Franklin Baker Company of the Philippines v. Workmen's Compensation Commission
REITERATIONFacts
The Antecedents: Salvador Abrigo, an employee of Franklin Baker Company of the Philippines (petitioner), filed a claim for compensation for disability due to "psycho-neurosis" allegedly traceable to his work as an electronic counting machine operator. He experienced dizziness and constant headaches after a short period in this role. Procedural History: The hearing officer ruled the illness compensable and ordered petitioner to pay P3,818.56. Petitioner sought review, and the Workmen's Compensation Commission (WCC) modified the award to P358.55 for temporary total disability from February 26, 1957, to July 15, 1957. Claimant Abrigo moved for reconsideration to extend the period, which was denied. Petitioner paid the award but deducted P118.75, claiming it was previously paid under the company's non-occupational accident and sickness disability benefit plan, which was part of a collective bargaining agreement. The WCC ordered the remittance of the deducted amount, stating the deduction was erroneous as the benefit plan was private while the compensation was a statutory liability. Petitioner refused to remit the P118.75, leading the WCC to issue a writ of execution. The Petition: Franklin Baker Company filed a special civil action for certiorari and prohibition, seeking to review the WCC's order and restrain the enforcement of the writ of execution.
Issue(s)
Whether the deduction of P118.75, previously paid under petitioner's non-occupational disability benefit plan, from the compensation awarded under the Workmen's Compensation Act is proper. Whether the WCC's order and writ of execution are valid.
Ruling
The petition is denied. The decision of January 27, 1964, and the order of December 6, 1966, as well as the writ of execution dated July 14, 1967, issued by the respondent Commission are affirmed. Petitioner is ordered to pay twelve (12%) percent interest per annum on the amount of P118.75 from July 8, 1964, until fully paid. The judgment is declared final and immediately executory.
Ratio Decidendi
On the propriety of the deduction: The Court held that the deduction of P118.75 was improper. The petitioner's argument that payments voluntarily made under its non-occupational benefit plan are deductible from compensation awards, citing Koppel Philippines vs. Aurelio Javellana, was found untenable. The Court emphasized that Section 7 of the Workmen's Compensation Act, as amended, explicitly states that any contract, regulation, or device intended to exempt the employer from all or part of the liability created by the Act is null and void. The Court found that the benefit plan, particularly its reservation clause, was an attempt by the petitioner to circumvent this statutory provision, making it illegal and contrary to public policy. Furthermore, the Court distinguished the nature of the liabilities: the benefit plan created a private, contractual obligation (ex contractu), while the Workmen's Compensation Act imposed a statutory liability (ex lege). The scope also differed, with the benefit plan covering non-occupational illnesses and the Act covering work-connected disabilities. Therefore, payment under one could not extinguish liability under the other. The Court also cited Philippine Long Distance Telephone Company vs. Rosal and Philippine Long Distance Telephone Company vs. Workmen's Compensation Commission and Marcial Brofas to reinforce that the company's benefit plan provided for separation, retirement, and gratuity pay, which were distinct from workmen's compensation. The Court also noted that the P118.75 payment was not exclusively for the psycho-neurosis but also for asthma and vertigo, some of which might have been non-occupational, making the deduction an attempt to reduce statutory liability based on a false premise. The Court reiterated that a satisfaction receipt signed by a disabled employee does not constitute a waiver, as the law does not consider valid any agreement to receive less compensation than what is legally entitled under the Act, citing Franklin Baker Co. of the Phil. vs. Alillana. On the validity of the WCC's order and writ of execution: The Court affirmed that the WCC's decision dated January 27, 1964, ordering the payment of P358.55, had become final and executory because the petitioner did not appeal it. Only the claimant filed a motion for reconsideration, which was denied. Consequently, the petitioner's subsequent act of unilaterally deducting P118.75 was unwarranted. The continued refusal to remit the amount, despite requests, was deemed bad faith, causing unjustifiable delay and prejudice to the claimant, who was deprived of the funds for over sixteen years. The writ of execution was a lawful means to enforce the final and executory decision.
Main Doctrine
An employer cannot deduct payments made under a private non-occupational disability benefit plan from compensation awarded under the Workmen's Compensation Act, as such a deduction is contrary to law and public policy, and the two liabilities are distinct and separate.