Carmelita Lledo vs. Atty. Cesar V.

Lledo, Branch Clerk of Court, Regional Trial Court, Branch 94, Quezon
City
Date: February 9, 2010

Facts:

Cesar V. Lledo, the former Branch Clerk of Court at the Regional Trial Court of Quezon City, faced serious
allegations brought forth by his wife, Carmelita Lledo, which included charges of immorality,
abandonment, and conduct unbecoming a public official. The administrative case was initiated after it
was discovered that Cesar had abandoned his family to cohabit with another woman, with whom he had
fathered children, and had neglected to provide financial support to his estranged family.

After thorough investigation and deliberation, the Office of the Court Administrator recommended
Cesar's dismissal from service. On December 21, 1998, the Supreme Court issued a decision affirming
the recommendation, dismissing him from his position with the forfeiture of all retirement benefits and
leave credits, along with a perpetual disqualification from reemployment in any government capacity.

Following the dismissal, on January 15, 1999, Carmelita and their children appealed to then Chief Justice
Hilario G. Davide, Jr., seeking consideration for the financial hardships they were facing due to Cesar's
abandonment. They requested that part of Cesar's forfeited retirement benefits be used to settle their
housing arrears with the Government Service Insurance System (GSIS) to prevent foreclosure on their
home of 26 years.

In response, the Office of the Court Administrator (OCA) recommended reconsideration regarding the
forfeiture of Cesar's leave credits, highlighting that these funds would be directed to Carmelita and her
children. However, the Court denied the motion for reconsideration due to a lack of merit.

Years later, on April 3, 2006, Cesar Jr., Cesar's son, reached out to the Court to inform them that his
father was suffering from severe health issues, including a stroke and renal failure. He emphasized the
financial burden of his father's medical expenses and requested a reconsideration of the forfeiture of
Cesar's accrued leave credits. The Court, acknowledging the motion, ultimately allowed for the return of
the leave credits to Cesar.

Cesar Jr. continued to advocate for his father, and on November 27, 2006, he requested judicial
clemency (Judicial clemency refers to the power of a court to grant leniency or pardon to a person who
has been penalized for misconduct, particularly in administrative cases involving judges or court
personnel. It allows the court to reduce or set aside the penalty, such as reinstating retirement benefits
or allowing reemployment in government service. Judicial clemency is granted in exceptional cases
where the person shows genuine remorse, has had an otherwise exemplary record, or when special
circumstances warrant such mercy.) regarding the refund of Cesar's personal contributions to the GSIS.
This prompted the Court to solicit comments from the GSIS regarding Cesar Jr.'s request for a refund of
the premiums that his father had contributed over the years.

However, the GSIS, in their response, stated that the refund of retirement premiums is generally not
permitted for employees who have been dismissed for cause with forfeiture of benefits. They cited the
actuarial foundations of the system, emphasizing that allowing refunds to those dismissed for cause
would undermine the financial integrity of the GSIS.
The Court examined the relevant laws governing the GSIS, including Commonwealth Act No. 186, which
established the GSIS, and subsequent amendments. It noted that while the later laws did not expressly
repeal earlier provisions concerning the treatment of dismissed employees, the implications and
interpretations of these laws needed careful consideration.

1. Commonwealth Act No. 186 (1936)

• Purpose: This law created the Government Service Insurance System (GSIS) to provide social
security and insurance benefits for government employees in the Philippines.

• Key Provisions:

o It replaced older pension systems, establishing a more unified scheme for government
workers.

o Section 9 specifies that if a member is dismissed for cause, their benefits are forfeited,
but they are entitled to half the cash or surrender value of their policy. In cases of
voluntary separation or other forms of separation, members are given options like cash
surrender, continuing the policy, or converting it into paid-up insurance.

• Impact: It formed the foundation of the social security benefits system for government
employees, particularly addressing what happens to benefits upon dismissal or separation from
service.

2. Republic Act No. 660 (1951)

• Purpose: This law amended Commonwealth Act No. 186, updating the GSIS system by adding
new provisions related to retirement insurance benefits and survivors’ benefits.

• Key Amendments:

o Expanded retirement benefits, providing members with a life annuity upon retirement,
based on their years of service and average monthly salary.

o Introduced additional options for annuity payments, including joint-life annuities for
employees and their beneficiaries.

o Section 11(d) specifically states that employees dismissed for cause or who voluntarily
separate are entitled only to their own premiums and voluntary deposits with interest,
amending the provisions in the original Commonwealth Act.

• Impact: It improved and clarified the entitlements of government employees, especially

3. Presidential Decree No. 1146 (1977)

• Purpose: Issued by then-President Ferdinand Marcos, this decree further expanded and
integrated the social security and insurance benefits for government employees, amending the
earlier GSIS law.
 • Key Provisions:

o It increased and broadened the benefits for government employees, including

o Section 4 states that a member continues to be a member even after separation from
service and is entitled to any benefits accrued before the separation, provided that the
terms of separation do not state otherwise.

• Impact: P.D. No. 1146 did not specifically address the issue of employees dismissed for cause
but reinforced the idea that members separated for reasons other than dismissal would still be
entitled to their accrued benefits.

4. Republic Act No. 8291 (1997)

• Purpose: Known as the "Revised Government Service Insurance Act of 1997," this law further
amended P.D. No. 1146 to enhance the benefits provided by GSIS.

• Key Amendments:

o It updated and expanded the coverage of GSIS benefits, covering retirement, separation,
disability, survivorship, and life insurance.

o Section 4 reiterated the provision that a member separated from service, whether
voluntarily or involuntarily, retains entitlement to benefits accrued up to that point.

o The repealing clause clarified that only provisions specifically inconsistent with the new
law would be considered repealed.

• Impact: Like P.D. No. 1146, R.A. No. 8291 did not explicitly repeal the earlier laws regarding
forfeiture for dismissed employees, meaning those provisions remained valid.

Summary of Interactions Between These Laws:

• Commonwealth Act No. 186 established the basic framework for GSIS, including the forfeiture
of benefits for employees dismissed for cause.

• R.A. No. 660 expanded on those benefits but retained the rule that dismissed employees only
get their own contributions.

• P.D. No. 1146 broadened the overall scope of GSIS benefits but did not alter the rules for
dismissal for cause.

• R.A. No. 8291 further improved GSIS coverage but, like its predecessors, did not change the
provisions related to employees dismissed for cause, which means earlier provisions (like those
from Commonwealth Act No. 186) remained in force.

These laws, while evolving over time, have consistently upheld the principle that employees dismissed
for cause do not receive full benefits, though they may still recover their own contributions with
interest.
Ultimately, the Court ruled that while dismissal indeed leads to the forfeiture of benefits, Cesar was still
entitled to a return of his personal contributions to the GSIS, arguing that these were his entitlements
made prior to dismissal, which should not be subject to forfeiture. The ruling emphasized the
importance of fair treatment of government employees and sought to prevent undue enrichment of the
GSIS at the expense of contributions made by employees.

Issue:

Whether a government employee dismissed from service for cause is entitled to recover personal
contributions paid to the Government Service Insurance System (GSIS).

Ruling:

The Supreme Court ruled that despite the forfeiture of Atty. Cesar Lledo’s retirement benefits due to his
dismissal, he was still entitled to a refund of his personal contributions to the GSIS. The Court
emphasized that the money paid as premiums were personal contributions made by the employee,
which should not be forfeited even after dismissal for cause. The Court also ruled that such
contributions should be returned with interest of 3% per annum, compounded monthly.

The ruling was based on the interpretation of various laws governing the GSIS, including Commonwealth
Act No. 186, Republic Act No. 660, Presidential Decree No. 1146, and Republic Act No. 8291. The Court
found no express or implied repeal of provisions entitling a dismissed employee to recover his personal
premiums. Moreover, it underscored that social legislation, like GSIS laws, should be liberally construed
in favor of the employee. Forfeiture of personal contributions, the Court said, would unjustly enrich the
GSIS.

Thus, the GSIS was ordered to return Atty. Cesar Lledo’s premiums and voluntary deposits, if any, with
the stipulated interest.

Connection to Presumption Against Implied Repeal:

In this case, the Supreme Court highlighted the principle of the presumption against implied repeal,
asserting that earlier laws governing GSIS contributions remained effective since the later statutes did
not explicitly repeal them. The ruling underscored that repeals by implication are generally disfavored
unless there is a clear legislative intent, which was not demonstrated in the amendments and
subsequent laws. The continuity of the original provisions regarding personal contributions supports the
presumption against implied repeal, maintaining the integrity of prior laws alongside newer statutes.