republic rep. by ssc and sss v. asia pro 538 scra 659

7/24/2019 Republic Rep. by SSC and SSS v. Asia Pro 538 SCRA 659

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CASE DIGEST: LABOR LAW REVIEWTopic: Jurisdiction

Republic of the Philippines represented by the Social Security Commission and SocialSecurity System v. Asiapro Cooperative G.R. 172101

Facts:

Petitioner Republic of the Philippines, represented by the Social Security Commission (SSC),

is a quasi-judicial body authorized by law to resolve disputes arising out of RA 8282; while SocialSecurity System (SSS) is a government corporation created by virtue of RA 1161 as amended.

On the other hand, respondent Asiapro is a multi-purpose cooperative created by virtue ofRA 6938 and duly registered with the Cooperative Development Authority (CDA).

Asiapro is composed of owners-members. Under its by-laws, they are of two categories, towit: (1) regular member entitled to full membership rights and (2) associate member who has limitedrights provided under its by-laws. Its prime objective is to provide savings and credit facilities and todevelop other livelihood services for its owners-members.

In the discharge of its objective, Asiapro entered into Service Contracts with Stanfilco- adivision of DOLE Philippines, Inc. and a company based in Bukidnon. Instead of receivingcompensation or wages from Asiapro, they receive a share in the service surplus; which Asiaproearns from different areas of trade it engages in, such as the income derived from the said ServiceContracts with Stanfilco.

In order to enjoy the benefits under the Social Security Law, the owners-members of Asiaprowho were assigned to Stanfilco requested the services of the latter to register them with petitionerSSS as self-employed and to remit their contributions as such.

However, SSS, through its VP for Mindanao Division, Atty. Eddie Jara, sent a letter to Asiapro

informing them that based on the Service Contracts, Asiapro is actually a manpower contractorsupplying employees to Stanfilco and for the reason, it is an employer of its owners-membersworking with Stanfilco. –Thus, Asiapro should register itself with the SSS as an employer and makethe corresponding report and remittances of premium contributions in accordance with the SSS law.

Asiapro then sent a reply to SSS asserting that it is NOT an employer as its owners-membersare the cooperative itself, hence, it cannot be its own employer.

***

Hence accordingly, SSS filed a petition before the SSC against Asiapro and Stanfilco praying

that Asiapro be directed to register as an employer and thus report its cooperative’s owners-members as covered employees under the compulsory coverage of the SSS law. Asiapro movedto dismiss, still alleging that no ER-EE relationship exists between it and its owners-members.

The trial courts denied Asiapro’s claim but the Court of Appeals granted Asiapro’s petition.

Meanwhile, in its Memorandum, petitioners raised the issue of whether or not the Court erredin not finding that the SSC has jurisdiction over the subject matter and that it has valid basis indenying Asiapro’s motion to dismiss.




Issue: Does the SSC have jurisdiction over the subject matter?

Court Ruling:

On the jurisdiction of the SSC over the matter:

Petitioner SSC’s jurisdiction is clearly stated in Section 5 of RA 8282 as well as Section 1,Rule III of the 1997 SSS Revised Rules of Procedure.

Section 5 provides—Settlement of Disputes—(a) any dispute arising under this act withrespect to coverage, benefits, contributions and penalties thereon or any other matter relatedthereto, shall be cognizable by the Commission.

Similarly, Section 1 of the 1997 SSS Revised Rules of Procedure states that— Jurisdiction— Any dispute arising under the Social Security Act with respect to coverage, entitlement of benefits,collection and settlement of contributions and penalties thereon or any other matter related

thereto, shall be cognizable by the Commission, after the SSS, through its President, Manageror Officer-in-Charge of the Department/ Branch/ Representative Office concerned had first takenaction thereon in writing.

It is clear then from these provisions that any issue regarding the compulsory coverage ofthe SSS is well within the exclusive jurisdiction of the SSC. It is important to note also that themandatory coverage under the SSS Law is premised on the existence of an ER-EE relationshipexcept in cases of compulsory coverage of the self-employed.

Further, it is axiomatic that the allegations in the complaint—not the defenses set upin the Answer or in the Motion to Dismiss, determine which court has jurisdiction over an

action; otherwise, the question of jurisdiction would depend almost entirely upon thedefendant.

In this case, the complaint filed by SSS before the SSC against Asiapro alleges that owners-members of the Asiapro and Stanfilco alleges that the owners-members of Asiapro are subject tothe compulsory coverage of the SSS because they are employees of the respondent cooperative.Hence, based on the allegations in the complaint, the case clearly falls within its jurisdiction.

On the NLRC jurisdiction:

The question on the existence of an ER-EE relationship is not within the exclusive jurisdiction

of the NLRC. Article 217 of the Labor Code, enumerating the jurisdiction of NLRC and Labor Arbitersprovide that:

“Art. 217. Jurisdiction of Labor Arbiters and the Commission—Except claims for EmployeeCompensation, Social Security, Medicare and maternity benefits, all other claims arising from ER-EE relations, including those of persons in domestic or household service, involving an amount ofP5,000.00 regardless of whether accompanied with a claim for reinstatement”

Hence, the question of determining the existence of ER-EE relationship FOR THEPURPOSE OF DETERMINING THE SSS COVERAGE is explicitly excluded from the NLRC




jurisdiction and falls within the jurisdiction of the SSC which is primarily charged with the duty ofsettling disputes arising under the SSS Law of 1997.

republic rep. by ssc and sss v. asia pro 538 scra 659

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