Corales vs. Employees' Compensation Commission

Claims for injury or sickness accruing before January 1, 1975 remain governed by the Workmen's Compensation Act, enforceable within its ten-year prescriptive period through the GSIS and ECC; decreed awards already final and executory shall be paid by the GSIS without prejudice to reimbursement from the employer, while decreed awards not yet final shall be paid directly by the respective employer.

Petitioners were government personnel — including a Bureau of Lands employee, public school teachers, a municipal judge, a letter carrier, and their surviving dependents — covered first by the Workmen's Compensation Act and later by Book IV, Title II of the Labor Code on Employees' Compensation under P.D. No. 626, as amended. The new scheme created the State Insurance Fund administered by the Government Service Insurance System for the public sector and the Employees' Compensation Commission as appellate body, while fixing March 31, 1975 as the deadline for filing workmen's compensation claims accruing before January 1, 1975. The defunct Workmen's Compensation Commission and its regional units were in the process of folding up when the present claims were filed with the GSIS.

Corales started government service in 1932 and retired on March 26, 1975 under Republic Act No. 660, as amended by Republic Act No. 4968. His tuberculosis was traced to 1965 when he was downed by high fever, with the cause of action placed in September 1965, and he filed his claim with the GSIS on August 4, 1975. Villones served as a government teacher from July 3, 1972, contracted his fatal ailment on December 4, 1972, died on September 2, 1975, and his dependent filed the claim on December 23, 1975. Cañeja entered government service on July 5, 1950 and filed on July 30, 1976 for schizophrenia for which he was confined at the National Mental Hospital from December 6, 1961 to February 15, 1962, from July 9, 1966 to January 10, 1967, and from January 2, 1973 to May 15, 1975, with out-patient treatment on several later dates. Barga began government work and in 1969 felt symptoms of duodenal ulcer, was hospitalized on February 22, 1975, discharged March 4, 1975, readmitted for exploratory laparotomy and drainage of pelvic abscess, discharged March 30, 1975, and resumed work on May 5, 1975 before filing his claim.

Thereafter, Restituto Duran entered government service on October 15, 1941, joined the judiciary on May 31, 1952 as justice of the peace, was first hospitalized in March 1972 and intermittently confined for castralgia angina pectoris, gouty arthritis, myofascitis, coronary insufficiency, hypocalcenia with cramps and monocytic leukemia until death from acute monocytic leukemia on April 28, 1977, with his widow filing with the GSIS on March 14, 1978. Bonifacia Calvero entered service as classroom teacher on July 28, 1941, had multiple sclerosis initially discovered on June 12, 1971, retired November 1, 1977 at age 55, and filed for disability benefits in late January 1978. Amelia Delegente claimed for a letter carrier employed by the Bureau of Posts regional office at San Pablo City from January 1, 1942 until death on May 28, 1976, whose thyroid carcinoma secondary to pulmonary tuberculosis was detected about April 1974, operated on during confinement beginning October 20, 1975, with the claim filed March 10, 1976. Perpetua Ceniza entered service September 12, 1947 as public school teacher, contracted chronic pyelonephritis and uremia, was confined in December 1977, died January 30, 1979 at age 49, and her husband filed November 14, 1979.

The GSIS found the claims non-compensable under the New Labor Code, and the ECC affirmed the denials. On appeal, the Supreme Court applied the old Workmen's Compensation Act and decreed compensation, finding the ailments work-connected and the filings timely under the ten-year statute-founded prescription despite being after March 31, 1975 and filed with the GSIS rather than the Department of Labor regional offices.

• Execution and Reimbursement: Petitioner Barga pleaded that the reliefs sought by the GSIS be granted provided his award was not prejudiced, that the GSIS be ordered to facilitate and expedite processing and payment, and that the proposal to refile claims elsewhere be treated as improper at this stage and ventilated only in future cases.
• Immediacy of Payment: Petitioner Villones maintained that resolution of the reimbursement issue should not be a condition precedent to execution, that reimbursement should not delay execution since the government guarantees the solvency of the State Insurance Fund, and that the directive for the GSIS to pay should be immediately executory and no longer reconsidered.
• Forum and Speedy Justice: Petitioner Villones argued that requiring government employees to file with the Commission on Audit and private employees with regular courts would derogate speedy labor justice through auditing red tape, fund-availability requirements and technical rules of evidence and procedure.
• Implementation of Award: Petitioner Duran prayed that the March 30, 1982 decision be maintained and implemented as soon as legally possible by whatever agency might be directed to pay, while petitioner Delegente prayed that the GSIS motion be denied for lack of merit.
• Payment with Reimbursement: Petitioner Ceniza manifested that the GSIS be directed to pay the awarded benefits and thereafter be allowed to seek reimbursement from the Ministry of Education and Culture after due hearing.

• Reimbursement and State Insurance Fund: Respondent GSIS argued that its right to reimbursement is anchored on the quasi-contract nature of compensation and aimed at preserving the State Insurance Fund for beneficiaries under the current law, with recovery from the employer who was originally liable.
• Proper Forum: Respondent GSIS maintained that compensation claims under the old law should be pursued before regular courts by private employees and before the Commission on Audit as money claims by government employees, on the principle of ubi jus ibi remedium and reversion of jurisdiction upon abolition of the Workmen's Compensation Commission.
• Direct Employer Liability: Respondent GSIS argued that the government employer concerned, not the GSIS, should be directed to pay claims accruing under the old law, invoking Avendano and Land, to avoid circuitous reimbursement proceedings and save time, effort and expense.
• Scope of Relief Prayed: Respondent GSIS prayed that its manifestation be noted with qualification of its alleged offer as merely equitable, that reimbursement apply only in Corales, Villones, Cañeja and Barga and other cases already final and executory, and that pending or non-final cases be resolved either by resort to Commission on Audit or regular courts or by direct employer liability.
• Prescription and Jurisdiction: Respondent ECC argued that the petitions should be dismissed as barred under Article 292 of the New Labor Code for filing beyond March 31, 1975, while respondent GSIS in Calvero added lack of jurisdiction of the entity where filed, non-lifelong benefits, and deletion of attorney's fees.
• Measure and Compensability: Respondent ECC in Duran sought amendment of the award to P6,000.00 death benefits, receipted medical and hospital refund, and P200.00 burial expenses under the Workmen's Compensation Act instead of P12,000.00 and P1,000.00 funeral expenses, while respondent GSIS questioned gouty arthritis as non-occupational and sought reconsideration, or alternatively reimbursement, plus deletion of attorney's fees and administrative costs.

• Final Awards — Payor: Whether the GSIS must pay the decreed awards in Corales, Villones, Cañeja and Barga where decisions are already final and executory, without prejudice to reimbursement from the employers.
• Non-Final Awards — Payor: Whether awards decreed under the Workmen's Compensation Act but not yet final shall be paid directly by the respective employers of the claimants.
• Prescription and Vested Rights: Whether claims accruing before January 1, 1975 but filed after March 31, 1975 are forever barred under Article 292 of the Labor Code or preserved by the ten-year prescriptive period under the old law.
• Jurisdiction and Forum: Whether the GSIS and ECC have jurisdiction to process and adjudicate old-law claims, or such claims must be filed with the Commission on Audit for government employees and regular courts for private employees.
• Measure of Benefits: Whether the Duran, Calvero, Delegente and Ceniza dispositives should be amended to conform to Workmen's Compensation Act benefits and to delete or adjust attorney's fees and administrative costs.

• Final Awards — Payor: Yes. The GSIS was directed to pay the decreed awards in Corales, Villones, Cañeja and Barga, the decisions being final and executory, without prejudice to reimbursement from the respective employers after due hearing.
• Non-Final Awards — Payor: Yes. Awards decreed under the Workmen's Compensation Act for ailments initially contracted before the Labor Code but whose decisions are not yet firm shall be paid by the respective employers.
• Prescription and Vested Rights: No bar. Causes accruing before the new scheme remain governed by the old law, including the ten-year statute-founded prescription as a vested right, notwithstanding Article 292's March 31, 1975 deadline.
• Jurisdiction and Forum: GSIS and ECC retain jurisdiction. Filing, processing and adjudication remain with the System subject to appeal to the Commission under Articles 171, 178, 165(e) and 175(c) and Rule XVII, not with the Commission on Audit or regular courts.
• Measure of Benefits: Yes, in part. The dispositives in Duran, Calvero, Delegente and Ceniza were amended to P6,000.00 death or disability benefits, receipted medical reimbursement, P200.00 burial or funeral expenses, P600.00 attorney's fees, and administrative costs against the named employer agencies.

• Final Awards — Payor: Because the four cases were adjudged compensable under the Workmen's Compensation Act for ailments initially contracted before the New Labor Code and the judgments had become final and executory, execution could no longer be disturbed. The GSIS as administrator of compensation adjudication was therefore required to satisfy the decreed awards promptly, its equitable concern being accommodated only through a preserved right to seek reimbursement from the employers after due hearing.
• Non-Final Awards — Payor: Because the later awards likewise rested on the old law where the employer was ultimately liable, and the decisions had not yet become firm, direct employer payment was imposed to avoid circuitous GSIS payment followed by reimbursement. Accordingly, the Supreme Court (Office of the Court Administrator), Ministry of Education and Culture, and Ministry of Transportation and Communications (Bureau of Posts) were respectively ordered to pay.
• Prescription and Vested Rights: Because the causes accrued during the Workmen's Compensation Act, Article 208 and Rule III limit the new Title to injury or sickness accruing on or after January 1, 1975, while Articles 292 and 294 preserve determination under the laws in force at accrual. The ten-year period for statute-founded rights was thus applied, filing with the GSIS was treated as filing with the appropriate agency during the folding up of workmen's compensation units, and literal application of the March 31, 1975 bar was rejected as rendering a constitutionally rooted vested right without a forum.
• Jurisdiction and Forum: Because Article 178 vests the System with original and exclusive jurisdiction over coverage, entitlement, contributions and related matters subject to Commission appeal, Article 171 makes State Insurance Fund liability exclusive, and Rule XVII requires claims to be filed directly with the System for processing and adjudication, the GSIS proposal for Commission on Audit or court filing was rejected as contrary to the Code and rules until amended. P.D. No. 954 was confined to cases pending as of March 31, 1976 before workmen's compensation bodies.
• Measure of Benefits: Because compensability was foreclosed but the amounts had to conform to the old statute, the awards were restated as P6,000.00 death or disability benefits with receipted medical refund, P200.00 burial or funeral expenses, P600.00 attorney's fees and administrative costs. The ECC's plea for outright dismissal on prescription grounds and the GSIS pleas to eliminate fees and costs were not sustained beyond this conforming amendment.

• Applicability of the old Workmen's Compensation Act — Causes of action for injury, sickness, disability or death accruing before January 1, 1975 are determined under the laws in force at accrual, pursuant to Articles 208, 292 and 294 of the Labor Code and Section 1(c) of Rule III; the new employees' compensation Title applies only to contingencies accruing on or after January 1, 1975. Applied to sustain old-law adjudication for ailments initially suffered before the Code even if claims were filed afterwards.
• Vested rights and ten-year prescription — Rights founded on the Workmen's Compensation Act as a statute prescribe in ten years and constitute vested rights that the March 31, 1975 deadline in Article 292 cannot defeat, especially where claimants persisted in work despite disability until retirement, death or incapacity. Applied to hold timely the filings in Corales, Villones, Cañeja, Barga, Duran, Calvero, Delegente and Ceniza.
• Filing with the GSIS during transition — Filing with the GSIS instead of Department of Labor regional offices does not militate against the claim when done within the lawful period, following Pobre vs. Santos, 77 SCRA 315-320. Applied to excuse GSIS filing while workmen's compensation bodies were folding up.
• Exclusive GSIS jurisdiction and ECC appeal — Under Articles 165(e), 171, 175(c) and 178 and Rule XVII, the System has original and exclusive jurisdiction to process and determine compensability of claims filed directly with it, subject to appeal to the ECC within twenty working days from submission of evidence, with GSIS-initiated rules subject to ECC approval. Applied to reject transfer of claims to the Commission on Audit or regular courts.
• Allocation of payment liability — For old-law awards already final and executory, the GSIS pays with a right to reimbursement from the employer after due hearing; for old-law awards not yet final, the employer pays directly. Applied to direct GSIS payment in Corales, Villones, Cañeja and Barga and employer payment in Duran, Calvero, Delegente and Ceniza.

• "WHEREFORE, THE GOVERNMENT SERVICE INSURANCE SYSTEM IS HEREBY DIRECTED TO PAY THE CLAIMANTS THE DECREED AWARDS IN THEIR RESPECTIVE CASES, WITHOUT PREJUDICE TO THE RIGHT OF THE GOVERNMENT SERVICE INSURANCE SYSTEM TO REIMBURSEMENT FROM THE RESPECTIVE EMPLOYERS OF THE CLAIMANTS OR OF THE DECEASED EMPLOYEE AFTER DUE HEARING." — States the March 15, 1982 allocation rule for final awards that the present resolution enforces against the GSIS.
• "the vested rights of claimants, whose causes of action accrued before the regime of the new compensation scheme, over the more favorable and compassionate provisions of the previous compensation statute, including the right to file their claims during the ten-year prescriptive period, should be recognized and respected." — Defines the doctrinal basis for rejecting the Article 292 bar and applying the old law.
• "Indeed, to sustain the stand of respondent ECC on this matter would result into a situation wherein herein claimants and others similarly circumstanced would have a bare right without any forum to enforce the same." — Explains why GSIS and ECC jurisdiction must be upheld to avoid rendering social-legislation rights worthless.
• "Unless and until the Labor Code and its implementing rules on compensation are amended, the foregoing provisions stand as they are. In the meantime, the filing, 'Processing and adjudication of claims for compensation should remain With the GSIS and the ECC." — Affirms continued GSIS and ECC competence and rejects the Commission on Audit or courts alternative.

• Ibañez vs. ECC, et al., L-47008, March 8, 1978 — Cited as the Second Decision lamenting that the Labor Code reduced compensability under the former Workmen's Compensation Act and noting the need for legislative remedy to reconcile humane social-justice policy with new benefits.
• Pobre vs. WCC, 77 SCRA 315-320, May 31, 1977 — Followed for the rule that filing in an office without authority may be treated as filed with the appropriate agency if within the allowed period, sustaining GSIS filings.
• Romero case, 77 SCRA 482, 489 (1977) — Cited by analogy for workers who persisted in working despite medical disability through determination and ingenuity, as did petitioners until retirement, death or incapacity.

• Article 292, Labor Code (Prescription and Transitory Filing) — Requires workmen's compensation claims accruing prior to the Code to be filed with Department of Labor regional offices not later than March 31, 1975, with November 1 to December 31, 1974 claims processed under old laws; construed as not barring statute-founded ten-year vested rights filed with the GSIS.
• Article 294 and Article 208, Labor Code — Provide that actions accruing prior to the Code are determined under laws in force at accrual and that Book IV, Title II applies only to contingencies accruing on or after January 1, 1975; applied with Rule III, Section 1(c) to govern all eight claims by the old Act.
• Articles 171, 178, 165(e) and 175(c), Labor Code — Establish exclusiveness of State Insurance Fund liability, the System's original and exclusive jurisdiction subject to ECC appeal, the definition of System as SSS or GSIS, and ECC rule-approval power; applied to retain filing and adjudication in the GSIS and ECC.
• Rule XVII, Sections 1-3, Amended Rules on Employees' Compensation — Require medical and income-benefit claims to be filed directly with the System and direct the System to process and determine compensability; applied to confirm GSIS cognizance.
• Workmen's Compensation Act, as amended; Republic Act No. 660 as amended by Republic Act No. 4968; P.D. No. 626, as amended; P.D. No. 954 — The old Act supplied the substantive benefits and ten-year prescription; the retirement laws fixed Corales retirement; P.D. No. 626 supplied the new scheme; P.D. No. 954 was limited to cases pending as of March 31, 1976 before workmen's compensation bodies.

Fernando, C.J., Teehankee, Concepcion Jr., Guerrero, Abad Santos, De Castro, Plana and Escolin, JJ., concur. Melencio-Herrera and Gutierrez, Jr., JJ., concur in the result. Aquino and Relova, JJ., took no part.