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Republic of the Philippines SUPREME COURT Manila EN BANC

KILUSANG MAYO UNO, represented by its Secretary General ROGELIO SOLUTA; REP. FERNANDO HICAP for himself and as Representative of the ANAKPAWIS PARTY-LIST ; CENTER FOR TRADE UNION AND HUMAN RIGHTS (CTUHR), represented by its Executive Director DAISY ARAGO., JOSELITO USTAREZ and SALVADOR CARRANZA, for themselves and in representation of the NATIONAL FEDERATION OF LABOR UNIONS-KMU (NAFLU-KMU); NENITA GONZAGA; PRESCILA A. MANIQUIZ; REDEN ALCANTRA, Petitioners, -versusG.R. No. ________ For : Certiorari and Prohibition with Application for a Temporary Restraining Order and/or Preliminary Injunction

Hon. BENIGNO SIMEON C. AQUINO III, Hon. PAQUITO N. OCHOA JR., SOCIAL SECURITY COMMISSION, SOCIAL SECURITY SYSTEM, and EMILIO S. DE QUIROZ JR ., Respondents. x-------------------------------------------------------x

PETITION FOR CERTIORARI AND PROHIBITION

PETITIONERS, by counsel, unto this Honorable Court, most respectfully state : NATURE OF THE PETITION

Petitioners, through the instant Petition for Certiorari under Rule 65 of the Rules of Court as amended, seek to annul or nullify the hike in the SSS premiums as embodied in the following issuances : a) Resolution No. 262 s.2013 dated April 19, 2013 issued by respondent Social Security Commission. b) Resolution No. 711-s. 2013 dated September 20, 2013 issued by respondent Social Security Commission; c) Circular No. 2018-010 dated October 2, 2013 issued by respondent Emilio S. De Quiros Jr;

Petitioners also seek to prohibit , enjoin, or prevent respondents from implementing or enforcing the said hike in SSS premiums as embodied in the said issuances. Petitioners also pray for the issuance of a temporary restraining order and/or a preliminary injunction pending the resolution of the instant Petition to immediately prevent respondents from enforcing or implementing the questioned issuance. Certified true copy of the SSC Resolution No. 262 s.2013 dated April 19, 2013 is here attached as Annex A. Certified true copy of the SSC Resolution No. 711-s. 2013 dated September 20, 2013 is here attached as Annex B. Certified true copy of the said SSS Circular No. 2013-010 is here attached as Annex C. The above issuances were issued by respondents with grave abuse of discretion amounting to acting without or in excess of jurisdiction and in blatant violation of existing laws, and petitioners have no appeal nor any plain, speedy and adequate remedy under the ordinary course of law except through the instant Petition. PARTIES A. Petitioners Petitioner Kilusang Mayo Uno (KMU) is a recognized labor center promoting the cause of genuine, militant and nationalist trade unionism in the country and is bringing the instant Petition on behalf of its individual members . Its address is at No. 63 , Narra Street, Brgy. Claro, Proj. 3, Quezon City. It is represented in this Petition by its Secretary General, Rogelio Soluta, who is holding office at the same address. Copy of the the Secretarys Certificate showing that
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Rogelio Soluta has been authorized to represent petitioner KMU in this case is here attached as Annex D. Petitioner Center for Trade Union and Human Rights (CTUHR) is a duly registered non-stock corporation organized for the purpose of promoting and protecting the rights of labor and holds office at Culmat Building, E. Rodriguez Sr. Avenue, Quezon City. It is represented by its Executive Director , Daisy Arago, who holds office in the same address. The authority of Daisy Arago to represent CTUHR in the instant Petition is evidenced by a Secretarys Certificate here attached as Annex D-1. Petitioner Fernando Hicap is of legal age, married , with office address at House of Representatives, Batasang Pambansa, Quezon City. He is presently the party-list representative of the AnakPawis Party List in the House of Representatives. Petitioner Joselito Ustarez is of legal age, married, a member of the SSS with SSS No. 03-2030254-5 and resides at No. 769 Panay Street, Sampaloc, Manila. He is presently the National President of the National Federation of Labor Unions KMU (NAFLU-KMU), a duly registered labor federation and is filing the present action as an SSS member and on behalf of his labor federation. Copy of the Secretarys Certificate showing that his Federation has authorized him to file the instant action is here attached as Annex D-2. Petitioner Salvador Carranza is legal age, married, a member of the SSS with SSS No. 03-5029078-0 and resides at A. Reyes Street, Road 4, Purok 3, Lower Bicutan, Taguig City. He is presently the National Treasurer of the National Federation of Labor Unions KMU (NAFLU-KMU), a duly registered labor federation and is filing the present action as an SSS member and on behalf of his labor federation. Copy of the Secretarys Certificate showing his authority to file the instant action is here attached as Annex D-2. Petitioner National Federation of Labor Unions-KMU (NAFLU-KMU) is a duly registered labor federation with address at No. 509-E Canteras Street, Mandaluyong City and is filing the instant action on behalf of its individual members. Petitioner Nenita Gonzaga is of legal age, married, a member of the SSS with SSS No. 33-0513034-2 and holds office at No. 63 Narra Street, Proj. 3, Quezon City. Petitioner Prescila Ang-Maniquiz is of legal age, married, a member of the SSS with SSS No. 03-2881600-2 and holds office at No. 63 Narra Street, Proj. 3, Quezon City.

Petitioner Reden Alcantara is of legal age, married, a member of the SSS with SSS No. 04-1051627-8 with address at No. 25 Brgy. Mabini, Tanauan City, Batangas.

B. Respondents

Respondent BENIGNO SIMEON C. AQUINO III is being sued as President of the Republic of the Philippines and is the head of the executive department with the duty to implement all laws , rules and regulations of the land. He may be served with notices, orders, and other processes of this Honorable Court at the Office of the President , New Executive Building, Malacanang Palace, J. P. Laurel Street, San Miguel, Manila. Respondent PAQUITO OCHOA JR is a cabinet official and is considered the alter ego of the President. He is sued in this capacity and holds office at the Office of the Executive Secretary, New Executive Building, Malacanang Palace, J. P. Laurel Street, San Miguel, Manila. Respondent SOCIAL SECURITY COMMISSION holds office at 12th Floor, SSS Bldg., Ayala Avenue corner Rufino Street, Makati City. It may be served with notice through Atty. Milagros Pagayatan , Social Security Commission Secretary, holding office at the same address. Respondent SOCIAL SECURITY SYSTEM holds office at the SSS Building, East Avenue, Quezon City and may served with notice through respondent EMILIO DE QUIROS JR, its President and CEO holding office at the same address.

STATEMENT OF FACTS

1. The much- reviled SSS premium hike is the subject matter of this Petition. 2. The desire to establish a social security system suitable to the needs of our people, especially workers and their families, which shall promote social justice and provide protection against the hazards of disability, sickness, old age, maternity, and other contingencies resulting in the loss of income and financial burden led our lawmakers to enact RA 1161 ( the Social Security Law) in 1954. 3. Pursuant to this law, the Social Security System (SSS) under
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the direction and control of the Social Security Commission (SSC), was created. 4. In 1997, RA 8282 was enacted to further strengthen the social security system. This law was approved on Labor Day ( May 1, 1997) consistent with its declaration that the State shall endeavor to extend social security protection to workers and their beneficiaries . 5. As envisioned, the SSS operates a provident fund coming from the contributions of employers, employees, self-employed individuals, and voluntary members from which the payment of benefits for its members come from. 6. The SSS is also empowered to invest a portion of its fund that are not needed to meet current benefit obligations in bonds, securities, promissory notes, real estate, and other activities as may be allowed by law. 7. In the long years that elapsed since its establishment, the SSS has grown considerably. 8. Recent statistics show that the membership of the SSS now exceeds 29 million members . 21,945, 734 of these members are private sector employees; 602, 139 are employers; 3,803,327 are self-employed; and 3,708,306 are voluntary members. 9. As of March 2012, the assets and investments of the SSS amounted to about P343.67 million. 10. As of June 2013, SSS assets was estimated to be about P368.788 billion. 11. billion. In 2011, the SSS net income was placed at P25.25

12. In the following year, 2012, the SSS net income grew to about P36.2 billion, posting an increase of 42%.
13. Over the years, years, SSS has invested billions of pesos in highly profitable industries such as real estate, mining, telecommunications, banking and power. 37% of these investments is in government securities, 25% in equities, and 4% in real estate assets. 14. During the last three years , for instance, SSS has increased its equity investments in Philex Mining Corp., Philippine Long Distance Telephone Co., First Holdings Corp., Manila Electric Co. and Union Bank. 5

6 15. Its profitable operation has allowed SSS to give hefty bonuses to its employees and top executives for the past years. 16. This notwithstanding the fact that as of December 2010,the SSS has a collectibles of about P8.5 billion from erring employers. 17. In 2010 for instance, SSS executives and employees received some P200 million as bonuses. 18. In 2012, the SSS gave out a total of P276 million bonus to its employees and executives. This was admitted by respondent SSS President Emilio Quiroz Jr. in a press conference last October 8, 2013.

19. The decision to grant so-called performance bonuses for 2012 was self-servingly made by the commissioners of the SSS. They received the following bonuses: Juan Santos, chairman, P1.17 million; Emilio de Quiros Jr., SSS president and SSS vice chairman, P1.04 million; Diana Pardo-Aguilar, P1.33 million; Daniel Edralin, P1.12 million, Eliza Antonino, P968,000; Marianita Mendoza, P1.02 million; Ibarra Malonzo, P1.41 million; and Bienvenido Laguesma, P1.30 million. 20. Aside from the 2012 year-end bonus, SSS officials also receive P80,000 a month for attending two meetings and additional P20,000 for every committee meeting they attend. 23. This was all done in atmosphere of public dissatisfaction with respect to the inability of the SSS to provide meaningful social protection service to its members and their beneficiaries. 24. In a 2012 annual audit report for the SSS, for example, the Commission on Audit (COA) chided the SSS for the snail-paced processing of payments for death, disability and retirement claims of its members. 25. Moreover, the COA also directed the SSS to swiftly take legal steps to collect over P367 million in premiums and penalties from 139 delinquent corporations and employers that have been remiss in their responsibility under the SSS law. 26. Also, the COA assailed the SSS for imposing excessive interest payments on borrowers to the tune of P788.8 million. 27. The COA said that the slow processing and payment of death, disability, and retirement claims did not meet the commitment of the SSS of providing prompt, convenient and meaningful social protection to the members and their beneficiaries. 28. This deterioration in the quality of service of the SSS has been meet with protests and demonstrations by the public, especially the labor sector.

7 29. But more recently, another development which has drawn heavy protests and criticism from the public was the hike in SSS contributions or premiums enacted or implemented by the respondents. 30. In one of his pre-Labor Day speeches in 2013, Pres. Benigno Aquino III pushed for a hike in SSS premiums citing the possible bankcrupcy of the Social Security System in the years to come as the main reason. 31. Respondent Emilio de Quiros Jr. contradicted the statement, claiming that the SSS is not losing funds; we are actually registering very strong net revenues. 32. On April l9, 2013, respondent Social Security Commission issued Resolution No. 262 s. 2013 (Annex A) approving the increase in SSS contributions from 10.4% of the monthly salary credit to 11% and the monthly salary credit from P15,000 to P16,000 the effectivity of which shall be subject to the approval of the President of the Philippines. 33. On September 20, 2013, respondent Social Security Commission issued Resolution No. 711-s (Annex B) which among others, approved and ratified the increase in contributions from 10.4 % to 11% to take effect in January 2014 as approved by respondent Pres. Benigno Aquino III pursuant to a Memorandum from respondent Executive Secretary dated September 9, 2013. 34. On October 2, 2013, respondent Social Security System through respondent Emilio De Quiros Jr. issued Circular No. 2313 -010 (Annex C) which contained the revised schedule of SSS contributions to be effective on the month of January 2014. 35. As per Circular No. 2313-010 , the increase of 0.6% in SSS contributions shall be shouldered equally by the employer and the employee on an equal basis. Thus, the employer shall pay 7.37% (from 7.07% ) and 3.63% for the employee ( from 3.33 %) instead of the usual 70-30 ratio. 36. The said increase in SSS contributions will further add to the financial burden of the Filipino workers majority of whom are mired in abject poverty due to the frequent increases of prices of basic commodities and the escalating cost of living. 37. Desperate and left with no other speedy and viable alternative, they now seek relief from this Honorable Court through the instant Petition.

LEGAL STANDING TO FILE THE INSTANT SUIT

Petitioners have the locus standi to file the instant Petition.

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Majority of petitioners are members of the SSS and are directly affected by the increased in SSS premiums or contributions which became effective this January 2014. In Atty. Oliver O. Lozano and Atty. Evangeline J. Lozano-Endriano vs. Speaker Prospero C. Nograles, G.R. No. 187883, June 16, 2000 , this Honorable Court held : Generally, a party will be allowed to litigate only when he can demonstrate that (1) he has personally suffered some actual or threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by the remedy being sought.

With respect to the other petitioners, they also have the legal personality to file the instant Petition, the issues raised herein being of transcendental importance which require their immediate resolution. As held in the case of Randolph David, et. al., vs. Pres. Gloria Macapagal Arroyo, et. al., G.R. No. 171396, March 3, 2006 : By way of summary, the following rules may be culled from the cases decided by this Court. Taxpayers, voters, concerned citizens, and legislators may be accorded standing to sue, provided that the following requirements are met: (1) (2) the cases involve constitutional issues; for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax measure is unconstitutional; for voters, there must be a showing of obvious interest in the validity of the election law in question; for concerned citizens, there must be a showing that the issues raised are of transcendental importance which must be settled early; and for legislators, there must be a claim that the official action complained of infringes upon their prerogatives as legislators.

(3)

(4)

(5)

The issues involved in this Petition are of transcendental importance , the early settlement of which is imperative. There is thus no dispute that petitioners they are clothe with
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the legal standing to file the present case. ISSUES Are the questioned issuances ( SSS Circular No. 2013-010, SSC Resolution No. 262-s. 2013, and SSC Resolution No. 711 s. 2013 ) issued in violation of existing laws and with grave abuse of discretion amounting to acting without or in excess of jurisdiction by the respondents ?

GROUNDS RELIED UPON FOR THE ALLOWANCE OF THE INSTANT PETITION

I THE ASSAILED ISSUANCES ARE NULL AND VOID HAVING BEEN ISSUED PURSUANT TO VAGUE AND UNCLEAR STANDARDS CONTAINED IN RA 8282 OR THE SOCIAL SECURITY LAW AS AMENDED. II THE INCREASE IN SSS CONTRIBUTIONS ARE NOT REASONABLY NECESSARY FOR THE ATTAINMENT OF THE PURPOSE SOUGHT AND IS UNDULY OPPRESSIVE UPON THE LABOR SECTOR, MAKING THE ASSAILED ISSUANCES NULL AND VOID.

III

THE REVISED RATIO OF SSS CONTRIBUTIONS BETWEEN EMPLOYERS AND EMPLOYEES AS CONTAINED IN THE ASSAILED RESOLUTIONS AND CIRCULAR IS GROSSLY UNJUST TO THE WORKING CLASS AND BEYOND THE POWER OF RESPONDENTS TO ENACT .

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ARGUMENT I THE ASSAILED ISSUANCES ARE NULL AND VOID HAVING BEEN ISSUED PURSUANT TO VAGUE AND UNCLEAR STANDARDS CONTAINED IN RA 8282 OR THE SOCIAL SECURITY LAW AS AMENDED.

1.1. The authority of respondents to revise or alter the amounts of contribution to the SSS is contained in Republic Act No. 8282 enacted in 1997. 1.2. Section 18 of RA 8282 provides :
"SEC. 18. Employee's Contributions. - (a) Beginning as of the last day of the calendar month when an employee's compulsory coverage takes effect and every month thereafter during his employment, the employer shall deduct and withhold from such employee's monthly salary, wage, compensation or earnings, the employee's contribution in an amount corresponding to his salary, wage, compensation or earnings during the month in accordance with the following schedule: SALARY BRACKET I II III IV V VI VII VIII IX X XI XII XIII XIV XV XVI XVII RANGE OF COMPENSATION 1,000.00 - 1,249.99 1,250.00 - 1,749.99 1,750.00 - 2,249.99 2,250.00 - 2,749.99 2,750.00 - 3,249.99 3,250.00 - 3,749.99 3,750.00 - 4,249.99 4,250.00 - 4,749.99 4,750.00 - 5,249.99 5,250.00 - 5,749.99 5,750.00 - 6,249.99 6,250.00 - 6,749.99 6,750.00 - 7,249.99 7,250.00 - 7,749.99 7,750.00 - 8.249.99 8,250.00 - 8,749.99 8,750.00 OVER MONTHLY SALARY CREDIT 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 6500 7000 7500 8000 8500 9000 MONTHLY CONTRIBUTION EMPLOYER EMPLOYEE TOTAL 50.70 76.00 101.30 126.70 152.00 177.30 202.70 228.00 253.30 278.70 304.00 329.30 354.70 380.00 403.30 430.70 456.00 33.30 50.00 66.70 83.30 100.00 116.70 133.30 150.00 166.70 183.70 200.00 216.78 233.30 250.00 266.70 283.30 300.00

84.00 126.00 168.00 210.00 252.00 294.00 336.00 378.00 420.00 462.40 504.00 546.00 588.00 630.00 672.00 714.00 756.00

"The foregoing schedule of contribution shall also apply to self-employed and voluntary members. "The maximum monthly salary credit shall be Nine thousand pesos (P9,000.00) effective January Nineteen hundred and ninety six (1996); Provided, That it shall be increased by One thousand pesos (P1,000.00) every year thereafter until it shall have reached Twelve

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thousand pesos (P12,000.00) by Nineteen hundred and ninety nine (1999): Provided, further, That the minimum and maximum monthly salary credits as well as the rate of contributions may be fixed from time to time by the Commission through rules and regulations taking into consideration actuarial calculations and rate of benefits, subject to the approval of the President of the Philippines

1.3. As may be noted, the last portion of the Section 18 allows the Social Security Commission to fix the rate of contributions to from time to time, through rules and regulations , taking into account (a) actuarial calculations and () rate of benefits; subject to the approval of the President of the Philippines. 1.4. The term actuarial calculations however, is a too general a term to be understood by a person with a reasonable mind. 1.5. Indeed, what does the term actuarial calculation means when it comes to fixing the rate of contributions to the SSS ? . 1.6. Sec. 8 of RA 8282 contains a definition of terms used in the SSS Law. 1.7. Unfortunately, the term actuarial calculation is not defined in the said section. 1.8. Furthermore, the relation of the rate of benefits received by a member of the SSS and actuarial calculation is not also defined under RA 8282. 1.9. What should be the relation between rate of benefits and actuarial calculation so as to empower respondent Social Service Commission to alter , increase, or decrease the rate of contributions of SSS members ? 1.10. Otherwise stated, what should factors should exist between the rate of benefits and actuarial calculation to serve as a basis for respondents to alter the rate of SSS contributions ? 1.11. What are the parameters or limitations imposed by such actuarial calculation and rate of benefits on the Social Security Commission in the fixing of premiums and contributions ?

1.12. We could only guess because the law, RA 8282 , is silent on the said matter.
1.13. The principle of separation of powers ordains that each of the three great branches of government has exclusive cognizance of and is supreme in matters falling within its own constitutionally allocated sphere ( please see Angara vs. Electoral Commission, 63 Phil. 139)
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1.14. Necessarily imbedded in this doctrine is the principle of nondelegation of powers, as expressed in the Latin maxim potestas delegata non delegari potest, which means what has been delegated, cannot be delegated. This doctrine is based on the ethical principle that such delegated power constitutes not only a right but a duty to be performed by the delegate through the instrumentality of his own judgment and not through the intervening mind of another ( Abakada Guro Party List vs. Ermita, 469 SCRA 1) 1.15. Thus, In Edu v. Ericta, No. L-32096, October 24, 1970, 35 SCRA 481, , this Honorable Court made it clear that that as a rule, the Legislature may not delegate its power of legislation to the Executive or the Judiciary. . 1.16. As ruled by this Honorable Court ruled in the Edu vs. Ericta case :
It is a fundamental principle flowing from the doctrine of separation of powers that Congress may not delegate its legislative power to the two other branches of the government, subject to the exception that local governments may over local affairs participate in its exercise. What cannot be delegated is the authority under the Constitution to make laws and to alter and repeal them; the test is the completeness of the statute in all its term and provisions when it leaves the hands of the legislature. To determine whether or not there is an undue delegation of legislative power, the inquiry must be directed to the scope and definiteness of the measure enacted. The legislature does not abdicate its functions when it describes what job must be done, who is to do it, and what is the scope of his authority. For a complex economy, that may indeed be the only way in which the legislative process can go forward. A distinction has rightfully been made between delegation of power to make laws which necessarily involves a discretion as to what it shall be, which constitutionally may not be done, and delegation of authority or discretion as to its execution to be exercised under and in pursuance of the law, to which no valid objection can be made. The Constitution is thus not to be regarded as denying the legislature the necessary resources of flexibility and practicability.

1.16. . This principle of non-delegation of powers admits of numerous exceptions, however, one of which is the delegation of legislative power to various specialized administrative agencies such as respondent Social Security Commission in this case .

1.17. The rationale for the aforementioned exception was clearly explained in our ruling in Gerochi v. Department of Energy , 527 SCRA 696 , to wit:
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In the face of the increasing complexity of modern life, delegation of legislative power to various specialized administrative agencies is allowed as an exception to this principle. Given the volume and variety of interactions in todays society, it is doubtful if the legislature can promulgate laws that will deal adequately with and respond promptly to the minutiae of everyday life. Hence, the need to delegate to administrative bodies the principal agencies tasked to execute laws in their specialized fields the authority to promulgate rules and regulations to implement a given statute and effectuate its policies. All that is required for the valid exercise of this power of subordinate legislation is that the regulation be germane to the objects and purposes of the law and that the regulation be not in contradiction to, but in conformity with, the standards prescribed by the law. These requirements are denominated as the completeness test and the sufficient standard test.

1.17. In Emmanuel Pelaez vs. The Auditor General, G.R. No. L23825, December 24, 1965, this Honorable Court expounded on the instances on which a valid delegation of legislative powers may be made, thus : Although Congress may delegate to another branch of the Government the power to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in itself it must set forth therein the policy to be executed, carried out or implemented by the delegate and (b) fix a standard the limits of which are sufficiently determinate or determinable to which the delegate must conform in the performance of his functions. Indeed, without a statutory declaration of policy, the delegate would in effect, make or formulate such policy, which is the essence of every law; and, without the aforementioned standard, there would be no means to determine, with reasonable certainty, whether the delegate has acted within or beyond the scope of his authority. Hence, he could thereby arrogate upon himself the power, not only to make the law, but, also and this is worse to unmake it, by adopting measures inconsistent with the end sought to be attained by the Act of Congress, thus nullifying the principle of separation of powers and the system of checks and balances, and, consequently, undermining the very foundation of our Republican system. 1.18. In Eastern Shipping Lines, Inc. vs. POEA, 166 SCRA 533,this Honorable Court held : There are two accepted tests to determine whether or not there is a valid delegation of legislative power, viz , the completeness test and the
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sufficient standard test. Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate the only thing he will have to do is enforce it. Under the sufficient standard test, there must be adequate guidelines or stations in the law to map out the boundaries of the delegate's authority and prevent the delegation from running riot 1.19. This Honorable case : : Court clarified in the Edu vs. Ericta

"What cannot be delegated is the authority under the Constitution to make laws and to alter and repeal them; the test is the completeness of the statute in all its term and provisions when it leaves the hands of the legislature. To determine whether or not there is an undue delegation of legislative power, the inquiry must be directed to the scope and definiteness of the measure enacted. The legislature does not abdicate its functions when it describes what job must be done, who is to do it, and what is the scope of his authority. For a complex economy, that may indeed be the only way in which the legislative process can go forward. A distinction has rightfully been made between delegation of power to make the laws which necessarily involves a discretion as to what it shall be, which constitutionally may not be one, and delegation of authority or discretion as to its execution to be exercised under and in pursuance of the law, to which no valid objection can be made. The Constitution is thus not to be regarded as denying the legislature the necessary resources of flexibility and practicability. To avoid the taint of unlawful delegation, there must be a standard, which implies at the very least that the legislature itself determines matters of principle and lays down fundamental policy. Otherwise, the charge of complete abdication may be hard to repel. A standard thus defines legislative policy, marks its limits, maps out its boundaries and specifies the public agency to apply it. It indicates the circumstances under which the legislative command is to be effected. It is the criterion by which legislative purpose may be carried out.
(Edu vs. Ericta , 35 SCRA 481)

1.20. Is the delegation of the power to SSS fix premiums or contributions complete in all its terms and conditions when it left the legislature such that when it reached the delegate the only thing he will have to do is enforce it ?.
1.21.

The answer is No.

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In the delegation of the power to fix SSS premiums, are there adequate guidelines or stations in the law to map out the boundaries of the delegate's authority and prevent the delegation from running riot ?
1.22.

1.23. Again, the answer is No. 1.24. The delegation therefore constitutes an unlawful delegation and must be declared null and void. 1.25. The assailed issuances increasing SSS contributions , having been issued pursuant to an invalid delegation of legislative powers, must be declared without force and effect.
1.26. Interestingly, the increase in SSS contributions appear to violate Sec.4, ( b) (2) of RA 8282 which provides :

"SEC. 4. Powers and Duties of the Commission and SSS. - (a) The Commission. - For the attainment of its main objectives as set forth in Section 2 hereof, the Commission shall have the following powers and duties: XXX XXX XXX XXX.

"(b) The Social Security System. - Subject to the provision of Section four (4), paragraph seven (7) hereof, the SSS shall have the following powers and duties: "(1) To submit annually not later than April 30, a public report to the President of the Philippines and to the Congress of the Philippines covering its activities in the administration and enforcement of this Act during the preceding year including information and recommendations on broad policies for the development and perfection of the program of the SSS; "(2) To require the actuary to submit a valuation report on the SSS benefit program every four (4) years, or more frequently as may be necessary, to undertake the necessary actuarial studies and calculations concerning increases in benefits taking into account inflation and the financial stability of the SSS, and to provide for feasible increases in benefits every four (4) years, including the addition of new ones, under such rules and regulations as the Commission may adopt, subject to the approval of the President of the Philippines: Provided, That the actuarial soundness of the reserve fund shall be guaranteed: Provided, further, That such increases in benefits shall not require any increase in the rate of contribution ;

XXX

XXX

XXX

XXX

(underlining supplied) 1.27. Considering that increase in benefits shall not require any increase in the rate of contributions as contained in the above-cited provision of RA 8282, increase in contributions without the corresponding increase in benefits is all the more prohibited. 1.28. In any way we look at it, therefore, the issuances regarding the increase in SSS contributions are unlawful and hence, null and void.

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II THE INCREASE IN SSS CONTRIBUTIONS ARE NOT REASONABLY NECESSARY FOR THE ATTAINMENT OF THE PURPOSES BEING SOUGHT AND IS UNDULY OPPRESSIVE UPON THE LABOR SECTOR, MAKING THE ASSAILED ISSUANCES NULL AND VOID.

2.1. Respondents have advanced certain contribution hike.

justifications for the SSS

2.2. According to Pres. Aquino, the SSS has P1.1 trillion in unfunded liability, which is bound to increase by eight per cent every year and may cause the state-run insurance agencys bankruptcy. 2.3. In his State of the Nation Address (SONA) last 2013, Pres. Aquino stressed the need to increase SSS premiums by at least 0.6 percent, citing a 2011 study that warned that 28 years from now, the pension fund for private sector workers would be depleted. 2.4. According to respondent De Quiros, the increase in contribution lessen the unfunded liabilities the future benefits of membersof the SSS, which was estimated at P1.07 trillon as of December 2010 and grows about eight percent annually. 2.5. Respondent De Quiros further claimed that the SSS has an actuarial life of only 26 years. 2.6.This, allegedly, is far from the ideal actuarial life which is 70 years. 2.7.This could be attained , however, if they raise monthly contribution rates to 14 percent on staggered basis.

2.8. Figures show, however, that the SSS can extend its actuarial life and increase the benefits of its members without increasing the premiums paid by its members. 2.9 . The membership of the SSS now exceeds 29 million members. 2.10. As of June 2013, SSS assets was estimated to be about P368.788 billion. 2.11. Its net income has also grown steadily, being P25.25 billion in 2011 to P36.2 billion in 2012, or an increase of 42%. 16

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2.12. Over the years, SSS has invested billions of pesos in highly profitable industries such as real estate, mining, telecommunications, banking and power. 37% of these investments is in government securities, 25% in equities, and 4% in real estate assets. 2.14. Yearly financial statements of the SSS reveal a healthy trend of increasing revenues, and revenues consistently exceeding expenses. 2.13. Moreover, the SSS has an uncollected remittances from erring employers which is in the amount of P8.5 billion as of December 2010.

2.14. The SSS can start running after erring employers , rather than increasing the monthly contributions from its members. 2.15. As asked by a union leader, how can the SSS go bankrupt when

presently, it has about 30 million members and is increasing rapidly ? Furthermore it has invested billions of pesos of its members funds in highly profitable industries such as real estate, mining, telecommunication, banking and power.
2.16. As to its claim that there is a need to extend the actuarial life of the SSS to the ideal which is 70 years and to attain zero unfunded liability, there is no legal provision which requires the SSS to attain these goals. 2.17. Republic Act 8282 does not contain any requirements on these matters. Even by international standards, defined benefit-schemes like that of the SSS are not fully pre-funded. 2.18. On the other hand, the increase in SSS contributions would mean a reduction in the already meager take-home pay of workers.

2.19. The money which workers use to purchase food and finance other basic needs are surely to suffer a reduction.
2.20. An increase in the SSS fund does not by itself constitute improved performance as it does not immediately translate into better benefits for members because the SSS leadership can allocate the funds for other purposes. 2.21. The increased in SSS contributions will therefore mean an added burden to its members, especially the workers who comprised the bulk of SSS membership. 2.22. This is ironic because under the 1987 Constitution, the State is supposed to protect the rights of workers and promote their welfare. 2.23. We cite Section 18 , Article II of the 1987 Constitution of the Philippines : 17

18 Section 18. The State affirms labor as a primary social force. It shall protect the rights of workers and promote their welfare. 2.24. Other provisions of the 1987 Philippine Constitution provides for the promotion of social justice and human rights as the policy of the State. 2.25. We cite Sections 9 and 10 of the Declaration of Principles and State Policies of the 1987 Philippine Constitution :

Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all. Section 10. The State shall promote social justice in all phases of national development. 2.26. We also cite Section 11 of Article II of the same Constitution which provides : Section 11. The State values the dignity of every human person and guarantees full respect for human rights. 2.27. In adopting or approving the questioned Resolutions and Circular, the respondents certainly violated the foregoing provisions of the 1987 Philippine Constitution. 2.28. Furthermore, it is respectfully submitted by petitioners that the increase in SSS premiums constitute an unlawful exercise of the police power of the State. 2.29. Police power is defined as the power inherent in a government to enact laws, within constitutional limits , to promote the order , safety, health, morals and general welfare of society ( 16 C.J.S. 537). 2.30. Primicias vs. Fuguso, 80 Phil. 71 defined police power as the power to prescribe regulations to promote the health, morals, education, good order or safety and the general welfare of the people.

2.31. In Rubi vs. Provincial Board of Mindoro, 39 Phil. 660, it was held that police power rests on the Latin maxims of salus populi est suprema lex ( the welfare of the people is the supreme law) and sic utere tuo ut alienum non laedas ( so use your own property that you do not injure others ). 2.32. The police power is lodged primarily in the national legislature, By virtue of a valid delegation of police power, it may also be exercised by the President, and administrative boards, as well as lawmaking bodies on all municipal levels, including the barangay (Cruz, Constitutional Law, 2007 Edition, p. 46) .

2.33. In Association of Small Landowners in the Philippines , Inc., et.

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19 al.vs. Honorable Secretary of Agrarian Reform, G. R. No. 78742, July 14, 1989, it was held : It is worth remarking at this juncture that a statute may be sustained under the police power only if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public generally as distinguished from those of a particular class require the interference of the State and, no less important, the means employed are reasonably necessary for the attainment of the purpose sought to be achieved and not unduly oppressive upon individuals. . 2.34. The tests to determine the validity of a police measure, as laid down in the cases of US vs. Toribio ( 21 Phil. 85) and Fabie vs. City of Manila, (21 Phil. 486), are the following :

(1) The interests of the public , generally, as distinguished from those of a particular class, require the exercise of the police power; (2) The means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.

2.35. It is obvious that the questioned Resolutions and Circular failed to comply with the second requirement for the valid exercise of police power. 2.36. First, the increase of SSS contributions is not necessary to accomplish its avowed purpose of increasing the actuarial life of the SSS or obtaining a significant decrease in its unfunded liability. 2.37. By fully utilizing its net income or by asserting its right over its unremitted premiums as recommended in the COA Report, the SSS can reasonably achieved the above objectives. 2.38. Second, the increase in SSS contributions is detrimental and unduly oppressive to the working class whose meager income which they could utilize for food and other basic necessities would be reduced. 2.39. Failing to satisfy the second requirement, the questioned Resolutions and Circular must be declared void and without effect.

III THE REVISED RATIO IN THE SHARING OF PAYMENTS BY EMPLOYERS AND EMPLOYEES FOR SSS CONTRIBUTIONS AS CONTAINED IN THE ASSAILED ISSUANCES IS UNFAIR TO THE WORKING CLASS AND BEYOND THE POWER
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OF RESPONDENTS TO ENACT . 3.1. The sharing of contributions between employers and employees for
SSS premiums was previously set at roughly 70-30. 3.2. This means that the sharing of contributions between employers and employees was roughly 70% for employers and 30% for employees. 3.3. This has been the . ratio for quite a long-time. 3.4. Thus, considering that the SSS Contributions before the questioned Resolutions and Circular was at 10.4% of an employees mont hly salary credit, 7.07% of this amount was shouldered by the employers with 3.33% being shouldered by the employees. 3.4.. For purposes of justice and consistency, respondents should have maintained this 70-30 ratio in subsequent increases of SSS premiums . 3.5. Unfortunately, the recent increase of SSS premiums implemented under the questioned issuances does not adhere to the former ratio of contributions between employers and employees. , 3.6. The increase of 0.6% in the SSS premiums as contained in the questioned issuances of the SSS and the SSC is to be borne equally or on a 5050 basis between the employers and employees , instead of being on the longstanding 70-30 basis. 3.7. Under the questioned Circular and Resolutions, the SSS premiums now stand at 11% of the employees monthly salary credit with 7.37% of the same to be shouldered by the employers and 3.63% of the same being shouldered by the employees.. 3.8. Had the long-standing ratio of 70-30 been maintained, the employees would have been liable for a lesser percentage . 3.9. It is submitted that this act of the respondents in changing the longstanding ratio of contributions is grossly unfair and detrimental to the employees. 3.10. After all, there is nothing in the law which authorizes respondents to adopt this 50-50 ratio, This was merely based on the whims and caprices of the respondents. 3.11. For this reason, the increased in SSS Contributions as embodied in the questioned SSC Resolutions and SSS Circular must be declared null and void.

GROUNDS FOR ISSUANCE OF A TEMPORARY RESTRAINING ORDER AND/OR PRELIMINARY INJUNCTION

1. Petitioners also pray for the issuance of a writ of preliminary injunction and/or a Temporary Restraining Order to enjoin
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Respondents from implementing the assailed Resolutions and Circular which implement the SSS Contributions Increase while the instant Petition is pending. 2. The same is necessary to protect the substantive rights and interests of petitioners . If the assailed SSC Resolutions and SSS Circular would continually be implemented, the rights of the petitioners would be violated .Accordingly, there exists an extreme necessity for the Honorable Court to issue a TRO or a preliminary injunction. 3. Indeed, the earnings intended for food requirement and other basic needs of the petitioners would be reduced as it would be utilized for the purpose of defraying the amount needed for the SSS Contributions Increase. 4. Petitioners have thus complied with the requirements provided by the Rules for the issuance of a TRO and/or Writ of Preliminary Injunction , having shown that (a) the invasion of right sought to be protected is material and substantial; (b) the right of the petitioners is clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ to prevent serious damage. 6. Petitioners prayer for a temporary restraining order and a writ of preliminary injunction to enjoin respondents from implementing the assailed SSC Resolutions and SSS Circular pending resolution of this case must thus be granted.

PRAYER WHEREFORE, premises considered, petitioners pray for the following : (1) that the Honorable Court give due course to this Petition ; (2) That immediately upon the filing of this Petition, a temporary restraining order and/or a writ of preliminary injunction be issued to restrain the respondents from implementing the SSS Contributions Increase as contained in the assailed SSC Resolutions and SSS Circular; (3) That after due proceedings, the increase in SSS Contributions under SSS Circular No. 2013-010, SSC Resolution No. 262-s. 2013 and SSC Resolution No. 711 s. 2013 be declared null and void. OTHER RELIEFS just and equitable under the circumstances are also prayed for.
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Quezon City for Manila; January 10, 2014.

PRO-LABOR LEGAL ASSISTANCE

No. 33-B CENTER E. Rodriguez Sr. Avenue

Quezon City Counsel for the Petitioners By :

REMIGIO D. SALADERO JR.

Roll No. 33489

IBP OR No. 907583 January 4, 2014; Rizal PTR No. 0255542 January 4, 2014, Baras, Rizal MCLE Compliance No. IV-0018772 April 24, 2013 Tel. No. 413-45-61
- and -

NOEL V. NERI Roll No. 47168 PTR No. __________________/Quezon City IBP No. 05613/Lifetime/Quezon City MCLE Compliance No. IV-0016234/4-10-13 -andVICENTE JAIME M. TOPACIO Roll No. 59418 IBP No_________________/Manila III PTR No.___________________/Quezon City MCLE No. IV-001878/4-23-13 Copy Furnished By Reg. Mail Due to the Distance and the Lack
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Of Available Messenger To Effect Personal Service : Hon. Benigno Simeon Aquino III Office of the President Malacanang Palace, J. P. Laurel Street San Miguel, Manila Hon. Pacquito Ochoa Jr. Office of the Executive Secretary Malacanang Palace, J. P. Laurel Street San Miguel, Manila Social Security Commission 12th Floor, SSS Bldg., Ayala Avenue corner Rufino Street, Makati City Social Security System SSS Building, East Avenue, Quezon City

Emilio De Quiros Jr. Office of the President And CEO SSS Building, East Avenue, Quezon City

Office of the Solicitor General 134 Amorsolo Street Legaspi Village, Makati City EXPLANATION

The service of copies of the instant Petition is made through registered mail, as personal service thereof cannot be made due to distance and lack of available personnel. This explanation is made pursuant to Rule 13, Section 11 of the Rules of Court.

REMIGIO D. SALADERO JR.

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The workers condemned the hike in SSS premiums from 10.4 per cent to 11 per cent, which Pres. Noynoy Aquino pushed for in one of his pre-Labor Day speeches and which will be implemented in June or July according to SSS Director Emilio de Quiros

d) Circular No. 2018-010 dated October 2, 2013 issued by

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respondent Emilio S. De Quiros Jr; e) Resolution No. 711-s. 2013 dated September 20, 2013 issued by respondent Social Security Commission; Resolution No. 262 s.2013 dated April 19, 2013 issued by respondent Social Security

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