G.R. No. L-33886. March 7, 1984.
SOCIAL SECURITY SYSTEM, Petitioner, vs. LEONOR ARELLANO and the WORKMEN’S COMPENSATION COMMISSION, Respondents.

FACTS

Leonor Arellano, a clerk at the Social Security System (SSS), contracted pulmonary tuberculosis and filed a claim for disability compensation under the Workmen’s Compensation Act. The Workmen’s Compensation Commission (WCC) rendered a final decision on January 20, 1970, declaring his disability work-connected and ordering the SSS to pay him a lump sum and a weekly compensation of P52.27 until his disability ceases, not to exceed P6,000. The SSS moved for reconsideration, which was denied in a subsequent WCC decision on August 11, 1970, adjusting the amounts but affirming the weekly compensation liability. The SSS partially complied by paying a lump sum but ceased the weekly payments.
In March 1971, Arellano filed an ex-parte motion to declare the balance due. The WCC granted this on April 23, 1971, ordering the SSS to pay accrued weekly benefits and continue future payments. Subsequently, the SSS sought clarification, inquiring about the effect of Arellano’s separation from service. The SSS had earlier terminated Arellano’s employment retroactive to December 23, 1970, citing his prolonged absence due to the same illness for which compensation was awarded.

ISSUE

Whether the final award of disability compensation benefits to an employee under the Workmen’s Compensation Act is extinguished by the employer’s subsequent act of terminating the employee’s services on the ground of absence caused by the very same compensable disability.

RULING

The Supreme Court ruled that the final compensation award is not extinguished by the subsequent dismissal. The petition was denied, and the WCC resolution was affirmed. The legal logic is anchored on the finality of judgments and the purpose of compensation law. The WCC’s award had already become final and executory; the SSS had even partially executed it by paying the initial lump sum. A final judgment cannot be altered by a subsequent unilateral act of a party.
Substantively, while compensation under Section 14 of the Workmen’s Compensation Act is generally premised on the existence of an employer-employee relationship and the loss of earning capacity during employment, the employer’s liability crystallizes upon the finality of the award. Allowing an employer to unilaterally abort this accrued liability by dismissing the employee for the absences caused by the compensable disability would defeat the very purpose of the law, which is to provide relief for work-connected injury or illness. It would place the employee at the mercy of the employer, enabling the latter to evade its statutory obligation through termination. The termination, based on the illness itself, does not negate the disability that had already been adjudged as compensable and for which a final monetary award was issued. The Court emphasized that such a rule would be inequitable and contrary to the protective intent of labor legislation.