7/24/2019 Chapter 3 - Victorias Milling Co vs SSS

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Victorias Milling Co vs SSS

On October 15, 1958, the Social Security Commission issued its Circular No. 22 of the following tenor .

!ffecti"e No"ember 1, 1958, all !m#loyers in com#uting the #remiums due the System, will ta$e into consideration and include in t

!m#loyee%s remuneration all bonuses and o"ertime #ay, as well as the cash "alue of other media of remuneration. &ll these will com#rise th

!m#loyee%s remuneration or earnings, u#on which the '(1)2* and 2(1)2* contributions will be based, u# to a ma+imum of 5-- for any omonth.

Petitioner Victorias Milling Company, Inc. protested against the circular as contradictory to a previous Circular No. 7, dateOctober 7, 1!7 e"pressly e"cluding overtime pay and bonus in the computation o# the employers$ and employeerespective monthly premium contributions, and submitting, %In order to assist your &ystem in arriving at a prop

interpretation o# the term $compensation$ #or the purposes o#% such computation, their observations on 'epublic (ct 11)and its amendment and on the general interpretation o# the *ords %compensation%, %remuneration% and %*ages%.

Issue: +ON bonuses, allo*ances, and overtime pay given in addition to the regular or base pay *ere e"pressly e"cludeor e"empted #rom the denition o# the term %compensation%

Held:Circular No. 22 in uestion was issued by the Social Security Commission, in "iew of the amendment of the #ro"isions of the Social Security /adefining the term 0com#ensation0 contained in Section 8 f of 3e#ublic &ct No. 1141 which, before its amendment, reads as follows .

f Com#ensation &ll remuneration for em#loyment include the cash "alue of any remuneration #aid in any medium other than cash e+ce

1 that #art of the remuneration in e+cess of 5-- recei"ed during the month6 2 bonuses, allowances or o"ertime #ay6 and ' dismissal an

all other #ayments which the em#loyer may ma$e, although not legally reuired to do so.

3e#ublic &ct No. 1792 changed the definition of 0com#ensation0 to

f Com#ensation &ll remuneration for em#loyment include the cash "alue of any remuneration #aid in any medium other than cash e+cethat #art of the remuneration in e+cess of 5--.-- recei"ed during the month.

t will thus be seen that whereas #rior to the amendment, bonuses, allowances, and o"ertime #ay gi"en in addition to the regular or base #ay were+#ressly e+cluded, or e+em#ted from the definition of the term 0com#ensation0, such e+em#tion or e+clusion was deleted by the amendatory law. t th

became necessary for the Social Security Commission to inter#ret the effect of such deletion or elimination. Circular No. 22 was, therefore, issued

a##rise those concerned of the inter#retation or understanding of the Commission, of the law as amended, which it was its duty to enforce. t did not aany duty or detail that was not already in the law as amended. t merely stated and circularied the o#inion of the Commission as to how the law shou

be construed.

:e find, therefore, that Circular No. 22 #ur#orts merely to ad"ise em#loyers(members of the System of what, in the light of the amendment of the lathey should include in determining the monthly com#ensation of their em#loyees u#on which the social security contributions should be based, and th

such circular did not reuire #residential a##ro"al and #ublication in the Official ;aette for its effecti"ity.

t hardly need be said that the Commission%s inter#retation of the amendment embodied in its Circular No. 22, is correct.