GR 160265; (July, 2009) (Digest)
G.R. No. 160265 ; July 13, 2009
NELY T. CO, Petitioner, vs. PEOPLE OF THE PHILIPPINES, SOCIAL SECURITY SYSTEM, OFFICE OF THE SOLICITOR GENERAL and SPOUSES JOSE and MERCEDES LIM, Respondents.
FACTS
An Information was filed against petitioner Nely T. Co for violating the Social Security Law by allegedly failing to remit the SSS contributions of respondent spouses Jose and Mercedes Lim, who claimed to be her employees. Prior to this criminal case, the spouses had filed a labor complaint for illegal dismissal and monetary claims against Co and her company. The Labor Arbiter dismissed the complaint, a decision affirmed by the NLRC, which explicitly ruled that the spouses were independent contractors, not employees, and that no employer-employee relationship existed. This NLRC resolution became final on December 20, 2001.
Notwithstanding this final labor ruling, the RTC denied Co’s motion to quash the Information. Co then filed a petition for certiorari with the CA. The CA dismissed her petition for failure to implead indispensable parties as ordered and denied her motion for reconsideration, holding her bound by her counsel’s negligence. Co elevated the case to the Supreme Court.
ISSUE
The primary issue is whether the RTC correctly denied the motion to quash the Information for violation of the SSS Law despite a prior final NLRC ruling that no employer-employee relationship existed between the parties.
RULING
The Supreme Court ruled in favor of the petitioner and granted the motion to quash. The Court suspended procedural rules to address the substantive issue in the interest of justice, noting the potential deprivation of liberty from a procedural lapse. On the merits, the Court held that the existence of an employer-employee relationship is a mandatory precondition for compulsory coverage under the Social Security Law. The final and binding NLRC ruling, which conclusively established that the respondent spouses were independent contractors and not employees, constitutes res judicata. This prior judgment on the precise issue of the employment relationship bars the criminal prosecution, as the alleged offense of non-remittance of contributions cannot exist absent that foundational relationship. The factual finding of the labor tribunal is binding on the RTC in the criminal case. Therefore, the facts alleged in the Information do not constitute an offense, warranting the quashal of the criminal charge against the petitioner.