Is there a prescriptive period for filing an action against the employer to remit to the SSS the employee’s unpaid contribution?
In many cases, employees are not aware whether the employer is complying with the requirements of RA 1161. Oftentimes, they will discover the employer’s non-compliance only after they have filed a claim for benefits with the SSS which could take place years after their employment or after their resignation. In these situations, may the employee still file a claim against the employer under the provisions of RA 1161.
The issue of the prescriptive period in filing an action against the employer for enforcing the provisions of RA 1161 was one of the issues raised in the case of Rafael A. Lo vs. Court of Appeals (GR No. 128667), in this case, in 1953, the respondent Luguibis started working as a mechanic at the Polangui Rice Mill Inc which was owned at the time by Jose Lo. In 1959, he was asked to render services as a mechanic at the Polangui Bijon Factory which was also owned by Jose Lo. He resigned in 1970 due to illness.
In 1978, the management of the company was transferred to Jose Lo’s son, Rafael Lo and his sister Leticia Lo. In 1981, the private respondent was again hired by Jose Lo as a mechanic. In 1984, the private respondent suffered an accident while repairing one of the defective machines in the noodle factory where he sustained serious injuries forcing him to retire.
In 1985, private respondent applied for retirement benefits with the SS. However, his application was denied since per SSS records he became a member only in 1983 and contributions were remitted only from October 1983 to September 1984 despite the fact that SSS contributions in the amount of P3.50 have been deducted from his monthly salary since 1957. As a result, he filed a petition with the SSS against petitioner Rafael Lo and Jose Lo.
The issue is whether the petitioner’s right to claim his SSS benefits has already prescribed.
The Supreme Court ruled that pursuant to Section 22(b), par. 2 of RA 1161 or the SSS Law, the right to file the said action has not yet prescribed. It states that “The right to institute the necessary action against the employer may be commenced within twenty (20) years from the time the delinquency is known or the assessment is made by the SSS, or from the time the benefit accrues, as the case may be. (emphasis supplied)
The Supreme Court also clarified that the said provision applies to administrative and civil actions against an employer for his failure to remit SSS contributions. On the other hand, criminal actions for violations of the SSS law, on the other hand, prescribe in four years.
The Supreme Court also explained the reckoning of the 20-year period. It explained that the period of prescription commences to run only upon the discovery of the violation. In this case, the discovery was made only when the petitioner’s application for retirement benefits was denied by SSS which was in 1985. Since the suit was filed within a few months from the time of the discovery of the violation, the Supreme Court ruled that the suit was filed within the prescriptive period.
