1. ORTEGA vs.

Social Security Commission and Social Security System

Doctrine:
Claims under the Labor Code for compensation and under the Social Security Law for benefits
are not the same as to their nature and purpose.
Facts:
Petitioner Ibarra Ortega, member of respondent Social Security System (SSS) filed claims for
partial permanent disability benefits on account of his illness with SSS, which the latter granted for total
of 23 months. After the expiration of his pension, Ortega then applied for total permanent disability
benefits but such application was denied by SSS. SSS observed that Ibarra was already granted benefits
under the same illness and his physical examination showed no progression of his illness. Accordingly,
Ortega filed before Social Security Commission (SSC) a petition alleging that SSS ignored the fact that
his attending physician diagnosed him of progressed illness. After exhausting administrative remedies,
SSC took cognizance of the petition and after hearing on the merits, it denied Ortega’s claim for
entitlement to total permanent disability. On appeal, the Court of Appeals affirmed in toto the SSC
order.

Issue:
Whether or not Ibarra can claim under Social Security Law for work connected disability claims
insofar as it relates to a demonstration of disability to perform his trade and profession

Held:
The conclusion that Ibarra is not entitled to total permanent disability benefits under the Social
Security Law was reached after petitioner was examined not just by one but four SSS physicians,
namely, Dr. Juanillo Descalzo III, Dr. Carlota A. Cruz-Tutaan, Dr. Jesus S. Tan and Dr. Rebecca Sison.
The initial physical examination and interview revealed that Ibarra had slight limitation of
grasping movement for both hands. According to Dr. Descalzo, this finding was not enough to grant an
extension of benefit since Ibarra had already received benefits equivalent to 30% of the body.
Responding to the allegation that the April 2000 physical examination was performed in a short period
of time, the doctor credibly explained that petitioner’s movements were already being monitored and
evaluated from a distance as part of the examination of his extremities in order to minimize malingering
and overacting.
Indeed, the evidence indicates that petitioner’s condition at the time material to the case does not
fall under the enumeration in the above-quoted provisions of the Social Security Law. Moreover, as
correctly held by the appellate court, the proviso of such provisions on the percentage degree of
disability applies when there is a related deterioration of the illness previously considered as partial
permanent disability. In this case, there is dearth of evidence on the proposition that petitioner’s array of
illnesses is related to Generalized Arthritis and Partial Ankylosis of the specific body parts.
Ibarra’s reliance on jurisprudence on work-connected disability claims insofar as it relates to a
demonstration of disability to perform his trade and profession is misplaced.
Claims under the Labor Code for compensation and under the Social Security Law for benefits
are not the same as to their nature and purpose. On the one hand, the pertinent provisions of the Labor
Code govern compensability of work-related disabilities or when there is loss of income due to work-
connected or work-aggravated injury or illness. On the other hand, the benefits under the Social Security
Law are intended to provide insurance or protection against the hazards or risks of disability, sickness,
old age or death, inter alia, irrespective of whether they arose from or in the course of the employment.
And unlike under the Social Security Law, a disability is total and permanent under the Labor Code if as
a result of the injury or sickness the employee is unable to perform any gainful occupation for a
continuous period exceeding 120 days regardless of whether he loses the use of any of his body parts.

2. Social Security System vs. CA and The Philippine Guards Protection Unit
Facts:
On February 18, 1960, as a result of a letter sent by the Social Security System to the Philippine
Guards Protection Unit threatening it with court action if it did not continue to remit its contributions to
the System, the said protection unit, owned and operated by Clemente V. Eslao filed with the Social
Security Commission a petition for exclusion from coverage under the System and for a refund its
remittances for September and October 1958. The reason given by the unit is that it is not subject to
compulsory coverage under the Social Security Act of 1954, as amended by Republic Act No. 1792,
because it is not the employer, but merely the agent of the thirty-nine security guards or watchmen
whose names appear in its membership list, for, actually, it has only one employee, namely, the clerk-
secretary of the office. Under Section 9 of the Social Security Act of 1954, as amended by Republic Act
No. 1792, which work effect on June 21, 1957, "the Commission may not compel any employer to
become a member of the System unless he shall have been in operation for at least two years and has, at
the time of admission, if admitted for membership during the first year of the System's operation, at least
fifty employees and if admitted for membership in the following year of operation and thereafter, at least
six employees ...." After the issues had been joined and the case heard, the Social Security Commission,
on April 12, 1961, handed down a resolution finding the Philippine Guards Protection Unit the employer
of the security guards or watchmen, and accordingly declaring the latter subject to compulsory coverage.
A motion to reconsider was filed, but the same was denied in an order of May 8, 1961. Hence, an appeal
was interposed by the Philippine Guards Portion Unit with the Court of Appeals, which reversed the
resolution and order of the Commission in a decision promulgated on July 24, 1967, the dispositive
portion whereof is summarized in the opening sentence of this Opinion.
Issue:
Whether or not for purposes of social security coverage, the security guards or watchmen in
question should be considered private respondent's employee's not only under Republic Act No. 1792,
but also under Republic Act No. 2658

Held:
There are practical considerations why private respondents Philippine Guards Protection Unit,
and not its clients, would be considered, for purposes of social security coverage, the employer of the 39
guards or watchmen listed in its roster
(a) A watchman is not permanently assigned to a client; for one reason or another he may be
pulled out of a particular assignment and detailed to another client. Consequently, different clients have
to deduct premiums from different watchmen at different times and remit them to the System together
with the clients' own share of the premiums.
(b) Under the arrangements between private respondents and its the clients, the latter do not
determine how much salary is to be plaid to the watchmen. The clients merely pay to private respondent
the fee stipulated in their contracts. How, then, can a client deduct the premiums due from a watchman?
And how can it determine the amount of the watchman's premium as well as its own?
(c) Service performed by one person for another is not considered an employment if the same is
"purely casual and not for the purpose of occupation or business of the employer" (Section 8[j][3],
Social Security Act of 1954). Under private respondent's hypothesis, a watchman may at times be
considered an employee and at other times not, depending on whether or not he happens to be assigned
to a client who carries on a trade business, industry, undertaking or activity of any kind (Section 8[c],
supra). A fortiori, of private respondent's 39 watchmen, some may be covered by the System's plan,
while others not. To pursue the matter further, all the 39 watchmen may be covered sometimes, and not
at other times.
(d) If private respondent's clients are considered the watchmen's employees, it may happen that
the 39 different watchmen have 39 different employers, which absurd, considering that all the watchmen
are on the payroll and under the supervision of only one entity.
Private respondent’s membership in the Social Security System from August 1, 1958 up to the
present is declared valid and effective. Coverage in the System upon all its employees falling within the
required age level, including its security guards or watchmen, is hereby declared compulsory; and
private respondent is directed to pay or remit to petitioner all back premiums due.
3. CMS Estate vs. SSS
Facts:
Petitioner CMS Estate Inc. is a domestic corporation engaged in the real estate business. In
December 1952, it began with only 6 employees. In 1956, it also engaged in the logging business and
obtained an ordinary license from the Bureau of Forestry to operate forest concession (13,000 hectares)
in Baganga, Davao. In January 1957, CMS Estate entered into a contract of management with Eufracio
Rojas for the operation of the logging concession which began in April 1957 with four employees
earning monthly salaries. By September 1957, CMS Estate had 89 employees in the logging operation.
But on December 1957, CMS Estate revoked its contract with Rojas. By August 1958, CMSEstate
became a member of SSS with respect to its real estate business and remitted to the SSS P203.13
representing the initial premium of the salaries of the employees in the logging business. But on October
1958, petitioner demanded the refund of the amount, alleging that it is not yet subject to compulsory
coverage in its logging business. Respondent SSS denied the petition on the ground that the logging
business is only an expansion of the company’s existing activities and that it should be considered a
member since December 1952 when it opened its business. CMS Estate contends that the SSS
contributions required of employees and employers under the SSS Act of 1954 are not in the nature of
excise taxes and therefore, not compulsory of employers.

Issues:
(1) Whether or not the contributions required of employers and employees under our Social
Security Act of 1954 are obligatory because the said Act was allegedly enactedby Congress in the
exercise of the police power of the State, not of its taxing power
(2) Whether or not a contractee-independent contractor relationship existed between petitioner
and Eufracio Rojas during the time that he was operating its forest concession at Baganga, Davao

Held:
(1) The said enactment implements the general welfare mandate of the Constitution and
constitutes a legitimate exercise of the police power of theState. The Social Security Law was enacted
pursuant to the policy of the government "to develop, establish gradually and perfect a social security
system whichshall be suitable to the needs of the people throughout the Philippines, and shall provide
protection against the hazards of disability, sickness, oldage and death" (Sec. 2, RA 1161, as amended).
Membership in the SSS is not a result of bilateral, consensual agreement where the rights and
obligations of the parties are defined by and subject totheir will, RA 1161 requires compulsory coverage
of employees and employers under the System. It is actually a legal imposition on said employers
andemployees, designed to provide social security to the workingmen. The principle of non-impairment
of the obligation of contract as provided in the Bill of Rights isnot a proper defense, the enactment being
a lawful exercise of the police power of the State. - The taxing power of the State is exercised for the
purpose of raising revenues. However, under our Social Security Law, the emphasis is more on
thepromotion of the general welfare.The Act is not part of our Internal Revenue Code nor are the
contributions and premiums therein dealt with and provided for,collectible by the Bureau of Internal
Revenue. The funds contributed to the System belong to the members who will receive benefits, as a
matter of right,whenever the hazards provided by the law occur. Together with the contributions
imposed upon employees and the Government, they are intended for the protection of said employees
against the hazards ofdisability, sickness, old age and death in line with the constitutional mandate to
promote social justice to insure the well-being and economic security of all the people. It is the intention
of the law to cover as many persons as possible so as to promote the constitutional objective of social
justice. It is clear that a later law prevailsover a prior statute and moreover the legislative intent must be
given effect.
(2) Rojas was not an independent contractor but merely an employee of the petitioner. Rojas was
appointed as operations manager of the logging concession; he has no power to appoint or hire
employees; as the term implies, he only managesthe employees and it is petitioner who furnishes him
the necessary equipment for use in the logging business; and he is not free from the control and direction
ofhis employer in matter connected with the performance of his work. Rojas should be entitled to the
compulsory coverage of the Act.

4. Santiago vs. CA & SSS

Facts:
Petitioners, Manuel H. Santiago, et al were employees of I-Feng Enamelling Company (Phil.)
Inc. for several years, some from 1950 up to the time the company closed its business on May 1, 1965.
Since the enactment of the Social Security Act, Republic Act No. 1161, employees have been paying,
through salary deductions, their personal contributions to the System. They also enjoyed salary loan
benefits, their installment payments thereto were likewise deducted and collected by their employer.
The said employer failed to remit to the System not only the installment payments to their salary
loans in the amount of P7,940.13 but also the back premiums in the amount of P137,787.90 as of July
1966, excluding of course the penalties therefor in the amount of P63,734.97 as of August 9,1966.
On appeal, Court of Appeals, which, in its Decision promulgated on December 23, 1974, upheld
the findings of the Commission and affirmed the challenged Resolution. Petitioners are now before us
assailing the foregoing Resolution and Decision.
Issues:
(1) W/N premium contributions and payments of salary loans by petitioners, which were
deducted and collected from their salaries by Employer, but not remitted to the System, should be
credited in their favor by the System
(2) W/N a contract of agency exist between the SSS and the Employer in the collection of the
salary loan installment payments

Held:
The judgment under review is hereby modified in that only the premium contributions paid by
petitioners to its employer, the I-Feng Enamelling Company (Phil.) Inc., shall be credited in petitioners'
favor so that they may continue to enjoy the benefits of the coverage as provided by law.
On the matter of payments of salary loans, SSS Circular No. 52 provides:
In case the borrower is in active employment, payment shall be made thru this employer by
means of salary deductions. For this purpose, he shall expressly authorize in the application form his
employer and the subsequent employers to whom he may later on transfer to deduct from his salaries the
installments due. The employer, in turn shall remit to the System these installments in accordance with
the procedure laid down.
It should be noted that it is the borrower who expressly authorizes his employer and subsequent
employers to deduct from his salary the installments due on his salary loan. The employer then remits
the installments due to the System in accordance with rules that the System has laid down. The
employer, in so deducting the installment payments from the borrower, does so upon the latter's
authorization. The employer is merely the conduit for remitting the premiums for reasons of
administrative convenience and expediency in order that SSS members may be served efficiently and
expeditiously. No contract of agency, in the legal sense, therefore may be said to exist between the
employer and the System.
The salary loans are not covered by law but by contract between the System as lender, and the
private employee, as borrower.
There is a difference, however, in respect of premium contributions, by reason of the explicit
provision of Section 22(b) of the Social Security Act, reading:
(b) The contributions payable under this Act in cases where an employer refuses or neglects to
pay the same shall be collected by the System in the same manner as taxes are made collectible under
the National Internal Revenue Code, as amended, Failure or refusal of the employer to pay or remit the
contributions herein prescribed shall not prejudice the right of the covered employee to the benefits of
the coverage.
Clearly, if the employer neglects to pay the premium contributions, the System may proceed with
the collection in the same manner as the Bureau of Internal Revenue in case of unpaid taxes. Plainly,
too, notwithstanding non-remittance by employers of the premium contributions, covered employees are
entitled to the benefits of the coverage, such as death sickness, retirement, and permanent disability
benefits. These benefits continue to be enjoyed by the employees by operation of law and not, as
petitioners allege, because the premium contributions and salary loan installment payments have already
became the money of the System upon payment by the employees to the employer. It should be
remembered that funds contributed to the System by compulsion of law are funds belonging to the
members, which are merely held in trust by the government.
Contrary to petitioners' contention, the penalty of 3% per month imposed on the employer, if any
premium contribution is not paid to the System, prescribed by Section 22 of the Act from the date the
contribution falls due until paid, does not necessarily make the employer the agent of the System. The
prescribed penalty is intended to exact compliance by the employer.

5. Gamogamo vs. PNOC Shipping and Transport Corp.

Facts:
On 23 January 1963, Petitioner was first employed with the Department of Health (DOH) as
Dental Aide. He remained employed at the DOH for fourteen years until he resigned. On 9 November
1977, petitioner was hired as company dentist by LUSTEVECO, a private domestic corporation.
Subsequently, respondent PNOC Shipping and Transport Corporation acquired and took over the
shipping business of LUSTEVECO, and petitioner was among those who opted to be absorbed by the
Respondent. Sometime in 1995, petitioner requested to be included in the next retrenchment schedule.
However, his request was turned down. Eventually, petitioner retired after serving the Respondent and
LUSTEVECO for 17 years and 4 months upon reaching his 60th birthday. He received a retirement pay
which is equivalent to one month pay for every year of service and other benefits. The cases of Dr.
Rogelio T. Buena and Mrs. Luz C. Reyes, who were holding permanent/non-redundant positions but
were willing to be retrenched under the program were retrenched and paid a 2-month separation pay for
every year of service under Respondent’s Manpower Reduction Program. In view of the action taken by
Respondent in the retrenchment of Dr. Buena and Mrs. Reyes, petitioner filed a complaint at the
National Labor Relations Commission (NLRC) for the full payment of his retirement benefits.

Issue:
Whether or not petitioner’s service with the DOH should be included in the computation of his
retirement benefits

Held:
No. Respondent’s Retirement scheme pertinently provides:
 SEC 4.1.Normal Retirement Date/Eligibility. -- The normal retirement date of an employee shall
be the first day of the month next following the employee’s sixtieth (60th) birthday. To be eligible for
the retirement benefit described under Sec. 4.2, the employee must have rendered at least ten (10) years
of continuous service with the Company. In case the retiring employee has rendered less than ten (10)
years of service with the Company, he shall be entitled to one (1) month’s final monthly basic salary
(12/12) for every year of service.
It is clear therefrom that the creditable service referred to in the Retirement Plan is the retiree’s
continuous years of service with Respondent. Since the retirement pay solely comes from Respondent’s
funds, it is but natural that Respondent shall disregard petitioner’s length of service in another company
for the computation of his retirement benefits. We cannot uphold petitioner’s contention that his
fourteen years of service with the DOH should be considered because his last two employers were
government-owned and controlled corporations, and fall under the Civil Service Law. It is not at all
disputed that while Respondent and LUSTEVECO are government-owned and controlled corporations,
they have no original charters; hence they are not under the Civil Service Law. Obviously, totalization of
service credits is only resorted to when the retiree does not qualify for benefits in either or both of the
Systems. Here, petitioner is qualified to receive benefits granted by the Government Security Insurance
System (GSIS).

6. Philippine Blooming Mills vs. SSS

Facts:
This suit is brought by the employer, Philippine Blooming Mills Co., Inc. (PBMC)and its alien
employees against the Social Security System
PBMC is a domestic corporation since 1957 which has employed Japanese technicians for
employment contracts ranging from 6 to 24 months. From April 28, 1957 to October 26, 1958 it
employed six (6) Japanese technicians. PBMC inquired with SSS if the said aliens are subject to
compulsory coverage under SSS, to which the latter replied that while they are compulsorily covered,
they are entitled to rebate a proportionate amount of their SSS contributions. Their employers shall also
be entitled to the same proportionate rebate
On October 7, 1958, the Assistant General Manager of the corporation, on its behalf and as
attorney-in-fact of the Japanese technicians, filed a claim with the SSS for the refund of the premiums
paid to the System, on the ground of termination of the members' employment. As this claim was
denied, they filed a petition with the Social Security Commission for the return or refund of the
premiums, in the total sum of P2,520.00, paid by the employer corporation and the 6 Japanese
employees, plus attorneys' fees. This claim was controverted by the SSS, alleging that Rule IX of the
Rules and Regulations of the System, as amended, requires membership in the System for at least 2
years before a separated or resigned employee may be allowed a return of his personal contributions.
Under the same rule, the employer is not also entitled to a refund of the premium contributions it had
paid.

Issue:
Whether PBMC (appellants) are bound by the amended Rules requiring membership for two
before refund of the premium contributions may be allowed

Held:
Yes. The amendment was to take effect upon approval of the President and not upon publication.
The date of approval came before the Japanese employees left therefore PBMC must comply with the 2
years membership rule as a qualification to refund premiums contributed.
The Rules and Regulations promulgated by the SSS, pursuant to the rule-making authority
granted in Section 4(a) of R.A. 1161 wherein it did state that employers will get a refund. There was
nothing stated about requiring a membership of two years before refund may be allowed. However, the
amendment to this was approved after the employment of the Japanese technicians had ceased and the
corresponding claim for the refund of the premium contributions was filed with the System.
The original Rules and Regulations of the SSS specifically provide that any amendment thereto
adopted by the Commission, shall take effect on the date of its approval by the President.
Consequently, the delayed publication of the amended rules in the Official Gazette did not affect
the date of their effectivity. (January 15, 1958 approved by the President)
It follows that when the Japanese Technicians were separated from employment on October
1958, the rule governing refund of premiums is Rule IX of the amended Rules and Regulations which
requires membership for 2 years before such refund of premiums may be allowed.

7. Pajarillo vs. SSS

Facts:
Pajarillo and other owners of fishing vessels enter into agreement with pilots, whereby the latter
take charge of the vessels’ equipment and gears used for fishing. A pilot hires crews to man the boat for
fishing trips. The fishermen could go out to the sea only when there is no moon or it is not yet very
bright. These men have no regular income. If the trip yields a catch, the proceeds thereof are divided
into three parts: for the owner of the boat and equipment; for expenses like crude oil and for
maintenance, and the other one-third is divided among the men. The men are under no obligation to stay
in one outfit. Sometimes, they join as members of the crew for one night only; sometimes two or three
days. Then, they leave and join other outfits. Even the pilot himself is not bound to retain his charge for
any definite duration. He can return the boat to its owner anytime, if he does not want to manage it
anymore. The vessel-owners were required to register as employers with the Social Security System but
they claimed that they were exempted from the compulsory coverage of the latter.

Issue:
Whether or not there exists an employer-employee relationship between the vessel-owners and
the crew-members to include the former in the compulsory coverage under SSS

Held:
No. The boat-owners are not responsible for the wage, salary, or fee of the pilot and crew-
members. Their sole participation in the venture is the furnishing or delivery of the equipment used for
fishing, after which, they merely wait for the boat's return and receive their share in the catch, if there is
any. For this part, a person who joins the outfit is entitled to a share or participation in the fruit of the
fishing trip. If it gives no return, the men get nothing.
But, even assuming arguendo that the pilot and crew-members may be treated as employees of
the boat-owners, they cannot also be made subject to compulsory coverage under SSS. The men are
under no obligation to remain in the outfit for any definite period. Thus, one can be the crew-member of
an outfit for one day and be the member of the crew of another vessel the next day. Also, there is no
regular schedule of fishing trips. It all depends on the weather and other natural conditions, and the
volition of the pilots and crew-men themselves. Also, even when a fishing trip is completed, it is no
assurance of income for the fishermen and the boat-owner as well.

8. SSC vs. Azote

Facts:
In 1994, Edgardo submitted his SSS Form E-4 with his wife Edna and their children as
beneficiaries. When he died in 2005, Edna tried to claim the death benefits as the wife of a deceased
member but it was denied. It appears from the SSS records that Edgardo had another set of SSS Form
E-4 in 1982 where his former wife Rosemarie and their child were designated as beneficiaries. Edna did
not know that Edgardo was previously married to another woman. She then filed for a petition before
the SSS, and notice was sent to Rosemarie but she made no answer. The SSC dismissed Edna’s petition
because the SSS Form E-4 designating Rosemarie and her child was not revoked by Edgardo, and that
she was still presumed to be the legal wife as Edna could not proved that Edgardo’s previous marriage
was annulled or divorced.
Issue:
Whether or not Edna is entitled to the SSS benefits as the wife of a deceased member

Held:
No. The law in force at the time of Edgardo’s death was RA 8282. Applying Section 8(e) and
(k) thereof, only the legal spouse of the deceased-member is qualified to be the beneficiary of the latter’s
SS benefits. Here, there is a concrete proof that Edgardo contracted an earlier marriage with another
individual as evidenced by their marriage contract.
Since the second marriage of Edgardo with Edna was celebrated when the Family Code was
already in force, Edna, pursuant to Art 41 of the Family Code, failed to establish that there was no
impediment or that the impediment was already removed at the time of the celebration of her marriage
to Edgardo. Edna could not adduce evidence to prove that the earlier marriage of Edgardo was either
annulled or dissolved or whether there was a declaration of Rosemarie’s presumptive death before her
marriage to Edgardo. What is apparent is that Edna was the second wife of Edgardo. Considering that
Edna was not able to show that she was the legal spouse of a deceased-member, she would not qualify
under the law to be the beneficiary of the death benefits of Edgardo.
Although the SSC is not intrinsically empowered to determine the validity of marriages, it is
required by Section 4(b) (7) of R.A. No. 828229 to examine available statistical and economic data to
ensure that the benefits fall into the rightful beneficiaries.