RURAL TRANSIT EMPLOYEES ASSOCIATION, ANGEL R. DE GUZMAN, LEON DAGAMAC, ET AL., PETITIONERS AND APPELLEES, VS. BACHRACH TRANSPORTATION CO., INC., AND SOCIAL SECURITY SYSTEM, RESP…

Rural Transit Employees Association versus Bachrach Transportation

The Case

This is a labor and social welfare case in which the Rural Transit Employees Association, together with Angel de Guzman, Leon Dagamac and other employee-members, stood as petitioners and appellees against Bachrach Transportation Company, Incorporated, and the Social Security System. The employees had been confined for injuries sustained in the course of their employment, and their employer had already paid them compensation under the Workmen's Compensation Act. The employees then demanded sickness benefits under the Social Security Act, and the employer refused, insisting that the earlier compensation barred any further recovery. The case matters because it settles a question every labor and social security practitioner must know: whether the exclusive remedy clause of the Workmen's Compensation law shuts out the separate statutory benefits that a member has bought and paid for under the Social Security System.

Procedural History

The employees instituted the appropriate proceeding before the Social Security Commission after their employer refused their claim for sickness benefits. On January 18, 1963, the Social Security Commission granted their prayer and issued the resolution that became the subject of the appeal. Bachrach Transportation Company then appealed that resolution to the Supreme Court, raising the sole issue of whether payment of compensation under the Workmen's Compensation Act precludes further recovery of sickness benefits under the Social Security law.

Facts

On different dates in 1960, Angel de Guzman, Leon Dagamac, Leonardo Santos and Amador de Guzman, all employees of Bachrach Transportation Company and compulsory members of the Social Security System, were confined for injuries sustained in the course of their employment. The employer paid them the corresponding compensation for the duration of their confinement, pursuant to the Workmen's Compensation Act.

In addition to that compensation, the employees demanded sickness benefits under the Social Security Act. The employer refused, on the ground that the receipt of compensation for their injuries barred recovery of further benefits under the Social Security law.

Because of that refusal, the employees instituted the proper proceeding before the Social Security Commission, which ruled in their favor. The employer then brought the matter to the Supreme Court.

Issues

• Whether or not payment to injured employees by the employer of compensation under the Workmen's Compensation Act precludes further recovery by the same employees of sickness benefits under the Social Security law.

Applicable Provisions

Section 5 of the Workmen's Compensation Act, as amended, provides:

Section 5. Exclusive right to compensation. The rights and remedies granted by this act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code and other laws, because of said injury.

This is the very provision the employer invoked, contending that the Social Security Act comes within the phrase "other laws," so that the compensation already paid excludes the sickness benefits claimed.

Ruling

The Court resolved the sole issue against the employer and held that the employees may recover sickness benefits under the Social Security Act notwithstanding their receipt of compensation under the Workmen's Compensation law. The Court found the issue was not new, having been settled in the earlier case of Benguet Consolidated against the Social Security System, and it adopted that ruling.

The Court explained that the exclusive remedy clause means only that there should be no double recovery against the same employer for the same death or injury. That is not the situation with social security benefits, because allowing those benefits does not amount to a double recovery against the same employer. The fact that the law requires the employer to advance sickness benefits is of no moment, since that obligation merely expedites payment, and the employer is subsequently reimbursed by the System. The twenty percent burden borne by the employer is imposed not as a liability for a compensable injury but to prevent connivance in fraudulent claims, and is more in the nature of an administrative expense.

The Court drew the distinction from the philosophy of the two laws. Workmen's compensation makes the industry bear the resulting injury to its employees. Social security sickness benefits, on the other hand, are paid to members as a matter of right whenever the hazards provided by law occur, out of a common fund to which the members themselves contribute. To deny those benefits would deprive the employees of statutory benefits they had bought and paid for. The Court added that social security benefits are insurance against hazards such as disability, sickness, old age or death, irrespective of whether they arose in the course of employment, while workmen's compensation is in the nature of indemnity for the injury suffered on account of the employment. Their nature and source are so clearly different that they cannot be considered alternate remedies.

Doctrine

The exclusive remedy clause of the Workmen's Compensation Act bars only a double recovery against the same employer for the same injury. It does not bar the recovery of social security sickness benefits, because those benefits are not paid as a burden on the industry but are paid to members as a matter of right from a common fund built by their own contributions. Workmen's compensation is indemnity for an employment injury; social security benefits are insurance against hazards whether or not they arose from the employment. The two are not alternate remedies, and the receipt of one does not preclude the other.

Disposition

The Supreme Court affirmed the resolution of the Social Security Commission, with costs against the appellant, so the employees prevailed and retained their sickness benefits.

Remember This

The one line to memorize: workmen's compensation is indemnity from industry, while social security benefits are insurance from a fund the members themselves paid into, so recovering one does not bar the other. Examiners use this case to test the exclusive remedy clause and the rule against double recovery, often as a trap asking whether social security benefits are barred by prior compensation.