G.R. No. L-41301 December 15, 1986
PILIPINAS SHELL PETROLEUM CORPORATION OF THE PHILIPPINES, petitioner, vs. HERMINIO DE LA ROSA and the WORKMEN’S COMPENSATION COMMISSION, respondents.

FACTS

Herminio de la Rosa was employed as a laborer by Pilipinas Shell Petroleum Corporation. In May 1969, he contracted an illness characterized by body numbness. Despite medical advice, he continued working and was transferred to different company branches. While working in Butuan City, he suffered a stroke and was hospitalized. His ailment was diagnosed as a transient ischemic attack. After his discharge and a two-month vacation leave, the company separated him from service due to his sickness.
Upon separation, de la Rosa received a total of P15,889.00 from Shell, which the company described as retirement gratuity and a “special payment” under its retirement plan and collective bargaining agreement. In consideration for this payment, he signed a “Release” document, waiving all claims against the company, including benefits under the Workmen’s Compensation Act. He subsequently filed a claim for disability compensation. The Regional Office dismissed his claim, ruling he had waived his rights by accepting the retirement benefits. The Workmen’s Compensation Commission reversed this, awarding him P6,000.00 in disability compensation. Shell filed this petition, arguing the “special payment” already discharged its compensation liability.

ISSUE

Whether the payment of retirement gratuity and the “special payment,” coupled with the executed “Release,” validly exempted the employer from its liability to pay disability benefits under the Workmen’s Compensation Act.

RULING

No. The Supreme Court affirmed the Commission’s decision, ordering Shell to pay the disability compensation. The legal logic rests on the mandatory and non-waivable nature of compensation benefits under the Workmen’s Compensation Act, a social legislation. The Court found that Shell failed to prove that the P15,889.00, particularly the unspecified “special payment,” was intended as or equivalent to the disability compensation mandated by law. The amount was more logically a consideration for his involuntary separation, not a substitute for statutory compensation.
Crucially, the “Release” document signed by de la Rosa is null and void under Section 7 of the Workmen’s Compensation Act ( Act No. 3428 , as amended), which expressly prohibits any contract or device intended to exempt the employer from liability created by the Act. The law’s intent is to protect workers, and such waivers are against public policy. The Court distinguished the cited case of Koppel (Phil.) Inc. v. Javellana, where an agreement clearly treated a payment as an advance against any future compensation award. Here, the “special payment” lacked such a definitive stipulation. Therefore, the employer’s liability under the Act remained undischarged, and the employee was entitled to the awarded disability benefits.