GR 98395 102449; (June, 1995) (Digest)
G.R. Nos. 98395-102449 June 19, 1995
GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. CIVIL SERVICE COMMISSION and DR. MANUEL BARADERO, respondents. GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. CIVIL SERVICE COMMISSION and MATILDE S. BELO, respondents.
FACTS
The GSIS initially filed petitions for certiorari to challenge CSC resolutions that ordered the crediting of government service rendered on a per diem basis for retirement purposes. In a decision dated October 28, 1994, the Supreme Court reversed the CSC, holding that per diem service was not creditable under the Government Service Insurance Act. Private respondents, Matilde S. Belo and Dr. Manuel Baradero, filed motions for reconsideration. Belo served as Vice-Governor of Capiz, receiving a fixed salary from 1972 to 1975 and again from 1980 to 1988, but was paid on a per diem basis during her holdover capacity from December 31, 1976, to January 1, 1979. Baradero served as a Sangguniang Bayan member from 1976 to 1978, also compensated on a per diem basis. Both rendered full-time service during these periods.
ISSUE
Whether government service rendered on a per diem basis constitutes “service with compensation” creditable for computing length of service under the Government Service Insurance Act.
RULING
The Supreme Court granted the motions for reconsideration and reversed its prior decision. The Court held that the nature of the remuneration, not its label, is controlling. While the law (Section 1(c) of R.A. No. 1573 ) generally excludes per diems from the definition of “salary, pay or compensation,” this exclusion pertains to per diems as daily allowances for expenses incurred while on duty outside one’s permanent station—essentially reimbursements for incidental costs. In the cases of Belo and Baradero, the “per diems” they received were not mere expense allowances but functioned as their actual base pay or compensation for full-time service in their respective positions during the disputed periods. Therefore, these amounts constituted “compensation” within the contemplation of the law. Consequently, the periods during which they served and were paid on this per diem basis are creditable for retirement computation. The CSC resolutions were reinstated.