Photo from Pexels | Mikhail Nilov
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
In the case of People of the Philippines vs. Antonio M. Talaue, G.R. No. 248652, June 19, 2024, the Supreme Court held that a mayor does not have the positive duty to remit the GSIS premium contributions of all employees within his political subdivision.
The Local Government Code of 1991 refers to municipal mayors as “chief executives” and not “heads of offices” as contemplated under Section 52(g) of RA No. 8291. Moreover, nowhere in the Local Government Code of 1991 does it include the remittance of GSIS premiums as part of the duties of a mayor.
Talaue served as Mayor of the Municipality of Sto. Tomas (Municipality), Isabela, from 1988 to 1998 and from 2001 to 2010.
In 2003, GSIS informed Talaue that the Municipality failed to remit the social insurance contributions of its employees between 1997 and 2003, amounting to PHP 12,071,451.22.
After the Municipality neglected to make payments despite multiple notices, GSIS initiated a case for collection and damages in the Regional Trial Court (RTC) of Pasay City. The RTC’s ruling was based on a Memorandum of Agreement (2008 MOA) between GSIS and the Municipality, which established a liability of PHP 25,444,429.92, to be paid over a period of 10 years.
Following a complaint filed by the GSIS, the Office of the Ombudsman charged Talaue with violating Section 52(g) in relation to Section 6(b) of the GSIS Act of 1997. This provision penalizes government office heads who fail to remit employees’ and employers’ contributions to the GSIS.
Talaue argued that the Department of Budget and Management (DBM) was responsible for withholding funds from the Municipality’s budget to cover GSIS premium contributions. He also asserted that the 2008 MOA reclassified the Municipality’s obligation as an outstanding loan, which, he claimed, could not serve as grounds for criminal liability.
The Sandiganbayan found Talaue guilty, ruling that the conversion of the outstanding contributions into a loan under the 2008 MOA did not absolve him of criminal liability.
The Supreme Court denied Talaue’s appeal in 2021, prompting him to file the present motion for reconsideration.
Granting the motion for reconsideration, the Court ruled that the prosecution failed to establish that Talaue was responsible for remitting employees’ GSIS premium contributions or that he intended to violate the GSIS Act of 1997.
The Court held that under RA 7160, or the Local Government Code, municipal mayors are considered “chief executives” and not the “heads of offices” mandated by section 52(g) of the GSIS Act of 1997 to remit GSIS contributions.
The Local Government Code does not include remitting GSIS contributions among a mayor’s listed duties. Furthermore, no internal directive or issuance was cited to demonstrate the mayor’s involvement in the remittance of GSIS contributions.
The prosecution also failed to prove that Talaue intended to withhold the remittance of contributions. Talaue believed that the GSIS premiums for 1997 had already been remitted, as the DBM had withheld PHP5,000,000.00 from the Municipality’s budget. Although mistaken, this belief negates any intent to cause the non-remittance.
This is further supported by Talaue’s actions upon learning of the unpaid contributions: he instructed that the Municipality’s accounts be updated and entered into the 2008 Memorandum of Agreement to arrange for payment.
Related Articles:
- What are disability benefits under the GSIS Act of 1997?
- PAYMENT OF SSS AND GSIS CONTRIBUTIONS BY THE SAME PERSON AT THE SAME TIME
Click here to subscribe to our newsletter
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
All rights reserved.
