For purposes of SSS coverage, members of labor organizations in government entities are not employees as defined by the Labor Code.

From May 1958 to July 1984, Ramchrisen Haveria was employed by the Social Security System.  Thereat, he became a member and officer/treasurer of the Social Security System Employees Association (SSSEA), a labor organisation within the SSS, and was reported by the latter as an employee for SSS coverage; SSEA also remitted his monthly contributions from May 1966 to December 1981.  After his employment with the SSS, he moved on to private companies, where he continued his SSS contribution.  He reached 60 years of age in 1997, after remitting 281 monthly contributions to the SSS.  In June, 2002, Haveria received a letter from the SSS informing him that his retirement benefits are being suspended in accordance with a legal opinion rendered in two other cases similar to him, on the basis that they were not entitled to retirement benefits as there was no employer-employee relationship between him and the SSEA,  a labor organization.

The Social Security Commission denied his petition, pointing out that that there was no employment relationship between Haveria and the SSSEA and that labor unions or associations are not employers with respect to its officers or members.  On his claim of estoppel, the SSC SSC held that SSS’ acceptance of Haveria’s registration documents did not ipso facto result in his membership because he did not meet the qualifying conditions for membership in the first place.

The CA affirmed the SSC decision.

The Issue:

Whether or not there is an employer-employee relationship between the SSSEA and Haveria, entitling him to retirement benefits from the SSS as a private employee.

The Ruling:

The petition lacks merit.

R.A. No. 1161 or the Social Security Act of 1954was enacted with the policy “to develop, establish gradually, and perfect a social security service which shall be suitable to the needs of the people throughout the Philippines, and shall provide protection against the hazards of unemployment, disability, sickness, old age and death.”R.A. No. 1161 was amended by R.A. No. 8282 in 1997. Haveria was registered with the SSS in May 1966 when R.A. No. 1161 was still effective.

Under R.A. No. 1161, there are two kinds of coverage: compulsory coverage and voluntary coverage. The Act provides:

C. Scope of the System

SECTION 9.

(a) Compulsory Coverage. — x x x all employees between the ages of eighteen and sixty years, inclusive, if they have been for at least six months in the service of an employer who is a member of the System: Provided, That the Commission may not compel any employer to become a member of the System unless he shall have been in operation for at least three years and has, at the time of admission, two hundred employees: x x x.

x x x x

(b) Voluntary Coverage. — x x x any employer not required to be a member of the System may become a member thereof and have his employees come under the provisions of this Act if the majority of his employees do not object; and any individual in the employ of the Government, or of any of its political subdivisions, branches, or instrumentalities, including corporations owned or controlled by the Government, as well as any individual employed by a private entity not subject to compulsory membership under this Act may join the System by paying twice the employee’s contribution prescribed in section nineteen. Any other individual may likewise join the System, subject to such rules and regulations as may be prescribed by the Commission. (Emphasis supplied)

Accordingly, under R.A. No. 1161, compulsory members are those employees in the private sector between the ages of 18 to 60 years old whose employer is required to register under the SSS. Voluntary coverage applies to employees of private employers who volunteer to be members although not required by the law, and employees of government agencies and corporations, and any individual employed by a private entity not subject to compulsory membership.

Voluntary coverage was expanded by R.A. No. 8282 to include spouses who devote full time to management of the household and overseas Filipino workers.^[20] Compulsory membership was likewise expanded to include self-employed professionals, partners and single proprietors of business, actors, actresses, news correspondents, professional athletes, coaches, trainers, jockeys, and individual farmers and fishermen.^[21]

For compulsory members, both the employer and employee contribute to the employee’s monthly premium contributions.Voluntary members pay for their own monthly premiums; as such, they are required to pay twice the amount of the employee’s contribution prescribed in Section 19 of R.A. No. 1161.

“Employer” is defined under R.A. No. 1161 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, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government.

The Labor Code also provides its own definition of the word:

Article 219. Definitions – x x x

x x x x

(e) “Employer” includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.

Haveria was reported by the SSSEA as an employee, and he claims coverage as a compulsory member of the SSS. As correctly held by the SSC and CA, the SSSEA, a labor organization, cannot be considered an employer under the law. The Labor Code expressly excludes labor organizations from the definition of an employer, except when they directly hire employees to render services for the union or association. Aside from his bare allegation that he was an employee of the SSSEA, Haveria did not present any other fact to substantiate his claim of employment with the SSSEA. He did not state his day-to-day duties or responsibilities and work hours; he did not even present proof of employment such as pay slips and contract of employment. Thus, the SSSEA was not an employer and Haveria was not its employee, but merely a member or officer thereof.

As a government employee, Haveria would have been qualified for voluntary coverage under Section 9 (b) of R.A. No. 1161,had he registered as a voluntary member while working with the SSS. However, he was registered as a compulsory member on the mistaken claim that he was an employee of a private entity, the SSSEA. Consequently, his compulsory coverage while supposedly employed with the SSSEA was erroneous.

Thus, as correctly found by the SSC and affirmed by the CA, Haveria’s compulsory coverage with the SSS validly started only in 1989 when he was reported as an employee of private employer, Stop Light Diners until his retirement with his second private employer, First Ivory Pharma Trade, Inc. in 1997.

On the issue of estoppel, the Court holds that the principle cannot be invoked against the SSS. Article 1431 of the Civil Code provides:

Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.

In the present case, it was the SSSEA and Haveria who made the incorrect representation to the SSS that an employment relationship existed between them. As a result of said representation, the SSS erroneously registered Haveria as a compulsory member. In Noda v. SSS,the Court held that if the act, conduct or misrepresentation of the party sought to be estopped is due to ignorance founded on innocent mistake, estoppel will not arise. Thus, Haveria cannot claim estoppel against the SSS as the latter merely relied on the former’s representation.

The Court finds that the CA did not commit any error in affirming the SSC Resolution and Order. Findings of administrative agencies are generally accorded great weight and respect, especially when affirmed by the CA. In Spouses Hipolito v. Cinco, et al.,^[27] the Court ruled:

“By reason of the special knowledge and expertise of said administrative agencies over matters falling under their jurisdiction, they are in a better position to pass judgment thereon; thus, their findings of fact in that regard are generally accorded great respect, if not finality, by the courts.” Such findings must be respected as long as they are supported by substantial evidence, even if such evidence is not overwhelming or even preponderant.-It is not the task of the appellate court to once again weigh the evidence submitted before and passed upon by the administrative body and to substitute its own judgment regarding sufficiency of evidence. 

Thus, the Court agrees with the ruling of the SSC, as affirmed by the CA, that, in the interest of justice and equity, Haveria’s contributions remitted by the SSSEA shall be considered as voluntary contributions so that his contributions can reach the minimum 120 monthly contributions for qualification to a retirement pension.^[29] The remainder shall be returned to Haveria, subject to offsetting of the pensions paid to him in excess, if any. The SSS shall make a recomputation of all paid monthly pensions of Haveria and make necessary adjustment thereto.

WHEREFORE, premises considered, the Petition is DENIED. The CA Decision dated October 22, 2007 and Resolution dated January 14, 2008 in CA-G.R. SP No. 98296 are AFFIRMED. The SSS is further ORDERED to:

(1)	CREDIT Haveria with a total of 120 monthly contributions;
(2)	RECOMPUTE all paid monthly pensions in accordance with No. 1; and
(3)	RETURN the remainder of 167 monthly premium contributions, subject to offsetting against the monthly pensions paid to him in excess of what he is entitled to, if any, in accordance with the computation in No. 2.

SO ORDERED.

Carpio, (Chairperson), Perlas-Bernabe, A. Reyes, Jr., and J. Reyes, Jr., JJ., concur.

G.R. No. 181154, August 22, 2018, RAMCHRISEN H. HAVERIA, PETITIONER, VS. SOCIAL SECURITY SYSTEM, CORAZON DE LA PAZ, AND LEONORA S. NUQUE, RESPONDENTS.