s claim for permanent total disability. The dispositive portion
thereof reads:

WHEREFORE, the petition for review is GRANTED. The challenged decisions of the
ECC and the GSIS are ANNULLED and SET ASIDE, and another [one is] entered
declaring the petitioner to be suffering from permanent total disability.
Respondent ECC is accordingly ordered to award the petitioner the full benefits
corresponding to his permanent total disability. Without costs.

SO ORDERED.14

On September 3, 2002, GSIS, as the agency charged with the management and
administration of the trust fund of the ECC, filed the instant petition.

Is respondent entitled to permanent total disability benefits?

We rule in the affirmative. In denying respondent’s claim for permanent total disability
benefits, the ECC held:

Based on the ECC Schedule of Compensation, appellant was already awarded the
maximum benefits commensurate to the degree of his disability. Moreover, the
primary criterion set for permanent total disability in this case was not met, that
is: permanent paralysis of two limbs; complete loss of sight of both eyes; brain
injury resulting in incurable imbecility; and loss of two limbs at or above the ankle
or wrist.

Page 16 of 38
Since appellant was already awarded the maximum benefits prevailing at the time
of his compulsory retirement, he is no longer entitled to additional benefits under
PD 626, as amended.15

Clearly, the ECC did not state its reason for declaring that the benefits awarded by the
GSIS to respondent are those that are commensurate to the degree of his disability. The
fact that the latter did not lose the use of any part of his body does not justify the denial
of his claim for permanent total disability. In Government Service Insurance System v.
Court of Appeals,16 it was held that while permanent total disability invariably results in
an employee’s loss of work or inability to perform his usual work, permanent partial
disability occurs when an employee loses the use of any particular anatomical part of his
body which disables him to continue with his former work. Stated otherwise, the test of
whether or not an employee suffers from permanent total disability is the capacity of
the employee to continue performing his work notwithstanding the disability he
incurred. If by reason of the injury or sickness he sustained, the employee is unable to
perform his customary job for more than 120 days and he does not come within the
coverage of Rule X of the Amended Rules on Employees Compensability (which, in a
more detailed manner, describes what constitutes temporary total disability), then the
said employee undoubtedly suffers from a permanent total disability regardless of
whether or not he loses the use of any part of his body. Permanent total disability does
not mean a state of absolute helplessness, but 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 any work which a person of similar mentality and attainment could do.17

In the case at bar, respondent’s entitlement to permanent total disability was


established by his medical records and by the investigation of the very agency he
worked for, the PNP, which found him "UNFIT FOR POLICE SERVICE".18Even the initial
findings of Dr. Gervillana B. Estrada, Medical Officer of the GSIS, Dumaguete City
evinced that respondent is really qualified for permanent total disability benefits. Most
of all, the decision of the PNP to retire him at the age of 55 for being unfit for police
service is a clear indication that his heart ailment rendered him incapable of effectively
and competently performing his job as a Police Chief Superintendent without serious
discomfort or pain and without material injury or danger to his life.19 In a number of
cases, 20 it was ruled that the early retirement of an employee due to a work-related
ailment, as in the case at bar, proves that he was really disabled totally to further
perform his assigned task, and to deny permanent total disability benefits when he was
forced to retire would render inutile and meaningless the social justice precept
guaranteed by the Constitution.

Page 17 of 38
The case of Tria v. Employees Compensation Commission,21 where we denied a claim for
conversion of disability benefits, is not applicable to the instant case. The claim therein,
which was filed 4 years after the employee’s retirement, refers to a claim for conversion
of a previously granted disability benefit from permanent partial to permanent total on
the ground of an alleged recurring illness. The case at bar, however, neither concerns a
recurring illness previously compensated, nor a claim for additional/conversion of
disability benefits, but involves a review of the ECC decision which classified
respondent’s early-retirement-causing disability as permanent partial instead of
permanent total. As to the decisions22 of the Court of Appeals cited by petitioner as
authorities, it must be stressed that judicial decisions which form part of our legal
system are only the decisions of the Supreme Court. While rulings of the Court of
Appeals may serve as precedents for lower courts, they only apply to points of law not
covered by any Supreme Court decision.23 This is not, however, the case here,
considering that the legal issue presented is already laid to rest by settled jurisprudence.
Significantly, one of the Court of Appeals’ cases cited by petitioner – Ijares v. Employees
Compensation Commission (CA-G.R. SP No. 26910, April 13, 1992) was reversed by this
Court on August 26, 1999, in G.R. No. 105854. There, we held that the early retirement of
an employee at the age of 60 by reason of a work-related illness justifies the award of
permanent total disability benefits.

WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in CA-
G.R. SP No. 63521, declaring respondent Leo L. Cadiz to be suffering from a permanent
total disability and ordering the Employees’ Compensation Commission to award him
the full benefits corresponding to his disability, is AFFIRMED in toto.

SO ORDERED.

G.R. No. 96844 January 23, 1992

REMUS A. DIOPENES, petitioner,


vs.
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) (Development Bank of the
Philippines) and the EMPLOYEES' COMPENSATION COMMISSION (ECC), respondents.

CRUZ, J.:

Two years after his retirement, Remus A. Diopenes filed an application for the
conversion of his compensation benefits from permanent partial disability to permanent
total disability. The application was rejected by the Government Service Insurance
System, which held that it had no more jurisdiction over the matter because the
applicant was no longer in the service. 1 On appeal, this decision was affirmed by the

Page 18 of 38
Employees' Compensation Commission on the ground that the alleged permanent total
disability was not service-connected. 2 Dissatisfied, the petitioner has come to this Court
for relief.

Diopenes joined the government service in 1959 as a clerk and eventually rose to Branch
Attorney of the Development Bank of the Philippines in Catarman, Northern Samar. On
April 5, 1978, he suffered a stroke and was found to have sustained a cardio-vascular
accident (CVA) with light hemiparesis. He was hospitalized from May 8 to June 15, 1978,
and went on sick leave of absence from February 28 to March 1, 1979.

As a result of the CVA, the GSIS granted the petitioner compensation for temporary
total disability for 240 days from May 1 to December 26, 1978, 3 and permanent partial
disability for 19 months beginning January 1, 1986, until July 1, 1987. 4

On December 28, 1985, the petitioner retired.

When on November 23, 1986, he requested the change in his compensation benefits, he
was required by the GSIS to undergo not only one but three medical examinations.

The first examination was conducted by Dr. Victor L. Cortez, Chief of the Gov. Valeriano
M. Gatuslao Memorial Hospital, who diagnosed the petitioner's ailment as "post CVA
with residual left hemiplegia," referring to the earlier stroke in 1978. The medical report
described as total and permanent the patient's "left hemiparesis (which) has persisted
since then up to the present." 5

The second examination was conducted by Dr. Felix Jardenico, GSIS medical officer for
its branches in Iloilo and Bacolod, who found that the left side of the petitioner's body
had been paralyzed since 1978 and recommended that "the claim of Atty. Remus A.
Diopenes, former Branch Attorney, DBP, Catarman Branch, Northern Samar, be given
preferential and favorable consideration and the action thereat be done soonest." 6

The third examination was conducted by Dr. Lucila Lazaro, resident physician of the
Corazon Locsin Montelibano Memorial Hospital, who reported that the petitioner
started his illness as early as "April 1978 as high blood pressure with left hemiplegia
which persisted up to the present" and said that the degree of disability was "total and
permanent." 7

Despite these reports, the GSIS denied the petitioner's request, holding that since the
hemiplegia was contracted after his retirement, he was not entitled to the benefits
claimed. Echoing this finding, the ECC stressed that the petitioner's "hemiplegia occured

Page 19 of 38
two years after he retired from the service" and thus could not be considered service-
connected under the Employees' Compensation Law.

There is no evidence that the hemiplegia occurred two years after the petitioner's
retirement, as concluded by the respondents. On the contrary, the three doctors who
examined the petitioner were one in the finding that the disability began in 1978 and
continued even after the petitioner's retirement in 1985. Significantly, one of these
doctors was the medical officer of the GSIS itself in Bacolod and Iloilo.

All of these doctors actually examined the petitioner. By contrast, the conclusion of the
GSIS medical staff in Manila was based on an arm-chair evaluation by doctors who had
not personally examined the petitioner.

Even if the Petitioner did suffer a second attack after his retirement, as the respondents
contend, this supervening event would not defeat his claim. The reason is that the
second stroke was only the consequence of the first stroke which he suffered in 1978,
when he was still in the service. There is no question that that first stroke was service-
connected as categorically admitted in the Employees Report made by the GSIS thus:

Immediately prior to his CVA attack on April 8, 1978, employee was


supervising court cases of DBP, he being on special detail at Catarman
DBP, Northern Samar, from his regular position as Assistant Branch
Attorney, DBP Dumaguete Branch. He was in his office preparing pleadings
to be filed in court in order to meet the deadline set by the Rules of Court
in the numerous court collection cases of the DBP Catarman, which prior
to and during the attack of his CVA, employee was working overtime to
beat the prescriptive period of filing same in court; the tension thereof
triggered his CVA on April 8, 1978. 8

The following ruling in Mondejar v. Workmen's Compensation Commission 9 is


applicable to the case at bar:

It is also noteworthy as stated in the referee's decision that because of his


illnesses brought about by his work and his first attack in 1972, petitioner's
condition had worsened to such an extent that he was constrained to
retire at age 60 on August 13, 1974, soon after which he suffered in
January, 1973 his second and near-fatal attack which "reduced him to a
complete wreck" — in the commission's own language. This second attack
was but the consequence of the illnesses which he suffered in the course
of his employment. It is patent, therefore, that contrary to the
commission's speculation, these illnesses were the "precipitating factors

Page 20 of 38
that triggered the stroke" which were "attributable to his employment"
and consequently petitioner's claim to compensation under the Act must
be upheld, in accordance with the law and settled jurisprudence.

Furthermore, it should be noted that the GSIS had earlier granted the petitioner
temporary total disability benefits for 240 days and permanent partial disability for
nineteen months, thus in effect acknowledging that he was suffering from permanent
total disability. Under Section 192 of the Labor Code, "(1) Temporary total disability
lasting continuously for more than one hundred twenty days" shall be deemed "total
and permanent."

We agree with the Solicitor General that the petitioner's request should not have been
denied by the respondents. Their posture cannot be sustained against the
uncontroverted medical evidence that the petitioner's incipient permanent and total
disability was incurred during his incumbency in the government service and merely
continued and aggravated after his retirement.

The GSIS and the ECC should be commended for their vigilance against unjustified
claims that will only deplete the funds intended to be disbursed for the benefit only of
deserving disabled employees. Nevertheless, we should caution against a too-strict
interpretation of the rules lest it result in the withholding of full assistance from those
whose capabilities have been diminished if not completely impaired as a consequence
of their service in the government. A humanitarian impulse, dictated by no less than the
Constitution itself under the social justice policy, calls for a liberal and sympathetic
approach to the legitimate appeals of disabled public servants like the herein petitioner.
Compassion for them is not a dole but a right.

WHEREFORE, the petition is GRANTED. The challenged decisions of the Government


Service Insurance System and the Employees' Compensation Commission are SET ASIDE
and petitioner Remus A. Diopenes is declared to be entitled to permanent total
disability benefits under Article 192 of the Labor Code and shall be compensated
accordingly. It is so ordered.

RETIREMENT BENEFITS – ENTITLEMENT OF LEAVE CREDITS – NATURE OF GSIS FUNDS

A.M. No. P-95-1167 February 9, 2010

CARMELITA LLEDO, Complainant,


vs.
ATTY. CESAR V. LLEDO, Branch Clerk of Court, Regional Trial Court, Branch 94, Quezon
City, Respondent.

Page 21 of 38
NACHURA, J.:

May a government employee, dismissed from the service for cause, be allowed to
recover the personal contributions he paid to the Government Service Insurance System
(GSIS)?

This is the question that confronts this Court in the instant case, the factual antecedents
of which are as follows:

On December 21, 1998, this Court promulgated a Decision1 in the above-captioned


case, dismissing from the service Atty. Cesar V. Lledo, former branch clerk of court of the
Regional Trial Court of Quezon City, Branch 94. Cesar’s wife, Carmelita, had filed an
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 he also begot children. He failed to provide support for his
family. The investigating judge recommended Cesar’s dismissal from the service. The
Office of the Court Administrator (OCA) adopted the recommendation.

The Court, in its December 21, 1998 Decision, disposed of the case in this wise:

WHEREFORE, Cesar V. Lledo, branch clerk of court of RTC, Branch 94, Quezon City, 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 Section 1 of Rule 139-B of the
Rules of Court.

SO ORDERED.2

In a letter3 dated January 15, 1999, Carmelita and her children wrote to then Chief
Justice Hilario G. Davide, Jr., begging for humane consideration and asking that part of
the money due Cesar be applied to the payment of the arrearages of their amortized
house and lot then facing foreclosure by the GSIS. They averred that Cesar’s
abandonment had been painful enough; and to lose their home of 26 years would be
even more painful and traumatic for the children.

The Court directed the OCA to comment. The OCA recommended that the Court’s
December 21, 1998 Decision be reconsidered insofar as the forfeiture of Cesar’s leave

Page 22 of 38
credits was concerned, underscoring, however, that said benefits would only be released
to Carmelita and her children.4

In a Resolution dated August 3, 1999,5 the Court resolved to deny the motion for
reconsideration for lack of merit.

On April 3, 2006, Cesar L. Lledo, Jr., Cesar’s son, wrote a letter6 to then Chief Justice
Artemio V. Panganiban. He related that his father had been bedridden after suffering a
severe stroke and acute renal failure. He had been abandoned by his mistress and had
been under Cesar Jr.’s care since 2001. The latter appealed to the Court to reconsider its
December 21, 1998 Decision, specifically the forfeiture of leave credits, which money
would be used to pay for his father’s medical expenses. Cesar Jr. asked the Court for
retroactive application of the Court’s ruling subsequent to his father’s dismissal, wherein
the Court ruled that despite being dismissed from the service, government employees
are entitled to the monetary equivalent of their leave credits since these were earned
prior to dismissal.

Treating the letter as a motion for reconsideration, the Court, on May 3, 2006, granted
the same, specifically on the forfeiture of accrued leave credits.7

Cesar Jr. wrote the Court again on November 27, 2006, expressing his gratitude for the
Court’s consideration of his request for his father’s leave credits. He again asked for
judicial clemency in connection with his father’s claim for refund of the latter’s personal
contributions to GSIS.8

The Court directed the GSIS to comment, within 10 days from notice, on Cesar Jr.’s
letter.9 For failing to file the required Comment, the Court, in a Resolution dated
December 11, 2007,10 required the GSIS to show cause why it should not be held in
contempt for failure to comply with the Resolution directing it to file its Comment. The
Court reiterated its December 11, 2007 Resolution on June 17, 2008, and directed
compliance.

In a letter11 dated April 16, 2009, Jason C. Teng, Regional Manager of the GSIS Quezon
City Regional Office, explained that a request for a refund of retirement premiums is
disallowed. He explained:

The rate of contribution for both government and personal shares of retirement
premiums was actuarially computed to allow the GSIS to generate enough investment
returns to be able to pay off future claims. During actuarial computation, the expected
demographics considered the percentages of different types of future claims (and non-
claims). As such, if those that were expected to have no future claim (e.g. those with

Page 23 of 38
forfeited retirement benefits) were suddenly allowed to receive claims for payment of
benefits, this would have a negative impact on the financial viability of the
GSIS.1avvphi1

Even as the Court noted the letter in its June 30, 2009 Resolution,12 it further required
the Board of Directors of the GSIS (GSIS Board) to file a separate Comment within 10
days from notice.

In its Comment,13 the GSIS Board said that Cesar is not entitled to the refund of his
personal contributions of the retirement premiums because "it is the policy of the GSIS
that an employee/member who had been dismissed from the service with forfeiture of
retirement benefits cannot recover the retirement premiums he has paid unless the
dismissal provides otherwise." The GSIS Board pointed out that the Court’s Decision did
not provide that Cesar is entitled to a refund of his retirement premiums.

There is no gainsaying that dismissal from the service carries with it the forfeiture of
retirement benefits. Under the Uniform Rules in Administrative Cases in the Civil Service,
it is provided that:14

Section 58. Administrative Disabilities Inherent in Certain Penalties.

a. The penalty of dismissal shall carry with it that of cancellation of eligibility, forfeiture
of retirement benefits, and the perpetual disqualification for reemployment in the
government service, unless otherwise provided in the decision.

However, in the instant case, Cesar Jr. seeks only the return of his father’s personal
contributions to the GSIS. He is not claiming any of the benefits that Cesar would have
been entitled to had he not been dismissed from the service, such as retirement
benefits.

To determine the propriety of Cesar Jr.’s request, a reexamination of the laws governing
the GSIS is in order.

The GSIS was created in 1936 by Commonwealth Act No. 186. It was intended to
"promote the efficiency and welfare of the employees of the Government of the
Philippines" and to replace the pension systems in existence at that time.15

Section 9 of Commonwealth Act No. 186 states:

Section 9. Effect of dismissal or separation from service. — Upon dismissal for cause of a
member of the System, the benefits under his membership policy shall be automatically

Page 24 of 38
forfeited to the System, except one-half of the cash or surrender value, which amount
shall be paid to such member, or in case of death, to his beneficiary. In other cases of
separation before maturity of a policy, the Government contributions shall cease, and
the insured member shall have the following options: (a) to collect the cash surrender
value of the policy; or (b) to continue the policy by paying the full premiums thereof; or
(c) to obtain a paid up or extended term insurance in such amount or period,
respectively, as the paid premiums may warrant, in accordance with the conditions
contained in said policy; o[r] (d) to avail himself of such other options as may be
provided in the policy.16

In 1951, Commonwealth Act No. 186 was amended by Republic Act (R.A.) No. 660. R.A.
No. 660 amended Sections 2(a), (d), and (f); 4; 5; 6; 7; 8; 10; 11; 12; 13; 14; 15; and 16 of
Commonwealth Act No. 186. R.A. No. 660 likewise added new provisions to the earlier
law, one of which reads:

Section 8. The following new sections are hereby inserted in Commonwealth Act
Numbered One hundred and eighty-six:

II. — Retirement Insurance Benefit

"Section 11. (a) Amount of annuity. — Upon retirement a member shall be automatically
entitled to a life annuity payable monthly for at least five years and thereafter as long as
he live. (sic) The amount of the monthly annuity at the age of fifty-seven years shall be
twenty pesos, plus, for each year of service rendered after the approval of this Act, one
and six-tenths per centum of the average monthly salary received by him during the last
five years of service, plus, for each year of service rendered prior to the approval of this
Act, if said service was at least seven years, one and two-tenths per centum of said
average monthly salary: Provided, That this amount shall be adjusted actuarially if
retirement be at an age other than fifty-seven years: Provided, further, That the
maximum amount of monthly annuity at age fifty-seven shall not in any case exceed
two-thirds of said average monthly salary or five hundred pesos, whichever is the
smaller amount: And provided, finally, That retirement benefit shall be paid not earlier
than one year after the approval of this Act. In lieu of this annuity, he may prior to his
retirement elect one of the following equivalent benefits:

"(1) Monthly annuity during his lifetime;

"(2) Monthly annuity during the joint-lives of the employee and his wife or
other designated beneficiary, which annuity, however, shall be reduced
upon the death of either to one-half and be paid to the survivor;

Page 25 of 38
"(3) For those who are at least sixty-five years of age, lump sum payment
of present value of annuity for first five years and future annuity to be paid
monthly; or

"(4) Such other benefit as may be approved by the System.

"(b) Survivors benefit. — Upon death before he becomes eligible for retirement,
his beneficiaries as recorded in the application of retirement annuity filed with
the System shall be paid his own premiums with interest of three per centum per
annum, compounded monthly. If on his death he is eligible for retirement, then
the automatic retirement annuity or the annuity chosen by him previously shall
be paid accordingly.

"(c) Disability benefit. — If he becomes permanently and totally disabled and his
services are no longer desirable, he shall be discharged and paid his own
contributions with interest of three per centum per annum, compounded
monthly, if he has served less than five years; if he has served at least five years
but less than fifteen years, he shall be paid also the corresponding employer's
premiums, without interest, described in subsection (a) of section five hereof; and
if he has served at least fifteen years he shall be retired and be entitled to the
benefit provided under subsection (a) of this section.

"(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 three per
centum per annum, compounded monthly."17

Thus, Section 11(d) of R.A. No. 660 should be deemed to have amended Commonwealth
Act No. 186.

In 1977, then President Ferdinand Marcos issued Presidential Decree (P.D.) No. 1146, an
act "Amending, Expanding, Increasing and Integrating the Social Security and Insurance
Benefits of Government Employees and Facilitating the Payment thereof under
Commonwealth Act No. 186, as amended, and for other purposes."

Section 4 of P.D. No. 1146 reads:

Section 4. Effect of Separation from the Service. A member shall continue to be a


member, notwithstanding his separation from the service and, unless the terms of his
separation provide otherwise, he shall be entitled to whatever benefits which shall have
accrued or been earned at the time of his separation in the event of any contingency
compensable under this Act.

Page 26 of 38
There is no provision in P.D. No. 1146 dealing specifically with GSIS members dismissed
from the service for cause, or their entitlement to the premiums they have paid.

Subsequently, R.A. No. 8291 was enacted in 1997, and it provides:

Section 1. Presidential Decree No. 1146, as amended, otherwise known as the "Revised
Government Service Insurance Act of 1977", is hereby amended to read as follows:

xxxx

SEC. 4. Effect of Separation from the Service. – A member separated from the service
shall continue to be a member, and shall be entitled to whatever benefits he has
qualified to in the event of any contingency compensable under this Act.

It is noteworthy that none of the subsequent laws expressly repealed Section 9 of


Commonwealth Act No. 186, as amended. In fact, none of the subsequent laws expressly
repealed the earlier laws. Be that as it may, we must still resolve the issue of whether the
same has been impliedly repealed.

We answer in the negative.

As a general rule, repeals by implication are not favored. When statutes are in pari
materia, they should be construed together. A law cannot be deemed repealed unless it
is clearly manifested that the legislature so intended it.18

The repealing clause of P.D. No. 1146 reads:

Section 48. Repealing Clause. All laws or parts of law specifically inconsistent herewith
shall be considered amended or repealed accordingly.

On the other hand R.A. No. 8291’s repealing clause states:

SEC. 3. Repealing Clause. – All laws and any other law or parts of law specifically
inconsistent herewith are hereby repealed or modified accordingly: Provided, That the
rights under existing laws, rules and regulations vested upon or acquired by an
employee who is already in the service as of the effectivity of this Act shall remain in
force and effect: Provided, further, That subsequent to the effectivity of this Act, a new
employee or an employee who has previously retired or separated and is reemployed in
the service shall be covered by the provisions of this Act.

This Court has previously determined the nature of similarly-worded repealing clauses.
Thus:
Page 27 of 38
The holding of this Court in Mecano vs. COA is instructive: "The question that should be
asked is: What is the nature of this repealing clause? It is certainly not an express
repealing clause because it fails to identify or designate the act or acts that are intended
to be repealed. Rather, it is an example of a general repealing provision, as stated in
Opinion No. 73, s. 1991. It is a clause which predicates the intended repeal under the
condition that a substantial conflict must be found in existing and prior acts. The failure
to add a specific repealing clause indicates that the intent was not to repeal any existing
law, unless an irreconcilable inconsistency and repugnancy exist in the terms of the new
and old laws. This latter situation falls under the category of an implied repeal."19

There are two accepted instances of implied repeal. The first takes place when the
provisions in the two acts on the same subject matter are irreconcilably contradictory, in
which case, the later act, to the extent of the conflict, constitutes an implied repeal of
the earlier one. The second occurs when the later act covers the whole subject of the
earlier one and is clearly intended as a substitute; thus, it will operate to repeal the
earlier law.20

Addressing the second instance, we pose the question: were the later enactments
intended to substitute the earlier ones? We hold that there was no such substitution.

P.D. No. 1146 was not intended to replace Commonwealth Act No. 186, as amended by
R.A. No. 660, but "to expand and improve the social security and insurance programs
administered by the Government Service Insurance System."21 Thus, as the above-
quoted repealing clause indicates, only the laws or parts of law specifically inconsistent
with P.D. No. 1146 were considered amended or repealed.22

In fact, Section 34 of P.D. No. 1146 mandates that the GSIS, as created and established
under Commonwealth Act No. 186, shall implement the provisions of that law.
Moreover, Section 13 states:

Section 13. Retirement Option. Employees who are in the government service upon the
effectivity of this Act shall, at the time of their retirement, have the option to retire under
this Act or under Commonwealth Act No. 186, as previously amended.

Accordingly, Commonwealth Act No. 186, as amended, had not been abrogated by P.D.
No. 1146.

Meanwhile, R.A. No. 8291, although enacted to amend P.D. No. 1146, did not expressly
repeal Commonwealth Act No. 186.

Page 28 of 38
Under the first instance of implied repeal, we are guided by the principle that in order to
effect a repeal by implication, the later statute must be so irreconcilably inconsistent
with and repugnant to the existing law that they cannot be reconciled and made to
stand together. The clearest case of inconsistency must be made before the inference of
implied repeal can be drawn, for inconsistency is never presumed.23

We now examine the effect of the later statutes on the provision specifically dealing
with employees dismissed for cause.

We again quote Section 11(d) of Commonwealth Act No. 186, as amended:

(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 three per centum per
annum, compounded monthly.

Compare this with Section 4 of P.D. No. 1146, to wit:

Section 4. Effect of Separation from the Service. A member shall continue to be a


member, notwithstanding his separation from the service and, unless the terms of his
separation provide otherwise, he shall be entitled to whatever benefits which shall have
accrued or been earned at the time of his separation in the event of any contingency
compensable under this Act.

and Section 1 of R.A. No. 8291, which amended Section 4 of P.D. No. 1146 and the law
in force at the time of Cesar’s dismissal from the service:

SEC. 4. Effect of Separation from the Service. – A member separated from the service
shall continue to be a member, and shall be entitled to whatever benefits he has
qualified to in the event of any contingency compensable under this Act.

There is no manifest inconsistency between Section 11(d) of Commonwealth Act No.


186, as amended, and Section 4 of R.A. No. 8291. The latter provision is a general
statement intended to cover members separated from the service whether the
separation is voluntary or involuntary, and whether the same was for cause or not.
Moreover, the same deals only with the benefits the member is entitled to at the time of
separation.

For the latter law to be deemed as having repealed the earlier law, it is necessary to
show that the statutes or statutory provisions deal with the same subject matter and
that the latter be inconsistent with the former. There must be a showing of repugnance,
clear and convincing in character. The language used in the later statute must be such as

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to render it irreconcilable with what had been formerly enacted. An inconsistency that
falls short of that standard does not suffice.24

As mentioned earlier, neither P.D. No. 1146 nor R.A. No. 8291 contains any provision
specifically dealing with employees dismissed for cause and the status of their personal
contributions. Thus, there is no inconsistency between Section 11(d) of Commonwealth
Act No. 186, as amended, and Section 4 of P.D. No. 1146, and, subsequently, R.A. No.
8291. The inevitable conclusion then is that Section 11(d) of Commonwealth Act No.
186, as amended, continues to govern cases of employees dismissed for cause and their
claims for the return of their personal contributions.

Finally, it should be remembered that the GSIS laws are in the nature of social
legislation, to be liberally construed in favor of the government employees.25 The money
subject of the instant request consists of personal contributions made by the employee,
premiums paid in anticipation of benefits expected upon retirement. The occurrence of
a 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 three per centum per annum, compounded
monthly.

WHEREFORE, the foregoing premises considered, the Government Service Insurance


System is hereby DIRECTED to return to Atty. Cesar Lledo his own premiums and
voluntary deposits, if any, plus interest of three per centum per annum, compounded
monthly.

SO ORDERED.

LIMITED PORTABILITY SCHEME

G.R. No. 141707 May 7, 2002

CAYO G. GAMOGAMO, petitioner,


vs.
PNOC SHIPPING AND TRANSPORT CORP., respondent.

DAVIDE, JR., C.J.:

Page 30 of 38
The pivotal issue raised in the petition in this case is whether, for the purpose of
computing an employee’s retirement pay, prior service rendered in a government
agency can be tacked in and added to the creditable service later acquired in a
government-owned and controlled corporation without original charter.

On 23 January 1963, Petitioner Cayo F. Gamogamo was first employed with the
Department of Health (DOH) as Dental Aide. On 22 February 1967, he was promoted to
the position of Dentist 1. He remained employed at the DOH for fourteen years until he
resigned on 2 November 1977.1

On 9 November 1977, petitioner was hired as company dentist by Luzon Stevedoring


Corporation (LUSTEVECO), a private domestic corporation.2 Subsequently, respondent
PNOC Shipping and Transport Corporation (hereafter Respondent) acquired and took
over the shipping business of LUSTEVECO, and on 1 August 1979, petitioner was among
those who opted to be absorbed by the Respondent.3 Thus, he continued to work as
company dentist. In a letter dated 1 August 1979, Respondent assumed without
interruption petitioner’s service credits with LUSTEVECO,4 but it did not make reference
to nor assumed petitioner’s service credits with the DOH.

On 10 June 1993, then President Fidel V. Ramos issued a memorandum5 approving the
privatization of PNOC subsidiaries, including Respondent, pursuant to the provisions of
Section III(B) of the Guidelines and Regulations to implement Executive Order No.
37.6 Accordingly, Respondent implemented a Manpower Reduction Program to govern
employees whose respective positions have been classified as redundant as a result of
Respondent’s decrease in operations and the downsizing of the organization due to lay-
up and sale of its vessels pursuant to its direction towards privatization.7 Under this
program, retrenched employees shall receive a two-month pay for every year of service.

Sometime in 1995, petitioner requested to be included in the next retrenchment


schedule. However, his request was turned down for the following reasons:8

1. As a company dentist he was holding a permanent position;

2. He was already due for mandatory retirement in April 1995 under his
retirement plan (first day of the month following his 60th birthday which was on 7
March 1995).

Eventually, petitioner retired after serving the Respondent and LUSTEVECO for 17 years
and 4 months upon reaching his 60th birthday, on 1 April 1995. He received a retirement
pay of P512,524.15,9 which is equivalent to one month pay for every year of service and
other benefits.

Page 31 of 38
On 30 August 1995, Admiral Carlito Y. Cunanan, Repondent’s president, died of Dengue
Fever and was forthwith replaced by Dr. Nemesio E. Prudente who assumed office in
December 1995. The new president implemented significant cost-saving measures. In
1996, after petitioner’s retirement, the cases of Dr. Rogelio T. Buena (company doctor)
and Mrs. Luz C. Reyes (telephone operator), who were holding permanent/non-
redundant positions but were willing to be retrenched under the program were brought
to the attention of the new president who ordered that a study on the cost-effect of the
retrenchment of these employees be conducted. After a thorough study, Respondent’s
Board of Directors recommended the approval of the retrenchment. These two
employees were retrenched and paid a 2-month separation pay for every year of service
under Respondent’s Manpower Reduction Program.10

In view of the action taken by Respondent in the retrenchment of Dr. Buena and Mrs.
Reyes, petitioner filed a complaint at the National Labor Relations Commission (NLRC)
for the full payment of his retirement benefits. Petitioner argued that his service with the
DOH should have been included in the computation of his years of service. Hence, with
an accumulated service of 32 years he should have been paid a two-month pay for
every year of service per the retirement plan and thus should have received at
least P1,833,920.00.

The Labor Arbiter dismissed petitioner’s complaint.11 On appeal, however, the NLRC
reversed the decision of the Labor Arbiter. In its decision12 of 28 November 1997, the
NLRC ruled:

WHEREFORE, the Decision of the Labor Arbiter dated May 30, 1997 is hereby SET
ASIDE and another judgment is hereby rendered to wit:

(1) the government service of the complainant with the Department of


Health numbering fourteen (14) years is hereby considered creditable
service for purposes of computing his retirement benefits;

(2) crediting his fourteen (14) years service with the Department of Health,
together with his nearly eighteen (18) years of service with the respondent,
complainant therefore has almost thirty-two (32) years service upon which
his retirement benefits would be computed or based on;

(3) complainant is entitled to the full payment of his retirement benefits


pursuant to the respondent’s Retirement Law or the retrenchment
program (Manpower Reduction Program). In any case, he is entitled to two
(2) months retirement/separation pay for every year of service.

Page 32 of 38
(4) all other claims are DISMISSED.

SO ORDERED.

Respondent filed a motion for reconsideration but it was denied.13

Unsatisfied with the reversal, Respondent filed with the Court of Appeals a special civil
action for certiorari which was docketed as CA-G.R. SP No. 51152. In its decision14 of 8
November 1999, the Court of Appeals set aside the NLRC judgment and decreed:

WHEREFORE, the petition is hereby GIVEN DUE COURSE and the writ prayed for
GRANTED. Consequently, the Decision and Resolution of the National Labor
Relations Commission (Second Division) dated November 28, 1997 and May 15,
1998, respectively, are hereby SET ASIDE AND NULLIFIED, without prejudice to
private respondent Cayo F. Gamo-gamo’s recovery of whatever benefits he may
have been entitled to receive by reason of his fourteen (14) years of service with
the Department of Health.

No pronouncement as to costs.

His motion for reconsideration having been denied by the Court of Appeals,15 petitioner
filed with us the petition in the case at bar. Petitioner contends that: (1) his years of
service with the DOH must be considered as creditable service for the purpose of
computing his retirement pay; and (2) he was discriminated against in the application of
the Manpower Reduction Program.16

Petitioner maintains that his government service with the DOH should be recognized
and tacked in to his length of service with Respondent because LUSTEVECO, which was
later bought by Respondent, and Respondent itself, were government-owned and
controlled corporations and were, therefore, under the Civil Service Law. Prior to the
separation of Respondent from the Civil Service by virtue of the 1987 Constitution,
petitioner’s length of service was considered continuous. The effectivity of the 1987
Constitution did not interrupt his continuity of service. He claims that he is supported by
the opinion of 18 May 1993 of the Civil Service Commission in the case of Petron
Corporation, where the Commission allegedly opined:

… that all government services rendered by employees of the Petron prior to


1987 Constitution are considered creditable services for purposes of computation
of retirement benefits. This must necessarily be so considering that in the event
that Petron would consider only those services of an employee with Petron when
it was excluded from the civil service coverage (that is after the 1987

Page 33 of 38
Constitution), it would render nugatory his government agencies prior to his
transfer to Petron. Hence, Petron or any other PNOC subsidiary has to include in
its retirement scheme or in its Collective Bargaining Agreement a provision of the
inclusion of the other government services of its employees rendered outside
Petron, otherwise, it would be prejudicial to the interest of the retireable
employee concerned.

Petitioner asserts that with the tacking in of his 14 years of service with the DOH to his
17 years and 4 months service with LUSTEVECO and Respondent, he had 31 years and 4
months creditable service as basis for the computation of his retirement benefits. Thus,
pursuant to Respondent’s Manpower Reduction Program, he should have been paid two
months pay for every year of his 31 years of service.

Petitioner likewise asserts that the principle of tacking is anchored on Republic Act No.
7699.17

Petitioner concludes that there was discrimination when his application for coverage
under the Manpower Reduction Program was disapproved. His application was denied
because he was holding a permanent position and that he was due for retirement.
However, Respondent granted the application of Dr. Rogelio Buena, who was likewise
holding a permanent position and was also about to retire. Petitioner was only given
one-month pay for every year of service under the regular retirement plan while Dr.
Buena was given a 2-month pay for every year of service under the Manpower
Reduction Program.

In its Comment to the petition, Respondent maintains that although it is a government-


owned and controlled corporation, it has no original charter. Hence, it is not within the
coverage of the Civil Service Law. It cites the decision in PNOC-EDC v.
Leogardo,18 wherein we held that only corporations created by special charters are
subject to the provisions of the Civil Service Law. Those without original charters are
covered by the Labor Code. Respondent also asserts that R.A. No. 7699 is not applicable.
Under this law an employee who has worked in both the private and public sectors and
has been covered by both the Government Service Insurance System (GSIS) and the
Social Security System (SSS), shall have his creditable services or contributions in both
Systems credited to his service or contribution record in each of the Systems, which shall
be summed up for purposes of old age, disability, survivorship and other benefits in
case the covered member does not qualify for such benefits in either or both Systems
without the totalization.

Respondent further contends that petitioner was not discriminated upon when his
application under the Manpower Reduction Program was denied. At the time of his

Page 34 of 38
retirement in 1995, redundancy was the main consideration for qualification for the
Manpower Reduction Program. Petitioner was not qualified. However in 1996, in order
to solve the company’s business reversals, the new president, Dr. Nemesio Prudente,
found it necessary to implement cost-saving strategies, among which was the
retrenchment of willing employees. Thus, the applications for retrenchment of Dr. Buena
and Mrs. Reyes were approved. Respondent had the prerogative to amend its policies to
meet the contingencies of the business for self-preservation.

We rule in the negative the issue of whether petitioner’s service with the DOH should be
included in the computation of his retirement benefits.

Respondent’s Retirement scheme19 pertinently provides:

ARTICLE IV

RETIREMENT BENEFITS

SEC 4.1. Normal Retirement Date/Eligibility. -- The normal retirement date of an


employee shall be the first day of the month next following the employee’s
sixtieth (60th) birthday. To be eligible for the retirement benefit described under
Sec. 4.2, the employee must have rendered at least ten (10) years of continuous
service with the Company. In case the retiring employee has rendered less than
ten (10) years of service with the Company, he shall be entitled to one (1) month’s
final monthly basic salary (12/12) for every year of service.

SEC. 4.2. Normal Retirement Benefit. -- The retirement benefit shall be payable in
lump sum upon retirement which shall be determined on the basis of the retiree’s
final monthly basic salary (14/12) as follows:

(a) One (1) month’s pay for every year of service for those who have
completed at least twenty (20) years of continuous service with the
Company.

(b) One and one-half (1 1/2) months’ pay for every year of service for
those who have completed twenty-one (21) to thirty (30) continuous years
of service with the Company.

(c) Two (2) months’ pay for every year of service for those who have
completed at least thirty-one (31) years of service with the Company.

Page 35 of 38
It is clear therefrom that the creditable service referred to in the Retirement Plan is the
retiree’s continuous years of service with Respondent.

Retirement results from a voluntary agreement between the employer and the
employee whereby the latter after reaching a certain age agrees to sever his
employment with the former.20

Since the retirement pay solely comes from Respondent’s funds, it is but natural that
Respondent shall disregard petitioner’s length of service in another company for the
computation of his retirement benefits.

Petitioner was absorbed by Respondent from LUSTEVECO on 1 August 1979. Ordinarily,


his creditable service shall be reckoned from such date. However, since Respondent
took over the shipping business of LUSTEVECO and agreed to assume without
interruption all the service credits of petitioner with LUSTEVECO,21 petitioner’s creditable
service must start from 9 November 1977 when he started working with
LUSTEVECO22 until his day of retirement on 1 April 1995. Thus, petitioner’s creditable
service is 17.3333 years.

We cannot uphold petitioner’s contention that his fourteen years of service with the
DOH should be considered because his last two employers were government-owned
and controlled corporations, and fall under the Civil Service Law. Article IX(B), Section 2
paragraph 1 of the 1987 Constitution states --

Sec. 2. (1) The civil service embraces all branches, subdivisions, instrumentalities,
and agencies of the Government, including government-owned or controlled
corporations with original charters.

It is not at all disputed that while Respondent and LUSTEVECO are government-owned
and controlled corporations, they have no original charters; hence they are not under
the Civil Service Law. In Philippine National Oil Company-Energy Development
Corporation v. National Labor Relations Commission,23 we ruled:

xxx "Thus under the present state of the law, the test in determining whether a
government-owned or controlled corporation is subject to the Civil Service Law
are [sic] the manner of its creation, such that government corporations created by
special charter(s) are subject to its provisions while those incorporated under the
General Corporation Law are not within its coverage."

Consequently, Respondent was not bound by the opinion of the Civil Service
Commission of 18 May 1993.

Page 36 of 38
Petitioner’s contention that the principle of tacking of creditable service is mandated by
Republic Act No. 7699 is baseless. Section 3 of Republic Act No. 7699 reads:

SEC 3. Provisions of any general or special law or rules and regulations to the
contrary notwithstanding, a covered worker who transfer(s) employment from
one sector to another or is employed in both sectors, shall have his creditable
services or contributions in both systems credited to his service or contribution
record in each of the Systems and shall be totalized for purposes of old-age,
disability, survivorship, and other benefits in case the covered employee does not
qualify for such benefits in either or both Systems without totalization: Provided,
however, That overlapping periods of membership shall be credited only once for
purposes of totalization (underscoring, ours).

Obviously, totalization of service credits is only resorted to when the retiree does not
qualify for benefits in either or both of the Systems. Here, petitioner is qualified to
receive benefits granted by the Government Security Insurance System (GSIS), if such
right has not yet been exercised. The pertinent provisions of law are:

SEC. 12 Old Age Pension. -- (a) xxx

(b) A member who has rendered at least three years but less than fifteen years of
service at the time of separation shall, upon reaching sixty years of age or upon
separation after age sixty, receive a cash payment equivalent to one hundred
percent of his average monthly compensation for every year of service with an
employer (Presidential Decree No, 1146, as amended, otherwise known as the
Government Service Insurance Act of 1977).

SEC. 4. All contributions paid by such member personally, and those that were
paid by his employers to both Systems shall be considered in the processing of
benefits which he can claim from either or both Systems: Provided, however, That
the amount of benefits to be paid by one System shall be in proportion to the
number of contributions actually remitted to that System (Republic Act No. 7699).

In any case, petitioner’s fourteen years of service with the DOH may not remain
uncompensated because it may be recognized by the GSIS pursuant to the aforequoted
Section 12, 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 R.A. No. 7699.

It may also be pointed out that upon his receipt of the amount of P512,524.15 from
Respondent as retirement benefit pursuant to its retirement scheme, petitioner signed
and delivered to Respondent a Release and Undertaking wherein he waives all actions,

Page 37 of 38
causes of actions, debts, dues, monies and accounts in connection with his employment
with Respondent.24 This quitclaim releases Respondent from any other obligation in
favor of petitioner. While quitclaims executed by employees are commonly frowned
upon as contrary to public policy and are ineffective to bar claims for the full measure of
the employees’ legal rights, there are legitimate waivers that represent a voluntary and
reasonable settlement of laborers’ claims which should be respected by the courts as
the law between the parties.25 Settled is the rule that not all quitclaims are per se invalid
or against public policy, except (1) where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person; and (2) where the terms of settlement
are unconscionable on their face.26 We discern nothing from the record that would
suggest that petitioner was coerced, intimidated or deceived into signing the Release
and Undertaking. Neither are we convinced that the consideration for the quitclaim is
unconscionable because it is actually the full amount of the retirement benefit provided
for in the company’s retirement plan.

In light of the foregoing, we need not discuss any further the issue of whether petitioner
was discriminated by Respondent in the implementation of the Manpower Reduction
Program. In any event, that issue is factual and petitioner has failed to demonstrate that,
indeed, he was discriminated upon.

WHEREFORE, no reversible error on the part of the Respondent Court of Appeals having
been shown, the petition in this case is DENIED and the appealed decision in CA-G.R. SP
No. 51152 is hereby AFFIRMED.

Costs against petitioner.

SO ORDERED.

Page 38 of 38