G.R. No. L-43389 April 28, 1980
Glenia Uy, for and in behalf of her minors, Reynaldo, Maria Elena (Marilen), and Conchita, all surnamed Uy, petitioners, vs. Workmen’s Compensation Commission and Lucy Perez, respondents.

FACTS

Petitioners, the children of the deceased Ki Lam Uy, filed a claim for death benefits under the Workmen’s Compensation Act. Their father was killed by robbers on September 27, 1974, at the farm bodega of respondent Lucy Perez in Leyte. The Acting Chief of the Workmen’s Compensation Unit issued an award in favor of the claimants on December 27, 1974, after the employer, Perez, failed to submit the required Employer’s Report of Accident. Perez filed a motion for reconsideration, leading to hearings on the merits. The Hearing Officer upheld the award.
The Workmen’s Compensation Commission, however, reversed this decision on February 23, 1976. The Commission absolved Perez from liability, ruling that Ki Lam Uy was not her employee but an independent contractor. The Commission based this on findings that Uy was paid per cavan of palay milled, furnished his own tools, and was not subject to control by Perez regarding the means and methods of his work. The petitioners elevated the case to the Supreme Court via certiorari.

ISSUE

The primary issue is whether the deceased Ki Lam Uy was an employee of Lucy Perez, thereby making his death compensable under the Workmen’s Compensation Act.

RULING

The Supreme Court reversed the decision of the Workmen’s Compensation Commission and reinstated the award of death benefits. The legal logic centered on the application of the “control test” to determine the employer-employee relationship. The Court found that Perez exercised control over Uy’s work. She provided the rice mill and warehouse, determined the price for milling, supplied the sacks, and Uy’s work of milling palay was directly related to her business of buying and selling rice. This integration into her trade indicated an employment relationship, not independent contractorship.
Crucially, the Court emphasized that the respondent employer failed to timely controvert the claim as required by Section 45 of the Workmen’s Compensation Act. Perez did not file the requisite notice to contest the claim within the statutory period after her knowledge of the accident. This failure constituted a renunciation of her right to challenge the claim and a waiver of all non-jurisdictional defenses, including the defense that no employer-employee relationship existed. Consequently, the claim was deemed compensable, and the employer’s liability became conclusive. The Court, however, acknowledged an advance payment made by Perez for burial expenses and deducted this amount from the total death benefits awarded.