September 4, 2010

Hon. DANIEL LACSONChairman, THE BOARD OF TRUSTEESGovernment Service Insurance SystemRoxas Blvd., Pasay City

RE: Letter-Appeal

Dear Mr. Chairman:

The Undersigned hereby manifests that he is elevating the Opinion expressed through a Letter/Memorandum dated August 6, 2010 on appeal to the Board of Trustees of the GSIS. Said Letter was received by the Undersigned on August 26, 2010.

Though the Undersigned is well aware of Sections 30 and 31 of Republic Act No. 8291, otherwise known as 'The Government Service Insurance System Act of 1997,' which provides:

"SECTION 30. Settlement of Disputes. — The GSIS shall have original and exclusive jurisdiction to settle any dispute arising under this Act and any other laws administered by the GSIS.

“The Board may designate any member of the Board, or official of the GSIS who is a lawyer, to act as hearing officer to receive evidence, make findings of fact and submit recommendations thereon. The hearing officer shall submit his findings and recommendations, together with all the documentary and testimonial evidence to the Board within thirty (30) working days from the time the parties have closed their respective evidence and filed their last pleading. The Board shall decide the case within thirty (30) days from the receipt of the hearing officer's findings and recommendations. The cases heard directly by the Board shall be decided within thirty (30) working days from the time they are submitted by the parties for decision.

"SECTION 31. Appeals. — Appeals from any decision or award of the Board shall be governed by Rules 43 and 45 of the 1997 Rules of Civil Procedure adopted by the Supreme Court on April 8, 1997 which will take effect on July 1, 1997: Provided, That pending cases and those filed prior to July 1, 1997 shall be

governed by the applicable rules of procedure: Provided, further, That the appeal shall take precedence over all other cases except criminal cases when the penalty of life imprisonment or death or reclusion perpetua is imposable.

“The appeal shall not stay the execution of the order or award unless ordered by the Board, by the Court of Appeals or by the Supreme Court and the appeal shall be without prejudice to the special civil action of certiorari when proper.”

as well as Sections 14.19, 14.20 & 14.21 of the Rules and Regulations Implementing the Government Service Insurance System Act of 1997, which states:

“SECTION 14.19 Findings and Recommendations of Hearing Officers. — Within Thirty (30) working days from the time the parties have closed their respective evidence and filed their last pleading, the Hearing Officer shall submit his findings and recommendations to the Board, together with documentary and testimonial evidence presented in the case.

“SECTION 14.20 Decision of the Board. — The Board shall decide the case transmitted to it by the Hearing Officer within Thirty (30) days from its submittal. If the case was heard directly by the Board, it shall render its decision thereon within Thirty (30) working days from the time case is submitted by the parties for decision.

“SECTION 14.21 Appeals. — Within Fifteen (15) days from receipt of notice of decision or award, the aggrieved party may appeal the decision of the GSIS Board of Trustees to the Court of Appeals. These appeals shall be governed by Sections 43 and 45 of the 1997 Rules of Civil Procedures adopted by the Supreme Court on April 8, 1997 which will take effect on July 1, 1997.

“Pending cases and those filed prior to July 1, 1997 shall be governed by the applicable rules of procedures.

“The appeal shall take precedence over all other cases except criminal cases where the penalty imposable is life imprisonment or death.

the Undersigned is, nevertheless, bringing forth this case to the attention of the GSIS Board of Trustees.

Indeed, as can be gleaned from the foregoing provisions, it is the hearing officer, as may be designated by the Board, who is required to submit his findings and recommendations within thirty (30) working days from the time the parties have closed their respective evidence and filed their last pleading to the the Board, who, in turn, shall decide the case within thirty (30) days from the receipt of the hearing officer's findings and recommendations.

Apropos, the Undersigned is taking the Opinion of Ms. Ma. Vilma F. Mooney, in his capacity as Regional Manager, as a mere Opinion of a hearing officer and not as a resolution and/or decision of the Board of Trustees and, thus, not yet appealable within the contemplation of Section 31 of Republic Act No. 8291.

The factual antecedent goes this way:

On __________, the Undersigned filed with the GSIS through its Satellite Office in the City of Borongan, a Letter-Request for Re-computation of Retirement Benefits, Adjustment of Pension and Payment of Differential of Lump Sum and Pension. The Letter-Request, in full, states:

“This refers to the request of the Undersigned for the re-computation of his retirement benefits, corresponding adjustment of his monthly pension and payment thereof of differential of his lump sum and monthly pension.

“He is a former Mayor of the Municipality of Can-avid, Eastern Samar, having been elected in such capacity for three (3) consecutive terms, that is, from July 1, 1992 up to June 30, 2001. Prior to holding said position, he was likewise elected to various positions in said Municipality since January 1, 1971 as attested to by his Service Record, which is being attached hereto as Annex “A”. In a nutshell, he has served as a public official as follows:

SERVICE RECORD OF APPOINTMENT OFFICE/ENTITY/DVISION

From To Designation Status Monthly Salary

01/01/71 12/31/74

Mun. Councilor

Elective 50.00/session

Municipality of Can-avid

Local

01/01/75 12/31/77

-do- -do- 80.00/session

-do- Local

01/01/78 12/31/79

-do- -do- 100.00/session

-do- Local

03/01/80 12/31/82

Mun. Vice Mayor

-do- 813.00 Office of the Mun. Vice Mayor,Can-avid, Eastern

Local

Samar01/01/83 12/31/8

4-do- -do- 944.00 -do- Local

01/01/85 08/03/86

-do- -do- 1,405.00 -do- Local

07/01/92 12/31/93

Mun. Mayor Elective 9,741.00 Office of the Mun. Mayor, Can-avid, Eastern Samar

Local

01/01/94 12/31/94

-do- -do- 10,091.00 -do- Local

01/01/95 04/30/95

-do- -do- 10,441.00 -do- Local

05/01/96 12/31/96

-do- -do- 11,441.00 -do- Local

01/01/97 10/31/97

-do- -do- 13,053.00 -do- Local

11/01/97 12/31/98

-do- -do- 14,195.00 -do- Local

01/01/99 12/13/99

-do- -do- 15,209.00 -do- Local

01/01/00 12/13/00

-do- -do- 18,251.00 -do- Local

01/01/01 06/30/01

-do- -do- 20,076.00 -do- Local

“As shown in the foregoing, he has been in the government service for more or less twenty four (24) long years and his salary was P20,076.00 at the time of his retirement. Considering such length of service and the considerable amount of salary he was receiving at the end of his term, he was expecting to receive a monthly pension, substantial enough to make both ends meet than what the GSIS is giving him at present. But to his disappointment, he has been receiving at the moment only a monthly pension of P5,838.70 far meager than the lowest ranked policeman receives.

“His suspicion for granting him only such a less amount is that the period of his employment in government from January 1, 1971 up to December 31, 1979 were not taken into consideration in the computation of his monthly pension, apparently for reasons that, during such period, the Undersigned did not pay his monthly contribution to the GSIS and, plus, the fact that he was merely receiving a “per diem” for every session as a Municipal Councilor then, a remuneration the GSIS did not construe as a form of salary. This was validated upon inquiry with your Regional Office.

“Upon consultation with legal counsel, the latter, however, intimated to Undersigned that it should not have been so. The GSIS should have taken into consideration the period abovementioned in the computation of the Lump Sum the Undersigned received and his monthly pension. He argued, that had said year of service been taken into account, there would

have been a corresponding increase in the lump sum the Undersigned initially received and his monthly pension.

“Counsel’s based his assertions in a case decided by the Supreme Court (Government Service Insurance System vs. Civil Service Commission, et al., G.R. No. 98395, June 19, 1995, 245 SCRA 179, 190), where it was held that government service rendered on a per diem basis is creditable in computing the length of service for retirement purposes.

“In said case, the issue under motions for reconsideration is the question of 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.

“In its decision dated October 28, 1994 the Supreme Court held that government service rendered on a per diem basis is not creditable in computing the length of service for retirement purposes, reversing and setting aside 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.

“But, on motion for reconsideration, the Supreme Court reversed and set aside its earlier ruling, holding, inter alia, that:

“‘While that 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. 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 from 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.

x x x x x x x x x

“‘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.

x x x x x x x x x

On the issue raised by the GSIS that petitioners Belo and Baradero could not benefit from the policy because they were not able to pay the premium, the High Court said:

“‘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.”

“Similarly in the case of the Undersigned, he was receiving remuneration only on a per diem basis ranging from a meager amount of P50.00 to P100.00 per session since he started his government service as a municipal councilor since January 1, 1971 until December 31, 1979. It was the only remuneration the Undersigned was receiving during his tenure as a councilor such that said per diem should rightfully be considered a compensation or remuneration attached to his office as a Councilor of the Municipality of Can-avid, Province of Eastern Samar, rather than as a reimbursement for incidental expenses incurred while away from home base.

“Likewise, it cannot be argued that the Undersigned could not avail himself of the benefits of the policy because no deductions were made from his salaries during the period when he was paid on a per diem basis. The Undersigned was not duly informed that period from 1971 to 1979 was not to be credited in computing the length of his service for retirement purpose. He assumed in all good faith that he 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. Had the Undersigned 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 fine, the Undersigned badly needs financial support at the moment especially that he is presently unemployed and only his wife is working.

“On the basis of the foregoing, it is thus humbly requested of your Honorable Office to direct a re-computation of the retirement benefits of the Undersigned taking into consideration the period during which he was receiving compensation on a per diem basis, make the corresponding incremental adjustment thereon, and pay to the Undersigned the corresponding differential of his lump sum and monthly pension.

“Your favorable action will be deeply appreciated.

On August 6, 2010, the Borongan Satellite Office of the GSIS through Ms. Ma. Vilma F. Mooneys issued a Letter/Memorandum denying the Undersigned’s request for recomputation, stating as follows:

The Undersigned disagrees with Ms. Mooney.

Ms. Mooney’s assertion to the effect that the ruling in Government Service Insurance System vs. Civi Service Commission where it was held that government service rendered on a per diem basis is creditable in computing the length of service for retirement purposes, is not correct.

While it is true that in the case of Government Service Insurance System vs. Civil Service Commission, et al., as referred to before, it was held that government service rendered on a per diem basis is creditable in computing the length of service for retirement purposes, it does not spell a difference in the present case of the Undersigned where he is requesting only for a re-computation of retirement benefits he is presently receiving, adjustment of monthly pension, and payment of differential. In other words, the doctrine enunciated in the aforesaid case also applies to the case of the Undersigned.

Indeed, the most common rule in statutory construction, and this applies to decisions of the Supreme Court, is that laws should be construed in the most sensible manner and

In enacting the law, the legislature is presumed to have ordained a valid and sensible law, one which operates no further than may be necessary to achieve its specific purpose. Statutes, as a rule, are to be construed in the light of the purpose to be achieved and the evil sought to be remedied. 30 And where the statute is fairly susceptible of two or more constructions, that construction should be adopted which will most tend to give effect to the manifest intent of the lawmaker and promote the object

for which the statute was enacted, and a construction should be rejected which would tend to render abortive other provisions of the statute and to defeat the object which the legislator sought to attain by its enactment. 31 In introducing a new rule on the reinstatement aspect of a labor decision under R A. No. 6715, Congress should not be considered to be indulging in mere semantic exercise. On appeal, however, the appellate tribunal concerned may enjoin or suspend the reinstatement order in the exercise of its sound discretion.

29. 238 SCRA at pp. 198-199.30. See LVN Pictures, Inc. v. Philippine Musicians Guild and CIR,

110 Phil. 725.31. US v. Toribio, 15 Phil. 85, 90.

[G.R. No. 118651. October 16, 1997.]PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioners, vs.

NATIONAL LABOR RELATIONS COMMISSION, PIONEER TEXTURIZING WORKERS UNION and LOURDES A. DE JESUS, respondents.

May 31, 1977PRESIDENTIAL DECREE NO. 1146AMENDING, 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 PURPOSESWHEREAS, the Government Service Insurance System in promoting the efficiency and welfare of the employees of the Government of the Philippines, administers the laws that grant to its members social security and insurance benefits;WHEREAS, it is necessary to preserve at all times the actuarial solvency of the funds administered by the System; to guarantee to the government employee all the benefits due him; and to expand and increase the benefits made available to him and his dependents to the extent permitted by available resources;WHEREAS, provisions of existing laws have impeded the efficient and effective discharge by the System of its functions and have unduly hampered the System from being more responsive to the dramatic changes of the times and from meeting the increasing needs and expectations of the Filipino public servant;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; cdWHEREAS, 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 and those of their dependents in the event of sickness, disability, death, retirement, and other contingencies; and to serve as a filing reward for dedicated public service;WHEREAS, in the light of existing economic conditions affecting the welfare of government employees, there is need to expand and improve the social security and insurance programs administered by the Government Service Insurance System, 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. NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree the following:SECTION 1. Title. — The short title of this Act shall be the "Revised Government Service Insurance Act of 1977." casia A. DefinitionsSECTION 2. Definition of Terms. — Unless the context otherwise indicates, the following terms shall mean:(a) System — The Government Service Insurance System created and established by Commonwealth Act No. 186;(b) Board — The Board of Trustees of the Government Service Insurance System;(c) Employer — The National Government, its political subdivisions, branches, agencies or instrumentalities, corporations owned and/or controlled by the Government, the Philippine Tuberculosis Society, the Philippine National Red Cross and the Philippine Veterans Bank;(d) Employee — any person in the service of an employer who receives compensation for such service;(e) Member — any person compulsorily covered by the System under Section 3 of this Act;(f) Dependent — the legitimate, legitimated, legally adopted, acknowledged natural or illegitimate child who is unmarried, not gainfully employed, and not over twenty-one years of age or is over twenty-one years of age but physically or mentally incapacitated and incapable of self-support; the legitimate spouse dependent for support upon the member, and the legitimate parent/s wholly dependent upon the member for support;(g) Primary beneficiaries — the dependent spouse until he marries and the dependent children;(h) Secondary beneficiaries — the dependent parents and legitimate descendants other than dependent children;(i) Compensation — the basic pay or salary received by an employee, pursuant to his employment/appointment/s, excluding per diems, bonuses, overtime pay, and allowances; cda(j) Contribution — the amount payable to the System by the member and the employer in accordance with section five of this act;

(k) Average monthly compensation — the quotient after dividing the aggregate compensations received by the member for the last three years immediately preceding his death/separation/disability/retirement, by the number of months he received said compensation, or three thousand pesos, which ever is smaller;(l) Revalued average monthly compensation — an amount equal to one hundred seventy percent of the first two hundred pes