Republic v. Asiapro Cooperative
REITERATIONFacts
The Antecedents: Respondent Asiapro Cooperative (Asiapro), a multi-purpose cooperative, entered into Service Contracts with Stanfilco. Its owners-members, who do not receive wages but a share in the service surplus, were assigned to Stanfilco. These owners-members requested to be registered with the Social Security System (SSS) as self-employed, with contributions covering both employer and employee shares. Procedural History: The SSS, through a letter, informed Asiapro that it was considered an employer of its owners-members working at Stanfilco and should register as such. Asiapro denied this, asserting that owners-members are the cooperative itself and cannot be its own employer. The SSS filed a petition-complaint with the Social Security Commission (SSC) for Asiapro to register as an employer and remit contributions. Asiapro filed a Motion to Dismiss, arguing no employer-employee relationship existed and thus the SSC lacked jurisdiction. The SSC denied the motion. Asiapro filed a Petition for Certiorari with the Court of Appeals (CA), which annulled and set aside the SSC orders, dismissing the SSS petition-complaint. The Petition: The Republic of the Philippines, represented by the SSC and SSS, filed a Petition for Review on Certiorari with the Supreme Court, seeking to reverse the CA decision and reinstate the SSC orders.
Issue(s)
Whether the petitioner SSC has jurisdiction over the petition-complaint filed before it by petitioner SSS against the respondent cooperative, including the determination of employer-employee relationship. Whether the respondent cooperative is estopped from assailing the jurisdiction of petitioner SSC since it had already filed an Answer with Motion to Dismiss before the said body.
Ruling
The Supreme Court granted the petition, reversed and set aside the decision and resolution of the Court of Appeals, and reinstated the orders of the SSC. The SSC was directed to continue hearing the petition-complaint filed by the SSS.
Ratio Decidendi
On the jurisdiction of the SSC and the existence of an employer-employee relationship: The Supreme Court held that the SSC has jurisdiction over disputes arising under the Social Security Law concerning coverage, benefits, contributions, and penalties. The petition-complaint filed by the SSS clearly involved the issue of compulsory coverage of Asiapro's owners-members, which falls within the SSC's exclusive domain. While the existence of an employer-employee relationship is a prerequisite for compulsory SSS coverage, the SSC has the authority to inquire into this relationship as an incident to determining coverage. The Court clarified that Article 217 of the Labor Code, which enumerates the jurisdiction of the NLRC, explicitly excludes claims for Social Security benefits and related matters, thus confirming the SSC's jurisdiction. The allegations in the complaint, not the defenses raised in the motion to dismiss, determine jurisdiction. Therefore, the SSC did not err in initially assuming jurisdiction. The Supreme Court found that all four elements of the employer-employee relationship (selection and engagement, payment of wages, power of dismissal, and power of control) were present between Asiapro and its owners-members. The Service Contracts indicated Asiapro's exclusive discretion in selection and engagement, the weekly stipends were considered wages, Asiapro had the power to discipline and remove members, and crucially, Asiapro exercised sole control over the means and methods of work. The Court emphasized that the "control test" is paramount. The contractual stipulation in the Service Contracts stating no employer-employee relationship was deemed void as contrary to law and public policy, as it was used to circumvent SSS coverage. The Court distinguished this case from Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, clarifying that while a member-owner cannot bargain with themselves, an employer-employee relationship can still exist between a cooperative (as a distinct juridical entity) and its member-owners. The management of the cooperative by its Board of Directors further supports its separate juridical personality. On estoppel: The Court found it unnecessary to discuss the issue of estoppel because it had already established that the SSC has jurisdiction over the case.
Main Doctrine
The Social Security Commission (SSC) has jurisdiction over disputes concerning compulsory coverage under the Social Security Law, including the determination of the existence of an employer-employee relationship, as this is incidental to the issue of coverage. A cooperative, being a juridical person distinct from its members, can have an employer-employee relationship with its owners-members, and contractual stipulations denying such relationship are void if contrary to law and public policy.