.. . , .. ~

REPUBLIC OF THE PHILIPPINES GOVERNMENT SERVICE INSURANCE SYSTEM

FINANCIAL CENT ER, ROXAS BOULEVARD, PASAY CITY

BOARD OF TRUSTEES

IN THE MATTER OF: CLAIM FOR REFUND OF PERMANENT PARTIAL DISABILITY BENEFITS (OSTEOARTHRITIS) DEDUCTED FROM COLA, AMELIORATION ALLOWANCE AND JUDGMENT DEBT

GLORIA C. LEYVA, MERCEDES T. RANESES, LEONARDA PEREZ, AMELIA VERGARA, RODRIGO R. GREGORIO, REMEDIOS PEREZ, MARIA B. PINEDA, RENATO NISCE and THE GERSIP ASSOCIATION, INC.,

Petitioners.

LETICIA DE MESA, NILDA LINAO, FELIX LOPEZ, CARLITO ROXAS, MARIANO SANTOS, RODRIGO GREGORIO and THE GERSIP ASSOCIATION, INC.,

Petitioners.

GSIS Case No. 004-04

GSIS Case No. 014-04

"---------------------------------------------------------------------------"

RESOLUTION

For resolution of the Board is the Motion for Reconsideration

filed by the Petitioners on October 08, 2012 on the Decision

promulgated on August 23 , 201 2, DISMISSING these cons olidated

Pe titions for lack of merit.

In fine, the Petitioners interposed the following arguments in

their Motion for Reconsideration:

1. The recovery of the PPD benefit due to Osteoarthritis

was made without valid justification having been based

on Board Resolution No. 345 dated November 21, 2001

and a new policy which were issued only after the grant

of said benefits;

2. Board Resolution No. 345 dated November 21, 2001 has

no force and effect because the same was not published

in the Official Gazette or in a newspaper of general

circulation;

3. The GSIS Board of Trustees being a court of law cannot

consider against the Petitioners the COA disallowances

and COA Audit Observation Memorandum, which were

not presented by the parties; and

4. The action based on solution indebiti has already

prescribed.

The Petitioners of these consolidated cases were employees of

the GSIS who were paid Permanent Partial Disability (PPD) Benefits

due to osteoarthritis. Subsequently, however, these benefits were

recovered from the Petitioners for having been given without legal

basis and in contravention to R.A. No. 8291 and its 1997

Implementing Rules and Regulations. The refund was effected

through deductions from the back pay differentials for Amelioration

Allowance and the Cost of Living Allowance (COLA) (GSIS Case No.

004-04) and from the refundable 25% Provident Fund Management

2

share (GSIS Case No. 014-04). These refunds led to the filing of these

Petitions.

The consolidated Petitions were dismissed, finding that the

deductions made to the Petitioner's COLA and amelioration

allowances and management share in the provident fund were proper

for the following reasons:

1. The payment of PPD benefits to Petitioners due to

osteoarthritis was made without legal basis, having been

done without any proof of loss or reduction in earning

capacity as required by Section 9.1.1, Rule IX of the 1997

IRR of R.A. No. 8291;

2. The amounts corresponding to the PPD benefits

which Petitioners erroneously received and to which they

are not entitled became obligations on their part to the

GSIS. Petitioners are legally and duty bound to return to

the GSIS the said amounts under the principle of solutio

indebiti.

3. The deductions were made on the strength of the

principle of off-setting and Petitioners' own signed

authorizations to effect such deductions.

The Comment (on the Motion for Reconsideration), states,

among others, that "(t)here being no new matters adduced in the

motion for reconsideration that are sufficiently persuasive to induce

a modification of the questioned Resolution dated August 23, 2012 ,

3

the Honorable Board's denial thereof must therefore ensue as a

matter of course."1

On January 31, 2013, Petitioners filed a Reply (to the Comment

on the Motion for Reconsideration) reiterating their arguments against

the assailed Decision.

It bears noting that Petitioners in their first and second

arguments posit essentially the same arguments as those already

considered and passed upon by the Board in the assailed Decision.

Thus, these need not again be discussed to avoid useless formality

and redundancy. 2

Additionally, Petitioners likewise assail the reference made to

the COA disallowance and the COA Audit Observation Memorandum

and further aver that the GSIS is already barred from recovering the

amounts erroneously paid due to prescription.

As can be gleaned from their arguments, Petitioners fail to

appreciate that the invalidity of the grant of the PPD benefits due to

Osteoarthritis previously given to them is not based on any COA

action or even any Board Resolution but rather on the law itself and

its implementing rules and regulations.

1 Citing PCI Bank vs. Escolin, 67 SCRA 202 (1975).

2 Onigas and Company Limited Partnership vs. Judge Velasco and Molina, G.R. No. 109645, March 4,

1996 and Molina vs. Hon. Presiding Judge, RTC, Quezon City, Br. 105 and Manila Banking Corp., G.R. No. 112564

4

... ·

Even a brief perusal of the questioned Decision reveals that the

basis for the declaration of the erroneous grant is R.A. No. 8291 itself

and its Implementing Rules and Regulations and not the COA

Disallowance and the Audit Observation Memorandum. These COA

actions merely serve as further background and corroboration for

the illegality and impropriety of the grant of PPD benefits, which is

the subject of this Petition.

Moreover, to address Petitioner's third issue, the subject COA

actions are part of the official records of the GSIS, of which the Board

may take judicial notice. The Board, furthermore, in the exercise of

its adjudicatory powers, is not precluded to verify Petitioners' own

assertions by checking GSIS official records.

Notably, R.A. No. 8291 and its Implementing Rules and

Regulations, give the Board of Trustees of the GSIS the exclusive

power to adjudicate and resolve any dispute arising out of any claim

or question from laws the GSIS administers. This power is governed

by the general principle that the Board " ... shall act on the merits of

the case with the end in view of promoting justice and equity, and

shall not be bound by technical rules of evidence."3 The same

principle has been retained under the 2010 Implementing Rules and

Regulations of R.A. No. 8291.4 Thus, the Board cannot ignore its own

official records pertinent to the Petitions on the expediency of

3 Rule XIV, Section 14.7, 1997 Implementing Rules and Regulations of R.A. No. 8291.

4 Rule V, Section 33.

5

technical rules of evidence, which, in the first place, are not strictly

applied in proceedings before quasi-judicial bodies.

As to the Petitioner's fourth argument claiming prescription as

a bar to the deduction effected against their Amelioration allowance,

COLA, and management share in the Provident Fund, even

Petitioners' own assertions belie this claim. The records show that

Petitioners themselves submitted a letter5 dated February 18 , 2003

signed by the President of the GSIS Retirees Association, Inc.

addressed to the President and General Manager of the GSIS, stating,

among others , that the subject PPD benefits were granted five (5)

years ago or in 1998. The erroneously paid PPD benefits, on the

other hand, were recovered from Petitioners in 2003 . The law

provides that the prescriptive period for actions based on quasi-

contracts (solutio indebiti) is six (6) years. 6 Clearly then, the

recovery of the erroneously paid amounts after five (5) years from

the grant is well-within the time frame fixed by law; hence not yet

prescribed at the time of recovery.

The arguments of the Petitioners once again fail to convince

and the motion must necessarily fail. It is quite clear that the basis

in finding that the payment of PPD benefit due to osteoarthritis

granted to Petitioners was erroneous is the law itself and its

Implementing Rules and Regulations and not, as claimed by

5 Annex "D" of the petition of Leyva, e t.al. 6

Article 1145, Civil Code of the Philippines.

6

Petitioners , Board Resolution No. 345 dated November 21, 2001 or

the COA disallowances.

WHEREFORE, premises considered and finding no reversible

error in the Decision dated 23 August 2012, the Motion for

Reconsideration is denied .

SO ORDERED, 2"7 JUN 2013

Pasay City, Philippines, - -------------------·

IEL L. LACSON, JR.

ROBE T G. VEZRA v ·ce Chairman

~'-~~~ KARINA CONSTANTINO-DAVID

Trustee

GERALD E MARIE BERBERABE-MARTINEZ

Trustee

FRANCISCO T. DUQUE III* Tru s tee

Chairman

~~.£A Trus tee

7

..

Copy furnished:

THE GERSIP ASSOCIATION, INC. No. 10 Road 16, Toro Hills, Project 8, Quezon City

ATTY. AGUSTIN S. SUNDIAM Counsel for Petitioners 8 Pangilinan Drive Toro Hills, Quezon City, M.M.

ATTY. MARIANNE C. ANINGAT Legal Services Group GSIS Financial Center, Roxas Blvd. Pasay City

8

.·

CERTIFICATION

WE, VANESSA JOY B. ONG PE-JONES, Attorney IV, and JOHN ANDREW R. SALAZAR, Attorney V of the GSIS Legal Services Group, having been assigned as Hearing Officers to draft a Resolution on the Motion for Reconsideration in GSIS Board of Trustees Consolidated Case Nos. 004-04 and 014-04 entitled "IN THE MATTER OF: CLAIM FOR REFUND OF PERMANENT PARTIAL DISABILITY BENEFITS (OSTEOARTHRITIS) DEDUCTED FROM COLA, AMELIORATION ALLOWANCE AND JUDGMENT DEBT, Gloria G. Leyva, et al. and Leticia De Mesa, et al., petitioners" hereby certify that the statement of facts herein stated and being presented before this Board is accurate and true, based on the records of the case, the pleadings and other documents submitted by the parties.

This certification is issued in compliance with Board Resolution No . 198-A adopted on September 15, 2004.

Pasa~r\ty,

i1 VANESSA JOHN ANDREW R. SALA~

Hearing Officer ~

G S I S Government Service Insurance System Financial Center, Pasay City, Metro Manila 1308

OFFICE OF THE CORPORATE SECRETARY

EXACT COPY OF RES. NO. 63 ADOPTED BY THE GSIS BOARD OF TRUSTEES IN ITS MEETING NO. 11 HELD ON 27 JUNE 2013

Resolution on the Motion for Reconsideration in GSIS Consolidated Case Nos. 004-04 and 014-04

RESOLUTION NO. 63

WHEREAS, the GSIS Board of Trustees, through its Resolution No. 133 adopted on 23 August 2012, approved the Decision in GSIS Consolidated Case Nos. 004-04 and 014-04 -entitled In the Matter of: Claim for Refund of Permanent Partial Disability Benefits (Osteoarthritis) Deducted from COLA, Amelioration Allowance and Judgment Debt, Gloria C. Leyva, et al. and Leticia De Mesa, et aL, Petitioners dismissing the consolidated petitions for lack of merit;

WHEREAS. on 8 October 2012, Petitioners filed a Motion for Reconsideration on the said Decision;

RESOLVED , to APPROVE and CONFIRM the Resolution on the Motion for Reconsideration in GSIS Consolidated Case Nos. 004-04 and 014-04, the dispositive portion of which states:

"WHEREFORE, premises considered and finding no reversible error in the Decision dated 23 August 2012, the Motion for Reconsideration is denied."

~ OPGM

I • '

BOARD MEETING NO. 11 27 JUNE 2013

Page 2 (Res. No. 63-20 13)

A copy of the Resolution on the Motion for Reconsideration in GSIS Consolidated Case Nos. 004-04 and 014-04 is attached and made an integral part of this Resolution.

CERflFIED CORRECT:

ATJY.~RESAABESAM!S-RAAGAS Corporate Secretary

~ OPGM