8/10/2019 Victoria Milling Company v Social Security Commission

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VICTORIA MILLING COMPANY V SOCIAL SECURITY COMMISSION

FACTSIn 1958, the SSC issued a circular (no. 22) providing that bonuses and overtime pay shall be included in thecomputation of the employers' and employees' respective monthly premium contributions.

However, Victorias Milling protested such circular and contended that it was contradictory to a previous circular (no.

7), which expressly excluded bonuses and overtime from the computation. Moreover, it challenged the validity of thecircular for lack of authority on the part of SSC to promulgate it without the approval of the President and for lack ofpublication in the OG.

The SSC ruled that the circular is not a rule or regulation that needed the approval of the President and publication tobe effective, but an administrative interpretation of the statute, a mere statement of general policy or opinion as tohow the law should be construed.

ISSUEW/N Circular No. 22 is a rule or regulation that requires presidential approval and publication in the OG for itseffectivity

HELDNO. There is a distinction between an admin rule or regulation and an admin interpretation of a law whoseenforcement is entrusted to an admin body. When an administrative agency promulgates rules and regulations, it

"makes" a new law with the force and effect of a valid law, while when it renders an opinion or gives a statement ofpolicy; it merely interprets a preexisting law. Rules and regulations when promulgated in pursuance of the procedureor authority conferred upon the administrative agency by law, partake of the nature of a statute, and compliancetherewith may be enforced by a penal sanction provided in the law. This is so because statutes are usually couchedin general terms, after expressing the policy, purposes, objectives, remedies and sanctions intended by thelegislature. The details and the manner of carrying out the law are often times left to the administrative agencyentrusted with its enforcement. In this sense, it has been said that rules and regulations are the product of adelegated power to create new or additional legal provisions that have the effect of law.

The SSC issued Circular No. 22 to apprise those concerned of the interpretation and understanding of theCommission of the law, as amended, which it was its duty to enforce. It did not add any duty or detail that was notalready in the law as amended. It merely stated and circularized the opinion of the Commission as to how the lawshould be construed--that the exemption of bonuses, allowances and overtime pay was deleted by the amendatorylaw.

Circular No. 22 merely advised employers-members of the system of what they should include in the determination ofthe monthly compensation of their employees upon which the contributions are based.