The tricky part in our labor laws is that they are reflective of constitutionally enshrined policies. Hence, contractual autonomy may not be used to justify deviation from labor laws. The State is obliged to look after laborers and to this extent it adopts a paternalistic (or maternalistic, to some women advocates) stance on labor. In our Revised Social Security Systems Law (RA 8282), this paternalistic attitude is present.
Today, we know that the Philippines benefits a lot from corporate decisions abroad to outsource services. Most of these outsourced aspects of businesses are done through the internet. This reality therefore raises an important question in labor law: Are internet based workers covered by RA 8282 or the Revised Social Security Systems Law enacted in 1997?
The answer is in the affirmative.
Regardless of where the employer of the Filipino internet based worker is located, he/she or it is required under the law, to enlist its employees in the SSS. Section 8(c) of the law defines the employer responsible to put up contributions to the SSS:
Employer- Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government: Provided, That a self-employed person shall be both employee and employer at the same time (underscoring and emphasis supplied).
Today, we know that the Philippines benefits a lot from corporate decisions abroad to outsource services. Most of these outsourced aspects of businesses are done through the internet. This reality therefore raises an important question in labor law: Are internet based workers covered by RA 8282 or the Revised Social Security Systems Law enacted in 1997?
The answer is in the affirmative.
Regardless of where the employer of the Filipino internet based worker is located, he/she or it is required under the law, to enlist its employees in the SSS. Section 8(c) of the law defines the employer responsible to put up contributions to the SSS:
Employer- Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government: Provided, That a self-employed person shall be both employee and employer at the same time (underscoring and emphasis supplied).
Conspicuously, the law does not use the term “doing business” in relation to foreign corporations, a technical term with well-defined meaning under the Foreign Investments Act (FIA). Hence, any employer physically located outside of the Philippines, but employing a Philippine based employee, may theoretically be required to put up the necessary contributions. That an employer is not “doing business” as the term is understood in the FIA, poses no obstacle to the application of the law.
Those working in the internet at home or the self-employed internet workers are not exempted. The proviso in Section 8(c) is clear in that the self-employed person is both his own person’s employer and employee at the same time. To erase all doubts on the matter, a new section in the SSS Law provides:
SEC. 9-A. Compulsory Coverage of the Self-Employed. - Coverage in the SSS shall also be compulsory upon such self-employed persons as may be determined by the Commission under such rules and regulations as it may prescribe, including but not limited to the following (emphasis supplied):
"1. All self-employed professionals;
"2. Partners and single proprietors of businesses;
"3. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term "employee" in Section 8 (d) of this Act;
"4. Professional athletes, coaches, trainers and jockeys; and
"5. Individual farmers and fishermen.
"Unless otherwise specified herein, all provisions of this Act applicable to covered employees shall also be applicable to the covered self-employed persons.
The enumeration being non-exclusive, it can include self-employed workers in the internet. To emphasize the compulsory nature, Section 28 (e) provides penalties.
"(e) Whoever fails or refuses to comply with the provisions of this Act or with the rules and regulations promulgated by the Commission, shall be punished by a fine of not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years, or both, at the discretion of the court: Provided, That where the violation consists in failure or refusal to register employees or himself, in case of the covered self-employed or to deduct contributions from the employees’ compensation and remit the same to the SSS, the penalty shall be a fine of not less Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) and imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years. (emphasis supplied)
"(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable for the penalties provided in this Act for the offense (emphasis supplied).
Labor laws, are imbued with public interest. The fact that the business is done online or through the internet should not excuse non-compliance with labor laws. It is clear that the Internet poses challenges to the implementation of labor laws. It is equally clear however, that the principles that animate these laws are very much applicable despite enforcement problems arising from the nature of the Internet.
"1. All self-employed professionals;
"2. Partners and single proprietors of businesses;
"3. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term "employee" in Section 8 (d) of this Act;
"4. Professional athletes, coaches, trainers and jockeys; and
"5. Individual farmers and fishermen.
"Unless otherwise specified herein, all provisions of this Act applicable to covered employees shall also be applicable to the covered self-employed persons.
The enumeration being non-exclusive, it can include self-employed workers in the internet. To emphasize the compulsory nature, Section 28 (e) provides penalties.
"(e) Whoever fails or refuses to comply with the provisions of this Act or with the rules and regulations promulgated by the Commission, shall be punished by a fine of not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years, or both, at the discretion of the court: Provided, That where the violation consists in failure or refusal to register employees or himself, in case of the covered self-employed or to deduct contributions from the employees’ compensation and remit the same to the SSS, the penalty shall be a fine of not less Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) and imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years. (emphasis supplied)
"(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable for the penalties provided in this Act for the offense (emphasis supplied).
Labor laws, are imbued with public interest. The fact that the business is done online or through the internet should not excuse non-compliance with labor laws. It is clear that the Internet poses challenges to the implementation of labor laws. It is equally clear however, that the principles that animate these laws are very much applicable despite enforcement problems arising from the nature of the Internet.
Bryan A. San Juan
Entry No. 14
2 comments:
Monitoring labor standards compliance by employers of the "informal sector" is really a problematic. Aside from the problems on the implementation of mandatory social security coverage, regulating the industry's compliance with concepts like "hours of work" and "regularization" is hard. At the end of the day, it is the worker who is at a disadvantage because of this lacuna.
hmmm, pero paano nga kung hindi considered doing business dito yung internet company. i guess mas malaki naman sweldo ng person na yun, siya na yung magbayad sa sss as self-employed or have other form of insurance for himself :)
Post a Comment