Case Summary (G.R. No. L-17361)
Applicable Facts
Zamora ceased working from December 22, 1957, to February 18, 1958, during which he was not compensated. He later took a sick leave without pay from March 9, 1958, until his death on June 13, 1958. Following his death, the petitioner filed a claim with the SSS for his beneficiaries, but the SSS determined that there were unpaid premiums for the months before his death—particularly February, March, and June 1958. The SSS billed the petitioner for its share of the premiums, which included P8.18 owed by the employer and a deduction of P5.85 from Zamora's death benefits representing his share of unpaid premiums.
Legal Basis and Issues Raised
The Social Security Commission had previously adopted a resolution stating that employers are liable for their contributions during any period when an employee's contract remains active, even if the employee is on leave without pay. The petitioner contested two primary issues: first, the claim that there is no employer liability for contributions during an employee's leave without pay, and second, the legitimacy of using a "theoretical salary" basis for calculating this liability.
Resolution of Employer Liability
The Supreme Court reaffirmed earlier rulings that established that an employer's obligation to remit contributions remains intact as long as the employer-employee relationship exists, regardless of whether the employee is on a compensated leave. The court noted that the contract of employment between the petitioner and Zamora remained unbroken during his leave. Therefore, the petitioner was held accountable for the contributions owed to the SSS.
Review of Theoretical Salary Basis
The decision also addressed the petitioner’s challenge to the SSS’s use of a "theoretical salary" for determining premium contributions in months without earned compensation. The court elucidated that this approach did not constitute an alteration of the law but was a necessary implementation of the existing statutory obligations of the employer. This is based on the premise that an employee's entitlement to benefits and the employer's requirement to contribute do n
...continue readingCase Syllabus (G.R. No. L-17361)
Case Background
- The case involves an appeal by Franklin Baker Company of the Philippines against the Social Security System (SSS) regarding a dismissal of a petition for reconsideration.
- The petitioner, Franklin Baker Company, is engaged in the manufacture of desiccated coconut and operates in San Pablo City.
- Tomas Zamora, the deceased, was an employee of Franklin Baker Company and a compulsory member of the SSS.
- The company temporarily ceased operations from December 22, 1957, to February 18, 1958, due to machinery overhaul and lack of production orders.
- During the cessation, Zamora did not render any services, and subsequently, he went on sick leave without pay from March 9, 1958, until his death on June 13, 1958.
Death Claim Application
- On July 10, 1958, Franklin Baker Company filed a death claim application with the SSS for Zamora’s designated beneficiaries.
- The SSS processed the claim but discovered that no premium remittances were made for Zamora for the months of February, March, and June 1958.
- The unpaid premiums totaled P14.03, with P5.85 attributable to Zamora (the employee's share) and P8.18 due from the employer (the petitioner's share).
Commission Resolution and Petitioner’s Appeal
- The SSS deducted the employee's share from the death benefits and billed the company for its share.
- Under Resolution No. 139, Series of 1958, the Social Security Commission ruled that employers are liable for the 3.5% share of premiums during months without remittances if an employer-employee relationship exists.
- The petitioner filed a petition for reconsideration which was dismissed by the Co