Victorias Milling Co. Inc. vs SSC
 Republic Act No. 1161 before its amendment defines compensation
Facts:
HOW THE DISPUTE STARTED:
 The Social Security Commission issued Circular 22 which states:
“Effective November 1, 1958, all Employers in computing the
premiums due the System, will take into consideration and include
in the Employee's remuneration all bonuses and overtime pay, as
well as the cash value of other media of remuneration. All these will
comprise the Employee's remuneration or earnings, upon which the
3-1/2% and 2-1/2% contributions will be based, up to a maximum of
P500 for any one month”
 The petitioner protested to the new circular stating that it was
contradictory to a previous circular, which expressly excluded
overtime pay and bonus in the computation of the employers’ and
employees’ premium.
 It also submitted that to help in the proper interpretation of the word
“compensation”, their observation on RA 1161 and its amendments
and on the general interpretation of the word is to be considered.
The SSC overruled the objections. Circular 22 was merely an
administrative interpretation of the statute, and not a rule or regulation
which needs the approval of the President.
Hence, this case.
ISSUE:
 WON Circular 22 is a rule a regulation under RA 1161.
 No
Ruling:
No. An administrative interpretation is one which is advisory to the
courts as to the real meaning of the law.
 When administrative bodies issue rules and regulations, it
technically makes a new law with the force and effect of a valid law.
While, when it renders opinions, it merely interprets a pre-existing
law.
as: All remuneration for employment include the cash value of any
remuneration paid in any medium other than cash. Except:
o that part of the remuneration in excess of P500 received
during the month;
o bonuses, allowances or overtime pay; and
o dismissal and all other payments which the employer may
make, although not legally required to do so.
 Republic Act No. 1792 changed the definition of “compensation” to:
(f) Compensation — All remuneration for employment include the
cash value of any remuneration paid in any medium other than
cash except that part of the remuneration in excess of P500.00
received during the month.
 In this case, Circular 22 was issued to apprise those concerned of
the interpretation of the Commission. It did not add anything to the
law, but merely stated the opinion of the Commission. It merely
advised the employers and employees with the interpretation of the
Commission regarding the amendments made.
 Therefore, the court finds that the circular is a mere administrative
interpretation of what they should include in the computation of the
monthly compensation of their employees.