G.R. No. 57473 - San Miguel Corporation vs. National Labor Relations Commission

On May 1, 1974, the Labor Code introduced a new tax-exempt employees’ compensation program.
The new scheme provided prompt payment of income and medical benefits in cases of work-connected disability or death.
It was funded by mandatory monthly contributions from all covered employers.
The program was compulsory to all employers and employees not over 60 years of age.
Benefits under the new system were exclusive and substituted all other employer liabilities regarding work-related accidents.
The new system came with its adjudicative machinery having original and exclusive jurisdiction over related claims, except those under the Supreme Court's review.

Provisions in the Labor Code governed the transition from the old compensation program to the new one.
Actions or claims accrued prior to the effectivity of the Labor Code, as well as pending cases before the old agencies, were to be decided under the pre-existing laws and procedures.
Specific deadlines were set for filing such claims (e.g., filing with the Department of Labor regional offices by March 31, 1975) and for the termination of insurance policies or indemnity bonds by December 31, 1974.

Before the implementation of the new compensation program, San Miguel Corporation voluntarily provided its salesmen and helpers with benefits higher than those mandated by the older Workmen’s Compensation Act.
These benefits included the employee’s basic salary, average commission, one sack of rice per month, free hospitalization, and cost-of-living allowances.
The aggregate value of these benefits was higher than what was provided under the earlier mandated scheme.

Upon the effectivity of the new scheme, the petitioner registered with the Social Security System and began remitting the required 1% premium contributions to the State Insurance Fund.
To counter the adverse impact of reduced benefits under the new system, the San Miguel Sales Force Union (PTGWO) filed two complaints:

The first complaint with the Bureau of Labor Relations on January 3, 1978, sought to compel the petitioner to pay the difference between its previous benefits and those provided under the new law.
A second complaint was filed with the Labor Arbiter concerning non-compliance with PD 851, underpayment of premiums for work on rest days and holidays, and underpayment of wages under PD 928.

The union also sought to include employees from additional offices in Valenzuela, Bulacan, and Muntinlupa in the bargaining unit.
After unsuccessful conciliation, the parties consented to consolidate the cases and submit them for compulsory arbitration.

The Labor Arbiter rendered a decision on July 14, 1978, sustaining the union’s claims, particularly finding the petitioner under obligation to pay the difference between what the State Insurance Fund compensated and the higher previous benefits.
On January 7, 1981, the National Labor Relations Commission (NLRC) upheld the Labor Arbiter’s decision, enforcing the petitioner’s continued liability under the pre-Code compensation scheme.
The petitioner raised a special civil action of certiorari and declaratory relief in the Court of Appeals, challenging the NLRC ruling.
The petitioner contended that once the new Labor Code took effect, the voluntarily assumed obligation to pay additional compensation should have ceased.
The case also involved a significant jurisdictional issue:

The union’s litigation before the Bureau of Labor Relations and the Labor Arbiter was argued to be outside their jurisdiction as workmen’s compensation claims were exclusively under the Social Security System’s original jurisdiction pursuant to Article 180 of the Labor Code.
The issue thus encompassed whether claims for work-related disability benefits should be adjudicated under the new mandatory system or continue under the old, voluntarily granted practices.

Whether the NLRC ruling that bound San Miguel Corporation to its pre-Labor Code practice for work-connected disability benefits is valid.

Does the new Labor Code extinguish the petitioner’s prior voluntary obligation to pay additional benefits beyond what is provided by the law?
Is the claim for the difference between the old compensation benefits and the new statutory benefits properly within the exclusive jurisdiction of the Social Security System?
Can an employee claim vested rights to a higher compensation benefit if the illness or injury occurred after the new system took effect?