kmu tro petition vs sss premium hike

8/13/2019 KMU TRO petition vs SSS Premium hike

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

KILUSANG MAYO UNO, represented by itsSecretary General ROGELIO SOLUTA;REP. FERNANDO HICAP for himself andas Representative of the ANAKPAWISPARTY-LIST ; CENTER FOR TRADEUNION AND HUMAN RIGHTS (CTUHR),represented by its Executive Director

DAISY ARAGO., JOSELITO USTAREZand SALVADOR CARRANZA, forthemselves and in representation of theNATIONAL FEDERATION OF LABORUNIONS-KMU (NAFLU-KMU); NENITAGONZAGA; PRESCILA A. MANIQUIZ;REDEN ALCANTRA,

Petitioners,

-versus- G.R. No. ________For : Certiorari andProhibition with Applicationfor a Temporary RestrainingOrder and/or PreliminaryInjunction

Hon. BENIGNO SIMEON C. AQUINO III,Hon. PAQUITO N. OCHOA JR., SOCIALSECURITY COMMISSION, SOCIAL

SECURITY SYSTEM, and EMILIO S. DEQUIROZ JR .,

Respondents.x-------------------------------------------------------x

PETITION FOR CERTIORARIAND PROHIBITION

PETITIONERS, by counsel, unto this Honorable Court, mostrespectfully state :

NATURE OF THE PETITION


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Petitioners, through the instant Petition for Certiorari under Rule 65of the Rules of Court as amended, seek to annul or nullify the hikein the SSS premiums as embodied in the following issuances :

a) Resolution No. 262 s.2013 dated April 19, 2013 issued byrespondent Social Security Commission.

b) Resolution No. 711-s. 2013 dated September 20, 2013 issuedby respondent Social Security Commission;

c) Circular No. 2018-010 dated October 2, 2013 issued byrespondent Emilio S. De Quiros Jr;

Petitioners also seek to prohibit , enjoin, or prevent respondentsfrom implementing or enforcing the said hike in SSS premiums asembodied in the said issuances.

Petitioners also pray for the issuance of a temporary restrainingorder and/or a preliminary injunction pending the resolution of theinstant Petition to immediately prevent respondents from enforcing orimplementing the questioned issuance.

Certified true copy of the SSC Resolution No. 262 s.2013 datedApril 19, 2013 is here attached as Annex A.

Certified true copy of the SSC Resolution No. 711-s. 2013 datedSeptember 20, 2013 is here attached as Annex B.

Certified true copy of the said SSS Circular No. 2013-010 is hereattached as Annex C.

The above issuances were issued by respondents with grave

abuse of discretion amounting to acting without or in excess ofjurisdiction and in blatant violation of existing laws, and petitionershave no appeal nor any plain, speedy and adequate remedy underthe ordinary course of law except through the instant Petition.

PARTIES

A. Petitioners

Petitioner Kilusang Mayo Uno (KMU) is a recognized labor centerpromoting the cause of genuine, militant and nationalist tradeunionism in the country and is bringing the instant Petition on behalfof its individual members . Its address is at No. 63 , Narra Street,Brgy. Claro, Proj. 3, Quezon City. It is represented in this Petitionby its Secretary General, Rogelio Soluta, who is holding office at thesame address. Copy of the the Secretarys Certificate showing that


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Rogelio Soluta has been authorized to represent petitioner KMU inthis case is here attached as Annex D.

Petitioner Center for Trade Union and Human Rights (CTUHR) is aduly registered non-stock corporation organized for the purpose ofpromoting and protecting the rights of labor and holds office atCulmat Building, E. Rodriguez Sr. Avenue, Quezon City. It isrepresented by its Executive Director , Daisy Arago, who holdsoffice in the same address. The authority of Daisy Arago torepresent CTUHR in the instant Petition is evidenced by a SecretarysCertificate here attached as Annex D-1.

Petitioner Fernando Hicap is of legal age, married , with officeaddress at House of Representatives, Batasang Pambansa,

Quezon City. He is presently the party-list representative of theAnakPawis Party List in the House of Representatives.

Petitioner Joselito Ustarez is of legal age, married, a member ofthe SSS with SSS No. 03-2030254-5 and resides at No. 769 PanayStreet, Sampaloc, Manila. He is presently the National President ofthe National Federation of Labor UnionsKMU (NAFLU-KMU), a dulyregistered labor federation and is filing the present action as an SSSmember and on behalf of his labor federation. Copy of theSecretarys Certificate showing that his Federation has authorizedhim to file the instant action is here attached as Annex D-2.

Petitioner Salvador Carranza is legal age, married, a member ofthe SSS with SSS No. 03-5029078-0 and resides at A. Reyes Street,Road 4, Purok 3, Lower Bicutan, Taguig City. He is presently theNational Treasurer of the National Federation of Labor UnionsKMU(NAFLU-KMU), a duly registered labor federation and is filing thepresent action as an SSS member and on behalf of his laborfederation. Copy of the Secretarys Certificate showing his authority

to file the instant action is here attached as Annex D-2.

Petitioner National Federation of Labor Unions-KMU (NAFLU-KMU)is a duly registered labor federation with address at No. 509-ECanteras Street, Mandaluyong City and is filing the instant action onbehalf of its individual members.

Petitioner Nenita Gonzaga is of legal age, married, a member ofthe SSS with SSS No. 33-0513034-2 and holds office at No. 63 Narra

Street, Proj. 3, Quezon City.

Petitioner Prescila Ang-Maniquiz is of legal age, married, amember of the SSS with SSS No. 03-2881600-2 and holds office atNo. 63 Narra Street, Proj. 3, Quezon City.


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Petitioner Reden Alcantara is of legal age, married, a memberof the SSS with SSS No. 04-1051627-8 with address at No. 25Brgy. Mabini, Tanauan City, Batangas.

B. Respondents

Respondent BENIGNO SIMEON C. AQUINO III is being sued asPresident of the Republic of the Philippines and is the head of theexecutive department with the duty to implement all laws , rules andregulations of the land. He may be served with notices, orders, andother processes of this Honorable Court at the Office of thePresident , New Executive Building, Malacanang Palace, J. P.

Laurel Street, San Miguel, Manila.

Respondent PAQUITO OCHOA JR is a cabinet official and isconsidered the alter ego of the President. He is sued in this capacityand holds office at the Office of the Executive Secretary, NewExecutive Building, Malacanang Palace, J. P. Laurel Street, SanMiguel, Manila.

Respondent SOCIAL SECURITY COMMISSION holds office at

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Floor, SSS Bldg., Ayala Avenue corner Rufino Street, MakatiCity. It may be served with notice through Atty. MilagrosPagayatan , Social Security Commission Secretary, holding office atthe same address.

Respondent SOCIAL SECURITY SYSTEM holds office at theSSS Building, East Avenue, Quezon City and may served with noticethrough respondent EMILIO DE QUIROS JR, its President and CEOholding office at the same address.

STATEMENT OF FACTS

1. The much- reviled SSS premium hike is the subject matter ofthis Petition.

2. The desire to establish a social security system suitable tothe needs of our people, especially workers and their families, which

shall promote social justice and provide protection against thehazards of disability, sickness, old age, maternity, and othercontingencies resulting in the loss of income and financial burden ledour lawmakers to enact RA 1161 ( the Social Security Law) in 1954.

3. Pursuant to this law, the Social Security System (SSS) under


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the direction and control of the Social Security Commission (SSC),was created.

4. In 1997, RA 8282 was enacted to further strengthen thesocial security system. This law was approved on Labor Day ( May1, 1997) consistent with its declaration that the State shall endeavorto extend social security protection to workers and theirbeneficiaries .

5. As envisioned, the SSS operates a provident fund comingfrom the contributions of employers, employees, self-employedindividuals, and voluntary members from which the payment ofbenefits for its members come from.

6. The SSS is also empowered to invest a portion of its fundthat are not needed to meet current benefit obligations in bonds,securities, promissory notes, real estate, and other activities as maybe allowed by law.

7. In the long years that elapsed since its establishment,the SSS has grown considerably.

8. Recent statistics show that the membership of the SSSnow exceeds 29 million members . 21,945, 734 of these membersare private sector employees; 602, 139 are employers; 3,803,327are self-employed; and 3,708,306 are voluntary members.

9. As of March 2012, the assets and investments of theSSS amounted to about P343.67 million.

10. As of June 2013, SSS assets was estimated to be aboutP368.788 billion.

11. In 2011, the SSS net income was placed at P25.25billion.

12. In the following year, 2012, the SSS net income grew toabout P36.2 billion, posting an increase of 42%.

13. Over the years, years, SSS has invested billions of pesos

in highly profitable industries such as real estate, mining,telecommunications, banking and power. 37% of these investments is

in government securities, 25% in equities, and 4% in real estate

assets.

14. During the last three years , for instance, SSS hasincreased its equity investments in Philex Mining Corp., Philippine LongDistance Telephone Co., First Holdings Corp., Manila Electric Co. and UnionBank.


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15. Its profitable operation has allowed SSS to give hefty

bonuses to its employees and top executives for the past years.

16. This notwithstanding the fact that as of December2010,the SSS has a collectibles of about P8.5 billion from erring

employers.

17. In 2010 for instance, SSS executives and employeesreceived some P200 million as bonuses.

18. In 2012, the SSS gave out a total of P276 million bonus to

its employees and executives. This was admitted by respondent SSS

President Emilio Quiroz Jr. in a press conference last October 8, 2013.

19. The decision to grant so-called performance bonuses for 2012was self-servingly made by the commissioners of the SSS. They received thefollowing bonuses: Juan Santos, chairman, P1.17 million; Emilio de Quiros Jr.,SSS president and SSS vice chairman, P1.04 million; Diana Pardo-Aguilar,P1.33 million; Daniel Edralin, P1.12 million, Eliza Antonino, P968,000; MarianitaMendoza, P1.02 million; Ibarra Malonzo, P1.41 million; and BienvenidoLaguesma, P1.30 million.

20. Aside from the 2012 year-end bonus, SSS officials also receive P80,000 amonth for attending two meetings and additional P20,000 for every committeemeeting they attend.

23. This was all done in atmosphere of public dissatisfaction with

respect to the inability of the SSS to provide meaningful socialprotection service to its members and their beneficiaries.

24. In a 2012 annual audit report for the SSS, for example,the Commission on Audit (COA) chided the SSS for the snail-pacedprocessing of payments for death, disability and retirement claims of

its members.

25. Moreover, the COA also directed the SSS to swiftly take

legal steps to collect over P367 million in premiums and penalties from139 delinquent corporations and employers that have been remiss intheir responsibility under the SSS law.

26. Also, the COA assailed the SSS for imposing excessiveinterest payments on borrowers to the tune of P788.8 million.

27. The COA said that the slow processing and payment of

death, disability, and retirement claims did not meet the commitmentof the SSS of providing prompt, convenient and meaningful social

protection to the members and their beneficiaries.

28. This deterioration in the quality of service of the

SSS has been meet with protests and demonstrations by the public,especially the labor sector.


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29. But more recently, another development which has drawn

heavy protests and criticism from the public was the hike in SSScontributions or premiums enacted or implemented by the

respondents.

30. In one of his pre-Labor Day speeches in 2013, Pres. BenignoAquino III pushed for a hike in SSS premiums citing the possible

bankcrupcy of the Social Security System in the years to come as themain reason.

31. Respondent Emilio de Quiros Jr. contradicted the statement,

claiming that the SSS is not losing funds; we are actually registering

very strong net revenues.

32. On April l9, 2013, respondent Social Security Commission issued

Resolution No. 262 s. 2013 (Annex A) approving the increase inSSS contributions from 10.4% of the monthly salary credit to 11% andthe monthly salary credit from P15,000 to P16,000 the effectivity of

which shall be subject to the approval of the President of thePhilippines.

33. On September 20, 2013, respondent Social Security Commission

issued Resolution No. 711-s (Annex B) which among others,approved and ratified the increase in contributions from 10.4 % to

11% to take effect in January 2014 as approved by respondent Pres.Benigno Aquino III pursuant to a Memorandum from respondent

Executive Secretary dated September 9, 2013.

34. On October 2, 2013, respondent Social Security System throughrespondent Emilio De Quiros Jr. issued Circular No. 2313 -010

(Annex C) which contained the revised schedule of SSS

contributions to be effective on the month of January 2014.

35. As per Circular No. 2313-010 , the increase of 0.6% in SSScontributions shall be shouldered equally by the employer and the

employee on an equal basis. Thus, the employer shall pay 7.37%

(from 7.07% ) and 3.63% for the employee ( from 3.33 %) instead ofthe usual 70-30 ratio.

36. The said increase in SSS contributions will further add to thefinancial burden of the Filipino workers majority of whom are mired in

abject poverty due to the frequent increases of prices of basiccommodities and the escalating cost of living.

37. Desperate and left with no other speedy and viable alternative,

they now seek relief from this Honorable Court through the instant

Petition.

LEGAL STANDING TO FILETHE INSTANT SUIT

Petitioners have the locus standi to file the instant Petition.


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Majority of petitioners are members of the SSS and aredirectly affected by the increased in SSS premiums or contributionswhich became effective this January 2014.

In Atty. Oliver O. Lozano and Atty. Evangeline J. Lozano-Endriano

vs. Speaker Prospero C. Nograles, G.R. No. 187883, June 16, 2000 , this

Honorable Court held :

Generally, a party will be allowed to litigate only when he can

demonstrate that (1) he has personally suffered some actual or threatened

injury because of the allegedly illegal conduct of the government; (2) theinjury is fairly traceable to the challenged action; and (3) the injury is likely

to be redressed by the remedy being sought.

With respect to the other petitioners, they also have the legalpersonality to file the instant Petition, the issues raised herein beingof transcendental importance which require their immediateresolution.

As held in the case of Randolph David, et. al., vs. Pres.Gloria Macapagal Arroyo, et. al., G.R. No. 171396, March 3, 2006 :

By way of summary, the following rules may be culled from

the cases decided by this Court. Taxpayers, voters, concerned citizens, and

legislators may be accorded standing to sue, provided that the following

requirements are met:

(1) the cases involve constitutional issues;

(2) fortaxpayers, there must be a claim of illegal disbursement

of public funds or that the tax measure is unconstitutional;

(3) for voters, there must be a showing of obvious interest in the

validity of the election law in question;

(4) for concerned cit izens, there must be a showing that the

issues raised are of transcendental importance which must be

settled early; and

(5) for legislators, there must be a claim that the official action

complained of infringes upon their prerogatives as legislators.

The issues involved in this Petition are of transcendentalimportance , the early settlement of which is imperative.

There is thus no dispute that petitioners they are clothe with


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the legal standing to file the present case.

ISSUES

Are the questioned issuances ( SSS Circular No. 2013-010,SSC Resolution No. 262-s. 2013, and SSC Resolution No.711s. 2013 ) issued in violation of existing laws and withgrave abuse of discretion amounting to acting without or inexcess of jurisdiction by the respondents ?

GROUNDS RELIED UPON FOR THEALLOWANCE OF THE INSTANT

PETITION

I

THE ASSAILED ISSUANCES ARE NULLAND VOID HAVING BEEN ISSUED PURSUANT

TO VAGUE AND UNCLEAR STANDARDSCONTAINED IN RA 8282 OR THE SOCIAL

SECURITY LAW AS AMENDED.

II

THE INCREASE IN SSS CONTRIBUTIONSARE NOT REASONABLY NECESSARY

FOR THE ATTAINMENT OF THE PURPOSESOUGHT AND IS UNDULY OPPRESSIVE

UPON THE LABOR SECTOR, MAKING THEASSAILED ISSUANCES NULL AND VOID.

III

THE REVISED RATIO OF SSSCONTRIBUTIONS BETWEEN EMPLOYERS

AND EMPLOYEES AS CONTAINEDIN THE ASSAILED RESOLUTIONS AND

CIRCULAR IS GROSSLY UNJUSTTO THE WORKING CLASS AND BEYOND THE

POWER OF RESPONDENTS TO ENACT .


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ARGUMENT

I

THE ASSAILED ISSUANCES ARE NULLAND VOID HAVING BEEN ISSUED PURSUANT

TO VAGUE AND UNCLEAR STANDARDSCONTAINED IN RA 8282 OR THE SOCIAL

SECURITY LAW AS AMENDED.

1.1. The authority of respondents to revise or alter the amounts ofcontribution to the SSS is contained in Republic Act No. 8282

enacted in 1997.

1.2. Section 18 of RA 8282 provides :

"SEC. 18. Employee's Contributions. - (a) Beginning as of the last day of thecalendar month when an employee's compulsory coverage takes effect andevery month thereafter during his employment, the employer shall deductand withhold from such employee's monthly salary, wage, compensation orearnings, the employee's contribution in an amount corresponding to hissalary, wage, compensation or earnings during the month in accordance with

the following schedule:

SALARYBRACKET

RANGE OFCOMPENSATION

MONTHLYSALARYCREDIT

MONTHLY CONTRIBUTION

EMPLOYER EMPLOYEE TOTAL

I 1,000.00 - 1,249.99 1000 50.70 33.30 84.0

II 1,250.00 - 1,749.99 1500 76.00 50.00 126.0

III 1,750.00 - 2,249.99 2000 101.30 66.70 168.0

IV 2,250.00 - 2,749.99 2500 126.70 83.30 210.0

V 2,750.00 - 3,249.99 3000 152.00 100.00 252.0

VI 3,250.00 - 3,749.99 3500 177.30 116.70 294.0

VII 3,750.00 - 4,249.99 4000 202.70 133.30 336.0VIII 4,250.00 - 4,749.99 4500 228.00 150.00 378.0

IX 4,750.00 - 5,249.99 5000 253.30 166.70 420.0

X 5,250.00 - 5,749.99 5500 278.70 183.70 462.4

XI 5,750.00 - 6,249.99 6000 304.00 200.00 504.0

XII 6,250.00 - 6,749.99 6500 329.30 216.78 546.0

XIII 6,750.00 - 7,249.99 7000 354.70 233.30 588.0

XIV 7,250.00 - 7,749.99 7500 380.00 250.00 630.0

XV 7,750.00 - 8.249.99 8000 403.30 266.70 672.0

XVI 8,250.00 - 8,749.99 8500 430.70 283.30 714.0

XVII 8,750.00OVER 9000 456.00 300.00 756.0

"The foregoing schedule of contribution shall also apply to self-employed andvoluntary members.

"The maximum monthly salary credit shall be Nine thousand pesos (P9,000.00) effectiveJanuary Nineteen hundred and ninety six (1996); Provided, That it shall be increased by Onethousand pesos (P1,000.00) every year thereafter until it shall have reached Twelve


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thousand pesos (P12,000.00) by Nineteen hundred and ninety nine (1999): Provided, further,That the minimum and maximum monthly salary credits as well as the rate of contributionsmay be fixed from time to time by the Commission through rules and regulations taking intoconsideration actuarial calculations and rate of benefits, subject to the approval of thePresident of the Philippines

1.3. As may be noted, the last portion of the Section 18 allows theSocial Security Commission to fix the rate of contributions to fromtime to time, through rules and regulations , taking into account (a)actuarial calculations and () rate of benefits; subject to the approvalof the President of the Philippines.

1.4.The term actuarial calculations however, is a too generala term to be understood by a person with a reasonable mind.

1.5. Indeed, what does the term actuarial calculation meanswhen it comes to fixing the rate of contributions to the SSS ?.1.6. Sec. 8 of RA 8282 contains a definition of terms used in the

SSS Law.

1.7. Unfortunately, the term actuarial calculation is notdefined inthe said section.

1.8. Furthermore, the relation of the rate of benefits received by a

member of the SSS and actuarial calculation is not also definedunder RA 8282.

1.9. What should be the relation between rate of benefits andactuarial calculation so as toempower respondent Social ServiceCommission to alter , increase, or decrease the rate of contributionsof SSS members ?

1.10. Otherwise stated, what should factors should exist between

the rate of benefits and actuarial calculation to serve as a basis forrespondents to alter the rate of SSS contributions ?

1.11. What are the parameters or limitations imposed by suchactuarial calculation and rate of benefits on the Social SecurityCommission in the fixing of premiums and contributions ?

1.12. We could only guess because the law, RA 8282 , is silent onthe said matter.

1.13. The principle of separation of powers ordains that each of the threegreat branches of government has exclusive cognizance of and is supreme

in matters falling within its own constitutionally allocated sphere ( please

see Angara vs. Electoral Commission, 63 Phil. 139)


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1.14.Necessarily imbedded in this doctrine is the principle of non-delegation of powers, as expressed in the Latin maximpotestas delegata nondelegari potest, which means what has been delegated, cannot be

delegated. This doctrine is based on the ethical principle that such

delegated power constitutes not only a right but a duty to be performed bythe delegate through the instrumentality of his own judgment and not

through the intervening mind of another ( Abakada Guro Party List vs.

Ermita, 469 SCRA 1)

1.15. Thus, In Edu v. Ericta, No. L-32096, October 24, 1970, 35SCRA 481, , this Honorable Court made it clear that that as a rule, theLegislature may not delegate its power of legislation to the Executive or

the Judiciary.

.1.16. As ruled by this Honorable Court ruled in the Edu vs. Ericta

case:

It is a fundamental principle flowing from the doctrine of separation

of powers that Congress may not delegate its legislative power to the two

other branches of the government, subject to the exception that local

governments may over local affairs participate in its exercise. What

cannot be delegated is the authority under the Constitution to make laws

and to alter and repeal them; the test is the completeness of the statute inall its term and provisions when it leaves the hands of the legislature. To

determine whether or not there is an undue delegation of legislative

power, the inquiry must be directed to the scope and definiteness of the

measure enacted. The legislature does not abdicate its functions when it

describes what job must be done, who is to do it, and what is the scope

of his authority. For a complex economy, that may indeed be the only

way in which the legislative process can go forward. A distinction has

rightfully been made between delegation of power to make laws which

necessarily involves a discretion as to what it shall be, which

constitutionally may not be done, and delegation of authority ordiscretion as to its execution to be exercised under and in pursuance of

the law, to which no valid objection can be made. The Constitution is

thus not to be regarded as denying the legislature the necessary resources

of flexibility and practicability.

1.16. . This principle of non-delegation of powers admits of numerousexceptions, however, one of which is the delegation of legislative power to

various specialized administrative agencies such as respondent Social

Security Commission in this case .

1.17. The rationale for the aforementioned exception was clearly

explained in our ruling in Gerochi v. Department of Energy , 527 SCRA

696 , to wit:


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In the face of the increasing complexity of modern life,

delegation of legislative power to various specialized

administrative agencies is allowed as an exception to this

principle. Given the volume and variety of interactions in todays

society, it is doubtful if the legislature can promulgate laws that

will deal adequately with and respond promptly to the minutiae of

everyday life. Hence, the need to delegate to administrative bodies

the principal agencies tasked to execute laws in their

specialized fields the authority to promulgate rules and

regulations to implement a given statute and effectuate its

policies. All that is required for the valid exercise of this power of

subordinate legislation is that the regulation be germane to the

objects and purposes of the law and that the regulation be not in

contradiction to, but in conformity with, the standards prescribed

by the law. These requirements are denominated as the

completeness test and the sufficient standard test.

1.17. In Emmanuel Pelaez vs. The Auditor General, G.R. No. L-23825, December 24, 1965, this Honorable Court expounded on theinstances on which a valid delegation of legislative powers may be made,

thus :

Although Congress may delegate to another branch of the

Government the power to fill in the details in the execution, enforcementor administration of a law, it is essential, to forestall a violation of theprinciple of separation of powers, that said law: (a) be complete in itself

it must set forth therein the policy to be executed, carried out orimplemented by the delegate and (b) fix a standard the limits of whichare sufficiently determinate or determinable to which the delegate mustconform in the performance of his functions. Indeed, without a statutory

declaration of policy, the delegate would in effect, make or formulatesuch policy, which is the essence of every law; and, without the

aforementioned standard, there would be no means to determine, withreasonable certainty, whether the delegate has acted within or beyond the

scope of his authority. Hence, he could thereby arrogate upon himself thepower, not only to make the law, but, also and this is worse to unmake

it, by adopting measures inconsistent with the end sought to be attainedby the Act of Congress, thus nullifying the principle of separation of

powers and the system of checks and balances, and, consequently,undermining the very foundation of our Republican system.

1.18. In Eastern Shipping Lines, Inc. vs. POEA, 166 SCRA 533,thisHonorable Court held :

There are two accepted tests to determine whether or not there is a

valid delegation of legislative power, viz , the completeness test and the


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sufficient standard test. Under the first test, the law must be complete in all

its terms and conditions when it leaves the legislature such that when itreaches the delegate the only thing he will have to do is enforce it. Under

the sufficient standard test, there must be adequate guidelines or stations in

the law to map out the boundaries of the delegate's authority and prevent thedelegation from running riot

1.19. This Honorable Court clarified in the Edu vs. Erictacase : :

"What cannot be delegated is the authority under theConstitution to make laws and to alter and repeal them; thetest is the completeness of the statute in all its term and

provisions when it leaves the hands of the legislature. Todetermine whether or not there is an undue delegation oflegislative power, the inquiry must be directed to the scope anddefiniteness of the measure enacted. The legislature does notabdicate its functions when it describes what job must be done,who is to do it, and what is the scope of his authority. For acomplex economy, that may indeed be the only way in whichthe legislative process can go forward. A distinction hasrightfully been made between delegation of power to make thelaws which necessarily involves a discretion as to what it shall

be, which constitutionally may not be one, and delegation ofauthority or discretion as to its execution to be exercised underand in pursuance of the law, to which no valid objection can bemade. The Constitution is thus not to be regarded as denyingthe legislature the necessary resources of flexibility andpracticability. To avoid the taint of unlawful delegation, theremust be a standard, which implies at the very least that thelegislature itself determines matters of principle and lays downfundamental policy. Otherwise, the charge of complete

abdication may be hard to repel. A standard thus defineslegislative policy, marks its limits, maps out its boundaries andspecifies the public agency to apply it. It indicates thecircumstances under which the legislative command is to beeffected. It is the criterion by which legislative purpose may becarried out.

(Edu vs. Ericta , 35 SCRA 481)

1.20. Is the delegation of the power to SSS fix premiums or contributionscomplete in all its terms and conditions when it left the legislature such

that when it reached the delegate the only thing he will have to do isenforce it ?.

1.21. The answer is No.


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1.22. In the delegation of the power to fix SSS premiums, are thereadequate guidelines or stations in the law to map out the boundaries of the

delegate's authority and prevent the delegation from running riot ?

1.23. Again, the answer is No.

1.24. The delegation therefore constitutes an unlawful delegation andmust be declared null and void.

1.25. The assailed issuances increasing SSS contributions , having beenissued pursuant to an invalid delegation of legislative powers, must be

declared without force and effect.

1.26. Interestingly, the increase in SSS contributions appear to violate Sec.4,( b) (2) of RA 8282 which provides :

"SEC. 4. Powers and Duties of the Commission and SSS. - (a) The Commission. - Forthe attainment of its main objectives as set forth in Section 2 hereof, the Commission shallhave the following powers and duties:

XXX XXX XXX XXX.

"(b) The Social Security System. - Subject to the provision of Section four (4), paragraph

seven (7) hereof, the SSS shall have the following powers and duties:

"(1) To submit annually not later than April 30, a public report to the President of thePhilippines and to the Congress of the Philippines covering its activities in theadministration and enforcement of this Act during the preceding year includinginformation and recommendations on broad policies for the development andperfection of the program of the SSS;

"(2) To require the actuary to submit a valuation report on the SSS benefit programevery four (4) years, or more frequently as may be necessary, to undertake thenecessary actuarial studies and calculations concerning increases in benefits takinginto account inflation and the financial stability of the SSS, and to provide for feasibleincreases in benefits every four (4) years, including the addition of new ones, undersuch rules and regulations as the Commission may adopt, subject to the approval ofthe President of the Philippines: Provided, That the actuarial soundness of thereserve fund shall be guaranteed: Provided, further, That such increases in benefitsshall not require any increase in the rate of contribution ;

XXX XXX XXX XXX

(underlining supplied)

1.27. Considering that increase in benefits shall not require any increase inthe rate of contributions as contained in the above-cited provision of RA 8282,

increase in contributions without the corresponding increase in benefits is allthe more prohibited.

1.28. In any way we look at it, therefore, the issuances regarding theincrease in SSS contributions are unlawful and hence, null and void.


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II

THE INCREASE IN SSS CONTRIBUTIONSARE NOT REASONABLY NECESSARY

FOR THE ATTAINMENT OF THE PURPOSESBEING SOUGHT AND IS UNDULY OPPRESSIVE

UPON THE LABOR SECTOR, MAKING THEASSAILED ISSUANCES NULL AND VOID.

2.1. Respondents have advanced certain justifications for the SSScontribution hike.

2.2. According to Pres. Aquino, the SSS has P1.1 trillion in

unfunded liability, which is bound to increase by eight per cent everyyear and may cause the state-run insurance agencys bankruptcy.

2.3. In his State of the Nation Address (SONA) last 2013, Pres. Aquino

stressed the need to increase SSS premiums by at least 0.6 percent, citing a

2011 study that warned that 28 years from now, the pension fund for private

sector workers would be depleted.

2.4. According to respondent De Quiros, the increase in contribution lessenthe unfunded liabilities the future benefits of membersof the SSS, which

was estimated at P1.07 trillon as of December 2010 and grows about eight

percent annually.

2.5. Respondent De Quiros further claimed that the SSS has an actuarial life

of only 26 years.

2.6.This, allegedly, is far from the ideal actuarial life which is 70 years.

2.7.This could be attained , however, if they raise monthly contribution rates to

14 percent on staggered basis.

2.8. Figures show, however, that the SSS can extend its actuarial life and

increase the benefits of its members without increasing the premiums paid by its

members.

2.9 . The membership of the SSS now exceeds 29 million members.

2.10.As of June 2013, SSS assets was estimated to be aboutP368.788 billion.

2.11. Its net income has also grown steadily, being P25.25 billion in 2011 toP36.2 billion in 2012, or an increase of 42%.


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2.12.Over the years, SSS has invested billions of pesosin highly profitable industries such as real estate, mining,telecommunications, banking and power. 37% of these investments is

in government securities, 25% in equities, and 4% in real estate

assets.

2.14. Yearly financial statements of the SSS reveal a healthy trend of

increasing revenues, and revenues consistently exceeding expenses.

2.13. Moreover, the SSS has an uncollected remittances from erringemployers which is in the amount of P8.5 billion as of December 2010.

2.14. The SSS can start running after erring employers , rather than

increasing the monthly contributions from its members.

2.15. As asked by a union leader, how can the SSS go bankrupt when

presently, it has about 30 million members and is increasing rapidly ?

Furthermore it has invested billions of pesos of its members funds in

highly profitable industries such as real estate, mining, telecommunication,

banking and power.

2.16. As to its claim that there is a need to extend the actuarial life of the SSS

to the ideal which is 70 years and to attain zero unfunded liability, there is nolegal provision which requires the SSS to attain these goals.

2.17. Republic Act 8282 does not contain any requirements on these matters.Even by international standards, defined benefit-schemes like that of the SSSare not fully pre-funded.

2.18. On the other hand, the increase in SSS contributions would mean areduction in the already meager take-home pay of workers.

2.19.The money which workers use to purchase food and financeother basic needs are surely to suffer a reduction.

2.20. An increase in the SSS fund does not by itself constitute improvedperformance as it does not immediately translate into better benefits for membersbecause the SSS leadership can allocate the funds for other purposes.

2.21. The increased in SSS contributions will therefore mean an added burden

to its members, especially the workers who comprised the bulk of SSS

membership.

2.22. This is ironic because under the 1987 Constitution, the State is supposed

to protect the rights of workers and promote their welfare.

2.23. We cite Section 18 , Article II of the 1987 Constitutionof the

Philippines :


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Section 18. The State affirms laboras a primary social force. It shall

protect the rights of workers and promote their welfare.

2.24. Other provisions of the 1987 Philippine Constitution provides for the

promotion of social justice and human rights as the policy of the State.

2.25. We cite Sections 9 and 10 of the Declaration of Principles and

State Policies of the 1987 Philippine Constitution:

Section 9.The State shall promote a just and dynamic social order that willensure the prosperity and independence of the nation and free the people frompoverty through policies that provide adequate social services, promote fullemployment, a rising standard of living, and an improved quality of life for all.

Section 10.The State shall promote social justice in all phases of nationaldevelopment.

2.26. We also cite Section 11 of Article IIof the same Constitution whichprovides :

Section 11.The State values the dignity of every human person andguarantees full respect for human rights.

2.27. In adopting or approving the questioned Resolutions and Circular, the

respondents certainly violated the foregoing provisions of the 1987 PhilippineConstitution.

2.28. Furthermore, it is respectfully submitted by petitioners that the increasein SSS premiums constitute an unlawful exercise of the police power of the State.

2.29. Police power is defined as the power inherent in a government to enactlaws, within constitutional limits , to promote the order , safety, health, morals andgeneral welfare of society ( 16 C.J.S. 537).

2.30. Primicias vs. Fuguso, 80 Phil. 71 defined police power as the power

to prescribe regulations to promote the health, morals, education, good order orsafety and the general welfare of the people.

2.31. In Rubi vs. Provincial Board of Mindoro, 39 Phil. 660,it was held that

police power rests on the Latin maxims of salus populi est suprema lex ( thewelfare of the people is the supreme law) and sic utere tuo ut alienum nonlaedas ( so use your own property that you do not injure others ).

2.32. The police power is lodged primarily in the national legislature, By virtue

of a valid delegation of police power, it may also be exercised by the President,and administrative boards, as well as lawmaking bodies on all municipal levels,including the barangay (Cruz, Constitutional Law, 2007 Edition, p. 46) .

2.33. In Association of Small Landowners in the Philippines , Inc., et.


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al.vs. Honorable Secretary of Agrarian Reform, G. R. No. 78742, July 14,1989,it was held :

It is worth remarking at this juncture that a statute may be sustained underthe police power only if there is a concurrence of the lawful subject and the

lawful method. Put otherwise, the interests of the public generally asdistinguished from those of a particular class require the interference of the Stateand, no less important, the means employed are reasonably necessary for theattainment of the purpose sought to be achieved and not unduly oppressive uponindividuals.

. 2.34. The tests to determine the validity of a police measure, as laid down inthe cases of US vs. Toribio ( 21 Phil. 85) and Fabie vs. City of Manila, (21

Phil. 486), are the following :

(1)

The interests of the public , generally, as distinguished fromthose of a particular class, require the exercise of the policepower;

(2) The means employed are reasonably necessary for theaccomplishment of the purpose and not unduly oppressiveupon individuals.

2.35. It is obvious that the questioned Resolutions and Circular failed to complywith the second requirement for the valid exercise of police power.

2.36. First, the increase of SSS contributions is not necessary to accomplish itsavowed purpose of increasing the actuarial life of the SSS or obtaining asignificant decrease in its unfunded liability.

2.37. By fully utilizing its net income or by asserting its right over its unremittedpremiums as recommended in the COA Report, the SSS can reasonablyachieved the above objectives.

2.38. Second, the increase in SSS contributions is detrimental and undulyoppressive to the working class whose meager income which they could utilizefor food and other basic necessities would be reduced.

2.39. Failing to satisfy the second requirement, the questioned Resolutions andCircular must be declared void and without effect.

III

THE REVISED RATIO IN THE

SHARING OF PAYMENTS BYEMPLOYERS AND EMPLOYEES

FOR SSS CONTRIBUTIONSAS CONTAINED IN THE ASSAILED

ISSUANCES IS UNFAIR TO THE WORKINGCLASS AND BEYOND THE POWER


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OF RESPONDENTS TO ENACT .

3.1. The sharing of contributions between employers and employees forSSS premiums was previously set at roughly 70-30.

3.2. This means that the sharing of contributions between employers andemployees was roughly 70% for employers and 30% for employees.

3.3. This has been the . ratio for quite a long-time.

3.4. Thus, considering that the SSS Contributions before the questionedResolutions and Circular was at 10.4% of an employees monthly salary credit,7.07% of this amount was shouldered by the employers with 3.33% beingshouldered by the employees.

3.4.. For purposes of justice and consistency, respondents should havemaintained this 70-30 ratio in subsequent increases of SSS premiums .

3.5. Unfortunately, the recent increase of SSS premiums implemented underthe questioned issuances does not adhere to the former ratio of contributionsbetween employers and employees.

, 3.6. The increase of 0.6% in the SSS premiums as contained in thequestioned issuances of the SSS and the SSC is to be borne equally or on a 50-50 basis between the employers and employees , instead of being on the long-standing 70-30 basis.

3.7. Under the questioned Circular and Resolutions, the SSS premiums nowstand at 11% of the employees monthly salary credit with 7.37% of the same tobe shouldered by the employers and 3.63% of the same being shouldered bythe employees..

3.8. Had the long-standing ratio of 70-30 been maintained, the employeeswould have been liable for a lesser percentage .

3.9. It is submitted that this act of the respondents in changing the long-standing ratio of contributions is grossly unfair and detrimental to the employees.

3.10. After all, there is nothing in the law which authorizes respondents toadopt this 50-50 ratio, This was merely based on the whims and caprices of therespondents.

3.11. For this reason, the increased in SSS Contributions as embodied in thequestioned SSC Resolutions and SSS Circular must be declared null and void.

GROUNDS FOR ISSUANCE OF A TEMPORARY

RESTRAINING ORDER AND/ORPRELIMINARY INJUNCTION

1. Petitioners also pray for the issuance of a writ ofpreliminary injunction and/or a Temporary Restraining Order to enjoin


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Respondents from implementing the assailed Resolutions andCircular which implement the SSS Contributions Increase while theinstant Petition is pending.

2. The same is necessary to protect the substantive rights andinterests of petitioners . If the assailed SSC Resolutions and SSSCircular would continually be implemented, the rights of thepetitioners would be violated .Accordingly, there exists an extremenecessity for the Honorable Court to issue a TRO or a preliminaryinjunction.

3. Indeed, the earnings intended for food requirement and otherbasic needs of the petitioners would be reduced as it would beutilized for the purpose of defraying the amount needed for the SSS

Contributions Increase.

4. Petitioners have thus complied with the requirements providedby the Rules for the issuance of a TRO and/or Writ of PreliminaryInjunction , having shown that (a) the invasion of right sought to beprotected is material and substantial; (b) the right of the petitioners isclear and unmistakable; and (c) there is an urgent and paramountnecessity for the writ to prevent serious damage.

6. Petitioners prayer for a temporary restraining order and a writof preliminary injunction to enjoin respondents from implementing theassailed SSC Resolutions and SSS Circular pending resolution of thiscase must thus be granted.

PRAYER

WHEREFORE, premises considered, petitioners pray for thefollowing :

(1) that the Honorable Court give due course to this Petition ;

(2) That immediately upon the filing of this Petition, a temporaryrestraining order and/or a writ of preliminary injunction beissued to restrain the respondents from implementing the SSSContributions Increase as contained in the assailed SSCResolutions and SSS Circular;

(3) That after due proceedings, the increase in SSS Contributionsunder SSS Circular No. 2013-010, SSC Resolution No. 262-s.2013 and SSC Resolution No. 711s. 2013 be declared nulland void.

OTHER RELIEFS just and equitable under the circumstances arealso prayed for.


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Quezon City for Manila;January 10, 2014.

PRO LABOR LEGAL ASSISTANCECENTER

No. 33-B E. Rodriguez Sr. Avenue

Quezon CityCounsel for the Petitioners

By :

REMIGIO D. SALADERO JR.

Roll No. 33489

IBP OR No. 907583

January 4, 2014; RizalPTR No. 0255542

January 4, 2014, Baras, Rizal

MCLE Compliance No. IV-0018772

April 24, 2013Tel. No. 413-45-61

- and -

NOEL V. NERI

Roll No. 47168

PTR No. __________________/Quezon City

IBP No. 05613/Lifetime/Quezon City

MCLE Compliance No. IV-0016234/4-10-13

-and-

VICENTE JAIME M. TOPACIO

Roll No. 59418

IBP No_________________/Manila III

PTR No.___________________/Quezon CityMCLE No. IV-001878/4-23-13

Copy Furnished By Reg. Mail

Due to the Distance and the Lack


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Of Available Messenger To Effect

Personal Service :

Hon. Benigno Simeon Aquino IIIOffice of the President

Malacanang Palace, J. P. Laurel Street

San Miguel, Manila

Hon. Pacquito Ochoa Jr.

Office of the Executive Secretary

Malacanang Palace, J. P. Laurel Street

San Miguel, Manila

Social Security Commission12thFloor, SSS Bldg., Ayala Avenuecorner Rufino Street, Makati City

Social Security SystemSSS Building, East Avenue,Quezon City

Emilio De Quiros Jr.Office of the President

And CEOSSS Building, East Avenue,Quezon City

Office of the Solicitor General134 Amorsolo Street

Legaspi Village, Makati City

EXPLANATION

The service of copies of the instant Petition is made throughregistered mail, as personal service thereof cannot be made due todistance and lack of available personnel. This explanation is madepursuant to Rule 13, Section 11 of the Rules of Court.

REMIGIO D. SALADERO JR.


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The workers condemned the hike in SSS premiums from 10.4 per cent

to 11 per cent, which Pres. Noynoy Aquino pushed for in one of hispre-Labor Day speeches and which will be implemented in June or Julyaccording to SSS Director Emilio de Quiros

d) Circular No. 2018-010 dated October 2, 2013 issued by


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respondent Emilio S. De Quiros Jr;

e) Resolution No. 711-s. 2013 dated September 20, 2013 issuedby respondent Social Security Commission;

Resolution No. 262 s.2013 dated April 19, 2013 issued byrespondent Social Security

kmu tro petition vs sss premium hike

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