G.R. No. L-15163; February 28, 1962
ELIZALDE ROPE FACTORY, INC., petitioner-appellant, vs. SOCIAL SECURITY COMMISSION, respondent-appellee.

FACTS

The case involves the obligation of an employer to pay Social Security System (SSS) premiums for an employee during a strike period. Edilberto Tupas, an employee of Elizalde Rope Factory, Inc., participated in a strike from September 17, 1957, to mid-February 1958. During these months, Tupas rendered no service and received no wages. The company did not remit SSS premiums for him for October 1957 to January 1958. Tupas died on May 6, 1958. The Social Security Commission subsequently billed the company P10.27 for its unpaid employer’s contribution corresponding to the strike period, based on its Circular No. 21. The circular stated that the employer’s obligation to remit its 3.5% contribution continues as long as the employer-employee relationship exists, even if the employee earns nothing, with the contribution to be based on the employee’s last received wage.
The company refused to pay the premiums for the strike months, contending that during a strike, the striker ceases to be an “employee” as defined by law because the twin requisites of performing service and receiving compensation are absent. It argued that the employer-employee relationship was suspended during the strike, thus terminating the obligation to contribute. The Commission denied the company’s request for reconsideration, prompting this appeal.

ISSUE

Whether an employer is obligated to pay its SSS premium contribution for an employee for the period during which the employee is on strike and receives no wages.

RULING

Yes, the employer is obligated to pay. The Supreme Court affirmed the resolution of the Social Security Commission. The legal logic centers on the continuity of the employer-employee relationship during a lawful strike. The Court held that a strike does not sever or dissolve this relationship; it is merely a temporary cessation of work as a means for laborers to press their demands, with the intent to eventually resume employment. Since the relationship persists, the statutory duty to contribute under the Social Security Act remains operative.
Examining Sections 18 and 19 of Republic Act No. 1161 , as amended, the Court noted that the law mandates monthly contributions “during his employment.” It does not explicitly condition the obligation upon the employee’s actual receipt of compensation for that specific month. The provisions require payment every month of employment following compulsory coverage. Edilberto Tupas was already under compulsory coverage when the strike began. Therefore, for the duration of the strike—a period still within the scope of his employment—the employer’s monthly contribution accrued. The Commission’s Circular No. 21, which bases the contribution on the last received wage during such unpaid periods, is a reasonable implementation of this statutory scheme to ensure continuous coverage. The employer’s contribution is an independent statutory duty, not contingent on the employee’s receipt of pay in a given month, as long as the employment bond itself is not terminated.