G.R. No. L-18081. April 30, 1963. SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (PAFLU), petitioner, vs. THE HON. JUDGE E. SORIANO, ETC., ET AL., respondents.
FACTS

The Social Security System Employees Association (PAFLU) submitted demands to the Social Security Commission (SSC), including a request for recognition as a collective bargaining agent. Instead of responding, the SSC filed a petition for declaratory relief before the Court of First Instance of Manila, seeking a declaration that the Social Security System (SSS) is a governmental agency performing governmental functions. This declaration would prohibit its employees from joining unions, compel collective bargaining, or striking. The union countered, asserting the SSS performs proprietary functions.
Subsequently, after a conference, the union filed an unfair labor practice charge against the SSC with the Court of Industrial Relations (CIR). Two days later, the union went on strike and picketed the SSC premises. On the same day, the SSC filed an urgent petition for a preliminary injunction with the Court of First Instance of Manila, presided by Judge E. Soriano. The judge issued an ex parte writ ordering the union to desist from picketing and any acts of violence. The union then filed this certiorari petition, arguing the judge had no jurisdiction to issue the injunction ex parte.

ISSUE

Whether the respondent judge acted in excess of jurisdiction in issuing the ex parte writ of preliminary injunction, which hinges on the nature of the SSS as either a governmental or proprietary entity.

RULING

The Supreme Court granted the petition, set aside the ex parte injunction, and made its own restraining order permanent. The legal logic centers on the distinction between governmental and proprietary functions. The Court, applying the test from Bacani v. National Coconut Corporation, held that an entity is not part of the “Government of the Republic of the Philippines” if it is not a municipal corporation, does not exercise powers as an attribute of sovereignty, possesses a corporate personality separate from the government, and can sue and be sued. The SSS meets these criteria for being a proprietary entity.
Crucially, the Court conducted a comparative analysis of the charters of the SSS and the Government Service Insurance System (GSIS). It found substantial similarities in their corporate powers, operational autonomy (including budgeting, acquiring property, and suing/being sued), investment authorities, and the appointment/tenure of their governing bodies. Since the GSIS had previously been declared by the Court to exercise proprietary functions, the legislative intent to pattern the SSS after the GSIS led to the inescapable conclusion that the SSS likewise performs proprietary functions. Consequently, its employees possess the right to organize and bargain collectively under Republic Act No. 875 (the Industrial Peace Act). Therefore, labor disputes involving the SSS fall under the exclusive jurisdiction of the CIR, not the regular courts. The respondent judge thus acted without jurisdiction in issuing the ex parte injunction.