The Regional Trial Court (RTC) of Olongapo City has convicted the president of a fishing rod manufacturer for failure to comply with the company’s legal obligation to pay over P1.6 million in employees’ contributions to the Social Security System (SSS).
SSS Assistant Vice President for Operations Legal Department Renato Jacinto S. Cuisia said that Hong Yeul Kim, a Korean national and President of the Jyung Myung Fishing Rod Manufacturing Corporation, was ordered to serve a jail term of six years and one day up to eight years.
“Aside from imprisonment, the conviction of Mr. Kim also included civil liabilities, since the court has ordered him to pay P1,627,467.63 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,” said Cuisia.
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 also invoked that no contributions were due for the period of April to October 2000 due to the company’s temporary shutdown.
However, during cross examination, “he confirmed he is offering to pay SSS the amount of P226,177.80 with the intention of applying the said amount to his delinquencies covering the period 1997 to 2000 because that is the only money he has. He also admitted that he failed to settle his delinquencies to SSS because he does not have the money or any resources to pay,” the decision said.
During the trial, Kim also raised that the non-remittance of contributions was due to the company’s economic losses and cessation of operations. However, the court did not give credit to the reason for failure to comply with the obligation with SSS.
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 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. 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 from other nationalities as long as they are within the bounds of the law,” Cuisia said.
At present, Kim has not appealed the decision of the court. However, according to the SSS lawyer handling the case, Blesselda M. Acosta, the SSS will be ready in case Kim will file a Motion for Reconsideration.