Republic v. Asiapro Cooperative (G.R. No.

172101)
Facts:
Respondent Asiapro Cooperative is composed of owners-members with primary
objectives of providing them savings and credit facilities and livelihood services. In
discharge of said objectives, Asiapro entered into several service contracts with Stanfilco.
Sometime later, the cooperative owners-members requested Stanfilco’s help in
registering them with SSS and remitting their contributions. Petitioner SSS informed
Asiapro that being actually a manpower contractor supplying employees to Stanfilco, it
must be the one to register itself with SSS as an employer and remit the contributions.
Respondent continuously ignoring the demand of SSS the latter filed before the SSC.
Asiapro alleges that there exists no employer-employee relationship between it and its
owners-members. SSC ruled in favor of SSS. On appeal, CA reversed the decision.

Issue:

Whether or not there is employer-employee relationship between Asiapro and its owners-
members.

Ruling: YES.

In determining the existence of an employer-employee relationship, the following

elements are considered: (1) the selection and engagement of the workers; (2) the
payment of wages by whatever means; (3) the power of dismissal; and (4) the power to
control the worker‘s conduct, with the latter assuming primacy in the overall consideration.
All the aforesaid elements are present in this case.

First. It is expressly provided in the Service Contracts that it is the respondent cooperative
which has the exclusive discretion in the selection and engagement of the owners-
members as well as its team leaders who will be assigned at Stanfilco.

Second. It cannot be doubted then that those stipends or shares in the service surplus
are indeed wages, because these are given to the owners-members as compensation in
rendering services to respondent cooperative‘s client, Stanfilco.
Third. It is also stated in the above-mentioned Service Contracts that it is the respondent
cooperative which has the power to investigate, discipline and remove the owners-
members and its team leaders who were rendering services at Stanfilco.

Fourth. In the case at bar, it is the respondent cooperative which has the sole control over
the manner and means of performing the services under the Service Contracts with
Stanfilco as well as the means and methods of work. Also, the respondent cooperative is
solely and entirely responsible for its owners-members, team leaders and other
representatives at Stanfilco. All these clearly prove that, indeed, there is an employer-
employee relationship between the respondent cooperative and its owners-members.

Manila Golf & Country Club v. IAC and Fermin Llamar (G.R. No. 64948)
Facts:
Respondent Fermin Llamar and his fellow caddies filed with the Social Security
Commission for coverage and availment of benefits under the Social Security Act.
Subsequently, all but 2 of the original 17 petitioners withdrew their claim for social security
coverage. The case continued and was adjudicated by the SSC only as regards the 2
holdouts dismissing their petition and stating that the caddies were never employees of
petitioner. An appeal was taken to the IAC but the other caddy’s appeal was dismissed
at his instance, leaving respondent Llamar the lone appellant. The IAC found for Llamar
finding employer-employee relationship between him and petitioner.

Issue:
Whether or not respondent Llamar is an employee of petitioner.

Ruling: NO.
The various matters of conduct, dress, language, etc. covered by the petitioner’s
regulations, does not, in the mind of the Court, so circumscribe the actions or judgment
of the caddies concerned as to leave them little or no freedom of choice whatsoever in
the manner of carrying out their services.

The Court agrees with petitioner that the group rotation system so-called, is less a
measure of employer control than an assurance that the work is fairly distributed, a caddy
who is absent when his turn number is called simply losing his turn to serve and being
assigned instead the last number for the day.
In the final analysis, petitioner has no way of compelling the presence of the caddies as
they are not required to render a definite number of hours of work on a single day. Even
the group rotation of caddies is not absolute because a player is at liberty to choose a
caddy of his preference regardless of the caddy’s order in the rotation. It can happen that
a caddy who has rendered services to a player on one day may still find sufficient time to
work elsewhere. Under such circumstances, he may then leave the premises of petitioner
and go to such other place of work that he wishes. Or a caddy who is on call for a particular
day may deliberately absent himself if he has more profitable caddying, or another,
engagement in some other place. These are things beyond petitioner’s control and for
which it imposes no direct sanctions on the caddies.

G.R. No. 100388 December 14, 2000

SOCIAL SECURITY SYSTEM, petitioner,

vs.
THE COURT OF APPEALS and CONCHITA AYALDE, respondents.

DECISION

YNARES-SANTIAGO, J.:

In a petition before the Social Security Commission, Margarita Tana, widow of the late
Ignacio Tana, Sr., alleged that her husband was, before his demise, an employee of
Conchita Ayalde as a farmhand in the two (2) sugarcane plantations she owned (known
as Hda. No. Audit B-70 located in Pontevedra, La Carlota City) and leased from the
University of the Philippines (known as Hda. Audit B-15-M situated in La Granja, La
Carlota City). She further alleged that Tana worked continuously six (6) days a week, four
(4) weeks a month, and for twelve (12) months every year between January 1961 to April
1979. For his labor, Tana allegedly received a regular salary according to the minimum
wage prevailing at the time. She further alleged that throughout the given period, social
security contributions, as well as medicare and employees compensation premiums were
deducted from Tana’s wages. It was only after his death that Margarita discovered that
Tana was never reported for coverage, nor were his contributions/premiums remitted to
the Social Security System (SSS). Consequently, she was deprived of the burial grant
and pension benefits accruing to the heirs of Tana had he been reported for coverage.
Hence, she prayed that the Commission issue an order directing:

1. respondents Conchita Ayalde and Antero Maghari as her administrator to pay the
premium contributions of the deceased Ignacio Tana, Sr. and report his name for SSS
coverage; and

2. the SSS to grant petitioner Margarita Tana the funeral and pension benefits due her.1

The SSS, in a petition-in-intervention, revealed that neither Hda. B-70 nor respondents
Ayalde and Maghari were registered members-employers of the SSS, and consequently,
Ignacio Tana, Sr. was never registered as a member-employee. Likewise, SSS records
reflected that there was no way of verifying whether the alleged premium contributions
were remitted since the respondents were not registered members-employers. Being the
agency charged with the implementation and enforcement of the provisions of the Social
Security Law, as amended, the SSS asked the Commission’s leave to intervene in the
case.2

In his answer, respondent Antero Maghari raised the defense that he was a mere
employee who was hired as an overseer of Hda. B-70 sometime during crop years 1964-
65 to 1971-72, and as such, his job was limited to those defined for him by the employer
which never involved matters relating to the SSS. Hence, he prayed that the case against
him be dismissed for lack of cause of action.3

For her part, respondent Ayalde belied the allegation that Ignacio Tana, Sr. was her
employee, admitting only that he was hired intermittently as an independent contractor to
plow, harrow, or burrow Hda. No. Audit B-15-M. Tana used his own carabao and other
implements, and he followed his own schedule of work hours. Ayalde further alleged that
she never exercised control over the manner by which Tana performed his work as an
independent contractor. Moreover, Ayalde averred that way back in 1971, the University
of the Philippines had already terminated the lease over Hda. B-15-M and she had since
surrendered possession thereof to the University of the Philippines. Consequently,
Ignacio Tana, Sr. was no longer hired to work thereon starting in crop year 1971-72, while
he was never contracted to work in Hda. No. Audit B-70. She also prayed for the dismissal
of the case considering that Ignacio Tana, Sr. was never her employee.4
After hearing both parties, the Social Security Commission issued a Resolution on
January 28, 1988, the dispositive portion of which reads:

After a careful evaluation of the testimonies of the petitioner and her witnesses, as well
as the testimony of the respondent together with her documentary evidences, this
Commission finds that the late Ignacio Tana was employed by respondent Conchita
Ayalde from January 1961 to March 1979. The testimony of the petitioner which was
corroborated by Agaton Libawas and Aurelio Tana, co-workers of the deceased Ignacio
Tana, sufficienty established the latter’s employment with the respondent.

As regards respondent Antero Maghari, he is absolved from liability because he is a mere

employee of Conchita Ayalde.

PREMISES CONSIDERED, this Commission finds and so holds that the late Ignacio
Tana had been employed continuously from January 1961 to March 1979 in Hda. B-70
and Hda. B-15-M which are owned and leased, respectively, by respondent Conchita
(Concepcion) Ayalde with a salary based on the Minimum Wage prevailing during his
employment.

Not having reported the petitioner’s husband for coverage with the SSS, respondent
Conchita (Concepcion) Ayalde is, therefore, liable for the payment of damages equivalent
to the death benefits in the amount of P7,067.40 plus the amount of P750.00 representing
funeral benefit or a total of P7,817.40.

Further, the SSS is ordered to pay to the petitioner her accrued pension covering the
period after the 5-year guaranteed period corresponding to the employer’s liability.

SO ORDERED."5

Respondent Ayalde filed a motion for reconsideration6 which the Commission denied for
lack of merit in an Order dated November 3, 1988.7

Not satisfied with the Commission’s ruling, Ayalde appealed to the Court of Appeals,
docketed as CA-G.R. SP No. 16427, raising the following assignment of errors:
I

The Social Security Commission erred in not finding that there is sufficient evidence to
show that:

(a) The deceased Ignacio Tana, Sr. never worked in the farmland of respondent-appellant
situated in Pontevedra, La Carlota City, otherwise known as Hacienda No. Audit B-70,
(Pontevedra B-70 Farm for short), in any capacity, whether as a daily or monthly laborer
or as independent contractor;

(b) During the time that respondent-appellant was leasing a portion of the land of the
University of the Philippines, otherwise known as Hacienda Audit No. B-15-M, (La Granja
B-15 Farm for short), the deceased Ignacio Tana, Sr. was hired thereat on a ‘pakyaw’
basis, or as an independent contractor, performing the services of an ‘arador’ (Plower),
for which he was proficient, using his own carabao and farming implements on his own
time and discretion within the period demanded by the nature of the job contracted.

II

The Social Security Commission erred in holding that there is no evidence whatsoever to
show that respondent-appellant was no longer leasing La Granja B-15 Farm.

III

The Social Security Commission erred in not holding that the deceased Ignacio Tana,
having been hired as an independent contractor on ‘pakyaw’ basis, did not fall within the
coverage of the Social Security Law.8

The Court of Appeals rendered judgment in favor of respondent-appellant Conchita

Ayalde and dismissed the claim of petitioner Margarita Tan.
The SSS, as intervenor-appellee, filed a Motion for Reconsideration, which was denied
on the ground that the arguments advanced are "mere reiterations of issues and
arguments already considered and passed upon in the decision in question which are
utterly insufficient to justify a modification or reversal of said decision."9

Hence, this petition for review on certiorari on the following assigned errors:

1) The Court of Appeals was in error in ruling that an employee working under the
"pakyaw" system is considered under the law to be an independent contractor.

2) The Court of Appeals was in error in not giving due consideration to the fundamental
tenet that doubts in the interpretation and implementation of labor and social welfare laws
should be resolved in favor of labor.

3) The Court of Appeals was in error in disregarding the settled rule that the factual
findings of administrative bodies on matters within their competence shall not be disturbed
by the courts.

4) The Court of Appeals was in error in ruling that even granting arguendo that Ignacio
Tana was employed by Conchita Ayalde, such employment did not entitle him to
compulsory coverage since he was not paid any regular daily wage or basic pay and he
did not work for an uninterrupted period of at least six months in a year in accordance
with Section 8(j) (1) of the SS Law.

The pivotal issue to be resolved in this petition is whether or not an agricultural laborer
who was hired on "pakyaw" basis can be considered an employee entitled to compulsory
coverage and corresponding benefits under the Social Security Law.

Petitioner, Social Security System (or SSS), argues that the deceased Ignacio Tana, Sr.,
who was hired by Conchita Ayalde on "pakyaw" basis to perform specific tasks in her
sugarcane plantations, should be considered an employee; and as such, his heirs are
entitled to pension and burial benefits.
The Court of Appeals, however, ruled otherwise, reversing the ruling of the Social Security
Commission and declaring that the late Ignacio Tana, Sr. was an independent contractor,
and in the absence of an employer-employee relationship between Tana and Ayalde, the
latter cannot be compelled to pay to his heirs the burial and pension benefits under the
SS Law.

At the outset, we reiterate the well-settled doctrine that the existence of an employer-
employee relationship is ultimately a question of fact.10 And while it is the general rule
that factual issues are not within the province of the Supreme Court, said rule is not
without exception. In cases, such as this one, where there are conflicting and
contradictory findings of fact, this Court has not hesitated to scrutinize the records to
determine the facts for itself.11 Our disquisition of the facts shall be our guide as to whose
findings are supported by substantial evidence.

The mandatory coverage under the SSS Law (Republic Act No. 1161, as amended by
PD 1202 and PD 1636) is premised on the existence of an employer-employee
relationship, and Section 8(d) defines an "employee" as "any person who performs
services for an employer in which either or both mental and physical efforts are used and
who receives compensation for such services where there is an employer-employee
relationship." The essential elements of an employer-employee relationship are: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the power of control with regard to the means and methods by which
the work is to be accomplished, with the power of control being the most determinative
factor.12

There is no question that Tana was selected and his services engaged by either Ayalde
herself, or by Antero Maghari, her overseer. Corollarily, they also held the prerogative of
dismissing or terminating Tana’s employment. The dispute is in the question of payment
of wages. Claimant Margarita Tana and her corroborating witnesses testified that her
husband was paid daily wages "per quincena" as well as on "pakyaw" basis. Ayalde, on
the other hand, insists that Tana was paid solely on "pakyaw" basis. To support her claim,
she presented payrolls covering the period January of 1974 to January of 1976;13 and
November of 1978 to May of 1979.14

A careful perusal of the records readily show that the exhibits offered are not complete,
and are but a mere sampling of payrolls. While the names of the supposed laborers
appear therein, their signatures are nowhere to be found. And while they cover the years
1975, 1976 and portions of 1978 and 1979, they do not cover the 18-year period during
which Tana was supposed to have worked in Ayalde’s plantations. Also an admitted fact
is that these exhibits only cover Hda. B70, Ayalde having averred that all her records and
payrolls for the other plantation (Hda. B-15-M) were either destroyed or lost.15

To our mind, these documents are not only sadly lacking, they are also unworthy of
credence. The fact that Tana’s name does not appear in the payrolls for the years 1975,
1976 and part of 1978 and 1979, is no proof that he did not work in Hda. B70 in the years
1961 to 1974, and the rest of 1978 and 1979. The veracity of the alleged documents as
payrolls are doubtful considering that the laborers named therein never affixed their
signatures to show that they actually received the amounts indicated corresponding to
their names. Moreover, no record was shown pertaining to Hda. B-15-M, where Tana was
supposed to have worked. Even Ayalde admitted that she hired Tana as "arador" and
sometimes as laborer during milling in Hda. B-15-M.16 In light of her incomplete
documentary evidence, Ayalde’s denial that Tana was her employee in Hda. B-70 or Hda.
B-15-M must fail.

In contrast to Ayalde’s evidence, or lack thereof, is Margarita Tana’s positive testimony,

corroborated by two (2) other witnesses. On the matter of wages, they testified as follows:

Margarita Tana:

Q. During the employment of your late husband, was he paid any wages?

A. Yes, he was paid.

Q. What was the manner of payment of his salary, was it on "pakyaw" or daily basis?

A. Daily basis.

Q. How many times did he receive his salary in a month’s time?

A. 2 times.
Q. You mean, payday in Hda. B-70 is every 15 days?

A. Yes, sir.

xxx xxx xxx

ATTY. GALVAN:

To prove that it is material to the main question because if ever the hacienda maintains
complete payrolls of their employees, then the burden of proof lies in the petitioner…..

HEARING OFFICER:

Let the witness answer, if she knows.

WITNESS:

There was no payroll, only pad paper.

ATTY. GALVAN: (continuing)

Q. Were the names of workers of the hacienda all listed in that pad paper every payday?

A. Yes, we just sign on pad paper because we have no payroll to be signed.

xxx xxx xxx

Q. What do you understand by payroll?

A. Payroll is the list where the whole laborers are listed and receive their salaries.

Q. And how did that differ from the pad paper which you said you signed?

A. There is a difference.

Q. What is the difference?

A. In the payroll, at the end there is a column for signature but in the pad paper, we only
sign directly.

Q. Did it contain the amount that you receive?

A. Yes, sir.

Q. And the date corresponding to the payroll pad?

A. I am not sure but it only enumerates our names and then we were given our salaries.

Q. Now, did you have a copy of that?

ATTY. GALVAN:

Objection, Your Honor, it is not the petitioner who had a copy, it is usually the owner
because the preparation of the payrolls is done by the employer who…..

ATTY. UNGCO:

That is why I’m asking …..

HEARING OFFICER:

Let the witness answer. Objection overruled.

WITNESS:

I don’t have.

xxx xxx xxx

Q. When you are receiving daily wage of P4.00 how much was your quincenal together
with your husband?

A. The highest salary I received for my own was P30.00 in one quincena.

Q. What about the salary of your husband, how much?

A. The same.

Q. Was this P30.00 per quincena later on increased?

A. There was an increase because formerly it was P4.00 now it is P8.00.

Q. In 1979 how much was your husband’s salary per quincena?

A. In one quincena my husband receives P60.00 while I only receive P30.00.17

AGATON LIBAWAS:
Q. During your employment, do you sign payrolls everytime you draw your salary?

A. We sign on intermediate pad.

Q. You mean, the practice of the hacienda is to have the names of the laborers receiving
that salaries listed on that intermediate pad?

A. Yes, sir.18

AURELIO TANA:

Q. By the way, how many times did you receive your salaries in a month?

A. We receive our wages twice a month that is, every 15 days.

Q. Did you sign payrolls everytime you received your salaries?

A. In the pad paper as substitute payroll.

Q. Do you know if all the workers of the hacienda were listed in that payrolls?

A. Yes, sir.

Q. Who was in charge in giving your salaries?

A. Antero Maghari.19
These witnesses did not waver in their assertion that while Tana was hired by Ayalde as
an "arador" on "pakyaw" basis, he was also paid a daily wage which Ayalde’s overseer
disbursed every fifteen (15) days. It is also undisputed that they were made to
acknowledge receipt of their wages by signing on sheets of ruled paper, which are
different from those presented by Ayalde as documentary evidence. In fine, we find that
the testimonies of Margarita Tana, Agaton Libawas and Aurelio Tana prevail over the
incomplete and inconsistent documentary evidence of Ayalde.

In the parallel case of Opulencia Ice Plant and Storage v. NLRC, the petitioners argued
that since Manuel P. Esita’s name does not appear in the payrolls of the company it
necessarily means that he was not an employee. This Court held:

"Petitioners further argue that ‘complainant miserably failed to present any documentary
evidence to prove his employment. There was no timesheet, pay slip and/or payroll/cash
voucher to speak of. Absence of these material documents are necessarily fatal to
complainant’s cause.’

We do not agree. No particular form of evidence is required to prove the existence of an

employer-employee relationship. Any competent and relevant evidence to prove the
relationship may be admitted. For, if only documentary evidence would be required to
show that relationship, no scheming employer would ever be brought before the bar of
justice, as no employer would wish to come out with any trace of the illegality he has
authored considering that it should take much weightier proof to invalidate a written
instrument. Thus, as in this case where the employer-employee relationship between
petitioners and Esita was sufficiently proved by testimonial evidence, the absence of time
sheet, time record or payroll has become inconsequential."20 (Underscoring ours)

Clearly, then, the testimonial evidence of the claimant and her witnesses constitute
positive and credible evidence of the existence of an employer-employee relationship
between Tana and Ayalde. As the employer, the latter is duty-bound to keep faithful and
complete records of her business affairs, not the least of which would be the salaries of
the workers. And yet, the documents presented have been selective, few and incomplete
in substance and content. Consequently, Ayalde has failed to convince us that, indeed,
Tana was not her employee.

The argument is raised that Tana is an independenent contractor because he was hired
and paid wages on "pakyaw" basis. We find this assertion to be specious for several
reasons.
First, while Tana was sometimes hired as an "arador" or plower for intermittent periods,
he was hired to do other tasks in Ayalde’s plantations. Ayalde herself admitted as much,
although she minimized the extent of Tana’s labors. On the other hand, the claimant and
her witnesses were direct and firm in their testimonies, to wit:

MARGARITA TANA:

Q. Was your late husband’s work continuous or not?

A. His work was continuous except on Sundays.

Q. Mrs. Witness, in January 1961, how many days in a week did your late husband work?

A. 4 weeks in January 1961.

Q. And how many months for that year did he work?

A. 12 months.

Q. Is this working pattern of your husband, considering that you testified that he worked
continuously, the same all throughout his employment from 1961 to 1978?

A. Yes, he worked continuously from 1961 to 1978 for 6 days a week, 4 weeks a month
and 12 months each year.

Q. Mrs. Witness, how many months did your husband work in 1979 considering that he
died in 1979?

A. 3 months.
Q. What was the nature of the work of your late husband from 1961 until his death in
1979?

A. Cutting canes, hauling canes with the use of canecarts, plowing, hauling fertilizers,
weeding and stubble cleaning.

xxx xxx xxx

Q. Now, the other co-workers of yours, you said they were Agaton Libawas, Narciso
Dueñas, Juan Dueñas, and Aurelio Tana, what were their jobs?

A. Hauling canes by the use of bull carts and cutting canes. Their works are the same
with that of my husband’s.

Q. But you mentioned among the duties of your husband as "arador" meaning – plowing
the fields?

A. Yes, he was also plowing because that is one of his duties.21

AGATON LIBAWAS:

Q. How about petitioner Margarita Tana and the late Ignacio Tana, were they regular
workers, or extra workers?

A. They were regular workers.

Q. In your case, Mr. Witness, considering that according to you, you are only a relief
worker, please inform the Commission how many months each year from 1961 to 1984
did you work in Hda. B-70 and Hda. B-15M with Conchita Ayalde?
A. During milling season, I worked 2 months, during cultivation if they are short of plowers
then they would call me to work for at least 3 months as a plower.

Q. So, all in all, each year, from 1961 to 1984 your average working months in Hda. B-70
and B-15M are 5 months each year?

A. Yes, sir.

Q. Mr. Witness, to prove that you have worked there, will you please inform at least 5
laborers of Hda. B-70 and B-15M of Conchita Ayalde?

A. Juan Dueñas, Narciso Dueñas, Aurelio Tana, Ignacio and Margarita Tana.

xxx xxx xxx

Q. Will you please inform the Commission if the deceased Ignacio Tana which is
according to you, was a regular worker of the 2 haciendas, if how many months did he
work during lifetime from 1961 until he died in 1979?

A. His work was continuous.

Q. And by continuous you mean he worked straight 12 months each year except in 1979?

A. He worked only for 10 months because the 2 months are already preparation for
cultivation.

xxx xxx xxx

Q. And according to you, in a year’s time, you worked only for at least 5 months in Hda.
B-70 and B-15M, is that correct?
A. Yes.

Q. And during this time that you are working in your riceland you will agree with me that
you do not know whether the laborers of this Hda. B-70 and Had B-15M are really working
because you are devoting your time in your riceland, is that correct?

A. I knew because the place of their work is just near my house, it is along the way.

Q. How about when the canes are already tall, can you actually see the workers in Hda.
B-70 and B-15M when you are busy at your riceland?

A. Yes, because they have to pass in my house.

Q. Is there no other passage in that hacienda except that road in front of your house?

A. Yes.

Q. Are you sure about that?

A. Yes, I am sure.22

AURELIO TANA:

Q. Do you know what is the work of the petitioner during the time when you were together
working in the field?

A. We were working together, like cutting and loading canes, hoeing, weeding, applying
fertilizers, digging canals and plowing.

Q. During your employment in the said hacienda where were you residing?
A. There inside the hacienda.

Q. What about the petitioner?

A. The same.

Q. How far is your house from the house of the petitioner?

A. About 20 arms-length.

Q. How far is Hda. B-70 from Hda. B-15.

A. It is very near it is divided by the road.

Q. What road are you referring to?

A. Highway road from Barangay Buenavista to La Granja.

Q. During your employment will you please inform the Commission the frequency of work
of the late Ignacio Tana?

A. 4 weeks a month, 6 days a week, 12 months a year.

Q. Why is it that you are in a position to inform the Commission about the period of
employment of Ignacio Tana?

A. Because we were together working.23

It is indubitable, therefore, that Tana worked continuously for Ayalde, not only as "arador"
on "pakyaw" basis, but as a regular farmhand, doing backbreaking jobs for Ayalde’s
business. There is no shred of evidence to show that Tana was only a seasonal worker,
much less a migrant worker. All witnesses, including Ayalde herself, testified that Tana
and his family resided in the plantation. If he was a mere "pakyaw" worker or independent
contractor, then there would be no reason for Ayalde to allow them to live inside her
property for free. The only logical explanation is that he was working for most part of the
year exclusively for Ayalde, in return for which the latter gratuitously allowed Tana and
his family to reside in her property.

The Court of Appeals, in finding for Ayalde, relied on the claimant’s and her witnesses’
admission that her husband was hired as an "arador" on "pakyaw" basis, but it failed to
appreciate the rest of their testimonies. Just because he was, for short periods of time,
hired on "pakyaw" basis does not necessarily mean that he was not employed to do other
tasks for the remainder of the year. Even Ayalde admitted that Tana did other jobs when
he was not hired to plow. Consequently, the conclusion culled from their testimonies to
the effect that Tana was mainly and solely an "arador" was at best a selective appreciation
of portions of the entire evidence. It was the Social Security Commission that took into
consideration all the documentary and testimonial evidence on record.

Secondly, Ayalde made much ado of her claim that Tana could not be her employee
because she exercised no control over his work hours and method of performing his task
as "arador." It is also an admitted fact that Tana, Jr. used his own carabao and tools.
Thus, she contends that, applying the "control test," Tana was not an employee but an
independent contractor.

A closer scrutiny of the records, however, reveals that while Ayalde herself may not have
directly imposed on Tana the manner and methods to follow in performing his tasks, she
did exercise control through her overseer.

Be that as it may, the power of control refers merely to the existence of the power. It is
not essential for the employer to actually supervise the performance of duties of the
employee; it is sufficient that the former has a right to wield the power.24 Certainly,
Ayalde, on her own or through her overseer, wielded the power to hire or dismiss, to
check on the work, be it in progress or quality, of the laborers. As the owner/lessee of the
plantations, she possessed the power to control everyone working therein and everything
taking place therein.
Jurisprudence provides other equally important considerations which support the
conclusion that Tana was not an independent contractor. First, Tana cannot be said to be
engaged in a distinct occupation or business. His carabao and plow may be useful in his
livelihood, but he is not independently engaged in the business of farming or plowing.
Second, he had been working exclusively for Ayalde for eighteen (18) years prior to his
demise. Third, there is no dispute that Ayalde was in the business of growing sugarcane
in the two plantations for commercial purposes. There is also no question that plowing or
preparing the soil for planting is a major part of the regular business of Ayalde.

Under the circumstances, the relationship between Ayalde and Tana has more of the
attributes of employer-employee than that of an independent contractor hired to perform
a specific project. In the case of Dy Keh Beng v. International Labor,25 we cited our long-
standing ruling in Sunripe Coconut Products Co. v. Court of Industrial Relations, to wit:

"When a worker possesses some attributes of an employee and others of an independent

contractor, which make him fall within an intermediate area, he may be classified under
the category of an employee when the economic facts of the relations make it more nearly
one of employment than one of independent business enterprise with respect to the ends
sought to be accomplished." (Underscoring Ours)26

We find the above-quoted ruling to be applicable in the case of Tana. There is

preponderance of evidence to support the conclusion that he was an employee rather
than an independent contractor.

The Court of Appeals also erred when it ruled, on the alternative, that if ever Tana was
an employee, he was still ineligible for compulsory coverage because he was not paid
any regular daily wage and he did not work for an uninterrupted period of at least six
months in a year in accordance with Section 8(j) (I) of the Social Security Law. There is
substantial testimonial evidence to prove that Tana was paid a daily wage, and he worked
continuously for most part of the year, even while he was also occasionally called on to
plow the soil on a "pakyaw" basis. As a farm laborer who has worked exclusively for
Ayalde for eighteen (18) years, Tana should be entitled to compulsory coverage under
the Social Security Law, whether his service was continuous or broken.

Margarita Tana alleged that SSS premiums were deducted from Tana’s salary, testifying,
thus:
Q. Were there deductions from the salaries of your husband while he was employed with
the respondent from 1961 to 1979?

A. Yes, there were deductions but I do not know because they were the ones deducting
it.1âwphi1

Q. Why do you know that his salaries were deducted for SSS premiums?

A. Because Antero Maghari asked me and my husband to sign SSS papers and he told
us that they will take care of everything.

Q. How much were the deductions every payday?

A. I do not know how much because our daily wage was only P4.00.27

Agaton Libawas, also testified:

Q. Mr. Witness, in your 15-day wages do you notice any deductions from it?

A. There were deductions and we were informed that it was for SSS.

Q. Mr. Witness, since when were there deductions from your salaries?

A. Since 1961.

Q. Up to when?

A. Up to 1979.
Q. Mr. Witness, are you a member of the SSS?

A. No.

Q. How about petitioner, if you know?

A. No, also.

Q. What happened to the deductions did you not ask your employer?

A. We asked but we were answered that we were being remitted for our SSS.

Q. Did you not verify?

A. No, because I just relied on their statement.28

Ayalde failed to counter these positive assertions. Even on the assumption that there
were no deductions, the fact remains that Tana was and should have been covered under
the Social Security Law. The circumstances of his employment place him outside the
ambit of the exception provided in Section 8(j) of Republic Act No. 1611, as amended by
Section 4 of R.A. 2658.

WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in C.A.-
G.R. SP No. 16427 and the Resolution dated June 14, 1991 are hereby REVERSED and
SET ASIDE. The Resolution of the Social Security Commission in SSC Case No. 8851 is
REINSTATED.
 BEN STA. RITA, petitioner,
vs.
THE COURT OF APPEALS, THE PEOPLE OF THE PHILIPPINES and THE SOCIAL
SECURITY SYSTEM, respondents.

RESOLUTION

FELICIANO, J.:

This is a Petition for Review an Certiorari of the Decision of the Court of Appeals ("CA")
in CA-G.R. SP. No. 34384 which ordered the Regional Trial Court ("RTC"), Branch 92,
Quezon City, to reinstate Criminal Case No. Q-92-35426 filed against petitioner Ben Sta.
Rita.

Petitioner Sta. Rita was charged in the RTC with violating Section 2(a) in relation to
Sections 22(d) and 28(e) of Republic Act No. 1161, as amended, otherwise known as the
Social Security Law. The Information alleged that petitioner, "as President/General
Manager of B. Sta. Rita Co., Inc. a compulsorily (sic) covered employer under the Social
Security Law, as amended, did then and there willfully and unlawfully fail, neglect and
refuse and still fails, neglects and refuses to remit to the Social Security System
contributions for SSS, Medicare and Employees Compensation for its covered
employees."1

Petitioner Sta. Rita moved to dismiss said criminal case on the following grounds:

1. That the facts charged do not constitute an offense, and;

2. That the RTC has no jurisdiction over this case. 2

The RTC sustained petitioner's motion and dismissed the criminal case filed against him.
It ruled that the Memorandum of Agreement entered into between the Department of
Labor and Employment ("DOLE") and the Social Security System ("SSS") extending the
coverage of Social Security, Medical Care and Employment Compensation laws to
Filipino seafarers on board foreign vessels was null and void as it was entered into by the
Administrator of the SSS without the sanction of the Commission and approval of the
President of the Philippines, in contravention of Section 4 (a) of R.A. No. 1161, as
amended.3

The People, through the Solicitor General, filed in the Court of Appeals a petition for
certiorari, prohibition and mandamus assailing the order of dismissal issued by the trial
court. Respondent appellate court granted the petition and ordered the Presiding Judge
of the trial court to reinstate the criminal case against petitioner. A motion for
reconsideration thereof was denied by the CA in a Resolution dated 17 April 1995.

Thereafter, petitioner filed in this Court a motion for extension of thirty (30) days from the
expiration of reglementary period within which to file a petition for review on certiorari.
The Court granted the motion and gave petitioner until 9 June 1995 to file the petition with
warning that no further extension will be given. Despite the warning, the petition was filed
only on 13 June 1995 or four (4) days after the due date. Moreover, it failed to comply
with requirement no. 2 of Circular No. 1-88, as amended and Circular No. 19-91 of the
Court as it did not contain an affidavit of service of copies thereof to respondents. It was
only on 14 July 1995, through an ex-parte manifestation, that the affidavit of service was
belatedly submitted to this Court.

In the Petition for Review, petitioner Sta. Rita contends that the Filipino seafarers
recruited by B. Sta. Rita Co. and deployed on board foreign vessels outside the
Philippines are exempt from the coverage of R.A. No. 1161 under Section 8 (j) (5) thereof:

Terms Defined

EMPLOYMENT — Any service performed by an employee for his employer, except —

xxx xxx xxx

(5) Service performed on or in connection with an alien vessel by an employee if he is

employed when such vessel is outside the Philippines.
xxx xxx xxx

According to petitioner, the Memorandum of Agreement entered into by the DOLE and
the SSS is null and void as it has the effect of amending the aforequoted provision of R.A.
No. 1161 by expanding its coverage. This allegedly cannot be done as only Congress
may validly amend legislative enactments.

Petitioner prays that the Court set aside the decision of the Court of Appeals ordering the
reinstatement of Criminal Case No. Q-92-35426 and that the Order of the RTC dismissing
the same be upheld.

It is well-settled in our jurisdiction that the right to appeal is a statutory right and a party
who seeks to avail of the right must comply with the rules.4 These rules, particularly the
statutory requirement for perfecting an appeal within the reglementary period laid down
by law, must be strictly followed as they are considered indispensable interdictions
against needless delays and for orderly discharge of judicial business.5 Petitioner's failure
to seasonably file the Petition and its failure to comply with the aforequoted Circulars of
the Court necessitate the denial of the Petition.

Besides, even if the Petition had been filed on time and had complied with the Circulars,
it would still have to be denied as petitioner has failed to show that respondent appellate
court committed any reversible error in rendering the assailed decision.

The Court agrees with the CA that the Information filed against petitioner was sufficient
as it clearly stated the designation of the offense by the statute, i.e. violation of the Social
Security Law, and the acts or omissions complained of as constituting the offense, i.e.,
petitioner's failure to remit his contributions to the SSS. The CA found that there is prima
facie evidence to support the allegations in the Information and to warrant the prosecution
of petitioner.

Respondent appellate court correctly upheld the validity of the Memorandum of

Agreement entered into between the DOLE and the SSS. Upon the one hand, contrary
to the trial court's finding, the Memorandum of Agreement was approved by the Social
Security Commission per the Commission's Resolution No. 437, dated 14 July 1988.6
Upon the other hand, the Memorandum of Agreement is not a rule or regulation enacted
by the Commission in the exercise of the latter's quasi-legislative authority Under Section
4 (a) of R.A. No. 1161, as amended, which reads as follows:
Sec. 4. Powers and Duties of the Commission. — For the attainment of its main objectives
as set forth in section two hereof, the Commission shall have the following powers and
duties:

(a) To adopt, amend and rescind, subject to the approval of the President, such rules and
regulations as may be necessary to carry out the provisions and purposes of this Act.

xxx xxx xxx

What the Memorandum of Agreement did was to record the understanding between the
SSS on the one hand and the DOLE on the other hand that the latter would include among
the provisions of the Standard Contract of Employment required in case of overseas
employment, a stipulation providing for coverage of the Filipino seafarer by the SSS. The
Memorandum of Agreement is not an implementing rule or regulation of the Social
Security Commission which, under Section 4 (a) abovequoted, is subject to the approval
of the President. Indeed, as a matter of strict law, the participation of the SSS in the
establishment by the DOLE of a uniform stipulation in the Standard Contract of
Employment for Filipino seafarers was not necessary; the Memorandum of Agreement
related simply to the administrative convenience of the two (2) agencies of government.

Moreover, the Court finds no merit in petitioner's contention that Section 8 (j) (5) of R.A.
No. 1161, as amended, absolutely exempts Filipino seafarers on board foreign vessels
from the coverage of the SSS statute. Section 8 (j) (5) simply defines the term
"employment" and does not in any way relate to the scope of coverage of the Social
Security System. That coverage is, upon the other hand, set out in Section 9 of R.A. No.
1161 as amended, which defines the scope of SSS coverage in the following terms:

Sec. 9 Compulsory Coverage. — (a) Coverage in the SSS shall be compulsory upon all
employees not over sixty years of age and their employers; Provided, . . . .

(b) Fillpinos recruited in the Philippines by foreign employers for employment abroad may
be covered by the SSS on a voluntary basis. (As amended by Sec. 2, P.D. No. 177, S-
1973 and Sec. 6, P.D. No. 735-S-1975) (Emphasis supplied)
It will be seen that the Memorandum of Agreement is in line with paragraph 9 (b) of the
Social Security statute quoted above. The Memorandum of Agreement provides, inter
alia, that:

xxx xxx xxx

NOW THEREFORE, for and in consideration of the foregoing premises, the parties hereto
agree and stipulate that one of the conditions that will be imposed by the Department of
Labor and Employment is the contract for overseas employment is the registration for
coverage of seafarers with the Social Security System, through the manning agencies as
the authorized representatives of the foreign employers in conformity with Section 9,
paragraph (b) of the Social Security Law (R.A. No. 1161, as amended), subject to the
following terms and conditions:

xxx xxx xxx7

(Emphasis supplied)

Thus, the Standard Contract of Employment to be entered into between foreign

shipowners and Filipino seafarers is the instrument by which the former express their
assent to the inclusion of the latter in the coverage of the Social Security Act. In other
words, the extension of the coverage of the Social Security System to Filipino seafarers
arises by virtue of the assent given in the contract of employment signed by employer
and seafarer; that same contract binds petitioner Sta. Rita or B. Sta. Rita Company, who
is solidarily liable with the foreign shipowners/employers.

It may be noted that foreign shipowners and manning agencies had generally expressed
their conformity to the inclusion of Filipino seafarers within the coverage of the Social
Security Act even prior to the signing of the DOLE-SSS Memorandum of Agreement.
Thus, the Whereas clauses of the Memorandum of Agreement state that:

WHEREAS, in the 74th Maritime Session (ILO) held from September 24 to October 9,
1987 in Geneva, it was agreed that as an internationally accepted principle, seafarers
shall have the right to social security protection;
xxx xxx xxx

WHEREAS, after a series of consultations with seafaring unions and manning agencies,
it was the consensus that Philippine social security coverage be extended to seafarers
under the employ of vessels flying foreign flags;

xxx xxx xxx8

(Emphasis supplied)

It is, finally, worthy of special note that by extending the benefits of the Social Security
Act to Filipino seafarers on board foreign vessels, the individual employment agreements
entered into with the stipulation for such coverage contemplated in the DOLE-SSS
Memorandum of Agreement, merely give effect to the constitutional mandate to the State
to afford protection to labor whether "local or overseas."9 Nullification of the SSS
stipulation in those individual employment contracts, through nullification of the
Memorandum of Agreement, constituted serious reversible error on the part of the trial
court. That petitioner should seek to deprive his countrymen of social security protection
after his foreign principal had agreed to such protection, is cause for dismay and is to be
deplored.

The Court of Appeals properly held that the reinstatement of the criminal case against
petitioner did not violate his right against double jeopardy since the dismissal of the
information by the trial court had been effected at his own instance. 10 There are only two
(2) instances where double jeopardy will attach notwithstanding the fact that the case was
dismissed with the express consent of the accused. The first is where the ground for
dismissal is insufficiency of evidence for the prosecution; and the second is where the
criminal proceedings have been unreasonably prolonged in violation of the accused's
right to speedy trial. 11 Neither situation exists in the case at bar. There is no legal
impediment to the reinstatement of Criminal Case No. Q-92-35426 against petitioner Sta.
Rita.

WHEREFORE, the Court Resolved to DENY the Petition for having been filed late, for
failure to comply with applicable Court Circulars and for lack of merit. The assailed
Decision of the Court of Appeals is hereby AFFIRMED. Cost against petitioner.
 SSS v. AGUAS
G.R. No. 165546 February 27, 2006.
CALLEJO, SR., J.

FACTS:
Ø Pablo Aguas, a member and pensioner of the SSS died.
Ø Pablo’s surviving spouse, Rosanna H. Aguas, filed a claim with the SSS for death
benefits on indicating in her claim that Pablo was survived by his minor child, Jeylnn
Ø Her claim for monthly pension was settled.
Ø SSS received a sworn from Leticia Aguas-Macapinlac, Pablo’s sister, contesting
Rosanna’s claim for death benefits. She alleged that Rosanna abandoned the family
abode approximately more than 6 years before, and lived with another man on whom she
has been dependent for support. She further averred that Pablo had no legal children with
Rosanna.
Ø The SSC ruled that Rosanna was no longer qualified as primary beneficiary.
Ø CA reversed the SSC deicision and favored the respondents.

ISSUE:
W/N Rosanna, Jeylnn and Janet are entitled to the SSS death benefits accruing from the
death of Pablo
HELD: Petition is PARTIALLY GRANTED.
Ø It bears stressing that under Article 164 of the Family Code, children conceived or born
during the marriage of the parents are legitimate.
Ø Jeylnn’s claim is justified by the photocopy of her birth certificate which bears the
signature of Pablo. Petitioner was able to authenticate the certification from the Civil
Registry showing that she was born on October 29, 1991. The records also show that
Rosanna and Pablo were married on December 4, 1977 and the marriage subsisted until
the latter’s death on December 8, 1996. It is therefore evident that Jeylnn was born during
Rosanna and Pablo’s marriage.
Ø Impugning the legitimacy of a child is a strictly personal right of the husband or, in
exceptional cases, his heirs. In this case, there is no showing that Pablo challenged the
legitimacy of Jeylnn during his lifetime.
Ø The presumption that Jeylnn is a legitimate child is buttressed by her birth certificate
bearing Pablo’s signature, which was verified from his specimen signature on file with
petitioner. A birth certificate signed by the father is a competent evidence of paternity.
Ø For Rosanna, to qualify as a primary beneficiary, she must establish 2 qualifying
factors: (1) that she is the legitimate spouse, and (2) that she is dependent upon the
member for support.
Ø A wife who is already separated de facto from her husband cannot be said to be
"dependent for support" upon the husband, absent any showing to the contrary. If it is
proved that the were till living together at the time of his death, it is presumed that she
was dependent on the husband for support, unless it is shown that she is capable of
providing for herself.
Ø Only Jeylnn is entitled to the SSS death benefits as it was established that she is his
legitimate child. Records show that Janet was merely "adopted" by the spouses, but there
are no legal papers to prove it. Rosanna was the legitimate wife of Pablo, she is likewise
not qualified as a primary beneficiary since she failed to present any proof to show that
at the time of his death, she was still dependent on him for support even if they were
already living separately. NOTE: Legitimacy cannot be extended to other siblings.

IN RE PETITION FOR EXEMPTION FROM COVERAGE BY THE SOCIAL SECURITY

SYSTEM. CATHOLIC ARCHBISHOP OF MANILA, petitioner-appellant, vs. SOCIAL
SECURITY COMMISSION, respondent-appellee.Feria, Manglapus & Associates for
petitioner-appellant.
Legal Staff, Social Security System and Solicitor General for respondent-appellee.

SYLLABUS

1. SOCIAL SECURITY; COVERAGE; EXISTENCE OF EMPLOYER-EMPLOYEE

RELATIONSHIP NECESSARY. — The coverage of the Social Security Law is predicated
on the existence of an employer-employee relationship of more or less permanent nature
and extends to employment of all kinds except those expressly excluded.

2. ID.; ID.; ID.; RELIGIOUS, CHARITABLE AND NON-PROFIT ENTITIES INCLUDED IN

TERM "EMPLOYER". — The term "employer" in the Social Security Law is sufficiently
comprehensive as to include religious and charitable institutions or entities not organized
for profit within its meaning. This is evident by the fact that it contains an exception in
which said institutions or entities are not included. Had the Legislature intended to limit
the operation of the law to entities organized for profit or gain, it would not have defined
an "employer" in such a way as to include the Government and yet make an express
exception of it.

3. ID.; ID.; ID.; DELETION OF PERTINENT PORTION OF REPUBLIC ACT NO. 1161
CLEAR INDICATION OF LEGISLATIVE INTENT. — The fact that the portion of Republic
Act No. 1161 which provides that services performed in the employ of institutions
organized for religious or charitable purposes were by express provisions of said Act
excluded from coverage thereof (sec. 8, par (j) sub-pars. 7 and 8), is clear indication that
the Legislature intended to include charitable and religious institutions within the scope of
the law.

4. ID.; ID.; ID.; SOCIAL SECURITY LAW LEGITIMATE EXERCISE OF POLICE POWER.
— The Social Security Law is a legitimate exercise of the police power of the State. It
affords protection to labor, especially to working women and minors, and is in full accord
with the constitutional provisions on the "promotion of social justice to insure the well
being and economic security of all the people." Being in fact a social legislation,
compatible with the policy of the Church to ameliorate living conditions of the working
class, the extent of its provisions cannot arbitrarily be delimited to relations between
capital and labor in industry and agriculture.

5. ID.; ID.; ID.; NATURE OF FUNDS CONTRIBUTED TO THE SOCIAL SECURITY

SYSTEM. — The funds contributed to the System created by the Social Security Law are
not public funds, but funds belonging to the members which are merely held in trust by
the Government. hence, the inclusion of religious organization under the coverage of the
law does not violate the constitutional prohibition against the application of public funds
for the use, benefit or support of any priest who might be employed by the Church.

6. ID.; ID.; ID.; ENFORCEMENT OF SOCIAL SECURITY LAW NOT IMPAIRMENT OF

CHURCH RIGHT. — The enforcement of the Social Security Law does not impair the
right of the Church to disseminate religious information, because all that the law requires
of the Church is to make monthly contributions to the System for covered employees in
its employ. These contributions are not "in the nature of taxes on employment." Together
with the contributions imposed upon the employees and the Government, they are
intended for protection of said employees against the hazards of disability, sickness, old
age and death in line with the constitutional mandate to promote social justice to insure
to well being and economic security of all the people.
7. STATUTORY CONSTRUCTION; PRINCIPLE OF EJUSDEM GENERIS; WHEN
APPLICABLE. — The principle of ejusdem generis applies only where there is
uncertainty. It is not controlling where the plain purpose and intent of the Legislature would
thereby be hindered and defeated (Grosjean vs. American Paints Works (La), 160 So.
499).

DECISION

GUTIERREZ DAVID, J p:

On September 1, 1958, the Roman Catholic Archbishop of Manila, thru counsel, filed with
the Social Security Commission a request that "Catholic Charities, and all religious and
charitable institutions and/or organizations, which are directly or indirectly, wholly or
partially, operated by the Roman Catholic Archbishop of Manila," be exempted from
compulsory coverage of Republic Act No. 1161, as amended, otherwise known as the
Social Security Law of 1954. The request was based on the claim that the said Act is a
labor law and does not cover religious and charitable institutions but is limited to
businesses and activities organized for profit. Acting upon the recommendation of its
Legal Staff, the Social Security Commission in its Resolution No. 572, series of 1958,
denied the request. The Roman Catholic Archbishop of Manila, reiterating its arguments
and raising constitutional objections, requested for reconsideration of the resolution. The
request, however, was denied by the Commission in its Resolution No. 767, series of
1958; hence, this appeal taken in pursuance of section 5 (c) of Republic Act No. 1161, as
amended.

Section 9 of the Social Security Law, as amended, provides that coverage "in the System
shall be compulsory upon all employees between the age of sixteen and sixty years
inclusive, if they have been for at least six months in the service of an employer who is a
member of the System, Provided, that the Commission may not compel any employer to
become a member of the System unless he shall have been in operation for at least two
years and has at the time of admission, if admitted for membership during the first year
of the System's operation at least fifty employees, and if admitted for membership the
following year of operation and thereafter, at least six employees . . .." The term
"employer" as used in the law is defined as "any person, natural or juridical, domestic or
foreign, who carries in the Philippines any trade, business, industry, undertaking, or
activity of any kind and uses the services of another person who is under his orders as
regards the employment, except the Government and any of its political subdivisions,
branches or instrumentalities, including corporations owned or controlled by the
Government" (par. [c], sec. 8), while an "employee" refers to "any person who performs
services for an `employer' in which either or both mental and physical efforts are used
and who receives compensation for such services" (par. [d] sec. 8). "Employment",
according to paragraph [j] of said section 8, covers any service performed by an employer
except those expressly enumerated thereunder, like employment under the Government,
or any of its political subdivisions, branches or instrumentalities including corporations
owned and controlled by the Government, domestic service in a private home,
employment purely casual, etc.

From the above legal provisions, it is apparent that the coverage of the Social Security
Law is predicated on the existence of an employer-employee relationship of more or less
permanent nature and extends to employment of all kinds except those expressly
excluded.

Appellant contends that the term "employer" as defined in the law should — following the
principle of ejusdem generis — be limited to those who carry on "undertakings or activities
which have the element of profit or gain, or which are pursued for profit or gain," because
the phrase "activity of any kind" in the definition is preceded by the words "any trade,
business, industry, undertaking." The contention cannot be sustained. The rule ejusdem
generis applies only where there is uncertainty. It is not controlling where the plain
purpose and intent of the Legislature would thereby be hindered and defeated. (Grosjean
vs. American Paints Works [La], 160 So. 449). In the case at bar, the definition of the term
"employer" is, we think, sufficiently comprehensive as to include religious and charitable
institutions or entities not organized for profit, like herein appellant, within its meaning.
This is made more evident by the fact that it contains an exception in which said
institutions or entities are not included. And, certainly, had the Legislature really intended
to limit the operation of the law to entities organized for profit or gain, it would not have
defined an "employer" in such a way as to include the Government and yet make an
express exception of it.

It is significant to note that when Republic Act No. 1161 was enacted, services performed
in the employ of institutions organized for religious or charitable purposes were by
express provisions of said Act excluded from coverage thereof (sec. 8, par. [j], subpars.
7 and 8). That portion of the law, however, has been deleted by express provision of
Republic Act No. 1792, which took effect in 1957. This is clear indication that the
Legislature intended to include charitable and religious institutions within the scope of the
law.

In support of its contention that the Social Security Law was intended to cover only
employment for profit or gain, appellant also cites the discussions of the Senate, portions
of which were quoted in its brief. There is, however, nothing whatsoever in those
discussions touching upon the question of whether the law should be limited to
organizations for profit or gain. Of course, the said discussions dwelt at length upon the
need of a law to meet the problems of industrializing society and upon the plight of an
employer who fails to make a profit. But this is readily explained by the fact that the
majority of those to be affected by the operation of the law are corporations and industries
which are established primarily for profit or gain.

Appellant further argues that the Social Security Law is a labor law and, consequently,
following the rule laid down in the case of Boy Scouts of the Philippines vs. Araos (G.R.
No. L-10091, January 29, 1958) and other cases 1 , applies only to industry and
occupation for purposes of profit and gain. The cases cited, however, are not in point, for
the reason that the law therein involved expressly limits its application either to
commercial, industrial or agricultural establishments or enterprises.

Upon the other hand, the Social Security Law was enacted pursuant to the "policy of the
Republic of the Philippines to develop, establish gradually and perfect a social security
system which shall be suitable to the needs of the people throughout the Philippines and
shall provide protection to employees against the hazards of disability, sickness, old age
and death." (Sec. 2, Republic Act No. 1161, as amended.) Such enactment is a legitimate
exercise of the police power. It affords protection to labor, especially to working women
and minors, and is in full accord with the constitutional provisions on the "promotion of
social justice to insure the well being and economic security of all the people." Being in
fact a social legislation, compatible with the policy of the Church to ameliorate living
conditions of the working class, appellant cannot arbitrarily delimit the extent of its
provisions to relations between capital and labor in industry and agriculture.

There is no merit in the claim that the inclusion of religious organizations under the
coverage of the Social Security Law violates the constitutional prohibition against the
application of public funds for the use, benefit or support of any priest who might be
employed by appellant. The funds contributed to the System created by the law are not
public funds, but funds belonging to the members which are merely held in trust by the
Government. At any rate, assuming that said funds are impressed with the character of
public funds, their payment as retirement, death or disability benefits would not constitute
a violation of the cited provision of the Constitution, since such payment shall be made to
the priest not because he is a priest but because he is an employee.
Neither may it be validly argued that the enforcement of the Social Security Law impairs
appellant's right to disseminate religious information. All that is required of appellant is to
make monthly contributions to the System for covered employees in its employ. These
contributions, contrary to appellant's contention, are not "in the nature of taxes on
employment." Together with the contributions imposed upon the employees and the
Government, they are intended for the protection of said employees against the hazards
of disability, sickness, old age and death in line with the constitutional mandate to promote
social justice to insure the well-being and economic security of all the people.

||| (In re Catholic Archbishop of Manila v. Social Security Commission, G.R. No. L-15045,
[January 20, 1961], 110 PHIL 616-622)

Dycaico vs. SSS, G.R. No. 161357, 30 Nov. 2005

Bonifacio S. Dycaico became a member of the SSS on January 24, 1980. In his self-
employed data record (SSS Form RS-1), he named the petitioner, Elena P. Dycaico, and
their eight children as his beneficiaries. At that time, Bonifacio and Elena lived together
as husband and wife with
considered retired and began receiving his monthly pension from the SSS. He continued
to receive the monthly pensionuntil he passed away on June 19, 1997. A few months
prior to his death, however, B
after Bonifacios death, the petitioner filed with the SSS an application for survivors
pension. Her application, however, was denied on the ground that under Section 12-B(d)
of Republic Act (Rep. Act) No. 8282 or the Social Security Law[2] she could not be
considered a primary beneficiary of Bonifacio as of the date of his retirement. The said
proviso reads:Sec. 12-B. Retirement Benefits. (d) Upon the death of the retired member,
his primary beneficiaries as of the date of his retirement shall be entitled to receive the

petitioners claim. The SSC refuted the petitioners contention that primary beneficiaries
need not be legitimate family members by citingthe definitions of primary beneficiaries
and dependents in Section 8 ofRep. Act No. 8282. Under paragraph (k) of the said
provision, primary beneficiaries are [t]he dependent spouse until he or she remarries, the
dependent legitimate, legitimated or legally adopted, and illegitimate children Paragraph
(e) of the same provision, on the other hand, defines dependents as the following: (1)
[t]he legal spouseentitled by law to receive support from the member; (2) [t]he legitimate,
legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully
employed and has not reached twenty-one (21) years of age, or if over twenty-one (21)
years of age, he is congenitally or while still a minor has been permanently
incapacitatedand incapable of self-support, physically or mentally; and (3) [t]he parent

to the SSC, it has consistently ruled that entitlement to the survivors pension in ones
capacity as primary beneficiary is premised on the legitimacy of relationship with and

Section 12-B(d) of Rep. Act No. 8282, the primary beneficiaries who are entitled to
survivors pension are those who qualify as such as of the date of retirement of the
deceased member. Hence, the petitioner, who was not then the legitimate spouse of
Bonifacio as of the date of his retirement, could not be considered his primary

married in January1997, a few months before he passed away, they merely intended to
legalizetheir relationship and had no intention to commit any fraud. Further, sinceRep.
Act No. 8282 is a social legislation, it should be construed liberally infavor of claimants
like the petitioner. She cites the Courts pronouncementthat the sympathy of the law on
social security is toward its beneficiaries,and the law, by its own terms, requires a

is to give survivorship pension only to primary beneficiaries at the time of the retirement
of the deceased member. Rep. Act No. 8282 itself ordains the persons entitled thereto

then the legitimate spouse of Bonifacio as of the date of his retirement, could be
considered his primary beneficiary.

Ruling:The Court holds that the proviso as of the date of his retirement in Section 12-B(d)
of Rep. Act No. 8282, which qualifies the term primary beneficiaries, is unconstitutional

analogous case, Government Service Insurance System v. Montesclaros …The proviso,

which denied a dependent spouses claim for survivorship pension if the dependent
spouse contracted marriage to the pensioner within the three-year prohibited period, was
declared offensive to the due process clause. There was outright confiscation of benefits
due the surviving spouse without giving him or her an opportunity to be heard. The proviso
was also held to infringe the equal protection clause as it discriminated against dependent
spouses who contracted their respective marriages to pensioners within three years
before they qualified for their pe
proviso as of the date of hisretirement in Section 12-B(d) of Rep. Act No. 8282 similarly
violates the due process and equal protection clauses of the Constitution.The proviso
infringes the equal pr
dependent spouses, i.e., her marriage to Bonifacio was contracted after his retirement.
She and those similarly situated are undoubtedly discriminated against as the proviso as
of the date of his retirement disqualifies them from being considered primary beneficiaries

to prevent sham marriages or those contracted by persons solely to enable one spouse
to claim benefits upon the anticipated death of the other spouse.

This concern is concededly valid. However, classifying dependent spouses and

determining their entitlement to survivors pension based on whether the marriage was
contracted before or after the retirement of the other spouse, regardless of the duration
of the said marriage, bears no relation to the achievement of the policy objective of the
law,i.e., provide meaningful protection to members and their beneficiaries against the
hazard of disability, sickness, maternity, old age, death and other contingencies resulting
in loss of income or financial burden."[14] Put differently, such classification of dependent

dependent spouses on the basis of whether their respective marriages to the SSS
member were contracted prior to or after thel atters retirement for the purpose of
entitlement to survivors pension does not rest on real and substantial distinctions. It is
arbit
ruled that, where the employee retires and meets the eligibility requirements, he acquires
a vested right to benefits that is protected by the due process clause and [r]etirees enjoy
a protected property interest whenever they acquire a right to immediate payment under
pre-existing law.[20] Further, since pursuant to the pertinent law therein, the dependent
spouse is entitled to survivorship pension, a widows right to receive pension following the

the retirement benefits of self-employed individuals, like Bonifacio, who have been
included in the compulsory coverage of Rep. Act No. 8282[25] are not mere gratuity

Rep. Act No. 8282, the surviving spouse is entitled to survivors pension accruing on the
death of the member; hence, the surviving spouses right to receive such benefit following
the demise of the wife or husband, as the case may be, is also part of the latters
contractual compensation.The proviso as of the date of his retirement in Section 12-B(d)
of Rep. Act No. 8282 runs afoul of the due process clause as it outrightly deprives the
surviving spouses whose respective marriages to the retired SSS members were
contracted after the latters retirement of their survivors benefits. There is outright
confiscation of benefits due such surviving spouses without giving them an opportunity to
en she and Bonifacio
got married in 1997, it was merely to legalize their relationship and not to commit fraud.
This claim is quite believable. After all, they had been living together since 1980 and, in
fact, during that time their eldest child was already twenty-four (24) years old. However,
the petitioner was not given any opportunity to prove her claim that she was Bonifacios
bona fide legal spouse as she was automatically disqualified from being considered as
his primary beneficiary.Conclusion Even as the proviso as of the date of his retirement in
Section 12-B(d) is nullified, the enumeration of primary beneficiaries for the purpose of
entitlement tosurvivors pension is not substantially affected since the following persons
are considered as such under Section 8(k) of Rep. Act No. 8282: (1) The dependent
spouse until he or she remarries; and (2) The dependent legitimate, legitimated or legally
adopted, and illegitimate children. In relation thereto, Section 8(e) thereof qualifies the
dependent spouse and dependent children as follows:(1) The legal spouse entitled by
law to receive support from the member;(2) The legitimate, legitimated or legally
adopted, and illegitimate child who is unmarried, not gainfully employed and has not
reached twenty-one years (21) of age, or if over twenty-one (21) years of age, he is
congenitally or while stilla minor has been permanently incapacitated and incapable of
self-support, physically or mentally. Finally, the Court concedes that the petitioner did not
raise the issue of the validity of the proviso as of the date of his retirement in Section 12-
B(d) of Rep. Act No. 8282. The rule is that the Court does not decide questions of a
constitutional nature unless absolutely necessary to a decision of the case.[29] However,
the question of the constitutionality of the proviso is absolutely necessary for the proper
resolution of the present case. Accordingly, the Court required the parties to present their
arguments on this issue and proceeded to pass upon the same in the exercise of its equity
jurisdiction and in order to render substantial justice to the petitioner who, presumably in
her advanced age by now, deserves to receive forthwith the survivors pension accruing
upon the death of her husband.
SSS v Davac G.R. No. L-21642 July 30, 1966
J. Barrera

Facts:
The late Petronilo Davac, a former employee of Lianga Bay, became a member of the
SSS. He designated Candelaria Davac as his beneficiary and indicated his relationship
to her as that of "wife". He died then each of the respondents (Candelaria Davac and
Lourdes Tuplano) filed their claims for death benefit with the SSS. The deceased
contracted two marriages, the first, with claimant Lourdes Tuplano and the second with
Candelaria Davac. The processing was withheld. The SSS filed this petition praying that
the two parties be required to litigate their claims.
The SSS issued the resolution naming Davac as the valid beneficiary. Not satisfied with
the resolution, Lourdes Tuplano brought the appeal.

Issue: Whether or not the Social Security Commission acted correctly in declaring
respondent Candelaria Davac as the person entitled to receive the death benefits in
question.
Held: Yes. SSS resolution affirmed.

Ratio:
Section 13, Republic Act No. 1161, provides:
1. SEC. 13. Upon the covered employee's death or total and permanent disability under
such conditions as the Commission may define, …his beneficiaries, shall be entitled to
the following benefit…
The beneficiary "as recorded" by the employee's employer is the one entitled to the death
benefits.
The appellant contends that the designation made in the person of the second and
bigamous wife is null and void, because (1) it contravenes the provisions of the Civil Code,
and (2) it deprives the lawful wife of her share in the conjugal property as well as of her
own and her child's legitime in the inheritance.
As to the first point, appellant argues that a beneficiary under the Social Security System
partakes of the nature of a beneficiary in life insurance policy and, therefore, the same
qualifications and disqualifications should be applied. Article 739 and 2012 of the civil
code prohibits persons whoi cannot receive donations from being beneficiaries of a policy.
The provisions mentioned in Article 739 are not applicable to Candelaria Davac because
she was not guilty of concubinage, there being no proof that she had knowledge of the
previous marriage of her husband Petronilo.
Regarding the second point raised by appellant, the benefits accruing from membership
in the Social Security System do not form part of the properties of the conjugal partnership
of the covered member. They are disbursed from a public special fund created by
Congress in pursuance to the declared policy of the Republic "to develop, establish
gradually and perfect a social security system which ... shall provide protection against
the hazards of disability, sickness, old age and death."
The sources of this special fund are from salary contributions.
Under other provisions, if there is a named beneficiary and the designation is not invalid,
it is not the heirs of the employee who are entitled to receive the benefits (unless they are
the designated beneficiaries themselves). It is only when there is no designated
beneficiaries or when the designation is void, that the laws of succession are applicable.
The Social Security Act is not a law of succession.
G.R. No. L-59743 May 31 1982

NATIONAL FEDERATION OF SUGAR WORKERS (NFSW), petitioner,

vs.
ETHELWOLDO R. OVEJERA, CENTRAL AZUCARERA DE LA CARLOTA (CAC), COL.
ROGELIO DEINLA, as Provincial Commander, 3311st P.C. Command, Negros
Occidental, respondents.

PLANA, J:

This is a petition for prohibition seeking to annul the decision dated February 20, 1982 of
Labor Arbiter Ethelwoldo R. Ovejera of the National Labor Relations Commission (NLRC)
with station at the Regional Arbitration Branch No. VI-A, Bacolod City, which, among
others, declared illegal the ongoing strike of the National Federation of Sugar Workers
(NFSW) at the Central Azucarera de la Carlota (CAC), and to restrain the implementation
thereof.

I. FACTS —

1. NFSW has been the bargaining agent of CAC rank and file employees (about 1200 of
more than 2000 personnel) and has concluded with CAC a collective bargaining
agreement effective February 16, 1981 — February 15, 1984. Under Art. VII, Sec. 5 of
the said CBA —

Bonuses — The parties also agree to maintain the present practice on the grant of
Christmas bonus, milling bonus, and amelioration bonus to the extent as the latter is
required by law.

The Christmas and milling bonuses amount to 1-½ months' salary.

2. On November 28, 1981, NFSW struck allegedly to compel the payment of the 13th
month pay under PD 851, in addition to the Christmas, milling and amelioration bonuses
being enjoyed by CAC workers.

3. To settle the strike, a compromise agreement was concluded between CAC and NFSW
on November 30,1981. Under paragraph 4 thereof —

The parties agree to abide by the final decision of the Supreme Court in any case involving
the 13th Month Pay Law if it is clearly held that the employer is liable to pay a 13th month
pay separate and distinct from the bonuses already given.

4. As of November 30, 1981, G.R. No. 51254 (Marcopper Mining Corp. vs. Blas Ople and
Amado Inciong, Minister and Deputy Minister of Labor, respectively, and Marcopper
Employees Labor Union, Petition for certiorari and Prohibition) was still pending in the
Supreme Court. The Petition had been dismissed on June 11, 1981 on the vote of seven
Justices. 1 A motion for reconsideration thereafter filed was denied in a resolution dated
December 15, 1981, with only five Justices voting for denial. (3 dissented; 2 reserved
their votes: 4 did not take part.)

On December 18, 1981 — the decision of June 11, 1981 having become final and
executory — entry of judgment was made.

5. After the Marcopper decision had become final, NFSW renewed its demand that CAC
give the 13th month pay. CAC refused.

6. On January 22, 1982, NFSW filed with the Ministry of Labor and Employment (MOLE)
Regional Office in Bacolod City a notice to strike based on non-payment of the 13th month
pay. Six days after, NFSW struck.

7. One day after the commencement of the strike, or on January 29, 1982, a report of the
strike-vote was filed by NFSW with MOLE.

8. On February 8, 1982, CAC filed a petition (R.A.B. Case No. 0110-82) with the Regional
Arbitration Branch VI-A, MOLE, at Bacolod City to declare the strike illegal, principally for
being violative of Batas Pambansa Blg. 130, that is, the strike was declared before the
expiration of the 15-day cooling-off period for unfair labor practice (ULP) strikes, and the
strike was staged before the lapse of seven days from the submission to MOLE of the
result of the strike-vote.

9. After the submission of position papers and hearing, Labor Arbiter Ovejera declared
the NFSW strike illegal. The dispositive part of his decision dated February 20, 1982
reads:

Wherefore, premises considered, judgment is hereby rendered:

1. Declaring the strike commenced by NFSW on January 28, 1982, illegal,

2. Directing the Central to resume operations immediately upon receipt hereof;

3. Directing the Central to accept back to work all employees appearing in its payroll as
of January 28, 1982 except those covered by the February 1, 1982 memorandum on
preventive suspension but without prejudice to the said employees' instituting appropriate
actions before this Ministry relative to whatever causes of action they may have obtained
proceeding from said memorandum;

4. Directing the Central to pay effective from the date of resumption of operations the
salaries of those to be placed on preventive suspension as per February 1, 1982
memorandum during their period of preventive suspension; and

5. Directing, in view of the finding that the subject strike is illegal, NFSW, its officers,
members, as well as sympathizers to immediately desist from committing acts that may
impair or impede the milling operations of the Central

The law enforcement authorities are hereby requested to assist in the peaceful
enforcement and implementation of this Decision.

SO ORDERED.
10. On February 26, 1982, the NFSW — by passing the NLRC — filed the instant Petition
for prohibition alleging that Labor Arbiter Ovejera, CAC and the PC Provincial
Commander of Negros Occidental were threatening to immediately enforce the February
20, 1982 decision which would violate fundamental rights of the petitioner, and praying
that —

WHEREFORE, on the foregoing considerations, it is prayed of the Honorable Court that

on the Petition for Preliminary Injunction, an order, after hearing, issue:

1. Restraining implementation or enforcement of the Decision of February 20, 1982;

2. Enjoining respondents to refrain from the threatened acts violative of the rights of
strikers and peaceful picketers;

3. Requiring maintenance of the status quo as of February 20, 1982, until further orders
of the Court;

and on the Main Petition, judgment be rendered after hearing.

1. Declaring the Decision of February 2O, l982 null and void;

2. Making the preliminary injunction permanent;

3. Awarding such other relief as may be just in the premises.

11. Hearing was held, after which the parties submitted their memoranda. No restraining
order was issued.

II ISSUES —
The parties have raised a number of issues, including some procedural points. However,
considering their relative importance and the impact of their resolution on ongoing labor
disputes in a number of industry sectors, we have decided — in the interest of expediency
and dispatch — to brush aside non-substantial items and reduce the remaining issues to
but two fundamental ones:

1. Whether the strike declared by NFSW is illegal, the resolution of which mainly depends
on the mandatory or directory character of the cooling-off period and the 7-day strike ban
after report to MOLE of the result of a strike-vote, as prescribed in the Labor Code.

2. Whether under Presidential Decree 851 (13th Month Pay Law), CAC is obliged to give
its workers a 13th month salary in addition to Christmas, milling and amelioration
bonuses, the aggregate of which admittedly exceeds by far the disputed 13th month pay.
(See petitioner's memorandum of April 12, 1982, p. 2; CAC memorandum of April 2, 1982,
pp. 3-4.) Resolution of this issue requires an examination of the thrusts and application
of PD 851.

III. DISCUSSION —

1. Articles 264 and 265 of the Labor Code, insofar as pertinent, read:

Art. 264, Strikes, picketing and lockouts. — ...

(c) In cases of bargaining deadlocks, the certified or duly recognized bargaining

representative may file a notice of strike with the Ministry (of Labor and Employment) at
least thirty (30) days before the intended date thereof. In cases of unfair labor practices,
the period of notice shall be shortened to fifteen (15) days; ...

(d) During the cooling-off period, it shall be the duty of the voluntary sttlement. Should the
dispute remain unsettled until the lapse of the requisite number of days from the
mandatory filing of the notice, the labor union may strike or the employer may declare a
lockout.
(f) A decision to declae a strike must be approved by at least two-thirds (2/3) of the total
union membership in the bargaining unit concerened by secret ballots in meetings or
referenda. A decision to declae a lockout must be approved by at least two-thirds (2/3) of
the board of direcotrs of the employer corporation or association or of the partners in a
partnership obtained by secret ballot in a meeting called for the purpose. the decision
shall be valid for the duration of the dispute based on substantially the same grounds
considered when the strike or lockout vote was taken . The Ministry, may at its own
intitiative or upon the request of any affected party, supervise the conduct of the secret
balloting. In every case, the union of the employer shall furnish the Ministry the results of
the voting at least seven (7) days before the intended strike or lockout, subject to the
cooling-off period herein provided. (Emphasis supplied).

ART. 265. Prohibited activities. — It shall be unlawful for any labor organization or
employer to declare a strike or lockout without first having bargained collectively in
accordance with Title VII of this Book or without first having filed the notice required in the
preceding Article or without the necessary strike or lockout vote first having been obtained
and reported to the Ministry.

It shall likewise be unlawful to declare a strike or lockout after assumption of jurisdiction

by the President or the Minister or after certification or submission of the dispute to
compulsory or voluntary arbitration or during the pendency of cases involving the same
grounds for the strike or lockout. (Emphasis supplied.)

(a) Language of the law. — The foregoing provisions hardly leave any room for doubt that
the cooling-off period in Art. 264(c) and the 7-day strike ban after the strike-vote report
prescribed in Art. 264(f) were meant to be, and should be deemed, mandatory.

When the law says "the labor union may strike" should the dispute "remain unsettled until
the lapse of the requisite number of days (cooling-off period) from the filing of the notice,"
the unmistakable implication is that the union may not strike before the lapse of the
cooling-off period. Similarly, the mandatory character of the 7-day strike ban after the
report on the strike-vote is manifest in the provision that "in every case," the union shall
furnish the MOLE with the results of the voting "at least seven (7) days before the intended
strike, subject to the (prescribed) cooling-off period." It must be stressed that the
requirements of cooling-off period and 7-day strike ban must both be complied with,
although the labor union may take a strike vote and report the same within the statutory
cooling-off period.
If only the filing of the strike notice and the strike-vote report would be deemed mandatory,
but not the waiting periods so specifically and emphatically prescribed by law, the
purposes (hereafter discussed) for which the filing of the strike notice and strike-vote
report is required would not be achieved, as when a strike is declared immediately after
a strike notice is served, or when — as in the instant case — the strike-vote report is filed
with MOLE after the strike had actually commenced Such interpretation of the law ought
not and cannot be countenanced. It would indeed be self-defeating for the law to
imperatively require the filing on a strike notice and strike-vote report without at the same
time making the prescribed waiting periods mandatory.

(b) Purposes of strike notice and strike-vote report.— In requiring a strike notice and a
cooling-off period, the avowed intent of the law is to provide an opportunity for mediation
and conciliation. It thus directs the MOLE "to exert all efforts at mediation and conciliation
to effect a voluntary settlement" during the cooling-off period . As applied to the CAC-
NFSW dispute regarding the 13th month pay, MOLE intervention could have possibly
induced CAC to provisionally give the 13th month pay in order to avert great business
loss arising from the project strike, without prejudice to the subsequent resolution of the
legal dispute by competent authorities; or mediation/conciliation could have convinced
NFSW to at least postpone the intended strike so as to avoid great waste and loss to the
sugar central, the sugar planters and the sugar workers themselves, if the strike would
coincide with the mining season.

So, too, the 7-day strike-vote report is not without a purpose. As pointed out by the
Solicitor General —

Many disastrous strikes have been staged in the past based merely on the insistence of
minority groups within the union. The submission of the report gives assurance that a
strike vote has been taken and that, if the report concerning it is false, the majority of the
members can take appropriate remedy before it is too late. (Answer of public
respondents, pp. 17-18.)

If the purpose of the required strike notice and strike-vote report are to be achieved, the
periods prescribed for their attainment must, as aforesaid, be deemed mandatory., —

... when a fair interpretation of the statute, which directs acts or proceedings to be done
in a certain way, shows the legislature intended a compliance with such provision to be
essential to the validity of the act or proceeding, or when some antecedent and
prerequisite conditions must exist prior to the exercise of power or must be performed
before certain other powers can be exercised, the statute must be regarded as
mandatory. So it has been held that, when a statute is founded on public policy [such as
the policy to encourage voluntary settlement of disputes without resorting to strikes],
those to whom it applies should not be permitted to waive its provisions. (82 C.J.S. 873-
874. Emphasis supplied.)

(c) Waiting period after strike notice and strike-vote report, valid regulation of right to
strike. — To quote Justice Jackson in International Union vs. Wisconsin Employment
Relations Board, 336 U.S. 245, at 259 —

The right to strike, because of its more serious impact upon the public interest, is more
vulnerable to regulation than the right to organize and select representatives for lawful
purposes of collective bargaining ...

The cooling-off period and the 7-day strike ban after the filing of a strike- vote report, as
prescribed in Art. 264 of the Labor Code, are reasonable restrictions and their imposition
is essential to attain the legitimate policy objectives embodied in the law. We hold that
they constitute a valid exercise of the police power of the state.

(d) State policy on amicable settlement of criminal liability. — Petitioner contends that
since the non-compliance (with PD 851) imputed to CAC is an unfair labor practice which
is an offense against the state, the cooling-off period provided in the Labor Code would
not apply, as it does not apply to ULP strikes. It is argued that mediation or conciliation in
order to settle a criminal offense is not allowed.

In the first place, it is at best unclear whether the refusal of CAC to give a 13th month pay
to NFSW constitutes a criminal act. Under Sec. 9 of the Rules and regulations
Implementing Presidential Decree No. 851 —

Non-payment of the thirteenth-month pay provided by the Decree and these rules shall
be treated as money claims cases and shall be processed in accordance with the Rules
Implementing the Labor Code of the Philippines and the Rules of the National Labor
Relations Commission.

Secondly, the possible dispute settlement, either permanent or temporary, could very well
be along legally permissible lines, as indicated in (b) above or assume the form of
measures designed to abort the intended strike, rather than compromise criminal liability,
if any. Finally, amicable settlement of criminal liability is not inexorably forbidden by law.
Such settlement is valid when the law itself clearly authorizes it. In the case of a dispute
on the payment of the 13th month pay, we are not prepared to say that its voluntary
settlement is not authorized by the terms of Art. 264(e) of the Labor Code, which makes
it the duty of the MOLE to exert all efforts at mediation and conciliation to effect a voluntary
settlement of labor disputes.

(e) NFSW strike is illegal. — The NFSW declared the strike six (6) days after filing a strike
notice, i.e., before the lapse of the mandatory cooling-off period. It also failed to file with
the MOLE before launching the strike a report on the strike-vote, when it should have filed
such report "at least seven (7) days before the intended strike." Under the circumstances,
we are perforce constrained to conclude that the strike staged by petitioner is not in
conformity with law. This conclusion makes it unnecessary for us to determine whether
the pendency of an arbitration case against CAC on the same issue of payment of 13th
month pay [R.A.B No. 512-81, Regional Arbitration Branch No. VI-A, NLRC, Bacolod City,
in which the National Congress of Unions in the Sugar Industry of the Philippines
(NACUSIP) and a number of CAC workers are the complainants, with NFSW as
Intervenor seeking the dismissal of the arbitration case as regards unnamed CAC rank
and file employees] has rendered illegal the above strike under Art. 265 of the Labor Code
which provides:

It shall likewise be unlawful to declare a strike or lockout after assumption of jurisdiction

by the President or the Minister, or after certification or submission of the dispute to
compulsory or voluntary arbitration or during the pendency of cases involving the same
grounds for the strike or lockout. (Emphasis supplied.)

(2) The Second Issue. — At bottom, the NFSW strike arose from a dispute on the meaning
and application of PD 851, with NFSW claiming entitlement to a 13th month pay on top
of bonuses given by CAC to its workers, as against the diametrically opposite stance of
CAC. Since the strike was just an offshoot of the said dispute, a simple decision on the
legality or illegality of the strike would not spell the end of the NFSW-CAC labor dispute.
And considering further that there are other disputes and strikes — actual and impending
— involving the interpretation and application of PD 851, it is important for this Court to
definitively resolve the problem: whether under PD 851, CAC is obliged to give its workers
a 13th month salary in addition to Christmas, milling and amelioration bonuses stipulated
in a collective bargaining agreement amounting to more than a month's pay.
Keenly sensitive to the needs of the workingmen, yet mindful of the mounting production
cost that are the woe of capital which provides employment to labor, President Ferdinand
E. Marcos issued Presidential Decree No. 851 on 16 December 1975. Thereunder, "all
employers are hereby required to pay salary of not more than all their employees
receiving a basic P1,000 a month, regardless of the nature of their employment, a 13th
month pay not later than December 24 of every year." Exempted from the obligation
however are:

Employers already paying their employees a 13th month pay or its equivalent ...
(Section 2.)

The evident intention of the law, as revealed by the law itself, was to grant an additional
income in the form of a 13th month pay to employees not already receiving the same.
Otherwise put, the intention was to grant some relief — not to all workers — but only to
the unfortunate ones not actually paid a 13th month salary or what amounts to it, by
whatever name called; but it was not envisioned that a double burden would be imposed
on the employer already paying his employees a 13th month pay or its equivalent —
whether out of pure generosity or on the basis of a binding agreement and, in the latter
ease, regardless of the conditional character of the grant (such as making the payment
dependent on profit), so long as there is actual payment. Otherwise, what was conceived
to be a 13th month salary would in effect become a 14th or possibly 15th month pay.

This view is justified by the law itself which makes no distinction in the grant of exemption:
"Employers already paying their employees a 13th month pay or its equivalent are not
covered by this Decree." (P.D. 851.)

The Rules Implementing P.D. 851 issued by MOLE immediately after the adoption of said
law reinforce this stand. Under Section 3(e) thereof —

The term "its equivalent" ... shall include Christmas bonus, mid-year bonus, profit-sharing
payments and other cash bonuses amounting to not less than 1/12th of the basic salary
but shall not include cash and stock dividends, cost of living allowances and all other
allowances regularly enjoyed by the employee, as well as non-monetary benefits. Where
an employer pays less than 1/12th of the employee's basic salary, the employer shall pay
the difference." (Italics supplied.)
Having been issued by the agency charged with the implementation of PD 851 as its
contemporaneous interpretation of the law, the quoted rule should be accorded great
weight.

Pragmatic considerations also weigh heavily in favor of crediting both voluntary and
contractual bonuses for the purpose of determining liability for the 13th month pay. To
require employers (already giving their employees a 13th month salary or its equivalent)
to give a second 13th month pay would be unfair and productive of undesirable results.
To the employer who had acceded and is already bound to give bonuses to his
employees, the additional burden of a 13th month pay would amount to a penalty for his
munificence or liberality. The probable reaction of one so circumstance would be to
withdraw the bonuses or resist further voluntary grants for fear that if and when a law is
passed giving the same benefits, his prior concessions might not be given due credit; and
this negative attitude would have an adverse impact on the employees.

In the case at bar, the NFSW-CAC collective bargaining agreement provides for the grant
to CAC workers of Christmas bonus, milling bonus and amelioration bonus, the aggregate
of which is very much more than a worker's monthly pay. When a dispute arose last year
as to whether CAC workers receiving the stipulated bonuses would additionally be entitled
to a 13th month pay, NFSW and CAC concluded a compromise agreement by which they
—

agree(d) to abide by the final decision of the Supreme Court in any case involving the
13th Month Pay Law if it is clearly held that the employer is liable to pay a 13th month pay
separate and distinct from the bonuses already given.

When this agreement was forged on November 30,1981, the original decision dismissing
the petition in the aforecited Marcopper case had already been promulgated by this Court.
On the votes of only 7 Justices, including the distinguished Chief Justice, the petition of
Marcopper Mining Corp. seeking to annul the decision of Labor Deputy Minister Amado
Inciong granting a 13th month pay to Marcopper employees (in addition to mid- year and
Christmas bonuses under a CBA) had been dismissed. But a motion for reconsideration
filed by Marcopper was pending as of November 30, 1981. In December 1981, the original
decision was affirmed when this Court finally denied the motion for reconsideration. But
the resolution of denial was supported by the votes of only 5 Justices. The Marcopper
decision is therefore a Court decision but without the necessary eight votes to be
doctrinal. This being so, it cannot be said that the Marcopper decision "clearly held" that
"the employer is liable to pay a 13th month pay separate and distinct from the bonuses
already given," within the meaning of the NFSW-CAC compromise agreement. At any
rate, in view of the rulings made herein, NFSW cannot insist on its claim that its members
are entitled to a 13th month pay in addition to the bonuses already paid by CAC.
WHEREFORE, the petition is dismissed for lack of merit. No costs.

SO ORDERED.