PHILIPPINE GLOBAL COMMUNICATIONS,

vs. RICARDO DE VERA, respondent.

INC., petitioner,

DECISION
GARCIA, J.:

Before us is this appeal by way of a petition for review on certiorari from

the 12 September 2002 Decision and the 13 February 2003 Resolution of
the Court of Appeals in CA-G.R. SP No. 65178, upholding the finding of illegal
dismissal by the National Labor Relations Commission against petitioner.
[1]

[2]

As culled from the records, the pertinent facts are:

Petitioner Philippine Global Communications, Inc. (PhilCom), is a
corporation engaged in the business of communication services and allied
activities, while respondent Ricardo De Vera is a physician by profession
whom petitioner enlisted to attend to the medical needs of its employees. At
the crux of the controversy is Dr. De Veras status vis a vis petitioner when the
latter terminated his engagement.
It appears that on 15 May 1981, De Vera, via a letter dated 15 May
1981, offered his services to the petitioner, therein proposing his plan of
works required of a practitioner in industrial medicine, to include the following:
[3]

1. Application of preventive medicine including periodic check-up of employees;

2. Holding of clinic hours in the morning and afternoon for a total of five (5)
hours daily for consultation services to employees;
3. Management and treatment of employees that may necessitate hospitalization
including emergency cases and accidents;
4. Conduct pre-employment physical check-up of prospective employees with no
additional medical fee;
5. Conduct home visits whenever necessary;
6. Attend to certain medical administrative function such as accomplishing
medical forms, evaluating conditions of employees applying for sick leave
of absence and subsequently issuing proper certification, and all matters
referred which are medical in nature.

The parties agreed and formalized respondents proposal in a document

denominated as RETAINERSHIP CONTRACT which will be for a period of
one year subject to renewal, it being made clear therein that respondent will
cover the retainership the Company previously had with Dr. K. Eulau and that
respondents retainer fee will be at P4,000.00 a month. Said contract was
renewed yearly. The retainership arrangement went on from 1981 to 1994
with changes in the retainers fee. However, for the years 1995 and 1996,
renewal of the contract was only made verbally.
[4]

[5]

The turning point in the parties relationship surfaced in December 1996

when Philcom, thru a letter bearing on the subject boldly written as
TERMINATION RETAINERSHIP CONTRACT, informed De Vera of its
decision to discontinue the latters retainers contract with the Company
effective at the close of business hours of December 31, 1996 because
management has decided that it would be more practical to provide medical
services to its employees through accredited hospitals near the company
premises.
[6]

On 22 January 1997, De Vera filed a complaint for illegal dismissal before

the National Labor Relations Commission (NLRC), alleging that that he had
been actually employed by Philcom as its company physician since 1981 and
was dismissed without due process. He averred that he was designated as a
company physician on retainer basis for reasons allegedly known only to
Philcom. He likewise professed that since he was not conversant with labor
laws, he did not give much attention to the designation as anyway he worked
on a full-time basis and was paid a basic monthly salary plus fringe benefits,
like any other regular employees of Philcom.
On 21 December 1998, Labor Arbiter Ramon Valentin C. Reyes came out
with a decision dismissing De Veras complaint for lack of merit, on the
rationale that as a retained physician under a valid contract mutually agreed
upon by the parties, De Vera was an independent contractor and that he was
not dismissed but rather his contract with [PHILCOM] ended when said
contract was not renewed after December 31, 1996.
[7]

On De Veras appeal to the NLRC, the latter, in a decision dated 23

October 2000, reversed (the word used is modified) that of the Labor Arbiter,
on a finding that De Vera is Philcoms regular employee and accordingly
directed the company to reinstate him to his former position without loss of
seniority rights and privileges and with full backwages from the date of his
dismissal until actual reinstatement. We quote the dispositive portion of the
decision:
[8]

WHEREFORE, the assailed decision is modified in that respondent is ordered to

reinstate complainant to his former position without loss of seniority rights and
privileges with full backwages from the date of his dismissal until his actual
reinstatement computed as follows:
Backwages:
a) Basic Salary
From Dec. 31, 1996 to Apr. 10, 2000 = 39.33 mos.
P44,400.00 x 39.33 mos. P1,750,185.00
b) 13th Month Pay:
1/12 of P1,750,185.00 145,848.75
c) Travelling allowance:
P1,000.00 x 39.33 mos. 39,330.00
GRAND TOTAL P1,935,363.75
The decision stands in other aspects.
SO ORDERED.
With its motion for reconsideration having been denied by the NLRC in its
order of 27 February 2001, Philcom then went to the Court of Appeals on a
petition for certiorari, thereat docketed as CA-G.R. SP No. 65178, imputing
grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of the NLRC when it reversed the findings of the labor arbiter and
awarded thirteenth month pay and traveling allowance to De Vera even as
such award had no basis in fact and in law.
[9]

On 12 September 2002, the Court of Appeals rendered a

decision, modifying that of the NLRC by deleting the award of traveling
allowance, and ordering payment of separation pay to De Vera in lieu of
reinstatement, thus:
[10]

WHEREFORE, premises considered, the assailed judgment of public respondent,

dated 23 October 2000, is MODIFIED. The award of traveling allowance is deleted
as the same is hereby DELETED. Instead of reinstatement, private respondent shall be
paid separation pay computed at one (1) month salary for every year of service
computed from the time private respondent commenced his employment in 1981 up to
the actual payment of the backwages and separation pay. The awards of backwages
and 13th month pay STAND.
SO ORDERED.

In time, Philcom filed a motion for reconsideration but was denied by the
appellate court in its resolution of 13 February 2003.
[11]

Hence, Philcoms present recourse on its main submission that THE COURT OF APPEALS ERRED IN SUSTAINING THE DECISION OF THE
NATIONAL LABOR RELATIONS COMMISSION AND RENDERING THE
QUESTIONED DECISION AND RESOLUTION IN A WAY THAT IS NOT IN
ACCORD WITH THE FACTS AND APPLICABLE LAWS AND
JURISPRUDENCE WHICH DISTINGUISH LEGITIMATE JOB CONTRACTING
AGREEMENTS FROM THE EMPLOYER-EMPLOYEE RELATIONSHIP.
We GRANT.
Under Rule 45 of the Rules of Court, only questions of law may be
reviewed by this Court in decisions rendered by the Court of Appeals. There
are instances, however, where the Court departs from this rule and reviews
findings of fact so that substantial justice may be served. The exceptional
instances are where:
xxx xxx xxx (1) the conclusion is a finding grounded entirely on speculation, surmise
and conjecture; (2) the inference made is manifestly mistaken; (3) there is grave abuse
of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings
of fact are conflicting; (6) the Court of Appeals went beyond the issues of the case and
its findings are contrary to the admissions of both appellant and appellees; (7) the
findings of fact of the Court of Appeals are contrary to those of the trial court; (8) said
findings of facts are conclusions without citation of specific evidence on which they
are based; (9) the facts set forth in the petition as well as in the petitioners main and
reply briefs are not disputed by the respondents; and (10) the findings of fact of the
Court of Appeals are premised on the supposed absence of evidence and contradicted
by the evidence on record.
[12]

As we see it, the parties respective submissions revolve on the primordial

issue of whether an employer-employee relationship exists between petitioner
and respondent, the existence of which is, in itself, a question of fact well
within the province of the NLRC. Nonetheless, given the reality that the
NLRCs findings are at odds with those of the labor arbiter, the Court,
consistent with its ruling in Jimenez vs. National Labor Relations
Commission, is constrained to look deeper into the attendant circumstances
obtaining in this case, as appearing on record.
[13]

[14]

In a long line of decisions, the Court, in determining the existence of an

employer-employee relationship, has invariably adhered to the four-fold test,
[15]

to wit: [1] the selection and engagement of the employee; [2] the payment of
wages; [3] the power of dismissal; and [4] the power to control the employees
conduct, or the so-called control test, considered to be the most important
element.
Applying the four-fold test to this case, we initially find that it was
respondent himself who sets the parameters of what his duties would be in
offering his services to petitioner. This is borne by no less than his 15 May
1981 letter which, in full, reads:
[16]

May 15, 1981

Mrs. Adela L. Vicente
Vice President, Industrial Relations
PhilCom, Paseo de Roxas
Makati, Metro Manila
Madam:
I shall have the time and effort for the position of Company physician with your
corporation if you deemed it necessary. I have the necessary qualifications, training
and experience required by such position and I am confident that I can serve the best
interests of your employees, medically.
My plan of works and targets shall cover the duties and responsibilities required of a
practitioner in industrial medicine which includes the following:
1. Application of preventive medicine including periodic check-up of
employees;
2. Holding of clinic hours in the morning and afternoon for a total of five (5)
hours daily for consultation services to employees;
3. Management and treatment of employees that may necessitate
hospitalization including emergency cases and accidents;
4. Conduct pre-employment physical check-up of prospective employees with
no additional medical fee;
5. Conduct home visits whenever necessary;
6. Attend to certain medical administrative functions such as accomplishing
medical forms, evaluating conditions of employees applying for sick leave

of absence and subsequently issuing proper certification, and all matters

referred which are medical in nature.
On the subject of compensation for the services that I propose to render to the
corporation, you may state an offer based on your belief that I can very well qualify
for the job having worked with your organization for sometime now.
I shall be very grateful for whatever kind attention you may extend on this matter and
hoping that it will merit acceptance, I remain
Very truly yours,
(signed)
RICARDO V. DE VERA, M.D.
Significantly, the foregoing letter was substantially the basis of the labor
arbiters finding that there existed no employer-employee relationship between
petitioner and respondent, in addition to the following factual settings:
The fact that the complainant was not considered an employee was recognized by the
complainant himself in a signed letter to the respondent dated April 21, 1982 attached
as Annex G to the respondents Reply and Rejoinder. Quoting the pertinent portion of
said letter:
To carry out your memo effectively and to provide a systematic and workable time
schedule which will serve the best interests of both the present and absent employee,
may I propose an extended two-hour service (1:00-3:00 P.M.) during which period I
can devote ample time to both groups depending upon the urgency of the situation. I
shall readjust my private schedule to be available for the herein proposed extended
hours, should you consider this proposal.
As regards compensation for the additional time and services that I shall render to the
employees, it is dependent on your evaluation of the merit of my proposal and your
confidence on my ability to carry out efficiently said proposal.
The tenor of this letter indicates that the complainant was proposing to extend his time
with the respondent and seeking additional compensation for said extension. This
shows that the respondent PHILCOM did not have control over the schedule of the
complainant as it [is] the complainant who is proposing his own schedule and asking
to be paid for the same. This is proof that the complainant understood that his
relationship with the respondent PHILCOM was a retained physician and not as an
employee. If he were an employee he could not negotiate as to his hours of work.

The complainant is a Doctor of Medicine, and presumably, a well-educated person.

Yet, the complainant, in his position paper, is claiming that he is not conversant with
the law and did not give much attention to his job title- on a retainer basis. But the
same complainant admits in his affidavit that his service for the respondent was
covered by a retainership contract [which] was renewed every year from 1982 to
1994. Upon reading the contract dated September 6, 1982, signed by the complainant
himself (Annex C of Respondents Position Paper), it clearly states that is a
retainership contract. The retainer fee is indicated thereon and the duration of the
contract for one year is also clearly indicated in paragraph 5 of the Retainership
Contract. The complainant cannot claim that he was unaware that the contract was
good only for one year, as he signed the same without any objections. The
complainant also accepted its renewal every year thereafter until 1994. As a literate
person and educated person, the complainant cannot claim that he does not know what
contract he signed and that it was renewed on a year to year basis.
[17]

The labor arbiter added the indicia, not disputed by respondent, that from
the time he started to work with petitioner, he never was included in its payroll;
was never deducted any contribution for remittance to the Social Security
System (SSS); and was in fact subjected by petitioner to the ten (10%)
percent withholding tax for his professional fee, in accordance with the
National Internal Revenue Code, matters which are simply inconsistent with
an employer-employee relationship. In the precise words of the labor arbiter:
xxx xxx xxx After more than ten years of services to PHILCOM, the complainant
would have noticed that no SSS deductions were made on his remuneration or that the
respondent was deducting the 10% tax for his fees and he surely would have
complained about them if he had considered himself an employee of PHILCOM. But
he never raised those issues. An ordinary employee would consider the SSS payments
important and thus make sure they would be paid. The complainant never bothered to
ask the respondent to remit his SSS contributions. This clearly shows that the
complainant never considered himself an employee of PHILCOM and thus,
respondent need not remit anything to the SSS in favor of the complainant.
[18]

Clearly, the elements of an employer-employee relationship are wanting in

this case. We may add that the records are replete with evidence showing that
respondent had to bill petitioner for his monthly professional fees. It simply
runs against the grain of common experience to imagine that an ordinary
employee has yet to bill his employer to receive his salary.
[19]

We note, too, that the power to terminate the parties relationship was
mutually vested on both. Either may terminate the arrangement at will, with or
without cause.
[20]

Finally, remarkably absent from the parties arrangement is the element of

control, whereby the employer has reserved the right to control the employee
not only as to the result of the work done but also as to the means and
methods by which the same is to be accomplished.
[21]

Here, petitioner had no control over the means and methods by which
respondent went about performing his work at the company premises. He
could even embark in the private practice of his profession, not to mention the
fact that respondents work hours and the additional compensation therefor
were negotiated upon by the parties. In fine, the parties themselves
practically agreed on every terms and conditions of respondents engagement,
which thereby negates the element of control in their relationship. For sure,
respondent has never cited even a single instance when petitioner interfered
with his work.
[22]

Yet, despite the foregoing, all of which are extant on record, both the
NLRC and the Court of Appeals ruled that respondent is petitioners regular
employee at the time of his separation.
Partly says the appellate court in its assailed decision:
Be that as it may, it is admitted that private respondents written retainer contract was
renewed annually from 1981 to 1994 and the alleged renewal for 1995 and 1996,
when it was allegedly terminated, was verbal.
Article 280 of the Labor code (sic) provides:
The provisions of written agreement to the contrary notwithstanding and regardless
of the oral agreements of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time
of the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one (1) year
of service, whether such is continuous or broken, shall be considered a regular with
respect to the activity in which he is employed and his employment shall continue
while such activity exists.
Parenthetically, the position of company physician, in the case of petitioner, is usually
necessary and desirable because the need for medical attention of employees cannot

be foreseen, hence, it is necessary to have a physician at hand. In fact, the importance

and desirability of a physician in a company premises is recognized by Art. 157 of the
Labor Code, which requires the presence of a physician depending on the number of
employees and in the case at bench, in petitioners case, as found by public respondent,
petitioner employs more than 500 employees.
Going back to Art. 280 of the Labor Code, it was made therein clear that the
provisions of a written agreement to the contrary notwithstanding or the existence of a
mere oral agreement, if the employee is engaged in the usual business or trade of the
employer, more so, that he rendered service for at least one year, such employee shall
be considered as a regular employee. Private respondent herein has been with
petitioner since 1981 and his employment was not for a specific project or
undertaking, the period of which was pre-determined and neither the work or service
of private respondent seasonal. (Emphasis by the CA itself).
We disagree to the foregoing ratiocination.
The appellate courts premise that regular employees are those who
perform activities which are desirable and necessary for the business of the
employer is not determinative in this case. For, we take it that any agreement
may provide that one party shall render services for and in behalf of another,
no matter how necessary for the latters business, even without being hired
as an employee. This set-up is precisely true in the case of an independent
contractorship as well as in an agency agreement. Indeed, Article 280 of the
Labor Code, quoted by the appellate court, is not the yardstick for determining
the existence of an employment relationship. As it is, the provision merely
distinguishes between two (2) kinds of employees, i.e., regular and casual. It
does not apply where, as here, the very existence of an employment
relationship is in dispute.
[23]

Buttressing his contention that he is a regular employee of petitioner,

respondent invokes Article 157 of the Labor Code, and argues that he
satisfies all the requirements thereunder. The provision relied upon reads:
ART. 157. Emergency medical and dental services. It shall be the duty of every
employer to furnish his employees in any locality with free medical and dental
attendance and facilities consisting of:
(a) The services of a full-time registered nurse when the number of employees
exceeds fifty (50) but not more than two hundred (200) except when the
employer does not maintain hazardous workplaces, in which case the
services of a graduate first-aider shall be provided for the protection of
the workers, where no registered nurse is available. The Secretary of

Labor shall provide by appropriate regulations the services that shall be

required where the number of employees does not exceed fifty (50) and
shall determine by appropriate order hazardous workplaces for purposes
of this Article;
(b) The services of a full-time registered nurse, a part-time physician and
dentist, and an emergency clinic, when the number of employees
exceeds two hundred (200) but not more than three hundred (300); and
(c) The services of a full-time physician, dentist and full-time registered nurse
as well as a dental clinic, and an infirmary or emergency hospital with
one bed capacity for every one hundred (100) employees when the
number of employees exceeds three hundred (300).
In cases of hazardous workplaces, no employer shall engage the services of a
physician or dentist who cannot stay in the premises of the establishment for at least
two (2) hours, in the case of those engaged on part-time basis, and not less than eight
(8) hours in the case of those employed on full-time basis. Where the undertaking is
nonhazardous in nature, the physician and dentist may be engaged on retained basis,
subject to such regulations as the Secretary of Labor may prescribe to insure
immediate availability of medical and dental treatment and attendance in case of
emergency.
Had only respondent read carefully the very statutory provision invoked by
him, he would have noticed that in non-hazardous workplaces, the employer
may engage the services of a physician on retained basis. As correctly
observed by the petitioner, while it is true that the provision requires
employers to engage the services of medical practitioners in certain
establishments depending on the number of their employees, nothing is there
in the law which says that medical practitioners so engaged be actually hired
as employees, adding that the law, as written, only requires the employer to
retain, not employ, a part-time physician who needed to stay in the premises
of the non-hazardous workplace for two (2) hours.
[24]

[25]

Respondent takes no issue on the fact that petitioners business of

telecommunications is not hazardous in nature. As such, what applies here is
the last paragraph of Article 157 which, to stress, provides that the employer
may engage the services of a physician and dentist on retained basis, subject
to such regulations as the Secretary of Labor may prescribe. The successive
retainership agreements of the parties definitely hue to the very statutory
provision relied upon by respondent.

Deeply embedded in our jurisprudence is the rule that courts may not
construe a statute that is free from doubt. Where the law is clear and
unambiguous, it must be taken to mean exactly what it says, and courts have
no choice but to see to it that the mandate is obeyed. As it is, Article 157 of
the Labor Code clearly and unequivocally allows employers in non-hazardous
establishments to engage on retained basis the service of a dentist or
physician. Nowhere does the law provide that the physician or dentist so
engaged thereby becomes a regular employee. The very phrase that they
may be engaged on retained basis, revolts against the idea that this
engagement gives rise to an employer-employee relationship.
[26]

With the recognition of the fact that petitioner consistently engaged the
services of respondent on a retainer basis, as shown by their various
retainership contracts, so can petitioner put an end, with or without cause, to
their retainership agreement as therein provided.
[27]

We note, however, that even as the contracts entered into by the parties
invariably provide for a 60-day notice requirement prior to termination, the
same was not complied with by petitioner when it terminated on 17 December
1996 the verbally-renewed retainership agreement, effective at the close of
business hours of 31 December 1996.
Be that as it may, the record shows, and this is admitted by both
parties, that execution of the NLRC decision had already been made at the
NLRC despite the pendency of the present recourse. For sure, accounts of
petitioner had already been garnished and released to respondent despite the
previous Status Quo Order issued by this Court. To all intents and purposes,
therefore, the 60-day notice requirement has become moot and academic if
not waived by the respondent himself.
[28]

[29]

WHEREFORE, the petition is GRANTED and the challenged decision of

the Court of Appeals REVERSED and SET ASIDE. The 21 December 1998
decision of the labor arbiter is REINSTATED.

JEROMIE D. ESCASINAS and G.R. No. 178827

EVAN RIGOR SINGCO,
Present:
Petitioners,

- versus -

QUISUMBING, J., Chairperson,

CARPIO MORALES,
NACHURA,*
BRION, and
PERALTA,** JJ.

SHANGRI-LAS
MACTAN Promulgated:
ISLAND RESORT and DR. March 4, 2009
JESSICA J.R. PEPITO,
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO MORALES, J.:
Registered nurses Jeromie D. Escasinas and Evan Rigor Singco (petitioners)
were engaged in 1999 and 1996, respectively, by Dr. Jessica Joyce R. Pepito
(respondent doctor) to work in her clinic at respondent Shangri-las Mactan Island
Resort (Shangri-la) in Cebu of which she was a retained physician.
In late 2002, petitioners filed with the National Labor Relations Commission
(NLRC) Regional Arbitration Branch No. VII (NLRC-RAB No. VII) a
complaint[1] for regularization, underpayment of wages, non-payment of holiday
pay, night shift differential and 13th month pay differential against respondents,
claiming that they are regular employees of Shangri-la. The case was docketed
as RAB Case No. 07-11-2089-02.
Shangri-la claimed, however, that petitioners were not its employees but of
respondent doctor whom it retained via Memorandum of Agreement
(MOA)[2] pursuant to Article 157 of the Labor Code, as amended.

Respondent doctor for her part claimed that petitioners were already
working for the previous retained physicians of Shangri-la before she was retained
by Shangri-la; and that she maintained petitioners services upon their request.
By Decision[3] of May 6, 2003, Labor Arbiter Ernesto F. Carreon declared
petitioners to be regular employees of Shangri-la. The Arbiter thus ordered
Shangri-la to grant them the wages and benefits due them as regular employees
from the time their services were engaged.
In finding petitioners to be regular employees of Shangri-la, the Arbiter
noted that they usually perform work which is necessary and desirable to Shangrilas business; that they observe clinic hours and render services only to Shangri-las
guests and employees; that payment for their salaries were recommended to
Shangri-las Human Resource Department (HRD); that respondent doctor was
Shangri-las in-house physician, hence, also an employee; and that the MOA
between Shangri-la and respondent doctor was an insidious mechanism in order to
circumvent [the doctors] tenurial security and that of the employees under her.
Shangri-la and respondent doctor appealed to the NLRC. Petitioners appealed too,
but only with respect to the non-award to them of some of the benefits they were
claiming.
By Decision[4] dated March 31, 2005, the NLRC granted Shangri-las and
respondent doctors appeal and dismissed petitioners complaint for lack of merit, it
finding that no employer-employee relationship exists between petitioner and
Shangri-la. In so deciding, the NLRC held that the Arbiter erred in interpreting
Article 157 in relation to Article 280 of the Labor Code, as what is required under
Article 157 is that the employer should provide the services of medical personnel
to its employees, but nowhere in said article is a provision that nurses are required
to be employed; that contrary to the finding of the Arbiter, even if Article 280
states that if a worker performs work usually necessary or desirable in the business
of the employer, he cannot be automatically deemed a regular employee; and that
the MOA amply shows that respondent doctor was in fact engaged by Shangri-la
on a retainer basis, under which she could hire her own nurses and other clinic
personnel.

Brushing aside petitioners contention that since their application for

employment was addressed to Shangri-la, it was really Shangri-la which hired
them and not respondent doctor, the NLRC noted that the applications for
employment were made by persons who are not parties to the case and were not
shown to have been actually hired by Shangri-la.
On the issue of payment of wages, the NLRC held that the fact that, for
some months, payment of petitioners wages were recommended by Shangri-las
HRD did not prove that it was Shangri-la which pays their wages. It thus credited
respondent doctors explanation that the recommendations for payment were based
on the billings she prepared for salaries of additional nurses during Shangri-las
peak months of operation, in accordance with the retainership agreement, the
guests payments for medical services having been paid directly to Shanrgi-la.
Petitioners thereupon brought the case to the Court of Appeals which, by
Decision[5] of May 22, 2007, affirmed the NLRC Decision that no employeremployee relationship exists between Shangri-la and petitioners. The appellate
court concluded that all aspects of the employment of petitioners being under the
supervision and control of respondent doctor and since Shangri-la is not principally
engaged in the business of providing medical or healthcare services, petitioners
could not be regarded as regular employees of Shangri-la.
Petitioners motion for reconsideration having been
Resolution[6] of July 10, 2007, they interposed the present recourse.

denied

by

Petitioners insist that under Article 157 of the Labor Code, Shangri-la is
required to hire a full-time registered nurse, apart from a physician, hence, their
engagement should be deemed as regular employment, the provisions of the MOA
notwithstanding; and that the MOA is contrary to public policy as it circumvents
tenurial security and, therefore, should be struck down as being void ab initio. At
most, they argue, the MOA is a mere job contract.
And petitioners maintain that respondent doctor is a labor-only contractor
for she has no license or business permit and no business name registration, which

is contrary to the requirements under Sec. 19 and 20 of the Implementing Rules

and Regulations of the Labor Code on sub-contracting.
Petitioners add that respondent doctor cannot be a legitimate
independent contractor, lacking as she does in substantial capital, the clinic having
been set-up and already operational when she took over as retained physician; that
respondent doctor has no control over how the clinic is being run, as shown by the
different orders issued by officers of Shangri-la forbidding her from receiving cash
payments and several purchase orders for medicines and supplies which were
coursed thru Shangri-las Purchasing Manager, circumstances indubitably showing
that she is not an independent contractor but a mere agent of Shangri-la.
In its Comment,[7] Shangri-la questions the Special Powers of Attorneys
(SPAs) appended to the petition for being inadequate. On the merits, it prays for
the disallowance of the petition, contending that it raises factual issues, such as the
validity of the MOA, which were never raised during the proceedings before the
Arbiter, albeit passed upon by him in his Decision; that Article 157 of the Labor
Code does not make it mandatory for a covered establishment to employ health
personnel; that the services of nurses is not germane nor indispensable to its
operations; and that respondent doctor is a legitimate individual independent
contractor who has the power to hire, fire and supervise the work of the nurses
under her.
The resolution of the case hinges, in the main, on the correct interpretation
of Art. 157 vis a vis Art. 280 and the provisions on permissible job contracting of
the Labor Code, as amended.
The Court holds that, contrary to petitioners postulation, Art. 157 does not
require the engagement of full-time nurses as regular employees of a company
employing not less than 50 workers. Thus, the Article provides:
ART. 157. Emergency medical and dental services. It shall be
the duty of every employer to furnish his employees in any locality
with free medical and dental attendance and facilities consisting of:

(a)

The services of a full-time registered nurse when

the number of employees exceeds fifty (50) but
not more than two hundred (200) except when the
employer does not maintain hazardous
workplaces, in which case the services of a graduate
first-aider shall be provided for the protection of the
workers, where no registered nurse is available. The
Secretary of Labor shall provide by appropriate
regulations the services that shall be required where
the number of employees does not exceed fifty (50)
and shall determine by appropriate order hazardous
workplaces for purposes of this Article;

(b)

The services of a full-time registered nurse, a

part-time physician and dentist, and an
emergency clinic, when the number of employees
exceeds two hundred (200) but not more than
three hundred (300); and

(c)

The services of a full-time physician, dentist and

full-time registered nurse as well as a dental clinic,
and an infirmary or emergency hospital with one bed
capacity for every one hundred (100) employees
when the number of employees exceeds three
hundred (300).

In cases of hazardous workplaces, no employer shall engage the

services of a physician or dentist who cannot stay in the premises of the
establishment for at least two (2) hours, in the case of those engaged on
part-time basis, and not less than eight (8) hours in the case of those
employed on full-time basis. Where the undertaking is nonhazardous
in nature, the physician and dentist may be engaged on retained
basis, subject to such regulations as the Secretary of Labor may
prescribe to insure immediate availability of medical and dental
treatment and attendance in case of emergency. (Emphasis and
underscoring supplied)

Under the foregoing provision, Shangri-la, which employs more than 200
workers, is mandated to furnish its employees with the services of a full-time
registered nurse, a part-time physician and dentist, and an emergency clinic which

means that it should provide or make available such medical and allied
services to its employees, not necessarily to hire or employ a service
provider. As held in Philippine Global Communications vs. De Vera:[8]
x x x while it is true that the provision requires
employers to engage the services of medical
practitioners in certain establishments depending on the
number of their employees, nothing is there in the law
which says that medical practitioners so engaged be
actually hired as employees, adding that the law, as
written, only requires the employer to retain, not employ, a
part-time physician who needed to stay in the premises of
the non-hazardous workplace for two (2) hours. (Emphasis
and underscoring supplied)

The term full-time in Art. 157 cannot be construed as referring to the type of
employment of the person engaged to provide the services, for Article 157
must not be read alongside Art. 280[9] in order to vest employer-employee
relationship on the employer and the person so engaged. So De Vera teaches:
x x x For, we take it that any agreement may provide
that one party shall render services for and in behalf of
another, no matter how necessary for the latters
business,even without being hired as an employee. This
set-up is precisely true in the case of an independent
contractorship as well as in an agency agreement. Indeed,
Article 280 of the Labor Code, quoted by the appellate
court, is not the yardstick for determining the existence
of an employment relationship. As it is, the provision
merely distinguishes between two (2) kinds of
employees, i.e., regular and casual. x x x[10] (Emphasis
and underscoring supplied)

The phrase services of a full-time registered nurse should thus be taken to refer to
the kind of services that the nurse will render in the companys premises and to its
employees, not the manner of his engagement.

As to whether respondent doctor can be considered a legitimate independent

contractor, the pertinent sections of DOLE Department Order No. 10, series of
1997, illuminate:
Sec. 8. Job contracting. There is job contracting permissible under
the Code if the following conditions are met:
(1) The contractor carries on an independent business and
undertakes the contract work on his own account under his own
responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters
connected with the performance of the work except as to the results
thereof; and
(2) The contractor has substantial capital or investment in the
form of tools, equipment, machineries, work premises, and other
materials which are necessary in the conduct of his business.

Sec. 9. Labor-only contracting. (a) Any person who undertakes to

supply workers to an employer shall be deemed to be engaged in laboronly contracting where such person:
(1) Does not have substantial capital or investment in the form
of tools, equipment, machineries, work premises and other
materials; and
(2) The workers recruited and placed by such persons are
performing activities which are directly related to the principal
business or operations of the employer in which workers are
habitually employed.
(b) Labor-only contracting as defined herein is hereby prohibited
and the person acting as contractor shall be considered merely as an
agent or intermediary of the employer who shall be responsible to the
workers in the same manner and extent as if the latter were directly
employed by him.
(c) For cases not falling under this Article, the Secretary of Labor
shall determine through appropriate orders whether or not the
contracting out of labor is permissible in the light of the circumstances of

each case and after considering the operating needs of the employer and
the rights of the workers involved. In such case, he may prescribe
conditions and restrictions to insure the protection and welfare of the
workers. (Emphasis supplied)

The existence of an independent and permissible contractor relationship is

generally established by considering the following determinants: whether the
contractor is carrying on an independent business; the nature and extent of the
work; the skill required; the term and duration of the relationship; the right to
assign the performance of a specified piece of work; the control and supervision of
the work to another; the employer's power with respect to the hiring, firing and
payment of the contractor's workers; the control of the premises; the duty to supply
the premises, tools, appliances, materials and labor; and the mode, manner and
terms of payment.[11]
On
the
other
hand,
existence
of an
employeremployee relationship is established by the presence
of
the
following
determinants: (1) the selection and engagement of theworkers; (2) power of
dismissal; (3) the payment of wages by whatever means; and (4) the power to
control the worker's conduct, with the latter assuming primacy in the overall
consideration.[12]
Against the above-listed determinants, the Court holds that respondent
doctor is a legitimate independent contractor. That Shangri-la provides the clinic
premises and medical supplies for use of its employees and guests does not
necessarily prove that respondent doctor lacks substantial capital and
investment. Besides, the maintenance of a clinic and provision of medical services
to its employees is required under Art. 157, which are not directly related to
Shangri-las principal business operation of hotels and restaurants.
As to payment of wages, respondent doctor is the one who underwrites the
following: salaries, SSS contributions and other benefits of the staff[13]; group life,
group personal accident insurance and life/death insurance[14] for the staff with
minimum benefit payable at 12 times the employees last drawn salary, as well as
value added taxes and withholding taxes, sourced from her P60,000.00 monthly

retainer fee and 70% share of the service charges from Shangri-las guests who
avail of the clinic services. It is unlikely that respondent doctor would report
petitioners as workers, pay their SSS premium as well as their wages if they were
not indeed her employees.[15]
With respect to the supervision and control of the nurses and clinic staff, it is
not disputed that a document, Clinic Policies and Employee Manual[16] claimed to
have been prepared by respondent doctor exists, to which petitioners gave their
conformity[17] and in which they acknowledged their co-terminus employment
status. It is thus presumed that said document, and not the employee manual being
followed by Shangri-las regular workers, governs how they perform their
respective tasks and responsibilities.
Contrary to petitioners contention, the various office directives issued by
Shangri-las officers do not imply that it is Shangri-las management and not
respondent doctor who exercises control over them or that Shangri-la has control
over how the doctor and the nurses perform their work. The letter[18] addressed to
respondent doctor dated February 7, 2003 from a certain Tata L. Reyes giving
instructions regarding the replenishment of emergency kits is, at most,
administrative in nature, related as it is to safety matters; while the letter [19] dated
May 17, 2004 from Shangri-las Assistant Financial Controller, Lotlot Dagat,
forbidding the clinic from receiving cash payments from the resorts guests is a
matter of financial policy in order to ensure proper sharing of the proceeds,
considering that Shangri-la and respondent doctor share in the guests payments for
medical services rendered. In fine, as Shangri-la does not control how the work
should be performed by petitioners, it is not petitioners employer.
WHEREFORE, the petition is hereby DENIED. The Decision of the Court
of Appeals dated May 22, 2007 and the Resolution dated July 10,
2007 are AFFIRMED.

OCEAN
BUILDERS
CONSTRUCTION
CORP.,
and/or DENNIS HAO,
Petitioners,

- versus -

G.R. No. 150898

Present:
CARPIO MORALES, Chairperson,
BRION,
BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.

SPOUSES
ANTONIO
and
Promulgated:
ANICIA CUBACUB,
Respondents.
April 13, 2011
x--------------------------------------------------x
DECISION
CARPIO MORALES, J.:
Bladimir Cubacub (Bladimir) was employed as maintenance man by petitioner
company Ocean Builders Construction Corp. at its office in Caloocan City.
On April 9, 1995, Bladimir was afflicted with chicken pox. He was thus
advised by petitioner Dennis Hao (Hao), the companys general manager, to rest for
three days which he did at the companys barracks where he lives free of charge.
Three days later or on April 12, 1995, Bladimir went about his usual chores
of manning the gate of the company premises and even cleaned the company
vehicles. Later in the afternoon, however, he asked a co-worker, Ignacio Silangga
(Silangga), to accompany him to his house in Capas, Tarlac so he could
rest. Informed by Silangga of Bladimirs intention, Hao gave Bladimir P1,000.00
and ordered Silangga to instead bring Bladimir to the nearest hospital.

Along with co-workers Narding and Tito Vergado, Silangga thus brought
Bladimir to the Caybiga Community Hospital (Caybiga Hospital), a primary-care
hospital around one kilometer away from the office of the company.
The hospital did not allow Bladimir to leave the hospital. He was then
confined, with Narding keeping watch over him. The next day, April 13, 1995, a
doctor of the hospital informed Narding that they needed to talk to Bladimirs
parents, hence, on Silanggas request, their co-workers June Matias and Joel Edrene
fetched Bladimirs parents from Tarlac.
At about 8 oclock in the evening of the same day, April 13, 1995, Bladimirs
parents-respondent spouses Cubacub, with their friend Dr. Hermes Frias (Dr.
Frias), arrived at the Caybiga Hospital and transferred Bladimir to the Quezon City
General Hospital (QCGH) where he was placed in the intensive care unit and died
the following day, April 14, 1995.
The death certificate issued by the QCGH recorded Bladimirs immediate
cause of death as cardio-respiratory arrest and the antecedent cause as
pneumonia. On the other hand, the death certificate issued by Dr. Frias recorded
the causes of death as cardiac arrest, multiple organ system failure, septicemia and
chicken pox.
Bladimirs parents-herein respondents later filed on August 17, 1995 before the
Tarlac Regional Trial Court (RTC) at Capas a complaint for damages against
petitioners, alleging that Hao was guilty of negligence which resulted in the
deterioration of Bladimirs condition leading to his death.
By Decision of April 14, 1997,[1] Branch 66 of the Tarlac RTC at Capas dismissed
the complaint, holding that Hao was not negligent. It ruled that Hao was not under
any obligation to bring Bladimir to better tertiary hospitals, and assuming that
Bladimir died of chicken pox aggravated by pneumonia or some other
complications due to lack of adequate facilities at the hospital, the same cannot be
attributed to Hao.

On respondents appeal, the Court of Appeals, by Decision of June 22,

2001, reversed the trial courts decision, holding that by Haos failure to bring
Bladimir to a better-equipped hospital, he violated Article 161 of the Labor
Code. It went on to state that Hao should have foreseen that Bladimir, an adult,
could suffer complications from chicken pox and, had he been brought to hospitals
like St. Lukes, Capitol Medical Center, Philippine General Hospital and the like,
Bladimir could have been saved.
Thus the appellate court disposed:
WHEREFORE, the decision of the Regional Trial Court of Capas,
Tarlac, Branch 66 in Civil Case No. 349 dated April 14, 1997 is hereby
REVERSED and SET ASIDE and a new one rendered holding the
defendants solidarily liable to plaintiffs-appellants for the following:
1. P50,000.00 for the life of Bladimir Cubacub;
2. P584,630.00 for loss of Bladimirs earning capacity;
3. P4,834.60 as reimbursement of expenses incurred at Quezon
City General Hospital as evidenced by Exhibits E to E-14
inclusive;
4. P18,107.75 as reimbursement of expenses for the 5-day wake
covered by Exhibits F to F-17;
5. P30,000.00 as funeral expenses at Prudential Funeral Homes
covered by Exhibit I;
6. P6,700.00
for acquisition
of memorial lot
at
Sto. Rosario Memorial Park covered by Exhibit J;
7. P50,000.00 as moral damages;
8. P20,000.00 as exemplary damages;
9. P15,000.00 as attorneys fees and
10. Cost of suit.
SO ORDERED.[2]

The motion for reconsideration was denied by Resolution[3] of November 26, 2001,
hence this petition.
Petitioners maintain that Hao exercised the diligence more than what the law
requires, hence, they are not liable for damages.
The petition is meritorious.
At the onset, the Court notes that the present case is one for damages based
on torts, the employer-employee relationship being merely incidental. To
successfully prosecute an action anchored on torts, three elements must be
present, viz: (1) duty (2) breach (3) injury and proximate causation. The assailed
decision of the appellate court held that it was the duty of petitioners to provide
adequate medical assistance to the employees under Art. 161 of the Labor Code,
failing which a breach is committed.
Art. 161 of the Labor Code provides:
ART. 161. Assistance of employer. It shall be the duty of any employer to
provide all the necessary assistance to ensure the adequate and
immediate medical and dental attendance and treatment to an injured or
sick employee in case of emergency. (emphasis and underscoring
supplied)
The Implementing Rules of the Code do not enlighten what the phrase adequate
and immediate medical attendance means in relation to an emergency. It would
thus appear that the determination of what it means is left to the employer, except
when a full-time registered nurse or physician are available on-site as required,
also under the Labor Code, specifically Art. 157 which provides:
Article 157. Emergency Medical and Dental Services. It shall be the duty of
every employer to furnish his employees in any locality with free
medical and dental attendance and facilities consisting of:
(a)

The services of a full-time registered nurse when the

number of employees exceeds fifty (50) but not more than
two hundred (200) except when the employer does not

maintain hazardous workplaces, in which case, the services

of a graduate first-aider shall be provided for the protection
of workers, where no registered nurse is available. The
Secretary of Labor and Employment shall provide by
appropriate regulations, the services that shall be required
where the number of employees does not exceed fifty (50)
and shall determine by appropriate order, hazardous
workplaces for purposes of this Article;
(b)

The services of a full-time registered nurse, a part-time

physician and dentist, and an emergency clinic, when the
number of employees exceeds two hundred (200) but not
more than three hundred (300); and

(c)

The services of a full-time physician, dentist and a full-time

registered nurse as well as a dental clinic and an infirmary or
emergency hospital with one bed capacity for every one
hundred (100) employees when the number of employees
exceeds three hundred (300). (emphasis and underscoring
supplied)

In the present case, there is no allegation that the company premises are
hazardous. Neither is there any allegation on the number of employees the
company has. If Haos testimony[4] would be believed, the company had only seven
regular employees and 20 contractual employees still short of the minimum 50
workers that an establishment must have for it to be required to have a full-time
registered nurse.
The Court can thus only determine whether the actions taken by petitioners
when Bladimir became ill amounted to the necessary assistance to ensure adequate
and immediate medical . . . attendance to Bladimir as required under Art. 161 of
the Labor Code.
As found by the trial court and borne by the records, petitioner Haos advice
for Bladimir to, as he did, take a 3-day rest and to later have him brought to the
nearest hospital constituted adequate and immediate medical attendance that he is
mandated, under Art. 161, to provide to a sick employee in an emergency.

Chicken pox is self-limiting. Hao does not appear to have a medical

background. He may not be thus expected to have known that Bladimir needed to
be brought to a hospital with better facilities than the Caybiga Hospital, contrary to
appellate courts ruling.
AT ALL EVENTS, the alleged negligence of Hao cannot be considered as
the proximate cause of the death of Bladimir. Proximate cause is that which, in
natural and continuous sequence, unbroken by an efficient intervening cause,
produces injury, and without which, the result would not have occurred.[5] An
injury or damage is proximately caused by an act or failure to act, whenever it
appears from the evidence in the case that the act or omission played
a substantial part in bringing about or actually causing the injury or damage, and
that the injury or damage was either a direct result or a reasonably probable
consequence of the act or omission.[6]
Verily, the issue in this case is essentially factual in nature. The dissent, apart from
adopting the appellate courts findings, finds that Bladimir contracted chicken pox
from a co-worker and Hao was negligent in not bringing that co-worker to the
nearest physician, or isolating him as well. This finding is not, however, borne by
the records. Nowhere in the appellate courts or even the trial courts decision is
there any such definite finding that Bladimir contracted chicken pox from a coworker. At best, the only allusion to another employee being afflicted with chicken
pox was when Hao testified that he knew it to heal within three days as was the
case of another worker, without reference, however, as towhen it happened.[7]
On the issue of which of the two death certificates is more credible, the
dissent, noting that Dr. Frias attended to Bladimir during his last illness, holds that
the certificate which he issued citing chicken pox as antecedent cause
deserves more credence.
There appears, however, to be no conflict in the two death certificates on the
immediate cause of Bladimirs death since both cite cardio-respiratory arrest due to
complications from pneumonia per QCGH, septicemia and chicken pox per Dr.

Frias. In fact, Dr. Frias admitted that the causes of death in both certificates were
the same.[8]
Be that as it may, Dr. Frias could not be considered as Bladimirs attending
physician, he having merely ordered Bladimirs transfer to the QCGH after seeing
him at theCaybiga Hospital. He thereafter left Bladimir to the care of doctors at
QCGH, returning to Capas, Tarlac at 4 oclock the following morning or eight
hours after seeing Bladimir.As he himself testified upon cross-examination, he
did not personally attend to Bladimir anymore once the latter was brought to the
ICU at QCGH.[9]
It bears emphasis that a duly-registered death certificate is considered a
public document and the entries therein are presumed correct, unless the party who
contests its accuracy can produce positive evidence establishing otherwise.[10] The
QCGH death certificate was received by the City Civil Registrar on April 17,
1995. Not only was the certificate shown by positive evidence to be inaccurate. Its
credibility, more than that issued by Dr. Frias, becomes more pronounced as note
is taken of the fact that he was not around at the time of death.
IN FINE, petitioner company and its co-petitioner manager Dennis Hao are
not guilty of negligence.
WHEREFORE, the petition is GRANTED. The challenged Decision of the
Court of Appeals is REVERSED, and the complaint is hereby DISMISSED.

MORRIS v. BAKER AUTO PARTS

Michigan Court of Appeals.
Decided November 27, 1974.

Cholette, Perkins & Buchanan (by Kenneth L. Block), for Baker Auto Parts and Employers
Mutual Casualty Company.
Vandeveer, Garzia, Tonkin, Kerr & Heaphy, P.C. (by James A. Sullivan), for Lustre Finish,
American Auto Parts, and Michigan State Accident Fund.
Hillman, Baxter & Hammond, for Gerald DeYoung and Citizens Mutual Insurance Company.
Before: HOLBROOK, P.J., and T.M. BURNS and VAN VALKENBURG, JJ.

HOLBROOK, P.J.
While in the employ of defendant Baker Auto Parts in 1966, plaintiff suffered an injury to
his left elbow which necessitated an operation to transplant his ulnar nerve. Plaintiff
petitioned on August 28, 1967, for a hearing on his claim for compensation. By decision
dated May 17, 1968, the referee found in plaintiff's favor. In November 1969 plaintiff
petitioned for another hearing. The hearing was held in May 1972 and plaintiff was
awarded continuing partial disability compensation. The award was affirmed by the
Workmen's Compensation Appeal Board (hereinafter referred to as WCAB), on April 5,
1974, with the exception that the WCAB ordered that interest be paid at the rate of 6%
per annum from the date each weekly payment was due until paid rather than 5% as
ordered by the referee. Leave to appeal was granted by this Court on August 21, 1974,
restricted to the propriety of the award of
[57 Mich. App. 67]

6% interest, and we further ordered that past due payments be made forthwith together with
interest at 5%, holding in abeyance the additional 1% interest. We are now advised that
$12,658.82 for 182 weeks compensation plus 5% interest and some other compensation has
since been paid.

In Maxwell v General Motors Corp, Fleetwood Division, WCO 1973 No 1075, the WCAB
began to order 6% interest be paid in its awards. In this state, interest had not been
allowed on workmen's compensation awards until Wilson v Doehler-Jarvis Division of
Nat'l Lead Co, 358 Mich. 510; 100 N.W.2d 226 (1960). Wilson expressly
overruled Fowler v Muskegon County 340 Mich. 522; 65 N.W.2d
801 (1954). Fowler had held that as interest in Michigan was purely statutory and there
was no provision in the workmen's compensation law therefor, interest could not be
awarded. In Wilson, at 358 Mich. 514-517; 100 N.W.2d 228-229, Mr. Justice VOELKER,
speaking for the Supreme Court, wrote:

"The Workmen's Compensation Act neither provides for, nor forbids, the allowance of
interest by the circuit court; the subject is simply not mentioned. The question is, does
the circuit court have authority to allow the legal rate of interest when it enters a
judgment on a compensation award? In the Fowler Case we said that interest is purely
statutory, yet the fact is that we have consistently allowed interest in many cases in
which no express statute could be invoked. See Hammond v Hannin, 21 Mich. 374
(1870) (damages for breach of contract to convey land); McCreery v Green, 38 Mich.
172 (1878) (fraudulent conveyance, breach of contract); Snow v Nowlin, 43 Mich. 383; 5
NW 443 (1880) (fraudulent conveyance); Taylor v Bay City Street R Co, 101 Mich. 140;
59 NW 447 (1894) (damages for negligence); Kaminski v Wayne County Board of
Auditors, 287 Mich. 62; 282 NW 902 (1938) (suit for back salary of a circuit court
commissioner).
[57 Mich. App. 68]

"On this same subject the United States Supreme Court in Rodgers v United States, 332 U.S.
371, 373; 68 S.Ct. 5; 92 L Ed 3 (1947), speaking through Mr. Justice Black said:

"`There is no language in the agricultural adjustment act or in any other act of congress
which specifically allows or forbids interest on penalties such as these prior to judgment.
But the failure to mention interest in statutes which create obligations has not been
interpreted by this Court as manifesting an unequivocal congressional purpose that the
obligation shall not bear interest. Billings v United States, 232 U.S. 261, 284-288; 34
S.Ct. 421; 58 L Ed 596 (1914). For in the absence of an unequivocal prohibition of
interest on such obligations, this Court has fashioned rules which granted or denied
interest on particular statutory obligations by an appraisal of the congressional purpose
in imposing them and in the light of general principles deemed relevant by the Court.
See, e.g., Royal Indemnity Co v United States, 313 U.S. 289; 61 S.Ct. 995; 85 L Ed
1361 (1941); Board of Commissioners of Jackson County v United States, 308 U.S.
343; 60 S.Ct. 285; 84 L Ed 313 (1939).
"`As our prior cases show, a persuasive consideration in determining whether such
obligations shall bear interest is the relative equities between the beneficiaries of the
obligation and those upon whom it has been imposed. And this Court has generally
weighed these relative equities in accordance with the historic judicial principle that one
for whose financial advantage an obligation was assumed or imposed, and who has
suffered actual money damages by another's breach of that obligation, should be fairly
compensated for the loss thereby sustained (citing authority).'

"We also feel that the failure of the legislature to mention interest does not necessarily
mean that it intended that the obligation created by it should not bear interest. Rather
we must look to the purpose of the legislation:
"`The primary purpose of the Workmen's Compensation Act is to provide compensation
for disability or death resulting from occupational injuries or diseases or accidental injury
to or death of employees. The
[57 Mich. App. 69]

statute is a remedial one enacted primarily for the benefit of the man who works in the pursuits
subject to its provisions; it is for the benefit of injured employees and not injured employers.' (24
MLP, Workmen's Compensation, 2, p 229).

"Who benefited from the delay in payment here? Who, if anyone, suffered any loss? In
the instant case, the disputed claim for compensation has been in the throes of litigation
for over 5 years. In the meantime the defendant-appellant has had the possession and
use of funds that it now appears rightfully belonged all along to the plaintiff, while the
plaintiff (theoretically if not actually) had to raise money elsewhere (and presumably pay
interest on it) to meet the daily necessities of life. In a real sense, then, the employee
and his dependents have been obliged to help subsidize the employer in the long,
expensive fight for possession of the money thus wrongfully withheld.
"Considering the broad purposes of the Workmen's Compensation Act and the various
equities involved we think and hold that the circuit court properly had jurisdiction to allow
interest on the award. In so holding we expressly overrule the contrary principles
expressed in the Fowler Case." (Emphasis supplied.)
In the case of Drake v Norge Division, Borg-Warner Corp, 367 Mich. 464, 468; 116
N.W.2d 842, 844 (1962), our Supreme Court stated:
"Unless interest is charged for past due benefits awarded, the employee inevitably will
receive less than he is entitled to receive. By the same token, unless interest is charged
for past due benefits awarded, the employer will have had the free use of money
determined to have been due the employee. Our belated recognition of the elementary
nature of the equities involved in this controversy finally establishes a parity between
the employee who ultimately collects accrued benefits and the employer who redeems a
claim by paying benefits in advance, at a commuted value of course (1948 CL
412.22; MSA 17.172)." (Emphasis supplied.)

[57 Mich. App. 70]

In 3 Larson's Workmen's Compensation Law, 83.40, pp 354.83-354.84, Professor Larson

wrote as follows:

"As to the right to interest on compensation payments, there is considerable difference

among the states as to the date from which interest should run. Minnesota has held in a
death case that interest should run. Minnesota has held in a death case that interest
should run only from the date of the claim, not from the date of the death; but Michigan,
by judicial decision, has decreed that interest is payable from the date of death, that is,
from the date each compensation payment `would have been due if it had been paid
voluntarily,' rather than from the date of death or the date of the highest appellate
decision. Accordingly, in a subsequent case, interest was allowed from the date of
injury, 1953, although no claim had been made until 1958. Oklahoma has selected a still
different date, that of the award following the original hearing. In the case of an award
that had been appealed, vacated, and reinstated, the court held that interest should run
from the date the award first became due, that is, immediately after the original hearing
and decision, which was favorable to claimant. Florida has held that, when attorneys'
fees have been awarded to claimant and the case has been appealed, interest is
payable on the attorneys' fees for the time the case is on appeal, if the decision is
affirmed." (Emphasis supplied.)
In Ralston Purina Co v Parsons Feed & Farm Supply, Inc, 416 F.2d 207, 213 (CA 8,
1969), Judge Blackmun, citing the Rodgers case, stated that the United States
Supreme Court, when faced with the problem of interest not provided for by statute,
"has approached and resolved these problems in a sense of equity or fairness".
Rodgers was also cited in Strachan Shipping Co v Wedemeyer, 452 F.2d 1225, 1228,
fn 10 (CA 5, 1971), cert den 406 U.S. 958; 92 S.Ct. 2060; 32 L Ed 2d 344 (1972). The
lone issue there decided was
[57 Mich. App. 71]

whether a Deputy Commissioner of the Bureau of Employees Compensation of the United

States Department of Labor, in making a compensation award under the Longshoremen's &
Harbor Workers' Compensation Act, 33 USC 901, et seq., had authority to include interest at the
rate of 6% per annum on compensation installments from the time payment would have been
due had the employer not controverted the right to compensation. In reviewing the legislative
history of the act, it was found that, as first enacted in 1927, there was no provision for interest
on defaulted payments. The Court wrote, on pp 1229-1230:

"In the absence of a provision either providing for or forbidding the allowance of interest
in compensation cases, most state courts have awarded interest on each installment
from its due date. The rationale as expressed by the Supreme Court of Florida is
particularly pertinent to the case at bar:
"`The compensation act is to be construed in favor of the working man. Not only have
we said this on many occasions but the act itself so provides. Section 440.26, FSA. If an
employer controverts the right to compensation, the penalty fixed by the law for an
unsuccessful contest is not only the payment in full of the award from the beginning but
also attorneys' fees and other specified costs. If a carrier fails to pay an installment due
without an award within the specified period of fourteen days, under specified
circumstances, the carrier suffers a penalty of 10% thereof, Section 440.20(5); and if the
carrier fails to pay an award within fourteen days, there may be added thereto an
amount equal to 20% thereof, Section 440.20(6), FS 1951, FSA. The basic philosophy
of the act is to insure and secure prompt payment of compensation or other awards to
the man who works for wages or his beneficiaries. This Court knows that the smaller the
award of compensation, the greater is the need for the prompt payment thereof. It is
common knowledge that those who work for small wages are dependent upon such
wages for their immediate
[57 Mich. App. 72]

livelihood. Inherent in the act itself is the intention that if such an award is wrongfully withheld
(and under the law it is wrongfully withheld if it be eventually determined that it should have
been paid), the person or the party which should have paid it should be compelled to pay, as
damages for its detention, lawful interest thereon from the date it should have been paid ...'
Parker v Brinson Construction Co, 78 So.2d 873, 875 (Fla, 1955).

"Under a well-settled rule, this Court should show `great deference to the interpretation
given the statute by the officers or agency charged with its administration.'" (Emphasis
supplied.)
Thus, it is apparent that the basis for awarding interest on workmen's compensation
awards may rest in equity and fairness absent a specific statute on the subject. The
WCAB has awarded interest at 6% per annum. Such awards of interest, when fair and
reasonable, should be upheld. We rule that under the law it has that power subject only
to judicial review. Under the present law, legal interest is permitted to be charged at the
rate of 6% per annum. With this in mind and considering that 6% interest is being
awarded to compensate an injured worker for monies improperly withheld, we find that

such an award is necessary to do equity and is therefore fair, just and valid. In passing,
it is well to state that we are cognizant that an injured worker not paid compensation
when due him or her would certainly, if the need arose, not be able to borrow money to
live on at the 6% rate awarded.
In speaking of delays in workmen's compensation cases, this Court in DeMott v Battle
Creek Goodwill Industries, 51 Mich.App. 127, 130; 214 N.W.2d 554, 556 (1974), stated
in part as follows:
"We do not assess blame for the long delay. Surely, the parties and their attorneys, the
hearing referee and
[57 Mich. App. 73]

the Workmen's Compensation Appeal Board, and indeed this Court all share responsibility for
the extensive time consumed in deciding plaintiff's claim. Perhaps delay occurs because time
limits for filing and adjudication are either too lenient or not strictly applied. In any case, clearly
the process takes entirely too long and demands legislative overhaul. Continuation of the
present time consuming system neither serves the litigants nor the policy objectives of the
Workmen's Compensation Act." (Emphasis supplied.)

We again reiterate our concern over the long delays occasioned in contested
compensation cases through the present process. We note that the fundamental
purpose of the Workmen's Compensation Act is to provide payment to injured
employees and dependents to enable them to have sustenance while they are in need.
Such payment in order to be effective must be received promptly by the proper persons.
MCLA 418.801; MSA 17.237(801) in pertinent part reads as follows:
"Compensation shall be paid promptly and directly to the person entitled thereto and
shall become payable on the fourteenth day after the employer has notice or knowledge
of the disability or death, on which date all compensation then accrued shall be paid.
Thereafter compensation shall be paid in weekly installments."
Delays in the WCAB and the Courts on occasion are so extended that when finally
determined, there is no one to be paid because the claimants and the dependents died.
See Dean v Arrowhead Steel Products Co, Inc, 5 Mich.App. 691; 147 N.W.2d
751 (1967). Fortunately, in this case the claimant is living and now receiving
compensation payments.

We are constrained to suggest that the Legislature give its attention to the problem of
such delays as we have addressed ourselves to in this
[57 Mich. App. 74]

opinion. It would seem that additional safeguards should be enacted to insure prompt payment
in accordance with the statute. Penalties should be provided by statute to be paid by the
employer or carrier when payment is withheld in every contested case.

We have held herein that the award of 6% interest by the WCAB is proper and legal.
We are aware of the holding in White v Extra Labor Power of America, 54 Mich.App.
370; 221 N.W.2d 214 (1974), where a panel of this Court found that interest in
workmen's compensation cases should be fixed at 5%. We decline to follow the
decision for the reasons herein fully explained.
JOSE B. SARMIENTO, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION & GOVERNMENT SERVICE INSURANCE
SYSTEM (National Power Corporation), respondents.
Perpetuo L.B. Alonzo for petitioner.
The Solicitor General and The Government Corporate Counsel for respondents.

GUTIERREZ, JR., J.:

This is a petition for review of the decision rendered by the Employees' Compensation Commission
in ECC Case No. 2134 on August 25, 1983 which affirmed the decision of the Government Service
Insurance System (GSIS) denying the petitioner's claim for death benefits as surviving spouse of the
late Flordeliza Sarmiento.
The findings of the respondent Commission are as follows:
The record shows that the late Flordeliza Sarmiento was employed by the National
Power Corporation in Quezon City as accounting clerk in May 1974. At the time of
her death on August 12, 1981 she was manager of the budget division. History of the
deceased's illness showed that symptoms manifested as early as April 1980 as a
small wound over the external auditory canal and mass over the martoid region.
Biopsy of the mass revealed cancer known as "differentiated squamous cell
carcinoma." The employee sought treatment in various hospitals, namely, Veterans
Memorial Hospital, United Doctors Medical Hospital and Makati Medical Center. In
March 1981, a soft tissue mass emerged on her left upper cheek as a result of which
her lips became deformed and she was unable to close her left eye. She continued
treatment and her last treatment at the Capitol Medical Center on July 12, 1 981 was
due to her difficulty of swallowing food and her general debility. On August 12, 1981,
she succumbed to cardiorespiratory arrest due to parotid carcinoma. She was 40
years old.

Believing that the deceased's fatal illness having been contracted by her during
employment was service-connected, appellant herein filed a claim for death benefits
under Presidential Decree No. 626, as amended. On September 9, 1982, the GSIS,
through its Medical Services Center, denied the claim. It was pointed out that parotid
carcinoma is "Malignant tumor of the parotid gland (salivary gland)" and that its
development was not caused by employment and employment conditions.
Dissatisfied with the respondent System's decision of denial, claimant wrote a letter
dated October 8, 1982 to the GSIS requesting that the records of the claim be
elevated to the Employees' Compensation Commission for review pursuant to the
law and the Amended Rules on Employees' Compensation. (At pp. 17-18, Rollo)
On August 25, 1983, the respondent Commission affirmed the GSIS' decision. It found that the
deceased's death causation by parotid carcinoma is not compensable because she did not contract
nor suffer from the same by reason of her work but by reason of embryonic rests and epithelial
growth.
It may be noted that the petitioner was earlier paid GSIS benefits in the amount of P142,285.03 but
the claim for employee's compensation was disallowed.
Hence, the instant petition.
The petitioner, while principally stressing the compensability of the deceased's ailment, attacks the
constitutionality of Presidential Decree No. 626, as amended, the law on employees' compensation
which superseded the Labor Code and the of the Workmen's Compensation Act. He alleges that
provisions the said law infringes upon the guarantees of promotion of social justice, substantive due
process, and equal protection of laws, and also permits unjust discrimination and amounts to class
legislation in its enforcement. He prays for the application of the Old Workmen's Compensation Act
which provided for a presumption of compensability whenever an ailment supervened during the
course of the employment.
We dismiss the petition.
We cannot give serious consideration to the petitioner's attach against the constitutionality of the
new law on employee's compensation. It must be noted that the petitioner filed his claim under the
provisions of this same law. It was only when his claim was rejected that he now questions the
constitutionality of this law on appeal by certiorari.
The Court has recognized the validity of the present law and has granted and rejected claims
according to its provisions. We find in it no infringement of the worker's constitutional rights. It is now
settled jurisprudence (see Sulit v. Employees' Compensation Commission, 98 SCRA 483; Armena v.
Employees' Compensation Commission, 122 SCRA 851; Erese v. Employees' Compensation
Commission, 138 SCRA 192; De Jesus v. Employees' Compensation Commission, 142 SCRA 92)
that the new law discarded the concepts of "presumption of compensability" and "aggravation" to
restore what the law believes is a sensible equilibrium between the employer's obligation to pay
workmen's compensation and the employees' rights to receive reparation for work-connected death
or disability.
In the case of De Jesus v. Employees' Compensation, (supra), this Court explained the new scheme
of employees' compensation as follows:
The new law establishes a state insurance fired built up by the contributions of
employers based on the saries of their employees. The injured worker does not have

to litigate his right to compensation. No employer opposes his claim. There is no

notice of injury nor requirement of controversion. The sick worker simply files a claim
with a new neutral Employees' Compensation Commission which then determines on
the basis of the employee's supporting papers and medical evidence whether or not
compensation may be paid. The payment of benefits is more prompt. The cost of
administration is low. The amount of death benefits has also been doubled.
On the other hand, the employer's duty is only to pay the regular monthly premiums
to the scheme. It does not look for insurance companies to meet sudden demands
for compensation payments or set up its own funds to meet these contingencies. It
does not have to defend itself from spuriously documented or long past claims.
The new law applies the social security principle in the handling of workmen's
compensation. The Commission administers and settles claims from a find under its
exclusive control. The employer does not intervene in the compensation process and
it has no control, as in the past, over payment of benefits. The open ended Table of
Occupational Diseases requires no proof of causation. A covered claimant suffering
from an occupational disease is automatically paid benefits.
Since there is no employer opposing or fighting a claim for compensation, the rules
on presumption of compensability and controversion cease to have importance. The
lopsided situation of an employer versus one employee, which called for equalization
through the various rules and concepts favoring the claimant, is now absent. (At pp.
99-100)
The petitioner's challenge is really against the desirability of the new law. These is no serious
attempt to assail it on constitutional grounds.
The wisdom of the present scheme of workmen's compensation is a matter that should be
addressed to the President and Congress, not to this Court. Whether or not the former workmen's
compensation program with its presumptions, controversions, adversarial procedures, and levels of
payment is preferable to the present scheme must be decided by the political departments. The
present law was enacted in the belief that it better complies with the mandate on social justice and is
more advantageous to the greater number of working men and women. Until Congress and the
President decide to improve or amend the law, our duty is to apply it.
Under the present law, a compensable illness means any illness accepted as an occupational
disease and listed by the Employees' Compensation Commission, or any illness caused by
employment subject to proof by the employee that the risk of contracting the same is increased by
working conditions (Bonifacio v. Government Service Insurance System, 146 SCRA 276).
Applying the law to the present case, parotid carcinoma or cancer of the salivary glands is not an
occupational disease considering the deceased's employment as accounting clerk and later as
manager of the budget division. The petitioner must, therefore, prove that his wife's ailment was
caused by her employment or that her working conditions increased the risk of her contracting the
fatal illness.
The petitioner alleges that as budget manager, the deceased visited regional and field operations
and was, naturally, exposed to the elements. According to the petitioner, the deceased's field trips
necessitated her to take frequent plane travels which caused deafening and numb sensations in her
ears. This, he says, caused her "differentiated carcinoma" which, according to the certificate of Dr.
Ariston Bautista, "apparently started on external auditory canal."

We find these allegations as mere conjectures. As with other kinds of cancer, the cause and nature
of parotid carcinoma is still not known. A medical authority, however, declares that:
SALIVARY GLANDS
Painless swelling of the parotid glands is often noted in hepatic cirrhosis in sarcoidis,
in mumps, following abdominal surgery, or associated with neoplasm or infections.
The common factors may be dehydration and inattention to oral hygiene. The latter
promotes the growth of large numbers of bacteria which, in the absence of sufficient
salivary flow, ascend from the mouth into the duct of a gland. Another cause of a
painful salivary gland is sialolithiasis (salivary duct stone). The submandibular glands
are most commonly affected. Pain and swelling associated with eating are
characteristic. Saliva promotes retention of artificial dentures because of its mucin
content. Thus, conditions characterized by diminished saliva flow often adversely
affect the ease with which dentures may be worn. Calcium phosphate stone tend to
form because of a high pH and viscosity of the submandibular gland saliva which has
a high mucin content. Stones are removed by manipulation or excision.
Autoimmune sialosis is the MikulicsSjogren Syndrome, a unilateral or bilateral
enlargement of the parotid and/or submandibular gland, and often the lacrimal
glands. Occasionally painful, it is associated with xerostomia (dry mouth) due to
impaired saliva formation that is most common in older women. Beriow et al., The
Merek Manuel, 14th Edition, pp. 2095-2096).
Another author states the following regarding squamous cell carcinoma:
Moreover, when the salivary gland is almost totally destroyed and replaced by
epidermoid cancer it may be difficult or even impossible to ascribe the origin of the
growth to salivary gland tissue. Indeed many squamous cell carcinomas, especially
of the parotid, may be metastatic lesions that develop in lymph nodes included within
the parotid. And it is important to stress that the juxtaparotid and intraparotid lymph
nodes are not merely accumulations of lymphoid tissue but nodes with efferent and
afferent lymphatics.
Squamous cell carcinomas of the major salivary glands are generally fixed to the skin
and the underlying tissues and, in the case of the parotid, are often the cause of
facial palsy.
Epidermoid cancers grow swiftly and the clinical course is usually rapid. A few
tumours, however, have been present for as long as two years before the patient
seeks advice. Some patients remain alive and asymptomatic after radical surgery,
but ordinarily the lesions are highly malignant, infiltrating locally and metastasizing to
the regional nodes Distant metastasis is seldom a prominent clinical feature. In the
case of the submandibular gland the tumor may simulate osteomyelitis of the
mandible or an abscess in the gland itself, and if such lesions are incised a chronic
sinus is liable to persist until radical treatment is undertaken. (Evans and
Cruickshank, Epithelial Tumours of the Salivary Glands, Vol. 1, p. 254)
Given the preceding medical evaluations, we affirm the findings of the public respondents which
found no proof that the deceased's working conditions have indeed caused or increased the risk of
her contracting her illness.

WHEREFORE, the petition is DISMISSED. The decisions of the Government Service Insurance
System and the Employees' Compensation Commission denying the claim are AFFIRMED.
NONATO ROSALES, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION, GOVERNMENT SERVICE INSURANCE
SYSTEM and The DEVELOPMENT BANK OF THE PHILIPPINES, respondents.

PADILLA, J.:
Assailed in this petition for review on certiorari is the decision of the Employees' Compensation
Commission, dated 17 April 1977, affirming in toto the ruling of the Employees' Compensation
Department of the Government Service Insurance System, dated 23 August 1976, which denied
petitioner's claim for benefits.
Petitioner, at the time of his retirement on 31 July 1976, was an employee of the Development Bank
of the Philippines, Ilagan, Isabela, specifically, a Collateral and File Clerk. Prior to holding said
position, he held the positions of clerk-typist, clerk-stenographer and collection clerk, respectively, in
the same bank.
On 6 to 10 April 1976, petitioner was confined in the University of Santo Tomas Hospital where his
ailment was diagnosed as Rheumatoid Arthritis. Following his disability, petitioner filed on 12 August
1976 with the Government Service Insurance System (GSIS) a claim for employees' compensation
under Presidential Decree No. 626. His application was denied on 23 August 1976. 1 Petitioner twice
moved to reconsider the denial of his claim with the GSIS, but the latter denied both motions for
reconsideration. On appeal to the Employees' Compensation Commission (ECC), the order of denial was
affirmed in toto. 2 Hence, the instant petition.

In his three-page petition, petitioner raises as errors allegedly committed by the ECC, the following:
A. That respondent Commission have acted with grave abuse of discretion when it
declared that petitioners ailment, DIAGNOSED as 'Rheumatoid Arthritis is not an
occupational disease;
B. Likewise, respondent Commission has acted with grave abuse of discretion when
it declared that petitioner miserably failed to offer proofs substantial enough to show
that such disease arose or has aggravated in the course of his employment due to
working conditions;
C. Finally, respondent Commission has acted in excess of its jurisdiction in denying
altogether petitioner's compensation benefits.
and contends that the decision of the GSIS, thru its Employees' Compensation Department, and that
of the ECC are "not in accord with the applicable decisions of this Tribunal and in violative to
(violation of) the spirit of Social Legislations which are designed for the benefit of retiring employees
of the government." 3
The petition is without merit.

Petitioner filed his claim under PD No. 626 which took effect on 1 January 1975. Under said law, for
an illness to be compensable, it must be done definitely accepted as an occupational disease listed
by the Commission, or any illness caused by employment subject to proof by the employee that the
risk of contracting the same was increased by working conditions. 4
The ECC denied the claim of petitioner for compensation on the ground that the
ailment, Rheumatoid Arthritis, was not an occupational disease, and that, as required by law,
petitioner failed to show proof that the risk of contracting the disease was increased by his working
conditions. We quote from the assailed decision:
Perusal of the evidence on record in the instant claim will disclose the miserable
failure of the appellant to discharge the burden required of him by the new law on
employees' compensation. Much as we may postulate the Identity of liberality, we
cannot go so far as to cast favorable reflection on what is otherwise a claim clearly
lacking of support in evidence, which is mandatory requisite under PD No. 626, as
amended, for finding the ailment in question as an occupational disease, or that, its
contraction was the result of the appellants' working conditions, it follows then that
the appealed decision is in accordance with the law and cannot be disturbed. 5
In denying, petitioner's claim, the ECC properly applied PD No. 626.
In workmen's compensation cases, the governing law is determined by the date on which the
claimant contracted his illness. 6 Thus, where an ailment supervened before the new Labor Code took
effect, the governing law is the old Workmen's Compensation Act. On the other hand, were an ailment
occured after 1 January 1975, the new law on Employees' Compensation applies. 7 Applying the
foregoing rules to the present case, we find nothing in the allegations as to when petitioner contracted the
disease. For failure to do so, and having filed his claim under PD No. 626, the presumption is that he
contracted the disease after the effectivity of PD No. 626 on 1 January 1975. The ECC, therefore, in
rendering the assailed decision and resolution, denying petitioner's claim, could not be faulted in applying
the governing law, which is PD No. 626.

Moreover, the doctrine enunciated by this Court in Caparas vs. WCC, et al., 8 cited by petitioner in his
motion for reconsideration of the ruling of the Employees' Compensation Department of the GSIS, is not
applicable in the present case. In that case, the Court granted compensation, on the basis of the old
Workmen's Compensation Act, it appearing that claimant contracted the disease prior to the effectivity of
PD No. 626.

WHEREFORE, the petition is hereby DENIED. With costs against petitioner.

TERESA M. ARMEA petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION AND GOVERNMENT SERVICE INSURANCE
SYSTEM (Municipal Treasurer's Office, Daraga, Albay), respondents.
Calleja & Armea Law Office for petitioner.
Chief Legal Officer for respondents.

VASQUEZ, J.:

This is a petition for review by certiorari of the decision of Employees' Compensation Commission in
ECC Case No. 0367 affirming the decision of the Government Service Insurance System which
denied the claim for death benefits filed by petitioner Teresa M. Armea.
Patricio D. Armea, husband of the herein petitioner was employed by the government on February
21, 1942, and held the positions of clerk, public school teacher, budget examiner and lastly as
municipal treasurer of Daraga, Albay, which position he occupied since July 1, 1975 until his death
on June 1, 1976. The cause of his death was certified to be " acute monolytic leukemia."
On September 30, 1976, petitioner filed a claim for employee's compensation with the respondent
GSIS which denied the said claim on the ground that Patricio D. Armea's ailment was not in the
least causally related to his duties and conditions of work, and that there was no showing that said
ailment directly resulted from his occupation or employment as municipal treasurer of Daraga, Albay.
(Annex "A", Petition) A motion for reconsideration of the denial of the claim filed by petitioner was
also denied by respondent GSIS on the ground that:
In the case of your husband, it will be noted that the ailment which resulted to his
death on June 1, 1976 was Acute Monolytic Leukemia. This is not being listed as an
occupational disease, therefore, requires such degree of proof as mentioned above.
On the basis, however, of the papers and evidence on record which you have
submitted it appears that you have not established that the decease's employment as
Municipal Treasurer of Daraga, Albay, there has not been any showing that the same
directly arose them from or resulted from the nature thereof. (Annex "B", Petition)
Petitioner appealed the decision of the respondent GSIS to the respondent Employee's
Compensation Commission on the principal contention that the respondent GSIS committed error in
denying her claim inasmuch as the death of her husband should be presumed compensable under
P.D. 626, as amended, as it was so presumed under Section 44 of Act 3428 the old Workmens
Compensation Law inasmuch as the illness that resulted in his death supervened in the course of his
employment. This contention was brushed aside by the respondent Employees' Compensation
Commission reasoning out as follows:
The dictum enumerated under Act 3428 that an illness is presumed compensable
once it is shown that it supervened in the course of employment cannot now be relied
upon to support a claim for compensation under P.D. 626, as amended. For under
P.D. 626, the sickness, to be compensable, must be an occupational disease listed
by the Commission, or if it is not so, then it must be caused by employment and the
employee must prove that the risk of contracting it is increased by working
conditions. Nowhere in the law can we find a provision from which we can draw the
presumption that once the illness developed during employment, it is compensable.
In fact, since by explicit mandate (Section 1[e], Rule III, Book VII of the implementing
rules of the Labor Code Act 3428, or the Workmen s Compensation Act, the law
under which the dictum evolved, has been then it follows as a logical consequence,
that the principle of presumptive compensability should have no application to cases
cognizable under P. D. 626, as amended
In claims grounded on non-occupational disease such as the case at hand, the
claimant is called upon by law to prove that his sickness is caused by his
employment and the risk of contracting it is increased by his working conditions
(Section l[b], Rule III on Employees' Compensation He is obligated by law to do
specific act to entitle him to compensation and, that is, to prove, by substantial
evidence, the direct causation between the illness which caused the death and the

nature of his employment On the other hand, the dictum of presumptive

compensability precisely exempts one who claims compensation benefits from doing
such a specific act, Thus, it would be discordant for the appellant herein to say that
he is relieved from coming forward with proof of work-connection between her
husband's employment and his fatal disease, as the two requirements are
unmistakably incompatible with each other, especially so because the express repeal
of Act 3428, as amended, under which the dictum evolved, by P. D. 442, as
amended (Labor Code of the Philippines and the implementing rules (Sec. l[e], Rule
IV, Book VII, increased our skepticism about its applicability to cases falling under
the decree.
Moreover, the etiology of "Monolytic Leukemia" from which appellants husband died
shows no causal relation with his work. Leukemia is a generalized proliferative
neoplastic disorder of the blood forming tissues, usually involving the leukecytic
series. ETIOLOGY: Some forms of Leukemia in chicken mice and rats are due to
viruses: thus far, there is no proof of a similar etiology in man. Pending further
investigation leukemia may be regarded as a cancer of the blood forming organs.
Genetic factors are not conspicuous in the occurrence of leukemia in man but in
some cases exposure to environmental factors, such as X-ray, radioactive materials
and certain chemicals (especially benzone) may be associated with the disease.
While leukemia is not difficult to diagnose in most instances, certain preleukemia
states and poorly defined leukemia variants may be difficult to classify. Occasionally,
a leukemia reaction (blood picture resembling leukemia) may appear with certain
infections (e.g., whooping cough infections mononuclosis tuberculosis and also in
noaneoplastic blood dyserasis and advanced cancer. (Monolytic Leukemia is a
disease, usually with a fairly rapid course marked by excessive proliferation of the
monolytic elements of the bone marrow, river and spleen. The monocytes probably
are produced in the reticuloondothehal system While circulating monocytes normally
constitute about 4 to 10% of the leucocytes monolytic leukemia they are infiltration of
lymphnnodes, spleen and bone marrow and appear in the peripheral blood. (Lygh
C.E.: The Merk Man of Diagnosis and Therapy. M.S. & D: N.J.: 11th edition: 1966;
pp. 90-91.) The records do not show proof that the death is related to his
employment as municipal treasurer nor was there an increased risk in the working
conditions; hence, this case is not compensable. (Annex "C", pp. 16-19, Rollo.)
The above-quoted ruling is the one brought to Us on appeal by certiorari in the instant proceeding,
In her present petition, the petitioner reiterates her reliance on what she terms " the long established
legal and concrete doctrine of our Honorable Supreme Court on presumptive compensability" which
she claims to be applicable likewise to claims for compensation under P.D. 626, as amended.
There is no dispute that the petitioner' s claim for death benefits is governed by the provisions of the
New Labor Code of the Philippines (P.D. 442, as amended inasmuch as the death of the petitioner' s
husband occurred on June 1, 1976 or after January 1, 1975. (Art. 208, P.D. 442, as amended.) In
Annex "A" of the Amended Rules on Employees' Compensation issued by the Employees'
Compensation Commission to implement Title II, Book IV of the Labor Code, " leukemia" is
considered as an occupational disease if the nature of the employment involved "exposure to X-rays,
ionizing particle of radium or other radioactive substance or other forms of radiant energy." As was
correctly observed by the respondent Employees' Compensation Commission no evidence on record
shows that the petitioner's husband in his job as municipal treasurer, or in the other government
positions held by him, was exposed to X-rays ionizing particle of radium or other radioactive
substance in connection with his duties.

The submittal by the petitioner that she could still rely on the doctrine of "presumptive
compensability" whereby, when an illness supervened during the course of employment there is a
presumption that the same arose out of or at least was aggravated in the course of employment
(Santos vs. Workmen's Compensation Commission), had already been resolved in "Sulit vs.
Employees' Compensation Commission" 98 SCRA 483 wherein, through Justice Aquino, this Court
expected the abandonment of the doctrine of presumptive compensability as follows:
Those radical innovations (referring to R.A. No. 772, Act No. 812, amending Section
2 of Act No. 3428), the presumption of compensability and the rule on aggravation of
illness, which favor the employee, paved the way for the latitudinarian or expansive
application of the Workmen's Compensation Law in favor of the employee or worker.
It now appears that after the government had experimented for more than twenty
years with such employee-oriented application of the law, the lawmaker found the
result to be unsatisfactory because it destroyed the parity or balance between the
competing interests of employer and employee with respect to Workmen's
compensation The balance was titled unduly in favor of the workmen.
Hence, to restore a sensible equilibrium between the employees obligation to pay
workmen's compensation and the employee's right to receive reparation for workconnected death or disability, the old law was jettisoned and in its place we have the
employees' compensation and state insurance fund in the Labor Code, as amended.
As correctly observed by the teamed Government Corporate Counsel Manuel M.
Lazaro, the Labor Code abolished the presumption of compensability and the rule on
aggravation of illness caused by the nature of the employment, This Court is
powerless to apply those rules under the Labor Code. (Resolution of March 8, 1978
in L-47008, Ibaez vs. Workmen's Compensation Commission).
In sustaining the decision appealed from We have not overlooked the ruling laid down in "Duran vs.
Employees' Compensation Commission " 113 SCRA 389, March 30, 1982, wherein this Court
ordered the payment of death benefits to the surviving wife of a municipal judge who died likewise of
acute monolytic leukemia on April 28. 1977. Said case does not contravene our previous rulings on
the abandonment of the doctrine of presumptive compensability and may even be said to be a
recognition thereof. The grant of compensation in Duran was premised on a showing by the therein
petitioner that although monolytic leukemia is not an occupational diseases, the said ailment resulted
from a complication or after. effects of prolonged treatment of diseases which were attributed to the
nature and conditions of his work. In Duran the following findings had been made:
Petitioner has sufficiently established and respondent Commission has in fact
admitted that as justice of the peace and judge, deceased served in three
municipalities which did not have adequate transportation facilities. Sta. Rita alone
where Judge Duran spent his last 13 years as municipal judge has 31 barrios.
Obviously, land transportation was not then developed nor easily available since
Judge Duran travelled mostly by foot or banca. It has also been shown and admitted
that aside from his regular duties of conducting hearings and making ocular
inspections, he went beyond his courtroom to settle disputes between parties by
amicable settlement or mediation and to speak at conferences and seminars. And in
the performance of such duties, it was normal to see him wade through streams or
ride in bancas.

It requires simple imagination to picture the experience that the deceased judge had
gone through just so he could dispense justice even if it meant giving more of himself
than what was normally expected of him He walked along distances and forged
streams under variable weather conditions. He was literally exposed to the elements
the sun, rain, weather and rough roads. He worked as if he were a fieldman he was a
roving judge, The tenious work coupled with unhealthy exposure bore down on him
after 20 years. He must have been a strong, healthy person when he first joined the
Judiciary because it took all of 20 years before he suffered from angina pectoris,
gouty arthrities, coronary insufficiency and monolytic leukemia. Needless to say, the
human body can only take so much physical and mental pressures.
xxx xxx xxx
It must be borne in mind that from March 1972 to April 28, 1977, decedent was
treated and hospitalized for angina pectoris, coronary insufficiency, gouty arthrities
and finally, acute monolytic leukemia. As part of his treatment he was continuously
given analgesics and antibiotics As shown by the aforequoted medical findings,
chloramphenicol is the technical name for antibiotics and phenybultazone for antirheumatic drugs. It has also been found that such medicines when taken consistently
for a long period of time, can be leukemogenic or can cause monolytic leukemia as a
complication. There is an element of certainty in aforesaid findings; of medical
authorities will not attest the same.
We have carefully examined the record of the instant case in an effort to find some credible and
adequate basis to show that the acute monolytic leukemia that resulted in the death of the
petitioner's husband could have been caused by or traceable to conditions under which he
Performed his duties as municipal treasurer. Sadly enough our efforts proved in vain. No
circumstance similar to those involved in Duran had been shown or is existent in the records to
justify a similar disposition of the case at bar.
We are equally unsuccessful in finding factual basis to apply in favor of the petitioner the ruling in
Corales vs. Employees' Compensation Commission (84 SCRA 762; 88 SCRA 547) to the effect that
if the illness of the deceased accrued before January 1, 1975, the presumption of compensability
must still be observed There is no showing of any illness suffered by the petitioner's husband prior to
January 1, 1975. The records reveal that the deceased was hospitalized for the first time on March
13, 1976 for allergy and influenza. His subsequent hospitalization on March 21, 1976 was for urinary
tract infection and on March 24, 1976 for acute monolytic leukemia. It would be delving in the realm
of pure conjecture to rule that the last mentioned disease accrued, or was aggravated by ailments
that supervened prior to January 1, 1975.
WHEREFORE, We are constrained to hold that the decision appealed from should be, as it is
hereby, AFFIRMED.