Social Security System v. Leonor Arellano
REITERATIONFacts
The Antecedents: Leonor Arellano, a clerk at the Social Security System (SSS), contracted pulmonary tuberculosis. He filed a claim for disability compensation under the Workmen's Compensation Act. Procedural History: The Workmen's Compensation Commission (WCC) initially declared Arellano's disability work-connected and ordered the SSS to pay specific amounts and weekly compensation. The SSS moved for reconsideration, which was denied, and the WCC chairman ordered the SSS to pay further compensation benefits. The SSS complied with the lump sum payment but not the weekly compensation. Arellano filed a motion to declare the balance due and demandable, which the WCC granted due to no opposition from SSS. Subsequently, the SSS Administrator informed Arellano that he was dropped from the roll of employees due to prolonged absence due to ill health, effective retroactively to December 23, 1970. The SSS then filed a motion for clarification regarding the effect of Arellano's retirement on the WCC order. The WCC chairman issued a resolution declaring that the claimant's retirement does not relieve the respondent (SSS) from payment of compensation due him. The Petition: The SSS filed a petition for review of the WCC resolution.
Issue(s)
Whether the SSS's liability for compensation benefits awarded to Leonor Arellano was affected by his subsequent separation (retirement) from the service. Whether the issue regarding the effect of the claimant's dismissal on his entitlement to compensation benefits was timely raised by the SSS.
Ruling
The Supreme Court affirmed the resolution of the Workmen's Compensation Commission dated June 9, 1971. Costs were against the petitioner (SSS).
Ratio Decidendi
On the issue of whether the SSS's liability for compensation benefits was affected by the claimant's separation from service: The Court held that compensation benefit is premised on the loss or impairment of earning capacity due to illness or injury during a period of employment. While entitlement generally presupposes an existing employer-employee relationship, this is not absolute once compensation benefits have been awarded and the award becomes final. The employer's liability cannot be unilaterally aborted by terminating the services of a disabled or sick employee, particularly when the reason for termination is absence caused by the very disability for which compensation was awarded. Allowing such a practice would permit employers to extinguish their liability at the expense of employees. The Court emphasized that the WCC's resolution correctly stated that the claimant's retirement did not relieve the SSS from its obligation to pay the compensation due. On the issue of whether the SSS timely raised the matter of the claimant's dismissal: The Court noted that the issue concerning the effect of the dismissal of the private respondent upon his entitlement to compensation benefits was tardily raised by the SSS. This was done through a mere motion for clarification and/or reconsideration after the decision awarding the benefits had become final and had already been partially paid by the SSS. This procedural tardiness further weakened the SSS's position.
Main Doctrine
An employer's liability for compensation benefits, once awarded and the award becomes final, cannot be aborted by its unilateral act of terminating the services of its disabled or sick employee, especially if the ground for termination is absence precisely caused by the disability for which compensation benefits were awarded.