THIRD DIVISION
G.R. No. 217949, February 20, 2019
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), PETITIONER, v. REYNALDO P. PALMIERY, RESPONDENT.
D E C I S I O N
REYES, A., JR., J.:
By their very nature, retirement laws are humanitarian in character. They reward an employee's loyalty and long service to their employer. For government service in particular, the retirement benefits are meant to attract qualified individuals and promote longevity in the government. Most important is their function to support retirees, especially those who are in their twilight years; during which time, gainful employment is not only difficult to find, but also impractical. The administration of retirement laws should, therefore, always lean on the side of the beneficiary in order to achieve these purposes.1
Before the Court is a petition for review on certiorari2 filed under Rule 45 of the Rules of Court, seeking to reverse and set aside the Decision3 dated January 21, 2015 and the Resolution4 dated April 17, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 129755.
WHEREFORE, the petition is hereby DISMISSED for lack of merit. 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.28 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. 8291.29
SO ORDERED.27
WHEREFORE, in light of all the foregoing, the petition is GRANTED. Accordingly, the decision dated February 28, 2013 of [GSIS] in GSIS Case No. 005-11 is hereby REVERSED and SET ASIDE.The CA held that under Section 12(g) of Commonwealth Act (C.A.) No. 186,33 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. 728.34 The CA further found that later laws, such as Presidential Decree (P.D.) No. 1146,35 P.D. No. 1981,36 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.37
Respondent GSIS is DIRECTED to process the total retirement benefits accruing in favor of [Reynaldo], based on his total length of government service.
SO ORDERED.32
WHEREFORE, the instant Motion for Reconsideration is hereby DENIED for lack of merit.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.41 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
SO ORDERED.40
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.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]."50 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. 8291.51
(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.49 (Emphases Ours)
Can services for which retirement contributions have been refunded be included in the computation of service in case of reinstatement?Notably, the GSIS did not dispute Reynaldo's refund. The GSIS accepted the amount and even issued a receipt in his favor.57 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 920,566.72.58
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.56
It must also be underscored that GSIS itself allowed respondent to retire under R.A. No. 910, following jurisprudence laid down by this Court.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.
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.60
| Very truly yours, |
(SGD) WILFREDO V. LAPITAN | |
Division Clerk of Court |
Endnotes:
* Designated as additional Member per Special Order No. 2624 dated November 28, 2018.
1GSIS v. De Leon, 649 Phil. 610, 622 (2010); Fetalino, et at, v. Commission on Elections, 700 Phil. 129, 149-150 (2012); and Philippine National Bank v. Dalmacio, G.R. No. 202308, July 5, 2017, 830 SCRA 136, 148.
2Rollo, pp. 22-49.
3 Penned by Associate Justice Sesinando E. Villon, with Associate Justices Rodil V. Zalameda and Maria Elisa Sempio Diy concurring; id. at 56-66.
4 Id. at 68-69.
5 Id. at 117.
6 Id.; see Executive Order No. 81, PROVIDING FOR THE 1986 REVISED CHARTER OF THE DEVELOPMENT BANK OF THE PHILIPPINES (approved on December 3, 1986).
7 AN ACT FURTHER AMENDING SECTION TWELVE OF COMMONWEALTH ACT NUMBERED ONE HUNDRED EIGHTY-SIX, AS AMENDED, BY PRESCRIBING TWO OTHER MODES OF RETIREMENT AND FOR OTHER PURPOSES (approved on May 31, 1957).
8Rollo, p. 136.
9 Id. at 118.
10 AN ACT TO AMEND COMMONWEALTH ACT NUMBERED ONE HUNDRED AND EIGHTY-SIX ENTITLED "AN ACT TO CREATE AND ESTABLISH A GOVERNMENT SERVICE INSURANCE SYSTEM, TO PROVIDE FOR ITS ADMINISTRATION, AND TO APPROPRIATE THE NECESSARY FUNDS THEREFOR," AND TO PROVIDE RETIREMENT INSURANCE AND FOR OTHER PURPOSES (approved on June 16, 1951).
11N.B. The accountabilities of Reynaldo to the GSIS included interests on the previously received benefits amounting to Php 33,167.84; rollo, p. 136.
12 Id. at 137.
13 Id. at 119.
14 Id. at 108-109.
15 Id. at 137.
16 Id. at 138.
17 AN ACT AMENDING PRESIDENTIAL DECREE NO. 1146, AS AMENDED, EXPANDING AND INCREASING THE COVERAGE AND BENEFITS OF THE GOVERNMENT SERVICE INSURANCE SYSTEM, INSTITUTING REFORMS THEREIN AND FOR OTHER PURPOSES. Approved on May 30, 1997.
18Rollo, pp. 107-120.
19 Id. at 124.
20 Id. at 125-126.
21 CA rollo, pp. 105-132.
22Rollo, pp. 127-128.
23 Id. at 106.
24 Id. at 73-104.
25 Id. at 72.
26 Id. at 135-154.
27 Id. at 152.
28 Id. at 148-149.
29 Id. at 151-152.
30 CA rollo, pp. 30-59.
31Rollo, pp. 56-66.
32 Id. at 65.
33 AN ACT TO CREATE AND ESTABLISH A "GOVERNMENT SERVICE INSURANCE SYSTEM," TO PROVIDE FOR ITS ADMINISTRATION, AND TO APPROPRIATE THE NECESSARY FUNDS THEREFOR (approved on November 14, 1936).
34 AN ACT TO FURTHER AMEND THE GOVERNMENT SERVICE INSURANCE ACT, AS AMENDED BY REPUBLIC ACT NUMBERED SIX HUNDRED SIXTY, AND TO AMEND SECTION TWENTY-SIX OF THE LATTER ACT (approved on June 18, 1952).
35 AMENDING, EXPANDING, INCREASING AND INTEGRATING THE SOCIAL SECURITY AND INSURANCE BENEFITS OF GOVERNMENT EMPLOYEES AND FACILITATING THE PAYMENT THEREOF UNDER COMMONWEALTH ACT NO. 186, AS AMENDED, AND FOR OTHER PURPOSES (approved on May 31, 1977).
36 FURTHER AMENDING PRESIDENTIAL DECREE NO. 1146, AS AMENDED, OTHERWISE KNOWN AS THE REVISED GOVERNMENT SERVICE INSURANCE ACT OF 1977 (approved on July 19, 1985).
37Rollo, pp. 60-65.
38 CA rollo, pp. 464-480.
39Rollo, pp. 68-69.
40 Id. at 68.
41 Id. at 35-38.
42 Id. at 44.
43 Id. at 39.
44 Id. at 167-175.
45 Id. at 176-177.
46 Id. at 181.
47 P.D. No. 1146, as amended by R.A. No. 8291, Section 3.
48 Id. at Section 13-A.
49 Id. at Section 10.
50Rollo, p. 42.
51 Id. at 45.
52 This provision reads:
Section 11. (a) Amount of annuity. — Upon retirement after faithful and satisfactory service a member shall be automatically entitled to a life annuity guaranteed for at least five years and thereafter as long as he lives. The amount of the monthly annuity at the age of fifty-seven years shall be thirty pesos, plus for each year of service after the sixteenth of June, nineteen hundred and fifty-one, two per centum of the average monthly salary received by him during the last three years of service, plus, for each year of service rendered prior to the sixteenth of June, nineteen hundred and fifty-one, one and two-tenths per centum of said average monthly salary: Provided, That this amount shall be adjusted actuarially if retirement be at an age other than fifty-seven years: Provided, further, That the maximum amount of monthly annuity at age fifty-seven shall not in any case exceed three-fourths of said average monthly salary: And provided, finally, That retirement benefit shall be paid not earlier than one year after the approval of this Act. In lieu of this annuity, he may prior to his retirement elect one of the following equivalent benefits.
(1) Monthly annuity during his lifetime;
(2) Monthly annuity during the joint-lives of the employee and his or her spouse guaranteed for at least five years, which annuity, however, shall, upon death of either and after the five-year guarantees period, be reduced to one-half and be paid to the survivor.
(3) For those who are at least sixty-three years of age, lump-sum payment of present value of annuity for first five years, and for those who are at least sixty but below sixty-three years of age, lump- sum payment of the present value of the annuity for the first three years, with the balance of the five-year guaranteed annuity payable in lump-sum upon reaching sixty-three years of age, and annuity after the guaranteed period to be paid monthly: Provided, further, That it shall be compulsory for an employer to pay on the date of retirement in preference to all other obligations, except salaries and wages of its employees, its share of at least the premiums required to permit an employee to enjoy [these] options.
(4) Such other benefits as may be approved by the System.
53 Supra note 48.
54See Ocampo v. Commission on Audit, 710 Phil. 706, 722-723 (2013), citing Santos v. Court of Appeals, 399 Phil. 298, 307-308 (2000).
55Rollo, p. 137.
56 Id. at 123.
57 Id. at 108-109.
58 Id, at 137-138.
59 649 Phil. 610 (2010).
60 Id. at 625.
61Philippine National Bank v. Dalmacio, G.R. No. 202308, July 5, 2017, 830 SCRA 136.
62 Id. at 148.
63GSIS v. Da Leon, supra note 59.