Ambassador Hotel VS SSS

1.
A case for nonpayment of Social Security System (SSS) contributions
AMBASSADOR HOTEL, INC., Petitioner vs.

SOCIAL SECURITY SYSTEM, Respondent
MENDOZA, J.:
June 21, 2017; G.R. No. 194137
FACTS:
SSS, after investigation, notice and opportunity to contest the petitioner’s obligations, filed a complaint with
the City Prosecutor's Office of Quezon City against Ambassador Hotel, Inc. (Ambassador Hotel) and its
officers for non-remittance of SSS contributions and penalty liabilities for the period from June 1999 to
March 2001 in the aggregate amount of ₱769,575.48.
After preliminary investigation, the City Prosecutor's Office filed an Information charging Ambassador
Hotel, Inc.'s Yolanda Chan (Yolanda), as President and Chairman of the Board with violation of Section
22(a), in relation to Section 22(d) and Section 28(e) of Republic Act
(R.A.) No. 1161, as amended by R.A. No. 8282. Yolanda was arrested. Upon arraignment, she pleaded not
guilty.
RTC held that Yolanda could not be held criminally liable for the non-payment of SSS contributions
because she was not performing the duties of the hotel's president from June 1999 to March 2001. The RTC,
however, ruled that the acquittal of Yolanda did not absolve Ambassador Hotel from its civil liabilities.
The CA affirmed in toto the RTC ruling. The CA opined that the acquittal of Yolanda did not extinguish the
civil action against Ambassador Hotel as the RTC did not declare that the fact from which the civil liability
might arise did not exist. Moreover, it underscored that Ambassador Hotel was not deprived of due process
as its directors and officers were informed numerous times regarding its delinquency and the pending case
filed against it. The CA concluded that Ambassador Hotel was given every opportunity to contest its
obligation with the SSS yet it did nothing.
ISSUE:
WHETHER OR NOT THE DECISION RENDERED BY THE LOWER COURT DECLARING

PETITIONER LIABLE TO RESPONDENT SOCIAL SECURITY SYSTEM FOR ALLEGED
UNREMITTED SSS CONTRIBUTION IS VALID.
RULING:
Yes. The decisions rendered by the lower court declaring petitioner liable to respondent for alleged
unremitted SSS contribution is valid for even when the employer is a corporation, it shall still be held liable
for the non-remittance of SSS contributions.
Under Section 8(c) of R.A. No. 8282, an employer is defined as "any person, natural or juridical,
domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking, or activity
of any kind and uses the services of another person who is under his orders as regards the employment,
except the Government and any of its political subdivisions, branches or instrumentalities, including
corporations owned or controlled by the Government."
Ambassador Hotel, as a juridical entity, is still bound by the provisions of R.A. No. 8282 and that
prompt remittance of SSS contributions under the aforesaid provision is mandatory. Naturally, a juridical
entity cannot be the subject of an arrest because it is a mere fiction of law;
thus, an arrest on its representative is sufficient to acquire jurisdiction over it. An arrest on its officers binds
the corporation.
Under Section 22 (a) thereof states:
Remittance of Contributions. (a) The contributions imposed in the preceding section shall be remitted to the
SSS within the first ten (10) days of each calendar month following the month for which they are applicable
or within such time as the Commission may prescribe. Every employer required to deduct and to remit such
contributions shall be liable for their payment and if any contribution is not paid to the SSS as herein
prescribed, he shall pay besides the contribution a penalty thereon of three percent (3%) per month from the
date the contribution falls due until paid. If deemed expedient and advisable by the Commission, the
collection and remittance of contributions shall be made quarterly or semiannually in advance, the
contributions payable by the employees to be advanced by their respective employers: Provided, That upon
separation of an employee, any contribution so paid in advance but not due shall be credited or refunded to
his employer.
Any divergence from this rule subjects the employer not only to monetary sanctions, that is, the
payment of penalty of three percent (3%) per month, but also to criminal prosecution if the employer fails
to: (a) register its employees with the SSS; (b) deduct monthly contributions from the salaries/wages of its
employees; or (c) remit to the SSS its employees' SSS contributions and/or loan payments after deducting
the same from their respective salaries/wages.

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1.

A case for nonpayment of Social Security System (SSS) contributions

AMBASSADOR HOTEL, INC., Petitioner vs.

WHETHER OR NOT THE DECISION RENDERED BY THE LOWER COURT DECLARING

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