Topics November 30, 2016

Sexual Harassment
Battered woman leave
Art. 136
Minor workers-read readings in syllabus
household helpers- read readings in syllabus
cases: Apex Mining Co., Inc. vs. NLRC, G.R. No. 94951, April 22, 1991
Traders Royal Bank vs. NLRC, G.R. No. 127864, Dec. 22, 1999

Department Circular No. 1 series of 2017 clarifying Department Order No. 174

RUBBERWORLD (PHILS.), INC. VS. NLRC, ET AL., (G. R. NO. 128003, JULY 26, 2000)
ALEMARS SIBAL AND SONS, INC. VS. NLRC, ET AL. (G. R. NO. 114761, JANUARY 19, 2000)

Book IV Health, Safety and Social Welfare Benefits

Cases:
Art. 167 (formerly 161)
1. Ocean Builders Construction Cor. Vs. Spouses Cubacub, G.R. No. 150898. April 13, 2011

Beneficiary
2. Bartolome vs SSS, gr no. 192531; nov. 12; 2014

Compensable injury/death
1. Belarmino vs. ECC, G.r. No. 90204, May 11, 1990
2. Valeriano vs. ECC and GSIS, G.R. No. 136200, June 13, 2000
3. Alano vs. ECC, G.r. No. L-48594, March 16, 1988
4. Lazo vs. ECC, G.R. No. 78617, June 18, 1990
5. GSIS vs. Zarate, G.r. No. 170847, August 3, 2010
6. GSIS vs. CA and Alegre, G.R. No. 128524, April 20, 1999
7. GSIS vs. CA, G.r. No. 124208, January 28, 2008
8. GSIS vs. Mecayer, G.r. No. 156182, April 13, 2007

Sickness
1. Raro vs. ECC, G.r. No. 58445, April 27, 1989
2. GSIS vs. MARIAN T. VICENCIO, G.R. No. 176832, May 21, 2009
3. GSIS vs ERNESTO A. VILLAMAYOR, G.R. No. 154386, August 22, 2006
4. GSIS vs. Victoriousa B. Vallar, G.r. No. 156023, October 18, 2007
5. GSIS vs. Raoet, G.R. No. 157038, December 23, 2009
6. ALEXANDER B. GATUS VS SSS, G.R. NO. 174725, JANUARY 26, 2011
7. [G.R. No. 132558. May 9, 2000] BEBERISA RIO, petitioner, vs. EMPLOYEES COMPENSATION COMMISSION
and SOCIAL SECURITY SYSTEM, respondents.

Art. 178 (formerly 172)

GSIS vs. Angel, G.R. No. 166863, July 20, 2011

Art. 173 (now Art. 179)

1. D.M. Consunji, Inc. vs. CA and Juego, G.r. No. 137873, April 20, 2001

Art. 192. Disability

1. Remigio vs. NLRC, G.r. No. 159887, April 12, 2006
2. Fil-Star Maritime Corporation G.R. No. 192686, Nov. 23, 2011
3. Santiago vs. Pacbasin Ship Management, Inc., g.r. No. 194677, April 18, 2012
4. IBARRA P. ORTEGA, versus -SOCIAL SECURITYCOMMISSION, and SOCIAL SECURITY SYSTEM,
G.R. No. 176150 June 25, 2008

Prescriptive period
1. SOLEDAD MUOZ MESA vs SSS, G.R. No. 160467, April 7, 2009

Art. 212
2. Ubic corp. vs. bandiola gr no. 157168; june 26; 2007
 G.R. No. 192531 November 12, 2014
BERNARDINA P. BARTOLOME, Petitioner, vs.
SOCIAL SECURITY SYSTEM and SCANMAR MARITIME SERVICES, INC., Respondents.

Nature of the Case

This Appeal, filed under Rule 43 of the Rules of Court, seeks to annul the March 17, 2010 Decision 1 of the Employees
Compensation Commission (ECC) in ECC Case No. SL-18483-0218-10, entitled Bernardina P. Bartolome v. Social
Security System (SSS) [Scanmar Maritime Services, Inc.}, declaring that petitioner is not a beneficiary of the deceased
employee under Presidential Decree No. (PD) 442, otherwise known as the Labor Code of the Philippines, as amended by
PD 626.2

The Facts

John Colcol (John), born on June 9, 1983, was employed as electrician by Scanmar Maritime Services, Inc., on board the
vessel Maersk Danville, since February 2008. As such, he was enrolled under the government's Employees' Compensation
Program (ECP).3 Unfortunately, on June 2, 2008, an accident occurred on board the vessel whereby steel plates fell on
John, which led to his untimely death the following day.4

John was, at the time of his death, childless and unmarried. Thus, petitioner Bernardina P. Bartolome, Johns biological
mother and, allegedly, sole remaining beneficiary, filed a claim for death benefits under PD 626 with the Social Security
System (SSS) at San Fernando City, La Union. However, the SSS La Union office, in a letter dated June 10,
20095 addressed to petitioner, denied the claim, stating:

We regret to inform you that wecannot give due course to your claim because you are no longer considered as the parent of
JOHN COLCOL as he was legally adopted by CORNELIO COLCOL based on documents you submitted to us.

The denial was appealed tothe Employees Compensation Commission (ECC), which affirmed the ruling of the SSS La
Union Branch through the assailed Decision, the dispositive portion of which reads:

WHEREFORE, the appealed decision is AFFIRMED and the claim is hereby dismissed for lack of merit.

SO ORDERED.6

In denying the claim, both the SSS La Union branch and the ECC ruled against petitioners entitlement to the death
benefits sought after under PD 626 on the ground she can no longer be considered Johns primary beneficiary. As culled
from the records, John and his sister Elizabeth were adopted by their great grandfather, petitioners grandfather, Cornelio
Colcol (Cornelio), by virtue of the Decision7 in Spec. Proc. No. 8220-XII of the Regional Trial Court in Laoag City dated
February 4, 1985, which decree of adoption attained finality.8 Consequently, as argued by the agencies, it is Cornelio who
qualifies as Johns primary beneficiary, not petitioner. Neither, the ECC reasoned, would petitioner qualify as Johns
secondary beneficiary even if it wereproven that Cornelio has already passed away. As the ECC ratiocinated:

Under Article 167 (j) of P.D. 626, as amended, provides (sic) that beneficiaries are the "dependent spouse until he
remarries and dependent children, who are the primary beneficiaries. In their absence, the dependent parentsand subject to
the restrictions imposed on dependent children, the illegitimate children and legitimate descendants who are the secondary
beneficiaries; Provided; that the dependent acknowledged natural child shall be considered as a primary beneficiary when
there are no other dependent children who are qualified and eligible for monthly income benefit."

The dependent parent referred to by the above provision relates to the legitimate parent of the covered member, as
provided for by Rule XV, Section 1 (c) (1) of the Amended Rules on Employees Compensation. This Commission
believes that the appellant is not considered a legitimate parent of the deceased, having given up the latter for adoption to
Mr. Cornelio C. Colcol. Thus, in effect, the adoption divested her of the statusas the legitimate parent of the deceased.

xxxx

In effect, the rights which previously belong [sic] to the biological parent of the adopted child shall now be upon the
adopting parent. Hence, in this case, the legal parent referred to by P.D. 626, as amended, as the beneficiary, who has the
right to file the claim, is the adoptive father of the deceased and not herein appellant.9 (Emphasis supplied)

Aggrieved, petitioner filed a Motion for Reconsideration, which was likewise denied by the ECC. 10 Hence, the instant
petition.

The Issues

Petitioner raises the following issues in the petition:

ASSIGNMENT OF ERRORS
I. The Honorable ECCs Decision is contrary to evidence on record.
II. The Honorable ECC committed grave abuse in denying the just, due and lawful claims of the petitioner as a lawful
beneficiary of her deceased biological son.
III. The Honorable ECC committed grave abuse of discretion in not giving due course/denying petitioners otherwise
meritorious motion for reconsideration.11

In resolving the case, the pivotal issue is this: Are the biological parents of the covered, but legally adopted, employee
considered secondary beneficiaries and, thus, entitled, in appropriate cases, to receive the benefits under the ECP?

The Court's Ruling

The petition is meritorious.

The ECCs factual findings are not consistent with the evidence on record

To recall, one of the primary reasons why the ECC denied petitioners claim for death benefits is that eventhough she is
Johns biological mother, it was allegedly not proven that his adoptive parent, Cornelio, was no longer alive. As intimated
by the ECC:

Moreover, there had been no allegation in the records as to whether the legally adoptive parent, Mr. Colcol, is dead, which
would immediately qualify the appellant [petitioner] for Social Security benefits. Hence, absent such proof of death of the
adoptive father, this Commission will presume him to be alive and well, and as such, is the one entitled to claim the benefit
being the primary beneficiary of the deaceased. Thus, assuming that appellant is indeed a qualified beneficiary under the
Social Security law, in view of her status as other beneficiary, she cannot claim the benefit legally provided by law to the
primary beneficiary, in this case the adoptive father since he is still alive.

We disagree with the factual finding of the ECC on this point.

Generally, findings of fact by administrative agencies are generally accorded great respect, if not finality, by the courts by
reason of the special knowledge and expertise of said administrative agenciesover matters falling under their
jurisdiction.12 However, in the extant case, the ECC had overlooked a crucial piece of evidence offered by the petitioner
Cornelios death certificate.13

Based on Cornelios death certificate, it appears that Johns adoptive father died on October 26, 1987,14 or only less than
three (3) years since the decree of adoption on February 4, 1985, which attained finality.15 As such, it was error for the
ECC to have ruled that it was not duly proven that the adoptive parent, Cornelio, has already passed away.

The rule limiting death benefits claims to the legitimate parents is contrary to law

This brings us to the question of whether or not petitioner is entitled to the death benefits claim in view of Johns work-
related demise. The pertinent provision, in this regard, is Article 167 (j) of the Labor Code, as amended, which reads:

ART. 167. Definition of terms. - Asused in this Title unless the context indicates otherwise:

xxxx

(j) 'Beneficiaries' means the dependent spouse until he remarries and dependent children, who are the primary
beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on dependent children, the
illegitimate children and legitimate descendants who are the secondary beneficiaries; Provided, that the dependent
acknowledged natural child shall be considered as a primary beneficiary when there are no other dependent children who
are qualified and eligible for monthly income benefit. (Emphasis supplied)

Concurrently, pursuant to the succeeding Article 177(c) supervising the ECC "[T]o approve rules and regulations
governing the processing of claims and the settlement of disputes arising therefrom as prescribed by the System," the ECC
has issued the Amended Rules on Employees Compensation, interpreting the above-cited provision as follows:

RULE XV BENEFICIARIES

SECTION 1. Definition. (a) Beneficiaries shall be either primary or secondary, and determined atthe time of employees death.

(b) The following beneficiaries shall be considered primary:

(1) The legitimate spouse living with the employee at the time of the employees death until he remarries; and

(2) Legitimate, legitimated, legally adopted or acknowledged natural children, who are unmarried not gainfully
employed, not over 21 years of age, or over 21 years of age provided that he is incapacitated and incapable of self -
support due to physicalor mental defect which is congenital or acquired during minority; Provided, further, that a
dependent acknowledged natural child shall be considered as a primary beneficiary only when there are no other
dependent children who are qualified and eligible for monthly income benefit; provided finally, that if there are two
 or more acknowledged natural children, they shall be counted from the youngest and without substitution, but not
exceeding five.

(c) The following beneficiaries shall be considered secondary:

(1) The legitimate parentswholly dependent upon the employee for regular support;

(2) The legitimate descendants and illegitimate children who are unmarried, not gainfully employed, and not over 21
years of age, or over 21 years of age providedthat he is incapacitated and incapable of self - support dueto physical
or mental defect which is congenital or acquired during minority. (Emphasis supplied)

Guilty of reiteration, the ECC denied petitioners claim on the ground that she is no longer the deceaseds legitimate
parent, as required by the implementing rules. As held by the ECC, the adoption decree severed the relation between John
and petitioner, effectively divesting her of the status of a legitimate parent, and, consequently, that of being a secondary
beneficiary.

We disagree.

a. Rule XV, Sec. 1(c)(1) of the Amended Rules on Employees Compensation deviates from the clear language of Art. 167
(j) of the Labor Code, as amended

Examining the Amended Rules on Employees Compensation in light of the Labor Code, as amended, it is at once apparent
that the ECC indulged in an unauthorized administrative legislation. In net effect, the ECC read into Art. 167 of the Code
an interpretation not contemplated by the provision. Pertinent in elucidating on this point isArticle 7 of the Civil Code of
the Philippines, which reads:

Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not beexcused by disuse,
or custom or practice to the contrary.

When the courts declared a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern.

Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the
Constitution.(Emphasis supplied)

As applied, this Court held in Commissioner of Internal Revenue v. Fortune Tobacco Corporation16 that:

As we have previously declared, rule-making power must be confined to details for regulating the mode or proceedings in
order to carry into effect the law as it has been enacted, and it cannot be extended to amend or expand the statutory
requirements or to embrace matters not covered by the statute. Administrative regulations must always be in harmony with
the provisions of the law because any resulting discrepancy between the two will always be resolved in favor of the basic
law. (Emphasis supplied)

Guided by this doctrine, We find that Rule XV of the Amended Rules on Employees Compensation is patently a wayward
restriction of and a substantial deviation from Article 167 (j) of the Labor Code when it interpreted the phrase "dependent
parents" to refer to "legitimate parents."

It bears stressing that a similar issue in statutory construction was resolved by this Court in Diaz v. Intermediate Appellate
Court17 in this wise:

It is Our shared view that the word "relatives" should be construed in its general acceptation. Amicus curiae Prof. Ruben
Balane has this to say:

The term relatives, although used many times in the Code, is not defined by it. In accordancetherefore with the canons of
statutory interpretation, it should beunderstood to have a general and inclusive scope, inasmuch as the term is a general
one. Generalia verba sunt generaliter intelligenda. That the law does not make a distinction prevents us from making one:
Ubi lex non distinguit, nec nos distinguera debemus. xxx

According to Prof. Balane, to interpret the term relatives in Article 992 in a more restrictive sense thanit is used and
intended is not warranted by any rule ofinterpretation. Besides, he further states that when the law intends to use the termin
a more restrictive sense, it qualifies the term with the word collateral, as in Articles 1003 and 1009 of the New Civil Code.

Thus, the word "relatives" is a general term and when used in a statute it embraces not only collateral relatives but also all
the kindred of the person spoken of, unless the context indicates that it was used in a more restrictive or limited sense
which as already discussed earlier, is not so in the case at bar. (Emphasis supplied)

In the same vein, the term "parents" in the phrase "dependent parents" in the afore-quoted Article 167 (j) of the Labor Code
is usedand 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 adoption. When the law does not distinguish, one should not distinguish. Plainly, "dependent parents" are
parents, whether legitimate or illegitimate, biological or by adoption,who are in need of support or assistance.

Moreover, the same Article 167 (j),as couched, clearly shows that Congress did not intend to limit the phrase "dependent
parents" to solely legitimate parents. At the risk of being repetitive, Article 167 provides that "in their absence, the
dependent parents and subject to the restrictions imposed on dependent children, the illegitimate children and legitimate
descendants who are secondary beneficiaries." Had the lawmakers contemplated "dependent parents" to mean legitimate
parents, then it would have simply said descendants and not "legitimate descendants." The manner by which the provision
in question was crafted undeniably show that the phrase "dependent parents" was intended to cover all parents legitimate,
illegitimate or parents by nature or adoption.

b. Rule XV, Section 1(c)(1) of the Amended Rules on Employees Compensation is in contravention of the equal
protection clause

To insist that the ECC validly interpreted the Labor Code provision is an affront to the Constitutional guarantee of equal
protection under the laws for the rule, as worded, prevents the parents of an illegitimate child from claiming benefits under
Art. 167 (j) of the Labor Code, as amended by PD 626. To Our mind, such postulation cannot be countenanced.

As jurisprudence elucidates, equal protection simply requires that all persons or things similarly situated should be treated
alike, both as to rights conferred and responsibilities imposed. It requires public bodies and institutions to treat similarly
situated individuals in a similar manner.18 In other words, the concept of equal justice under the law requires the state to
govern impartially, and it may not drawdistinctions between individuals solely on differences that are irrelevant to a
legitimate governmental objective.19

The concept of equal protection, however, does not require the universal application of the laws to all persons or things
without distinction. What it simply requires isequality among equals as determined according to a valid classification.
Indeed, the equal protection clause permits classification. Such classification, however, to be valid must pass the test of
reasonableness. The test has four requisites: (1) The classification rests on substantial distinctions; (2) It is germane tothe
purpose of the law; (3) It is not limited to existing conditions only; and (4) It applies equally to all members of the same
class. "Superficial differences do not make for a valid classification."20

In the instant case, there is no compelling reasonable basis to discriminate against illegitimate parents. Simply put, the
above-cited rule promulgated by the ECC that limits the claim of benefits to the legitimate parents miserably failed the test
of reasonableness since the classification is not germane to the law being implemented. We see no pressing government
concern or interest that requires protection so as to warrant balancing the rights of unmarried parents on one hand and the
rationale behind the law on the other. On the contrary, the SSS can better fulfill its mandate, and the policy of PD 626
that employees and their dependents may promptly secure adequate benefits in the event of work-connected disability or
death - will be better served if Article 167 (j) of the Labor Code is not so narrowly interpreted.

There being no justification for limiting secondary parent beneficiaries to the legitimate ones, there can be no other course
of action to take other than to strikedown as unconstitutional the phrase "illegitimate" as appearing in Rule XV, Section
1(c)(1) of the Amended Rules on Employees Compensation.

Petitioner qualifies as Johns dependent parent

In attempting to cure the glaring constitutional violation of the adverted rule, the ECC extended illegitimate parents an
opportunity to file claims for and receive death benefitsby equating dependency and legitimacy to the exercise of parental
authority. Thus, as insinuated by the ECC in its assailed Decision, had petitioner not given up John for adoption, she could
have still claimed death benefits under the law.

To begin with, nowhere in the law nor in the rules does it say that "legitimate parents" pertain to those who exercise
parental authority over the employee enrolled under the ECP. Itwas only in the assailed Decision wherein such
qualification was made. In addition, assuming arguendothat the ECC did not overstep its boundaries in limiting the
adverted Labor Code provision to the deceaseds legitimate parents, and that the commission properly equated legitimacy
to parental authority, petitioner can still qualify as Johns secondary beneficiary.

True, when Cornelio, in 1985, adoptedJohn, then about two (2) years old, petitioners parental authority over John was
severed. However, lest it be overlooked, one key detail the ECC missed, aside from Cornelios death, was that when the
adoptive parent died less than three (3) years after the adoption decree, John was still a minor, at about four (4) years of
age.

Johns minority at the time of his adopters death is a significant factor in the case at bar. Under such circumstance,
parental authority should be deemed to have reverted in favor of the biological parents. Otherwise, taking into account Our
consistent ruling that adoption is a personal relationship and that there are no collateral relatives by virtue of
adoption,21 who was then left to care for the minor adopted child if the adopter passed away?

To be sure, reversion of parental authority and legal custody in favor of the biological parents is not a novel concept.
Section 20 of Republic Act No. 855222 (RA 8552), otherwise known as the Domestic Adoption Act, provides:
Section 20. Effects of Rescission. If the petition [for rescission of adoption] is granted, the parental authority of the
adoptee's biological parent(s), if known, or the legal custody of the Department shall be restored if the adoptee is still a
minoror incapacitated. The reciprocal rights and obligations of the adopter(s) and the adoptee to each other shall be
extinguished. (emphasis added)

The provision adverted to is applicable herein by analogy insofar as the restoration of custody is concerned.1wphi1 The
manner herein of terminating the adopters parental authority, unlike the grounds for rescission, 23 justifies the retention of
vested rights and obligations between the adopter and the adoptee, while the consequent restoration of parental authority in
favor of the biological parents, simultaneously, ensures that the adoptee, who is still a minor, is not left to fend for himself
at such a tender age.

To emphasize, We can only apply the rule by analogy, especially since RA 8552 was enacted after Cornelios death. Truth
be told, there is a lacuna in the law as to which provision shall govern contingencies in all fours with the factual milieu of
the instant petition. Nevertheless, We are guided by the catena of cases and the state policies behind RA 855224 wherein the
paramount consideration is the best interest of the child, which We invoke to justify this disposition. It is, after all, for the
best interest of the child that someone will remain charged for his welfare and upbringing should his or her adopter fail or
is rendered incapacitated to perform his duties as a parent at a time the adoptee isstill in his formative years, and, to Our
mind, in the absence or, as in this case, death of the adopter, no one else could reasonably be expected to perform the role
of a parent other than the adoptees biological one.

Moreover, this ruling finds support on the fact that even though parental authority is severed by virtue of adoption, the ties
between the adoptee and the biological parents are not entirely eliminated. To demonstrate, the biological parents, insome
instances, are able to inherit from the adopted, as can be gleaned from Art. 190 of the Family Code:

Art. 190. Legal or intestate succession to the estate of the adopted shall be governed by the following rules:

xxx

(2) When the parents, legitimate or illegitimate, or the legitimate ascendants of the adopted concur withthe adopter, they
shall divide the entire estate, one-half tobe inherited by the parents or ascendants and the other half, by the adopters;

xxx

(6) When only collateral blood relatives of the adopted survive, then the ordinary rules of legal or intestate succession shall
apply.

Similarly, at the time of Cornelio Colcols death, which was prior to the effectivity of the Family Code, the governing
provision is Art. 984 of the New Civil Code, which provides:

Art. 984. In case of the death of an adopted child, leaving no children or descendants, his parents and relatives by
consanguinity and not by adoption, shall be his legal heirs.

From the foregoing, it is apparent that the biological parents retain their rights of succession tothe estate of their child who
was the subject of adoption. While the benefits arising from the death of an SSS covered employee do not form part of the
estateof the adopted child, the pertinent provision on legal or intestate succession at least reveals the policy on the rights of
the biological parents and those by adoption vis--vis the right to receive benefits from the adopted. In the same way that
certain rights still attach by virtue of the blood relation, so too should certain obligations, which, We rule, include the
exercise of parental authority, in the event of the untimely passing of their minor offsprings adoptive parent. We cannot
leave undetermined the fate of a minor child whose second chance ata better life under the care of the adoptive parents was
snatched from him by deaths cruel grasp. Otherwise, the adopted childs quality of life might have been better off not
being adopted at all if he would only find himself orphaned in the end. Thus, We hold that Cornelios death at the time of
Johnsminority resulted in the restoration of petitioners parental authority over the adopted child.

On top of this restoration of parental authority, the fact of petitioners dependence on John can be established from the
documentary evidence submitted to the ECC. As it appears in the records, petitioner, prior to Johns adoption, was a
housekeeper. Her late husband died in 1984, leaving her to care for their seven (7) children. But since she was unable to
"give a bright future to her growing children" as a housekeeper, she consented to Cornelios adoption of Johnand Elizabeth
in 1985.

Following Cornelios death in 1987, so records reveal, both petitioner and John repeatedly reported "Brgy. Capurictan,
Solsona, Ilocos Norte" as their residence. In fact, this veryaddress was used in Johns Death Certificate 25 executed in
Brazil, and in the Report of Personal Injury or Loss of Life accomplished by the master of the vessel boarded by
John.26 Likewise, this is Johns known address as per the ECCs assailed Decision.27Similarly, this same address was used
by petitioner in filing her claim before the SSS La Union branch and, thereafter, in her appeal with the ECC. Hence, it can
be assumed that aside from having been restored parental authority over John, petitioner indeed actually execised the same,
and that they lived together under one roof.

Moreover, John, in his SSS application,28 named petitioner as one of his beneficiaries for his benefits under RA 8282,
otherwise known as the "Social Security Law." While RA 8282 does not cover compensation for work-related deaths or
injury and expressly allows the designation of beneficiaries who are not related by blood to the member unlike in PD 626,
Johns deliberate act of indicating petitioner as his beneficiary at least evinces that he, in a way, considered petitioner as his
dependent. Consequently, the confluence of circumstances from Cornelios death during Johns minority, the restoration
ofpetitioners parental authority, the documents showing singularity of address, and Johns clear intention to designate
petitioner as a beneficiary - effectively made petitioner, to Our mind, entitled to death benefit claims as a secondary
beneficiary under PD 626 as a dependent parent.

All told, the Decision of the ECC dated March 17, 2010 is bereft of legal basis. Cornelios adoption of John, without more,
does not deprive petitioner of the right to receive the benefits stemming from Johns death as a dependent parent given
Cornelios untimely demise during Johns minority. Since the parent by adoption already died, then the death benefits
under the Employees' Compensation Program shall accrue solely to herein petitioner, John's sole remaining beneficiary.

WHEREFORE, the petition is hereby GRANTED. The March 17, 2010 Decision of the Employees' Compensation
Commission, in ECC Case No. SL-18483-0218-10, is REVERSED and SET ASIDE. The ECC is hereby directed to
release the benefits due to a secondary beneficiary of the deceased covered employee John Colcol to petitioner Bernardina
P. Bartolome.

No costs.

SO ORDERED.
 G.R. No. 160467 April 7, 2009
SOLEDAD MUOZ MESA, Petitioner, vs.
SOCIAL SECURITY SYSTEM and PHILROCK INCORPORATED, Respondent.

On appeal is the Court of Appeals Decision1 dated January 16, 2003 sustaining the Decision2 dated August 24, 2001 of the
Employees Compensation Commission (ECC) in ECC Case No. MS-12322-501, as well as its Resolution3 dated October
3, 2003 denying petitioners motion for reconsideration.

Teodoro Mesa (Mesa), the deceased husband of petitioner Soledad Muoz Mesa, was an employee of respondent Philrock
Incorporated (Philrock), from April 1966 to November 1998.4

In the course of his employment, Mesa was diagnosed to be afflicted with diabetes mellitus, pulmonary tuberculosis, and
ischemic heart disease5 for which he was confined from September 23 to 30, 1988 at St. Marthas Specialty Clinic in
Tarlac City. Upon his discharge from the hospital, he continued to work for Philrock until he succumbed to myocardial
infarction on November 19, 1988. He last held the position of Project General Superintendent.

Close to 12 years later or in October 2000, Mesas wife, herein petitioner, claimed for employees compensation benefits
under Presidential Decree (P.D.) No. 626 or the Employees Compensation Law, as amended.

By pro-forma letter6 dated January 18, 2001, the Social Security System (SSS) denied petitioners claim on the ground of
prescription. Petitioner moved for reconsideration, alleging that the filing of the claim was delayed because she was not
aware that her husband was entitled to employees compensation until she heard it from a friend who was able to claim a
similar benefit, and that she could not file the claim immediately because she herself was in and out of the hospital. The
motion was elevated by the SSS to the ECC per memorandum7 dated April 17, 2001.

By Decision dated August 24, 2001, the ECC held that petitioners claim had prescribed on November 26, 1991, following
Article 2018 of P.D. 626, as amended, which provides that claims under said law should be brought within three years from
the time the cause of action accrued. Even if Art. 11449 of the Civil Code were applied, the ECC posed, the claim would
still be barred by prescription since the period is reckoned from the date of contingency or November 25, 1998 to the date
of filing of the claim in October 2000 which entailed a period of almost 12 years.

Petitioner thereupon appealed to the Court of Appeals, contending that the three-year period in P.D. 626 should not be
construed as a prescriptive period but more of a requisite for the exercise of a right granted by law, and pleading for the
application of the social justice precepts in resolving the controversy in her favor.

Via a Supplement to the Petition,10 petitioner submitted the Online Inquiry System-generated "D[eath] D[isability and] R[etirement]
Claims Information" sheet11 showing that she filed a claim for death and funeral benefits with the SSS on December 12, 1988.

By the challenged Decision dated January 16, 2003, the appellate court dismissed petitioners petition and affirmed the ECC
Decision. Citing Vda. De Hornido v. ECC, Art. 201 of P.D. 626, and Art. 1144 of the Civil Code, the appellate court held that at
the time petitioner instituted the claim for employees compensation benefits, almost 12 years had elapsed, hence, it had prescribed.

On petitioners filing before the SSS of a claim for death and funeral benefits on November 25, 1988, the appellate court
held that the same did not operate as constructive notice to the ECC for purposes of employees compensation, hence, it
did not toll the running of the prescriptive period. Additionally, it held that this issue was not presented before the lower
tribunals and was raised for the first time on appeal, hence, it could not be entertained; and that although the November 25,
1988 claim was denominated as "SSS Death and Funeral Benefit," what petitioner actually claimed was funeral or burial
benefits alone, not death benefits resulting from compensable injury or illness, and it was only in 2000 that she filed for
death benefits, hence, the said claim for funeral benefits could not operate as constructive notice on the part of SSS within
the purview of the rules on employees compensation.

Petitioners motion for reconsideration having been denied by Resolution dated October 3, 2003, the present appeal was filed.

Petitioner reiterates her contention that her claim has not prescribed and that the funeral claim served as constructive notice
to the SSS/ECC to toll the running of the prescriptive period pursuant to ECC Resolution No. 90-03-0022 and 93-08-0068.
And she requests the Court to apply social justice precepts and humanitarian considerations.

The appeal is impressed with merit.

Apropos is the ruling in Buena Obra v. SSS12 in which the Court, speaking through then Associate, now Chief Justice
Puno, held that the claim for funeral benefits under P.D. No. 626, as amended, which was filed after the lapse of 10 years
by the therein petitioner who had earlier filed a claim for death benefits, had not prescribed,

The issue of prescription in the case at bar is governed by P.D. No. 626, or the Law on Employees' Compensation. Art. 201
of P.D. No. 626 and Sec. 6, Rule VII of the 1987 Amended Rules on Employees' Compensation both read as follows:

"No claim for compensation shall be given due course unless said claim is filed with the System within three years from
the time the cause of action accrued."
This is the general rule. The exceptions are found in Board Resolution 93-08-0068 and ECC Rules of Procedure for the Filing
and Disposition of Employees Compensation Claims. Board Resolution 93-08-0068 issued on 5 August 1993, states:

"A claim for employee's compensation must be filed with System (SSS/GSIS) within three (3) years from the time the
cause of action accrued, provided however, that any claim filed within the System for any contingency that may be held
compensable under the Employee's Compensation Program (ECP) shall be considered as the EC claim itself. The three-
year prescriptive period shall be reckoned from the onset of disability, or date of death. In case of presumptive death, the three
(3) years limitation shall be counted from the date the missing person was officially declared to be presumptively dead.

In addition, Section 4(b), Rule 3 of the ECC Rules of Procedure for the Filing and Disposition of Employees
Compensation Claims, reads:

"RULE 3. FILING OF CLAIM

Section 4. When to file.

(a) Benefit claims shall be filed with the GSIS or the SSS within three (3) years from the date of the occurrence of the
contingency (sickness, injury, disability or death).
(b) Claims filed beyond the 3-year prescriptive period may still be given due course, provided that:
1. A claim was filed for Medicare, retirement with disability, burial, death claims, or life (disability) insurance, with the GSIS
within three (3) years from the occurrence of the contingency.
2. In the case of the private sector employees, a claim for Medicare, sickness, burial, disability or deathwas filed within three
(3) years from the occurrence of the contingency.
3. In any of the foregoing cases, the employees compensation claim shall be filed with the GSIS or the SSS within a
reasonable time as provided by law. [Emphasis supplied.]"

We agree with the petitioner that her claim for death benefits under the SSS law should be considered as the Employees
Compensation claim itself. This is but logical and reasonable because the claim for death benefits which petitioner filed
with the SSS is of the same nature as her claim before the ECC. Furthermore, the SSS is the same agency with which
Employees Compensation claims are filed. As correctly contended by the petitioner, when she filed her claim for death benefits
with the SSS under the SSS law, she had already notified the SSS of her employees compensation claim, because the SSS is the
very same agency where claims for payment of sickness/disability/death benefits under P.D. No. 626 are filed.

Section 4(b)(2), Rule 3 of the ECC Rules of Procedure for the Filing and Disposition of the Employees Compensation
Claims, quoted above, also provides for the conditions when EC claims filed beyond the three-year prescriptive period may
still be given due course. Section 4(b)(2) states the condition for private sector employees, requiring that a claim for
Medicare, sickness, burial, disability or death should be filed within three (3) years from the occurrence of the contingency.
In the instant case, the petitioner was able to file her claim for death benefits under the SSS law within the three-year
prescriptive period. In fact, she has been receiving her pension under the SSS law since November 1988.

It is true that under the proviso, the employees compensation claim shall be filed with the GSIS/SSS within a reasonable time as
provided by law. It should be noted that neither statute nor jurisprudence has defined the limits of "reasonable time." Thus, what
is reasonable time depends upon the peculiar facts and circumstances of each case. In the case at bar, we also find petitioners
claim to have been filed within a reasonable time considering the situation and condition of the petitioner. We have ruled that
when the petitioner filed her claim for death benefits under the SSS law, her claim for the same benefits under the Employees
Compensation Law should be considered as filed. The evidence shows that the System failed to process her compensation claim.
Under the circumstances, the petitioner cannot be made to suffer for the lapse committed by the System.

In light of the immediately-quoted portions of the Courts decision in Buena Obra, the Court holds that petitioners filing
of a claim before the SSS, even arguendo that it was only for funeral benefits, on November 25, 1988 served as
constructive notice on the part of the SSS/ECC pursuant to the ECC Board Resolution 93-08-0068 vis a vis ECC Rules of
Procedure for the Filing and Disposition of Employees Compensation Claims, that she was claiming before the SSS for
compensation benefits under P.D. No. 626, effectively tolling the running of the prescriptive period. The term "funeral
benefits" certainly connotes benefits arising from death. Petitioners claim is thus not barred.

At this juncture, the Court reiterates its oft-repeated ruling that pursuant to the Constitutional guarantee of social justice, a
liberal attitude in favor of the employee should be adopted.1avvphi1

[C]laims falling under the Employees Compensation Act should be liberally resolved to fulfill its essence as a social
legislation designed to afford relief to the working man and woman in our society. It is only this kind of interpretation that
can give meaning and substance to the compassionate spirit of the law as embodied in Article 4 of the New Labor Code,
which states that all doubts in the implementation and interpretation of the provisions of the Labor Code including its
implementing rules and regulations should be resolved in favor of labor.14 (Underscoring supplied)

The issue of whether Mesas death is compensable was never, however, fully raised nor discussed in any of the
proceedings below, nor is it ventilated in the present petition, and the records are bereft of adequate evidence to enable the
Court to rule thereon. A remand of the case to the ECC for the resolution of such issue is thus in order.1avvphi1

WHEREFORE, the petition is GRANTED. The challenged Court of Appeals Decision dated January 16, 2003 and Resolution
dated October 3, 2003 are REVERSED and SET ASIDE. Let the records of the case be REMANDED to the Employees
Compensation Commission which is DIRECTED to rule with dispatch on the merits of petitioners claim for compensation
benefits under Presidential Decree No. 626. SO ORDERED.
 G.R. No. 157168 June 26, 2007
U-BIX CORPORATION, Petitioner, vs. RICHEL BANDIOLA, Respondent.

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision, 1 dated 27 June
2002, rendered by the Court of Appeals, partially affirming the Resolution,2 promulgated by the National Labor Relations
Commission (NLRC) on 16 August 2000. The Court of Appeals, in its assailed Decision, sustained the award of actual
damages in the amount of 7,742.50, moral damages in the amount of 25,000.00 and exemplary damages in the amount
of 25,000.00 in favor of respondent Richel Bandiola (Bandiola), in relation to an injury sustained by the latter in the
course of his employment with petitioner U-BIX Corporation, (U-BIX)

Sometime in April 1995, Bandiola was employed by U-BIX to install furniture for its customers. On 13 April 1997,
Bandiola and two other U-BIX employees were involved in a vehicular accident on their way to Baguio, where they were
assigned by U-BIX to install furniture for an exhibit. As a result of the accident, Bandiola sustained a fracture on his left
leg.3

Bandiola and his co-employees were initially brought to the Rosario District Hospital. The next day, 14 April 1997, they
were transferred to the Philippine Orthopedic Hospital (Orthopedic). After his broken leg was cemented, Bandiola was
advised to go back for further medical treatment. U-BIX paid for the medical expenses incurred in both hospitals.4

Bandiola claims that he asked U-BIX for financial assistance but that the latter refused. As a consequence, he could no
longer afford to go back to the Orthopedic in Quezon City, which is of considerable distance from his residence in
Paraaque. Instead, he went to Medical Center Paraaque (MCP) where he had his leg cast in fiberglass. 5 He attached the
receipts, issued by MCP and Dr. Celestino Musngi, for medical expenses with a total amount of 7,742.50.6 He also
attached a copy of the Roentgenological Report, dated 24 April 1997, of Amado V. Carandang, a Radiologist in
MCP.7 The said report affirmed that Bandiolas left leg was still fractured, even after the doctors at the Orthopedic put a
plaster cast on his leg. Bandiola added that he paid for other medical expenses for which no receipts were issued.

Bandiola maintains that before his leg was cast in fiberglass, he asked Rey Reynes, U-BIXs Assistant Manager for Project
Management, for financial assistance but was refused. After the medical procedure, he again went to Reynes and presented
a receipt for his medical expenses, but was told to pay for them in the meantime. Bandiola also avers that while he was
waiting for his injuries to heal, he called the U-BIX office in Makati to ask for a salary advance, but was told by a
secretary, a certain Ms. Clarisse, that this was not possible since he had not worked after 13 April 1997. 8

On September 1998, Bandiola filed a Complaint before the Labor Arbiter, where he alleged underpayment of salary; non-
payment of overtime pay; premium pay for work performed on holidays and rest days; separation pay; service incentive
leave pay; 13th month pay; and the payment of actual, moral and exemplary damages.9 The Labor Arbiter ordered in its
Decision, dated 16 September 1998, that10 :

Accordingly, complainant is entitled to salary differential, service incentive leave pay and 13th month pay computed as
follows:

xxxx

WHEREFORE, respondent is hereby ordered to pay complainant the following:

Salary Differential 20,424.00

Service incentive leave 825.00

13th Month pay 10,324.15

GRAND TOTAL 31,573.15

All other claims are DISMISSED for lack of merit.

Bandiola asserts that U-BIX failed to extend to him any financial assistance after he was injured in the performance of his
duties, and that as a result, he suffered physical pain, mental torture, fright, sleepless nights, and serious anxiety. He claims
that this entitles him to moral and exemplary damages.11

U-BIX, on the other hand, denies that Bandiola notified it of any medical expenses he purportedly incurred until the
complaint was filed before the Labor Arbiter.12

As can be gleaned from above, the Labor Arbiter allowed Bandiolas claim for salary differential, service incentive leave
pay and 13th month pay due to U-BIXs failure to present payrolls or similar documents. Incidentally, the award of these
claims is no longer questioned in the present petition. The other claims, particularly those for medical expenses that
Bandiola allegedly incurred and for moral and exemplary damages, were dismissed.

Bandiola filed an appeal before the NLRC. In a Resolution dated 16 August 2000, the NLRC amended the Decision
rendered by the Labor Arbiter on 16 September 1998. It ruled that U-BIX should reimburse Bandiola the amount of
12,742.50 for the medical expenses he incurred in connection with his fractured leg. It further ruled that U-BIX is liable
to pay Bandiola 25,000.00 in moral damages and 25,000.00 in exemplary damages for refusing to reimburse Bandiola
for the medical expenses he incurred after it failed to report to the Social Security System (SSS) the injuries sustained by
Bandiola.13 The aforementioned NLRC Resolution decrees that14 :

WHEREFORE, premises considered, [herein respondent Bandiolas] appeal is GRANTED. The Labor Arbiters decision
in the above-entitled case is hereby AFFIRMED with the MODIFICATION that in addition to the monetary award granted
to [herein respondent Bandiola] by the Labor Arbiter, [herein petitioner UBIX] is ordered to reimburse [herein respondent
Bandiola] the amount of 12,742.50 for the medical expenses which he incurred in line of duty. [Herein petitioner UBIX]
is likewise ordered to pay [herein respondent Bandiola] the amount of Twenty-Five Thousand Pesos (25,000.00) for
moral damages and Twenty-five Thousand Pesos (25,000.00) for exemplary damages.

Thereafter, U-BIX filed a Motion for Reconsideration, which was denied by the NLRC in another Resolution on 11
October 2000.15

On appeal, the Court of Appeals modified the NLRC Resolution, dated 16 August 2000. It affirmed Bandiolas entitlement
to reimbursement of his medical expenses, but reduced the amount to 7,742.50, the amount of actual damages he was able
to prove. It also affirmed without modification the award of moral and exemplary damages, and the monetary award
granted by the Labor Arbiter.16 In the dispositive portion of its Decision, dated 27 June 2002, the Court of Appeals ruled
that17 :

WHEREFORE, the instant petition is PARTIALLY GRANTED and the assailed resolution of the NLRC is accordingly
AFFIRMED WITH MODICATION such that the actual damages in the form of reimbursement for the medical expenses
incurred by [herein respondent Bandiola] is REDUCED to 7,742.50 instead of the 12,742.50 which was granted by the
NLRC.

Hence, the present petition, in which the following issues were raised18 :

I THE HONORABLE COURT OF APPEALS ERRED IN ORDERING PETITIONER U-BIX TO REIMBURSE

RESPONDENT BANDIOLA FOR ALLEGED MEDICAL EXPENSES OF 7,742.50 WHEN THERE IS NO
EVIDENCE SUBMITTED BY RESPONDENT IN SUPPORT THEREOF.

II THE HONORABLE COURT OF APPEALS ERRED IN AWARDING MORAL DAMAGES OF 25,000.00

AND EXEMPLARY DAMAGES OF 25,000.00 TO RESPONDENT BANDIOLA WITHOUT ANY FACTUAL OR
LEGAL BASIS APART FROM THE FACT THAT THE SAME ARE EXORBITANT AND CLEARLY INTENDED TO
ENRICH RESPONDENT.

The petition is without merit.

Contrary to the arguments put forward by U-BIX, it is liable to reimburse Bandiola the amount of 7,742.50 for medical
expenses because its failure to comply with its duty to record and report Bandiolas injury to the SSS precluded Bandiola
from making any claims. Moreover, U-BIX, by its own admission, reimbursed its other employees who were involved in
the same accident for their medical expenses.19 Clearly, the reimbursement of medical expenses for injuries incurred in the
course of employment is part of the benefits enjoyed by U-BIXs employees. The only justification for its refusal to
reimburse Bandiola was that he intended to defraud the company by presenting spurious receipts amounting to 7,742.50
that were allegedly issued four months before their presentation.

Articles 205 and 206 of the Labor Code set the reportorial requirements in cases when an employee falls sick or suffers an
injury arising in the course of employment. An injury is said to arise "in the course of employment" when it takes place
within the period of employment, at a place where the employee may reasonably be, and while he is fulfilling his duties or
is engaged in doing something incidental thereto.20 The aforecited provisions of the Labor Code provide that:

ART. 205 RECORD OF DEATH OR DISABILITY

(a) All employers shall keep a logbook to record chronologically the sickness, injury or death of their employees, setting
forth therein their names, dates and places of the contingency, nature of the contingency and absences. Entries in the
logbook shall be made within five days from notice or knowledge of the occurrence of contingency. Within five days after
entry in the logbook, the employer shall report to the System only those contingencies he deems to be work-connected.

(b) All entries in the employers logbook shall be made by the employer or any of his authorized official after verification of
the contingencies or the employees absences for a period of a day or more. Upon request by the System, the employer shall
furnish the necessary certificate regarding information about any contingency appearing in the logbook, citing the entry
number, page number and date. Such logbook shall be made available for inspection to the duly authorized representatives
of the System.

xxxx

ART 206. NOTICE OF SICKNESS, INJURY OR DEATH

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.

As a general rule, the injured employee must notify his employer, who is obligated to enter the notice in a logbook within
five days after notification. Within five days after making the entry, the employer of a private company reports the work-
related sickness or injury to the SSS. The claim is forwarded to the SSS, which decides on the validity of the claim. When
the SSS denies the claim, the denial may be appealed to the Employees Compensation Commission (ECC) within 30 days.

However, the law provides an exception to the rule requiring an employee to notify his or her employer of his injuries.
Under Section B of ECC Board Resolution No. 2127, issued on 5 August 1982, notice of injury, sickness or death of the
employee need not be given to the employer in any of the following situations:

(1) When the employee suffers the contingency within the employers premises;

(2) When the employee officially files an application for leave of absence by reason of the contingency from which he
suffers;

(3) When the employer provides medical services and/or medical supplies to the employee who suffers from the
contingency; and

(4) When the employer can be reasonably presumed to have had knowledge of the employees contingency, in view of the
following circumstances:

(4.1) The employee was performing an official function for the employer when the contingency occurred;

(4.2) The employees contingency has been publicized through mass media outlets; or

(4.3) The specific circumstances of the occurrence of the contingency have been such that the employer can be reasonably
presumed to have readily known it soon thereafter; or

(4.4) Any other circumstances that may give rise to a reasonable presumption that the employer has been aware of the
contingency.

In the present case, there is no dispute that Bandiolas leg injury was sustained in the course of his employment with U-
BIX. At the time of the accident, Bandiola was on the way to Baguio, where he was ordered by U-BIX to install furniture
for an exhibit. Moreover, U-BIX was aware that Bandiola, as well as his other co-employees, were injured during the
accident. U-BIX admitted to providing Bandiola and his co-employees with medical assistance and it even sent its
representative, Rey Reynes, to Rosario District Hospital, where they were confined, and had them transferred to the
Orthopedic. U-BIX was also aware that the Orthopedic instructed Bandiola to return for further medical treatment. It is
implicit that Bandiola needed further treatment for his broken leg and was, thus, incapacitated to work.

Given the foregoing circumstances, U-BIX had the legal obligation to record pertinent information in connection with the
injuries sustained by Bandiola in its logbook within five days after it had known about the injuries; and to report the same
to the SSS within five days after it was recorded in the logbook, in accordance with Articles 205 and 206 of the Labor
Code. Had U-BIX performed its lawful duties, the SSS, or the ECC on appeal, could have properly considered whether or
not Bandiola was entitled to reimbursement for his medical expenses, as well as disability benefits while he was unable to
work. However, U-BIX did not present any evidence showing that it had complied with these legal requirements. It had not
even replied to Bandiolas allegations in his Position Paper, dated 13 April 1998, that its employees were not even
members of the SSS.21

As early as 1938, this Court emphasized, in the case of Murillo v. Mendoza,22 that labor laws have demonstrated an
impetus towards ensuring that employees are compensated for work-related injuries. The law has since treated such
compensation as a right, which the employees can claim, instead of an act of charity to be given at the employers
discretion.

The intention of the Legislature in enacting the Workmens Compensation Act was to secure workmen and their
dependents against becoming objects of charity, by making a reasonable compensation for such accidental calamities as are
incidental to the employment. Under such act injuries to workmen and employees are to be considered no longer as results
of fault or negligence, but as the products of the industry in which the employee is concerned. Compensation for such
injuries is, under the theory of such statute, like any other item in the cost of production or transportation, and ultimately
charged to the consumer. The law substitutes for liability for negligence an entirely new conception; that is, that if the
injury arises out of and in the course of the employment, under the doctrine of mans humanity to man, the cost of
compensation must be one of the elements to be liquidated and balanced in the course of consumption. In other words, the
theory of law is that, if the industry produces an injury, the cost of that injury shall be included in the cost of the product of
the industry.

In De Jesus v. Employees Compensation Commission,23 this Court further noted that while the present law protects
employers from spurious and long overdue claims, it stresses at the same time that the claims for compensation are to be
promptly and properly addressed. More importantly, employers no longer need to determine the validity of a claim or to
defend themselves from spurious claims. Their duties are thus limited to paying the monthly premiums and reporting the
sickness, injury or death for which compensation is due.

The new law establishes a state insurance fund built up by the contributions of employers based on the salaries of their
employees. The injured worker does not have to litigate his right to compensation. No employer opposes his claim. There
is no notice of injury nor requirement of controversion. The sick worker simply files a claim with a new neutral
Employees Compensation Commission which then determines on the basis of the employees supporting papers and
medical evidence whether or not compensation may be paid. The payment of benefits is more prompt. The cost of
administration is low. The amount of death benefits has also been doubled.

On the other hand, the employers duty is only to pay the regular monthly premiums to the scheme. It does not look for
insurance companies to meet sudden demands for compensation payments or set up its own funds to meet these
contingencies. It does not have to defend itself from spuriously documented or long past claims.

The new law applies the social security principle in the handling of workmens compensation. The Commission
administers and settles claims from a fund under its exclusive control. The employer does not intervene in the
compensation process and it has no control, as in the past, over payment of benefits. x x x.

Since there is no employer opposing or fighting a claim for compensation, the rules on presumption of compensability and
controversion cease to have importance. The lopsided situation of an employer versus one employee, which called for
equalization through the various rules and concepts favoring the claimant, is now absent.

By failing to report Bandiolas injury to the SSS, U-BIX disregarded the law and its purpose; that is, to provide a proper
and prompt settlement of his claims. Instead, U-BIX arrogated upon itself the duty of determining which medical expenses
are proper for reimbursement. In doing so, it could unnecessarily delay and unjustifiably refuse to reimburse Bandiola for
medical expenses even if they were adequately supported by receipts, as was done in this instance. The expense and delay
undergone by Bandiola since 1997 in obtaining reimbursement for his medical expenses of 7,742.50 very clearly defeat
the purpose of the law.

U-BIX does not question its liability to pay for medical expenses incurred in connection with the 13 April 1997 accident; it
admits that it paid for all the medical expenses of its other employees, who were involved in the accident.24 It refused,
however, to reimburse Bandiola for further medical expenses on the ground that the receipts were counterfeit and belatedly
presented to U-BIX.

Bandiola presented eight receipts with a total amount of 7,742.50 issued by MCP and his attending physician, Dr.
Celestino Musngi. The amounts indicated therein range from 200.00 to 2,936.00. The receipts were issued on 24 April
1997 and 6 May 1997, or around the time the accident occurred on 13 April 1997. From the face of the receipts, there is no
showing that these documents are false or falsified. U-BIX could have easily confirmed with MCP or Dr. Celestino
Musngi, who issued said receipts, the authenticity of the documents. However, it failed to allege that it took any steps to
check the authenticity of the receipts. It also failed to present any evidence that these receipts are fake. Absent any proof,
no weight can be attached to the allegation that the receipts are spurious.

The party who alleges the fact has the burden of proving it. The burden of proof is assigned to the defendant of a claim
when he or she alleges an affirmative defense, which is not a denial of an essential ingredient in the complainants cause of
action - the existence of the receipts, in the present case - but is one which, if established, will be a good defense, i.e., an
avoidance of the claim.25 One who alleges an affirmative defense that is denied by the complainant - the falsity of the
receipts, in this case - has the burden of proving it. Unless the party asserting the affirmative of an issue sustains the burden
of proof, his or her cause will not succeed. If he or she fails to establish the facts of which the matter asserted is predicated,
the complainant is entitled to a verdict or decision in his or her favor. 26 In this case, U-BIXs affirmative defense that the
receipts are spurious is rejected due to utter lack of proof.

U-BIX asserts that no demand was made by the petitioner and that it only came to know of Bandiolas medical expenses
when it received the Summons to attend a preliminary conference before the Labor Arbiter. For his part, Bandiola insists
that before filing the case with the NLRC, he approached U-BIX three times for financial assistance in connection with his
medical expenses, but he was refused. Bandiola identified the persons he spoke to as Rey Reynes and a certain Ms.
Clarisse.27 U-BIX alleges that it sent Rey Reynes to look for Bandiola in the address recorded in their office files, but that
he no longer resided therein.28 Bandiola contested this allegation by stating that he had not changed his residence. 29 As of
20 September 2006, Bandiola still resided at the same address, Sampaloc Site II-B, Barangay B.F. Homes, Paranaque City,
as evidenced by the Certificate of Indigency issued by Barangay BF Homes Chairperson Florencia N. Amurao.30

U-BIX maintains that Bandiola kept the company in the dark regarding his medical expenses because he intended to file a
baseless suit aimed at extorting money from the company. This Court finds it implausible that a worker who received less
than minimum wage31 would choose to initiate legal proceedings before even seeking to collect from his employer. To
automatically presume that Bandiola intended to defraud the company despite the absence of supporting evidence would
constitute a hasty and unsubstantiated generalization, which displays a prejudice against ordinary workers, such as
Bandiola.

U-BIXs continued and stubborn refusal to reimburse Bandiolas medical expenses was made evident during the
mandatory conference before the Labor Arbiter when it refused to recognize the receipts shown to it. If U-BIX had refused
to take cognizance of the receipts presented during a quasi-judicial proceeding before a public officer, then it would have
been more likely that it ignored, if not flat-out refused, to consider the said receipts when the same were presented by a
lowly employee.

Under the facts of the case, Bandiola is entitled to moral and exemplary damages. There is no question that moral damages
may be awarded in cases when a wrongful act or omission has caused the complainant mental anguish, fright and serious
anxiety.32 Articles 2217 and 2219, in connection with Article 21 of the Civil Code, read:

Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation and similar injury. Though incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of the defendants wrongful act for omission.

Art. 2219. Moral damages may be recovered in the following and analogous cases:

xxxx

(10)Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or
public policy shall compensate the latter for the damage.

U-BIX failed to perform its legal obligation to report to the SSS the injuries suffered by Bandiola, and, thereafter, failed to
extend the same "financial aid" it extended to other employees who were involved in the same accident. After it was shown
the receipts for the medical expenses Bandiola paid for in connection with the injuries, U-BIX unreasonably refused to
reimburse him for the expenses. It is not difficult to accept Bandiolas claim that he suffered mental anguish, serious
anxiety and fright when U-BIX left him without any options for financial support while he was suffering from and
rendered incapacitated by work-related injuries. He was severely distressed by his plight that he felt that he could no longer
continue to work for U-BIX. U-BIXs unjustified and continued refusal to reimburse Bandiola after it failed to report his
injury to the SSS, despite the receipts he presented, demonstrates bad faith. By singling out Bandiola from its other
employees, who were reimbursed for their medical expenses, and forcing him to litigate for ten years in order to claim the
unsubstantial amount of 7,742.50, U-BIX was clearly indulging in malicious conduct.

As regards the award of moral damages, this Court has ruled that there is no hard and fast rule in determining the fair
amount for moral damages, since each case must be governed by its own peculiar circumstances. 33 It should enable the
injured parties to obtain means, diversions or amusements that will serve to alleviate the moral sufferings the injured party
has undergone by reason of defendants culpable action. In other words, the award of moral damages is aimed at a
restoration within the limits of the possible, of the spiritual and/or psychological status quo ante; and therefore it must be
proportionate to the suffering inflicted. Therefore, in light of the sufferings sustained by Bandiola, this Court sustains the
award of 25,000.00 as moral damages.

Article 2229 of the Civil Code provides that exemplary damages may be imposed by way of example or correction for
public good.34 It reads:

Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition
to the moral, temperate, liquidated or compensatory damages.

Exemplary damages are designed to permit the courts to mould behavior that has socially deleterious consequences, and
their imposition is required by public policy to suppress the wanton acts of the offender.35

The Labor Code provides for the medical expenses, as well as disability benefits of workers suffering from work-related
injuries and recognizes such compensation as their right. Indeed, a system has been put in place for the prompt collection
of the benefits, which are given by law to injured employees. All that U-BIX was required to do was to report the injury; it
need not have defended itself from what it perceived to be spurious claims. Instead, it took upon itself the duty of
determining the validity of Bandiolas claims and unjustifiably refused to reimburse his properly receipted medical
expenses. The prolonged litigation of his valid claims is not the only miserable situation which the present labor laws
sought to prevent, but the pathetic situation wherein a laborer is placed at the mercy of his or her employer for recompense
that is his or hers by right. Exemplary damages are, thus, rightfully imposed against U-BIX.

IN VIEW OF THE FOREGOING, the instant Petition is DENIED. This Court AFFIRMS the assailed Decision of the
Court of Appeals, promulgated on 27 June 2002, finding U-BIX liable to Bandiola for 7,742.50 in actual damages,
25,000.00 for moral damages and 25,000.00 in exemplary damages. Costs against the petitioner.

SO ORDERED.
 G.R. No. 127864 December 22, 1999
TRADERS ROYAL BANK, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION and ROGELIO ESPAOLA, respondent.

Whether an employer-employee relationship exists between petitioner Traders Royal Bank and private respondent Rogelio
Espaola this is the issue on which hinges the fate of private respondent who after twenty (20) years of service found himself
"jobless" and deprived of his only means of livelihood.

On 27 June 1974 Agro-Commercial Security Services Agency Inc. (AGRO) assigned Rogelio Espaola to work as a janitor at
the Iloilo Branch of petitioner Traders Royal Bank (TRB). This assignment was covered by Mission Order No. 29 dated 26 June
1974 which was duly issued by the Administrative Officer of AGRO, Alberto G. Espinosa.1Sometime in 1982 Espaola was
informed that he would be absorbed by a new agency, Royal Protective and Janitorial Services Inc. (ROYAL), and that he would
perform the same functions.2 However, since ROYAL was also managed and owned by the same people who previously handled
AGRO, it did not give him separation pay or any other benefits. ROYAL also appointed Alberto G. Espinosa, AGRO's former
Administrative Officer, as its General Manager.3

On 15 July 1988 TRB and ROYAL executed a new service agreement whereby ROYAL would continue supplying janitorial
services TRB for one year, beginning 23 March 1988.4 The contract also stated that if there was no notice to terminate at the end
of the one (1) year period it would remain in force on a monthly basis.

When the service agreement expired on 23 March 1989 TRB did not issue a termination notice. Instead, it continued to avail of
ROYAL's services on a monthly basis as stated in the contract. It was only on 4 February 1994 that TRB sent a letter to ROYAL
apprising the latter of its desire to terminate the service agreement effective 16 March 1994.5In turn, ROYAL sent a notice to
private respondent Espaola informing him that due to TRB's decision to end their contract his services were no longer
needed.6 After being dismissed ROYAL declined to give him any further assignment since his job was allegedly coterminus with
its contract with TRB.

On 24 March 1994 Espaola filed a case against ROYAL, TRB and Alberto Espinosa for illegal dismissal, illegal deduction,
underpayment of wages, non-payment of overtime pay, premium pay for rest day, service incentive leave pay, 13th month pay
and night shift differentials with a prayer for reinstatement and back wages. He also claimed moral and exemplary damages as
well as attorney's fees.7

On 20 December 1995 the Labor Arbiter ruled in favor of TRB holding that Espaola had no cause of action against it as there was no
employer-employee relationship between them. The Labor Arbiter further ruled that Espaola was ROYAL's employee but he was not
entitled to any monetary award since he did not prove his claims of underpayment and illegal deductions against ROYAL.8

On appeal public respondent National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter and ruled
that Espaola was not an employee of ROYAL but of TRB. NLRC then ordered TRB to reinstate him and to pay him the total
amount of P110,829.78 broken down as follows: P81,265.90 for backwages, P736.92 for ERA, P15,698.08 for salary
differentials, P3,143.45 for 13th month pay and P10,075.00 for attorney's fees.9

After its motion for reconsideration was denied TRB filed this special civil action for certiorari contending that the NLRC
gravely abused its discretion in reversing the Labor Arbiter's decision and declaring Espaola to be its employee.10

Who was Espaola's real employer? If Espaola was ROYAL's employee then he would have no recourse against TRB since his
dismissal was caused by the legitimate termination of a service contract. But if he was really TRB's employee then he would be
entitled to reinstatement and full back wages as he was illegally dismissed.

To prove that Espaola was not its employee TRB cites Mission Order No. 29 signed by AGRO Administrative Officer Alberto
G. Espinosa. The order stated that Rogelio Espaola would be assigned as janitor to TRB's Iloilo Branch. It also provided that his
employment would be from 26 January 1974 until revoked. 11 TRB argues that this proves that AGRO was Espaola's employer
from 1974 to 1982. And when he agreed to be absorbed by ROYAL he became its employee from 1982 to 1994. Hence, he was
never employed by TRB. To bolster its contention TRB refers to the provisions of its service agreement with ROYAL, dated 15
July 1988, which state that:

2. That the janitor and/or janitress assigned to the PARTY OF THE FIRST PART (petitioner) shall in no way be considered
as employees of the PARTY OF THE FIRST PART and the PARTY OF THE SECOND PART (ROYAL) shall be
responsible for the conduct and performance of its duties;

6. For and in consideration of the services to be rendered by he PARTY OF THE SECOND PART to the PARTY OF THE
FIRST PART, the latter shall pay to the PARTY OF THE SECOND PART (under this agreement) the amount of TWO
THOUSAND TWO HUNDRED FIFTY SEVEN & 32/100 ONLY (2,257.32), Philippine Currency, per month per janitress,
the same payable in two (2) installments on the 15th and last day of every month.

TRB asserts that aside from the agreement itself which reveals that it was ROYAL which provided the janitors' salary, par. 2
thereof also states that the janitors were its own employees. Thus, Espaola's dismissal was the result of a valid termination of its
service agreement with ROYAL.

We are not convinced. This Court has ruled that the existence of employer-employee relationship cannot be proved by merely
showing the agreement of the parties.12 It is a question of fact which should be supported by substantial
evidence.13 And in determining the existence of such relationship the elements usually considered are: (a) the selection of the
employee; (b) the payment of wages; (c) the power of dismissal; and, (d) the power to control the employee's conduct, with the
"control test" generally assuming primacy in the overall consideration.14

Who then had control over Espaola's conduct? Was it ROYAL or TRB? Between the two, we believe it was TRB. Espaola
claimed in his position paper that

Complainant, as previously stated, was required to work as a janitor and as a driver. Moreover, he was required to do his
cleaning chores at night in order not to disturb the transaction of business at the bank during office hours. Thus, every night
from Sunday to Thursday he was required to clean the bank premises of respondent TRB. From Monday to Friday he was
required to drive TRB's armored car and pick up the children of respondent TRB's manager, Mrs. Erlinda Ocampo, then drive
them to Angelicum School in Jaro, Iloilo City. Thereafter, he was required to stay in the bank premises until 5:00 P.M.,
except for lunch break, run errands and discharge other tasks and chores assigned to him by respondent TRB's employees.
After 5:00 P.M. complainant was required to drive the above named officers of respondent TRB home. He usually got back to
the bank between 6:00 P.M. to 7:00 P.M. Upon his arrival he would start cleaning the bank and, since the premises was big, it
usually took about 2 hours or up to 9:00 P.M. to finish his cleaning. Because he had to work late and start working early and
since his residence was in Sta. Barbara, Iloilo, where there was no public transportation at night, he had to sleep in the bank.
His day-to-day work was monitored and supervised by respondent TRB.15

The above allegations contained in the position paper of Espaola were never refuted. TRB could have easily presented
affidavits, written explanations or any other pleadings to defend itself and disprove Espaola's claims.16However, the only
evidence it ever presented was its service agreement with ROYAL. From the time TRB submitted its position paper to the Labor
Arbiter up to the time it submitted its memorandum to the Supreme Court, not once did it deny that it designated Espaola as its
driver. On the other hand, Espaola constantly reiterated in his pleadings that TRB supervised and controlled his work as its
janitor-driver. The fact that Espaola's allegations were never controverted at any stage of the proceedings affirms that such
averments were true.17 Furthermore, Rule 9, Sec. 11, of the Rules of Court, which supplements the NLRC rules, also provides
that an allegation which is not specifically denied is deemed admitted.18

Besides, even if this Court relied on the service agreement, as espoused by TRB, it can still be seen that TRB was the one which
controlled and supervised Espaola. Paragraph 3 of the contract states

3. That the PARTY OF THE FIRST PART shall have the direct control and supervision over their janitor's and janitress'
conduct and performance in consonance with the preceding paragraph, with minimum interference by the PARTY OF THE
SECOND PART, provided however, that discipline and administration of these janitors and janitress shall conform with the
standards and policies of the PARTY OF THE FIRST PART . . . .

TRB should, under the foregoing, be obviously deemed as Espaola's employer.

Petitioner cites Filipino Synthetic Fiber Corp. (FILSYN) v. NLRC 19 in an effort to persuade this Court that the doctrine therein should
be applied in the instant case. We do not agree. In FILSYN, the employees worked exclusively as janitors and were never required by
FILSYN to perform any other task. Furthermore, there was no proof that FILSYN controlled the manner they worked. Hence, in that
case, the Court ruled that the employer of the janitors was the De Lima Corporation, the janitorial agency, and not FILSYN. In the
present case, however, Espaola not only worked as a janitor but he was also TRB's driver. Since 1974 he was required to drive TRB's
armored car, bring and fetch the children of the bank's manager to and from school, drive for its officers, and perform various errands
assigned to him by TRB employees.

Furthermore, FILSYN presented substantial evidence that the janitorial agency was an independent contractor. It presented De
Lima's Articles of Incorporation and proof of its capitalization amounting to almost P2,000,000. This was not done by TRB.
Instead, it relied heavily on the aforementioned service agreement covering the period from 1988 to 1994. TRB did not even
prove sufficiently that it was not Espaola's employer from 1974 to 1987.

As a matter of fact, it was ROYAL which submitted documents to establish that it was an independent contractor. However, it
alleged that it never knew that TRB utilized Espaola as its driver and compelled him to do other chores.20 ROYAL further
claimed that it was TRB which had control and supervision over Espaola.21 Again, TRB never refuted this statement. Neither
did it prove that ROYAL was the one which effectively controlled and supervised the manner Espaola worked.

The NLRC therefore did not abuse its discretion in ruling that Espaola was not the employee of ROYAL. On the contrary, it was the
Labor Arbiter who came up with the erroneous conclusion. He disregarded the uncontroverted allegations of Espaola and hastily
concluded that since ROYAL was an independent contractor, it was Espaola's direct employer. While it may be that ROYAL could
very well be an independent contractor although it did not establish this fact with competent evidence to qualify it as such and
that Espaola's name appeared in its payroll,22 nevertheless, whatever role ROYAL had in this case, it was certainly not as the
employer of Espaola. For the fact remains that it was TRB which had control and supervision over Espaola's work. Consequently, it
should be considered as his employer.

Since Espaola was illegally dismissed he is entitled to reinstatement with full back wages.23 The NLRC erred in ruling that he
was only entitled to back wages from 16 March 1994 to 30 September 1996. An illegally dismissed employee is entitled to back
wages from the time he was dismissed to the time of his actual reinstatement.24However, the NLRC's ruling with regard to the
salary differentials and 13th month pay differentials must be sustained.

WHEREFORE, the petition is DISMISSED. The assailed Decision of public respondent National Labor Relations Commission
reversing that of the Labor Arbiter and ordering petitioner Traders Royal Bank to reinstate private respondent Rogelio Espaola and to
pay him salary differentials of P15,698.00, 13th month pay differentials of P3,143.45 and attorney's fees of P10,075.43 is AFFIRMED,
but with the modification that petitioner should pay private respondent full back wages from 16 March 1994 up to his actual
reinstatement. Costs against petitioner. SO ORDERED.
 G.R. No. 128003 July 26, 2000
RUBBERWORLD [PHILS.], INC., and JULIE YAO ONG, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION, AQUINO MAGSALIN, PEDRO MAIBO, RICARDO BORJA, ALICIA
M. SAN PEDRO AND FELOMENA B. TOLIN, respondents.

What is before the Court for resolution is a petition to annul the resolution of the National Labor Relations Commission
(NLRC),1 affirming the labor-arbiter's award but deleting the moral and exemplary damages.

The facts are as follows:

Petitioner Rubberworld (Phils.), Inc. [hereinafter Rubberworld], a corporation established in 1965, was engaged in
manufacturing footwear, bags and garments.

Aquilino Magsalin, Pedro Manibo, Ricardo Borja, Benjamin Camitan, Alicia M. San Pedro, and Felomena Tolin were
employed as dispatcher, warehouseman, issue monitor, foreman, jacks cementer and outer sole attacher, respectively.

On August 26, 1994, Rubberworld filed with the Department of Labor and Employment a notice of temporary shutdown of
operations to take effect on September 26, 1994. Before the effectivity date, however, Rubberworld was forced to
prematurely shutdown its operations.

On November 11, 1994, private respondents filed with the National Labor Relations Commission a complaint2against
petitioner for illegal dismissal and non-payment of separation pay.

On November 22, 1994, Rubberworld filed with the Securities and Exchange Commission (SEC) a petition for declaration
of suspension of payments with a proposed rehabilitation plan.3

On December 28, 1994, SEC issued the following order:

"Accordingly, with the creation of the Management Committee, all actions for claims against Rubberworld Philippines,
Inc. pending before any court, tribunal, office, board, body, Commission or sheriff are hereby deemed SUSPENDED.

"Consequently, all pending incidents for preliminary injunctions, writ or attachments, foreclosures and the like are hereby
rendered moot and academic.

"SO ORDERED."4

On January 24, 1995, petitioners submitted to the labor arbiter a motion to suspend the proceedings invoking the SEC order
dated December 28, 1994. The labor arbiter did not act on the motion and ordered the parties to submit their respective
position papers.

On December 10, 1995, the labor arbiter rendered a decision, which provides:

"In the light of the foregoing, respondents are hereby declared guilty of ILLEGAL SHUTDOWN and that respondents are
ordered to pay complainants their separation pay equivalent to one (1) month pay for every year of service.

Considering the malicious act of closing the business precipitately without due regard to the rights of complainants, moral
damages and exemplary damage in the sum of P 50,000.00 and P 30,000.00 respectively is hereby awarded for each of the
complainants.

Finally 10 % of all sums owing to complainants is hereby adjudged as attorney's fees.

SO ORDERED."5

On February 5, 1996, petitioners appealed to the National Labor Relations Commission (NLRC) alleging abuse of
discretion and serious errors in the findings of facts of the labor arbiter.

On August 30, 1996, NLRC issued a resolution, the dispositive portion of which reads:

"PREMISES CONSIDERED, the decision appealed from is hereby, AFFIRMED with MODIFICATION in that the award
of moral and exemplary damages is hereby, DELETED.

SO ORDERED."6

On November 20, 1996, NLRC denied petitioners' motion for reconsideration.

Hence, this petition.7

The issue is whether or not the Department of Labor and Employment, the Labor Arbiter and the National Labor Relations
Commission may legally act on the claims of respondents despite the order of the Securities and Exchange Commission
suspending all actions against a company under rehabilitation by a management committee created by the Securities and
Exchange Commission.

Presidential Decree No. 902-A is clear that "all actions for claims against corporations, partnerships or associations under
management or receivership pending before any court, tribunal, board or body shall be suspended accordingly." The law
did not make any exception in favor of labor claims.8

"The justification for the automatic stay of all pending actions for claims is to enable the management committee or the
rehabilitation receiver to effectively exercise its/his powers free from any judicial or extra judicial interference that might
unduly hinder or prevent the 'rescue' of the debtor company. To allow such other actions to continue would only add to the
burden of the management committee or rehabilitation receiver, whose time, effort and resources would be wasted in
defending claims against the corporation instead of being directed toward its restructuring and rehabilitation."9

Thus, the labor case would defeat the purpose of an automatic stay.1wphi1 To rule otherwise would open the floodgates
to numerous claims and would defeat the rescue efforts of the management committee.

Besides, even if an award is given to private respondents, the ruling could not be enforced as long as petitioner is under
management committee.10

This finds ratiocination in that the power to hear and decide labor disputes is deemed suspended when the Securities and
Exchange Commission puts the corporation under rehabilitation.

Thus, when NLRC proceeded to decide the case despite the SEC suspension order, the NLRC acted without or in excess of
its jurisdiction to hear and decide cases. As a consequence, any resolution, decision or order that it rendered or issued
without jurisdiction is a nullity.

WHEREFORE, the petition is hereby GRANTED. The decision of the labor arbiter dated December 10, 1995 and the
NLRC resolution dated August 30, 1996, are SET ASIDE.

No costs.

SO ORDERED.
 G.R. No. 114761 January 19, 2000
ALEMAR'S SIBAL & SONS, INC., petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION, NLM-KATIPUNAN (representing the group of CHARITO
ALIMORONG), respondents.

The petition before the Court is for certiorari1 to set aside the resolutions of the National Labor Relations
Commission2 dismissing the appeal of petitioner and upholding the order of the Labor Arbiter to proceed with the
execution of the decision rendered in favor of private respondent.

On January 30, 1984, private respondent NLM Katipunan, representing the group of Charito Alimurong, filed with the
Department of Labor and Employment a notice of strike,3 raising charges of unfair labor practice (ULP) and illegal
dismissal against petitioner. Thereafter, the charges were elevated to respondent National Labor Relations Commission
(NLRC) for compulsory arbitration.4

On April 29, 1985, Labor Arbiter Emilio V. Pealosa rendered a decision5 ordering petitioner to pay private respondent
separation pay equivalent to one-half (1/2) month pay for every year of service.

On December 23, 1985, the Research and Information Unit of the NLRC submitted its computation of the separation pay
due to private respondent, which amounted to a total of P207,365.33.

On January 4, 1988, private respondent filed with the Labor Arbiter a motion for execution of the decision of the Labor
Arbiter. Petitioner did not file any opposition thereto.

At the hearing held on April 19, 1988, petitioner and private respondent agreed to the computation of the separation pay.
The terms of settlement are as follows:

As agreed upon by the parties, a downpayment of P20,736.53 will be paid in May 1988 which is equivalent to 10%
of the total money judgment. In June 1988, P41,473.06 will be paid by respondent and the rest covering the initial
forty four (44) will be paid July 1988. The balance of the P207,365.20 will be spread over a fifteen (15) months
period.

(Sgd) Counsel (Sgd) Counsel

for Complainant for Respondent6

Thus, Labor Arbiter Jose de Vera directed petitioner to pay the agreed amount of P20,736.53 representing 10% of the total
amount of the separation pay due the complainants on May 16, 1988.

On June 10, 1988, the Rehabilitation Receiver of petitioner submitted a Manifestation with Motion,7 alleging that petitioner
was not yet in a position to comply with the directive of Labor Arbiter de Vera for the reason that it was still under
Rehabilitation Receivership by virtue of the order of the Securities and Exchange Commission (SEC) dated August 1,
1984. Thus, it sought deferment of such payment until the SEC will issue an order formally approving the rehabilitation of
petitioner and allowing complainants to file their claims with the Rehabilitation Receiver.

Due to the failure of petitioner to comply with its obligation to pay the first batch of complainants their separation pay, the
Labor Arbiter granted the motion for execution of private respondent in an order dated July 18, 1988.

On August 5, 1988, petitioner filed a motion for reconsideration of the order granting the motion for execution, contesting
the amount computed by the Research Information Unit of the National Labor Relations Commission.

On September 9, 1988, Labor Arbiter Jose De Vera denied the motion, stating as follows:

. . .respondent failed to manifest any objection or to submit its comment on the computation made by the Research
and Information Unit, this Branch. In fact, on March 17, 1988, it submitted a proposal as to how the complainants'
claim for separation pay would be satisfied. Further, when the complainants agreed to accept payment of their
separation pay on scheduled basis, the first payment of P20,736.53 scheduled in May 1988, which was agreed
upon by the parties, said respondent failed to comply and instead, it filed a Manifestation with Motion praying for
the deferment of execution until the Securities and Exchange Commission issues an Order formally approving the
rehabilitation of the respondent.

Besides, the respondent Motion for Reconsideration is filed out of time considering that as per bailiffs return,
respondent received the questioned Order on July 26, 1988 while its Motion was filed only on August 5, 1988, or
more than ten (10) days from receipt of the Order.8

On September 26, 1988, petitioner filed with the Labor Arbiter a Motion to Suspend Execution, 9 citing as reason therefor
the order issued by the Securities and Exchange Commission which states:

All actions for claims against the corporation before any court, tribunal or body are suspended accordingly.10
On October 27, 1988, petitioner appealed the Labor Arbiter's order11 for the issuance of a writ of execution to the NLRC. In
a decision dated October 13, 1993, the NLRC dismissed the appeal. On February 2, 1994, the NLRC likewise denied the
petitioner's motion for reconsideration.

Hence, this petition.12

Petitioner contends that public respondent should have denied the order of the Labor Arbiter for the immediate payment of
separation pay in favor of private respondent. Petitioner insists that a stay of execution of monetary award is justified in
this case because of the order of the Securities and Exchange Commission suspending all claims against petitioner pending
before any court, tribunal or body.

The Solicitor General, in his Manifestation,13 recommends that the petition be given due course without prejudice to the
subsequent receipt of separation pay by private respondent in accordance with the preference and concurrence of credits
under the Civil Code, the Insolvency Law and Article110 of the Labor Code.

Respondent National Labor Relations Commission, on the other hand, contends that petitioner is bound by its agreement
with private respondent as to the computation of separation pay to be paid. The NLRC emphasizes that the order of
execution made by the Labor Arbiter had reached finality and stresses that petitioner's succeeding motions had been filed
out of time.14

We note that at the time this petition had been filed on May 4, 1994, petitioner had been placed under rehabilitation
receivership. Jurisprudence has established that a stay of execution may be warranted by the fact that a petitioner
corporation has been placed under rehabilitation receivership.15 However, it is undisputed that on March 5, 1997, the
Securities and Exchange Commission issued an order approving the proposed rehabilitation plan of petitioner and placing
it under liquidation pursuant to Presidential Decree 902-A . Subject to the control of the SEC, the liquidator, Ledesma,
Saludo & Associates,16 was ordered to "wind up the affairs of the corporation, continue to manage the corporation for
purposes of liquidation in order to protect the interest of its creditors and avoid dissipation, loss, wastage, or destruction of
the remaining assets and other properties of the corporation and to ensure orderly payment of claims against such
corporation in accordance with applicable laws."17

Thus, petitioner pointed out that the SEC's order suspending all claims against it pending before any other court, tribunal or
body was pursuant to the rehabilitation receivership proceedings. Such order was necessary to enable the rehabilitation
receiver to effectively exercise its powers free from any judicial or extra-judicial interference that might unduly hinder the
rescue of the distressed company.18 Since receivership proceedings have ceased and petitioner's rehabilitation receiver and
liquidator, Ledesma Saludo & Associates, has been given the imprimatur to proceed with corporate liquidation, the cited
order of the Securities and Exchange Commission has been renderedfunctus officio. Thus, there is no legal impediment for
the execution of the decision of the Labor Arbiter for the payment of separation pay.

Considering that petitioner's monetary obligation to private respondent is long overdue and that petitioner has signified its
willingness to comply with such obligation by entering into an agreement with private respondent as to the amount and
manner of payment, petitioner can not delay satisfaction of private respondent's claim. However, due to events subsequent
to the filing of this petition, private respondent must present its claim with the rehabilitation receiver and liquidator of
petitioner, subject to the rules on preference of credits.

WHEREFORE, the Court hereby DISMISSES the petition and direct private respondent to file its claim with the
rehabilitation receiver/liquidator of petitioner in SEC EB No. 81 entitled "In the Matter of the Liquidation of Alemar's
Sibal & Sons" pending before the Securities and Exchange Commission.1wphi1.nt

No Costs.

SO ORDERED.