G.R. No. 141285. July 5, 2001.
Cebu Institute of Medicine and Dr. Josefina L. Poblete, petitioners, vs. Cebu Institute of Medicine Employees’ Union-National Federation of Labor, respondent.

FACTS

Petitioner Cebu Institute of Medicine (CIM) is a non-stock, non-profit educational institution. Respondent Cebu Institute of Medicine Employees’ Union National Federation of Labor (UNION) is the duly certified bargaining representative of CIM’s employees. The UNION demanded that CIM stop its practice of charging the employer’s mandatory share in the SSS, Medicare, and Pag-Ibig premiums against the seventy percent (70%) incremental tuition fee increase authorized under Section 5, paragraph (2) of RA 6728. CIM refused. The dispute was submitted to voluntary arbitration. The Voluntary Arbitrator ruled in favor of the UNION, holding that charging the employer’s share against the 70% incremental tuition fee increase contravened Section 19 of RA 1161 (the Social Security Law), which prohibits employers from deducting or recovering their contributions from employees’ compensation. The Voluntary Arbitrator ordered CIM to refund the amounts and to refrain from the practice. CIM’s motion for reconsideration was denied. The Court of Appeals affirmed the Voluntary Arbitrator’s ruling, reasoning that paying the employer’s share from funds allotted for employees would make the employees contribute the entire amount of the premiums and reduce the portion of the tuition fee increases intended for their benefit.

ISSUE

May the mandatory share of an educational institution in the SSS, Medicare, and Pag-Ibig premiums be charged against the seventy percent (70%) incremental tuition fee increase authorized under Section 5, paragraph (2) of RA 6728?

RULING

Yes. The Supreme Court reversed the decisions of the Court of Appeals and the Voluntary Arbitrator. The Court held that the employer’s share in the SSS, Medicare, and Pag-Ibig premiums falls under the category of “other benefits” for teaching and non-teaching personnel, as stated in Section 5, paragraph (2) of RA 6728. The law mandates that seventy percent (70%) of the incremental tuition fee increase shall go to the payment of salaries, wages, allowances, and other benefits of personnel. There is no specific prohibition against charging the employer’s share to this 70% allocation. The Court reasoned that the 70% is not delivered whole to the employees but is packaged in the form of salaries, wages, allowances, and other benefits, which include SSS, Medicare, and Pag-Ibig premiums. The educational institution has the discretion to determine the disposition of this 70% increase. Charging the employer’s share against this fund is deemed integrated in the amount allocated for these benefits. The remaining thirty percent (30%) is intended for institutional improvements and operational costs, not for benefits like SSS premiums. The Court also cited the precedent in University of Pangasinan v. Confesor, which held that social security contributions should be charged against the tuition fee increase allocation for salaries and benefits. Therefore, petitioner CIM is allowed to charge its share in the SSS, Medicare, and Pag-Ibig premiums against the seventy percent (70%) incremental tuition fee increase.