The Supreme Court (SC) has ruled that employees who are illegally dismissed are entitled not only to full back wages but also to the remittance of their Social Security System (SSS) contributions.
In a decision written by Associate Justice Maria Filomena Singh and made public Aug. 11, the SC’s Third Division held that an employer’s obligation to remit SSS contributions continues during the period covered by an employee’s illegal dismissal.
This case involves four employees of Lopez Sugar Corporation (LSC), who were illegally dismissed. LSC was ordered to reinstate them to their former positions and pay them full back wages. After the ruling became final, the employees asked LSC to remit their SSS contributions for the period covered by their back wages so they could qualify for retirement benefits.
LSC refused, arguing that under the Social Security Act of 1997, its obligation to pay SSS contributions ended upon the employees’ separation from employment, regardless of whether their dismissal was legal or illegal.
The Social Security Commission (SSC) rejected LSC’s position and ordered it to pay the contributions. The SSC ruled that because the employees were illegally dismissed, the employer-employee relationship was deemed to have continued during the period they were prevented from working.
The Court of Appeals affirmed the ruling.
The SC agreed.
Under Article 294 of the Labor Code, illegally-dismissed employees are entitled to full back wages and other benefits. The SC explained that they are considered to have remained employed during the period covered by their back wages and are, therefore, entitled to the rights and benefits that would have accrued during that period.
Thus, LSC remained obligated to remit the employees’ SSS contributions for the period covered by their back wages, the SC Office of the Spokesperson said in a press release.
The SC also imposed a penalty of three percent per month on LSC for its failure to remit the contributions, reckoned from the date they became due until full payment. ||
