GOVERNMENT SERVICE INSURANCE SYSTEM, 

Petitioner, v. CIVIL SERVICE

COMMISSION and DR. MANUEL BARADERO, Respondents.

GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner, v. CIVIL SERVICE

COMMISSION and MATILDE S. BELO, Respondents.
G.R. No. 98395, 19 June 1995.

BACKGROUND OF CONSOLIDATED CASES:

G.R. No. 98395

Dr. Manuel Baradero was a government employee, who occupied the position of Medical Officer
IV in the Philippine Medical Care Commission, until he reached the mandatory age of retirement
of 65 years old.

He served the Philippine Army as an enlisted man from 1942 to 1945. He resumed his
government career on January 1976, when he was elected a member of the Sangguniang
Bayan of the Municipality of La Castellana, Negros Occidental where he received per diem for
every session attended. He resigned from the Sangguniang Bayan on October 1976. On 1978,
he was appointed Medical Officer I at the Philippine Medical Care Commission, where he
served until he reached the compulsory retirement age of 65 years old.

Prior to turning 65 years old, Dr. Baradero applied for compulsory retirement with GSIS, which
credited in his favor 13 years of government service, excluding his term as a Sangguniang
Bayan member. He requested an extension of service from the CSC to enable him to complete
15 years of government service so that he may avail of retirement benefits.

The request was denied by the CSC. Instead, it ruled that Dr. Baradero's two-year stint as a
member of the Sangguniang Bayan be considered as creditable service, hence completing the
mandatory 15-year service and making him eligible for retirement benefits.

G.R. No. 102449

Matilde Belo retired from the government service on 1988. At the time of her retirement, Belo
was the Vice-Governor of Capiz in a hold-over capacity. She served as Governor of Capiz from
1972 to 1988.

As an elected government official, Belo received a fixed salary of P13, 000.00 per annum from
January 1976 until December 1976. Thereafter, she held the same position in a hold-over
capacity and was remunerated as follows: (1) from December 1976 to January 1979, she
received per diem for every session attended of the Sangguniang Panlalawigan; and (2) from
December 1979 to February 1988, she received a fixed salary ranging from P23,000.00 to
P45,000.00 per annum.

Belo sought an opinion from the CSC to determine if the service she rendered in which period
she was paid on a per diem basis is creditable for retirement purposes. CSC affirmed it.

Belo's application for retirement was referred to the GSIS Committee on Claims, which adopted
a position contrary to that of the CSC. Later on, GSIS received the Order which directed its
President and General Manager to show cause why they should not be held in contempt for the
delay in the implementation of CSC Resolution.
The GSIS filed its "Manifestation/Explanation," alleging that it cannot implement the resolution
considering that it has a pending petition for certiorari before this Court in the case of Dr.
Baradero (G.R. No. 98395), where the same issue was raised.

FINAL FACTS:

In decision dated October 28, 1994 we held that government service rendered on a per diem
basis is not creditable in computing the length of service for retirement purposes. Thus, we
reversed the questioned resolutions and orders of the Civil Service Commission (CSC) requiring
the Government Insurance System (GSIS) to consider creditable the services of private
respondents on a per diem basis.

Private respondent Matilde S. Belo in G. R. No. 102449 filed a motion for reconsideration dated
17 November 1994, of this Court's decision of October 28, 1994. She insists that the services
rendered by her as Vice Governor of Capiz, between December 31, 1975 to January 1, 1979,
be considered as creditable for purposes of retirement.

Respondent Belo held the position of Vice-Governor of Capiz continuously between January 5,
1972 up to February 1, 1988. From January 25, 1972 up to December 31, 1979, she held office
by virtue of an election and was paid a fixed salary. From December 31, 1979 up to February 1,
1988, she held the position of Vice Governor of Capiz in a holdover capacity, broken down into
two periods: 

1. A period in which she was paid on a per diem basis from December 31, 1976
to December 31, 1979; and

2. A period in which she was paid a fixed salary — from January 1, 1980 to
February 1,1988.

In its June 7, 1989 Resolution on the matter, CSC held that the services rendered for the first
holdover period between January 31, 1976 to January 1, 1979 was creditable for purposes of
retirement. CSC noted that during the entire holdover period, respondent Belo actually served
on a full time basis as Vice Governor and was on call 24 hours a day. Disagreeing with the
CSC's insistence that the period in which respondent Belo was paid on a per diem basis should
be credited in computing the number of years of creditable service to the government, GSIS
subsequently filed a petition for certiorari before this court, questioning the orders of the CSC.

A review of the circumstances surrounding payment to respondent Belo of the per diems in

question convinces us that her motion is meritorious. We are convinced that the "per diem" she
received was actually paid for in the performance of her duties as Vice-Governor of Capiz in a
holdover capacity not as the per diem referred to by section 1(c) of R.A. No 1573 which
amended Section 1(c) of C.A. No. 186 (Government Insurance Service Act).

In G.R. No. 98395, the period disputed was served by respondent Baradero as a member of the
Sangguniang Bayan of the Municipality of La Castellana, Negros Occidental between January
1, 1976 to October 10, 1978 where he was likewise paid on a  per diem basis. It is not
disputed that during this period, respondent Baradero rendered full services to the government
as a member of the Sangguniang Bayan. In fact, on the basis of its earlier resolution on the
case of respondent Belo, the Civil Service Commission recognized the period in which
respondent Baradero served as a member of the Sangguniang Bayan as creditable for
retirement purposes instead of allowing his petition for extension of service in order to complete
the 15 year period of service required for the purpose of qualifying for retirement benefits.

ISSUE:

Whether or not regular service in government on a per diem basis, without any other form of
compensation or emolument, is compensation within the contemplation of the term 'service with
compensation' under the Government Service Insurance Act of 1987?

RULING:

Yes.

Respondents Belo and Baradero received were dominated as "per diem," the amounts received
were actually in the nature of a compensation or pay. What should therefore be considered as
controlling in both cases would be the nature of remuneration, not the label attached to it.

Respondent Belo held the position of Vice-Governor of Capiz continuously between January 5,
1972 up to February 1, 1988. From January 25, 1972 up to December 31, 1979, she held office
by virtue of an election and was paid a fixed salary. From December 31, 1979 up to February 1,
1988, she held the position of Vice Governor of Capiz in a holdover capacity, broken down into
two periods: 2 

1. A period in which she was paid on a per diem basis — from December 31, 1976 to December
31, 1979; and

2. A period in which she was paid a fixed salary — from January 1, 1980 to February 1, 1988.

In its June 7, 1989 Resolution 3 on the matter, CSC held that the services rendered for the first
holdover period between January 31, 1976 to January 1, 1979 was creditable for purposes of
retirement. CSC noted that during the entire holdover period, respondent Belo actually served
on a full time basis as Vice Governor and was on call 24 hours a day.

Disagreeing with CSC's insistence that the period in which respondent Belo was paid on a per
diem basis should be credited in computing the number of years of creditable service to the
government, GSIS subsequently filed a petition for Certiorari before this court, questioning the
orders of the CSC.

A review of the circumstance surrounding payment to respondent Belo of the per diems in
question convinces us that her motion is meritorious. We are convinced that the "per diem" she
received was actually paid for in the performance of her duties as Vice-Governor of Capiz in a
holdover capacity not as the per diem referred to be section 1 (c) of R. A. No. 1573 which
amended Section 1(c) of C. A. No. 186 (Government Service Insurance Act).

A closer look at the aforecited provision reveals a legislative intent to make a clear distinction
between salary, pay or compensation, on one hand, and other incidental allowances, including
per diems on the other. Section 1(c) provides:
(c) Salary, pay or compensation shall be construed as to exclude all bonuses, per diems,
allowances and overtime pay, or salary, pay or compensation given to the base pay of the
position or rank as fixed by law or regulations. 5 

Since it is generally held that an allowance for expenses incident to the discharge of an office is
not a salary of office, it follows that if the remuneration received by a public official in the
performance of his duties does not constitute a mere "allowance for expenses" but
appears to be his actual "allowance for expenses" but appears to be his actual base pay,
then no amount of categorizing the salary as a "per diem" would take the allowances
received by petitioner from the term service with compensation for the purpose of
computing the number of years of service in government.

Furthermore, it would grossly violate the law's intent to reward the public servant's years of
dedicated service to government for us to gloss over the circumstances surrounding the
payment of the said remunerations to the petitioner in taking a purely mechanical approach to
the problem by accepting an attached label at face value.

In G. R. No. 98395, the period disputed was served by respondent Baradero as a member of
the Sangguniang Bayan of the Municipality of La Castellana, Negros Occidental between
January 1, 1976 to October 10, 1978 where he was likewise paid on a per diem basis. It is not
disputed that during this period, respondent Baradero rendered full services to the government
as a member of the Sangguniang Bayan.

In fact, on the basis of its earlier resolution on the case of respondent Belo, the Civil Service
Commission recognized the period in which respondent Baradero served as a member of the
Sangguniang Bayan as creditable for retirement purposes instead of allowing his petition for
extension of service in order to complete the 15 year period of service required for the purpose
of qualifying for retirement benefits. 

In the sense in which the phrase "per diem" is used under the Government Service Insurance
Law, a per diem is a daily allowance given for each day an officer or employee of
government is away form his home base. This is its traditional meaning: its usual signification
is as a reimbursement for extra expenses incurred by the public official in the
performance of his duties. Under this definition the per diem is intended to cover the cost of
lodging and subsistence of officers and employees when the latter are on duty outside of their
permanent station. 

On the other hand, a per diem could rightfully be considered a compensation or

remuneration attached to an office. Under the circumstances obtaining in the case of
respondent Belo the per diems received by her during the period that she acted in holdover
capacity obviously were in the nature of compensation or remuneration for her services as Vice
Governor of the Province of Capiz, rather than as a reimbursement for incidental expenses
incurred while away from her home base. In connection with this, it is important to lay stress to
the following facts:

1. Petitioner rendered service to the government continuously from January 25, 1972 to
February 1, 1988 as Vice Governor of the Province of Capiz. During a portion of the holdover-
period, i. e., from December 31, 1976 to January 1, 1979, payment for her services to the
government was through per diems for ever regular or special session of the Sangguniang
Panlalawigan attended.
2. The CSC noted that: "[F]ormer Vice Governor Belo was on a full time basis when she
served . . . on a hold-over capacity. . . As such provincial official she is (sic) legally and factually
on call by the provincial people and the province more than eight hours a day, or at any time of
the day beyond the prescribed working hours.

3. She receive no other forms of remuneration during the disputed period."

The same could be said of the services rendered by respondent Baradero, who, before and
after the period in question had an unblemished record of service to the government as a
member of the army and as a medical officer of the Philippine Medicare Commission. The
disputed period was served on a full-time basis regardless of the denomination given to the
compensation received by him.

What ought to be controlling in the cases a bench therefore, should be the nature of the
remuneration rather than the label attached to it. While there is no dispute that the law expecting
per diems from the definition of compensation is clear and requires no interpretation, however,
since the term per diem may construed either as compensation or as allowance, it would be
necessary for us to inquire whether the term per diem in the GSIS Law refers to one or the other
signification.

As explained above, it is plainly obvious that per diem as compensation, is not what the law
contemplates. The clear intent of the Government Insurance Law was to exclude those extra
incidental expenses or incurred on a daily basis covered by the traditional definition of the term
per diem. An important fact missed from our earlier decision was that, while respondent Belo
was paid a fixed salary, which apparently rectified an otherwise anomalous situation. The
services rendered by respondent Belo having been continuous, the disputed period
should be credited for purposes of retirement.

On the other hand, respondent Baradero was willing to serve two additional years of service to
government in order to complete the 15 year period required by our retirement laws. The Civil
Service Commission felt this was unnecessary and denied the same on the ground that the
period served on a per diem basis, was, like the disputed period in the Belo case, creditable. 14 

The distinctions between salary and per diem made hereinabove were in fact adverted to in our
original decision dated October 28, 1994. In explaining the allowance of service rendered on a
per diem basis in the case of Inocencio vs. Ferrer of the Social Security System, we noted with
approval the Government Service Insurance System's explanation that the per diem service
which was credited for purposes of retirement was Commissioner Ferrer's full time service as
Hearing Officer not this per diem service for attendance at Board Meetings. Even then, we
indirectly noted the difference between per diem paid as compensation for services rendered on
a full time basis and per diem as allowance for incidental expenses. Respondent Belo asserts,
with reason, that the per diems paid to her, while reckoned on the basis of attendance in Board
Meetings, were for her full time services as Vice Governor of the Province of Capiz. In fact, the
same service, albeit still on a hold-over basis, was eventually paid with a fixed salary.

Retirement benefits given to government employees in effect reward them for giving the best
years of their lives to the service of their country. This is especially true with those in
government service occupying positions requiring management skills because the years they
devote to government service could be spent more profitably in lucrative appointments in the
private sector. In exchange for their selfless dedication to government service, they enjoy
security of tenure and are ensured of a reasonable amount of support after they leave the
government. The bases for the provision of retirement benefits is, therefore, service to
government. While a government insurance system rationalizes the management of funds
necessary to keep this system of retirement support afloat and is partly dependent on
contributions made by the thousands of members of the system, the fact that these
contributions are minimal when compared to the amount of retirement benefits actually received
shows that such contributions, while necessary, are not absolutely determinative in drawing up
criteria for those who would qualify as recipients of the retirement benefit system.

It cannot be convincingly asserted that petitioners could not avail themselves of the benefits of
the policy because no deductions were made from their salaries during the disputed periods
when they were paid on a per diem basis. In respondent Belo's case, before and after that short
interregnum, she was paid a fixed salary. She was not duly informed that short period was not
to be credited in computing the length of her service for retirement purposed. She assumed in
all good faith that she continued to be covered by the GSIS insurance benefits considering that
in fact and in practice the deductions are virtually mandatorily made from all government
employees on an essentially involuntary basis. Similarly, had respondent Baradero been
informed of the need to pay the required deductions for the purpose of qualifying for retirement
benefits, he would have willingly paid the required sums. In a sense, the contract made between
the GSIS and the government employee is done on a take-it-or-leave-it basis, that is, it is a
virtual contract of adhesion which gives the employee no choice but no involuntarily accede to
the deductions made from their oftentimes meager salaries. If the GSIS did not deduct, it was by
its own choice: contributions were exacted from petitioner before and after the disputed. To
assert that petitioners would have been made entitled to benefits had they opted for optional
deductions at that point misses the principal fact in issue here, which is the question as to
whether or not the disputed periods should be credited as service with compensation for the
purposes of retirement.

Moreover, the source of GSIS benefits is not in essence merely contractual; rather, it is a social
legislation is clearly indicated in the "whereases" of Presidential Decree No. 1146, to
wit:nadchanroblesvirtualawlibrary

WHEREAS, provisions of existing laws that have prejudiced, rather than benefited, the
government employee; restricted, rather than broadened, his benefits, prolonged, rather than
facilitated the payment of benefits, must now yield to his paramount welfare;

WHEREAS, the social security and insurance benefits of government employees must be
continuously re-examined and improved to assure comprehensive and integrated social security
and insurance programs that will provide benefits responsive to their needs sickness, disability,
death, retirement, and other contingencies, and to serve as a fitting reward for dedicated public
service;

WHEREAS, in the light existing economic conditions affecting the welfare of government
employees there is a need to expand and improve the social security and insurance programs
administered by the Government Service Insurance Systems, specifically among others, by
increasing pension benefits, expanding disability benefits, introducing survivorship benefits,
introducing sickness income benefits, and eventually extending the compulsory coverage of
these programs to all government employees regardless of employment status.

The situation as far as private respondents and the GSIS are concerned could be rectified by
deducting a reasonable amount corresponding to the contributions which should have been
deducted during the period from the amount of retirement benefits accruing to them. It would be
grossly inequitable — as it would violate the spirit of the government retirement and insurance
laws — to permanently penalize both respondents Belo and Baradero by ignoring the fact of
actual period of service to government with compensation, and deny them the retirement
privileges that they, for their unselfish service to the government justly deserve. Under the
peculiar circumstances of the case at bench, the demand for equity prompts us to regard spirit
not letter, and intent, not form, in according substantial justice to both respondents, where the
law, through its inflexible rules might prove inadequate.

DISPOSITION:

Decision dated October 28, 1994 is reconsidered and the questioned resolutions and orders of
the CSC requiring GSIS to consider creditable the services of private respondents on a per
diem basis AFFIRMED.
HILARION BERONILLA v. GOVERNMENT SERVICE INSURANCE SYSTEM, its BOARD OF
TRUSTEES, ET AL.
G.R. No. L-21723 November 26, 1970
FACTS:

A special civil action for prohibition seeking to declare Resolution No. 1497 of the Board of
Trustees of the GSIS to the effect that “petitioner Beronilla be considered compulsorily retired
from the service as Auditor of the Philippine National Bank” as null and void. Previously,
petitioner had occupied many other positions in the government and had been a member of the
GSIS during all times required by law.

In all his applications and records including his Member’s Service Record which he submitted to
the GSIS on 1954, petitioner uniformly indicated that his date of birth is January 14, 1898.
On September 29, 1959, he requested the Commissioner of Civil Service, thru the Auditor
General, that his date of birth indicated in the records be changed to January 14, 1900.
According to his petition, it was only in 1955 and before the demise of his mother, he found out
his true date of birth. His letter to the Civil Service Commissioner was supported by affidavits
attesting his true date of birth. The letter was then endorsed by the Commission to the GSIS for
action “without the intervention of the Civil Service Commission”.

The GSIS legal counsel denied the petitioner’s letter-request. Upon learning of this denial,
petitioner submitted additional evidence to support his request. However, the legal counsel
reiterated his former denial. The petitioner appealed to the General Manager of the System (Mr.
Rodolfo Andal). The latter placed “OK” at the foot of the request, thereby indicating the approval
of the request for change of birthdate. Because of such approval, the notes of the adjustments
of the date of birth of petitioner were sent to the Auditor General and the Commissioner of Civil
Service where the proceeds of petitioner’s policy were re-computed. The adjustment included
the issuance of a new life policy no. of the petitioner, therefore extending it.

Almost three years after Mr. Andal approved the change of petitioner’s date of birth, Mr. Ismael
Mathay then Auditor of the Central Bank detailed to the Philippine National Bank, wrote the
Board of Trustees of the GSIS about the service of the petitioner, who was continuously paid
even after reaching the age of 65, which is the compulsory retirement age from the government
service. This advice was sent to the Board of Trustees of GSIS. Upon knowing which, the Board
of Trustees of GSIS adopted the disputed resolution of the Legal Counsel of GSIS, thereby
denying the request for change of birthdate of the petitioner.

ISSUE: Whether or not the GSIS Board of Trustees acted within its powers when it reversed
the approval by General Manager Andal of petitioner's request for the change of his date of
birth?

HELD: YES

The court decided to uphold the superior authority of the Board over the General
Manager and to dismiss this petition. It is thus obvious that by express statutory authority,
the Board of Trustees directly manages the System and the General Manager is only the chief
executive officer of the Board. In the exercise of its power to adopt rules and regulations for the
administration of the System and the transaction of its business, the Board may lodge in the
General Manager the authority to act on any matter the Board may deem proper, but in no wise
can such conferment of authority be considered as a full and complete delegation resulting in
the diminution, much less exhaustion, of the Board's own statutorily-based prerogative and
responsibility to manage the affairs of the System and, accordingly, to decide with finality any
matter affecting its transactions or business.

In other words, even if the Board may entrust to the General Manager the power to give final
approval to applications for retirement annuities, the finality of such approval cannot be
understood to divest the Board, in appropriate cases and upon its attention being called to a
flaw, mistake or irregularity in the General Manager's action, of the authority to exercise its
power of supervision and control which flows naturally from the ultimate and final responsibility
for the proper management of the System imposed upon it by the charter.

On laches or estoppel

Petitioner posits that even assuming that the Board may have the power to reverse or modify
any action of the General Manager in the exercise of his authority, because of the failure of
the Board to act from June 2, 1960, when General Manager Andal acted favorably on his
request to August 9, 1963, when the Board approved the herein impugned Resolution No.
1497, or for more than three years, during which time corresponding adjustments were made
in his GSIS records, payment and life insurance policies and due notices were served by the
GSIS itself on all parties concerned on the basis of his changed date of birth, respondent
should be considered as guilty of laches or held in estoppel to change or alter the action
of Mr. Andal.

Although there were substantial changes made because of the approval made by Mr. Andal,
these actions cannot make the GSIS guilty for laches or estoppel since as a general rule,
actuations by the government do not create laches or estoppel. Further, it was only thru Mr.
Mathay’s letter that the Board knew about Mr. Andal’s action. For the sake of inequity, the Board
was convinced that the originally recorded date of birth should not be disturbed, since said
recorded date of birth was used uniformly by the petitioner decades back in all his official
records.With regards to the petitioner’s contention that he was denied due process as when he
was not notified about Mr. Mathay’s letter, the court ruled that procedures established by GSIS
does not require notice and hearing.Finally, with regards to petitioner’s argument that the
Board’s action impaired his constitutional right of the obligations of his contract, the court ruled
that retirement of government employees is imposed by law and is not a result of any
contractual stipulations.

Important also it is not to overlook that as regards the actuations of government officials, the
general rule is that their mistakes and omissions do not create estoppel.
In this case, all that the Board has done is to set aside what it found to be an erroneous
decision of the General Manager in approving the change of date of petitioner's birth, because
from the evidence before it, the Board was convinced that the originally recorded date of birth
should not be disturbed. We cannot see where the charged inequity of such action of the Board
could lie.

On denial of due process

Anent petitioner's contention that he was denied due process when the Board of Trustees acted
on the letter of Mr. Mathay, without notifying him thereof or hearing him thereon, suffice it to say
that since there is no showing that under the procedure established in the GSIS, such notice
and hearing are required, considering that the System operates as a business corporation and
generally notice and hearing are not indispensable for due process in corporations, and in any
event, inasmuch as what was considered by the Board was nothing more than petitioner's own
conflicting representations, and if petitioner really believed he should have been heard, he could
have filed a motion for reconsideration or reopening, it cannot be said that indeed he had not
had due opportunity to present his side.

On impairment of obligation of contract of insurance

Petitioner's argument that the Board's resolution in question constitutes an impairment of the
obligations of his contract of insurance, it is obvious that the constitutional injunction that is
evidently the basis of such argument refers to the legislature and not to resolutions even of
government corporations. Besides, petitioner's life insurance policy, apart from not having any
real relevance in this case, what is involved being his retirement, contains specific provisions
contemplating the correction of any error or mistake in the date of birth of the insured. On the
other hand, the retirement of government employees is imposed by law and is not the result of
any contractual stipulation.

DISPOSITION:

Petition in this case is DISMISSED.

 GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner, vs.FERNANDO P. DE
LEON, Respondent.

G.R. No. 186560, 17 November 2010

This case involves a former government official who, after honorably serving office for 44
years, was comfortably enjoying his retirement in the relative security of a regular
monthly pension, but found himself abruptly denied the benefit and left without means of
sustenance. This is a situation that obviously cries out for the proper application of
retirement laws, which are in the class of social legislation.

FACTS:

Respondent Fernando de Leon retired as Chief State Prosecutor of the DOJ, after years of
service to the government. He applied for retirement under RA 910, invoking RA 3783, as
amended by RA 4140, which provides that chief state prosecutors hold the same rank as
judges. The application was approved by GSIS. Thereafter, and for more than 9 years,
respondent continuously received his retirement benefits, until 2001, when he failed to receive
his monthly pension.

Respondent learned that GSIS cancelled the payment of his pension because DBM informed
GSIS that respondent was not qualified to retire under RA 910; that the law meant to apply only
to justices and judges;and that having the same rank and qualification as a judge did not entitle
him to the retirement benefits provided.

Respondent wrote GSIS several letters but he received no response until November 9, 2007,
when respondent received the following letter from GSIS, stating that Chief State Prosecutors
are not covered by R.A. 910. Thus, they cannot accede to the request of the respondent that he
may be allowed to apply under a different law. Respondent have to retire and in fact have
already retired under a different law. In fact, Section 55 of Republic Act No. 8291 provides for
exclusivity of benefits which means that a retiree may choose only one retirement scheme
available to him to the exclusion of all others.

Respondent then filed a petition for mandamus before the CA, praying that petitioner be
compelled to continue paying his monthly pension and to pay his unpaid monthly benefits from
2001. He also asked that GSIS and the DBM be ordered to pay him damages. CA granted the
petition.

The CA found that GSIS allowed respondent to retire under RA. No. 910, following precedents
which allowed non-judges to retire under the said law. The CA said that it was not respondent’s
fault that he was allowed to avail of the benefits under R.A. No. 910; and that, even if his
retirement under that law was erroneous, respondent was, nonetheless, entitled to a monthly
pension under the GSIS Act. The CA held that this was not a case of double retirement, but
merely a continuation of the payment of respondent’s pension benefit to which he was clearly
entitled. Since the error in the award of retirement benefits under R.A. 910 was not attributable
to respondent, it was incumbent upon GSIS to continue defraying his pension in accordance
with the appropriate law which might apply to him. It was unjust for GSIS to entirely stop the
payment of respondent’s monthly pension without providing any alternative sustenance to him.

The CA further held that, under R.A. No. 660, R.A. No. 8291, and Presidential Decree (P.D.)
No. 1146, respondent is entitled to a monthly pension for life. He cannot be penalized for the
error committed by GSIS itself. Thus, although respondent may not be qualified to receive the
retirement benefits under R.A. No. 910, he is still entitled to a monthly pension under R.A. No.
660, P.D. No. 1146, and R.A. No. 8291.

Petitioner GSIS is now before this Court, assailing the Decision of the CA and the Resolution
denying its motion for reconsideration.

GSIS admits that respondent received monthly pensions from August 1997 until December
2001. Thereafter, the DBM refused to remit the funds for respondent’s pension on the ground
that he was not entitled to retire under R.A. No. 910 and should have retired under another law,
without however specifying which law it was. It appears that the DBM discontinued the payment
of respondent’s pension on the basis of the memorandum of the Chief Presidential Legal
Counsel that Chief Prosecutors of the DOJ are not entitled to the retirement package under R.A.
No. 910.

Because of the discontinuance of his pension, respondent sought to convert his retirement
under R.A. No. 910 to one under another law administered by GSIS. However, this conversion
was not allowed because, as GSIS avers, R.A. No. 8291 provides that conversion of one’s
retirement mode on whatever ground and for whatever reason is not allowed beyond one
year from the date of retirement.

GSIS assails the CA’s Decision for not specifying under which law respondent’s retirement
benefits should be paid, thus making it legally impossible for GSIS to comply with the
directive. It then raises several arguments that challenge the validity of the appellate court’s
decision.

First, GSIS argues that the CA erred in issuing a writ of mandamus despite the absence of any
specific and clear right on the part of respondent, since he could not even specify the benefits to
which he is entitled and the law under which he is making the claim.

Second, GSIS alleges that it had refunded respondent’s premium payments because he opted
to retire under R.A. No. 910, which it does not administer. Thus, GSIS posits that the nexus
between itself and respondent had been severed and, therefore, the latter cannot claim benefits
from GSIS anymore.

Third, GSIS contends that the CA erred in concluding that respondent would not be unjustly
enriched by the continuation of his monthly pension because he had already benefited from
having erroneously retired under R.A. No. 910. GSIS points out that it had refunded
respondent’s premium contributions. When the Chief Presidential Legal Counsel concluded that
respondent was not entitled to retire under R.A. No. 910, it was implicit recognition that
respondent was actually not entitled to the P1.2 million lump sum payment he received, which
he never refunded.15

Fourth, GSIS points out that the CA erred in concluding that respondent was not seeking
conversion from one retirement mode to another. It reiterates that R.A. No. 8291 expressly
prohibits conversion beyond one year from retirement. To compel GSIS to release respondent’s
retirement benefits despite the fact that he is disqualified to receive retirement benefits violates
R.A. No. 8291, and would subject its officials to possible charges under R.A. No. 3019, the Anti-
Graft and Corrupt Practices Act.

Fifth, GSIS contends that respondent is not entitled to the retirement benefits under R.A. No.
8291 because, when he retired in 1992, the law had not yet been enacted. The retirement laws
administered by GSIS at that time were R.A. No. 660, R.A. No. 1616, and P.D. No. 1146.

Lastly, GSIS argues that the writ of mandamus issued by the CA is not proper because it
compels petitioner to perform an act that is contrary to law.

Respondent traverses these allegations, and insists that he has a clear legal right to receive
retirement benefits under either R.A. No. 660 or P.D. No. 1146. He claims that he has met all
the conditions for entitlement to the benefits under either of the two laws. Respondent contends
that the return of his contributions does not bar him from pursuing his claims because GSIS can
require him to refund the premium contributions, or even deduct the amount returned to him
from the retirement benefits he will receive. He also argues that resumption of his monthly
pension will not constitute unjust enrichment because he is entitled to the same as a matter of
right for the rest of his natural life.

Respondent accepts that he is not covered by R.A. No. 8291. He, therefore, asks this Court to
modify the CA Decision, such that instead of Section 13 of R.A. No. 8291, it should be Section
12 of P.D. No. 1146 or Section 11 of R.A. No. 660 to be used as the basis of his right to receive,
and the adjustment of, his monthly pension.

Furthermore, respondent argues that allowing him to retire under another law does not
constitute "conversion" as contemplated in the GSIS law. He avers that his application for
retirement under R.A. No. 910 was duly approved by GSIS, endorsed by the DOJ, and
implemented by the DBM for almost a decade. Thus, he should not be made to suffer any
adverse consequences owing to the change in the interpretation of the provisions of R.A. No.
910. Moreover, he could not have applied for conversion of his chosen retirement mode to one
under a different law within one year from approval of his retirement application, because of his
firm belief that his retirement under R.A. No. 910 was proper – a belief amply supported by its
approval by GSIS, the favorable endorsement of the DOJ, and its implementation by the DBM.

The petition is without merit.

On Mandamus

GSIS contends that respondent’s petition for mandamus filed before the CA was procedurally
improper because respondent could not show a clear legal right to the relief sought.

The Court disagrees with petitioner. The CA itself acknowledged that it would not indulge in
technicalities to resolve the case, but focus instead on the substantive issues rather than on
procedural questions. Furthermore, courts have the discretion to relax the rules of procedure in
order to protect substantive rights and prevent manifest injustice to a party.

The Court has allowed numerous meritorious cases to proceed despite inherent procedural
defects and lapses. Rules of procedure are mere tools designed to facilitate the attainment of
justice. Strict and rigid application of rules which would result in technicalities that tend to
frustrate rather than to promote substantial justice must always be avoided.22

Respondent has a clear legal right to the relief prayed for. Thus, the CA acted correctly when it
gave due course to respondent’s petition for mandamus.

On liberal interpretation of social legislation

The inflexible rule in our jurisdiction is that social legislation must be liberally construed in favor
of the beneficiaries. Retirement laws, in particular, are liberally construed in favor of the
retiree because their objective is to provide for the retiree’s sustenance and, hopefully, even
comfort, when he no longer has the capability to earn a livelihood. The liberal approach aims to
achieve the humanitarian purposes of the law in order that efficiency, security, and well-being of
government employees may be enhanced. Indeed, retirement laws are liberally construed
and administered in favor of the persons intended to be benefited, and all doubts are
resolved in favor of the retiree to achieve their humanitarian purpose.

In this case, as adverted to above, respondent was able to establish that he has a clear legal
right to the reinstatement of his retirement benefits.

In stopping the payment of respondent’s monthly pension, GSIS relied on the memorandum of
the DBM, which was based on the Chief Presidential Legal Counsel’s opinion that respondent,
not being a judge, was not entitled to retire under R.A. No. 910. And because respondent had
been mistakenly allowed to receive retirement benefits under R.A. No. 910, GSIS erroneously
concluded that respondent was not entitled to any retirement benefits at all, not even under any
other extant retirement law. This is flawed logic.

Respondent’s disqualification from receiving retirement benefits under R.A. No. 910 does not
mean that he is disqualified from receiving any retirement benefit under any other existing
retirement law.

Application of RA 8291

The CA incorrectly held that respondent was covered by R.A. No. 8291. R.A. No. 8291 became
a law after respondent retired from government service. Hence, petitioner and even respondent
agree that it does not apply to respondent, because the law took effect after respondent’s
retirement.

Prior to the effectivity of R.A. No. 8291, retiring government employees who were not entitled to
the benefits under R.A. No. 910 had the option to retire under either of two laws:
Commonwealth Act No. 186, as amended by R.A. No. 660, or P.D. No. 1146.

Respondent indicated his preference to retire under P.D. No. 1146, since this law provides for
higher benefits, and because the same was the latest law at the time of his retirement in 1992.

Under P.D. No. 1146, to be eligible for retirement benefits, one must satisfy the following
requisites:

Section 11. Conditions for Old-Age Pension.

(a) Old-age pension shall be paid to a member who:

(1) has at least fifteen years of service;

(2) is at least sixty years of age; and

(3) is separated from the service.

Respondent had complied with these requirements at the time of his retirement. Accordingly,
respondent is entitled to receive the benefits provided under Section 12 of the same law, to wit:

Section 12. Old-Age Pension.

(a) A member entitled to old-age pension shall receive the basic monthly pension for life but in
no case for a period less than five years: Provided, That, the member shall have the option to
convert the basic monthly pensions for the first five years into a lump sum as defined in this Act:
Provided, further, That, in case the pensioner dies before the expiration of the five-year period,
his primary beneficiaries shall be entitled to the balance of the amount still due to him. In default
of primary beneficiaries, the amount shall be paid to his legal heirs.

To grant respondent these benefits does not equate to double retirement, as GSIS
mistakenly claims. Since respondent has been declared ineligible to retire under R.A. No.
910, GSIS should simply apply the proper retirement law to respondent’s claim, in
substitution of R.A. No. 910. In this way, GSIS would be faithful to its mandate to administer
retirement laws in the spirit in which they have been enacted, i.e., to provide retirees the
wherewithal to live a life of relative comfort and security after years of service to the
government. Respondent will not receive --- and GSIS is under no obligation to give him ---
more than what is due him under the proper retirement law.

It must be emphasized that P.D. No. 1146 specifically mandates that a retiree is entitled to
monthly pension for life. As this Court previously held:

Considering the mandatory salary deductions from the government employee, the government
pensions do not constitute mere gratuity but form part of compensation.

In a pension plan where employee participation is mandatory, the prevailing view is that
employees have contractual or vested rights in the pension where the pension is part of
the terms of employment. The reason for providing retirement benefits is to compensate
service to the government. Retirement benefits to government employees are part of
emolument to encourage and retain qualified employees in the government service. Retirement
benefits to government employees reward them for giving the best years of their lives in the
service of their country.

Thus, where the employee retires and meets the eligibility requirements, he acquires a
vested right to benefits that is protected by the due process clause. Retirees enjoy a
protected property interest whenever they acquire a right to immediate payment under pre-
existing law. Thus, a pensioner acquires a vested right to benefits that have become due as
provided under the terms of the public employees’ pension statute. No law can deprive such
person of his pension rights without due process of law, that is, without notice and opportunity to
be heard.
It must also be underscored that GSIS itself allowed respondent to retire under R.A. No. 910,
following jurisprudence laid down by this Court.

One could hardly fault respondent, though a seasoned lawyer, for relying on petitioner’s
interpretation of the pertinent retirement laws, considering that the latter is tasked to administer
the government’s retirement system. He had the right to assume that GSIS personnel knew
what they were doing.

Since the change in circumstances was through no fault of respondent, he cannot be prejudiced
by the same. His right to receive monthly pension from the government cannot be
jeopardized by a new interpretation of the law.

GSIS’ argument that respondent has already been enormously benefited under R.A. No. 910
misses the point.

Retirement benefits are a form of reward for an employee’s loyalty and service to the employer,
and are intended to help the employee enjoy the remaining years of his life, lessening the
burden of having to worry about his financial support or upkeep. A pension partakes of the
nature of "retained wages" of the retiree for a dual purpose: to entice competent people to enter
the government service; and to permit them to retire from the service with relative security, not
only for those who have retained their vigor, but more so for those who have been incapacitated
by illness or accident.

Surely, giving respondent what is due him under the law is not unjust enrichment.

Conversion of retirement benefit

As to GSIS’ contention that what respondent seeks is conversion of his retirement mode, which
is prohibited under R.A. No. 8291, the Court agrees with the CA that this is not a case of
conversion within the contemplation of the law. The conversion under the law is one that is
voluntary, a choice to be made by the retiree. Here, respondent had no choice but to look for
another law under which to claim his pension benefits because the DBM had decided not to
release the funds needed to continue payment of his monthly pension.

If the DBM had not suspended the payment of his pension, he would not have sought any other
law under which to receive his benefits. The necessity to "convert" was not a voluntary choice of
respondent but a circumstance forced upon him by the government itself.

Finally, GSIS would like this Court to believe that because it has returned respondent’s premium
contributions, it is now legally impossible for it to comply with the CA’s directive.

Given the fact that respondent is ineligible to retire under R.A. No. 910, the refund by GSIS of
respondent’s premium payments was erroneous. Hence, GSIS can demand the return of the
erroneous payment or it may opt to deduct the amount earlier received by respondent from the
benefits which he will receive in the future. Considering its expertise on the matter, GSIS can
device a scheme that will facilitate either the reimbursement or the deduction in the most cost-
efficient and beneficial manner.

The foregoing disquisition draws even greater force from subsequent developments. While this
case was pending, the Congress enacted Republic Act No. 10071, the Prosecution Service Act
of 2010. On April 8, 2010, it lapsed into law without the signature of the President, 31 pursuant to
Article VI, Section 27(1) of the Constitution.

Section 24 of R.A. No. 10071 provides:

Section 24. Retroactivity. - The benefits mentioned in Sections 14 and 16 hereof shall be

granted to all those who retired prior to the effectivity of this Act.

By virtue of this express provision, respondent is covered by R.A. No. 10071. In addition, he is
now entitled to avail of the benefits provided by Section 23, that "all pension benefits of retired
prosecutors of the National Prosecution Service shall be automatically increased whenever
there is an increase in the salary and allowance of the same position from which he retired."

Respondent, as former Chief State Prosecutor, albeit the position has been renamed
"Prosecutor General," should enjoy the same retirement benefits as the Presiding Justice of the
CA, pursuant to Section 14 of R.A. No. 10071, to wit:

Section 14. Qualifications, Rank and Appointment of the Prosecutor General. - The Prosecutor
General shall have the same qualifications for appointment, rank, category, prerogatives, salary
grade and salaries, allowances, emoluments, and other privileges, shall be subject to the same
inhibitions and disqualifications, and shall enjoy the same retirement and other benefits as those
of the Presiding Justice of the Court of Appeals and shall be appointed by the President.34

Furthermore, respondent should also benefit from the application of Section 16 of the law, which
states:

Section 16. Qualifications, Ranks, and Appointments of Prosecutors, and other Prosecution

Officers. – x x x.

Any increase after the approval of this Act in the salaries, allowances or retirement benefits or
any upgrading of the grades or levels thereof of any or all of the Justices or Judges referred to
herein to whom said emoluments are assimilated shall apply to the corresponding prosecutors.

Lastly, and most importantly, by explicit fiat of R.A. No. 10071, members of the National
Prosecution Service have been granted the retirement benefits under R.A. No. 910, to wit:

Section 25. Applicability. - All benefits heretofore extended under Republic Act No. 910, as
amended, and all other benefits that may be extended by the way of amendment thereto shall
likewise be given to the prosecutors covered by this Act.

Hence, from the time of the effectivity of R.A. No. 10071, respondent should be entitled to
receive retirement benefits granted under R.A. No. 910.

Consequently, GSIS should compute respondent’s retirement benefits from the time the
same were withheld until April 7, 2010 in accordance with P.D. No. 1146; and his
retirement benefits from April 8, 2010 onwards in accordance with R.A. No. 910.

A final note. The Court is dismayed at the cavalier manner in which GSIS handled respondent’s
claims, keeping respondent in the dark as to the real status of his retirement benefits for so
long. That the agency tasked with administering the benefits of retired government employees
could so unreasonably treat one of its beneficiaries, one who faithfully served our people for
over 40 years, is appalling. It is well to remind GSIS of its mandate to promote the efficiency and
welfare of the employees of our government, and to perform its tasks not only with competence
and proficiency but with genuine compassion and concern.

DISPOSITION:

The decision of Court of Appeals in CA-G.R. SP No. 101811 are affirmed with modification.
Government Service Insurance System is ORDERED to (1) pay respondent’s retirement
benefits in accordance with P.D. No. 1146, subject to deductions, if any, computed from the
time the same were withheld until April 7, 2010; and (2) pay respondent’s retirement benefits in
accordance with R.A. No. 910, computed from April 8, 2010 onwards.

In order that respondent may not be further deprived of his monthly pension benefits, this
Decision is IMMEDIATELY EXECUTORY.
 DIONISIO M. RABOR vs. CIVIL SERVICE COMMISSION
G.R. No. 111812 May 31, 1995

FACTS:

Dionisio Rabor is a Utility worker in the Office of the Mayor in Davao city. Since he already
reached the age of 68, he is now advised to apply for retirement but then he wishes for
extension so he can avail the benefit s of the retirement laws given to the employees of the
Government by GSIS, in which one of the requirements is that you have served for 15 years in
the government; by that time, it is just his 13th year in the government that’s why he requested
for extension of service and he also presents a GSIS certificate with a notation to the effect that
his service is extended for him to complete the 15-years requirement for retirement.

The government of Davao City wrote to the Regional Director of the Civil Service Commission,
Region XI (CSRO-XI) and Director Cawad states that Rabor’s request is contrary to
Memorandum Circular No. 65 for it is stated to such memorandum that employees who have
reached the compulsory retirement age of 65 shall not be retained and, only in meritorious
cases, may be extend only for 6 months. Mayor Duterte then informed Rabor about the decision
of CSRO-XI and advised him to stop reporting starting August 16, 1991.

Then, he sent a letter to CSRO-XI asking for extension and asking for another 2 years so he
could avail the benefits given to government employees. His request was denied. Rabor next
wrote to the Office of the President seeking for reconsideration of CSRO-XI. The Office of
the President referred it to the Civil Service Commission but again, CSC dismissed his appeal
and affirmed decision of CSRO-XI and stated CSC M.C No 27, s. 1990:

1. Any request for extension of service of compulsory retirees to complete the fifteen years
service requirement for retirement shall be allowed only to permanent appointees in the
career service who are regular members of the Government Service Insurance System
(GSIS) and shall be granted for a period of not exceeding one (1) year.

Plus the fact that as early as October 1988 Rabor already reached the retirement age. On
October 28, 1992, invoking the decision in Cena v. Civil Service Commission, the petitioner
sought for reconsideration and asked for reinstatement with back salaries and benefits.
And again, his reconsideration was denied. Then he filed a petition to the Supreme Court
appealing from CSC. Rabor contends that his case squarely falls within the ruling in the case of
Cena.

Opposing, CSC stated that it is different for the court gave the discretion to the Land
Registration Authority. CENA’s case Gaudencio Cena was appointed Registrar of the Register
of Deeds of Malabon, Metropolitan Manila. Before reaching his 65th birthday, for his total years
in the service will just be 11 years and 9 months by then, Cena requested the Secretary of
Justice, through the Administrator of the Land
Registration Authority ("LRA") that he be allowed to extend his service to complete the fifteen-
year service requirement to enable him to retire with the full benefit of an Old-Age Pension
under Section 11 (b) of P.D. No. 1146. If Cena's request were granted, he would complete
fifteen (15) years of government service on 15 April 1994, at the age of sixty-eight (68) years.
CSC affirmed his request but for 1 year only so he filed an appeal to the SC and the SC
granted his request. Thus the court concluded:
Accordingly, the Petition is GRANTED. The Land Registration Authority (LRA) and Department
of Justice has the discretion to allow petitioner Gaudencio Cena to extend his 11 years, 9
months and 6 days of government to complete the fifteen-year service so that he may retire with
full benefits under Section 11, paragraph (b) of P.D. 1146

The Court reached the above conclusion primarily on the basis of the "plain and ordinary
meaning" of Section 11 (b) of P.D. No. 1146. Section 11 may be quoted in its entirety:

Sec. 11 Conditions for Old-Age Pension . —

(a) Old-Age Pension shall be paid to a member who:
(1) has at least fifteen (15) years of service;
(2) is at least sixty (60) years of age; and
(3) is separated from the service.

(b) unless the service is extended by appropriate authorities, retirement shall be compulsory for
an employee at sixty-five-(65) years of age with at least fifteen (15) years of service; Provided,
that if he has less than fifteen (15) years of service, he shall he allowed to continue in the
service to completed the fifteen (15) years.

While Section 11 (b) appeared cast in verbally unqualified terms, there were (and still are)
two (2) administrative issuances which prescribe limitations on the extension of service that may
be granted to an employee who has reached sixty-five (65) years of age; the Civil Service
Commission Circular No. 27, Series of 1990 and Memorandum Circular No. 65 of the Office of
the President. The former limits the extension for only three years and the latter, only on
meritorious reasons, limits up to 6 months only.

And Medialdea, J. resolved the challenges posed by the above two (2) administrative
regulations by, firstly, considering as invalid Civil Service Memorandum No. 27 and, secondly,
by Interpreting the Office of the President's Memorandum Circular No. 65
As inapplicable to the case of Gaudencio T. Cena. Medialdea, J wrote:

The Civil Service Commission Memorandum Circular No. 27 being in the nature of an
administrative regulation, must be governed by the principle that administrative regulations
adopted under legislative authority by a particular department must be in harmony with the
provisions of the law, and should be for the sole purpose of carrying into effect its general
provisions.

The rule on limiting to one the year the extension of service of an employee who has reached
the compulsory retirement age of sixty-five (65) years, but has less than fifteen (15) years of
service under Civil Service Memorandum Circular No. 27, S. 1990, cannot likewise be
accorded validity because it has no relationship or connection with any provision of P.D. 1146
supposed to be carried into effect.

The rule was an addition to or extension of the law, not merely a mode of carrying it into effect.
The Civil Service Commission has no power to supply perceived omissions in P.D. 1146.

ISSUE:

WON the ruling, regarding the validity of CSC M.C No. 27, in the case of Cena can be used as
basis for granting Rabor’s request?
HELD:

NO. Clearly, Cena when it required a considerably higher degree of detail in the statute to be
implemented, went against prevailing doctrine. It seems clear that if the governing or enabling
statute is quite detailed and specific to begin with, there would be very little need (or occasion)
for implementing administrative regulations. It is, however, precisely the inability of legislative
bodies to anticipate all (or many) possible detailed situations in respect of any relatively complex
subject matter, that makes subordinate, delegated rule-making by administrative agencies so
important and unavoidable. All that may be reasonably; demanded is a showing that the
delegated legislation consisting of administrative regulations are germane to the general
purposes projected by the governing or enabling statute. This is the test that is appropriately
applied in respect of Civil Service Memorandum Circular No. 27, Series of 1990, and to this test
we now turn.

Like what Mr. Justice J.B.L. Reyes said in the ruling of People v. Exconde case:
It is well established in this jurisdiction that, while the making of laws is a non-delegable
activity that corresponds exclusively to Congress, nevertheless, the latter may constitutionally
delegate authority and promulgate rules and regulations to implement a given legislation and
effectuate its policies, for the reason that the legislature often finds itimpracticable (if not
impossible) to anticipate and provide for the multifarious and complex situations that may be
met in carrying the law into effect.

All that is required is that the regulation should be germane to the objects and purposes of the
law; that the regulation be not in contradiction with it, but conform to standards that the law
prescribes. Plus, not only P.D. No. 1146 is the statute that should appropriately be
examined is the present Civil Service law there is Administrative Code of 1987 which
provides the Commission was acting as "the central personnel agency of the
government empowered to promulgate policies, standards and guidelines for efficient,
responsive and effective personnel administration in the government."

Another thing, the SC find it very difficult to suppose that the limitation of permissible
extensions of service after an employee has reached sixty-five (65) years of age has no
reasonable relationship or is not germane to the foregoing provisions of the present Civil
Service Law. The physiological and psychological processes associated with ageing in human
beings are in fact related to the efficiency and quality of the service that may be expected from
individual persons. The policy considerations which guided the Civil Service Commission in
limiting the maximum extension of service allowable for compulsory retirees, were summarized
by Griño-Aquino, J. in her dissenting opinion in Cena:

Worth pondering also are the points raised by the Civil Service Commission that extending the
service of compulsory retirees for longer than one (1) year would:
(1) give a premium to late-comers in the government service and in effect discriminate against
those who enter the service at a younger age;
(2) delay the promotion of the latter and of next-in-rank employees; and
(3) prejudice the chances for employment of qualified young civil service applicants who have
already passed the various government examination but must wait for jobs to be vacated by
"extendees" who have long passed the mandatory retirement age but are enjoying extension of
their government service to complete 15 years so they may qualify for old-age pension.

SC’s conclusion is that the doctrine of Cena should be and is hereby modified to this extent:
that Civil Service Memorandum Circular No. 27, Series of 1990, more specifically paragraph (1)
thereof, is hereby declared valid and effective.

Section 11 (b) of P.D. No. 1146 must, accordingly, be read together with Memorandum Circular
No. 27. We reiterate, however, the holding in Cena that the head of the government agency
concerned is vested with discretionary authority to allow or disallow extension of the service of
an official or employee who has reached sixty-five (65) years of age without completing fifteen
(15) years of government service; this discretion is, nevertheless, to be exercised conformably
with the provisions of Civil Service Memorandum Circular No. 27, Series of 1990.

DISPOSITION:

The conclusion that we reached in the instant case, this last ruling of Cena is properly regarded
as merely orbiter.

We also do not believe it necessary to determine whether Civil Service Memorandum Circular
No. 27 is fully compatible with Office of the President's Memorandum Circular No. 65; this
question must be reserved for detailed analysis in some future justiciable case.

Applying now the results of our reexamination of Cena to the instant case, we believe and so
hold that Civil Service Resolution No. 92-594 dated 28 April 1992 dismissing the appeal of
petitioner Rabor and affirming the action of CSRO-XI Director Cawad dated 26 July 1991, must
be upheld and affirmed. The Petition for Certiorari is hereby DISMISSED for lack of merit. No
pronouncement as to costs.
 TANCINCO v. GSIS

FACTS:

At around noon of July 17, 1995, while he was repairing a service vehicle in front of his house
along the National Road in Barangay Palanas, Lemery, Batangas, SPO1 Eddie G. Tancinco
was shot dead by five (5) unidentified armed men. SPO1 Tancinco was a member of the NCR
Security Protection Group of the Philippine National Police, and at the time of his death, was
assigned as part of the close-in security detail of then Vice-President Joseph E. Estrada. SPO1
Tancinco was off-duty at the time inasmuch as the former Vice-President was in the United
States for medical treatment.

His widow, petitioner Rufina Tancinco, filed a claim for benefits before the Government Service
Insurance System (GSIS).

GSIS:

On February 19, 1996, the GSIS denied petitioner’s claim on the ground that there was no proof
that petitioner’s husband’s death was work-related.

ECC:

On December 19, 1996, issued a Resolution dismissing the appeal for lack of merit. As ruled by
the Commission:chanrob1es virtual 1aw library

It is evident that the death of SPO1 Tancinco on July 17, 1995, when he was on off duty status
did not arise out of and in the course of his employment as a member of the PNP Security
Command.

The conditions aforementioned were not satisfied in the present case. Notably, SPO1 Tancinco
was repairing his service vehicle at the time of his death. He was neither executing an order for
VP Estrada nor performing an official function on that fateful day inasmuch as Police
Superintendent Atilano Miranda duly certified that SPO1 Tancinco was on "off-duty status" on
July 17, 1995.

We would like to stress once more that not all contingencies such as injury, disability, or death
which befall an employee are compensable. The same must be the result of accident arising out
of and in the course of employment.chanrob1es virtua1 1aw 1ibrary

Since the cause of SPO1 Tancinco’s death is no longer part of his official functions, the claim for
compensation benefits under Presidential Decree No. 626, as amended, cannot be given due
course.

CA: Denied.

Issue:

Whether or not Tancinco’s death is compensable?

RULING: NO.
SECTION 1. Grounds — (a) For the injury and the resulting disability or death to be
compensable, the injury must be the result of an employment accident satisfying all of the
following conditions:chanrob1es virtual 1aw library

(1) The employee must have been injured at the place where his work requires him to be;

(2) The employee must have been performing his official functions; and

(3) If the injury is sustained elsewhere, the employee must have been executing an order for the
employer.

The aforesaid requirements have not been met.

First requirement, as part of the former Vice-President’s security detail, the decedent was
required to guard the person of the former; hence, his presence was officially required wherever
the Vice-President would go. At the time of his death, SPO1 Tancinco was off-duty since Vice-
President Estrada was out of the country. In fact, he was at home; it is not even known if he was
temporarily re-assigned to another detail while the Vice-President was away. Clearly, he was
not at the place where his work required him to be.

Second requirement, it was not sufficiently established that SPO1 Tancinco died while
performing his official functions. In this regard, we held that policemen are regarded as being on
twenty-four (24) hour alert. As we explained in Employees’ Compensation Commission v. Court
of Appeals,

. . . But for clarity’s sake and as a guide for future cases, we hereby hold that members of the
national police, like P/Sgt. Alvaran, are by the nature of their functions technically on duty 24
hours a day. Except when they are on vacation leave, policemen are subject to call at any time
and may be asked by their superiors or by any distressed citizen to assist in maintaining the
peace and security of the community.

Taking together jurisprudence and the pertinent guidelines of the ECC with respect to claims for
death benefits, namely:

(a) that the employee must be at the place where his work requires him to be;

(b) that the employee must have been performing his official functions; and

(c) that if the injury is sustained elsewhere, the employee must have been executing an order
for the employer, it is not difficult to understand then why SPO2 Alegre’s widow should be
denied the claims otherwise due her.

Obviously, the matter SPO2 Alegre was attending to at the time he met his death, that of
ferrying passengers for a fee, was intrinsically private and unofficial in nature proceeding as it
did from no particular directive or permission of his superior officer.

In the absence of such prior authority as in the cases of Hinoguin and Nitura, or peacekeeping
nature of the act attended to by the policeman at the time he died even without the explicit
permission or directive of a superior officer, as in the case of P/Sgt. Alvaran, there is no
justification for holding that SPO2 Alegre met the requisites set forth in the ECC guidelines. That
he may be called upon at any time to render police work as he is considered to be on a round-
the-clock duty and was not on an approved vacation leave will not change the conclusion
arrived at considering that he was not placed in a situation where he was required to exercise
his authority and duty as a policeman. In fact, he was refusing to render one pointing out that he
already complied with the duty detail.

At any rate, the 24-hour duty doctrine, as applied to policemen and soldiers, serves more as
an after-the-fact validation of their acts to place them within the scope of the guidelines rather
than a blanket license to benefit them in all situations that may give rise to their deaths.

In other words, the 24-hour duty doctrine should not be sweepingly applied to all acts and
circumstances causing the death of a police officer but only to those which, although not on
official line of duty, are nonetheless basically police service in character.

In the present case, the decedent was repairing a service vehicle when he was killed. We have
tried to view it from all possible angles, but the inescapable conclusion is that he was not
performing acts that are "basically police service in character." As a policeman, SPO1 Tancinco
is part of "an organized civil force for maintaining order, preventing and detecting crimes, and
enforcing the laws . ."

Based on these parameters, it cannot be said that the deceased was discharging official
functions; if anything, repairing a service vehicle is only incidental to his job.

Neither was the THIRD requirement satisfied. As the fatal incident occurred when SPO1
Tancinco was at home, it was incumbent on petitioner to show that her husband was
discharging a task pursuant to an order issued by his superiors. This also was not done.

In administrative proceedings, the quantum of proof necessary to support a claim is substantial

evidence, which is that "amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion." Unfortunately, the burden was not successfully met.

DISPOSITION:

Petition denied.
 G.R. No. 217949, February 20, 2019

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), PETITIONER, v. REYNALDO P.

PALMIERY, RESPONDENT.

FACTS:

Respondent Reynaldo P. Palmiery (Reynaldo) began his government service on May 2, 1961
as a Laborer in the Philippine Veterans Administration. 

On January 1, 1987, or after more than 25 years of service, he retired as a Manager of the
Development Bank of the Philippines (DB-P) when the bank underwent reorganization. The
DBP paid his gratuity benefit under Republic Act (R.A.) No. 1616 in the amount of Php
189,618.46. Reynaldo received the refund of his contributions amounting to Php 60,395.85.8 In
total, he received Php 250,014.31.

On January 2, 1987, Reynaldo re-entered government service when he was appointed as

Manager III in the Social Security System (SSS). He continued to work in the SSS until his
retirement as a Deputy Administrator effective June 1, 1994. 

Reynaldo then claimed retirement benefits under R.A. No. 660; pursuant to which, he was
granted a five (5)-year lump sum pension in the amount of Php 532,491.28. This amount was
subject to the following deductions:

(a) the amount of benefits he received prior (i.e. Php 250,014.31); and

(b) his outstanding accountabilities (i.e. Php 57,774.64). 

Thus, Reynaldo received the aggregate amount of Php 224,836.73 on July 4, 1994.12

After four (4) years, or on July 7, 1998, Reynaldo was appointed as a member of the
Government Service Insurance System (GSIS) Board of Trustees. During his tenure as a
member of the board, he began to concurrently serve as the GSIS Executive Vice-President
after his appointment to this position on July 16, 1998.

On July 11, 2001, Reynaldo refunded to GSIS the amount of Php 895,320.78, or the benefits he
previously received from his retirement. He also requested for the suspension of his monthly
pension, which became effective on July 1, 1999, or five (5) years after the payment of his lump
sum pension. Reynaldo likewise refunded the pension he received on various dates, pending
the GSIS' action on his request. All in all, the total amount Reynaldo refunded to GSIS was Php
920,566.72.16

Reynaldo retired upon reaching the compulsory retirement age on May 28, 2005. On May 14,
2010, he applied for retirement benefits under R.A. No. 8291. Included in his application was his
request for full credit of his government service starting on July 1, 1961 until his mandatory
retirement on May 28, 2005, or approximately 38 years.

Ruling of the GSIS

In 2010, the GSIS Claims Department rejected Reynaldo's application for retirement benefits
under R.A. No. 8291, for failure to meet the service requirement. The Claims Department stated
that the GSIS would only credit Reynaldo's service after his re-entry to the government in 1998.
Reynaldo was likewise informed that the amount previously refunded to the GSIS would be
returned to him without interest.

On November 11, 2011 petitioner filed with the GSIS Office of the Corporate Secretary. The
petition was then forwarded to the GSIS Chief Legal Counsel for appropriate action.

GSIS denied his petition. The GSIS Claims Department is hereby ordered to refund to
[Reynaldo] the amount of Php920,566.72, which he returned to the GSIS. The acceptance of
the refund shall be deemed as a constructive filing of the claim for separation benefits.

According to the GSIS Board of Trustees, it has approved Policy and Procedural Guidelines
(PPG) No. 183-06 on January 4, 2006, which established a clear procedure in the processing of
retirement claims of re-employed government officials.

Under these guidelines, government employees who re-entered on or after the effectivity
of R.A. No. 8291, or on June 24, 1997, cannot claim their previous years of service upon
retirement. Since Reynaldo re-entered government service after June 24, 1997, the GSIS Board
of Trustees excluded the years of service prior to his re-entry in the computation of his service
under R.A. No. 8291.

Ruling of the CA

On January 21, 2015, the CA granted his appeal and ruled Respondent GSIS is DIRECTED to
process the total retirement benefits accruing in favor of [Reynaldo], based on his total length of
government service.

The CA held that under Section 12(g) of Commonwealth Act (C.A.) No. 186, a reinstated
government employee may receive full credit for the years of service, provided that the
retirement and pension benefits previously received are refunded to the GSIS. This is the
applicable policy, despite the amendments enacted under R.A. No. 660 and R.A. No. 728. 

The CA further found that later laws, such as Presidential Decree (P.D.) No. 1146, P.D. No.
1981,and R.A. No. 8291, all failed to expressly repeal this provision of C.A. No. 186. Finally, as
a piece of social legislation, the CA held that retirement laws should be liberally construed in
favor of their beneficiaries.

Disagreeing with the adverse rulings of the CA, the GSIS filed the present petition before the
Court. According to the GSIS, Section 10(b) of R.A. No. 8291 is clear with respect to employees
who re-enter government service after retirement. The law supposedly considers these
employees as new entrants, as a consequence of which, the GSIS excludes the services
credited to the previous retirement in the computation of benefits. Furthermore, the GSIS argues
that there is a distinction between those who re-entered government service before the
effectivity of R.A. No. 8291, and those who re-entered and retired after its effectivity.42 Since
Reynaldo falls under the latter category, his previous years of service cannot be included in the
computation of his retirement benefits.43
Reynaldo submits that the GSIS erroneously interpreted Section 10(b) of R.A. No 8291. He
argues that only the service credited for retirement for which corresponding benefits have been
awarded is excluded in the computation. He likewise subscribes to the CA's finding that the
Primer on the GSIS Act of 1997 allows the refund of previously received benefits for the
purpose of giving full credit in the computation of retirement benefits. 

Lastly, he submits that the GSIS Board of Trustees cannot rely on PPG No. 183-06 to
deny his claim because at the time he refunded the previously received benefits to GSIS,
this policy was not yet in place.

ISSUE:

Whether or not Reynaldo's previous years in government should be included in the computation
for his retirement benefits?

RULING:

YES. The GSIS should give full credit to Reynaldo's years of service in the government.

In computing the years of service, the present GSIS Law excludes only services credited
for retirement for which the corresponding benefits have been awarded.

The current governing law for retirees in the government service is R.A. No. 8291, otherwise
known as "The Government Service Insurance System Act of 1997" It amended P.D. No. 1146,
or the "Revised Government Service Insurance Act of 1977."

Under this law, all government employees who have not reached the mandatory retirement age
are compulsorily required to become members of the GSIS. This membership entitles
employees, except those in the judiciary and constitutional commissions, to life insurance,
retirement, and other benefits (e.g. disability, survivorship, separation, and unemployment).47

For retirement benefits, R.A. No. 8291 provides the following conditions before a member may
become qualified to receive this benefit, viz.:

(a) the employee must have rendered at least 15 years of service;

(b) the employee must be at least 60 years old at the time of retirement; and

(c) the employee must not be receiving a monthly pension as a result of permanent total
disability.

R.A. No. 8291 further provides for the manner by which service is computed, thus:

SECTION 10. Computation of Service. — (a) The computation of service for the purpose of
determining the amount of benefits payable under this Act shall be from the date of original
appointment/election, including periods of service at different times under one or more
employers, those performed overseas under the authority of the Republic of the Philippines,
and those that may be prescribed by the GSIS in coordination with the Civil Service
Commission.

(b) All service credited for retirement, resignation or separation for which corresponding
benefits have been awarded under this Act or other laws shall be excluded in the
computation of service in case of reinstatement in the service of an employer and
subsequent retirement or separation which is compensable under this Act.

For the purpose of this section the term service shall include full time service with
compensation: Provided, That part time and other services with compensation may be included
under such rules and regulations as may be prescribed by the GSIS.

Pursuant to this provision, the GSIS argues that there is no longer "any exemption or condition
such as refund of previously received benefits[,] as a restorative recourse of adding previous
services in the computation of service [for reinstated employees]." 

The provision in Section 12(g) of C.A. No. 186, which allows for the refund of previously
received benefits, is no longer found in the present law. Thus, the GSIS argues that this
recourse is not available to those who re-entered government service after the effectivity of R.A.
No. 8291.

On re-entering government

The provision in Section 12(g) of C.A. No. 186, which allows for the refund of previously
received benefits, is no longer found in the present law. Thus, the GSIS argues that this
recourse is not available to those who re-entered government service after the effectivity of R.A.
No. 8291.The Court does not agree.

While it is true that Section 12(g) of C.A. No. 186 explicitly provides for giving full credit to the
prior years of service upon the refund of benefits previously received, the absence of a similar
provision in R.A. No. 8291 does not necessarily mean that the law has abandoned this
policy. A review of Section 12 of C.A. No. 186 shows that it covered the conditions for
retirement. This provision prescribed the requirements for an employee-member to avail of the
retirement benefits under C.A. No. 186, as well as the specific benefits to which such member
may be entitled, given the various enumerated conditions.

Section 12(g) of C.A. No. 186 specifically makes reference to Section 12(f), which disqualifies
separated employees receiving the annuity under Section 11 of C.A. No. 186, from being
appointed to another appointive position, unless he or she possesses special qualifications.
During the period of new employment, the annuity payment is suspended. Payment of the
annuity resumes only after the termination of the employment.

But under Section 12(g) of C.A. No. 186, the GSIS should give full credit to the services
rendered prior to the reinstatement, if such separated employee is not receiving the
annuity mentioned in Section 11. The full credit of services is conditioned upon the refund of
contributions for retirement, and the benefits previously received under any pension or
retirement plan.

Thus, taken in its proper context, Section 12(g) of C.A. No. 186 applies to a specific category of
employees and their corresponding benefits. The provision's subsequent absence in R.A. No.
8291 is attributable to the revised conditions for retirement under the new law, which was
streamlined to only three (3) requirements for eligibility.53 The Court cannot interpret its absence
in R.A. No. 8291 as an express prohibition against refunding previously received benefits for
purposes of claiming retirement benefits under the law. The GSIS, therefore, erroneously relied
on the absence of this provision to deny the claim of Reynaldo.
More importantly, a plain reading of Section 10(b) of R.A. No. 8291 reveals that employees
who already received the retirement benefits under R.A. No. 8291, or the other laws, cannot
credit their years of service prior to their re-entry in the government. Conversely, this means
that employees who have not received their retirement benefits are entitled to full credit
of their service.

MOST IMPORTANT PART

In this regard, those similarly situated, or those who refunded their retirement benefits to the
GSIS after they re-entered government service should be allowed to include their prior
years of service in the computation of their eligibility and retirement benefits. This is
consistent with the legal precept against double compensation, which prohibits payment
for the same services covering the same period. Thus, if the employee has not received
his/her retirement benefits, or has returned them to the GSIS, as the case may be, then
the prohibition against double retirement benefits cannot apply.

For this reason, giving full credit to Reynaldo's years of service in the government does not
contravene any existing statute or policy, especially since it is undisputed that Reynaldo
refunded his previously received benefits to the GSIS. The GSIS even suspended his monthly
pension effective October 1, 2001, pursuant to the request of Reynaldo. His re-entry into
government service after the effectivity of R.A. No. 8291 is, therefore, inconsequential to the
present case. The distinction that the GSIS created between individuals who re-entered
government service before the effectivity of R.A. No. 8291, and those who re-entered after its
effectivity, cannot supersede the unambiguous policy in Section 10(b) of the new GSIS Law.

The claim for retirement benefits in this case cannot be jeopardized by GSIS' new
interpretation of R.A. No. 8291.

Significantly, when Reynaldo refunded his benefits, the GSIS subscribed to the policy that the
prior services of an employee reinstated in the government may be credited as long as a refund
of the previously received retirement benefits is made. The GSIS Primer on R.A. No. 8291
states, thus:

Can services for which retirement contributions have been refunded be included in the
computation of service in case of reinstatement?

Yes, however, the corresponding contributions plus interests shall be deducted from benefits to
be received. Services which are excluded in the computation of service in case of reinstatement
are services for which the following retirement and separation benefits have been paid:

(1) cash payments, lump sums or pensions for retirement or old-age benefits under GSIS
retirement laws such as R.A. 8291, P.D. 1146 and R.A. 660 and other special
retirement laws which include R.A. 910, P.D. 1638, R.A. 6975, R.A. 7699, etc.; or

(2) retirement gratuities under R.A. 1616 and R.A. 6683; or

(3)  cash payments and pensions as separation benefits under R.A. 8291.
Are the previous services of an employee credited if upon reinstatement to the service,
he/she refunded all the retirement benefits he/she received?

Yes, because technically the employee in this case has not received any retirement or
separation benefits. Formerly, refund of retirement benefits received was a requirement upon
reinstatement. Under R.A. 8291, there is no such requirement.

Notably, the GSIS did not dispute Reynaldo's refund. The GSIS accepted the amount and even
issued a receipt in his favor. Reynaldo's request to suspend the payment of his monthly pension
was also granted, as a result of which, the monthly pension under R.A. No. 660 was suspended
effective October 1, 2001. Pending the suspension of his monthly pension, Reynaldo made
succeeding refunds of the amounts he received from the GSIS. His total refund thus amounted
to Php 920,566.72.

In accepting the refund of Reynaldo, the GSIS cannot subsequently apply PPG No. 183-06,
which adopts a new policy prejudicial to the retiree. The GSIS is the primaiy agency tasked with
administering the government's retirement system. Reynaldo, thus, correctly assumed that
when the GSIS accepted the refund of his retirement benefits, the agency would grant full credit
to his years of service in the government.

As the Court aptly held in GSIS v. De Leon:

It must also be underscored that GSIS itself allowed respondent to retire under R.A. No. 910,
following jurisprudence laid down by this Court.

One could hardly fault respondent, though a seasoned lawyer, for relying on petitioner's
interpretation of the pertinent retirement laws, considering that the latter is tasked to administer
the government's retirement system. He had the right to assume that GSIS personnel knew
what they were doing.

Since the change in circumstances was through no fault of respondent, he cannot be prejudiced
by the same. His right to receive monthly pension from the government cannot be jeopardized
by a new interpretation of the law.

Granting full credit to Reynaldo's years of service is neither unjust enrichment nor violative of
the principle against double compensation. There is no express prohibition under R.A. No. 8291
against crediting the years of service upon the refund of previously received retirement benefits.
In this case, Reynaldo refunded his retirement pay and monthly pension; and, from the time his
monthly pension was suspended, Reynaldo no longer received the benefits due him. Denying
his claim is, therefore, tantamount to depriving Reynaldo of his compensation for the years of
service he rendered to the government, despite being eligible under the law.

Ultimately, in our jurisdiction, the inflexible rule is that social legislation must be liberally
construed in favor of the beneficiaries. This includes retirement laws, the main objective of
which is to provide support to retirees, especially at a time when their employment has
ended.The benefits that retirees receive from retirement is also a form of reward for loyally
serving their employer. In light of the humanitarian purpose of retirement laws, all doubts should
be resolved in favor of the retiree as the person primarily intended to be benefited by this
legislation.
DISPOSITION:

WHEREFORE, the petition is DENIED. The Decision dated January 21, 2015 and the
Resolution dated April 17, 2015, which were both promulgated by the Court of Appeals
are AFFIRMED.

The Government Service Insurance System is directed to give full credit to the years of service
of Reynaldo P. Palmiery and to grant the retirement benefits due him, less any lawful
deductions and corresponding interest and legal interest, if there are any.