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REPUBLIC OF THE PHILIPPINESGOVERNMENT SERVICE TNSURANCE SYSTEM
FINANCIAL CENTE& ROXAS BOULEVARD, PASAY CITY
BOARD OF TRUSTEES
IN RE:
REQUEST TO BE ALLOWEDTO RETURN SEPARATIONBENEFITS PREVIOUSLYRECETVED FOR THEPURPOSE OF TACKING THEPERIOD OF SERVICEPREVIOUSLYCOMPENSATED TO THECURRENT PERIOD OFSERVICE ANDRECOMPUTATION OFSEPARATION BENEFITS
GSIS CASE NO. 016-13
FRANCISCA D. GONZALEZ,Petitioner.
DECISION
Before the Board is a Petition filed on September 2, 2013 by
Francisca D. Gonzalez, appealing the May 28, 2Ol3 Resolution of
the Committee on Claims (hereinafter, CoC), in Case No' 35-2013,
denying Petitioner's request that she be allowed to return the
separation benefits she previously received in order that her
previous period of service may be added to her current years of
service for the purpose of increasing her benefits under R'A' No'
8291. The dispositive portion ofsaid CoC Resolution reads:
WHER.EFORE, premises considered, the requestof Francisca D. Gonzalez to refund the separationbenefits she previously received from GSIS is herebyDENIED.
FACTS OF THE CASE
Petitioner entered government service through the National
Power Corporation (NPC) on June 21, 1979. She was deemed
separated from service effective March 1, 2003 pursuant to
National Power Board (NPB) Resolution No. 2OO2-124 issued by
the National Power Board as a consequence of R'A' No. 9136 or the
Electric Power Reform Act of 2001 (EPIRA). On the same day,
Petitioner was rehired bY the NPC.
In view of Petitioner's separation ftom service by virtue of
NPB Resolution No. 2OO2-124, Petitioner fiIed an application for
the grant of separation benefits under R'A. No. B29t from the
GSIS. The same was granted and Petitioner was paid in
accordance with Sec. 11(b) of R.A. No. 8291, the gross amount of
Three Hundred Thirty Two Thousand Seven Hundred Ninety Eight
Pesos and Fifty Eight Centavos (Php 332,798.58) representing the
L8-month cash payment benefit. Additionally under the same
provision of law, upon reaching the age of sixty (60) years,
Petitioner shall be paid an old-age monthly pension in the amount
of Eighteen Thousand Four Hundred Eighty Eight Pesos and Eighty
One Centavos (Php 18,488.81).
In a letter dated February 18, 2004 addressed to GSIS
Laguna Branch Office, Petitioner requested, in view of her
immediate rehiring by the NPC, to be allowed to return the amount
she received from GSIS Laguna Branch Office "for the purpose of
increasing (her) retirement benefit in the future." Said request
was denied by the GSIS Laguna Branch Office on the ground that
the same is not allowed under existing GSIS policy.
On May 26, 2009, Petitioner's employment with the NPC was
terminated due to the privatization of the Makban Geothermal
Power Plant pursuant to the EPIRA' On August 12, 2009,
Petitioner filed her application for separation benefits. Her claim
was approved in accordance with Sec. 11(a) of R.A. No' 82911
given that her period with premium payments amounted to 5'57
years. Said provision entitled her, per tentative computationz, to a
cash payment in the gross amount of Php 203,LG8.27 payable to
her when she reaches 60 years of age.
Subsequently, Petitioner wrote a letter dated March IB,2013
addressed to the President and General Manager of the GSIS,
reiterating her desire to return the benefits she previously received
from the GSIS with interest. Said letter was referred to the CoC
for resolution.
' SEC. 11. Separation Benefits. - The separation benefit shall consist of: (a) a cash payment
equivalent to one h..ndred percent (100%) of his average monthly compensation for- each
year of service he paid contributions, but not less than Twelve Thousand Pesos (P12'000)
payable upon reaching sixty (60) years of age or upon separation, whichever comes later:'proui,re,r,
rnut the member resigns or separates from the service after he has rendered at least
three (3) years of service but less than fifteen (15) years;
xxxr Subject to final comPutation on April 14,2013 (Petitioner's 60e birthday)'
In April 2013, Petitioner started receiving her old-age
pension benefits by virtue of her first separation from the NPC
through automatic crediting to her UMID account.
On May 28, 2013, the CoC issued a Resolution in Case No'
35-2013, denying Petitioner's request to be allowed to return the
separation benefits she received in 2003 covering her period of
service from June 2l , 197I to February 28, 2003.
On October tl, 2013, Petitioner sent a verified letter3 dated
October 10, 2013 to the GSIS Office of the Corporate Secretary,
assailing the CoC Resolution and alleging that she "sincerely
returned the amount (she) received in order that (her) service be
continued-(she) withdraw (her) application for retirement because
(she) was rehired."
In compliance with the Summons dated October 21, 2013,
the CoC through counsel fiIed its Answer prayrng for the dismissal
of this Petition. The CoC argued that under the provisions of R'A'
No. 8291 and its 1997 Implementing Rules and Regulations (IRR),
Petitioner upon her re-entry in the government service and
payment of separation benefits covering her previous government
seryice, was already considered as a new entrant. The CoC
averred that R.A. No. 8291 and its 1997 IRR expressly provide that
anyone who re-enters government service shall be considered as a
new entrant and the period of service for which corresponding
benefits have already been previously paid shall be excluded in the
I Trcated as a Petition.
computation of service for the purpose of determining future
benefits.
The CoC further stated that this position is further
strengthened by the approval of Policy and Procedural Guidelines
(PPG) No. 183-06 (Guidelines in the Processing of Retirement
Claims of Re-employed Government Officials/Employees who had
Previously Received Retirement Benefits) as said PPG distinguishes
between those government employees who re-entered government
service before the date of effectivitya of R.A. No. B29t and those
who re-entered government service after its effectivity. The CoC
stated that said PPG allows only those employees who re-entered
government service before June 24, 1997 to include their previous
services in the computation of their Period with Premium Payments
(PPP) for the purpose of subsequent retirement, provided that
he/she refunds the benefits he/she previously received. Petitioner,
having re-entered the government service after June 24' 1.997 ' is
not covered by the aforementioned PPG as she is already
considered as a new entrant pursuant to Section 8.6, RuIe VIII of
the 1997 IRR of R.A. No. 8291.
Thus, having no basis in law and regulation, the CoC prayed
for the dismissal of the Petition.
Thereafter, a preliminary conference was held on December
6, 2013 where the parties entered into stipulations offact and had
their respective documentary evidence marked. Both parties were
a lwc 24, 199-l .
also ordered to submit their respective Position Papers.
In March 20L4, tt.le monthly release of Petitioner's pension
payments was suspended as per her requests in view of the
pendency of her appeal for recomputation.
On May 15, 2014, a clarificatory hearing was conducted
where Petitioner was requested to submit additional documentary
evidence. On June LO, 2014, Petitioner submitted a copy of her
Service Record, Notice of Termination dated Apnl 24, 2009 and
her letter dated February 18, 2004 addressed to the then Manager
of GSIS Laguna Branch Office.
On August lg, 2014, the net amount of Php 178,389'666,
representing the cash payment benefit for her 2009 termination,
was credited to Petitioner's UMID account.
Petitioner then submitted excerpts from the Supreme Court
Decision and Resolutions in G.R. No. 156208 captioned as NPC
Ddverc and Mechanics Association (NPC Dama), et aI. vs.
NPC, et aI.
Finally, on November 12, 2014, Petitioner submitted a letter
reiterating her claim that the amounts credited to her UMID
account representing her pension has remained intact as she has
not touched the said amounts while her appeal is pending'
Petitioner likewise requested for the speedy disposition of her
5 Made through a letter received on February 13, 20't4.6 Gross amount of Php 229,052.90\ess PhP 50,663.24 (balance of policy loan)'
Petition.
ISSUE
The basic issue for resolution is whether Petitioner's previous
government service covering the period from June 21., 1979 to
February 28, 2003, for which she has previously received
separation benefits under R.A. No. 8291, may be included in the
computation of her period of government service in relation to her
current application for separation benefits under R.A. No. 8291,.
DISCUSSION
The Petition is meritorious. Although the position and the
arguments of the CoC are well-taken, those, however, failed to take
into account the peculiar factual backdrop surrounding this case. If
this case merely involves the determination of whether a
government employee is allowed to return whatever beneflts he/she
might have received from GSIS covering a specific period of service
so that that same period of service may be added on to his/her
current period of service for the purpose of determining and
increasing the amount of benefits to be given for a subsequent
retirement or separation, the CoC would undoubtedly have been
correct. Indeed, R.A. No. 8291 and its IRR both sufficiently and
explicitly provide that all the service for which benefits have
already been paid shall no longer be included in the computation of
service for a second or subsequent retirement or separation, such
that, a government employee upon re-employment into the
government shall be considered as a new entrant. This case,
however, is not so cut and dried.
It is noted that Petitioner, who was a former employee of the
NPC, was first terminated effective March 1, 2003' pursuant to
NPB Resolution No. 2002-1'24, which was issued as a consequence
of the implementation of the EPIRA. It is likewise noted that the
implementation of the EPIRA has spawned many cases in its wake,
which have inevitably made an impact on the question of
retirement and separation of NPC employees'
One of these cases of particular significance to the case at
bar is the case of NPC Driverc and Mechanics Association
(NPC DAMA), et aI. vs. The National Power Corporation, et
aI.7 The Supreme Court in this case declared that National Power
Board (NPB) Resolution Nos. 2002-124 and 2002-125, both dated
November 18, 2002, which directed, among other things, the
termination of all employees of the NPC as a consequence of its
restructuring under the EPIRA, are void and without legal effect'
In its subsequent Resolutions dated September 17, 2008 and
December 2, 2OOg, respectively, the Supreme Court further held
that as a consequence of the nullity of the aforementioned NPB
Resolutions, all the employees who were terminated by virtue
thereof were illegally terminated and are thus entitled to
reinstatement or payment of separation pay in lieu of reinstatement
with back wages subject to the deduction of the separation pay they
received from their illegal termination. The Supreme Court further
'G.R. No. 156208, Scprember 26,2006.
held that in view of the issuance of NPB Resolution No. 2007-55 on
September 14, 2007, which adopted, confirmed and approved the
contents of NPB Resolution Nos. 2002-124 and 2002-125, all NPC
employees were considered to have been Iegally terminated as of
that date (September 14,2OO7) and not earlier.
Thus, given the foregoing, it is immediately clear that
Petitioner's termination from the NPC effective March 1, 2003 was
illegal as the same was effected pursuant to NPB Resolution No'
2OO2-t24, which the Supreme Court declared as a nullity. That
being the case, the grant of separation benefits to Petitioner for her
services from June 21, L979 to February 28, 2003 was unwarranted
and must necessarily be rectified. Given that Petitioner's 2003
termination was declared illegal, it is as if she was not separated
from the service during that time. Consequently, absent a legal
termination, there is no valid cause or contingency to compensate'
Thus, in view of the supervening events in this case, there is no
basis to grant separation benefits to Petitioner in 2003' The
amounts Petitioner had already received as separation benefits
were, as a result, paid by mistake and must necessarily be
returned.
Considering that Petitioner has also received the cash
payment representing separation benefits for her 2009 termination
from the NPC, covering the period from 2003 to 2009, she is
Iikewise liable to return the same. Correspondingly, Petitioner's
separation benefits must inevitably be recomputed.
Although the Supreme Court likewise held that all NPC
employees who were illegally terminated by virtue of NPB
Resolution Nos. 2002-124 and 2002-125 are considered terminated
on the date the National Power Board issued NPB Resolution No.
2007-55 or specifically on September 14, 2007, It must also be
emphasized that Petitioner was immediately rehired in 2003 and
went on to serve the government until her final termination from
the NPC on May 26, 2009. Thus, in reality, there was no gap in
Petitioner's period of government service. Moreover, with the
declaration by the Supreme Court that Petitioner's 2003
termination was a nullity, Petitioner's first application for
separation benefits was improper and should not have been
granted. Consequently, given that there was no valid application
for separation benefits in 2OO7 and given that Petitioner validly
applied for separation benefits only after her final termination from
the NPC in 2009, said application should, therefore, as a matter of
course, cover the period of her government service from June 21.,
1979 to May 26, 20098.
The erroneous payment of separation benefits to Petitioner
for her 2003 and 2009 terminations, respectively, necessarily gives
rise to an obligation on the part of the Petitioner to return the said
amounts under the principle of solutio indebiti.
Under the said principle, if something is received when there
is no right to demand it, and it was unduly delivered through
N Wilh Period with Premium Paymcnls rrl 29.1 t5tr5tr44 ycars.
l0
mistake, the obligation to return it arises.e Hence, the erroneous
payment of separation benefits to Petitioner for her 2003 and 2009
terminations is covered by solutio indebiti and gives rise to an
obligation on her part to return the total amount of Seven Hundred
Sixty Seven Thousand Two Hundred Sixteen Pesos and Fifty Seven
Centavos (Php 767,216.57) she erroneously received, which is
broken down as follows:
BENEFIT GROSS AMOUNTLB-month Cash Payment(2003 termination)
Php 332,798.58
Old-age Pension from April2013 to February 2Ol4 +cash qift
Php 205,365.09
Cash Payment Benefit (2009termination)
Php 229,052.90
TOTAL P}rp 767,2L6.57
However, no interest on said amount should be imposed
against Petitioner. Under the Civil Code:
Art. 2159. Whoever in bad faith acceptsshall pay legal interest if a sum of moneybe liable for fruits received or whichreceived if the thing produces fruits.
He shall furthermore be answerabieimpairment of the thing from any cause,the person who delivered the thing, until
an undue payment,is involved, or shallshould have been
for any loss orand for damages toit is recovered.
In this case, no bad faith can be imputed to the Petitioner as
she was completely unaware that the grant of separation benefits
to her will later on be adjudged as unwarranted as a consequence
of supervening events, of which she had no knowledge. Verily,
Petitioner must not be penalized for the occurrence of
circumstances and events, over which she had absolutely no
lt
e Article 2154, Civil Code of the Philippines
control. Hence, no interest may be charged against the Petitioner'
She is liable to return the amount of Php 767,216.57 without
interest.
Even as it turned out that Petitioner is not entitled to the
separation benefits which were actually given to her for her 2003
illegal termination and 2009 termination, she is also undoubtedly
entitled to separation benefits for the period from June 21, 7979 to
May 26, 2009.
The corresponding recomputation of Petitioner's separation
benefits entitles her to (1) an 1B-month cash payment benefit in the
amount of Four Hundred Ninety Five Thousand One Hundred
Ninety Four and Sixty Nine Centavos (Php 495,194.69); and (2) a
basic monthly pension of Twenty Seven Thousand Five Hundred
Ten Pesos and Eighty Two Centavos (Php 27,510.82)''0 Under R'A'
No. 8291, Petitioner is entitled to receive her monthly pension upon
reaching the age of 60.11 Petitioner turned 60 years old on April
14, 2Ol3; thus, Petitioner has already earned the release of her
recomputed pension for twenty one (2 1) months or the period
covering April 2013 to January 2015. A summary of Petitioner's
earned separation benefits is presented, as follows:
BENEFIT AMOUNT1B-month Cash Payment Php 495,194.69Old-age Pension from April2013 toJanuary 2015
Php 593,316.68
TOTAL Php 1,088,5L1.37
r0 Pursuant to Sec. 11(b) of R.A. No. 8291 .
rt Ibid.
12
On the other hand, as discussed above, Petitioner is still
liable to return the amount of Php 767,216.57 under the principle
of solutio indebiti. Hence, in order to facilitate the immediate
release of beneflts to Petitioner, the total amount Petitioner already
received as separation benefits (Php 767,216'57) should first be
deducted from her recomputed separation benefits (Php
1,088,511.37), in order to arrive at the amount to be released to
Petitioner. Thus:
Total of earned seParationbenefits until IanuarY 2015
Php 1,088,511.37
Total of separation benefltspaid to Petitioner for her2003 and 2009terminations
Less:Php767,216.57
TOTAL Php 321,294.8O
Therefore, the amount of Three Hundred Twenty One
Thousand Two Hundred Ninety Four Pesos and Eighty Centavos
(Php 321,294.80) shoutd be immediately released to Petitioner'
Consequently, the GSIS Operating Unit Concerned (OUC) is hereby
directed to immediately release the said amount to Petitioner and
to resume the monthly pension payments of Php 27,5t0'82 to her
UMID account starting February 2015 onwards.
IN VIEW OF THE FOREGOING, the Petition is GRANTED, the
GSIS OUC is directed to:
(1) Immediately release the amount of Php 321,2g4'BO,
which is the difference between Petitioner's
recomputed separation benefits (Php 1,088,511'37) and
13
the separation benefits she actually received
(Php767,216.57). Petitioner's recomputed separation
benefits consist of the 1B-month cash benefit and old-
age pension from April L4, 2Ot3 to January 2015; while
the separation benefits already received by her consist
of the L8-month cash benefit and old-age pension from
April 14, 2013 to February 2Ol4t2 for her illegal 2003
termination and cash payment benefit for her 2009 final
termination.
(2) Resume the timely and regular release of Petitioner's
monthly old-age pension in the amount of Php
27,510.82 starting February 2015 onwards.
Accordingly, CoC Resolution in Case No. 35-2013 dated May
28,2013 is hereby reversed and set aside'
SO ORDERED.
Pasay City, 3 0 APR 2015
/v)xRT G. VE(!7ARA
ice Chairman
!Ua* q, qrTr^/frrsrl cJcdztr
tnr(te# u
t o,*t
KARINA
GERALDIN
CONSTANTINO-DAVID
MARTINEZTrustee
Trustee
RIE BERBERABE
r? wirh cash giti.
14
OMAN FEL .{k
Copy furnished:
Ms. Francisca D. GonzalezPetitionerBlock 9 Lot 14Juniper St. Jubilation Home Village WestBrgy. Zapote, Biflan City, Laguna
Atty. Julie Marie M. RiveraCounsel for CoCProsecution and Quasi-Judicial Cases DepartmentLegal Services GroupGSISFinancial Center, Pasay City
15
I,VANESSAJOYB.ONGPE-JONES,AttorneyV,oftheGSISLegalServicesiroup, havin-g been assigned as the Hearing Offlcer to draft the Decision inGSIS- i3oard of TrusteeJ Case Nos. 016-13 entitted "In Re: Request to beAllowed to Return separation Benefits Preuiously Received for the Purposei ir"iing the period of Seruice Previously Compensated to Current Periodof Seruici and Recomputation of Separation Benefits"hereby certify_that thestatement of facts herein stated and being presented before this Board isu"ir.ut" and true, based on the records oflhe case, the pleadings and otherdocuments submitted by the parties.
CERTIFICATION
This certification is issued in compliance with Board Resolution No. 198-A
adopted on September 15,2004.
Pasay City, November 17 ,2014.
VANESSAJOY B. O ONESHearing
G S I S ffJ,:',l T."#i,:,"i,"#?',?,',}Jfl li,*f }sffi
OFFICE OF THE CORPORATE SECRETARY
EXACT COPY OF RES. NO. 58 ADOPTED BY THE GSIS BOARD OFTRUSTEES IN ITS MEETING NO. 8 HELD ON 30 APRIL 2015
Approval of the Decision in GSIS Case No. 016-13, fn Re.'Request to be Allowed. to Return Separation BenefitsPretlouslg Receiaed Jor the Purpose oJ Tacking the
Period of Service Preuiouslg Compensated to the CurrentPeriod of Servlce and Recomputdtion of Separation
Benefits, Francisca D, Gonzalez, Petitioner
RESOLUTION NO. 58
WHEREAS, Ms. Francisca D. Gonzalez flled aPetition before the GSIS Board of Trustees, docketedas GSIS Case No. O16-13, appealing the 28 May 2O13Resolution of the GSIS Committee on Claims (CoC) inCase No. 35-2013, which denied Petitioner's requestthat she be allowed to return the separation benefitsshe previously received, in order that her previousperiod of service may be added to her current years ofservice, for the purpose of increasing her benefitsunder R.A. No. 8291;
WHEREAS, pursuant to Section 3O of R.A. No.8291, the GSIS has original and exclusive jurisdictionto settle any dispute arising from the application ofthe laws administered by the GSIS;
RESOLVED, to APPROVE and CONFIRM theDecision in GSIS Case No. 016-13, In Re: Request tobe Allowed to Return Separation Benefits PreuiouslgReceiued for the Purpose of Tacking the Period ofSeruice Preuiouslg Compensated to the Cunent Peiodof Seruice and Recomputation of Separation Benefits,
BOARD MEETING NO. 830 APRIL 2015
Page 2(Res. No. 5A -2015)
Francisca D. Gorrzalez, Petitioner, the dispositiveportion of which states:
"IN VIEW OF THE FOREGOING, thcPetition is GRANTED, the GSIS OUC is directedto:
(1) Immediately release3.21,294.8O, whichbetween Petitioner's recomputed separationbenefits (Php 1,088,511.37) and theseparation benefits she actually received(Php 767,216.57). Petitioner's recomputedseparation benefits consist of the l8-monthcash benefit and old-age pension from April14, 2013 to January 2015; while theseparation benefits already received by herconsist of the l8-month cash benefit andold-age pension from April 74, 2073 toFebruary 2ol4t2 for her illegal 2OO3termination and cash payment benefit forher 2009 final termination.
(2) Resume the timely and regular release ofPetitioner's monthly old-age pension in theamount of Php 27,SLO.82 startingFebruary 2015 onwards.
"Accordingly, CoC Resolution in Case No.35-20f3 dated May 28,2013 is hereby reversedand set aside.
"SO ORDERED."
theis
amount of Phpthe difference
12 wirh cash gift.
t;rrl,,.i,,1
BOARD MEETING NO. 830 APRIL 2015
Page 3lRes. No. 68 -2015)
A copy of the Decision in GSIS Case No. 016- 13is attached and made an integral part of thisResolution.
CERTIFIED CORRECT:
ATTY. MARIA THEREISA ABESAMIS-RAAGASCorporate Secretary
c. ve0crRA KARINA CONSTANTINO-DAVID
"k"HJkTrustee
Chairman
GERALDINE MATrustee
II
l,,l
Trustee
OMAN FELIDE S. IEYES