Roman Catholic Archbishop of Manila vs. Social Security Commission

Religious and charitable institutions not organized for profit fall within the compulsory coverage of the Social Security Law, because the law defines "employer" broadly as any person, natural or juridical, carrying on any trade, business, industry, undertaking, or activity of any kind, and the Legislature deliberately removed the prior statutory exemption for institutions organized for religious or charitable purposes.

The Roman Catholic Archbishop of Manila operates Catholic Charities and various religious and charitable institutions and organizations, directly or indirectly, wholly or partially. Republic Act No. 1161, as amended, known as the Social Security Law of 1954, established a social security system providing protection to employees against the hazards of disability, sickness, old age, and death. When originally enacted, the law expressly excluded from coverage services performed in the employ of institutions organized for religious or charitable purposes, but Republic Act No. 1792, which took effect in 1957, deleted that exemption. The Social Security Commission is the administrative body tasked with implementing the law and ruling on coverage disputes, with appeals from its resolutions lying to the Supreme Court pursuant to section 5(c) of the Act.

On September 1, 1958, the Roman Catholic Archbishop of Manila, through counsel, filed with the Social Security Commission a request that Catholic Charities and all religious and charitable institutions and organizations directly or indirectly, wholly or partially, operated by the Archbishop be exempted from compulsory coverage under Republic Act No. 1161, as amended, the Social Security Law of 1954. The request was predicated on the claim that the Act is a labor law limited to businesses and activities organized for profit and does not cover religious and charitable institutions. Acting upon the recommendation of its Legal Staff, the Social Security Commission denied the request in Resolution No. 572, series of 1958.

The Archbishop reiterated its arguments and raised constitutional objections in a motion for reconsideration, asserting that inclusion of religious organizations would violate the constitutional prohibition against the application of public funds for the support of any priest and would impair the right to disseminate religious information. The Commission denied the motion in Resolution No. 767, series of 1958. The Archbishop thereafter appealed to the Supreme Court pursuant to section 5(c) of Republic Act No. 1161, as amended.

The statutory framework central to the dispute defines "employer" as any person, natural or juridical, domestic or foreign, who carries in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person under his orders as regards the employment, except the Government and its political subdivisions, branches, or instrumentalities, including government-owned or controlled corporations. An "employee" is any person who performs services for an employer using either or both mental and physical efforts and receives compensation therefor. Section 9 makes coverage compulsory upon all members between sixteen and sixty years of age who have been in the service of a covered employer for at least six months. When Republic Act No. 1161 was originally enacted, services performed in the employ of institutions organized for religious or charitable purposes were expressly excluded from coverage, but Republic Act No. 1792, effective 1957, deleted that exemption.

• Ejusdem Generis Interpretation: Petitioner argued that the term "employer" as defined in the law should, following the principle of ejusdem generis, be limited to those who carry on undertakings or activities having the element of profit or gain, because the phrase "activity of any kind" is preceded by the words "any trade, business, industry, undertaking."
• Nature as Labor Law: Petitioner maintained that the Social Security Law is a labor law and, pursuant to the rule in Boy Scouts of the Philippines vs. Araos and related cases, applies only to industry and occupation for purposes of profit and gain.
• Constitutional Objection — Public Funds: Petitioner contended that inclusion of religious organizations under the coverage of the Social Security Law violates the constitutional prohibition against the application of public funds for the use, benefit, or support of any priest who might be employed by the Archbishop.
• Constitutional Objection — Religious Dissemination: Petitioner argued that enforcement of the Social Security Law impairs the Archbishop's right to disseminate religious information, as the required monthly contributions constitute a burden on religious operations.
• Contributions as Taxes: Petitioner asserted that the contributions required under the law are in the nature of taxes on employment.

• Statutory Coverage: Whether the Social Security Law's compulsory coverage extends to religious and charitable institutions not organized for profit.
• Constitutionality — Public Funds: Whether inclusion of religious organizations under the law violates the constitutional prohibition against the application of public funds for the support of any priest.
• Constitutionality — Religious Freedom: Whether enforcement of the Social Security Law impairs the Archbishop's right to disseminate religious information.

• Statutory Coverage: Yes. The law's definition of "employer" is sufficiently comprehensive to include religious and charitable institutions not organized for profit, as evidenced by the Legislature's deliberate deletion of the prior exemption for such institutions through Republic Act No. 1792.
• Constitutionality — Public Funds: No. The funds contributed to the System are not public funds but funds belonging to the members held in trust by the Government; even if treated as public funds, payment of benefits to a priest would be made not because he is a priest but because he is an employee.
• Constitutionality — Religious Freedom: No. All that is required is the making of monthly contributions for covered employees; the contributions, together with those of employees and the Government, are intended for protection against the hazards of disability, sickness, old age, and death, in line with the constitutional mandate to promote social justice.

• Statutory Coverage: The principle of ejusdem generis applies only where there is uncertainty and is not controlling where the plain purpose and intent of the Legislature would thereby be hindered and defeated. The definition of "employer" in the Social Security Law is sufficiently comprehensive to include religious and charitable institutions, as made evident by the fact that it contains an express exception for the Government and its instrumentalities — an exception that would have been unnecessary had the Legislature intended to limit coverage to profit-oriented entities. The legislative history confirms this: when Republic Act No. 1161 was originally enacted, services performed in the employ of religious or charitable institutions were expressly excluded, but Republic Act No. 1792 deleted that exclusion, demonstrating a clear legislative intent to include such institutions within the law's scope. The cases cited by petitioner (Boy Scouts of the Philippines vs. Araos, UST Hospital Employees Association vs. UST Hospital, San Beda College vs. National Labor Union, Quezon Institute vs. Velasco) are not in point because the laws therein involved expressly limited application to commercial, industrial, or agricultural establishments or enterprises, whereas the Social Security Law contains no such limitation. The law was enacted pursuant to the policy of developing a social security system providing protection to employees against the hazards of disability, sickness, old age, and death, and is a legitimate exercise of police power in full accord with constitutional provisions on the promotion of social justice.
• Constitutionality — Public Funds: The contributions to the System are not public funds but funds belonging to the members, merely held in trust by the Government. Assuming arguendo that they are impressed with the character of public funds, payment of retirement, death, or disability benefits to a priest-employee would not violate the cited constitutional provisions, because such payment would be made to the priest not because he is a priest but because he is an employee.
• Constitutionality — Religious Freedom: Enforcement of the law requires only that the Archbishop make monthly contributions to the System for covered employees. These contributions, contrary to petitioner's contention, are not taxes on employment. Together with employee and Government contributions, they are intended for the protection of employees against the hazards of disability, sickness, old age, and death, consistent with the constitutional mandate to promote social justice and insure the well-being and economic security of all the people. Being social legislation compatible with the Church's own policy of ameliorating living conditions of the working class, petitioner cannot arbitrarily delimit the extent of its provisions.

• Ejusdem Generis — Under this canon of statutory construction, general words following specific words are construed to include only objects of the same class as those specifically enumerated. The Court held that the canon applies only where there is uncertainty and is not controlling where the plain purpose and intent of the Legislature would thereby be hindered and defeated. Because the Social Security Law's definition of "employer" was deliberately broad — containing an express exception only for the Government and its instrumentalities — and because the Legislature had removed the prior exemption for religious and charitable institutions, ejusdem generis could not be invoked to restrict coverage to profit-oriented entities.

• Police Power and Social Legislation — The Social Security Law is a legitimate exercise of police power, enacted to develop and perfect a social security system providing protection to employees against disability, sickness, old age, and death. The Court applied this doctrine to reject the argument that the law, as social legislation, should be confined to capital-labor relations in industry and agriculture, holding that its coverage extends to all employer-employee relationships of a more or less permanent nature except those expressly excluded by the statute itself.

• Trust Fund Doctrine (Social Security Contributions) — Contributions to the Social Security System are not public funds but funds belonging to the members, merely held in trust by the Government. The Court relied on this principle to defeat the constitutional objection that coverage of religious institutions would result in public funds being used for the support of a priest.

• "The rule ejusdem generis applies only where there is uncertainty. It is not controlling where the plain purpose and intent of the Legislature would thereby be hindered and defeated." — This passage articulates the limiting principle on the ejusdem generis canon, establishing that legislative intent prevails over the canon where the statute's purpose is clear.

• "This is clear indication that the Legislature intended to include charitable and religious institutions within the scope of the law." — The Court's interpretation of the deletion of the religious and charitable institution exemption by Republic Act No. 1792 as deliberate legislative intent to include such institutions within compulsory coverage.

• "The funds contributed to the System created by the law are not public funds, but funds belonging to the members which are merely held in trust by the Government." — This defines the nature of social security contributions as trust funds rather than public funds, resolving the constitutional objection regarding public support of clergy.

• "Such payment shall be made to the priest not because he is a priest but because he is an employee." — The Court's rationale for rejecting the constitutional prohibition argument: benefits are paid by virtue of employment status, not religious office.

• Grosjean vs. American Paints Works (La), 160 So. 449 — Cited as authority for the proposition that ejusdem generis is not controlling where the plain purpose and intent of the Legislature would thereby be hindered and defeated.
• Boy Scouts of the Philippines vs. Araos, G.R. No. L-10091, January 29, 1958 — Distinguished. Petitioner cited it for the proposition that labor laws apply only to profit-oriented enterprises, but the Court held it inapplicable because the law therein involved expressly limited its application to commercial, industrial, or agricultural establishments, unlike the Social Security Law.
• UST Hospital Employees Association vs. UST Hospital, G.R. No. L-6988, May 24, 1954 — Distinguished for the same reason as Boy Scouts of the Philippines vs. Araos: the law involved expressly limited application to specific types of establishments.
• San Beda College vs. National Labor Union, G.R. No. L-7649, October 29, 1955 — Distinguished on the same ground as the above cases.
• Quezon Institute vs. Velasco and Quezon Institute vs. Parazo, G.R. Nos. L-7742-43, November 23, 1955 — Distinguished on the same ground as the above cases.

• Section 8(c), Republic Act No. 1161, as amended (Social Security Law of 1954) — Defines "employer" as any person, natural or juridical, domestic or foreign, who carries 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 its political subdivisions, branches, or instrumentalities, including government-owned or controlled corporations. The Court construed this definition as broad enough to include religious and charitable institutions.
• Section 8(d), Republic Act No. 1161, as amended — Defines "employee" as any person who performs services for an employer using either or both mental and physical efforts and receives compensation for such services.
• Section 8(i), Republic Act No. 1161, as amended — Defines "employment" as covering any service performed by an employee for an employer except those expressly enumerated, such as government employment, domestic service in a private home, and purely casual employment.
• Section 9, Republic Act No. 1161, as amended — Provides for compulsory coverage of all members between sixteen and sixty years of age who have been in the service of a covered employer for at least six months.
• Section 8(j), subpars. 7 and 8, Republic Act No. 1161 (original version) — Originally excluded services performed in the employ of institutions organized for religious or charitable purposes from coverage; deleted by Republic Act No. 1792 (1957), which the Court treated as clear legislative intent to include such institutions.
• Section 2, Republic Act No. 1161, as amended — Declares the policy of the Republic to develop, establish gradually, and perfect a social security system providing protection to employees against the hazards of disability, sickness, old age, and death.
• Section 5(c), Republic Act No. 1161, as amended — Provides the right of appeal from resolutions of the Social Security Commission to the Supreme Court.
• Constitutional provisions on social justice — Cited as the constitutional basis for the Social Security Law, mandating the promotion of social justice to insure the well-being and economic security of all the people.
• Constitutional prohibition on public funds for clergy support — Raised by petitioner but rejected by the Court on the ground that social security contributions are trust funds, not public funds, and benefits are paid by virtue of employment, not religious office.

• Paras, C.J. — Concurred.
• Padilla — Concurred.
• Bautista Angelo — Concurred.
• Paredes — Concurred.
• Dizon — Concurred.
• Concepcion — Concurred in the result.
• Reyes, J.B.L. — Concurred in the result.
• Barrera — Concurred in the result.
• Bengzon — Reserved his vote.