Philippine Supreme Court Jurisprudence


Philippine Supreme Court Jurisprudence > Year 1966 > January 1966 Decisions > G.R. No. L-20088 January 22, 1966 LUZON STEVEDORING CORP. v. SOCIAL SECURITY SYSTEM:




PHILIPPINE SUPREME COURT DECISIONS

EN BANC

[G.R. No. L-20088. January 22, 1966.]

LUZON STEVEDORING CORPORATION, Petitioner-Appellant, v. SOCIAL SECURITY SYSTEM, Respondent-Appellee.

C. R. Tiongson, and B. L. Rillo, for the Petitioner-Appellant.

Solicitor General and Solicitor Camilo D. Quiason for the Respondent-Appellee.


SYLLABUS


1. SOCIAL SECURITY ACT; COMPULSORY COVERAGE OF TEMPORARY EMPLOYEES. — Formerly, the pertinent provision on compulsory coverage of the Social Security Act, as amended by Republic Act 1792 required at least six months service with the employer. The Social Security Act was however amended by Republic Act 2658 which eliminated the six months service requirement. Sans such requirement, all employees regardless of tenure would qualify for compulsory membership in the Social Security System, except those classes of employees contemplated in Section 8(j) of the Social Security Act.

2. ID.; ID.; EXEMPTION FROM COVERAGE. — Section 8 (j) defines employment covered by the Social Security Act and provides exception therefrom. Among the exceptions mentioned — paragraph (10) are services performed by temporary employees which may be excluded by regulation of the Social Security Commission. In this connection, although Congress has delegated to the Social Security Commission the issuance of regulations bearing on the exemption of services performed by temporary employees from social security coverage, no such regulation has been cited to buttress the claim for exemption. Perforce, no exemption could be granted as there is no way of telling whether or not the employees in question belong to a group or class designated by regulation of the Social Security Commission as exempt.

3. ID.; ID.; DEATH AND DISABILITY BENEFITS; NUMBER OF MONTHLY CONTRIBUTIONS NOT A PREREQUISITE TO THE ENJOYMENT OF BENEFITS. — It is not entirely correct to say that the employees cannot possibly be entitled to social security benefits by reason of their temporary employment. From the moment an employee is reported for membership, he is entitled to death and disability benefits pursuant to Section 13 of Republic Act 1161, as amended. The number of monthly contributions mentioned in said section is not a prerequisite to the enjoyment of death or disability benefits but is merely a basis in determining the amount of benefit to be paid.

4. ID.; ID.; SICKNESS AND RETIREMENT BENEFITS; WHEN EMPLOYEE MAY ENJOY SAID BENEFITS. — An employee member may enjoy sickness and retirement benefits provided he accumulates to his credit twelve and one-hundred twenty months contributions, respectively. It is not an impossibility for the employee in question to reach the minimum number of monthly contributions simply because their employment is temporary and intermittent. For nowhere in the law is it required that the monthly contributions be in the same amount, consecutive or derived from the same employer. Moreover, Sections 12 and 13 of the law specifically provides that a covered employee shall receive a lump sum which should not be less than the total contributions paid by him and his employer in his behalf. The employee therefore loses not a single centavo of his investment. On the contrary, he gains by the amount paid by his employer in his behalf.


D E C I S I O N


BENGZON, J. P., J.:


Luzon Stevedoring Corporation (Lusteveco for short), a domestic corporation with principal office in Manila, is engaged in the business of stevedoring, lightering and towing in the cities of Iloilo and Bacolod under the trade name of Visayan Stevedore Transportation Company. It owns, maintains and operates towboats, barges and a drydock. In 1959 it carried in its payrolls temporary employees assigned as follows:chanrob1es virtual 1aw library

(1) 1,752 and 2,552 stevedores in the cities of Iloilo and Bacolod, respectively, who were hired on rotation and on vessel-by- vessel basis. They were paid daily with the understanding of being laid off at the end of each day. On the average, each stevedore worked for 14 days during the year.

(2) Drydock workers temporarily drafted in the repair and maintenance of towboats and barges during the peak season, i.e., September to December. They were paid on daily basis and the duration of their employment depended upon the number of vessels or barges drydocked. Average number of working days for each laborer in 1959 amounted to only 20 days.

(3) Sailors, patrons, officers and crew members of towboats and barges who were hired in place of regular sailors, patrons, officers and crew members who were absent or on leave. They were laid off upon return of the regular employees. Each relief worker averaged 36 working days in 1959.

The labor unions to which said temporary workers belong controls the rotation of employment.

On September 28, 1960 the Consolidated Union of the Philippines, Trade Union of Central Philippines, Union de Marinos de Iloilo and Vistranco Employees Association requested the Social Security Commission for the exemption of the aforementioned temporary employees from compulsory coverage of the Social Security Act (RA 1161) on the ground that they "work only intermittently and are not in a position to maintain membership in the Social Security System long enough to be fully entitled to the law’s sickness, disability, death and retirement benefits." Later, on October 19, 1960 Lusteveco lodged a similar request with the Social Security Commission. On April 16, 1962, however, the Social Security Commission denied the request for exemption and ordered Lusteveco to "pay all back premiums due and unpaid from the respective dates of coverage of the employees concerned, to be determined from the records of the System." Its motion for reconsideration having been denied, Lusteveco instituted the instant appeal.

The question is, do said temporary and casual employees come within the compulsory coverage of the Social Security Act?

Lusteveco’s plea for exemption rests on the contention that compulsory coverage under the Social Security Act, as amended, extends primarily to permanent employees and secondarily to temporary employees whose tenure of employment is merely indefinite but not with respect to the duration of the work to be performed. Such a contention would accordingly place beyond the ambit of the law the employees in question who were allegedly hired by the day with uncertain chance of working the following day even if the same work were still available.

Formerly, the pertinent provision on compulsory coverage of the Social Security Act, as amended by Republic Act 1792, stated:jgc:chanrobles.com.ph

"SEC. 9. Compulsory coverage. — Coverage in the System shall be compulsory upon all employees between the ages of sixteen and sixty years, inclusive, if they have been for at least six months in the service of the employer who is a member of the System: . . ." (Italics supplied)

Coverage required at least six months service with the employer. Hence, the effectivity of the coverage on the first day of the calendar month following the month when the employer qualified as a member of the System, provided the employee has rendered at least six months’ service. 1 In this light, this Court was prompted to state that the coverage of the Social Security Law is predicated on the existence of an employer-employee relationship of more or less permanent nature and extends to employment of all kinds except those expressly excluded. 2

The Social Security Act was however amended by Republic Act 2658 which took effect on June 18, 1960. 3 The amendment broadened the coverage of the Social Security System, increased its benefits and liberalized the terms and conditions for their enjoyment. 4 Thus, Sections 9 and 10 were made to read as follows:jgc:chanrobles.com.ph

"SEC. 9. Compulsory coverage. — Coverage in the System shall be compulsory upon all employees between the ages of sixteen and sixty, inclusive, and their employers: . . ."cralaw virtua1aw library

"SEC. 10. Effective date of coverage. — Compulsory coverage of the employer shall take effect on the first day of his operation, and that of the employee on the date of his employment." (Italics supplied)

Eliminated was the six months’ service requirement. Sans such requirement, all employees regardless of tenure, such as the employees in question, would qualify for compulsory membership in the Social Security System; except of course those classes of employees contemplated in Section 8(j) of the Social Security Act.

Section 8(j) defines employment covered by the Social Security Act and provides exception therefrom. Among the exceptions mentioned — paragraph 10 — are services performed by temporary employees which may be excluded by regulation of the Social Security Commission. It is pursuant to this exception that Lusteveco seeks to persuade the Social Security Commission and this Court to exempt the employees in question from social security coverage. Suffice it to state in this instance that Congress has delegated to the Social Security Commission the issuance of regulations bearing on the exemption of services performed by temporary employees from social security coverage. No such regulation has been cited to buttress the claim for exemption. Perforce, no exemption could be granted as there is no way of telling whether or not the employees in question belong to a group or class designated by regulation of the Social Security Commission as exempt.

Lusteveco further argues that since the employees in question are hired intermittently in short durations, it would be impossible for them to accumulate the requisite number of monthly contributions to the Social Security System before they can be entitled to benefits afforded by the Social Security Act. Consequently, as to them, exemption from membership in the Social Security System ought to be granted because the law could not have intended them to be covered without enjoying the benefits provided for therein.

It is not entirely correct to say that the employees in question cannot possibly be entitled to social security benefits by reason of their temporary employment. From the moment an employee is reported for membership, he is entitled to death and disability benefits pursuant to Section 13 of Republic Act 1161, as amended. The number of monthly contributions mentioned in said section is not a prerequisite to the enjoyment of death or disability benefits but is merely a basis in determining the amount of benefit to be paid.

In the case of sickness and retirement benefits, an employee member may enjoy said benefits provided he accumulates to his credit twelve and one-hundred twenty months contributions, respectively. It is not an impossibility for the employees in question to reach the minimum number of monthly contributions simply because their employment is temporary and intermittent. For nowhere in the law is it required that the monthly contributions be in the same amount, consecutive or derived from the same employer. Moreover, Sections 12 and 13 of the law specifically provides that a covered employee shall receive a lump sum which should not be less than the total contributions paid by him and his employer in his behalf. The employee therefore loses not a single centavo of his investment. On the contrary, he gains by the amount paid by his employer in his behalf.

The coverage in the Social Security System of the employees in question, temporary though their employment may be, is in line with the declared policy of Congress to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the laborers throughout the Philippines, and shall provide protection against the hazards of disability, sickness, old age and death. Adherence to such policy would strongly militate in favor of the coverage of such temporary employees for, more than their brothers who are regularly and permanently employed, they are exposed to the hazards of disability, sickness, old age and death. More often than not, they are hapless and defenseless victims of these hazards. Social justice demands that "they who have less in life should be given more in law." The elimination of the six months’ service requirement aforementioned is a clear indication of such congressional policy.

Wherefore, the resolutions of the Social Security Commission appealed from are hereby affirmed. No costs. So ordered.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Regala and Zaldivar, JJ., concur.

Dizon and Makalintal, JJ., took no part.

Endnotes:



1. Section 10, R.A. 1161.

2. Roman Catholic Archbishop of Manila v. Social Security Commission, L-15045, Jan. 20, 1961.

3. The application for exemption in this case was filed with the Social Security System on October 19, 1960.

4. Montemayor, Jeremias U.: Labor, Agrarian and Social Legislation, First Edition, Vol. II, p. 650.




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