The Supreme Court (SC) has declared unconstitutional a provision in the Implementing Rules and Regulations of the Social Security Act of 2018 that mandates advance payments by land-based Overseas Filipino Workers (OFWs) of their Social Security System (SSS) contributions for three months.
The provision in the IRR of Republic Act No. 11199, the Social Security Act of 2018, mandates that the advance payment of SSC contributions as self-employed is a pre-condition to the issuance of the Overseas Employment Certificates (OECs) of the OFWs.
Prior to the issuance of an OEC, a worker is technically not considered an OFW yet.
In a full court decision written by Associate Justice Maria Filomena D. Singh, the SC said “to enforce compulsory coverage of land-based OFWs through the issuance of OECs is unduly oppressive, unreasonable, and repugnant to the Constitution.”
While the provisions of RA 11199 have been declared constitutional, the provision in the law’s IRR under Rule 14, Section 7(iii) has been declared contrary to Sections 1 and 6 of Article III of the Constitution on the right to life, liberty, and property, and the right to abode and travel.
Rule 14, Section 7 (iii) of the IRR states: “For land-based OFWs in countries without any SSA or BLA (bilateral social security and labor agreements) with the Republic of the Philippines, the measures for enforcement of compulsory coverage shall include, among others, the collection of contribution payments by the Philippine Overseas Employment Administration (POEA) and/or the concerned DOLE (Department of Labor and Employment) agencies, through its applicable documentation and deployment process such as the issuance of Overseas Employment Certificate (OEC).…”
The SC said the provision in the IRR “places an undue burden on the land-based OFWs by imposing as condition to the issuance of their OECs the payment of the employer’s contribution, an onus not placed on any other class of employee under the SSS coverage.”
It also said that land-based OFWs, who have not even commenced employment yet, much less received their salaries, would be compelled to advance their SSS contributions under Rule 14, Section 7 (iii).
The OFWs “are being compelled to prepay the required SSS contributions, otherwise, they cannot leave the country due to the absence of an OEC,” the SC also said.
It stressed: “This situation places undue burden on our OFWs, who often resort to borrowing money to cover costly deployment expenses. The Court is reminded of the hardships and sacrifices faced by our OFWs.”
The SC ruling was issued on the petition filed by Migrante International and party-list groups Bayan Muna, Gabriela, ACT-Teachers and Kabataan.
The petitioners told the SC that the imposition deprives them of property without due process and restricts their right to work.
They pointed out that it is ultra vires (beyond the powers) on the part of the SSS to enforce compulsory coverage of land-based OFWs through the issuance of OECs.
They also said that “enforcing SSS coverage via OЕС issuance is patently oppressive and discriminatory.”
In its decision, the SC said:
“Social security protection is fundamentally grounded in the State's police power. By mandating social security coverage, the State ensures that all workers, regardless of their nature of employment, location, and status, have access to essential social security benefits, in times of need.
“This is especially beneficial to OFWs, who leave their families behind to work abroad. Aside from enduring separation from their loved ones, OFWs often face harsh working conditions, including long hours, excessive workloads and inadequate safety measures.
“Through coverage in the SSS, OFWs and their beneficiaries are safeguarded from the hazards of disability, sickness, maternity, old age, death, and loss of income.
“While social security protection for OFWs is crucial, the State grapples with challenges related to differences in workers' nature of employment, status, and place of work.
“In addressing these challenges, the State is justified in making reasonable distinctions among workers to ensure comprehensive SSS for all. However, it is essential that the State does not unduly burden OFWs when enforcing the collection of SSS contributions.
“Unfortunately, the assailed provision of the IRR of Republic Act No. 11199 requires land-based OFWs to pay SSS contributions before receiving their OEC. This measure unjustly deprives land-based OFWs of their right to work and places an inordinate restraint on their right to travel.
“To truly honor the sacrifices of our OFWs, often hailed as modern-day heroes, it is crucial to refrain from oppressive policies that unfairly burden them.
“Accordingly, the Petition for Certiorari and Prohibition is partly granted. Rule 14, Section 7(iii) of the Implementing Rules and Regulations of Republic Act No. 11199 is declared unconstitutional for being contrary to Sections 1 and 6 of Article III of the Constitution.
“The Social Security System, Philippine Overseas Employment Administration, and Department of Labor and Employment are permanently enjoined from implementing this unconstitutional provision.
“The constitutionality of the assailed provisions of Republic Act No. 11199 and the remaining assailed provisions of the Implementing Rules and Regulations of Republic Act No. 11199 are upheld.
“Pursuant to Rule 50, Section 1 of the Implementing Rules and Regulations of Republic Act No. 11199, these provisions remain in force and effect. So ordered.”