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GOVERNMENT SERVICE INSURANCE SYSTEM v. REYNALDO P. PALMIERY

FACTS:

Reynaldo Palmiery began his government service in 1961 and retired in 1987. He received retirement benefits under R.A. No. 1616 and a refund of his contributions. He re-entered government service in 1987 and retired again in 1994, receiving retirement benefits under R.A. No. 66. In 1998, he was appointed as a member of the GSIS Board of Trustees and concurrently served as the GSIS Executive Vice-President. In 2001, he refunded the retirement benefits he received and requested the suspension of his monthly pension. He retired again in 2005 and applied for retirement benefits under R.A. No. 8291. The GSIS rejected his application, stating that his previous years of service cannot be included in the computation of his benefits. Reynaldo filed a petition, which was denied by the GSIS Board of Trustees. He appealed to the Court of Appeals (CA), which granted his appeal and directed the GSIS to process his retirement benefits based on his total length of government service. The GSIS filed a petition before the Court, arguing that Reynaldo's previous years of service should not be included in the computation of his benefits.

ISSUES:

  1. Whether the previous years of service of the employee should be included in the computation of his retirement benefits.

  2. Whether the absence of a provision similar to Section 12(g) of C.A. No. 186 in R.A. No. 8291 prohibits the refund of previously received benefits for the purpose of claiming retirement benefits.

  3. Whether or not the refund of retirement benefits received is a requirement for the inclusion of previous services upon reinstatement.

  4. Whether or not the Government Service Insurance System (GSIS) can apply a new policy prejudicial to the retiree after accepting the refund of retirement benefits.

  5. Whether the petitioner is entitled to the benefits being claimed.

  6. Whether the petitioner is entitled to interest and legal interest on the benefits being claimed.

RULING:

  1. Yes, the previous years of service of the employee should be included in the computation of his retirement benefits. The current GSIS Law excludes only services credited for retirement for which the corresponding benefits have been awarded. Section 10(a) of R.A. No. 8291 provides that the computation of service for the purpose of determining retirement benefits shall include periods of service under one or more employers, including those performed overseas under the authority of the Republic of the Philippines. Furthermore, Section 10(b) of R.A. No. 8291 provides that service credited for retirement, resignation, or separation for which corresponding benefits have been awarded 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 the law. Thus, employees who have not received their retirement benefits are entitled to full credit of their service.

  2. No, the absence of a provision similar to Section 12(g) of C.A. No. 186 in R.A. No. 8291 does not prohibit the refund of previously received benefits for the purpose of claiming retirement benefits. Section 12(g) of C.A. No. 186 applies to a specific category of employees and their corresponding benefits. Its absence in R.A. No. 8291 is attributable to the revised conditions for retirement under the new law, which streamlined the requirements for eligibility. 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. Full credit of services is conditioned upon the refund of contributions for retirement and the benefits previously received under any pension or retirement plan.

  3. The refund of retirement benefits received is not a requirement for the inclusion of previous services upon reinstatement. Under R.A. No. 8291, there is no such requirement. The employee in this case has not received any retirement or separation benefits, thus, the inclusion of previous services is allowed.

  4. The GSIS cannot apply a new policy prejudicial to the retiree after accepting the refund of retirement benefits. The retiree rightly 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. The change in circumstances was through no fault of the retiree and his right to receive monthly pension cannot be jeopardized by a new interpretation of the law.

  5. The Supreme Court ruled that the petitioner is entitled to the benefits being claimed, less any lawful deductions.

  6. The Supreme Court ruled that the petitioner is also entitled to interest and legal interest on the benefits being claimed, if there are any.

PRINCIPLES:

  • The current GSIS Law excludes only services credited for retirement for which the corresponding benefits have been awarded.

  • Employees who have not received their retirement benefits are entitled to full credit of their service.

  • The absence of a provision in a new law, which was present in a previous law, does not necessarily mean that the new law has abandoned the policy. The provision may have been revised or consolidated into other provisions in the new law.

  • Plain reading of a law is important in determining its intent and scope.

  • Specific provisions in a law may apply to specific categories of employees and their corresponding benefits.

  • The absence of a specific provision in a new law does not necessarily prohibit certain actions or remedies that were allowed under a previous law.

  • The prohibition against double retirement benefits does not apply if the employee has not received his/her retirement benefits, or has returned them to the GSIS. (Doctrine of double compensation)

  • Social legislation, such as retirement laws, must be liberally construed in favor of the beneficiaries. (Doctrine of liberal construction)

  • Benefits received from retirement is a form of reward for loyally serving the employer and retirement laws should be interpreted to resolve all doubts in favor of the retiree. (Doctrine of humanitarian purpose)

  • Employees are entitled to receive their benefits in accordance with the law, subject to any lawful deductions.

  • If there are any benefits due to an employee, the employer is required to pay interest and legal interest on those benefits.