Case Summary (G.R. No. 228087)
Issue
Whether employers who fully paid contributions and accrued penalties prior to the effectivity of R.A. No. 9903 are entitled to the condonation benefits—specifically, refund or waiver of penalties already settled before February 1, 2010.
SSC Resolution
The SSC denied petitioners’ petitions, holding that condonation laws are acts of liberality to be strictly construed. Since petitioners had no unpaid contributions or penalties as of February 1, 2010, there was nothing to condone or refund.
Court of Appeals Decision
The CA affirmed the SSC. It interpreted “accrued penalty” under the IRR to mean “unpaid penalty” and held that R.A. No. 9903 applies only to obligations outstanding as of its effectivity. Allowing refund of already-paid penalties would render the law absurd and threaten SSS resources. The CA also upheld the classification as valid under the equal protection clause.
Petitioners’ Arguments
- Section 4’s equity proviso extends waiver to penalties paid before effectivity.
- Employers could not separate payment of contributions from penalties prior to R.A. No. 9903.
- Denial of refund frustrates the law’s purpose and violates equal protection by favoring those who deferred payment.
Respondents’ Arguments
- Petitioners had no delinquencies as of February 1, 2010; nothing remained to condone.
- R.A. No. 9903 contains no provision for refund of penalties already paid.
- The IRR definition of “accrued penalty” as “unpaid” is reasonable and binding.
- Condonation statutes are strictly construed; extending benefits would deplete SSS funds.
- Classification between those who paid before and after effectivity is valid under equal protection.
Statutory Interpretation of R.A. No. 9903
The Court applied the plain-meaning rule. Section 4 waives only penalties “when and until all delinquent contributions are remitted” during the availment period or, by equity, where arrears were settled before effectivity “but still have accrued penalties.” The terms “condoned,” “waived,” and “accrued” unambiguously refer to existing, unpaid obligations at effectivity.
Definition of “Accrued Penalty” under the IRR
Section 1(d) of SSC Circular No. 2010-004 defines “accrued penalty” as the unpaid 3% penalty under R.A. No. 1161. This definition fills the statutory gap and reasonably clarifies that only unpaid penalties are subject to waiver.
Prospective Application
R.A. No. 9903 provides a six-month availment window from effectivity—indicating prospective application. Absent express retroactivity, the law does not affect obligations already extinguished by payment before February 1, 2010.
Strict Construction and Social Justice Considerations
Condonation statutes are liberality measures construed against applicants. The SSS trust fund, being workers’ pooled contributions, warrants strict scrutiny of any waiver or refund of penalties to preserve fund viability and protect members’ interests.
Rule-Making Power of the SSS
Under R.A. No. 8282 and R.A. No. 9903, the SSC may promulgate IRR to implement social security laws. Its reasonable definition of “accrued penalty” should not be judicially disturbed, as it properly implements congressional intent.
Separate Payment of Contributions and Penalties
No law or regulation mandated concurrent payment of c
...continue readingCase Syllabus (G.R. No. 228087)
Facts
- Petitioners are four private corporations in the pawnshop business, compulsorily registered with the SSS under R.A. No. 8282.
- In 2009, petitioners paid delinquent contributions and penalties for various periods from 2000 to 2009, amounting to several million pesos.
- R.A. No. 9903 (Social Security Condonation Law of 2009) took effect on February 1, 2010, waiving penalties for delinquent employers who settled arrears within six months.
- On July 26, 2010, petitioners sought refund of penalties paid in 2009 under Section 4 of R.A. No. 9903 and the IRR (SSC Circular No. 2010-004).
- SSS branches denied refund requests, reasoning that R.A. No. 9903 did not cover penalties paid before its effectivity.
Procedural History
- Petitioners filed separate petitions before the Social Security Commission (SSC) seeking reimbursement of their paid penalties.
- The SSC denied all petitions in its Resolution dated November 6, 2013, and denied reconsideration in its Order of January 21, 2015.
- Petitioners appealed to the Court of Appeals (CA) in CA-G.R. SP No. 140916.
- The CA affirmed the SSC in a Decision dated February 26, 2016, and denied reconsideration on November 2, 2016.
- Petitioners brought the case to the Supreme Court via a petition for review on certiorari under Rule 45.
Petitioner’s Contentions
- Section 4 of R.A. No. 9903 expressly extends waiver of accrued penalties to employers who settled arrears before the law’s effectivity.
- Prior to R.A. No. 9903, employers could not pay arrears without paying penalties, making pre-effectivity payment inevitable.
- The IRR’s definition of “accrued penalty” should include penalties paid before effectivity, to avoid unjust