Philippine Long Distance Telephone Company v. Rosal
REITERATIONFacts
The Antecedents: Godofredo Rosal, an employee of Philippine Long Distance Telephone Company (PLDT), sustained injuries from a vehicular accident on May 30, 1969, while riding a company vehicle returning from a temporary assignment. He developed an intra-cranial tumor, complicated with tuberculosis and cardio-respiratory illness, which led to his death on May 4, 1971. His widow, Leonora B. Rosal, filed a claim for death compensation benefits under the Workmen's Compensation Act for herself and their minor children. Procedural History: The claim was declared uncontroverted, and an award was rendered by the Regional Office No. 4, Department of Labor, ordering PLDT to pay death compensation benefits and burial expenses. PLDT filed a Motion to Set Aside Award, arguing it was denied its day in court and the cause of death was not compensable. The Workmen's Compensation Commission (WCC) denied this motion. PLDT then sought reconsideration, requesting that P4,959.96, previously paid to the widow under PLDT's Benefit Plan, be deducted from the award, citing Section 1, Article VIII of the Plan. The WCC denied this motion as well, leading to the present petition. The Petition: PLDT seeks to have the amount of P4,959.96 paid under its Benefit Plan deducted from the WCC award, arguing that its Benefit Plan provisions do not contravene the Workmen's Compensation Act and that such payments should be considered advances or part of the statutory compensation.
Issue(s)
Whether the amount of P4,959.96 paid by petitioner to respondent Leonora B. Rosal under its Benefit Plan is deductible from the award of death compensation benefits granted by the Workmen's Compensation Commission, considering the required approval of the Workmen's Compensation Commissioner. Whether the petitioner's Benefit Plan is valid and binding in relation to the Workmen's Compensation Act, and whether liabilities under the plan are distinct from those under the Act.
Ruling
The Supreme Court affirmed the decision of the Workmen's Compensation Commission, ruling that the amount paid under PLDT's Benefit Plan is not deductible from the award granted under the Workmen's Compensation Act. The Court held that the Benefit Plan was not approved by the Workmen's Compensation Commissioner, rendering it invalid under Section 29 of the Act. Furthermore, the Court found that the liabilities under the Benefit Plan and the Workmen's Compensation Act are distinct and separate.
Ratio Decidendi
On the deductibility of the amount paid under the Benefit Plan: The Court ruled that the amount of P4,959.96 paid by PLDT to Leonora B. Rosal under its Benefit Plan is not deductible from the death compensation benefits awarded under the Workmen's Compensation Act. This is primarily because the Benefit Plan, as an agreement concerning compensation, was never presented to nor approved by the Workmen's Compensation Commissioner or any of his authorized representatives, as mandated by Section 29 of the Workmen's Compensation Act. Without such approval, the agreement embodied in the Benefit Plan is not valid nor binding concerning compensation claims under the Act. The ruling in Pangasinan Transportation Co., Inc. vs. WCC was cited, emphasizing the necessity of approval by the Commissioner for the validity of any compensation agreement. The argument that the payment should be considered an advance, as in the Koppel (Phil), Inc. vs. Javellana, Sr. case, was distinguished because, in that instance, the agreement was implicitly recognized as an advance against a compensation award. Here, the Benefit Plan itself, as a basis for deduction, lacked the required statutory approval. The Court also noted that Section 7 of the Workmen's Compensation Act declares null and void any contract, regulation, or device intended to exempt an employer from liability created by the Act. On the validity of the Benefit Plan provisions and the distinct nature of liabilities: The Court agreed with the respondents that PLDT's liability under its Benefit Plan is distinct and separate from its liability under the Workmen's Compensation Act. The nature and purpose of the Benefit Plan were examined, noting that it provides benefits for separation, retirement, or gratuity pay to permanent and regular employees under specific conditions, which are not necessarily work-connected. This contrasts with the Workmen's Compensation Act, which specifically covers work-related injuries and illnesses. The Court reiterated its findings in a previous case involving the same PLDT Benefit Plan (Philippine Long Distance Telephone Company vs. Workmen's Compensation Commission and Marcial Brofas), where it was held that payments under the Plan are not in the concept of workmen's compensation but rather for separation, retirement, and gratuity pay. Therefore, payment pursuant to the Plan did not extinguish PLDT's liability under the Act. The Court found that Section 1, Article VIII of PLDT's Benefit Plan, which stipulates that beneficiaries shall receive the greater amount between benefits under the Plan or the Workmen's Compensation Law, but not both, does not exempt PLDT from its statutory liability. However, the crucial factor for deductibility is the lack of approval by the Workmen's Compensation Commissioner.
Main Doctrine
Payments made under a company's benefit plan, which are distinct from statutory workmen's compensation benefits and are not approved by the Workmen's Compensation Commissioner, are not deductible from the award granted under the Workmen's Compensation Act.