Social Security Commission v. Alba
REITERATIONFacts
The Antecedents: Apolonio Lamboso filed a claim for retirement benefits with the Social Security System (SSS) in 1991, which was denied due to having only 39 paid contributions. He appealed to the Social Security Commission (SSC), alleging employment with Far Alba (Hda. La Roca) from 1960 to 1973, and with Ramon S. Benedicto (Hda. Alibasao and Hda. Kamandag) from 1973 to 1984. Far Alba was declared in default for failure to file an answer. The SSC found that Lamboso worked for Far Alba from 1960 to April 1973 and for Ramon Benedicto from May 1973 to 1984. The SSC ordered Far Alba to pay delinquent contributions, penalties, and damages for the period from June 18, 1960, to April 1973, and Ramon Benedicto for the period from May 1973 to 1984. Procedural History: Far Alba moved for reconsideration, citing lack of notice and denial of due process, which the SSC denied, stating summons was served on his wife and he was declared in default after failing to file a responsive pleading. Far Alba then filed a Petition for Review with the Court of Appeals (CA), arguing violation of due process, lack of obligation to remit contributions prior to 1970 and after 1973 due to absence of employer-employee relationship, and prescription of the claim. The CA reversed the SSC ruling, holding that Far Alba was not an employer prior to 1970 as an administrator and that he should be absolved for the period January 1970 to March 1973 as contributions were already remitted. The CA further stated that claims prior to 1970 should have been filed against the estate of Arturo Alba, Sr. The Petition: The SSC filed a Petition for Review on Certiorari, insisting that Far Alba, as administrator and son of the owner, could be considered an employer under the Social Security Act of 1954. The SSC also asserted that claims for SS contributions are not money claims to be filed against an estate but are obligations created by law, akin to taxes, enforceable within a prescriptive period of twenty (20) years.
Issue(s)
Whether Far Alba was an employer of Apolonio Lamboso under the Social Security Act of 1954 for the period prior to 1970. Whether the claim for delinquent SSS contributions should have been filed against the estate of Arturo Alba, Sr. Whether Far Alba was denied due process.
Ruling
The petition is GRANTED. The Decision and Resolution of the Court of Appeals are REVERSED and SET ASIDE insofar as they absolved respondent Far Alba from liability to remit petitioner Apolonio Lamboso’s monthly contributions prior to January 1970. The Resolution of the Social Security Commission is REINSTATED.
Ratio Decidendi
On the issue of Far Alba's status as an employer prior to 1970: The Court held that Far Alba was indeed an employer of Apolonio Lamboso under the Social Security Act of 1954 for the period prior to 1970. The Court found that Lamboso's clear and direct testimony, corroborated by his co-worker Rodolfo Sales, established that Far Alba served as the hacienda's administrator from 1960 to 1965 and solely ran the place from 1965 onwards, receiving Lamboso's salary directly from him. The Court applied the control test, which is determinative of an employer-employee relationship for SSS coverage, and found that Far Alba possessed the essential elements: selection and engagement, payment of wages, power of dismissal, and the power of control over the means and methods of work. Furthermore, the Court noted that Far Alba, as the son of the owner and an "owner-in-waiting," had interests inextricably linked with the hacienda's operation, going beyond merely acting in the interest of his father. The Court also cited Article 167(f) of the Labor Code, defining an employer as any person employing the services of an employee, and concluded that Far Alba, as administrator, acted as a legal representative of the employer. The Court emphasized that Section 8(c) of the Social Security Act of 1954 is broad enough to include those acting directly or indirectly in the interest of the employer, thus encompassing administrators like Far Alba. On the issue of filing claims against the estate: The Court sustained the jurisdiction of the SSC over disputes concerning coverage, benefits, contributions, and penalties under the Social Security Act. It agreed with the SSC's assertion that an action for remittance of SSS contributions is not a money claim to be filed against an estate, distinguishing it from claims arising from contracts. Citing Vera, et al. v. Judge Fernandez, the Court stated that claims by the government for unpaid taxes are not covered by the statute of non-claims and can be enforced against heirs. Similarly, the Court reasoned that SSS contributions are obligations created by law, and thus, actions for their remittance should be treated like taxes, enforceable against heirs and not strictly limited to estate proceedings. On the issue of due process: The Court found no denial of due process. The records showed that summons was properly served on Far Alba's wife, and he was declared in default only after failing to file a responsive pleading within the reglementary period. His subsequent failure to file a motion to lift the default order before the promulgation of the resolution meant he could not claim to have been deprived of due process.
Main Doctrine
An administrator of a hacienda, especially one who is the son of the owner and actively manages its operations, can be considered an employer under the Social Security Act of 1954 for the purpose of remitting employee contributions, particularly when the control test for employer-employee relationship is met.