FRANKLIN BAKER COMPANY OF THE PHILIPPINES, PETITIONER, VS. MAURICIO ALILLANA AND WORKMEN’S COMPENSATION COMMISSION, RESPONDENTS.

Franklin Baker versus Alillana

The Case

This is a petition brought by the Franklin Baker Company of the Philippines against Mauricio Alillana and the Workmen's Compensation Commission, asking the Supreme Court to overturn an award of additional disability compensation. The employer does not deny that its former worker is sick; it disputes only the Commission's power to reopen a case it had already decided and to pay beyond the statutory period. The case matters because it settles, as a rule of law, that the period of compensation under the Workmen's Compensation Act may be extended by the Commission, and that a worker's signed receipt of satisfaction does not bar him from claiming more.

Procedural History

The claim began in the Regional Office, where the hearing officer awarded disability benefits to Alillana. Franklin Baker Company elevated the matter to the Workmen's Compensation Commission, and the Commissioner affirmed the award, slightly reducing the amount. The company paid that award in full, and Alillana acknowledged satisfaction in writing.

Alillana then filed a motion in the same case for additional compensation, alleging continuing disability. The Commission ordered a physical examination, and after its doctor found him still suffering from temporary total disability, the Commission issued an order for additional compensation, raising the total award to the then statutory maximum. The company moved for reconsideration, and the Commission en banc denied the motion, holding that the period of disability may be extended beyond two hundred eight weeks under Section 18 of the Act. The company then filed this petition, bringing the question of the Commission's power before the Supreme Court on appeal from the Commission's orders.

Facts

Franklin Baker Company, a domestic corporation engaged in producing copra, took Mauricio Alillana into employment in July 1947 as a truck loader. In 1956 he was assigned as a washer, and four months later he became a shell collector. His duties were to pick up unshelled coconuts from a moving conveyor, place them in a carrying basket, and hand them to the shellers; four times during each eight-hour workday he and some assistants personally rotated the pulley to keep the conveyor running when coconut shells caused it to stick.

In April 1958 Alillana suffered pains at the ribs, was found with bronchitis, and went on leave. In May 1958 the company allowed him to resume work. From the end of May 1958 he complained from time to time of cough with chest and back pains, for which he was treated. Referred for physical and X-ray examinations, his condition in July 1958 was found to be far advanced pulmonary tuberculosis at the left lung, associated with bronchitis. The next day he retired from the company. Franklin Baker paid him a sum under its non-occupational sickness and disability benefit plan, and a further sum as retirement benefits.

Alillana then filed a claim for disability compensation under the Workmen's Compensation Act. The Regional Office hearing officer awarded benefits, and the Commission affirmed with a slight reduction, applying Section 14 on temporary total disability, computed at sixty per centum of his average weekly wage times the maximum of two hundred eight weeks, less a brief period of sporadic employment. The company paid that award, and Alillana acknowledged satisfaction in writing. Alleging continuing disability, he later moved in the same case for additional compensation. After a physical examination by the Commission's doctor, who found him still suffering from temporary total disability, the Commission ordered additional compensation, raising the total award to the then statutory maximum of four thousand pesos.

Issues

• Whether or not the Workmen's Compensation Commission has the power under Section 18 of the Workmen's Compensation Act to extend the period of disability compensation beyond the two hundred eight weeks fixed in Section 14.
• Whether or not Alillana's signing of a satisfaction receipt for the earlier award bars him from recovering additional compensation.

Applicable Provisions

Section 14 of the Workmen's Compensation Act provides:

Section 14. Total disability. In case the injury or sickness causes total disability for labor, the employer, during such disability but exclusive of the first three days shall pay to the injured employee a weekly compensation equivalent to sixty per centum of his average weekly wages; but not more than thirty-five pesos nor less than ten pesos per week, except in the case provided for in the next following paragraph. Such weekly payments shall in no case continue after the disability has ceased, nor shall they extend over more than two hundred and eight weeks, nor shall the aggregate sum paid as compensation exceed in any case four thousand pesos. But no award of permanent disability shall take effect until after two weeks have elapsed from the date of injury.

This is the provision that fixes the weekly rate, the two hundred eight week ceiling, and the four thousand peso maximum, and it is the ceiling the employer says cannot be exceeded.

Section 18 of the same Act, as amended, provides in its last paragraph:

The total compensation prescribed in this and the next preceding section and the total compensation prescribed in sections fourteen and fifteen of this Act, shall, together, not exceed the sum of four thousand pesos: Provided, however, that after the payment has been made for the period specified by the Act in each case, the Workmen's Compensation Commissioner may from time to time cause the examination of the condition of the disabled laborer, with a view to extending, if necessary, the period of compensation which shall not, however, exceed the said amount of four thousand pesos.

This proviso is the source of the Commission's power to reopen a decided case and to extend the period of compensation, subject only to the four thousand peso ceiling.

Section 29 of the Act provides:

The law does not consider as valid any agreement to receive less compensation than what the worker is entitled to recover under the Act.

This is the provision the Court invokes to reject the employer's claim of waiver by satisfaction receipt.

Ruling

On the first issue, the Court held that the Commission did have the power to extend the period beyond two hundred eight weeks. It relied on its earlier ruling in Avecilla Building Corporation versus Workmen's Compensation Commission, which had already construed the proviso of Section 18 as an innovation introduced by the amendatory law, empowering the Commissioner to reopen a case already decided and to extend the period of compensation, provided the total does not exceed four thousand pesos. The Court quoted that ruling at length, including its observation that the provision recognizes the obvious fact that a worker's condition may later change markedly for the worse, and that the objectives of the law are best accomplished if the commission can increase, decrease, revive, or terminate payments to correspond to the claimant's changed condition. The Court noted that the Commissioner may from time to time cause the examination of the disabled laborer with a view to extending the period of compensation. It therefore found no error in extending Alillana's compensation beyond two hundred eight weeks, up to a total of not more than four thousand pesos.

On the second issue, the Court held that Alillana's having signed a satisfaction receipt could not result in waiver, because the law does not consider as valid any agreement to receive less compensation than what the worker is entitled to recover under the Act. The receipt, in other words, could not close the door that Section 18 had opened.

Doctrine

First, the period of disability compensation under Section 14 of the Workmen's Compensation Act may be extended by the Workmen's Compensation Commission under the proviso of Section 18, as amended, which authorizes the Commissioner, after payment has been made for the period specified by the Act, to cause from time to time the examination of the disabled laborer with a view to extending, if necessary, the period of compensation, subject only to the aggregate ceiling of four thousand pesos. The two hundred eight week limit in Section 14 is therefore not an absolute bar; it yields to the reopening power.

Second, a worker's signed receipt of satisfaction for an earlier award does not amount to a valid waiver of further compensation, because the law does not consider as valid any agreement to receive less compensation than what the worker is entitled to recover under the Act. A Bar answer should tie both rules to the quoted provisions: the proviso of Section 18 supplies the power to reopen and extend, and Section 29 supplies the rule against waiver.

Disposition

The Supreme Court affirmed the appealed orders of the Workmen's Compensation Commission, with no costs; the employer lost and the additional award to Alillana stood.

Remember This

Memorize this line: the two hundred eight week period under Section 14 may be extended by the Commission under Section 18, up to the four thousand peso ceiling, and a satisfaction receipt is no waiver. Examiners use this case to test the reopening power of the Commission and the rule that a worker cannot validly agree to receive less than what the law gives him.