All overseas Filipino workers must be covered by social security benefits under Republic Act No. 11199, or the Social Security Act of 2018, according to a ruling by the Philippine Supreme Court on March 26.
However, the Supreme Court declared that requiring land-based OFWs to pay their SSS contributions before they can obtain an Overseas Employment Certificate is unconstitutional, as it violates their right to work and travel.
In the decision, written by Associate Justice Maria Filomena D. Singh, the Court ruled that Rule 14, Section 7(iii) of the Implementing Rules and Regulations (IRR) of RA 11199, which mandates advance payment of SSS contributions as a condition for issuing the OEC, is unconstitutional.
The Court permanently prohibited concerned government agencies, including the SSS, the Philippine Overseas Employment Administration, and the Department of Labor and Employment (now the Department of Migrant Workers), from enforcing this requirement.
Migrante International, which filed the case, welcomed the decision as a victory in its long-standing campaign against the mandatory collection of fees from OFWs.
The Court emphasized that linking the OEC issuance to SSS contributions was unconstitutional, stating: “To truly honour the sacrifices of our OFWs, often hailed as modern-day heroes, it is crucial to refrain from oppressive policies that unfairly burden them.”
However, the Court affirmed that all OFWs must be covered by the SSS, which it recognized as both a benefit and a right. It pointed out that mandatory social security coverage is particularly beneficial to OFWs, who endure long hours, harsh working conditions, and separation from their families. The SSS coverage safeguards both the workers and their beneficiaries.
The Court tasked the Department of Foreign Affairs (DFA) and the Department of Migrant Workers (DMW) with ensuring that agreements are made with host countries, obligating foreign employers to contribute to the SSS.
Migrante and other petitioners had challenged RA 11199 and its IRR, arguing that it discriminated against land-based OFWs who are treated as self-employed, while foreign employers are not legally required to contribute. In contrast, sea-based OFWs are covered by standard contracts that require recruitment agencies to pay their SSS contributions.
For OFWs in Hong Kong, this would have meant paying around P5,500 in monthly contributions, which is approximately 15% of the minimum wage for migrant workers there. According to the SSS charter, employers are supposed to contribute 10% of the monthly salary, with the worker contributing 5%.
Migrante argued that categorizing land-based OFWs as self-paying members was discriminatory, and requiring SSS payment as a condition for the OEC violated their right to work and travel.
The Supreme Court agreed that making SSS contributions a requirement for obtaining the OEC contradicted workers’ rights, as it forced OFWs to pay before they even started working or receiving their salaries. The Court ruled that this violated land-based OFWs’ right to travel.
However, the Court clarified that the law itself did not discriminate against land-based OFWs. It explained that the contributions were necessary for both the employer and employee. The Court placed the responsibility of ensuring proper contributions from foreign employers on the DFA and the DMW, urging them to negotiate labor and social security agreements with host countries.
In a separate concurring and dissenting opinion, Senior Associate Justice Marvic Leonen agreed that the IRR unfairly shifted the financial burden onto land-based OFWs due to the absence of labor and security agreements with foreign employers. He argued that the real issue was the lack of a legal mechanism requiring foreign employers to pay their share, a responsibility the government must address.
Associate Justice Amy C. Lazaro-Javier, in her dissent, argued that requiring SSS payments before issuing the OEC was a valid method to ensure coverage, especially in the absence of agreements with host countries. She acknowledged the burden on workers but emphasized the importance of protecting their welfare and that of their families.
Meanwhile, Associate Justice Alfredo Benjamin S. Caguioa, also in his separate concurring and dissenting opinion, stated that it was not discriminatory for land-based OFWs to pay both the employee and employer contributions, as they could negotiate a higher salary or recover the employer’s share later. He also argued that linking the OEC to SSS payments did not violate OFWs’ right to travel, as they were still free to leave the country.