The Regional Trial Court (RTC) of Olongapo City has convicted the president of a fishing rod manufacturer for failure to pay over P1.6 million in employees’ contributions to the Social Security System (SSS).
Renato Jacinto Cuisia, SSS assistant vice president for Operations Legal Department, said Hong Yeul Kim, a South Korean and the president of the Jyung Myung Fishing Rod Manufacturing Corp., was meted six years and one day up to eight years’ imprisonment.
“Aside from imprisonment, the conviction of Kim also included civil liabilities, since the court has ordered him to pay P1.6 million to SSS for unpaid contributions covering the period of July 1997 to June 2000 plus penalties of three percent per month, in line with the Social Security [SS] Act,” Cuisia added.
Kim claimed that the SSS erred in computing the company’s liability by including the contributions for employees who were on forced leave during the covered period.
He invoked that no contributions were due for April to October 2000 because of the company’s temporary shutdown.
During cross-examination, however, he confirmed that he offered to pay the SSS P226,177.80 with the intention to apply the amount to his delinquencies, saying it was the only money he had.
During the trial, Kim cited company’s economic losses and cessation of operations for the non-remittance of contributions.
The court reiterated in its decision that failure to comply with a special law such as the SS Act is considered “malum prohibitum,” which means that intent or good faith is immaterial.
It is enough, it said, that the law was violated and that the person responsible for the violation should be held accountable.
“The penalty for violation of the SS Act is punitive in character to ensure that employers will take their responsibilities seriously. The SSS does not exercise any discretion in the enforcement of the law and only implements what the law provides,” Cuisia explained.
Under the law, employers are required to report employees for SSS coverage within 30 days from the start of employment. They must also deduct monthly contributions from employees’ salaries and, along with the company’s corresponding share, remit these to the SSS on or before the 10th day of the following month. Late contributions are charged a three-percent monthly penalty.
“The case should serve as a warning to employers who neglect their obligations to their workers. The SSS does not only go after Filipino employers who are delinquent in paying employees’ contributions, but also those other nationalities,” Cuisia said.