G. R. No. 15163. February 28, 1962
ELIZALDE ROPE FACTORY, INC., PETITIONER AND APPELLANT, VS. SOCIAL SECURITY COMMISSION, RESPONDENT AND APPELLE.
PADILLA, J.:
On 17 September 1957 the laborers of the Elizalde Rope Factory, Inc.
went on strike. Edilberto Tupas, a laborer, was one of the strikers.
The strike ended in the middle of February 1958. From October 1957 to
January 1958, the period of time the strike lasted, the rope factory
did not pay to the Social Security Commission any premium for Edilberto
Tupas. In February 1958 it resumed and continued to pay the premium
until 6 May 1958 when Edilberto Tupas died.
On 16 July 1958 the Social Security Commission sent bill No. 138 to
the Elizalde Rope Factory, Inc. in the amount of P10.27 representing
its contribution to the unpaid premium for Edilberto Tupas. In a letter
dated 23 July 1958 the rope factory averred “that the amount of P9.45,
representing employer’s 3 1/2% premium contribution for October,
November, December, 1957 should be for the account of the late
Edilberto Tupas for the reason that he was then on strike and
consequently, unemployed by the company. Mr. Tupas, during these
months, received no wages. The Company, however, was willing to pay the
amount of P0.82 only, as underpaid premium for the month of May, 1958.”
On 4 November 1958 the Social Security Commission wrote to the
Elizalde Rope Factory, Inc., declaring the strike “not unlawful” and
reiterating its demand upon the latter to pay the amount of P10.27. To
the letter were attached as Annex A circular No, 21, dated 15 October
1958, which reads as follows:
To: All Employers and Employees
Subject: Obligation to pay Premiums
The
Social Security Commission in further clarification of its policies on
the implementation of the Social Security Law, calls the attention of
all member Employers and Employees of the Social System to the
following requirements:In general the Employer’s
obligation to remit his 3 1/2% contribution and to deduct or withhold
and remit to the System the Employee’s 2 1/2% contribution, exists as
long as the employer-employees membership is not broken or terminated,
as when the employee is on leave without pay. In other words, the
Employer will continue to remit his 3 1/2% contribution every month
even without the employee’s 2 1/2%, where there are no earnings on the
part of the employee. The 3 1/2% will be based on the month’s earnings
of the employee immediately preceding the month where there is no
earning. The unpaid 2 1/2% employee’s contribution will be deducted
either in lump sum or by installments from future earnings of the
employee.
and as Annex B a memorandum dated 28 October 1958 prepared by the Legal Staff of the Commission recommending that—
(1) The Elizalde Rope Factory be advised that it
should pay the 3 1/2% contribution for the account of the deceased
Edilberto Tupas corresponding to the months of October, November,
December (1957), January and February (1958) the same to be based on
the wages he received in August, 1957, in accordance with Circular No.
21.(2) The Elizalde Rope Factory be advised that it should
pay its 3 1/2% contribution for the account of all the other strikers
corresponding to the months covered by the strike, the same to be based
on the wages or compensation each of them received in August, 1957, in
accordance with Circular No. 21.(3) The premiums for the
deceased Edilberto Tupas be recomputed such that the 2 1/2% employee’s
contribution should be based on the wages he received in August, 1957.(4)
The other employees who participated in the strike be required to pay 2
1/2% employee’s contribution corresponding to the months covered by the
strike, the same to be based on the wages or compensation each of them
received in August, 1957.
On 2 December 1958 the rope factory requested the Commission to
reconsider its ruling requiring it to pay the 3 1/2 contribution in
question. By resolution No. 41, a copy of which was received by the
rope factory on 16 January 1959, the Commission denied the request for
reconsideration. Hence, this appeal from said resolution.
The issue is: should social security premium corresponding to a
period when a covered worker is on strike be paid by the employer.
The petitioner Elizalde Rope Factory, Inc. contends that that it is
not required to pay the 3 1/2% contribution corresponding to a period
of strike, because during such period a striker ceases to be an
employee whom the law [*] describes 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.
According to the petitioner, since the requisites of rendering or
performing service and receiving compensation therefor are wanting
while Edilberto Tupas was on strike, he during the strike was not an
employee for whom premium should be paid. Also invoking the legal
definition of an employer [*] as—
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 * * *,
the petitioner contends that during the strike it ceased to be
Edilberto Tupas’ employer, for it neither used his services nor had him
under its order as regards his employment, and concludes that while he
was on strike no premium should accrue and be paid for him.
On the other hand, the respondent Social Security Commission argues
that “the premiums corresponding to the months during which the strike
was pending must be paid * * *,” pursuant to its Circular No. 21 dated
15 October 1958, heretofore quoted.
Although during a strike the worker renders no work or service and
receives no compensation, yet his relationship as an employee with his
employer is not severed or dissolved. Strike is the workers’ means of
expressing their grievances to employers and enforcing compliance with
their demands made upon them. And when laborers go on strike, it cannot
be said that they intend to cut off or terminate their relationship
with their employer. On the contrary, a strike may improve the
employer-employee relationship by bringing about better working
conditions and more efficient services. Hence, the petitioner’s
contention that Edilberto Tupas ceased to be an employee from 17
September 1957 to the middle of February 1958 when he was on strike,
cannot be sustained.
Section 18 of Republic Act No. 1161 as amended by Republic Act No. 1792 provides that—
Beginning as of the last day of the calendar month immediately preceding the month when an employee’s compulsory coverage takes effect and every month thereafter during his employment,
there shall be deducted and withheld from the monthly compensation of
such covered employee a contribution equal to two and a half per centum of his monthly compensation. (Italics supplied.)
and section 19 thereof provides that—
Beginning as of the last day of the month immediately preceding the month when an employee’s compulsory coverage takes effect and every month thereafter during his employment, his employer shall pay, with respect to such covered employee in his employ, a monthly contribution equal to three and a half per centum of the monthly compensation of said covered employee. * * * (Italics supplied.)
The above legal provisions do not require that the employer’s 3 1/2%
and employee’s 2 1/2% contributions be based on the latter’smonthly
compensation actually earned or received by the employee covered by the
Social Security System. They only provide that after an employee is
compulsory covered by the System he and his employer will contribute to
pay the premium every month during his employment. In the case at bar,
Edilberto Tupas was compulsorily covered in September 1957 by the
System.
When he was on strike from 17 September 1957 to the middle of
February 1958, his employment did not cease or end. For such period,
his monthly premium accrued and the petitioner as his employer must pay
its 3Va% contribution in accordance with Circular No. 21 of the System.
The resolution appealed from is affirmed, with costs against the petitioner.
Bengzon, C. J., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Barrera, Paredes, Dizon, and De Leon, JJ., concur.
[*] Republic Act No. 1161, as amended by Republic Acts Nos. 1792 and 2658.