SC resolves legal row over GSIS contributions


THE Supreme Court (SC) has resolved issues on whether the government’s share in Government Service Insurance System (GSIS) contributions for contractual employees can be validly sourced from the 20-percent premium pay given to such employees, in lieu of leave benefits.

In a ruling penned by Junior Associate Justice Francis Jardeleza, the SC’s Third Division dismissed a petition filed by the GSIS “on the ground of forum shopping, with a warning to the [agency]that a repetition of the same or similar acts in the future shall be dealt with more severely.”

The SC affirmed with modification an appealed decision of the Court of Appeals (CA), ruling that “the deduction of the government share in GSIS contributions from the twenty percent (20 percent) premium pay granted to contractual employees may only be made upon the effectivity of Memorandum Circular No. 14, s. 1999 granting leave benefits to such employees.”

On May 30, 1997, Republic Act 8291, or “The Government Service Insurance System Act of 1997” provided for, among others, compulsory GSIS coverage of all government employees, regardless of employment status.

Angelita Tolentino and all other contractual employees of various projects and programs within and under the control and supervision of the Department of Environment and Natural Resources (DENR) wrote the GSIS to inquire about their standing prior to enactment of RA 8291.

The GSIS, in a letter dated January 8, 1998, through its senior vice president for the Social Insurance Group Lourdes Patag, advised that while casual and contractual employees paid from the regular lump-sum appropriations are covered under RA 8291, contractual employees who were hired for the duration of the projects and are receiving additional 20 percent pay were not.

The DENR, through a memorandum dated September 16, 1999, accordingly informed its project and program directors that deductions from the premium pay shall be “reflected in the payroll starting October 1999 to include arrearages for the months of January to September 1999.”

Tolentino et al. argued that GSIS committed forum shopping in the case.

At the time that the GSIS filed its petition on July 23, 2002, it already had knowledge that the Department of Budget and Management had already filed an appeal before the CA.

Despite this knowledge, the GSIS filed another pleading, and contrary to its undertaking in its certification against forum-shopping, it did not inform the High Court of the pending case before the appellate court.

In its August 12, 2015 ruling, the SC rejected Tolentino et al.’s claim of exemption from RA 8291.

According to the court, Section 3 of the law states that, save for specified officials of the
government, membership in the GSIS shall be compulsory for all employees, regardless of employment status.

“Neither can they claim exemption based on the letter dated January 8, 1998 sent by then [Patag] advising them of their non-coverage,” the SC said.

“The policies behind the pertinent laws and regulations in this case show that the same can be harmonized to give effect to every relevant provision of law or regulation. Section 5 of RA 8291 shows a clear intent to divide responsibility for payment of the required GSIS premiums between the government employer and the covered employee.”

The pertinent rules of the Civil Service Commission (CSC), on the other hand, show a clear policy to equitably balance the benefits given to regular and contractual personnel of the government, the SC said.

“Thus, payment of the government share in GSIS contributions from the premium pay of contractual employees cannot be made earlier than the effectivity of CSC Memorandum Circular No. 14, s. 1999.”


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