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Agrarian [Other Social Legislations] van, panyang, boss, papa.

p, lem, raz

2009

Other Social Legislation I. RA 8282 (Social Security Act of 1997) Jurisdiction and rules of social security commission (Section 5) SEC. 5. Settlement of Disputes. (a) Any dispute arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any other matter related thereto, shall be cognizable by the Commission, and any case filed with respect thereto shall be heard by the Commission, or any of its members, or by hearing officers duly authorized by the Commission and decided within twenty (20) days after the submission of the evidence. The filing, determination and settlement of disputes shall be governed by the rules and regulations promulgated by the Commission. (b) Appeal to Courts. Any decision of the Commission, in the absence of an appeal therefrom as herein provided, shall become final and executory fifteen (15) days after the date of notification, and judicial review thereof shall be permitted only after any party claiming to be aggrieved thereby has exhausted his remedies before the Commission. The Commission shall be deemed to be a party to any judicial action involving any such decision, and may be represented by an attorney employed by the Commission, or when requested by the Commission, by the Solicitor General or any public prosecutors. (c) Court Review. The decision of the Commission upon any disputed matter may be reviewed both upon the law and the facts by the Court of Appeals. For the purpose of such review, the procedure concerning appeals from the Regional Trial Court shall be followed as far as practicable and consistent with the purposes of this Act. Appeal from a decision of the Commission must be taken within fifteen (15) days from notification of such decision. If the decision of the Commission involves only questions of law, the same shall be reviewed by the Supreme Court. No appeal bond shall be required. The case shall be heard in a summary manner, and shall take precedence over all cases, except that in the Supreme Court, criminal cases wherein life imprisonment or death has been imposed by the trial court shall take precedence. No appeal shall act as a supersedeas or a stay of the order of the Commission unless the Commission itself, or the Court of Appeals or the Supreme Court, shall so order. (d) Execution of Decisions. The Commission may, motu proprio or on motion of any interested party, issue a writ of execution to enforce any of its decisions or awards, after it has become final and executory, in the same manner as the decision of the Regional Trial Court by directing the city or provincial sheriff or the sheriff whom it may appoint to enforce such final decision or execute such writ; and any person who shall fail or refuse to comply with such decision, award or writ, after being required to do so shall, upon application by the Commission pursuant to Rule 71 of the Rules of Court, be punished for contempt. CASES: SSS vs. Atlantic Gulf and Pacific Company of Manila (2008) From the allegations of respondents' complaint, it readily appears that there is no longer any dispute with respect to respondents' accountability to the SSS. Respondents had, in fact, admitted their delinquency and offered to settle them by way of dacion en pago subsequently approved by the SSS in Resolution No. 270-s. 2001. SSS stated in said resolution that "the dacion en pago proposal of AG&P Co. of Manila and Semirara Coals Corporation to pay their liabilities in the total amount of P30,652,710.71 as of 31 March 2001 by offering their 5.8 ha. property located in San Pascual, Batangas, be, as it is hereby, approved.." [9] This statement unequivocally evinces its consent to the dacion en pago. In Vda. de Jayme v. Court of Appeals,[10] the Court ruled significantly as follows: Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation. It is a special mode of payment where the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt. The undertaking really partakes in one sense of the nature of sale, that is the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the debtor's debt. As such, the essential elements of a contract of sale, namely, consent, object certain, and cause or consideration must be present. In its modern concept, what actually takes place in dacion en pago is an objective novation of the obligation where the thing offered as an accepted equivalent of the performance of an obligation is considered as the object of the contract of sale, while the debt is considered as the purchase price. In any case, common consent is an essential prerequisite, be it sale or novation, to have the effect of totally extinguishing the debt or obligation. The controversy, instead, lies in the non-implementation of the approved and agreed dacion en pago on the part of the SSS. As such, respondents filed a suit to obtain its enforcement which is, doubtless, a suit for specific performance and one incapable of pecuniary estimation beyond the competence of the Commission. Republic vs. Asiapro Cooperative (2007) Petitioner SSCs jurisdiction is clearly stated in Section 5 of Republic Act No. 8282 as well as in Section 1, Rule III of the 1997 SSS Revised Rules of Procedure. Section 5 of Republic Act No. 8282 provides: SEC. 5. Settlement of Disputes. (a) Any dispute arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any other matter related thereto, shall be cognizable by the Commission, x x x. (Emphasis supplied.) Similarly, Section 1, Rule III of the 1997 SSS Revised Rules of Procedure states: Section 1. Jurisdiction. Any dispute arising under the Social Security Act with respect to coverage, entitlement of benefits, collection and settlement of contributions and penalties thereon, or any other matter related thereto, shall be cognizable by the Commission after the SSS through its President, Manager or Officer-in-charge of the

Agrarian [Other Social Legislations] van, panyang, boss, papa.p, lem, raz

2009

Department/Branch/Representative Office concerned had first taken action thereon in writing. (Emphasis supplied.) It is clear then from the aforesaid provisions that any issue regarding the compulsory coverage of the SSS is well within the exclusive domain of the petitioner SSC. It is important to note, though, that the mandatory coverage under the SSS Law is premised on the existence of an employeremployee relationship except in cases of compulsory coverage of the self-employed. SSS vs. Vda. De Bailon (2006) The SSS faults the CA for failing to give due consideration to the findings of facts of the SSC on the prior and subsisting marriage between Bailon and Alice; in disregarding the authority of the SSC to determine to whom, between Alice and respondent, the death benefits should be awarded pursuant to Section 5 of the Social Security Law; and in declaring that the SSS did not give respondent due process or ample opportunity to present evidence in her behalf. The SSS submits that "the observations and findings relative to the CFI proceedings are of no moment to the present controversy, as the same may be considered only as obiter dicta in view of the SSCs finding of the existence of a prior and subsisting marriage between Bailon and Alice by virtue of which Alice has a better right to the death benefits."41 The petition fails. That the SSC is empowered to settle any dispute with respect to SSS coverage, benefits and contributions, there is no doubt. In so exercising such power, however, it cannot review, much less reverse, decisions rendered by courts of law as it did in the case at bar when it declared that the December 10, 1970 CFI Order was obtained through fraud and subsequently disregarded the same, making its own findings with respect to the validity of Bailon and Alices marriage on the one hand and the invalidity of Bailon and respondents marriage on the other. In interfering with and passing upon the CFI Order, the SSC virtually acted as an appellate court. The law does not give the SSC unfettered discretion to trifle with orders of regular courts in the exercise of its authority to determine the beneficiaries of the SSS. Signey vs. SSS (2008) We deemed it best not to disturb the findings of fact of the SSS which are supported by substantial evidence and affirmed by the SSC and the Court of Appeals. Moreover, petitioner ought to be reminded of the basic rule that this Court is not a trier of facts. It is a well-known rule that in proceedings before administrative bodies, technical rules of procedure and evidence are not binding.[24] The important consideration is that both parties were afforded an opportunity to be heard and they availed themselves of it to present their respective positions on the matter in dispute. It must likewise be noted that under Section 2, Rule 1 of the SSC Revised Rules of Procedure, the rules of evidence prevailing in the courts of law shall not be controlling. In the case at bar, the existence of a prior subsisting marriage between the deceased and Editha is supported by substantial evidence. Petitioner, who has fully availed of her right to be heard, only relied on the waiver of Editha and failed to present any evidence to invalidate or otherwise controvert the confirmed marriage certificate registered under LCR Registry No. 2083 on 21 November 1967. She did not even try to allege and prove any infirmity in the marriage between the deceased and Editha. Employer (Section 8[c]) SEC. 8. Terms Defined. For purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings: (c) Employer- Any person, natural or juridical, domestic or foreign, who carries on 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: Provided, That a self-employed person shall be both employee and employer at the same time. CASE: SSC vs. Alba (2008) Section 8 (c), Social Security Act of 1954 (as amended by Presidential Decree [P.D.] No. 1202 and P.D. No. 1636) defines an employer as "any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade or 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." 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." Employee (Section 8 [d]) SEC. 8. Terms Defined. For purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings: (d) Employee Any person who performs services for an employer in which either or both mental or physical efforts are used and who receives compensation for such services, where there is an employer-

Agrarian [Other Social Legislations] van, panyang, boss, papa.p, lem, raz

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employee relationship: Provided, That a self-employed person shall be both employee and employer at the same time. CASES: SSS vs. CA The Court of Appeals, in finding for Ayalde, relied on the claimants 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. 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. Lazaro vs. SSC It is an accepted doctrine that for the purposes of coverage under the Social Security Act, the determination of employer-employee relationship warrants the application of the control test, that is, whether the employer controls or has reserved the right to control the employee, not only as to the result of the work done, but also as to the means and methods by which the same is accomplished. The SSC, as sustained by the Court of Appeals, applying the control test found that Laudato was an employee of Royal Star. We find no reversible error. Lazaros arguments may be dispensed with by applying precedents. Suffice it to say, the fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee relationship. In Grepalife v. Judico, the Court upheld the existence of an employer-employee relationship between the insurance company and its agents, despite the fact that the compensation that the agents on commission received was not paid by the company but by the investor or the person insured. The relevant factor remains, as stated earlier, whether the "employer" controls or has reserved the right to control the "employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. Lazaros arguments may be dispensed with by applying precedents. Suffice it to say, the fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee relationship. In Grepalife v. Judico, the Court upheld the existence of an employer-employee relationship between the insurance company and its agents, despite the fact that the compensation that the agents on commission received was not paid by the company but by the investor or the person insured. The relevant factor remains, as stated earlier, whether the "employer" controls or has reserved the right to control the "employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. Dependents and beneficiaries (Section 8 [e] and [k]) SEC. 8. Terms Defined. For purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings: (e) Dependents The dependents shall be the following: (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 (21) years of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally; and (3) The parent who is receiving regular support from the member. (k) Beneficiaries The dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted, and illegitimate children, who shall be the primary beneficiaries of the member: Provided, That the dependent illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted children: Provided, further, That in the absence of the dependent legitimate, legitimated children of the member, his/her dependent illegitimate children shall be entitled to one hundred percent (100%) of the benefits. In their absence, the dependent parents who shall be the secondary beneficiaries of the member. In the absence of all the foregoing, any other person designated by the member as his/her secondary beneficiary. CASES: Signey vs. SSS (2008) supra. SSS vs. delos Santos (2008)

Agrarian [Other Social Legislations] van, panyang, boss, papa.p, lem, raz

2009

As found by both the SSC and the CA, the divorce obtained by respondent against the deceased Antonio was not binding in this jurisdiction. Under Philippine law, only aliens may obtain divorces abroad, provided they are valid according to their national law. The divorce was obtained by respondent Gloria while she was still a Filipino citizen and thus covered by the policy against absolute divorces. It did not sever her marriage ties with Antonio. However, although respondent was the legal spouse of the deceased, We find that she is still disqualified to be his primary beneficiary under the SS Law. She fails to fulfill the requirement of dependency upon her deceased husband Antonio. Social Security System v. Aguas is instructive in determining the extent of the required dependency under the SS Law. In Aguas, the Court ruled that although a husband and wife are obliged to support each other, whether one is actually dependent for support upon the other cannot be presumed from the fact of marriage alone. Further, Aguas pointed out that a wife who left her family until her husband died and lived with other men, was not dependent upon her husband for support, financial or otherwise, during the entire period. Coverage (Section 9) SEC. 9-A. Compulsory Coverage of the Self-Employed. Coverage in the SSS shall also be compulsory upon such self-employed persons as may be determined by the Commission under such rules and regulations as it may prescribe, including but not limited to the following: 1. All self-employed professionals; 2. Partners and single proprietors of businesses; 3. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term employee in Section 8 (d) of this Act; 4. Professional athletes, coaches, trainers and jockeys; and 5. Individual farmers and fishermen. Unless otherwise specified herein, all provisions of this Act applicable to covered employees shall also be applicable to the covered self-employed persons. CASES: Tan vs. Ballena (2008) In the present case, petitioners were charged with violations of the SSS Law for their failure to either promptly report some of the respondents for compulsory coverage/membership with the SSS or remit their SSS contributions and loan amortizations. In support of their claims, respondents have attached unto their Joint Complaint-Affidavit a summary of their unreported and unremitted SSS contributions, as gathered from the SSS Online Inquiry System, and a computation of their unreported and unremitted SSS contributions. On the part of the petitioners, they have not denied their fault in not remitting the SSS contributions and loan payments of the respondents in violation of Section 28, paragraphs (e), (f) and (h) of the SSS Law. Instead, petitioners interposed the defenses of lack of criminal intent and good faith, as their failure to remit was brought about by alleged economic difficulties, and they have already agreed to settle their obligations with the SSS through a memorandum of agreement to pay in installments. As held by the Court of Appeals, the claims of good faith and absence of criminal intent for the petitioners acknowledged non-remittance of the respondents contributions deserve scant consideration. The violations charged in this case pertain to the SSS Law, which is a special law. As such, it belongs to a class of offenses known as mala prohibita. The law has long divided crimes into acts wrong in themselves called acts mala in se; and acts which would not be wrong but for the fact that positive law forbids them, called acts mala prohibita. This distinction is important with reference to the intent with which a wrongful act is done. The rule on the subject is that in acts mala in se, the intent governs; but in acts mala prohibita, the only inquiry is, has the law been violated? When an act is illegal, the intent of the offender is immaterial. Thus, the petitioners admission in the instant case of their violations of the provisions of the SSS Law is more than enough to establish the existence of probable cause to prosecute them for the same. Retirement and benefits (Section 12-B) SEC. 12-B. Retirement Benefits. (a) A member who has paid at least one hundred twenty (120) monthly contributions prior to the semester of retirement and who: (1) has reached the age of sixty (60) years and is already separated from employment or has ceased to be self-employed; or (2) has reached the age of sixty-five (65) years, shall be entitled for as long as he lives to the monthly pension: Provided, That he shall have the option to receive his first eighteen (18) monthly pensions in lump sum discounted at a preferential rate of interest to be determined by the SSS. (b) A covered member who is sixty (60) years old at retirement and who does not qualify for pension benefits under paragraph (a) above, shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf: Provided, That he is separated from employment and is not continuing payment of contributions to the SSS on his own. (c) The monthly pension shall be suspended upon the reemployment or resumption of self-employment of a retired member who is less than sixty-five (65) years old. He shall again be subject to Section Eighteen and his employer to Section Nineteen of this Act. (d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-

Agrarian [Other Social Legislations] van, panyang, boss, papa.p, lem, raz

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year guaranteed period, excluding the dependents pension. (e) The monthly pension of a member who retires after reaching age sixty (60) shall be the higher of either: (1) the monthly pension computed at the earliest time he could have retired had he been separated from employment or ceased to be self-employed plus all adjustments thereto; or (2) the monthly pension computed at the time when he actually retires. CASE: Dycaico vs. SSS (2005) The SSS denied the petitioners application for survivors pension on the sole ground that she was not the legal spouse of Bonifacio as of the date of his retirement; hence, she could not be considered as his primary beneficiary under Section 12-B(d) of Rep. Act No. 8282. 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 for it violates the due process and equal protection clauses of the Constitution. Xxx The legislative history of Rep. Act No. 8282 does not bear out the purpose of Congress in inserting the proviso as of the date of his retirement to qualify the term primary beneficiaries in Section 12-B(d) thereof. To the Courts mind, however, it reflects congressional concern with the possibility of relationships entered after retirement for the purpose of obtaining benefits. In particular, the proviso was apparently intended 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. The nexus of the classification to the policy objective is vague and flimsy. Put differently, such classification of dependent spouses is not germane to the aforesaid policy objective. 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 to survivors 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 still a minor has been permanently incapacitated and incapable of self-support, physically or mentally. Permanent Disability Benefits (Section 13-A) SEC. 13-A. Permanent Disability Benefits. (a) Upon the permanent total disability of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of disability, he shall be entitled to the monthly pension: Provided, That if he has not paid the required thirty-six (36) monthly contributions, he shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher. A member who (1) has received a lump sum benefit; and (2) is reemployed or has resumed self-employment not earlier than one (1) year from the date of his disability shall again be subject to compulsory coverage and shall be considered a new member. (b) The monthly pension and dependents pension shall be suspended upon the reemployment or resumption of self-employment or the recovery of the disabled member from his permanent total disability or his failure to present himself for examination at least once a year upon notice by the SSS. (c) Upon the death of the permanent total disability pensioner, his primary beneficiaries as of the date of disability shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period excluding the dependents pension. (d) The following disabilities shall be deemed permanent total: 1. Complete loss of sight of both eyes; 2. Loss of two limbs at or above the ankle or wrists; 3. Permanent complete paralysis of two limbs; 4. Brain injury resulting to incurable imbecility or insanity; and 5. Such cases as determined and approved by the SSS. (e) If the disability is permanent partial, and such disability occurs before thirty-six (36) monthly contributions have been paid prior to the semester of disability, the benefit shall be such percentage of the

Agrarian [Other Social Legislations] van, panyang, boss, papa.p, lem, raz

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lump sum benefit described in the preceding paragraph with due regard to the degree of disability as the Commission may determine. (f) If the disability is permanent total and such disability occurs after thirt y-six (36) monthly contributions have been paid prior to the semester of disability, the benefit shall be the monthly pension for permanent total disability payable not longer than the period designated in the following schedule: (g) The percentage degree of disability which is equivalent to the ratio that the designated number of months of compensability bears to seventy-five (75), rounded to the next higher integer, shall not be additive for distinct, separate and unrelated permanent partial disabilities, but shall be additive for deteriorating and related permanent partial disabilities to a maximum of one hundred percent (100%), in which case, the member shall be deemed as permanently totally disabled. (h) In case of permanent partial disability, the monthly pension benefit shall be given in lump sum if it is payable for less than twelve (12) months. (i) For the purpose of adjudicating retirement, death and permanent total disability pension benefits, contributions shall be deemed paid for the months during which the member received partial disability pension: Provided, That such contributions shall be based on his last contribution prior to his disability. (j) Should a member who is on partial disability pension retire or die, his disability pension shall cease upon his retirement or death. CASE: Ortega vs. SSC Claims under the Labor Code for compensation and under the Social Security Law for benefits are not the same as to their nature and purpose. On the one hand, the pertinent provisions of the Labor Code govern compensability of work-related disabilities or when there is loss of income due to work-connected or work-aggravated injury or illness. On the other hand, the benefits under the Social Security Law are intended to provide insurance or protection against the hazards or risks of disability, sickness, old age or death, inter alia, irrespective of whether they arose from or in the course of the employment. And unlike under the Social Security Law, a disability is total and permanent under the Labor Code if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days regardless of whether he loses the use of any of his body parts. Right to institute (Section 22 [b]) SEC. 22-A. Remittance of Contributions of Self-Employed Member. Self-employed members shall remit their monthly contributions quarterly on such dates and schedules as the Commission may specify through rules and regulations: Provided, That no retroactive payment of contributions shall be allowed, except as provided in this Section. CASES: Lo vs. CA The clear and explicit language of the statute leaves no room for doubt as to its application. Indeed, in Benedicto v. Abad Santos, we held that 22(b) of R.A. 1161 applies to administrative and civil actions against an employer for his failure to remit SSS contributions. Criminal actions for violations of the SSS law, on the other hand, prescribes in four years, as provided in Act No. 3326. Private respondent, in this case, discovered the delinquency of petitioner in remitting his SSS contributions only after his separation from employment on September 13, 1984. Prior thereto, private respondent could not have known that his SSS contributions were not being remitted by petitioner since deductions were made on his salary monthly. Thus, even if petitioner is correct in saying that the prescriptive period should be counted from the day on which the corresponding action could have been instituted, the action in this case could only be instituted when the delinquency was made known to the private respondent and not when the obligation to pay the premiums accrued. Thus, even if the case of People v. Monteiro were not applied to the present case, R.A. 1161, 22(b) expressly provides that the period of prescription to file the necessary action against the employer should likewise commence on the day said violation was discovered. xxxxxxxxxxxxxxxxxxxxxx In amending R.A. 1161, P.D. 1636 provided for a 20-year prescriptive period and, in effect, extended the 10-year period of prescription provided by the Civil Code. For cases, therefore, with rights arising prior to P.D. 1636, the 20-year prescriptive period shall take effect as long as the original prescriptive period has not expired. Even assuming that the prescriptive period has begun to run in this case prior to the discovery of the violation in 1985, it could have started only at the time the benefit accrued, i.e., in September 1970 when private respondent left his job due to illness. On January 1, 1980, when P.D. 1636 took effect, the 10-year prescriptive period has not expired and was, thus, deemed extended to 20 years. Penal Clause (Section 28) SEC. 28. Penal Clause. (a) Whoever, for the purpose of causing any payment to be made under this Act, or under an agreement thereunder, where none is authorized to be paid, shall make or cause to be made false statement or representation as to any compensation paid or received or whoever makes or causes to be made any false statement of a material fact in any claim for any benefit payable under this Act, or application for loan with the SSS, or whoever makes or causes to be made any false statement, representation, affidavit or document in connection with such claim or loan, shall suffer the penalties

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provided for in Article One hundred seventy-two of the Revised Penal Code. (b) Whoever shall obtain or receive any money or check under this Act or any agreement thereunder, without being entitled thereto with intent to defraud any member, employer or the SSS, shall be fined not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) and imprisoned for not less than six (6) years and one (1) day nor more than twelve (12) years. (c) Whoever buys, sells, offers for sale, uses, transfers or takes or gives in exchange, or pledges or gives in pledge, except as authorized in this Act or in regulations made pursuant thereto, any stamp, coupon, ticket, book or other device, prescribed pursuant to Section Twenty-three hereof by the Commission for the collection or payment of contributions required herein, shall be fined not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or imprisoned for not less than six (6) years and one (1) day nor more than twelve (12) years, or both, at the discretion of the court. (d) Whoever, with intent to defraud, alters, forges, makes or counterfeits any stamp, coupon, ticket, book or other device prescribed by the Commission for the collection or payment of any contribution required herein, or uses, sells, lends, or has in his possession any such altered, forged or counterfeited materials, or makes, uses, sells or has in his possession any such altered, forged, material in imitation of the material used in the manufacture of such stamp, coupon, ticket, book or other device, shall be fined not less than Five thousand pesos (P5,000.00) non more than Twenty thousand pesos (P20,000.00) or imprisoned for not less than six years (6) and one (1) day nor more than twelve (12) years, or both, at the discretion of the court. (e) Whoever fails or refuses to comply with the provisions of this Act or with the rules and regulations promulgated by the Commission, shall be punished by a fine of not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years, or both, at the discretion of the court: Provided, That where the violation consists in failure or refusal to register employees or himself, in case of the covered selfemployed or to deduct contributions from the employees compensation and remit the same to the SSS, the penalty shall be a fine of not less Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) and imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years. (f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable for the penalties provided in this Act for the offense. (g) Any employee of the SSS who receives or keeps funds or property belonging, payable or deliverable to the SSS and who shall appropriate the same, or shall take or misappropriate, or shall consent, or through abandonment or negligence, shall permit any other person to take such property or funds, wholly or partially, or shall otherwise be guilty of misappropriation of such funds or property, shall suffer the penalties provided in Article Two hundred seventeen of the Revised Penal Code. (h) Any employer who, after deducting the monthly contributions or loan amortizations from his employees compensation, fails to remit the said deduction to the SSS within thirty (30) days from the date they became due, shall be presumed to have misappropriated such contributions or loan amortizations and shall suffer the penalties provided in Article Three hundred fifteen of the Revised Penal Code. (i) Criminal action arising from a violation of the provisions of this Act may be commenced by the SSS or the employee concerned either under this Act or in appropriate cases under the Revised Penal Code: Provided, That such criminal action may be filed by the SSS in the city or municipality where the SSS office is located, if the violation was committed within its territorial jurisdiction or in Metro Manila, at the option of the SSS. CASES: Tan et al. vs. Ballena The Complaint-Affidavit alleged that the company did not regularly report the respondent employees for membership at the Social Security System (SSS) and that it likewise failed to remit their SSS contributions and payment for their SSS loans, which were already deducted from their wages. According to respondents, these acts violated Sections 9, 10, 22 and 24, paragraph (b) of Republic Act No. 1161, as amended by Republic Act No. 8282; as well as Section 28, paragraphs (e), (f), and (h) thereof, in relation to Article 315 of the Revised Penal Code, the pertinent portions of which read: SEC. 28. Penal Clause. xxxx (e) Whoever fails or refuses to comply with the provisions of this Act or with the rules and regulations promulgated by the Commission, shall be punished by a fine of not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years, or both, at the discretion of the court: Provided, That, where the violation consists in failure or refusal to register employees or himself, in case of the covered self-employed, or to deduct contributions from the employees compensation and remit the same to the SSS, the penalty shall be a fine of not less Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) and imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years.

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(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable to the penalties provided in this Act for the offense. xxxx (h) Any employer who after deducting the monthly contributions or loan amortizations from his employees compensation, fails to remit the said deductions to the SSS within thirty (30) days from the date they became due shall be presumed to have misappropriated such contributions or loan amortizations and shall suffer the penalties provided in Article Three hundred fifteen of the Revised Penal Code. xxxxxxxxxxxxxxxxxxxxxxxxxxxxx In the present case, petitioners were charged with violations of the SSS Law for their failure to either promptly report some of the respondents for compulsory coverage/membership with the SSS or remit their SSS contributions and loan amortizations. In support of their claims, respondents have attached unto their Joint Complaint-Affidavit a summary of their unreported and unremitted SSS contributions, as gathered from the SSS Online Inquiry System, and a computation of their unreported and unremitted SSS contributions. On the part of the petitioners, they have not denied their fault in not remitting the SSS contributions and loan payments of the respondents in violation of Section 28, paragraphs (e), (f) and (h) of the SSS Law. Instead, petitioners interposed the defenses of lack of criminal intent and good faith, as their failure to remit was brought about by alleged economic difficulties, and they have already agreed to settle their obligations with the SSS through a memorandum of agreement to pay in installments. As held by the Court of Appeals, the claims of good faith and absence of criminal intent for the petitioners acknowledged non-remittance of the respondents contributions deserve scant consideration. The violations charged in this case pertain to the SSS Law, which is a special law. As such, it belongs to a class of offenses known as mala prohibita. The law has long divided crimes into acts wrong in themselves called acts mala in se; and acts which would not be wrong but for the fact that positive law forbids them, called acts mala prohibita. This distinction is important with reference to the intent with which a wrongful act is done. The rule on the subject is that in acts mala in se, the intent governs; but in acts mala prohibita, the only inquiry is, has the law been violated? When an act is illegal, the intent of the offender is immaterial. Thus, the petitioners admission in the instant case of their violations of the provisions of the SSS Law is more than enough to establish the existence of probable cause to prosecute them for the same. Garcia vs. SSC Petitioner invokes the rule in statutory construction called ejusdem generic; that is, where general words follow an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same kind or class as those specifically mentioned. According to petitioner, to be held liable under Section 28(f) of the Social Security Law, one must be the managing head, managing director, or managing partner. This Court though finds no need to resort to statutory construction. Section 28(f) of the Social Security Law imposes penalty on: (1) the managing head; (2) directors; or (3) partners, for offenses committed by a juridical person The said provision does not qualify that the director or partner should likewise be a managing director or managing partner. The law is clear and unambiguous. RA 8291 (GSIS Act of 1997) Coverage The following are not covered by the GSIS: 1. Employees who have separate retirement schemes under special laws and are therefore covered by their respective retirement laws, to include the members of the Judiciary, Constitutional Commissions and other similarly situated government officials; 2. Contractual employees who have no employer-employee relationship with the agencies they serve; 3. Uniformed members of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) including the Bureau of Jail Management and Penology (BJMP) and the Bureau of Fire Protection People v. Sandiganbayan x x x Members of the Armed Forces of the Philippines and the Philippine National Police are expressly excluded from the coverage of The GSIS Act of 1997. Therefore, soldiers and military personnel, who are incidentally employees of the Government, rely on the administration of the AFP-RSBS for their retirement, pension and separation benefits. x x x Creditable Service Valdez v. GSIS Petitioner's argument that the GSIS violated RA No. 8291 when it indorsed petitioner's claim to the CSC for resolution is untenable. Section 10 of RA No. 8291, otherwise known as the "Government Service

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Insurance System Act of 1997," explicitly authorizes the GSIS and the CSC to work hand in hand in the computation of service in the government for the purpose of availment of the retirement benefits under the said Act. Pertinently, the said Act provides: Sec. 10. Computation of Service. (a) The computation of service for the purpose of determining the amount of benefits payable under this Act shall be from the date of original appointment/election, including periods of service at different times under one or more employers, those performed overseas under the authority of the Republic of the Philippines, and those that may be prescribed by the GSIS in coordination with the Civil Service Commission. The last paragraph of Section 10 of RA No. 8291 dictates that for purposes of computation of government service, only full-time services with compensation are included: For the purpose of this section, the term service shall include full time service with compensation: Provided, That part time and other services with compensation may be included under such rules and regulations as may be prescribed by the GSIS. Eligibility and features of benefit Survivorship benefits (Section 20) "SEC. 20. Survivorship Benefits. - When a member or pensioner dies, the beneficiaries shall be entitled to survivorship benefits provided in Sections 21 and 22 hereunder subject to the conditions therein provided for. The survivorship pension shall consist of: (1) the basic survivorship pension which is fifty percent (50%) of the basic monthly pension; and (2) the dependent childrens pension not exceeding fifty percent (50%) of the basic monthly pension GSIS Cebu City Branch v. Montesclaros Under PD 1146, the primary beneficiaries are (1) the dependent spouse until such spouse remarries, and (2) the dependent children. The secondary beneficiaries are the dependent parents and legitimate descendants except dependent children. The law defines dependent as "the legitimate, legitimated, legally adopted, acknowledged natural or illegitimate child who is unmarried, not gainfully employed, and not over twenty-one years of age or is over twenty-one years of age but physically or mentally incapacitated and incapable of self-support." The term also includes the legitimate spouse dependent for support on the member, and the legitimate parent wholly dependent on the member for support. xxxx In a pension plan where employee participation is mandatory, the prevailing view is that employees have contractual or vested rights in the pension where the pension is part of the terms of employment. The reason for providing retirement benefits is to compensate service to the government. Retirement benefits to government employees are part of emolument to encourage and retain qualified employees in the government service. Retirement benefits to government employees reward them for giving the best years of their lives in the service of their country. xxxx In addition to retirement and disability benefits, PD 1146 also provides for benefits to survivors of deceased government employees and pensioners. Under PD 1146, the dependent spouse is one of the beneficiaries of survivorship benefits. A widow's right to receive pension following the demise of her husband is also part of the husband's contractual compensation. Tax Exemption Rubia v. GSIS In so far as Section 39 of the GSIS charter exempts the GSIS from execution, suffice it to say that such exemption is not absolute and does not encompass all the GSIS funds. By way of illustration and as may be gleaned from the Implementing Rules and Regulation of the GSIS Act of 1997, one exemption refers to social security benefits and other benefits of GSIS members under Republic Act No. 8291 in connection with financial obligations of the members to other parties. The pertinent GSIS Rule provides: Rule XV. Funds of the GSIS Section 15.7 Exemption of Benefits of Members from Tax, Attachment, Execution, Levy or other Legal Processes. The social security benefits and other benefits of GSIS members under R.A. 8291 shall be exempt from tax, attachment, garnishment, execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative bodies in connection with all financial obligations of the member, including his pecuniary accountability arising from or caused or occasioned by his exercise or performance of his official functions or duties or incurred in connection with his position or work, as well as COA disallowances. Monetary liability in favor of the GSIS, however, may be deducted from the benefits of the member. Furthermore, the declared policy of the State in Section 39 of the GSIS Charter granting GSIS an exemption from tax, lien, attachment, levy, execution, and other legal processes should be read together with the grant of power to the GSIS to invest its excess funds under Section 36 of the same Act. Under Section 36, the GSIS is granted the ancillary power to invest in business and other ventures for the benefit of the employees, by using its excess funds for investment purposes. In the exercise of such function and power, the GSIS is allowed to assume a character similar to a private corporation. Thus, it may sue and be sued, as also explicitly granted by its charter. Needless to say, where proper, under Section 36, the GSIS may be held liable for the contracts it has entered into in the course of its business investments. For GSIS cannot

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claim a special immunity from liability in regard to its business ventures under said Section. Nor can it deny contracting parties, in our view, the right of redress and the enforcement of a claim, particularly as it arises from a purely contractual relationship of a private character between an individual and the GSIS. City of Davao, et.al., v. RTC Branch XII of Davao City The GSISs tax-exempt status, in sum, was withdrawn in 1992 by the Local Government Code but restored by the Government Service Insurance System Act of 1997, the operative provision of which is Section 39. Miscellaneous GSIS, et. al., v. Kapisanan ng mga Manggagawa sa GSIS It should be stressed right off that the civil service encompasses all branches and agencies of the Government, including government-owned or controlled corporations (GOCCs) with original charters, like the GSIS, or those created by special law. As such, employees of covered GOCCs are part of the civil service system and are subject to circulars, rules and regulations issued by the Civil Service Commission (CSC) on discipline, attendance and general terms/conditions of employment, inclusive of matters involving selforganization, strikes, demonstrations and like concerted actions. In fact, policies established on public sector unionism and rules issued on mass action have been noted and cited by the Court in at least a case. Among these issuances is Executive Order (EO) No. 180, series of 1987, providing guidelines for the exercise of the right to organize of government employees. Relevant also is CSC Resolution No. 021316 which provides rules on prohibited concerted mass actions in the public sector. In Alliance of Government Workers v. Minister of Labor and Employment, a case decided under the aegis of the 1973 Constitution, an en banc Court declared that it would be unfair to allow employees of government corporations to resort to concerted activity with the ever present threat of a strike to wring benefits from Government. Then came the 1987 Constitution expressly guaranteeing, for the first time, the right of government personnel to self-organization to complement the provision according workers the right to engage in peaceful concerted activities, including the right to strike in accordance with law. With the view we take of the events that transpired on October 4-7, 2004, what respondents members launched or participated in during that time partook of a strike or, what contextually amounts to the same thing, a prohibited concerted activity. The phrase prohibited concerted activity refers to any collective activity undertaken by government employees, by themselves or through their employees organization, with the intent of effecting work stoppage or service disruption in order to realize their demands or force concessions, economic or otherwise; it includes mass leaves, walkouts, pickets and acts of similar nature. Indeed, for four straight days, participating KMG members and other GSIS employees staged a walk out and waged or participated in a mass protest or demonstration right at the very doorstep of the GSIS main office building. The record of attendance for the period material shows that, on the first day of the protest, 851 employees, or forty eight per cent (48%) of the total number of employees in the main office (1,756) took to the streets during office hours, from 6 a.m. to 2 p.m., leaving the other employees to fend for themselves in an office where a host of transactions take place every business day. On the second day, 707 employees left their respective work stations, while 538 participated in the mass action on the third day. A smaller number, i.e., 306 employees, but by no means an insignificant few, joined the fourth day activity. To say that there was no work disruption or that the delivery of services remained at the usual level of efficiency at the GSIS main office during those four (4) days of massive walkouts and wholesale absences would be to understate things. And to place the erring employees beyond the reach of administrative accountability would be to trivialize the civil service rules, not to mention the compelling spirit of professionalism exacted of civil servants by the Code of Conduct and Ethical Standards for Public Officials and Employees.