Case Summary (G.R. No. 125837)
Relevant Proceedings
On 20 August 1985, the private respondents filed a petition with the SSC, asserting their status as regular employees entitled to coverage under the Social Security Act, due to their continuous employment in various construction projects managed by the petitioner since 1977. They alleged that they were improperly dismissed and not reported for social security coverage, thus violating the provisions of the law.
Petitioner's Defense
In response, the petitioner contended that the private respondents were project employees, not regular employees. He claimed their employment was limited to specific projects and thus exempt from compulsory coverage under the Social Security Act. The petitioner argued that the claims were barred by prescription and laches, asserting that the private respondents were aware of their employment status and had delayed in filing their claims.
Social Security Commission's Order
The SSC, in an order dated 01 February 1995, sided with the private respondents, determining their classification as regular employees according to the Labor Code, specifically Article 280. Consequently, the SSC ordered the petitioner to remit unpaid SSS contributions and penalties for late payments.
Court of Appeals' Ruling
The Court of Appeals affirmed the SSC's decision, concluding that the private respondents’ work was necessary to the petitioner’s business operations, aligning with characteristics of regular employment per Article 280 of the Labor Code. The court dismissed the defense based on prescription and laches as unfounded, noting that the claim was filed within the twenty-year prescriptive period mandated for non-remittance cases under the Social Security Act.
Supreme Court's Analysis
Upon review, the Supreme Court emphasized the necessity of establishing an employer-employee relationship to mandate SSS coverage, which is characterized by control over work results, wage payment, and dismissal authority. The Court reinforced the classification of the respondents as employees despite the petitioner's position on their project-based employment status.
Continuity of Employment and Regularity
The Supreme Court noted the continuous nature of the respondents’ employment across multiple projects, affirming their regular employee status based on the long-term periods of service, which ranged from two to eight years. Thus, the Court ruled out the classification of the respondents as project employees based on their repeated hiring and vital roles in the petitioner’s operations.
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Case Background
- This case is a petition for review of the Decision of the Court of Appeals in CA-G.R. CV No. 38269 dated March 6, 1996, and its Resolution dated July 30, 1996.
- The Court of Appeals affirmed the Order of the Social Security Commission (SSC) dated February 1, 1995, which ruled that private respondents were regular employees of petitioner Reynaldo Cano Chua.
- The SSC ordered the petitioner to pay the Social Security System (SSS) for unpaid contributions and penalties for delayed remittance.
Parties Involved
- Petitioner: Reynaldo Cano Chua, owner of Prime Mover Construction Development.
- Respondents: Andres Paguio, Pablo Canale, Ruel Pangan, Aurelio Paguio, Rolando Trinidad, Romeo Tapang, and Carlos Maliwat—claimed to be regular employees of the petitioner engaged in various construction projects.
Claims of Private Respondents
- The respondents filed a Petition with the SSC claiming they were regular employees, continuously assigned to the petitioner’s construction projects and dismissed without justifiable grounds.
- They alleged the petitioner did not report them to the SSS for compulsory coverage, violating the Social Security Act.
Petitioner’s Defense
- The petitioner denied the claims, asserting that the respondents were project employees with no cause of action against him.
- He argued that their employment was fixed for specific projects and claimed such employees are not entitled to SSS coverage.
- The petitioner contended that the claims were barred by prescription and laches.