SC reverses verdict: State insurance must pay claims, fines

Evelyn Macairan – Filipino star

August 29, 2022 | 12:00 am

MANILA, Philippines – The state insurance fund must provide compensation for work-related injuries and death cases of workers, according to the Supreme Court (SC), overturning a 2007 ruling that requires employers to pay compensation.

In a statement issued last Tuesday, the SC issued a decision written by Associate Justice Rodil Zalameda, stating that although Title II, Book IV of the Labor Code on Employees Compensation and State Insurance Fund has already repealed Article 1711 of the Civil Code, the successors of the Injured or those who died still have the option to choose between the recovery of wages under the Labor Code or against the employer for damages under the Civil Code.

Therefore, the SC declared that Article 1711 of the Civil Code was repealed by Title II, Book IV of the Labor Code of the Philippines.

Likewise, the SC set aside its 2007 decision in Candano Shipping Lines Inc. v. Sugata-on (Candano), which allowed the payment of interest for future loss of income pursuant to Article 1711 of the Civil Code.

The SC, however, said that the suspension of the Candano decision will be applied in the future.

In the instructions issued on the application of Candano’s decision and the modification of its abandonment, the high court explained that in the actions presented before Aug. 6, 2007, which is the end of Candano, Article 1711 of the Civil Code shall be considered as amended by Title II, Book IV of the Labor Code.

Therefore, Section 1711 of the Civil Code cannot act, or award interest.

Candano was not yet a regular model at the time this was issued.

In the absence of Candano, there is no valid reason to support the repeal of the Civil Code.

Actions that were issued during Canano, from the end of 2007 to the end of this decision, Article 1711 of the Civil Code will be empowered based on Candano’s decision.

For actions filed after the expiration of this decision, Section 1711 of the Civil Code will not apply because Article 1711 was repealed by the Labor Code.

Therefore, the SC held that Section 1711 of the Civil Code can no longer be used against employers to recover compensation for work-related injuries or deaths.

The lawsuit stemmed from a 2012 complaint filed by respondent Jenny Rose Nedic against plaintiff Oceanmarine Resources Corp. the alleged “future losses” of Romeo Ellao, who is Nedic’s common-law partner and the father of her son. SC.

On Nov. 2, 2011, Ellao, who was working as a driver for Oceanmarine, was shot dead by two unidentified motorcycle-riding criminals after withdrawing money from Oceanmarine’s banks. At the same time, the assailants took a bag containing money from the car and fled.

After Ellao’s death, Nedic’s lawyer wrote to Oceanmarine to disgorge future earnings, but Oceanmarine refused.

This prompted Nedic to file a case in the Parañaque City Regional Trial Court (RTC) under Article 1711 of the Civil Code, which states that business owners and other employers have the responsibility to pay compensation for the death of their employees if death occurs. of and at work even if accidental or entirely due to chance.

In a decision dated September 22, 2014, the RTC dismissed Nedic’s complaint for failure to establish a connection between Oceanmarine’s negligence and Ellao’s death.

The case was brought to the Court of Appeals (CA), which reversed the decision of the RTC and awarded Nedic actual damages for loss of earning power.

Citing Canano, the CA held that the employer’s obligation to pay damages only applies when the employee dies or is injured while on the job.

Oceanmarine then filed a petition for review on certiorari before the SC.

Using the aforementioned guidelines, the high court affirmed and modified the decision of the CA December 19, 2017 and ordered Oceanmarine to pay the heirs of Ellao P1,410,000 as interest for loss of earning power, attorney’s fees and costs.

The SC, however, said that Nedic erred in relying on Article 1711 of the Civil Code, which now appears to have been repealed by Title II, Book IV of the Labor Code. His actions under Article 1711 were deemed to be valid and eligible for relief pursuant to Candano, which was the prevailing doctrine at the time of the decision and prior to that doctrine.