Case Digest (G.R. No. L-17361)
Facts:
Franklin Baker Company of the Philippines v. Social Security System, G.R. No. L-17361, April 29, 1963, the Supreme Court En Banc, Makalintal, J., writing for the Court.
Petitioner-appellant Franklin Baker Company of the Philippines manufactured desiccated coconut in San Pablo City and was the employer of Tomas Zamora, a compulsory member of the Social Security System (SSS); both employer and employee were covered by the Social Security Act. Petitioner suspended operations from December 22, 1957 to February 18, 1958 due to machine overhauls and lack of production orders; Zamora rendered no actual services in that shutdown period. He thereafter went on sick leave without pay from March 9, 1958 until his death on June 13, 1958.
On July 10, 1958 the SSS received a death-claim application filed by petitioner for the designated beneficiaries of Zamora. Upon processing the claim the SSS determined that no premium remittances had been made for Zamora for February, March, and June 1958; it found unpaid premiums totaling P5.85 chargeable to the employee and P8.18 chargeable to the employer. The SSS deducted the employee’s share from the death benefits paid to the beneficiaries and billed petitioner for the employer’s share.
The Social Security Commission had adopted Resolution No. 139, Series of 1958, providing that “employers are liable to the 3 1/2% company’s share during the months when there are no premiums remitted, if there is existing employer-employee relationship between them during those months.” Petitioner filed a petition for reconsideration with the Commission contesting the demand; the Commission dismissed the petition on April 28, 1960. The case was brought to the Supreme Court on appeal from the Social Security Commission’s resolution of dismissal.
Petitioner raised two main contentions before the Commission and on appeal: (1) that an employer is not liable for its 3.5% share during periods when an employee is on leave without pay because the employee receives no compensation; and (2) that the Commission’s adopti...(Subscriber-Only)
Issues:
- Is an employer liable to pay its 3.5% Social Security contribution during months when an employee is on leave without pay where no compensation was actually received?
- Is the Social Security Commission’s adoption and application of a “theoretical salary” basis (per Circular Nos. 21 and 24) to compute contributions for wageless months beyond its authority and an unlawful amendment of the Social Se...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
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