11/08/2026
The has ruled that employees who are illegally dismissed are entitled not only to full backwages but also to the remittance of their Social Security System (SSS) contributions.
In a Decision written by Associate Justice Maria Filomena D. Singh, the SC’s Third Division held that an employer’s obligation to remit SSS contributions continues during the period covered by an employee’s illegal dismissal.
The case involved four employees of Lopez Sugar Corporation (LSC) who were illegally dismissed. LSC was ordered to reinstate them to their former positions and pay them full backwages. After the ruling became final, the employees asked LSC to remit their SSS contributions for the period covered by their backwages so they could qualify for retirement benefits.
LSC refused, arguing that under the 𝘚𝘰𝘤𝘪𝘢𝘭 𝘚𝘦𝘤𝘶𝘳𝘪𝘵𝘺 𝘈𝘤𝘵 𝘰𝘧 1997, its obligation to pay SSS contributions ended upon the employees’ separation from employment, regardless of whether their dismissal was legal or illegal.
The Social Security Commission (SSC) rejected LSC’s position and ordered it to pay the contributions. The SSC ruled that because the employees were illegally dismissed, the employer-employee relationship was deemed to have continued during the period they were prevented from working.
Holding that LSC remained obligated to remit the employees’ SSS contributions for the period covered by their backwages, the SC stated that under Article 294 of the 𝘓𝘢𝘣𝘰𝘳 𝘊𝘰𝘥𝘦, illegally dismissed employees are entitled to full backwages and other benefits.
The SC explained that such employees are considered to have remained employed during the period covered by their backwages and are therefore entitled to the rights and benefits that would have accrued during that period.
Since LSC failed to remit the illegally dismissed employees’ social security contributions, the SC held that LSC is liable to pay a penalty thereon of three percent per month, reckoned from the date they became due until full payment.
Read the full text of the Press Release at https://sc.judiciary.gov.ph/?p=170676.
Read the full text of the Decision at https://sc.judiciary.gov.ph/?p=165713.
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