G.R. No. 125837 ; October 6, 2004
Reynaldo Cano Chua, doing business under the name & style Prime Mover Construction Development, petitioner, vs. Court of Appeals, Social Security Commission, Social Security System, Andres Paguio, Pablo Canale, Ruel Pangan, Aurelio Paguio, Rolando Trinidad, Romeo Tapang and Carlos Maliwat, respondents.

FACTS

Private respondents, working as carpenters, masons, and fine graders, filed a petition with the Social Security Commission (SSC) against petitioner Reynaldo Chua, owner of Prime Mover Construction Development. They claimed to be his regular employees since 1977, dismissed without cause and without being reported for compulsory SSS coverage. They argued their work was necessary and desirable to his ongoing construction business. Petitioner countered that they were merely project employees, hired for specific construction projects, and thus not entitled to SSS coverage. He also asserted the action was barred by prescription and laches, as it was filed years after their initial hiring.
The SSC ruled in favor of the employees, declaring them regular and ordering petitioner to pay unpaid SSS contributions plus penalties. The Court of Appeals affirmed this decision. Petitioner elevated the case to the Supreme Court, reiterating his arguments on the project employment status and the defenses of prescription and laches.

ISSUE

The primary issue is whether private respondents are regular employees entitled to compulsory SSS coverage, or project employees excluded from such coverage. A corollary issue is whether the claim for SSS coverage is barred by prescription or laches.

RULING

The Supreme Court denied the petition and affirmed the lower courts’ rulings. On the employment status, the Court held that private respondents were regular employees. Citing Article 280 of the Labor Code, the Court emphasized that where an employee has been performing tasks necessary and desirable to the usual business of the employer for at least one year, the employee is deemed regular, regardless of whether the employment is continuous or intermittent. Petitioner’s construction business was continuous, involving a succession of projects, and the respondents’ skills were indispensable to this trade. Their repeated rehiring over several years demonstrated they were part of a work pool from which petitioner drew workers for his various projects, solidifying their regular status.
Consequently, as regular employees, they were subject to compulsory coverage under the Social Security Act. The Court rejected the defenses of prescription and laches. It cited Section 22(b) of the Social Security Law, which provides a twenty-year prescriptive period for the SSS to collect unpaid contributions from the time the delinquency is known. The Court also noted that laches does not apply against the government when it acts to enforce a public right, such as the collection of social security contributions meant to protect workers. The imposition of penalties for delayed remittance was likewise upheld as mandatory under the law.