552 Phil. 632


[ G.R. NO. 157168, June 26, 2007 ]




This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision,[1] dated 27 June 2002, rendered by the Court of Appeals, partially affirming the Resolution,[2] promulgated by the National Labor Relations Commission (NLRC) on 16 August 2000. The Court of Appeals, in its assailed Decision, sustained the award of actual damages in the amount of P7,742.50, moral damages in the amount of P25,000.00 and exemplary damages in the amount of P25,000.00 in favor of respondent Richel Bandiola (Bandiola), in relation to an injury sustained by the latter in the course of his employment with petitioner U-BIX Corporation, (U-BIX)

Sometime in April 1995, Bandiola was employed by U-BIX to install furniture for its customers. On 13 April 1997, Bandiola and two other U-BIX employees were involved in a vehicular accident on their way to Baguio, where they were assigned by U-BIX to install furniture for an exhibit. As a result of the accident, Bandiola sustained a fracture on his left leg.[3]

Bandiola and his co-employees were initially brought to the Rosario District Hospital. The next day, 14 April 1997, they were transferred to the Philippine Orthopedic Hospital (Orthopedic). After his broken leg was cemented, Bandiola was advised to go back for further medical treatment. U-BIX paid for the medical expenses incurred in both hospitals.[4]

Bandiola claims that he asked U-BIX for financial assistance but that the latter refused. As a consequence, he could no longer afford to go back to the Orthopedic in Quezon City, which is of considerable distance from his residence in ParaƱaque. Instead, he went to Medical Center ParaƱaque (MCP) where he had his leg cast in fiberglass.[5] He attached the receipts, issued by MCP and Dr. Celestino Musngi, for medical expenses with a total amount of P7,742.50.[6] He also attached a copy of the Roentgenological Report, dated 24 April 1997, of Amado V. Carandang, a Radiologist in MCP.[7] The said report affirmed that Bandiola's left leg was still fractured, even after the doctors at the Orthopedic put a plaster cast on his leg. Bandiola added that he paid for other medical expenses for which no receipts were issued.

Bandiola maintains that before his leg was cast in fiberglass, he asked Rey Reynes, U-BIX's Assistant Manager for Project Management, for financial assistance but was refused. After the medical procedure, he again went to Reynes and presented a receipt for his medical expenses, but was told to pay for them in the meantime. Bandiola also avers that while he was waiting for his injuries to heal, he called the U-BIX office in Makati to ask for a salary advance, but was told by a secretary, a certain Ms. Clarisse, that this was not possible since he had not worked after 13 April 1997.[8]

On September 1998, Bandiola filed a Complaint before the Labor Arbiter, where he alleged underpayment of salary; non-payment of overtime pay; premium pay for work performed on holidays and rest days; separation pay; service incentive leave pay; 13th month pay; and the payment of actual, moral and exemplary damages.[9] The Labor Arbiter ordered in its Decision, dated 16 September 1998, that[10]:
Accordingly, complainant is entitled to salary differential, service incentive leave pay and 13th month pay computed as follows:

x x x x

WHEREFORE, respondent is hereby ordered to pay complainant the following:

Salary Differential P20,424.00
Service incentive leave 825.00
13th Month pay 10,324.15
GRAND TOTAL P31,573.15

All other claims are DISMISSED for lack of merit.
Bandiola asserts that U-BIX failed to extend to him any financial assistance after he was injured in the performance of his duties, and that as a result, he suffered physical pain, mental torture, fright, sleepless nights, and serious anxiety. He claims that this entitles him to moral and exemplary damages.[11]

U-BIX, on the other hand, denies that Bandiola notified it of any medical expenses he purportedly incurred until the complaint was filed before the Labor Arbiter.[12]

As can be gleaned from above, the Labor Arbiter allowed Bandiola's claim for salary differential, service incentive leave pay and 13th month pay due to U-BIX's failure to present payrolls or similar documents. Incidentally, the award of these claims is no longer questioned in the present petition. The other claims, particularly those for medical expenses that Bandiola allegedly incurred and for moral and exemplary damages, were dismissed.

Bandiola filed an appeal before the NLRC. In a Resolution dated 16 August 2000, the NLRC amended the Decision rendered by the Labor Arbiter on 16 September 1998. It ruled that U-BIX should reimburse Bandiola the amount of P12,742.50 for the medical expenses he incurred in connection with his fractured leg. It further ruled that U-BIX is liable to pay Bandiola P25,000.00 in moral damages and P25,000.00 in exemplary damages for refusing to reimburse Bandiola for the medical expenses he incurred after it failed to report to the Social Security System (SSS) the injuries sustained by Bandiola.[13] The aforementioned NLRC Resolution decrees that[14]:
WHEREFORE, premises considered, [herein respondent Bandiola's] appeal is GRANTED. The Labor Arbiter's decision in the above-entitled case is hereby AFFIRMED with the MODIFICATION that in addition to the monetary award granted to [herein respondent Bandiola] by the Labor Arbiter, [herein petitioner UBIX] is ordered to reimburse [herein respondent Bandiola] the amount of P12,742.50 for the medical expenses which he incurred in line of duty. [Herein petitioner UBIX] is likewise ordered to pay [herein respondent Bandiola] the amount of Twenty-Five Thousand Pesos (P25,000.00) for moral damages and Twenty-five Thousand Pesos (P25,000.00) for exemplary damages.
Thereafter, U-BIX filed a Motion for Reconsideration, which was denied by the NLRC in another Resolution on 11 October 2000.[15]

On appeal, the Court of Appeals modified the NLRC Resolution, dated 16 August 2000. It affirmed Bandiola's entitlement to reimbursement of his medical expenses, but reduced the amount to P7,742.50, the amount of actual damages he was able to prove. It also affirmed without modification the award of moral and exemplary damages, and the monetary award granted by the Labor Arbiter.[16] In the dispositive portion of its Decision, dated 27 June 2002, the Court of Appeals ruled that[17]:
WHEREFORE, the instant petition is PARTIALLY GRANTED and the assailed resolution of the NLRC is accordingly AFFIRMED WITH MODICATION such that the actual damages in the form of reimbursement for the medical expenses incurred by [herein respondent Bandiola] is REDUCED to P7,742.50 instead of the P12,742.50 which was granted by the NLRC.
Hence, the present petition, in which the following issues were raised[18]:



The petition is without merit.

Contrary to the arguments put forward by U-BIX, it is liable to reimburse Bandiola the amount of P7,742.50 for medical expenses because its failure to comply with its duty to record and report Bandiola's injury to the SSS precluded Bandiola from making any claims. Moreover, U-BIX, by its own admission, reimbursed its other employees who were involved in the same accident for their medical expenses.[19] Clearly, the reimbursement of medical expenses for injuries incurred in the course of employment is part of the benefits enjoyed by U-BIX's employees. The only justification for its refusal to reimburse Bandiola was that he intended to defraud the company by presenting spurious receipts amounting to P7,742.50 that were allegedly issued four months before their presentation.

Articles 205 and 206 of the Labor Code set the reportorial requirements in cases when an employee falls sick or suffers an injury arising in the course of employment. An injury is said to arise "in the course of employment" when it takes place within the period of employment, at a place where the employee may reasonably be, and while he is fulfilling his duties or is engaged in doing something incidental thereto.[20] The aforecited provisions of the Labor Code provide that:

(a) All employers shall keep a logbook to record chronologically the sickness, injury or death of their employees, setting forth therein their names, dates and places of the contingency, nature of the contingency and absences. Entries in the logbook shall be made within five days from notice or knowledge of the occurrence of contingency. Within five days after entry in the logbook, the employer shall report to the System only those contingencies he deems to be work-connected.

(b) All entries in the employers logbook shall be made by the employer or any of his authorized official after verification of the contingencies or the employees absences for a period of a day or more. Upon request by the System, the employer shall furnish the necessary certificate regarding information about any contingency appearing in the logbook, citing the entry number, page number and date. Such logbook shall be made available for inspection to the duly authorized representatives of the System.

x x x x


Notice of sickness, injury or death shall be given to the employer by the employee or by his dependents or anybody on his behalf within five days from the occurrence of the contingency. No notice to the employer shall be required if the contingency is known to the employer or his agents or representatives.
As a general rule, the injured employee must notify his employer, who is obligated to enter the notice in a logbook within five days after notification. Within five days after making the entry, the employer of a private company reports the work-related sickness or injury to the SSS. The claim is forwarded to the SSS, which decides on the validity of the claim. When the SSS denies the claim, the denial may be appealed to the Employees' Compensation Commission (ECC) within 30 days.

However, the law provides an exception to the rule requiring an employee to notify his or her employer of his injuries. Under Section B of ECC Board Resolution No. 2127, issued on 5 August 1982, notice of injury, sickness or death of the employee need not be given to the employer in any of the following situations:
(1) When the employee suffers the contingency within the employer's premises;

(2) When the employee officially files an application for leave of absence by reason of the contingency from which he suffers;

(3) When the employer provides medical services and/or medical supplies to the employee who suffers from the contingency; and
(4) When the employer can be reasonably presumed to have had knowledge of the employee's contingency, in view of the following circumstances:

(4.1) The employee was performing an official function for the employer when the contingency occurred;

(4.2) The employee's contingency has been publicized through mass media outlets; or

(4.3) The specific circumstances of the occurrence of the contingency have been such that the employer can be reasonably presumed to have readily known it soon thereafter; or

(4.4) Any other circumstances that may give rise to a reasonable presumption that the employer has been aware of the contingency.
In the present case, there is no dispute that Bandiola's leg injury was sustained in the course of his employment with U-BIX. At the time of the accident, Bandiola was on the way to Baguio, where he was ordered by U-BIX to install furniture for an exhibit. Moreover, U-BIX was aware that Bandiola, as well as his other co-employees, were injured during the accident. U-BIX admitted to providing Bandiola and his co-employees with medical assistance and it even sent its representative, Rey Reynes, to Rosario District Hospital, where they were confined, and had them transferred to the Orthopedic. U-BIX was also aware that the Orthopedic instructed Bandiola to return for further medical treatment. It is implicit that Bandiola needed further treatment for his broken leg and was, thus, incapacitated to work.

Given the foregoing circumstances, U-BIX had the legal obligation to record pertinent information in connection with the injuries sustained by Bandiola in its logbook within five days after it had known about the injuries; and to report the same to the SSS within five days after it was recorded in the logbook, in accordance with Articles 205 and 206 of the Labor Code. Had U-BIX performed its lawful duties, the SSS, or the ECC on appeal, could have properly considered whether or not Bandiola was entitled to reimbursement for his medical expenses, as well as disability benefits while he was unable to work. However, U-BIX did not present any evidence showing that it had complied with these legal requirements. It had not even replied to Bandiola's allegations in his Position Paper, dated 13 April 1998, that its employees were not even members of the SSS.[21]

As early as 1938, this Court emphasized, in the case of Murillo v. Mendoza,[22] that labor laws have demonstrated an impetus towards ensuring that employees are compensated for work-related injuries. The law has since treated such compensation as a right, which the employees can claim, instead of an act of charity to be given at the employer's discretion.
The intention of the Legislature in enacting the Workmen's Compensation Act was to secure workmen and their dependents against becoming objects of charity, by making a reasonable compensation for such accidental calamities as are incidental to the employment. Under such act injuries to workmen and employees are to be considered no longer as results of fault or negligence, but as the products of the industry in which the employee is concerned. Compensation for such injuries is, under the theory of such statute, like any other item in the cost of production or transportation, and ultimately charged to the consumer. The law substitutes for liability for negligence an entirely new conception; that is, that if the injury arises out of and in the course of the employment, under the doctrine of man's humanity to man, the cost of compensation must be one of the elements to be liquidated and balanced in the course of consumption. In other words, the theory of law is that, if the industry produces an injury, the cost of that injury shall be included in the cost of the product of the industry.
In De Jesus v. Employee's Compensation Commission,[23] this Court further noted that while the present law protects employers from spurious and long overdue claims, it stresses at the same time that the claims for compensation are to be promptly and properly addressed. More importantly, employers no longer need to determine the validity of a claim or to defend themselves from spurious claims. Their duties are thus limited to paying the monthly premiums and reporting the sickness, injury or death for which compensation is due.
The new law establishes a state insurance fund built up by the contributions of employers based on the salaries of their employees. The injured worker does not have to litigate his right to compensation. No employer opposes his claim. There is no notice of injury nor requirement of controversion. The sick worker simply files a claim with a new neutral Employees' Compensation Commission which then determines on the basis of the employee's supporting papers and medical evidence whether or not compensation may be paid. The payment of benefits is more prompt. The cost of administration is low. The amount of death benefits has also been doubled.

On the other hand, the employer's duty is only to pay the regular monthly premiums to the scheme. It does not look for insurance companies to meet sudden demands for compensation payments or set up its own funds to meet these contingencies. It does not have to defend itself from spuriously documented or long past claims.

The new law applies the social security principle in the handling of workmen's compensation. The Commission administers and settles claims from a fund under its exclusive control. The employer does not intervene in the compensation process and it has no control, as in the past, over payment of benefits. x x x.

Since there is no employer opposing or fighting a claim for compensation, the rules on presumption of compensability and controversion cease to have importance. The lopsided situation of an employer versus one employee, which called for equalization through the various rules and concepts favoring the claimant, is now absent.
By failing to report Bandiola's injury to the SSS, U-BIX disregarded the law and its purpose; that is, to provide a proper and prompt settlement of his claims. Instead, U-BIX arrogated upon itself the duty of determining which medical expenses are proper for reimbursement. In doing so, it could unnecessarily delay and unjustifiably refuse to reimburse Bandiola for medical expenses even if they were adequately supported by receipts, as was done in this instance. The expense and delay undergone by Bandiola since 1997 in obtaining reimbursement for his medical expenses of P7,742.50 very clearly defeat the purpose of the law.

U-BIX does not question its liability to pay for medical expenses incurred in connection with the 13 April 1997 accident; it admits that it paid for all the medical expenses of its other employees, who were involved in the accident.[24] It refused, however, to reimburse Bandiola for further medical expenses on the ground that the receipts were counterfeit and belatedly presented to U-BIX.

Bandiola presented eight receipts with a total amount of P7,742.50 issued by MCP and his attending physician, Dr. Celestino Musngi. The amounts indicated therein range from P200.00 to P2,936.00. The receipts were issued on 24 April 1997 and 6 May 1997, or around the time the accident occurred on 13 April 1997. From the face of the receipts, there is no showing that these documents are false or falsified. U-BIX could have easily confirmed with MCP or Dr. Celestino Musngi, who issued said receipts, the authenticity of the documents. However, it failed to allege that it took any steps to check the authenticity of the receipts. It also failed to present any evidence that these receipts are fake. Absent any proof, no weight can be attached to the allegation that the receipts are spurious.

The party who alleges the fact has the burden of proving it. The burden of proof is assigned to the defendant of a claim when he or she alleges an affirmative defense, which is not a denial of an essential ingredient in the complainant's cause of action - the existence of the receipts, in the present case - but is one which, if established, will be a good defense, i.e., an avoidance of the claim.[25] One who alleges an affirmative defense that is denied by the complainant - the falsity of the receipts, in this case - has the burden of proving it. Unless the party asserting the affirmative of an issue sustains the burden of proof, his or her cause will not succeed. If he or she fails to establish the facts of which the matter asserted is predicated, the complainant is entitled to a verdict or decision in his or her favor. [26] In this case, U-BIX's affirmative defense that the receipts are spurious is rejected due to utter lack of proof.

U-BIX asserts that no demand was made by the petitioner and that it only came to know of Bandiola's medical expenses when it received the Summons to attend a preliminary conference before the Labor Arbiter. For his part, Bandiola insists that before filing the case with the NLRC, he approached U-BIX three times for financial assistance in connection with his medical expenses, but he was refused. Bandiola identified the persons he spoke to as Rey Reynes and a certain Ms. Clarisse.[27] U-BIX alleges that it sent Rey Reynes to look for Bandiola in the address recorded in their office files, but that he no longer resided therein.[28] Bandiola contested this allegation by stating that he had not changed his residence.[29] As of 20 September 2006, Bandiola still resided at the same address, Sampaloc Site II-B, Barangay B.F. Homes, Paranaque City, as evidenced by the Certificate of Indigency issued by Barangay BF Homes Chairperson Florencia N. Amurao.[30]

U-BIX maintains that Bandiola kept the company in the dark regarding his medical expenses because he intended to file a baseless suit aimed at extorting money from the company. This Court finds it implausible that a worker who received less than minimum wage[31] would choose to initiate legal proceedings before even seeking to collect from his employer. To automatically presume that Bandiola intended to defraud the company despite the absence of supporting evidence would constitute a hasty and unsubstantiated generalization, which displays a prejudice against ordinary workers, such as Bandiola.

U-BIX's continued and stubborn refusal to reimburse Bandiola's medical expenses was made evident during the mandatory conference before the Labor Arbiter when it refused to recognize the receipts shown to it. If U-BIX had refused to take cognizance of the receipts presented during a quasi-judicial proceeding before a public officer, then it would have been more likely that it ignored, if not flat-out refused, to consider the said receipts when the same were presented by a lowly employee.

Under the facts of the case, Bandiola is entitled to moral and exemplary damages. There is no question that moral damages may be awarded in cases when a wrongful act or omission has caused the complainant mental anguish, fright and serious anxiety.[32] Articles 2217 and 2219, in connection with Article 21 of the Civil Code, read:
Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act for omission.

Art. 2219. Moral damages may be recovered in the following and analogous cases:

x x x x

(10)Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.
U-BIX failed to perform its legal obligation to report to the SSS the injuries suffered by Bandiola, and, thereafter, failed to extend the same "financial aid" it extended to other employees who were involved in the same accident. After it was shown the receipts for the medical expenses Bandiola paid for in connection with the injuries, U-BIX unreasonably refused to reimburse him for the expenses. It is not difficult to accept Bandiola's claim that he suffered mental anguish, serious anxiety and fright when U-BIX left him without any options for financial support while he was suffering from and rendered incapacitated by work-related injuries. He was severely distressed by his plight that he felt that he could no longer continue to work for U-BIX. U-BIX's unjustified and continued refusal to reimburse Bandiola after it failed to report his injury to the SSS, despite the receipts he presented, demonstrates bad faith. By singling out Bandiola from its other employees, who were reimbursed for their medical expenses, and forcing him to litigate for ten years in order to claim the unsubstantial amount of P7,742.50, U-BIX was clearly indulging in malicious conduct.

As regards the award of moral damages, this Court has ruled that there is no hard and fast rule in determining the fair amount for moral damages, since each case must be governed by its own peculiar circumstances.[33] It should enable the injured parties to obtain means, diversions or amusements that will serve to alleviate the moral sufferings the injured party has undergone by reason of defendant's culpable action. In other words, the award of moral damages is aimed at a restoration within the limits of the possible, of the spiritual and/or psychological status quo ante; and therefore it must be proportionate to the suffering inflicted. Therefore, in light of the sufferings sustained by Bandiola, this Court sustains the award of P25,000.00 as moral damages.

Article 2229 of the Civil Code provides that exemplary damages may be imposed by way of example or correction for public good.[34] It reads:
Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.
Exemplary damages are designed to permit the courts to mould behavior that has socially deleterious consequences, and their imposition is required by public policy to suppress the wanton acts of the offender.[35]

The Labor Code provides for the medical expenses, as well as disability benefits of workers suffering from work-related injuries and recognizes such compensation as their right. Indeed, a system has been put in place for the prompt collection of the benefits, which are given by law to injured employees. All that U-BIX was required to do was to report the injury; it need not have defended itself from what it perceived to be spurious claims. Instead, it took upon itself the duty of determining the validity of Bandiola's claims and unjustifiably refused to reimburse his properly receipted medical expenses. The prolonged litigation of his valid claims is not the only miserable situation which the present labor laws sought to prevent, but the pathetic situation wherein a laborer is placed at the mercy of his or her employer for recompense that is his or hers by right. Exemplary damages are, thus, rightfully imposed against U-BIX.

IN VIEW OF THE FOREGOING, the instant Petition is DENIED. This Court AFFIRMS the assailed Decision of the Court of Appeals, promulgated on 27 June 2002, finding U-BIX liable to Bandiola for P7,742.50 in actual damages, P25,000.00 for moral damages and P25,000.00 in exemplary damages. Costs against the petitioner.


Ynares-Santiago, (Chairperson), Austria-Martinez, and Nachura, JJ., concur.

[1] Penned by Associate Justice Eloy R. Bello, Jr. with Associate Justices Godardo A. Jacinto and Rebecca de Guia-Salvador, concurring. Rollo, pp. 36-40.

[2] Id. at 127-135.

[3] Id. at 36.

[4] Id. at 36-37.

[5] Id. at 60.

[6] Id. at 64-67.

[7] Id. at 68.

[8] CA rollo, pp. 98 and 121.

[9] Id. at 58.

[10] Rollo, p. 120.

[11] Id. at 98.

[12] Id. at 118-119.

[13] Rollo, p. 133.

[14] Id. at 134.

[15] Id. at 149.

[16] Id. at 38-39.

[17] Id. at 39-40.

[18] Id. at 17.

[19] Id. at 73 and 76.

[20] Iloilo Dock and Engineering Co. v. Workmen's Compensation Commission, 135 Phil. 95, 98, (1968).

[21] Rollo, p. 59.

[22] 66 Phil. 689, 700. (1938).

[23] 226 Phil. 33, 40-41 (1986).

[24] Rollo, p. 133.

[25] Republic v. Estate of Hans Menzi, G.R. No. 152578, 23 November 2005, 476 SCRA 20, 55-56; and Mavest (USA), Inc. v. Sampaguita Garment Corporation, G.R. No. 127454, 21 September 2005, 470 SCRA 440, 452.

[26] Aznar Brothers Realty Company v. Aying, G.R. No. 144773, 16 May 2005, 458 SCRA 496, 512.

[27] Rollo, pp. 116-117.

[28] Id. at 71.

[29] CA rollo, p. 97.

[30] Rollo, pp. 231-232.

[31] Id. at 119-120.

[32] Patricio v. Leviste, G.R. No. 51832, 26 April 1989, 172 SCRA 774, 780.

[33] Roque v. Torres, G.R. No. 157632, 6 December 2006.

[34] Makabali v. Court of Appeals, G.R. No. L-46877, 22 January 1988, 157 SCRA 253, 259.

[35] Kierulf v. Court of Appeals, 336 Phil. 414, 428 (1997).

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