Cebu Institute of Technology vs. Ople

2/20/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 156
VOL. 156, DECEMBER 18, 1987 629

Cebu Institute of Technology (CIT) vs. Ople
*
No. L-58870. December 18, 1987.
CEBU INSTITUTE OF TECHNOLOGY (CIT),

petitioner, vs. HON. BLAS OPLE, in his capacity as
Minister, Ministry of Labor and Employment, JULIUS
ABELLA, ARSENIO ABELLANA, RODRIGO ALIWALAS,
ZOSIMO ALMOCERA, GERONIDES ANCOG,
GREGORIO ASIA, ROGER BAJARIAS, BERNARDO
BALATAYO, JR., BASILIO CABALLES, DEMOCRITO
TEVES, VOLTAIRE DELA CERNA, ROBERTO
COBARRUBIAS, VILMA GOMEZ CHUA, RUBEN
GALLITO, EDGARDO CONCEPCION, VICTOR
COQUILLA, JOSE DAKOYKOY, PATERNO WONG,
EVELYN LACAYA, RODRIGO GONZALES, JEOGINA
GOZO, MIGUEL CABALLES, CONSUELO JAVELOSA,
QUILIANO LASCO, FRANKLIN LAUTA, JUSTINIANA
LARGO, RONALD LICUPA, ALAN MILANO, MARIA
MONSANTO, REYNALDO NOYNAY, RAMON
PARADELA, NATALIO PLAZA, LUZPURA QUIROGA,
NOE RODIS, COSMENIA SAAVEDRA,
_______________
* EN BANC.
630
630 SUPREME COURT REPORTS ANNOTATED

LEONARDO SAGARIO, LETICIA SERRA, SIEGFREDO

TABANAG, LUCINO TAMAOSO, DANILO TERANTE,
HELEN CALVO TORRES, ERNESTO VILLANUEVA,
DOLORES VILLONDO, EDWARD YAP, ROWENA
VIVARES, DOLORES SANANAM, RODRIGO BACALSO,
YOLANDA TABLANTE, ROMERO BALATUCAN,
http://www.central.com.ph/sfsreader/session/00000161b3cd6230963ad327003600fb002c009e/t/?o=False 1/65
CARMELITA LADOT, PANFILO CANETE, EMMANUEL

CHAVEZ, JR., SERGIO GALIDO, ANGEL COLLERA,
ZOSIMO CUNANAN, RENE BURT LLANTO, GIL
BATAYOLA, VICENTE DELANTE, CANDELARIO DE
DIOS, JOSE MA. ESTELLA, NECITA TRINIDAD,
ROTELLO ILUMBA, TEODORICO JAYME, RAYMUNDO
ABSIN, RUDY MANEJA, REYNA RAMOS, ANASTACIA
BLANCO, FE DELMUNDO, ELNORA MONTERA,
MORRISON MONTESCLAROS, ELEAZAR
PANIAMOGAN, BERNARDO PILAPIL, RODOLFO POL,
DEMOSTHENES REDOBLE, PACHECO ROMERO,
DELLO SABANAL, SARAH SALINAS, RENATO
SOLATORIO, EDUARDO TABLANTE, EMMANUEL
TAN, FELICISIMO TESALUNA, JOSE VERALLO, JR.,
MAGDALENO VERGARA, ESMERALDA ABARQUEZ,
MAC ARTHUR DACUYCUY ACOMPANADA, TRINIDAD
ADLAWAN, FE ELIZORDO ALCANTARA, REOSEBELLA
AMPER, ZENAIDA BACALSO, ELIZA BADANA,
GEORGIA BAS, ERLINDA BURIAS, ELDEFONSO
BURIAS, CORAZON CASENAS, REGINO CASTAÑEDA,
GEORGE CATADA, CARMENCITA G. CHAVEZ,
LORETIA CUNANAN, FLORES DELFIN, TERESITA
ESPINO, ELVIE GALANZA, AMADEA GALELA,
TERESITA JUNTILLA, LEONARDA KAPUNGAN,
ADORACION LANAWAN, LINDA LAYAO, GERARDO
LAYSON, VIRGILIO LIBETARIO, RAYMOND PAUL
LOGARTA, NORMA LUCERO, ANATOLIA MENDEZ,
ELIODORO MENDEZ, JUDALINE MONTE, ELMA
OCAMPO, ESTEFA OLIVARES, GEORGE ORAIS,
CRISPINA PALANG, GRETA PEGARIDO, MELBA
QUIACHON, REMEDIOS QUIROS, VIRGINIA RANCES,
EDNA DELOS REYES VICENTE TAN, EMERGENCIA
ROSELL, JULIETA TATING, MERCIA TECARRO,
FELISA VERGARA WEMINA VILLACIN, MACRINA
YBARSABAL
631
VOL. 156, DECEMBER 18, 1987 631

MILAGROS CATALAN, JULIETA AQUINDE, SONIA

ARTIAGA, MA. TERESITA OBANDO, ASUNCION
ABAYAN, ESTHER CARREON, ECHEVARRE,
BUENAFE SAMSON, CONCEPCION GONZALES,
VITALIANA VENERACION, LEONCIA ABELLAR,

REYNITA VILLACARLOS. respondents.
*
No. L-68345. December 18, 1987.
DIVINE WORD COLLEGE OF LEGAZPI, petitioner, vs.

The Honorable Deputy Minister of Labor and Employment,
VICENTE LEOGARDO, JR., the HONORABLE
REGIONAL DIRECTOR (Regional Office No. 5) of the
Ministry of Labor & Employment GERARDO S.
CASTILLO, CECILIA MANUEL and other alleged
complainants, respondents,
*
Nos. L-69224-5. December 18, 1987.
FAR EASTERN UNIVERSITY EMPLOYEES LABOR

UNION, petitioner, vs. FAR EASTERN UNIVERSITY and
the NATIONAL LABOR RELATIONS COMMISSION,
respondents.
*
No. L-70832. December 18, 1987.
GREGORIO T. FABROS, ROGELIO B. DE GUZMAN,

CRESENCIANO ESPINO, JOSE RAMOS SUNGA,
BAYLON BANEZ, FERNANDO ELESTERIO, ISMAEL
TABO, AMABLE TUIBEO, CELSO TUBAY, RAFAEL
HERNANDEZ, GERONIMO JASARENO, MEL
BALTAZAR, MA. LOURDES PASCUAL, T. DEL
ROSARIO ACADEMY TEACHERS and EMPLOYEES
ASSOCIATION, DENNIS MONTE, BECKY TORRES,
LOIDA VELASCO, ROMLY NERY, DAISY N. AMPIG,
PATRICIO DOLORES, ROGELIO RAMIREZ, and NILDA
L. SEVILLA, petitioners, vs. The HON. JAIME C. LAYA,
in his capacity as Minister of Education, Culture and
Sports, respondents.
_______________
* EN BANC.
632

*
No. L-76521. December 18, 1987.
JASMIN BISCOCHO, ROWENA MARIANO, AGNES

GALLEGO, MA. ANA ORDENES, ISABEL DE LEON,
LUZVIMINDA FIDEL, MARIQUIT REYES, SOTERA
ORTIZ, ANGELINA ROXAS, BITUIN DE PANO,
ELIZABETH ORDEN, APOLLO ORDEN, GUILLERMA
CERCANO, IMELDA CARINGAL, EFREN BATIFORA,
ROSIE VALDEZ, DELIA QUILATEZ, FELIX
RODRIGUEZ, OSCAR RODRIGUEZ, JOVITA CEREZO,
JOSEFINA BONDOC, BELEN POSADAS, DOLORES
PALMA, ANTONINA CRUZ, CONRADO BANAYAT,
TERESITA LORBES, and CORAZON MIRANDA,
petitioners, vs. THE HONORABLE AUGUSTO SANCHEZ,
in his capacity as Minister of Labor and Employment,
ESPIRITU SANTO PAROCHIAL SCHOOL AND
ESPIRITU SANTO PAROCHIAL SCHOOL FACULTY
ASSOCIATION, respondents.
*
No. L-76596. December 18, 1987.
RICARDO C. VALMONTE and CORAZON BADIOLA,

petitioners, vs. THE HONORABLE AUGUSTO SANCHEZ,
in his capacity as Minister of Labor and Employment,
ESPIRITU SANTO PAROCHIAL SCHOOL FACULTY
ASSOCIATION, and ESPIRITU SANTO PAROCHIAL
SCHOOL, respondents.
Constitutional Law; Courts; The function of the Court is

limited to the judicial task of saying what the law is as enacted by
the law making body.—Amidst these opposing forces the task at
hand becomes saddled with the resultant implications that the
interpretation of the law would bear upon such varied interests.
But this Court can not go beyond what the legislature has laid
down. Its duty is to say what the law is as enacted by the
lawmaking body. That is not the same as saying what the law
should be or what is the correct rule in a given set of
circumstances. It is not the province of the judiciary to look into
the wisdom of the law nor to question the policies adopted by the
legislative branch. Nor is it the business of this Tribunal to
remedy every unjust situation that may arise from the application
of a particular law. It is for the legislature to enact
_______________
* EN BANC.
633
VOL, 156, DECEMBER 18, 1987 633
remedial legislation if that be necessary in the premises. But as

always, with apt judicial caution and cold neutrality, the Court
must carry out the delicate function of interpreting the law,
guided by the Constitution and existing legislation and mindful of
settled jurisprudence. The Court's function is therefore limited,
and accordingly, must confine itself to the judicial task of saying
what the law is, as enacted by the lawmaking body,
Same; Same; Same; Allowances and benefits chargeable
against proceeds of tuition fee increases which the law allows for
return on investments of schools have no other resources.—This
Court has consistently held, beginning with the University of the
East case, that if the schools have no resources other than those
derived from tuition fee increases, allowances and benefits should
be charged against the proceeds of tuition fee increases which the
law allows for return on investments under section 3(a) of Pres.
Dec. No. 451, therefore, not against the 60% portion allocated for
increases in salaries and wages (See 117 SCRA at 571). This
ruling was reiterated in the University of Pangasinan case and in
the Saint Louis University case. This interpretation of the law is
consistent with the legislative intent expressed in the Decree
itself, i.e., to alleviate the sad plight of private schools and that of
their personnel wrought by slump in enrollment and increasing
operational costs on the part of the schools, and the increasing
costs of living on the part of the personnel (Preamble, Pres. Dec.
No. 451). While coming to the aid of the private school system by
simplifying the procedure for increasing tuition fees, the Decree
imposes as a condition for the approval of any such increase in
fees, the allocation of 60% of the incremental proceeds thereof, to
increases in salaries or wages of school personnel. This condition
makes for a quid pro quo of the approval of any tuition fee hike by
a school, thereby assuring the school personnel concerned, of a
share in its proceeds. The condition having been imposed to attain
one of the main objectives of the Decree, which is to help the
school personnel cope with the increasing costs of living, the same
cannot be interpreted in a sense that would diminish the benefit
granted said personnel.
Same; Same; Same; Same; Allowances not included in the
concept of salaries or wages.—ln the light of existing laws which
exclude allowances from the basic salary or wage in the
computation of the amount of retirement and other benefits
payable to an employee, this Court will not adopt a different
meaning of the terms "salaries or wages" to mean the opposite, i.e,

to include allowances in the concept of salaries or wages.
634
Same; Same; Same; Same; Same; Implementing rules and

regulations promulgated by the then MECS that allowances and
other benefits can be charged against the 60% proceeds of the
tuition fee increase were ultra vires and not binding upon the
court.—As to the alleged implementing rules and regulations
promulgated by the then MECS to the effect that allowances and
other benefits may be charged against the 60% portion of the
proceeds of tuition fee increases provided for in Section 3(a) of
Pres. Dec. No. 451, suffice it to say that these were issued ultra
vires, and therefore not binding upon this Court. Rules and
regulations promulgated in accordance with the power conferred
by law would have the force and effect of law [Victorias Milling
Company, Inc. v. Social Security Commission, 114 Phil. 555
(1962)] if the same are germane to the subjects of the legislation
and if they conform with the standards prescribed by the same
law [People v. Maceren, G.R. No. L-32166, October 18, 1977, 79
SCRA 450]. Since the implementing rules and regulations cited by
the private schools adds allowances and other benefits to the
items included in the allocation of 60% of the proceeds of tuition
fee increases expressly provided for by law, the same were issued
in excess of the rule-making authority of said agency, and
therefore without binding effect upon the courts. At best the same
may be treated as administrative interpretations of the law and
as such, they may be set aside by this Court in the final
determination of what the law means.
Same; Same; Same; Section 42 of BP Blg. 232 repeals
Presidential Decree No. 451.—The Court after comparing section
42 of B.P. Blg. 232 and Pres. Dec. No. 451, particularly section
3(a) thereof, finds evident irreconcilable differences. Under Pres.
Dec. No. 451, the authority to regulate the imposition of tuition
and other school fees or charges by private schools is lodged with
the Secretary of Education and Culture (Sec. 1), whereas section
42 of B.P. Blg. 232 liberalized the procedure by empowering each
private school to determine its rate of tuition and other school fees
or charges. Pres. Dec. No. 451 provides that 60% of the
incremental proceeds of tuition fee increases shall be applied or
used to augment the salaries and wages of members of the faculty
and other employees of the school, while B.P. Blg. 232 provides
that the increment shall be applied or used in accordance with the
regulations promulgated by the MECS. A closer look at these

differences eads the Court to resolve the question in favor of
repeal. As pointed out by the Solicitor General, three aspects of
the disputed provisions of law support the above conclusion. First,
the legislative authority under Pres. Dec. No. 451 retained the
power to
635
VOL. 156, DECEMBER 18, 1987 635
apportion the incremental proceeds of the tuition fee increases;

such power is delegated to the Ministry of Education and Culture
under B.P. Blg. 232. Second, Pres. Dec. No. 451- limits the
application or use of the increment to salary or wage increase,
institutional development, student assistance and extension
services and return on investment, whereas B.P. Blg. 232 gives
the MECS discretion to determine the application or use of the
increments. Third, the extent of the application or use of the
increment under Pres. Dec. No. 451 is fixed at the pre-determined
percentage allocations: 60% for wage and salary increases, 12%
for return in investment and the balance of 28% to institutional
development, student assistance and extension services, while
under B.P. Blg. 232, the extent of the allocation or use of the
increment is likewise left to the discretion of the MECS. The
legislative intent to depart from the statutory limitations under
Pres. Dec. No. 451 is apparent in the second sentence of section 42
of B.P. Blg. 232. Pres. Dec. No. 451 and section 42 of B.P. Blg. 232
which cover the same subject matter, are so clearly inconsistent
and incompatible. with each other that there is no other
conclusion but that the latter repeals the former in accordance
with section 72 of B.P. Blg. 232 to wit: Sec. 72. Repealing clause.
—All laws or parts thereof inconsistent with any provision of this
Act shall be deemed repealed or modified, as the case may be.
Same; Delegation of legislative power; Statutory grant of
rulemaking power to administrative agencies like the Secretary of
Education is a valid exception to the rule on non-delegation of
legislative power; Requisites.—The statutory grant of rule-making
power to administrative agencies like the Secretary of Education
is a valid exception to the rule on non-delegation of legislative
power provided two conditions concur, namely: 1) the statute is
complete in itself, setting forth the policy to be executed by the
agency, and 2) said statute fixes a standard to which the latter
must conform.
Civil Procedure; Certiorari and/or Prohibition only persons

aggrieved by the act or proceeding in question may file a petition
for certiorari and/or prohibition.—This Court finds merit in the
respondents' objection. Under Rule 65 of the Rules of Court (Secs.
1 and 2), only a person aggrieved by the act or proceeding in
question may file a petition for certiorari and/or prohibition. The
Valmonte petition fails to indicate how the petitioners would be
aggrieved by the assailed Order. It appears that the petitioners
are not parties and never at any time intervened in the
conciliation conferences and arbitration proceedings before the
respondent Minister. The parties therein, who stand to be directly
affected by the Order of the respon-
636
dent Minister, do not contest the validity of said Order. The

petition does not even state that petitioners act as representative
of the parents' association in the School or in behalf of other
parents similarly situated.
Same; Same; Same; Motion for Reconsideration should first
be availed of before filing a petition for certiorari and prohibition.
—If indeed, petitioners Valmonte and Badiola are aggrieved by
the said Order, they should have intervened and moved for a
reconsideration of respondent Minister's Order before filing the
instant petition. Petitioners failed to show that the case falls
under any one of the recognized exceptions to the rule that a
motion for reconsideration should first be availed of before filing a
petition for certiorari and prohibition.
Same; Due Process; Administrative agencies not strictly bound
by the technical rules of procedure.—lt could not therefore be
contended that the petitioner was deprived of his right to be
heard when it appears on the record that it was permitted to
ventilate its side of the issues. There was sufficient compliance
with the requirements of due process. In the face of the well-
settled principle that administrative agencies are not strictly
bound by the technical rules of procedure, this Court dismisses
the petitioner's claim that formal investigative and arbitration
proceedings should be conducted. "While a day in court is a
matter of right in judicial proceedings, in administrative
proceedings it is otherwise since they rest upon different
principles."
Labor Law; Employees; Incentive Leave Benefits; Petitioner's

teaching personnel not deemed field personnel; Claim that private
respondents are not entitled to the service leave benefit cannot be
sustained.—The phrase "those who are engaged on task or
contract basis" should however, be related with "field personnel,"
applying the rule on ejusdem generis that general and unlimited
terms are restrained and limited by the particular terms that
they follow. [Vera v. Cuevas, G.R. No. L-33693, May 31, 1979, 90
SCRA 379]. Clearly, petitioner's teaching personnel cannot be
deemed field personnel which refers "to non-agricultural
employees who regularly perform their duties away from the
principal place of business or branch office of the employer and
whose actual hours of work in the field cannot be determined with
reasonable certainty. [Par. 3, Article 82, Labor Code of the
Philippines]. Petitioner's claim that private respondents are not
entitled to the service incentive leave benefit cannot therefore be
sustained.
637
VOL. 156, DECEMBER 18, 1987 637
Cebu Institute of Technohgy (CIT) vs. Ople
Same; Power to Investigate; Secretary of Labor or his duly

authorized representatives are accorded power to investigate
complaints for non-compliance with labor laws.—Contrary to the
petitioner's protestation of lack of jurisdiction, the Secretary of
Labor or his duly authorized representatives (which includes
Regional Directors) are accorded the power to investigate
complaints for noncompliance with labor laws, particularly those
which deal with labor standards such as payment of wages and
other forms of compensation, working hours, industrial safety,
etc.
Same; Same; Same; Labor Standard cases arising from
violation of labor standard laws under the exclusive original
jurisdiction of the Regional Director.—Furthermore, Policy
Instruction No. 6 which deals with the distribution of jurisdiction
over labor cases restates inter alia that "(L)abor standards cases
arising from violation of labor standards laws discovered in the
course of inspection or complaints where employer-employee
relations still exist" are under the exclusive original jurisdiction of
the Regional Director. Even assuming that respondent Regional
Director was without jurisdiction to entertain the case at bar,
petitioner is now barred at this stage to claim lack of jurisdiction
having actively participated in the proceedings below. Petitioner
never questioned the jurisdiction of the respondent Regional

Director.
Same; Allowances; Transportation allowances a form of bonus
equivalent to the 13th month pay.—This Court sustains the
aforequoted view of public respondent. The benefit herein
designated as "transportation allowance" is a form of bonus
equivalent to the 13th month pay. Nevertheless, where this does
not amount to 1/12 of the employees basic salary, the employer
shall pay the difference.
CORTES, J.:
Six cases involving various private schools, their teachers

and non-teaching school personnel, and even parents with
children studying in said schools, as well as the then
Minister of Labor and Employment, his Deputy, the
National Labor Relations Commission, and the then
Minister of Education, Culture and Sports, have been
consolidated in this single Decision in order to dispose of
uniformly the common legal issue raised therein, namely,
the allocation of the incremental proceeds of authorized
tuition fee increases of private schools provided for in
section 3 (a) of Presidential Decree No. 451, and
638

Cebu Institute of Technology (CIT) us. Ople
thereafter, under the Education Act of 1982 (Batas

Pambansa Blg. 232).
Specifically, the common problem presented by these
cases requires an interpretation of section 3(a) of Pres.
Decree No. 451 which states:
SEC. 3. Limitations.—The increase in tuition or other school fees

or other charges as well as the new fees or charges authorized
under the next preceding section shall be subject to the following
conditions:
(a) That no increase in tuition or other school fees or charges
shall be approved unless sixty (60%) per centum of the proceeds is
allocated for increase in salaries or wages of the members of the
faculty and all other employees of the school concerned, and the
balance for institutional development, student assistance and
extension services, and return to investments: Provided, That in
no case shall the return to investments exceed twelve (12%) per
centum of the incremental proceeds;
* * *
In addition, there is also a need for a pronouncement on the

effect of the subsequent enactment of B.P. Blg. 232 which
provides for the allocation of tuition fee increases in section
42 thereof.
In a nutshell, the present controversy was precipitated
by the claims of some school personnel for allowances and
other benefits and the refusal of the private schools
concerned to pay said allowances and benefits on the
ground that said items should be deemed included in the
salary increases they had paid out of the 60% portion of
the proceeds from tuition fee increases provided for in
section 3 (a) of Pres. Decree No. 451. The interpretation
and construction of laws being a matter of judicial power
and duty [Marbury v. Madison, 1 Cranch 137 (1803);
Endencia v. David, 93 Phil. 696 (1953)], this Court has
been called upon to resolve the controversy.
In the process of reading and at times, having to
decipher, the numerous pleadings filed in the six cases, the
Court found that the main issue has been approached by
the parties from almost diametrical points, thereby
bringing into focus three sub-issues: first, whether or not
allowances and other fringe
639
VOL. 156, DECEMBER 18, 1987 639

benefits of faculty members and other school employees

may be charged against the 60% portion of the tuition fee
increases provided for in section 3(a) of Pres. Dec. No. 451:
second, whether or not the same items may be charged
against said portion under the provisions of B.P. Blg. 232:
and, third, whether or not schools and their employees may
enter into a collective bargaining agreement allocating
more than 60% of said incremental proceeds for salary
increases and other benefits of said employees. After these
sub-issues have been resolved, the Court will tackle the
other incidents attending the individual cases, seriatim.
The factual antecedents that brought these cases before
this Tribunal are as follows:
I. FACTUAL BACKGROUND OF EACH CASE
A. CEBU INSTITUTE OF TECHNOLOGY CASE

This case originated from a Complaint filed with the

Regional Office No. VII of the Ministry of Labor on
February 11, 1981 against petitioner Cebu Institute of
Technology (CIT) by private respondents, Panfilo Canete,
et al., teachers of CIT, for non-payment of: a) cost of living
allowances (COLA) under Pres. Dec. Nos. 525, 1123, 1614,
1678 and 1713, b) thirteenth (13th) month pay differentials
and c) service incentive leave. By virtue of an Order issued
by the then Deputy Minister of Labor Carmelo C. Noriel, a
labor-management committee composed of one
representative each from the Ministry of Labor and
Employment (MOLE), the Minister of Education, Culture
and Sports (MECS), and two representatives each from CIT
and from the teachers was created. Said committee was to
ascertain compliance with the legal requirements for the
payment of COLA, thirteenth (13th) month pay and service
incentive leave [Rollo, p. 84].
The position taken by CIT during the conference held by
the labor management committee was that it had paid the
allowances mandated by various decrees but the same had
been integrated in the teacher's hourly rate. It alleged that
the
640

payment of COLA by way of salary increases is in line

with Pres. Dec. No. 451. It also claimed in its position
paper that it had paid thirteenth month pay to its
employees and that it was exempt from the payment of
service incentive leave to its teachers who were employed
on contract basis [Rollo, pp. 8586].
After the report and recommendation of the committee,
herein public respondent, then Minister of Labor and
Employment issued the assailed Order dated September
29, 1981 and held that the basic hourly rate designated in
the Teachers' Program is regarded as the basic hourly rate
of teachers exclusive of the COLA, and that COLA should
not be taken from the 60% incremental proceeds of the
approved increase in tuition fee. The dispositive portion of
the Order reads:
PREMISES CONSIDERED, CIT is hereby ordered to pay its

teaching staff the f ollowing:
1) COLA under P.D.'s 525 and 1123 from February 1978 up

to 1981;
2) COLA under P.D.'s 1614, 1634, 1678 and 1713; and
3) Service incentive ve lea ve from 1978 up to 1981. CIT is
further directed to integrate into the basic salaries of its
teachers and (sic) COLA under P.D.'s 525 and 1123
starting on January 1981, pursuant to P.D. 1751. For
purposes of integration, the hourly rate shown in its
Teachers' Program for school year 198182 shall be
considered as the basic hourly rate.
SO ORDERED.
Petitioner assails the aforesaid Order in this Special Civil

Action of Certiorari with Preliminary Injunction and/or
Restraining Order. The Court issued a Temporary
Restraining Order on December 7, 1981 against the
enforcement of the questioned Order of the Minister of
Labor and Employment.
B. DIVINE WORD COLLEGE OF LEGAZPI CASE

Upon a complaint filed by ten faculty members for alleged
non-compliance by herein petitioner Divine Word College
of
641
VOL. 156, DECEMBER 18, 1987 641

Legazpi with, among others, Pres. Dec. No. 451, i.e.,

allowances were charged to the 60% incremental proceeds
of tuition fee increase, the Labor Regulation Section of
Regional Office No. V (Legazpi City) of the Ministry of
Labor and Employment conducted an inspection of the
employment records of said school. On the basis of the
report on the special inspection that the school did not
comply with Pres. Dec. No. 451, herein respondent
Regional Director issued an Order dated May 30, 1983,
requiring compliance by the Divine Word College. The
latter filed a Memorandum of Appeal from said Order
which the Regional Director treated as a Motion for
Reconsideration. Upon failure of the school to comply with
the aforesaid Order, another Order (August 2, 1983) was
issued by herein respondent Regional Director requiring
herein petitioner to pay the faculty members-complainants
(herein private respondents) the amounts indicated therein
or the total sum of Six Hundred Seventeen Thousand Nine
Hundred Sixty Seven Pesos and Seventy Seven Centavos

(P617,967.77). Petitioner's Motion for Reconsideration of
the Order was denied.
On appeal, the respondent Deputy Minister of Labor
and Employment affirmed the Order of the Regional
Director, viz:
Coming now to the substantial merit of the case, we share the

view that the emergency allowances due the complainants under
the several presidential decrees (PD's 525, 1123, etc.) cannot be
charged by the respondent against the 60% of the incremental
proceeds from increase in tuition fees authorized under PD 451,
not only because as per decision of the Supreme Court (UE vs.
UE Faculty Association, et. al., G.R. No. 57387, September 30,
1982) said allowances whether mandated by law or secured by
collective bargaining should be taken only from the return to
investment referred to in the decree if the school has no other
resources to grant the allowances but not from the 60%
incremental proceeds, but also because to hold otherwise would,
to our mind, inevitably result in the loss of one benefit due the
complainants—that is the salary or wage increase granted them
by PD 451.
* * *
In other words, we believe that by paying the complainants'

allowances out of the 60% incremental proceeds intended for their
salary increase they are practically being deprived of one benefit
—their share in the 60% incremental proceeds in terms of
642

salary or wage increase.

WHEREFORE, for the reasons abovestated, the Order
appealed from is hereby AFFIRMED, and the appeal
DISMISSED, for lack of merit.
SO ORDERED.
(Annex "K" to Petition; Rollo, p. 108,110).
This special civil action of Certiorari and Prohibition with

Preliminary Injunction questions the interpretation of, and
application by the respondent Deputy Minister, of the
provisions of Pres. Dec. No, 451, as set forth in the assailed
Order.
On March 25, 1985, after considering the allegations,
issues and arguments adduced in the Petition as well as
the Comment thereon of the public respondent and

dispensing with the private respondents' Comment, the
Court resolved to dismiss the Petition for lack of merit
(Rollo, p. 198). On April 26, 1985, petitioner filed a Motion
for Reconsideration with Motion to Consider the Case En
Banc. On June 26, 1985 the First Division of the Court
referred the case to the Court En Banc for consolidation
with G.R. No. 70832, entitled "Gregorio T. Fabros, et. al. vs.
Hon. Jaime C. Laya, etc." since it involves the same issue
on the application of 60% incremental proceeds of
authorized tuition fee increases [Rollo, p. 235]. The Court
EN BANC resolved to accept the case. (Resolution of July
16, 1985). These cases were further consolidated with other
cases involving the same issues.
C. FAR EASTERN UNIVERSITY CASE

On December 17, 1978, petitioner Union filed with the
Ministry of Labor and Employment a complaint against
respondent University for non-payment of legal holiday
pay and under-payment of the thirteenth (13th) month
pay. On July 7, 1979, while the case was pending, the
Union President, in his personal capacity, filed another
complaint for violation of Pres. Dec. No. 451 against the
same respondent.
The two cases were forthwith consolidated and jointly
heard and tried. On March 10, 1980, Labor Arbiter Ruben
A.
643
VOL. 156, DECEMBER 18, 1987 643

Aquino promulgated a decision the dispositive portion of

which is quoted hereunder:
RESPONSIVE TO THE FOREGOING, respondent is hereby

directed, within ten (10) days from receipt hereof, to:
1. To (sic) pay the paid legal holidays that it withdrew since

January 14, 1976 up to the present; and
2. Pay the 13th month pay differential of complainant's for
the covered period December 16, 1975 to December 17,
1978, date of filing of complaint for non-payment of legal
holiday pay and under payment of the 13th month pay,
and thereafter. Barred forever are money claims beyond
three (3) years from the time the course (sic) of action
occurred. Respondent's formula on transportation
allowance which was deducted from the 13th month pay is

thus subject to this prescriptive period, for purposes of
computation of differentials for the 13th month pay.
The claim under PD 451 is hereby dismissed for lack of merit.

SO ORDERED.
(Annex "E" to Petition; Rollo, p. 55, 65-66).
Both parties appealed the decision of the Labor Arbiter. On

September 18, 1984, the respondent Commission disposed
of the appeal in the following manner:
RESPONSIVE TO THE FOREGOING, the Decision of Labor

Arbiter Ruben A. Aquino in the instant case dated March 10, 1980
is hereby Modified in the sense that complainant's claims for legal
holiday pay and 13th month pay are likewise dismissed for lack of
merit and the dismissal of the claim under P.D. 451 is hereby
Affirmed en (sic) toto.
(Annex "A" to Petition: Rollo, p. 24, 35).
Petitioner's Motion for Reconsideration dated September

29, 1984 was denied for lack of merit on November 8, 1984.
Before this Court is the petition on certiorari filed by the
Union assailing the abovementioned decision of the
Commissioner.
D. FABROS CASE
644

This petition is in the nature of a class suit brought by

petitioners in behalf of the faculty members and other
employees of more than 4000 private schools nationwide.
Petitioners seek to enjoin the implementation of
paragraphs 7 to 7.5 of MECS Order No. 5, series of 1985
on the ground that the said order is null and void for being
contrary to Pres. Dec. No. 451 and the rulings of the
Supreme Court in the cases of University of the East v. UE
Faculty Association [G.R. No. L-57387, September 20, 1982,
117 SCRA 554], University of Pangasinan Faculty Union v.
University of Pangasinan and NLRC [G.R. No. 63122,
February 20, 1984, 127 SCRA 691], St. Louis University
Faculty Club v. NLRC and St. Louis University [G.R. No.
65585, September 28, 1984, 132 SCRA 380].
On September 11, 1982, Batas Pambansa Blg. 232
(Education Act of 1982) was signed into law. On the matter
of tuition and other school fees of private schools, section

42 of said law provides as follows:
Sec. 42. Tuition and other School Fees.—Each private school shall
determine its rate of tuition and other school fees or charges. The
rates and charges adopted by schools pursuant to this provision
shall be collectible, and their application or use authorized, subject
to rules and regulations promulgated by the Ministry of
Education, Culture and Sports. (Italics supplied).
Invoking section 42 of B.P. Blg. 232, among others, as its

legal basis, the then Minister of Education Jaime C. Laya
promulgated on April 1,1985 the disputed MECS Order No.
25, s. 1985 entitled Rules and Regulations To Implement
the Provisions of B.P. Blg. 232. The Education Act of 1982,
Relative to Student Fees for School Year 1985-1986. The
relevant portions of said Order are quoted hereunder:
7. Application or Use of Tuition and

Other School Fees or Charges.
7.1 The proceeds from tuition fees and other school charges as
well as other income of each school, shall be treated as an
institutional fund which shall be administered and managed for
the support of school purposes strictly: Provided, That for the
purpose of generating additional financial resources or income for
the opera
645
VOL. 156, DECEMBER 18, 1987 645

tional support and maintenance of each school, two or more

schools may pool their institutional funds, in whole or in part,
subject to the prior approval of their respective governing boards.
7.2 Tuition fees shall be used to cover the general expenses of
operating the school in order to allow it to meet the minimum
standards required by the Ministry or any other higher standard,
to which the school aspires. They may be used to meet the costs of
operation for maintaining or improving the quality of
instruction/training/research through improved facilities and
through the payment of adequate and competitive compensation
for its faculty and support personnel, including compliance with
mandated increases in personnel compensation and/or allowance.
7.3 Tuition fees shall be used to cover minimum and necessary
costs including the following: (a) compensation of school
personnel such as teaching or academic staff, school
administrators, academic non-teaching personnel, and non-
academic personnel, (b) maintenance and operating expenses,

including power and utilities, rentals, depreciation, office
supplies; and (c) interest expenses and installment payments on
school debts.
7.4 Not less than sixty (60) percent of the incremental tuition
proceeds shall be used for salaries or wages, allowances and fringe
benefits of faculty and support staff, including cost of living
allowance, imputed costs of contributed services, thirteenth (13th)
month pay, retirement fund contributions, social security,
medicare, unpaid school personnel claims, and payments as may
be prescribed by mandated wage orders. collective bargaining
agreements and voluntary employer practices, Provided: That
increases in fees specifically authorized for the purposes listed in
paragraph 4.3.3 hereof shall be used entirely for those purposes.
(Italics supplied).
7.5 Other student fees and charges as may be approved,
including registration, library, laboratory, athletic, application,
testing fees and charges shall be used exclusively for the indicated
purposes, including (a) the acquisition and maintenance of
equipment, furniture and fixtures, and buildings, (b) the payment
of debt amortization and interest charges on debt incurred for
school laboratory, athletic, or other purposes, and (c) personal
services and maintenance and operating expenses incurred to
operate the facilities or services f or which f ees and charges are
collected.
The Petition prayed f or the issuance of a temporary

restraining order which was granted by this Court after
hearing. The dispositive portion of the resolution dated
May 28, 1985 reads
646

as follows:
After due consideration of the allegations of the petition
dated May 22, 1985 and the arguments of the parties, the
Court Resolved to ISSUE, effective immediately and
continuing until further orders from this Court, a
TEMPORARY RESTRAINING ORDER enjoining the
respondent from enforcing or implementing paragraphs 7.4
to 7.5 of MECS Order No. 25, s. 1985, which provide for the
use and application of sixty per centum (60%) of the
increases in tuition and other school fees or charges
authorized by public respondent for the school year 1985-
1986 in a manner inconsistent with section 3(a), P.D. No.
451, (which allocates such 60% of the increases exclusively

'for increases in salaries or wages of the members of the
faculty and other employees of the school concerned.') and
directing accordingly that such 60% of the authorized
increases shall be held in escrow by the respective colleges
and universities, i.e., shall be kept intact and not disbursed
for any purpose pending the Court's resolution of the issue
of the validity of the aforementioned MECS Order in
question. (Rollo, p. 21).
In the same resolution, the Philippine Association of
Colleges and Universities (PACU) was impleaded as
respondent.
Subsequent to the issuance of this resolution, four (4)
schools, represented in this petition, moved for the lifting
of the temporary restraining order as to them. In separate
resolutions, this Court granted their prayers.
Ateneo de Manila University, De La Salle University
(Taft Avenue) and De La Salle University-South, through
their respective counsels, manifested that for the school
year 19851986, tuition fee increase was approved by the
MECS and that on the basis of Pres. Dec. No. 451, 60% of
the tuition fee increases shall answer for salary increase.
However, a budgeted salary increase, exclusive of living
allowances and other benefits, was approved for the same
school year which when computed amounts to more than
the 60%.
This Court granted the motions in separate resolutions
lifting the temporary restraining order with respect to
these schools in order that they may proceed with the
implementation of the general salary increase for their
employees.
In the case of St. Louis University, its Faculty Club, Ad-
647
VOL. 156, DECEMBER 18, 1987 647

ministrative Personnel Association and the University

itself joined in a petition seeking for leave that 49% of the
increase in tuition and other fees for school year 1985-1986
be released. Petitioners manifested that the remaining
balance shall continue to be held in escrow by the
University.
In a resolution dated January 28, 1986, the Court
resolved as follows:
Accordingly, the Temporary Restraining Order issued by this

Court on May 28, 1985 is hereby ordered LIFTED with respect to
Saint Louis University of Baguio City in order that it may
proceed immediately with the implementation of salary increases
for its employees.
D. BISCOCHO CASE
The Espiritu Santo Parochial School and the Espiritu
Santo Parochial School Faculty Association were parties to
a labor dispute which arose from a deadlock in collective
bargaining. The parties entered into conciliation
proceedings. The union went on strike after efforts at the
conciliation failed. Subsequently, a return to work
agreement was forged between the parties and both agreed
to submit their labor dispute to the jurisdiction of the
Minister of Labor.
In the exercise of his power to assume jurisdiction, the
Ministry of Labor and Employment issued an Order dated
April 14,1986 which provides for the following:
IN CONSIDERATION OF ALL THE FOREGOING, the Ministry

hereby declares the strike staged by the Union to be legal and
orders the following:
a) the School to submit the pertinent record of employment

of Romualdo Noriego to the Research and Information
Division of the NLRC for computation of his
underpayment of wages and for the parties to abide by the
said computation;
b) the School to submit all pertinent record of collections of
tuition fee increases for school year (sic) 1982-1983, 1983-
1984 and 1984-1985 to the Research and Information
Division of the NLRC for proper computation and for
equal distribution of the amount to all
648

employees and teachers during the abovementioned school

year (sic) as their salary adjustment under P.D. 451;
c) the parties to wait for the final resolution of the llegal
dismissal (case) docketed as NLRC NCR Case No. 5-1450-
85 and to abide by the said resolution;
d) to furnish the MECS a copy of this order for them to issue
the guidelines in the implementation of PRODED
Program;
e) the parties to execute a collective bargaining agreement
with an economic package equivalent to 90% of the
proceeds from tuition fee increases for school year 1985-
1986, and another 90% for school year 1986-1987 and 85%
for school year 1987-1988. The amount aforementioned
shall be divided equally to all members of the bargaining
unit as their respective salary adjustments. Such other
benefits being enjoyed by the members of the bargaining
unit prior to the negotiation of the CBA shall remain the
same and shall not be reduced.
f) the School to deduct the amount equivalent to ten (10%)
per cent of the backwages payable to all members of the
bargaining unit as negotiation fee and to deliver the same
to the Union Treasurer for proper disposition. (Italics
supplied).
SO ORDERED.
(Rollo, pp. 16-17)
Pursuant to the said order, private respondent Union

agreed to incorporate in their proposed collective
bargaining agreement (CBA) A) with the School the
following:
2) The Union and School Administration will incorporate the

following in their CBA—A—
1) The computation of the tuition fee increase shall be gross to gross

from which the corresponding percentage of 90% will be taken.
The resulting amount will be divided among 141 5 employees for
1985-86 and 132.5 employees for 1986-87.
A- ½ the resulting increase will be added to basic and divided by 13.3 to

arrive at monthly increase in basic. The other 1/2 will be divided by 12.3
to arrive at monthly increase in living allowance.
* * *
4) x x x
649
VOL. 156, DECEMBER 18, 1987 649

Upon request/demand of the Union, School will deduct from

backwages of managerial employees and others outside the
bargaining unit what Union will charge its own members in the
form of attorney 's fees, special assessment and union

dues/agency fee.
5) The signing of the CBA and payment of backwages and

others shall be on November 26,1986 at the Espiritu Santo
Parochial School Library.
(Rollo, pp. 3-4).
The herein petitioners, Jasmin Biscocho and 26 others, all

employees and faculty members of the respondent School,
filed the present petition for prohibition to restrain the
implementation of the April 14, 1986 Order of respondent
Labor Minister as well as the agreements arrived at
pursuant thereto. They contend that said Order and
agreements affect their rights to the 60% incremental
proceeds under Pres. Dec. No. 451 which provide for the
exclusive application of the 60% incremental proceeds to
basic salary.
Acting on the petitioners' prayer, this Court
immediately issued a temporary restraining order on
November 25, 1986 "... enjoining the respondents from
enforcing, implementing and proceeding with the
questioned order of April 14,1986 and collective bargaining
agreement executed between respondents Union and the
School Administration in pursuance thereof." [Rollo, p. 20].
F. VALMONTE CASE
This Petition was filed by parents with children studying at
respondent school, Espiritu Santo Parochial School to
nullify the Order dated April 14, 1986 issued by public
respondent, then Minister of Labor and Employment,
specifically paragraphs (e) and (f) thereof, quoted in the
Biscocho case.
The award contained in the said Order is the result of
the assumption of jurisdiction by the public respondent
over a labor dispute involving the private respondents
school and faculty association, The latter had earlier filed a
notice of strike because of a bargaining deadlock on the
demands of its
650

members for additional economic benefits. After numerous

conciliation conferences held while the union was on strike,
the parties voluntarily agreed that the public respondent

shall assume jurisdiction over all the disputes between
them. As to the subject matter of the instant case, the
public respondent found that the latest proposals of the
respondent school was to give 85% of the proceeds from
tuition fee increases for the school years to be divided
among the teachers and employees as salary adjustments.
What the respondent faculty association offered to accept
was a package of 95% for school year 1985-1986, 90% for
school year 1986-1987. The respondent school offered to
strike the middle of the two positions, hence the Order
complained of by the petitioners [See Annex "A", Petition;
Rollo, pp. 9, 14-15; Comment of the Respondent Faculty
Association; Rollo, p. 26].
II. RESOLUTION OF THE COMMON LEGAL ISSUE
This long-drawn controversy has sadly placed on the

balance diverse interests, opposed yet intertwined, and all
deserving, and demanding, the protection of the State. On
one arm of the balance hang the economic survival of
private schools and the private school system, undeniably
performing a complementary role in the State's efforts to
maintain an adequate educational system in the country.
Perched precariously on the other arm of the same balance
is the much-needed financial uplift of schoolteachers,
extolled for all times as the molders of the minds of youth,
hence of every nation's future. Ranged with them with
needs and claims as insistent are other school personnel.
And then, anxiously waiting at the sidelines, is the interest
of the public at large, and of the State, in the continued
availability to all who desire it, high-standard education
consistent with national goals, at a reasonable and aff
ordable price.
Amidst these opposing forces the task at hand becomes
saddled with the resultant implications that the
interpretation of the law would bear upon such varied
interests. But this Court can not go beyond what the
legislature has laid down. Its duty is to say what the law is
as enacted by the lawmaking body. That is not the same as
saying what the law should be or what
651
VOL. 156, DECEMBER 18, 1987 651

is the correct rule in a given set of circumstances. It is not

the province of the judiciary to look into the wisdom of the
law nor to question the policies adopted by the legislative
branch. Nor is it the business of this Tribunal to remedy
every unjust situation that may arise from the application
of a particular law. It is for the legislature to enact
remedial legislation if that be necessary in the premises.
But as always, with apt judicial caution and cold
neutrality, the Court must carry out the delicate function
of interpreting the law, guided by the Constitution and
existing legislation and mindful of settled jurisprudence.
The Court's function is therefore limited, and accordingly,
must confine itself to the judicial task of saying what the
law is, as enacted by the lawmaking body.
FIRST SUB-ISSUE
A. Whether or not allowances and other fringe benefits of

employees may be charged against the 60% portion of the
incremental proceeds provided for in sec. 3(a) of Pres. Dec.
No. 451.
1. Arguments raised in the Cebu Institute of Technology

case
In maintaining its position that the salary increases it had
paid to its employees should be considered to have included
the COLA, Cebu Institute of Technology (CIT) makes
reference to Pres. Dec. No. 451 and its Implementing Rules.
The line of reasoning of the petitioner appears to be based
on the major premise that under said decree and rules, 60%
of the incremental proceeds from tuition fee increases may
be applied to salaries, allowances and other benefits of
teachers and other school personnel. In support of this
major premise, petitioner cites various implementing rules
and regulations of the then Minister of Education, Culture
and Sports, to the effect that 60% of the incremental
proceeds may be applied to salaries, allowances and other
benefits for members of the faculty and other school
personnel [Petition citing Implementing Rules and
Regulations of Pres. Dec. No. 451 of various dates; Rollo,
pp. 318-320]. Petitioner concludes that the salary increases
it had granted the CIT teachers out of the 60% portion of
the incremental proceeds of its tuition fee increases from
1974-1980
652

pursuant to Pres. Dec. No. 451 and the MECS

implementing rules and regulations must be deemed to
have included the COLA payable to said employees for
those years [Rollo, pp. 9111.
With leave of Court, the Philippine Association of
Colleges and Universities, filed its Memorandum as
Intervenor in support of the proposition that schools may
pay the COLA to faculty members and other employees out
of the 60% of the increase in tuition fees. In addition to the
arguments already set forth in the memorandum of the
petitioner CIT, intervenor PACU attacks the Decision of
this Court in University of the East v. University of the
East Faculty Association, et. al., G.R. No. 57387 as "not
doctrinal" and inapplicable to the CIT case. The Court held
in the UE case, which was promulgated on September 30,
1982, during the pendency of these cases, that:
. . . allowances and benefits should be chargeable to the return to

investment referred to in Sec. 3(a), if the schools should happen to
have no other resources than incremental proceeds of authorized
tuition fee increases. . . (See Dispositive Portion of the Decision)
Intervenor PACU alleges that the aforecited U.E. decision

does not categorically rule that COLA and other fringe
benefits should not be charged against the 60% incremental
proceeds of the authorized tuition fee increase.
The Solicitor General, on the other hand, argues in
support of the Order of the public respondent that Pres.
Dec. No. 451 allocates the 60% proceeds of tuition fee
increases exclusively for salary increases of teachers and
non-teaching supportive personnel of the school concerned,
and that the Decree does not provide that said salary
increases would take the place of the COLA [Rollo, p. 244-
245], He cites as authority for this stance, two (2)
memoranda of the then President dated June 6, 1978 and
March 30, 1979 both of which provide that the 60%
incremental proceeds of tuition fee increases "shall be
allocated for the increase in the salaries of teachers and
supportive personnel." Anent the U.E. case, the Solicitor
General states that the Supreme Court in deciding said
case took note of the stand of the Office of the President
that the 60% incremental proceeds shall be solely applied to
salaries of faculty members and
653
VOL. 156, DECEMBER 18, 1987 653

employees.
On August 7, 1986, considering the supervening events,
including the change of administration, that have
transpired during the pendency of these cases, the Court
required the Solicitor General to state whether or not he
maintains the action and position taken by his predecessor-
in-office. In his Compliance with said Resolution, the
Solicitor General Manifested the position that:
a. If the tuition fee increase was collected during the

effectivity of Presidential Decree No. 451, 60% thereof
shall answer exclusively for salary increase of school
personnel. Other employment benefits shall be covered by
the 12% allocated for return of investment, this is in
accordance with the ruling of this Honorable Court in
University of the East vs. U.E. Faculty Association, et. al
(117 SCRA 554), x x x and reiterated in University of
Pangasinan Faculty Union v. University of Pangasinan,
et. al. (127 SCRA 691) and St. Louis Faculty Club v. NLRC
(132 SCRA 380).
b. If the salary increase was collected during the effectivity
of Batas Pambansa Blg. (sic) 232, 60% thereof shall
answer not only for salary increase of school personnel
but also for other employment benefits.
(Rollo, at pp. 513-514)
2. Arguments raised in the Divine Word College Case

Petitioner Divine Word College of Legazpi (DWC) advances
the theory that the COLA, 13th month pay and other
personnel benefits decreed by law, must be deemed
chargeable against the 60% portion allocated for increase of
salaries or wages of faculty and all other school employees.
In support of this stance, petitioner points out that said
personnel benefits are not included in the enumeration of
the items for which the balance (less 60%) or 40% portion
of the incremental proceeds may be alloted under section
3(a) of Pres. Dec. No. 451 [Rollo, pp. 29-30. Petitioner
likewise cites the interpretation of the respondent Minister
of Education, Culture and Sports [embodied in the
Implementing Rules and Regulations of P.D. 451, DEC
Issuance, May 13, 1987; Rollo, p. 30], that the 60%
incremental proceeds of authorized tuition fee increases
may be applied to increases in emoluments and/or benefits
for
654

members of faculty, including staff and administrative

employees of the school as the valid interpretation of the
law, as against that made by the respondent Deputy
Minister of Labor in the assailed Order. If the latter
interpretation is upheld, petitioner would go as far as
questioning the constitutionality of Pres. Dec. No. 451
upon the ground that the same discriminates against the
petitioner and other private schools as a class of
employers. According to the petitioner, the discrimination
takes the form of requiring said class of employers to give
60% of their profits to their employees in addition to the
COLA mandated by law, while other employers have to
contend only with salary increases and COLA [Petition;
Rollo, p. 46].
With regard to the Decision of this Court in the U.E.
case, petitioner claims exemption therefrom upon the
ground that the Court's interpretation of a law cannot be
applied retroactively to parties who have relied upon the
previous administrative interpretation which has not been
declared invalid or unconstitutional [Petition; Rollo, pp. 50-
51]. Petitioner further argues on this point that if the court
had intended to invalidate the MECS interpretation of the
Decree, it should have positively stated so in the Decision
[Petition; Rollo, p. 50].
The Comment of the public respondents cite as settled
jurisprudence applicable to the case at bar, the ruling of
this Court in the U.E. case, supra, which was reiterated in
the subsequent cases of University of Pangasinan Faculty
Union v. University of Pangasinan, et al, and St. Louis
Faculty Club v. NLRC, et al.
Public respondents Deputy Minister of Labor and
Employment and Regional Director of the MOLE (Region
V) likewise attack the validity of the Revised
Implementing Rules and Regulations of Pres. Dec. No. 451
cited by the petitioner insofar as said rules direct the
allotment of the 60% of incremental proceeds from tuition
fee hikes for retirement plan, faculty development and
allowances. They argue that said rules and regulations
were invalid for having been promulgated in excess of the
rule-making authority of the then Minister of Education
under Pres. Dec. No. 451 which mandates that the
655
VOL. 156, DECEMBER 18, 1987 655

60% of incremental proceeds from tuition fee hikes should

be allotted solely for salary increases [Comment; Rollo, pp.
184185]. Finally, with respect to the issue on the alleged
unconstitutionality of Pres. Dec. No. 451, the public
respondents posit that a legislation (such as Pres. Dec. No.
451) which affects a particular class does not infringe the
constitutional guarantee of equal protection of the law as
long as it applies uniformly and without discrimination to
everyone of that class [Comment; Rollo, p. 14].
3. Arguments raised in the Far Eastern University case

It is the petitioner's contention that in respect of Pres. Dec.
No. 451, the decision of the NLRC is a defiance of the
rulings of this Court in the cases of University of the East
v. U.E. Faculty Association, et al and of University of
Pangasinan Faculty Union v. University of Pangasinan
and NLRC (supra). The Union submits that monetary
benefits, other than increases in basic salary, are not
chargeable to the 60% incremental proceeds.
The respondent University in its Comment dated June
13, 1982 refers to Article 97(f) of the Labor Code which
provides a definition of the term "wages" to support its
position that "salaries or wages" as used in Pres. Dec. No.
451 should be interpreted to include other benefits in terms
of money.
As mentioned in the Cebu Institute of Technology
case, the Solicitor General filed its Compliance with this
Court's resolution dated August 7, 1986 requiring him to
manifest whether public respondents maintain the position
they have taken in these consolidated cases. The resolution
of September 25, 1986 required petitioners to Comment on
said Compliance.
The Comment dated December 6,1986 was received by
this Court after petitioner Union was required to show
cause why no disciplinary action should be taken against
them for failure to comply earlier. The Union agreed with
the position taken by the Solicitor General that under Pres.
Dec. No. 451, 60% of the tuition fee increases, shall answer
exclusively for salary increase. However, it expressed
disagreement with the opinion that during the effectivity
of B.P. Blg. 232, the 60% incremen-
656

tal proceeds shall answer not only for salary increases but
also for other employment benefits. The Union argues that
whereas "Pres. Dec. No. 451 is a law on a particular
subject, viz., increase of tuition fee by educational
institutions and how such increase shall be allocated, B.P.
Blg. 232 is not a law on a particular subject of increase of
tuition fee . . .; at most it is a general legislation on tuition
fee as it touches on such subject in general." [Comment on
Compliance; Rollo, p. 376], Suppletory to its argument that
B.P. Blg. 232 did not impliedly repeal Pres. Dec. No. 451,
the Union also invokes the principle that a special or
particular law cannot be repealed by a general law.
RESOLUTION OF THE FIRST SUB-ISSUE

This Court has consistently held, beginning with the
University of the East case, that if the schools have no
resources other than those derived from tuition fee
increases, allowances and benefits should be charged
against the proceeds of tuition fee increases which the law
allows for return on investments under section 3(a) of Pres.
Dec. No. 451, therefore, not against the 60% portion
allocated for increases in salaries and wages (See 117
SCRA at 571). This ruling was reiterated in the University
of Pangasinan case and in the Saint Louis University case.
There is no cogent reason to reverse the Court's ruling in
the aforecited cases. Section 3(a) of Pres. Dec. No. 451
imposes among the conditions for the approval of tuition
fee increases, the allocation of 60% per cent of the
incremental proceeds thereof for increases in salaries or
wages of school personnel, and not for any other item such
as allowances or other fringe benefits. As aptly put by the
Court in University of Pangasinan Faculty Union v.
University of Pangasinan, supra:
x x x The sixty (60%) percent incremental proceeds from the

tuition increase are to be devoted entirely to wage or salary
increases which means increases in basic salary. The law cannot
be construed to include allowances which are benefits over and
above the basic salaries of the employees. To charge such benefits
to the 60% incremental proceeds would be to reduce the increase
in basic salary provided by law, an increase intended also to help
the teachers and
657
VOL. 156, DECEMBER 18, 1987 657
other workers tide themselves and their families over these

difficult economic times. [I talics supplied] (127 SCRA 691, 702).
This interpretation of the law is consistent with the

legislative intent expressed in the Decree itself, i.e., to
alleviate the sad plight of private schools and that of their
personnel wrought by slump in enrollment and increasing
operational costs on the part of the schools, and the
increasing costs of living on the part of the personnel
(Preamble, Pres. Dec. No. 451). While coming to the aid of
the private school system by simplifying the procedure for
increasing tuition fees, the Decree imposes as a condition
for the approval of any such increase in fees, the allocation
of 60% of the incremental proceeds thereof, to increases in
salaries or wages of school personnel. This condition makes
for a quid pro quo of the approval of any tuition fee hike by
a school, thereby assuring the school personnel concerned,
of a share in its proceeds. The condition having been
imposed to attain one of the main objectives of the Decree,
which is to help the school personnel cope with the
increasing costs of living, the same cannot be interpreted
in a sense that would diminish the benef it granted said
personnel.
In the light of existing laws which exclude allowances
from the basic salary or wage in the computation of the
amount of retirement and other benefits payable to an
employee, this Court will not adopt a different meaning of
the terms "salaries or wages" to mean the opposite, i.e. to
include allowances in the concept of salaries or wages.
As to the alleged implementing rules and regulations
promulgated by the then MECS to the effect that
allowances and other benefits may be charged against the
60% portion of the proceeds of tuition fee increases
provided for in Section 3(a) of Pres. Dec. No. 451, suffice it
to say that these were issued ultra vires, and therefore not
binding upon this Court.
The rule-making authority granted by Pres. Dec. No.
451 is confined to the implementation of the Decree and to
the imposition of limitations upon the approval of tuition
fee increases, to wit:
SEC. 4. Rules and Regulations.—The Secretary of Education and

Culture is hereby authorized, empowered and directed to issue
658

the requisite rules and regulations for the effective

implementation of this Decree. He may, in addition to the
requirements and limitations provided for under Sections 2 and 3
hereof, impose other requirements and limitations as he may
deem proper and reasonable.
The power does not allow the inclusion of other items in

addition to those for which 60% of the proceeds of tuition
fee increases are allocated under Section 3(a) of the
Decree. Rules and regulations promulgated in accordance
with the power conferred by law would have the force and
effect of law [Victorias Milling Company, Inc. v. Social
Security Commission, 114 Phil. 555 (1962)] if the same are
germane to the subjects of the legislation and if they
conform with the standards prescribed by the same law
[People v. Maceren, G.R. No. L32166, October 18, 1977, 79
SCRA 450]. Since the implementing rules and regulations
cited by the private schools adds allowances and other
benefits to the items included in the allocation of 60% of the
proceeds of tuition fee increases expressly provided for by
law, the same were issued in excess of the rule-making
authority of said agency, and therefore without binding
effect upon the courts. At best the same may be treated as
administrative interpretations of the law and as such, they
may be set aside by this Court in the final determination of
what the law means.
SECOND SUB-ISSUE
B. Whether or not allowances and other fringe benefits

may be charged against the 60% portion of the
incremental proceeds of tuition fee increases upon
the effectivity of the Education Act of 1982 (B.P.
Blg. 232).
1. Arguments raised in the Fabros case

In assailing MECS Order No. 25, s. 1985, petitioners argue
that the matter of allocating the proceeds from tuition fee
increases is still governed by Pres. Dec. No. 451. It is their
opinion that section 42 of B.P. Blg. 232 did not repeal Pres.
Dec. No. 451 for the following reasons: first, there is no
conflict between section 42 of B.P. Blg. 232 and section 3(a)
of Pres.
659
VOL. 156, DECEMBER 18, 1987 659

Cebu Institute of Technology (CIT) vs, Ople
Dec. No. 451 or any semblance of inconsistency to deduce a

case of a repeal by implication: second, Pres. Dec. No. 451
is a specific law upon a particular subject—the purposes
and distribution of the incremental proceeds of tuition fee
increases, while B.P. Blg. 232 is a general law on the
educational system; as such, a specific law is not repealed
by a subsequent general law in the absence of a clear
intention; and third, Pres. Dec. No. 451 is still the only law
on the subject of tuition fee increases there being no
prescription or provision in section 42 of B.P. Blg. 232 or
elsewhere in the law. They furthermore aver that the
disputed MECS Order which imposed additional burdens
against the 60% incremental proceeds of tuition fee
increases are not provided in either Pres. Dec. No. 451 or
B.P. Blg. 232. The logical result as intimated by petitioners
is that the inclusion of paragraph 7.4 and related
paragraphs 7 to 7.3 and 7.5 in the questioned MECS order
contravenes the statutory authority granted to the public
respondent, and the same are theref ore, void.
Respondent PACU takes the contrary view contending
that MECS Order No. 25, s. 1985, complies with the
mandate of section 42 of B.P. Blg. 232 which law had
already repealed Pres. Dec. No. 451. PACU notes that the
University of the East case invoked by petitioners is not
applicable because the issue in that case does not involve
the effect of B.P. Blg. 232 on Pres. Dec. No. 451.
The Solicitor General, representing the public
respondent, after giving a summary of the matters raised
by petitioner and respondent PACU, points out that the
decisive issue in this case is whether B.P. Blg. 232 has
repealed Pres. Dec. No. 451 because on the answer to this
question depends the validity of MECS Order No. 25, s.
1985. Public respondent holds the view consistent with that
of PACU on the matter of B.P. Blg. 232 having repealed
Pres. Dec. No. 451. To support this contention, the Solicitor
General compared the respective provisions of the two laws
to show the inconsistency and incompatibility which would
result in a repeal by implication.
RESOLUTION OF THE SECOND SUB-ISSUE

On the matter of tuition fee increases section 42 of B.P.
Blg.
660

232 provides:
SEC. 42. Tuition and Other School Fees.—Each private school

shall determine its rate of tuition and other school fees or
charges. The rates and charges adopted by schools pursuant to
this provision shall be collectible and their application or use
authorized, subject to rules and regulations promulgated by the
Ministry of Education, Culture and Sports. (Italics supplied).
The enactment of B.P. Blg. 232 and the subsequent

issuance of MECS Order No. 25, s. 1985 revived the old
controversy on the application and use of the incremental
proceeds from tuition fee increases. As can be gleaned from
the pleadings and arguments of the parties in these cases,
one side, composed of the teachers and other employees of
the private schools, insist on the applicability of section
3(a) of Pres. Dec. No. 451 as interpreted and applied in the
University of the East, University of Pangasinan and St.
Louis University cases, while the private schools uphold the
view that the matter of allocating the incremental proceeds
from tuition fee increases is governed by section 42 of B.P.
Blg. 232 as implemented by the MECS Rules and
Regulations. As stated, the latter's argument is premised
on the allegation that B.P. Blg. 232 impliedly repealed
Pres. Dec. No. 451.
On the second sub-issue, therefore, this Court upholds
the view taken by the Solicitor General in the Fabros case,
that the decisive issue is whether B.P. Blg. 232 has
repealed Pres. Dec. No. 451.
In recognition of the vital role of private schools in the
country's educational system, the government has provided
measures to regulate their activities. As early as March 10,
1917, the power to inspect private schools, to regulate their
activities, to give them official permits to operate under
certain conditions and to revoke such permits for cause was
granted to the then Secretary of Public Instruction by Act
No. 2706 as amended by Act No. 3075 and Commonwealth
Act No. 180. Republic Act No. 6139, enacted on August 31,
1970, provided for the regulation of tuition and other fees
charged by private schools in order to discourage the
collection of exorbitant and unreasonable fees. In an effort
to simplify the "cumbersome
661
VOL. 156, DECEMBER 18, 1987 661

and time consuming" procedure prescribed under Rep. Act

No. 6139 and "to alleviate the sad plight of private
schools," Pres, Dec. No. 451 was enacted on May 11, 1974.
While this later statute was being implemented, the
legislative body envisioned a comprehensive legislation
which would introduce changes and chart directions in the
educational system, hence, the enactment of B.P. Blg. 232.
What then was the effect of B.P. Blg. 232 on Pres. Dec. No.
451?
The Court after comparing section 42 of B.P. Blg. 232
and Pres. Dec. No. 451, particularly section 3(a) thereof,
finds evident irreconcilable differences.
Under Pres. Dec. No. 451, the authority to regulate the
imposition of tuition and other school fees or charges by
private schools is lodged with the Secretary of Education
and Culture (Sec. 1), where section 42 of B.P. Blg. 232
liberalized the procedure by empowering each private
school to determine its rate of tuition and other school fees
or charges.
Pres. Dec. No. 451 provides that 60% of the incremental
proceeds of tuition fee increases shall be applied or used to
augment the salaries and wages of members of the faculty
and other employees of the school, while B.P. Blg. 232
provides that the increment shall be applied or used in
accordance with the regulations promulgated by the
MECS.
A closer look at these differences leads the Court to
resolve the question in favor of repeal. As pointed out by
the Solicitor General, three aspects of the disputed
provisions of law support the above conclusion. First, the
legislative authority under Pres. Dec. No. 451 retained the
power to apportion the incremental proceeds of the tuition
fee increases; such power is delegated to the Ministry of
Education and Culture under B.P. Blg. 232. Second, Pres.
Dec. No. 451 limits the application or use of the increment
to salary or wage increase, institutional development,
student assistance and extension services and return on
investment, whereas B.P. Blg. 232 gives the MECS
discretion to determine the application or use of the
increments. Third, the extent of the application or use of
the increment under Pres. Dec. No. 451 is fixed at the pre-
determined percentage allocations; 60% for wage and
salary increases, 12% for return in investment and the

balance of 28%
662

to institutional development, student assistance and

extension services, while under B.P; Blg. 232, the extent of
the allocation or use of the increment is likewise left to the
discretion of the MECS.
The legislative intent to depart from the statutory
limitations under Pres. Dec. No. 451 is apparent in the
second sentence of section 42 of B.P. Blg. 232. Pres. Dec.
No. 451 and section 42 of B.P. Blg. 232 which cover the
same subject matter, are so clearly inconsistent and
incompatible with each other that there is no other
conclusion but that the latter repeals the former in
accordance with section 72 of B.P. Blg. 232 to wit:
Sec. 72. Repealing clause.—All laws or parts thereof inconsistent

with any provision of this Act shall be deemed repealed or
modified, as the case may be.
Opinion No. 16 of the Ministry of Justice dated January

29, 1985, quoted below, supports the above conclusion:
Both P.D. No. 451 and B.P. Blg. 232 deal with the imposition of
tuition and other school fees or charges and their use and
application, although the latter is broader in scope as it covers
other aspects of the education system. We note substantial
differences or inconsistencies between the provisions of the two
laws. P.D. No. 451 prescribes certain limitations in the increase
of tuition and other school fees and their application, whereas the
latter law, B.P. Blg. 232 is silent on the matter. Under P.D. 451,
rates of tuition/school fees need prior approval of the Secretary of
Education, Culture (now Minister of Education, Culture and
Sports), who also determines the reasonable rates for new school
fees, whereas under B.P. Blg. 232, each private school determines
its rate of tuition and other school fees or charges. P.D. No. 451
authorizes the Secretary of Education and Culture to issue
requisite rules and regulations to implement the said Decree and
for that purpose, he is empowered to impose other requirements
and limitations as he may deem proper and reasonable in addition
to the limitations prescribed by the Decree for increases in tuition
fees and school charges, particularly, the limitations imposed in
the allocation of increases in fees and charges, whereas under
B.P. Blg. 232, the collection and application or use of rates and
charges adopted by the school are subject to rules and regulations

promulgated by the Ministry of Education, Culture and Sports
without
663
VOL. 156, DECEMBER 18, 1987 663

any mention of the statutory limitations on the application or use

of the fees or charges. The authority granted to private schools to
determine its rates of tuition and unconditional authority vested
in the Ministry of Education, Culture and Sports to determine by
rules and regulations the collection and application or use of
tuition or fees rates and charges under B.P. Blg. 232 constitute
substantial and irreconcilable incompatibility with the provisions
of P.D. No. 451, which should be for that reason deemed to have
been abrogated by the subsequent legislation.
Moreover, B.P. Blg. 232 is a comprehensive legislation dealing
with the establishment and maintenance of an integrated system
of education and as such, covers the entire subject matter of the
earlier law, P.D. No. 451. The omission of the limitations or
conditions imposed in P.D. No. 451 for increases in tuition fees
and school charges is an indication of a legislative intent to do
away with the said limitations or conditions. (Crawford, supra, p.
674). It has also been said that—
an act which purports to set out in full all that it intends to contain,
operates as a repeal of anything omitted which was contained in the old
act and not included in the amendatory act." (People vs. Almuete, 69
SCRA 410; People vs. Adillo, 68 SCRA 90) (Ministry of Justice, Op. No.
16, s. 1985).
Having concluded that under B.P. Blg. 232 the collection

and application or use of tuition and other school fees are
subject only to the limitations under the rules and
regulations issued by the Ministry, the crucial point now
shifts to the said implementing rules.
The guidelines and regulations on tuition and other
school fees issued after the enactment of B.P. Blg. 232
consistently permit the charging of allowances and other
benefits against the 60% incremental proceeds. Such was
the tenor in the MECS Order No. 23, s. 1983; MECS Order
No. 15, s. 1984; MECS Order No. 25, s. 1985; MECS Order
No. 22, s. 1986; and DECS Order No. 37, s. 1987. The
pertinent portion of the latest order reads thus:
In any case of increase at least sixty percent (60%) of the

incremental proceeds should be allocated for increases in or
provisions for salaries or wages, allowances and fringe benefits of

faculty and other staff, including accruals to cost of living
allowance, 13th month
664

pay, social security, medicare and retirement contribution and

increases as may be provided in mandated wage orders, collective
bargaining agreements or voluntary employer practices.
The validity of these orders, particularly MECS Order No.

25, s. 1985, is attacked on the ground that the additional
burdens charged against "... the 60% of the proceeds of the
increases in tuition fees constitute both as [sic] an excess of
statutory authority and as (sic) a substantial impairment
of the accrued, existing and protected rights and benefits
of the members of faculty and non-academic personnel of
private schools." [Memorandum for Petitioners; Rollo, p.
191]. Petitioners allege that these additional burdens
under the MECS Order are not provided in the law itself,
either in section 42 of B.P. Blg. 232 or section 3(a) of Pres.
Dec. No. 451, except increases in salaries in the latter
provision.
Section 42 of B.P. Blg. 232 grants to the Minister of
Education (now Secretary of Education) rule-making
authority to fill in the details on the application or use of
tuition fees and other school charges. In the same vein is
section 70 of the same law which states:
SEC. 70. Rule-making Authority.—The Minister of Education,

Culture and Sports charged with the administration and
enforcement of this Act, shall promulgate the necessary
implementing rules and regulations.
Contrary to the petitioners' insistence that the questioned

rules and regulations contravene the statutory authority
granted to the Minister of Education, this Court finds that
there was a valid exercise of rule-making authority.
The statutory grant of rule-making power to
administrative agencies like the Secretary of Education is
a valid exception to the rule on non-delegation of
legislative power provided two conditions concur, namely:
1) the statute is complete in itself, setting forth the policy
to be executed by the agency, and 2) said statute fixes a
standard to which the latter must conform [Vigan Electric
Light Co., Inc. v. Public Service Commission, G.R. No. L-
19850, January 30, 1964, and Pelaez v. Auditor General,

G.R. No. L-23825, December 24, 1965].
665
VOL. 156, DECEMBER 18, 1987 665

The Education Act of 1982 is "an act providing for the

establishment and maintenance of an integrated system for
education'' with the f ollowing basic policy:
It is the policy of the State to establish and maintain a complete,

adequate and integrated system of education relevant to the goals
of national development. Toward this end, the government shall
ensure, within the context of a free and democratic system,
maximum contribution of the educational system to the
attainment of the following national development goals:
1. To achieve and maintain an accelerating rate of economic

development and social progress;
2. To assure the maximum participation of all the people in
the attainment and enjoyment of the benefits of such
growth; and
3. To achieve and strengthen national unity and
consciousness and preserve, develop and promote
desirable cultural, moral and spiritual values in a
changing world.
The State shall promote the right of every individual to

relevant quality education, regardless of sex, age, creed, socio-
economic status, physical and mental conditions, racial or ethnic
origin, political or other affiliation. The State shall therefore
promote and maintain equality of access to education as well as
the enjoyment of the benefits of education by all its citizens.
The State shall promote the right of the nation's cultural
communities in the exercise of their right to develop themselves
within the context of their cultures, customs, traditions, interests
and belief, and recognizes education as an instrument for their
maximum participation in national development and in ensuring
their involvement in achieving national unity. (Section 3,
Declaration of Basic Policy).
With the foregoing basic policy as well as specific policies

clearly set forth in its various provisions, the Act is
complete in itself and does not leave any part of the policy-
making, a strictly legislative function, to any
administrative agency.
Coming now to the presence or absence of standards to

guide the Minister of Education in the exercise of rule-
making power, the pronouncement in Edu v. Ericta [G.R.
No. L-32096, October 24, 1970, 35 SCRA 481, 497] is
relevant:
The standard may be either expressed or implied. If the former,
666

the non-delegation objection is easily met. The standard though

does not have to be spelled out specifically. It could be implied
from the policy and purpose of the act considered as a whole. In
the Reflector Law, clearly the legislative objective is public safety.
What is sought to be attained as in Calalang v. Williams is "safe
transit upon the roads." (Italics supplied).
Thus, in the recent case of Tablarin, et al v. Hon.

Gutierrez, et al, {G.R. No. 78164, July 31, 1987], the Court
held that the necessary standards are set forth in Section 1
of the 1959 Medical Act, i.e., "the standardization and
regulation of medical education" as well as in other
provisions of the Act. Similarly, the standards to be
complied with by Minister of Education in this case may be
found in the various policies set forth in the Education Act
of 1982.
MECS Order No. 25, s. 1985 touches upon the economic
relationship between some members and elements of the
educational community, i.e., the private schools and their
faculty and support staff. In prescribing the minimum
percentage of tuition fee increments to be applied to the
salaries, allowances and fringe benefits of the faculty and
support staff, the Act affects the economic status and the
living and working conditions of school personnel, as well
as the funding of the private schools.
The policies and objectives on the welfare and interests
of the various members of the educational community are
found in section 5 of B.P. Blg. 232. which states:
SEC. 5. Declaration of Policy and Objectives.—It is likewise

declared government policy to foster, at all times, a spirit of
shared purposes and cooperation among the members and
elements of the educational community, and between the
community and other sectors of society, in the realization that
only in such an atmosphere can the true goals and objectives of
education be fulfilled.
Moreover, the State shall:
1. Aid and support the natural right and duty of parents in

the rearing of the youth through the educational system.
2. Promote and safeguard the welfare and interests of the
students by defining their rights and obligations,
according them privileges, and encouraging the
establishment of sound relationships between them and
the other members of the school community
667
VOL. 156, DECEMBER 18, 1987 667

3. Promote the social and economic status of all school

personnel, uphold their rights, define their
obligations, and improve their living and working
conditions and career prospects.
4. Extend support to promote the viability of those
institutions through which parents, students and
school personnel seek to attain their educational
goals.
On the other hand, the policy on the funding of schools in

general, are laid down in section 33:
SEC. 33. Declaration of Policy—It is hereby declared to be a

policy of the State that the national government shall contribute
to the financial support of educational programs pursuant to the
goals of education as declared in the Constitution. Towards this
end, the government shall:
1. Adopt measures to broaden access to education through

financial assistance and other forms of incentives to
schools, teachers, pupils and students; and
2. Encourage and stimulate private support to education
through, inter alia, fiscal and other assistance measures.
Given the abovementioned policies and objectives, there are

sufficient standards to guide the Minister of Education in
promulgating rules and regulations to implement the
provisions of the Education Act of 1982. As in the Ericta
and Tablarin cases, there is sufficient compliance with the
requirements of the non-delegation principle.
THIRD SUB-ISSUE
C. Whether or not schools and their employees may

enter into a collective bargaining agreement
allocating more than 60% of said incremental
proceeds for salary increases and other benefits of
said employees.
1. Arguments raised in the Biscocho and Valmonte cases

Assailed by the petitioners in the Biscocho and the
Valmonte cases is the Order of the respondent Minister of
Labor directing the execution of a CBA A between the
school and the respondent Espiritu Santo Parochial School
Faculty
668

Association which provides for an economic package

equivalent to 90% of the proceeds of tuition fee increases
for school year 1985-1986, another 90% for school year
1986-1987 and 85% for school year 1987-1988. Pursuant to
said Order, petitioners in the Biscocho case allege that the
parties had agreed to incorporate in their CBA a provision
which allocates one-half (1/2) of the 90% portion of the
proceeds or 45% to increases in the monthly basic salaries
and the other one-half (1/2) or 45% to increases in monthly
living allowance.
The petitioners in the two cases seek the nullification of
the MOLE Order for exactly opposite reasons. In the
Biscocho case, the controversy springs from what
petitioners perceive to be a diminution of the benefits to be
received by the school employees insofar as the CBA
allocates only 45% for salary increases instead of 60%,
which petitioners claim to be the portion set aside by Pres.
Dec. No. 451 for that purpose. Parenthetically, the case
questions the allocation of the remaining 45% of the 90%
economic package under the CBA, to allowances. Stripped
down to its essentials, the question is whether or not the
90% portion of the proceeds of tuition fee increases alloted
for the economic package may be allocated for both salary
increases and allowances.
On the other hand, petitioners in the Valmonte case
believe that the MOLE cannot order the execution of a
CBA which would allocate more than 60% of the proceeds
of tuition fee increases for salary increases of school
employees. Furthermore, petitioners question the authority
of the then Minister of Labor and Employment to issue the

aforequoted Order insofar as this allocates the tuition fee
increases of the respondent private school. According to
them, only the Minister of Education, Culture and Sports
has the authority to promulgate rules and regulations on
the use of tuition fees and increases thereto, pursuant to
the provisions of B.P. Blg. 232. They further argue that the
assailed Order collides with the provisions of Pres. Dec.
No. 451 insofar as it allocates 90% of the tuition fee
increases for salary adjustments of the members of the
bargaining unit which exceeds the 60% of the said
increases allocated by the Decree f or the same purpose.
Before delving further into the questions raised, this
Court
669
VOL. 156, DECEMBER 18, 1987 669

notes that in the Valmonte case, respondent Minister and

respondent Faculty Association raise a procedural objection
to the filing of the Petition: the standing of the petitioners
to bring this suit. Both respondents decry the petitioners'
lack of the interest required in Rule 65 of the Rules of
Court for the filing of the Petition for Certiorari and
Prohibition, since the latter do not appear to be in any way
aggrieved by the enforcement of the Order. Petitioners-
parents did not even participate in the proceedings below
which led to the issuance of the assailed Order.
This Court finds merit in the respondents' objection.
Under Rule 65 of the Rules of Court (Secs. 1 and 2), only a
person aggrieved by the act or proceeding in question may
file a petition for certiorari and/or prohibition. The
Valmonte petition fails to indicate how the petitioners
would be aggrieved by the assailed Order. It appears that
the petitioners are not parties and never at any time
intervened in the conciliation conferences and arbitration
proceedings before the respondent Minister. The parties
therein, who stand to be directly affected by the Order of
the respondent Minister, do not contest the validity of said
Order. The petition does not even state that petitioners act
as representative of the parents' association in the School
or in behalf of other parents similarly situated.
If indeed, petitioners Valmonte and Badiola are
aggrieved by the said Order, they should have intervened
and moved for a reconsideration of respondent Minister's
Order before filing the instant petition. Petitioners failed to
show that the case falls under any one of the recognized
exceptions to the rule that a motion for reconsideration
should first be availed of bef ore f iling a petition f or
certiorari and prohibition.
In view of the foregoing, the resolution of the third sub-
issue will be based mainly on the arguments raised in the
Biscocho case.
RESOLUTION OF THE THIRD SUB-ISSUE
The Biscocho case involves the issue on the allocation of

the incremental proceeds of the tuition fee increases
applied for by the respondent Espiritu Santo Parochial
School for school
670

years 1985-1986, 1986-1987, and 1987-1988. With the

repeal of Pres. Dec. No. 451 by B.P. Blg. 232, the allocation
of the proceeds of any authorized tuition fee increase must
be governed by specific rules and regulations issued by the
Minister (now Secretary) of Education pursuant to his
broadened rulemaking authority under section 42 of the
new law. Thus, insofar as the proceeds of the authorized
tuition fee increases for school year 1985-1986 are
concerned, the allocation must conform with the pertinent
section of MECS Order No. 25, s. 1985, to wit:
7. Application or Use of Tuition and Other School Fees or

Charges.
x x x
7.4 Not less than sixty (60) percent of the incremental tuition
proceeds shall be used for salaries or wages, allowances and
fringe benefits of faculty and support staff, including cost of
living allowance, imputed costs of contributed services, thirteenth
(13th) month pay, retirement fund contributions, social security,
medicare, unpaid school personnel claims, and payments as may
be prescribed by mandated wage orders, collective bargaining
agreements and voluntary employer practices: Provided, That
increases in fees specifically authorized for the purposes listed in
paragraph 4.3.3 hereof shall be used entirely for those purposes.
x x x
With regard to the proceeds of the tuition fee increases for

school year 1986-1987, the applicable rules are those
embodied in MECS Order No. 22, s. 1986 which made
reference to MECS Order No. 25, s. 1985, the pertinent
portion of which is quoted above.
Finally, as to the proceeds of the tuition fee increases for
school year 1987-1988, DECS Order No. 37, s. 1987 must
apply:
c. Allocation of Incremental Proceeds
(1) In any case of increase at least sixty percent (60%)

of the incremental proceeds should be allocated for
increases in or provisions for salaries or wages,
allowances and fringe benefits of faculty and
671
VOL. 156, DECEMBER 18, 1987 671

other staff, including accruals to cost of living

allowance, 13th month pay, social security,
medicare and retirement contributions and
increases as may be provided in mandated wage
orders, collective bargaining agreements or
voluntary employer practices.
(2) Provided, that in all cases of increase the allocation
of the incremental proceeds shall be without
prejudice to the Supreme Court cases on the
interpretation and applicability of existing
legislations on tuition and other fees especially on
the allocation and use of any incremental proceeds
of tuition and other fees increases. (Italics supplied).
x x x
Based on the aforequoted MECS and DECS rules and

regulations which implement BP Blg. 232, the 60% portion
of the proceeds of tuition fee increases may now be allotted
for both salaries and allowances and other benefits. The
60% figure is, however, a minimum which means that
schools and their employees may agree on a larger portion,
or in this case, as much as 90% for salaries and allowances
and other benefits. This is not in anyway to allow
diminution or loss of the portion allotted for institutional
development of the school concerned. Thus, paragraph 7.5
of MECS Order No. 25, series of 1985 specifically provides
that other student fees and charges like registration,

library, laboratory or athletic fees shall be used exclusively
for the purposes indicated.
III. RESOLUTION OF THE SPECIFIC ISSUES
CEBU INSTITUTE OF TECHNOLOGY CASE

Petitioner assigns three other errors in the petition for
certiorari:
RESPONDENT MINISTER OF THE MINISTRY OF

LABOR AND EMPLOYMENT COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO A DENIAL
OF DUE PROCESS OF LAW IN DIRECTLY ISSUING
THE ORDER DATED SEPTEMBER 29, 1981 WITHOUT
CONDUCTING A FORMAL INVESTIGATION ATION
AND ARBITRATION PROCEEDINGS.
672

PUBLIC RESPONDENT ERRED IN NOT DECLARING

THAT PETITIONER IS EXEMPTED AND/OR NOT
OBLIGED TO PAY SERVICE INCENTIVE LEAVE.
PUBLIC RESPONDENT ERRED IN NOT DECLARING

THAT PRIVATE RESPONDENTS' CLAIMS FOR COLA
AND SERVICE INCENTIVE LEAVE ARE FULLY
BARRED BY LACHES AND/OR EXTINGUISHED BY
PRESCRIPTION.
1. Petitioner assails the Order of the Minister of

Labor on the ground that the same was issued
without the benefit of a hearing and was merely
based on the report of the labormanagement
committee which is allegedly without power to pass
upon the issues raised. On this premise, petitioner
claims that it was denied its right to due process.
Petitioner's contention is without merit. The

LaborManagement Committee was empowered to
investigate the complaint against the petitioner for non-
payment of the cost of living allowance, 13th month pay
and service incentive leave from 1974-1981 [Annex "F";
Rollo, p. 37]. In the committee, petitioner was represented
by its counsel, registrar and assistant accountant and in
the conferences that were held, the representatives of the
petitioner were present. Furthermore, the petitioner's
position paper submitted to the committee reflects that in
all the deliberations, it was never denied the right to
present evidence and be heard on all the issues raised,
particularly to demonstrate that it had complied with the
various COLA, 13th month pay and service incentive leave
decrees. The evidence presented during the conferences
and the position paper of the parties were made the basis
of the committee's report and recommendation which in
turn became the basis of the order of the Minister of Labor
directing the petitioner to pay the complainants their
COLA and service incentive leave benefits.
It could not therefore be contended that the petitioner
was deprived of his right to be heard when it appears on
the record
673
VOL. 156, DECEMBER 18, 1987 673

that it was permitted to ventilate its side of the issues.

There was sufficient compliance with the requirements of
due process. In the face of the well-settled principle that
administrative agencies are not strictly bound by the
technical rules of procedure, this Court dismisses the
petitioner's claim that formal investigative and arbitration
proceedings should be conducted. "While a day in court is a
matter of right in judicial proceedings, in administrative
proceedings it is otherwise since they rest upon different
principles." [Cornejo v. Gabriel and Provincial Board of
Rizal, 41 Phil. 188 (1920); Tajonera v. Lamaroza, G.R. Nos.
L-48907 and L-49035, December 19,1981,110 SCRA 438].
2. Going now to the matter of service incentive leave

benefits, petitioner claims that private respondents
are engaged by the school on a contract basis as
shown by the individual teachers contract which
defines the nature, scope and period of their
employment; hence, they are not entitled to the said
benefit according to Rule V of the Implementing

Rules and Regulations of the Labor Code to wit:
SEC. 1. Coverage.—This rule [on Service Incentive Leave] shall

apply to all employees, except:
x x x
(d) Field personnel and other employees whose performance

is unsupervised by the employer including those who are
engaged on task or contract basis, purely commission
basis, or those who are paid in a fixed amount for
performing work irrespective of the time consumed in the
performance thereof; (MOLE Rules and Regulations, Rule
V, Book III).
The phrase "those who are engaged on task or contract

basis" should however, be related with "field personnel,"
applying the rule on ejusdem generis that general and
unlimited terms are restrained and limited by the
particular terms that they follow, [Vera v. Cuevas, G.R. No.
L-33693, May 31, 1979, 90 SCRA 379]. Clearly, petitioner's
teaching personnel cannot be deemed field personnel which
refers "to non-agricultural employees who regularly
perform their duties away from the principal place of
business or branch office of the employer and whose actual
hours of work in the field cannot be determined
674

with reasonable certainty. [Par. 3, Article 82, Labor Code

of the Philippines]. Petitioner's claim that private
respondents are not entitled to the service incentive leave
benefit cannot therefore be sustained.
3. As a last ditch effort to bar private respondents'

claims, petitioner asserts that the same are barred
by laches and/or extinguished by prescription
according to Article 291 of the Labor Code which
provides:
Art. 291. Money claims.—All money claims arising from employer-

employee relations accruing during the effectivity of this Code
shall be filed within three (3) years from the time the cause of
action accrued; otherwise, they shall be forever barred.
x x x
All money claims accruing prior to the effectivity of this Code

shall be filed with the appropriate entities established under this
Code within one (1) year from the date of effectivity, and shall be
processed or determined in accordance with implementing rules
and regulations of the Code; otherwise, they shall be forever
barred.
Considering that the complaint alleging non-payment of

benefits was filed only on February 11, 1981, petitioner
argues that prescription has already set in.
From the aforequoted provision, it is not fully accurate
to conclude that the entire claims for COLA and service
incentive leave are no longer recoverable. This Court finds
no reason to disturb the following pronouncement of the
Minister of Labor:
x x x
Simply stated, claims for COLA under P.D. 525, which took
effect on August 1, 1974, for the months of August,
September and October 1974 must be filed within one (1)
year from November 1, 1974, otherwise they shall be
considered prescribed; claims under the same decree that
accrued on or after November 1,1974 should be initiated
within three (3) years from the date of accrual thereof,
otherwise the same shall be deemed extinguished.
Although this particular claim was filed on February 11,
1981, petitioners herein are entitled to COLA under P.D.
525 from February 1978 up to the present since the COLA
that accrued in February 1978 has not yet prescribed at the
time that the claim was filed in February 1981. In the same
vein, petitioners herein should be granted COLA under
P.D. 1123 from
675
VOL. 156, DECEMBER 18, 1987 675

February 1978 up to 1981 inasmuch as said decree became

effective only on May 11, 1977. Further, petitioners are
entitled to the full amount of COLA provided under P.D.'s
1614, 1634, 1678 and 1713. It must be pointed out that the
earliest of the just cited four (4) decrees, i.e., P.D. 1614,
just took effect on April 1, 1979. Thus, the prescriptive
period under Art. 292 of the Labor Code, as amended, does
not as yet apply to money claims under the just mentioned

decrees.
DIVINE WORD COLLEGE CASE

In assailing the disputed Order, petitioner contends that
the public respondents acted with grave and patent abuse
of discretion amounting to lack of jurisdiction in that:
1. The Regional Director has no jurisdiction over

money claims arising f from employer-employee
relationship; and
2. The Regional Director and Deputy Minister of
Labor adopted the report of the Labor Standards
Division without affording the petitioner the
opportunity to be heard.
1. Petitioner school claims that the case at bar is a

money claim and should therefore be within the
original and exclusive jurisdiction of the Labor
Arbiter pursuant to article 217 of the Labor Code,
as amended.
It appears from the record, however, that the original

complaint filed by ten (10) faculty members of the Divine
Word College was for non-compliance with Pres. Dec. No.
451 and with Labor Code provisions on service incentive
leave, holiday and rest day pay and which complaint
specifically prayed that an inspection of the College be
conducted.
Contrary to the petitioner's protestation of lack of
jurisdiction, the Secretary of Labor or his duly authorized
representatives (which includes Regional Directors) are
accorded the power to investigate complaints for non-
compliance with labor laws, particularly those which deal
with labor standards such as payment of wages and other
forms of compensation, working hours, industrial safety,
etc.. This is provided for in article 128 of the Labor Code,
as amended:
676

Art. 128. Visitorial and enforcement power.—
(a) The Secretary of Labor or his duly authorized

representatives, including labor regulation officers, shall
have access to employers' records and premises at any

time of the day or night, whenever work is being
undertaken therein, and the right to copy therefrom, to
question any employee and investigate any fact, condition
or matter which may be necessary to determine violations
or which may aid in the enforcement of this Code and of
any labor law, wage order or rules and regulations issued
pursuant thereto.
(b) The Secretary of Labor or his duly authorized
representatives shall have the power to order and
administer, after due notice and hearing, compliance with
the labor standards provisions of this Code based on the
findings of labor regulation officers or industrial safety
engineers made in the course of inspection, and to issue
writs of execution to the appropriate authority for the
enforcement of their order, except in cases where the
employer contests the findings of the labor regulations
officer and raises issues which cannot be resolved without
considering evidentiary matters that are not verifiable in
the normal course of inspection. (Italics supplied).
Furthermore, Policy Instruction No. 6 which deals with the

distribution of jurisdiction over labor cases restates inter
alia that "(L)abor standards cases arising from violation of
labor standards laws discovered in the course of inspection
or complaints where employer-employee relations still
exist" are under the exclusive original jurisdiction of the
Regional Director.
Even assuming that respondent Regional Director was
without jurisdiction to entertain the case at bar, petitioner
is now barred at this stage to claim lack of jurisdiction
having actively participated in the proceedings below.
Petitioner never questioned the jurisdiction of the
respondent Regional Director.
2. The petitioner claims that it was never afforded the

opportunity to be heard and was therefore denied
due process.
There is no dispute that an inspection of the College was

conducted after a complaint by some faculty members was
filed with the Regional Office of the Ministry of Labor and
Employment. A report was submitted on the basis of the
findings contained therein. Petitioner was furnished a copy
of said
677
VOL. 156, DECEMBER 18, 1987 677

report to which it filed a comment. Finding this to be

without merit, the Regional Director issued an order giving
petitioner ten (10) days to manifest its compliance with the
findings, otherwise, another would be issued to enforce
payment. Petitioner appealed but instead of resolving the
memorandum of appeal, which the Regional Director
treated as a motion for reconsideration, said Director
issued another Order dated August 2, 1983 directing the
payment of the employees' share in the sixty (60%) percent
incremental proceeds. Petitioner moved for a
reconsideration of the latest order which the Regional
Director, however, denied, thereby elevating the case to the
Office of the Minister of Labor and Employment.
The foregoing facts demonstrate that petitioner had the
opportunity to refute the report on the inspection
conducted. It submitted a comment thereto, which was in
effect its position paper. The arguments therein and
evidence attached thereto were considered by respondent
Regional Director in the order issued subsequently. They,
therefore, had ample opportunity to present their side of
the controversy.
What due process contemplates is not merely the
existence of an actual hearing. The "right to be heard"
focuses more on the substance rather than the form. In the
case at bar, petitioner was actually heard through the
pleadings that it filed with the Regional Office V. As it
itself admitted in its petition that it was afforded the right
to be heard on appeal [See Rollo, p. 58], petitioner cannot
therefore insist that it was denied due process.
FAR EASTERN UNIVERSITY CASE
Two other issues are raised in this petition, to wit:

WHETHER OR NOT 'TRANSPORTATION ALLOWANCE'
SHOULD BE CONSIDERED AS 'EQUIVALENT' TO
13THMONTH PAY UNDER PRES. DEC. NO. 851.
WHETHER OR NOT LEGAL-HOLIDAY PAY BENEFIT

COULD
678

BE VALIDLY WITHDRAWN AFTER BEING PRACTICED

CONTINUOUSLY FOR EIGHT (8) MONTHS.
1. The issue on the thirteenth (13th) month pay

involves an interpretation of the provisions of Pres.
Dec. No. 851 which requires all employers "to pay
all their employees receiving a basic salary of not
more than P 1,000 a month, regardless of the
nature of the employment, a 13th-month pay" (Sec.
1). However, "employer[s] already paying their
employees a 13thmonth pay or its equivalent are
not covered" (Sec. 2). (Italics supplied)
The Rules and Regulations Implementing Pres. Dec. No.

851 provide the following:
SEC. 3. Employees—The Decree shall apply to all employers

except to:
x x x
c) Employers already paying their employees 13th-month or

more in a calendar year or its equivalent at the time of
this issuance;
x x x
The term "its equivalent" as used in paragraph (c) hereof shall

include Christmas bonus, mid-year bonus, profit-sharing
payments and other cash bonuses amounting to not less than
1/12th of the basic salary but shall not include cash and stock
dividends, cost of living allowances and all other allowances
regularly enjoyed by the employer, as well as non-monetary
benefits. Where an employer pays less than 1/12th of the
employees basic salary, the employer shall pay the difference.
In the case at bar, the 13th month pay is paid in the

following manner:
FOR REGULAR EMPLOYEES:
Transportation Allowance (TA)
50% of basic for the first year of service plus additional 5%

every year thereafter but not to exceed 100% of basic
salary
Christmas Bonus (CB)
50% of basic salary for the first year of service plus

additional
679
VOL. 156, DECEMBER 18, 1987 679

5% every year thereafter but not to exceed 100% of basic

salary.
For employees who have served the University for more
than 10 years, the University pays them emoluments
equivalent to the 14 months salaries.
13th Month Pay Formula:
Monthly Rate x No. of

months served for the year
__________________Less TA/CB = 13th Mo. pay
12 months
FOR CASU AL EMPLOYEES:
13th Month Pay Formula:
Add salaries from 16 December of previous year to 15th

December of present year [and] divide by 12 months = 13th Mo.
Pay (Rollo, pp. 60, 72).
The University's answer to the Union's claim of

underpayment of the 13th month pay is that the
"transportation allowance" paid to its employees partakes
the nature of a midyear bonus which under section 2 of
Pres. Dec. No. 851 and section 3(c) of the Implementing
Rules and Regulations is equivalent to the 13th month pay.
The Labor Arbiter ordered FEU to pay the 13th month
pay differentials of the complainants reasoning that:
CLEARLY, transportation allowance cannot be considered as

"equivalent" of 13th month pay as it is neither a Christmas
bonus, midyear bonus, profit sharing payment, or other cash
bonuses, pursuant to paragraphs (c) and (e), Section 3 of PD 851.
The regularity of its payment further cements this proposition.
PERFORCE, complainants are underpaid of their 13th month
pay in an amount equivalent to 50% of their basic salary for the
1st year of service, plus additional 5% every year thereafter but
not to exceed 100% of their basic salary which, per respondent's
formula, corresponds to their transportation allowance. (Rollo, p.

61).
On appeal, the Third Division of the National Labor

Relations Commission reversed the Labor Arbiter's ruling
by dismissing the complainant's claim for underpayment of
the
680

13th month pay for lack of merit. The NLRC ruled that:
From the above findings and conclusion, it is clear that insofar as

employees with ten (10) years of service or more are concerned,
they receive the equivalent of one (1) month pay for Christmas
bonus and another one (1) month pay as transportation allowance
or a total of fourteen (14) months salary in a year. Obviously, this
group of employees are fully paid of their 13th month pay and are
not therefore subject to the instant claim. As it is only those with
less than ten (10) years of service are included or encompassed by
the Labor Arbiter's resolution on this particular issue. With this
clarification, we shall now proceed to discuss the crux of the
controversy, that is, the determination of whether or not the so
designated "transportation allowance" being paid to the
employees should be considered among those deemed equivalent
to 13th month pay. As adverted earlier, the Labor Arbiter opined
that it cannot be so considered as the equivalent of 13th month
pay.
x x x
In passing upon the issue, we deemed it best to delve deeper

into the nature and intendment of the transportation allowances
as designated by both the complainants and the respondent.
Complainants claim that the transportation allowance they enjoy
has always been called and termed allowance and never as bonus
since the time the same was given to them. They assert that it
simply was intended as an allowance and not a bonus. It would
appear however that complainants do not dispute respondent's
stand that transportation allowance is being paid only every
March of each year as distinguished from other allowances that
are being paid on a monthly basis or on a bi-monthly basis; that
the amount of transportation allowance to be paid is dependent
on the length of service of the employee concerned (i.e. 50% basic
in the first year and additional 5% for each succeeding years, etc.);
that the said method of computing the amount of the
transportation allowance to be paid the complainants is identical

to that used in determining Christmas bonus (respondent's
exhibit 8) that the reason behind said transportation allowance is
to financially assist employees in meeting their tax obligations as
the same become due on or about the month of March of each
year.
x x x
We are inclined to believe and so hold that by the manner by

which said transportation allowance is being paid (only once a
year) as well as the method in determining the amount to be paid
(similar
681
VOL. 156, DECEMBER 18, 1987 681

to Christmas bonus) and considering further the reason behind

said payment (easing the burden of taxpayer-employee), the said
transportation allowance given out by respondent while
designating as such, partakes the nature of a mid-year bonus. It
bears to note in passing that in providing for transportation
allowance, respondent was not compelled by law nor by the CBA
(Annex "A" of respondent's Appeal) as nowhere in the CBA nor in
the Labor Code can be found any provision on transportation
allowance. It was therefore a benefit that stemmed out purely
from the voluntary act and generosity of the respondent FEU.
Moreover, said transportation allowance is only being paid once a
year. On the other hand, regular allowances not considered as
13th month pay equivalent under P.D. 851, to our mind, refer to
those paid on regular intervals and catering for specific
employees' needs and requirements that recur on a regular basis.
Verily, if the intendment behind the disputed transportation
allowance is to answer for the daily recurring transportation
expenses of the employees, the same should have been paid to
employees on regular periodic intervals. All indications, as we see
it, point out to conclusion that the disputed transportation
allowance, while dominated as such apparently for lack of better
term, is in fact a form of bonus doled out by the respondent
during the month of March every year.
Hence, we hold that it is one of those that can very well be
considered as equivalent to the 13th month pay (Rollo, pp. 73, 74,
75, 76).
This Court sustains the aforequoted view of public

respondent. The benefit herein designated as
"transportation allowance" is a form of bonus equivalent to
the 13th month pay. Nevertheless, where this does not

amount to 1/12 of the employees basic salary, the employer
shall pay the dif ference.
The evident intention of the law was to grant an
additional income in the form of a 13th month pay to
employees not already receiving the same. This Court ruled
in National Federation of Sugar Workers (NFSW) v.
Ovejera: [G.R. No. 59743, May 31, 1982, 114 SCRA 354].
Otherwise put, the intention was to grant some relief—not to all

workers—but only to the unfortunate ones not actually paid a
13th month salary or what amounts to it, by whatever name
called: but it was not envisioned that a double burden would be
imposed on the employer already paying his employees a 13th
month pay or its equivalent—whether out of pure generosity or
on the basis of a bind
682

ing agreement and, in the latter case, regardless of the

conditional character of the grant (such as making the payment
dependent on profit), so long as there is actual payment.
Otherwise, what was conceived to be a 13th month salary would
in effect become a 14th or possibly 15th month pay.
x x x
Pragmatic considerations also weigh heavily in favor of

crediting both voluntary and contractual bonuses for the purpose
of determining liability for the 13th month pay. To require
employers (already giving their employees a 13th month salary or
its equivalent) to give a second 13th month pay would be unfair
and productive of undesirable results. To the employer who had
acceded and is already bound to give bonuses to his employees,
the additional burden of a 13th month pay would amount to a
penalty for his munificence or liberality. The probable reaction of
one so circumstanced would be to withdraw the bonuses or resist
further voluntary grants for fear that if and when a law is passed
giving the same benefits, his prior concessions might not be given
due credit; and this negative attitude would have an adverse
impact on the employees (pp. 369, 370).
The case of Dole Philippines, Inc. v. Leogardo [G.R. No.

60018, October 23, 1982, 117 SCRA 938 (1982)], citing the
ruling in the above case also pointed out that:
To hold otherwise would be to impose an unreasonable and undue

burden upon those employers who had demonstrated their
sensitivity and concern for the welfare of their employees. A
contrary stance would indeed create an absurd situation whereby
an employer who started giving his employees the 13th month
pay only because of the unmistakable force of the law would be in
a far better position than another who, by his own magnanimity
or by mutual agreement, had long been extending his employees
the benefits contemplated under PD No. 851, by whatever
nomenclature these benefits have come to be known. Indeed, PD
No. 851, a legislation benevolent in its purpose, never intended to
bring about such oppressive situation. (p. 944)
2. Presidential Decree No. 570-A was issued on

November 1, 1974 amending certain articles of
Presidential Decree No. 442 (Labor Code of the
Philippines promulgated on May 1, 1974 which took
effect six months thereafter). Section 28 thereof
provides that:
683
VOL. 156, DECEMBER 18, 1987 683

Section 28. A new provision is hereby substituted in lieu of the

original provision of Article 258 of the same Code to read as
follows:
Art. 258. Right to holiday pay—
(a) Every worker shall be paid his regular holidays, except in

retail and service establishments regularly employing less
than ten (10) workers;
(b) The term 'holiday' as used in this Chapter, shall include:
New Year's day, Maundy Thursday, Good Friday, the
ninth of April, the first of May, the twelfth of June, the
fourth of July, the thirtieth of November, the twenty fifth
and thirtieth of December and the day designated by law f
or holding a general election.
(c) When employer may require work on holidays. The
employer may require an employee to work on any holiday
but such employee shall be paid a compensation
equivalent twice his regular rate.
Presidential Decree No. 850 issued on December 16, 1975

also amending certain articles of Pres. Dec. No. 442
adopted the aforequoted provision. Two months later, on
February 16, 1976, the Rules and Regulations
Implementing the Labor Code, as amended, was released

the pertinent portion of which states that:
Section 2. Status of employees paid by the month—Employees who

are uniformly paid by the month, irrespective of the number of
working days therein, with a salary of not less than the statutory
or established minimum wage shall be presumed to be paid for all
days in the month whether worked or not.
For this purpose, the monthly minimum wage shall not be less
than the statutory minimum wage multiplied by 365 days divided
by twelve.
Section 3. Holiday Pay—Every employer shall pay his
employees their regular daily wage for any unworked regular
holiday.
As used in the Rule, the term 'holiday' shall exclusively refer
to: New Year's Day, Maundy Thursday, Good Friday, the ninth of
April, the first of May, the twelfth of June, the fourth of July, the
thirtieth of November, the twenty-fifth and thirtieth of December
and the day designated by law for a general election or national
referendum or plebiscite (MOLE Rules and Reg. Book III, Rule
IV, sec. 2 (1976).
684

After one week, on February 23, 1976, the Minister of

Labor issued Policy Instruction No. 9, to clarify further the
right to holiday pay, thus:
The Rules Implementing PD 850 have clarified the policy in the

implementation of the ten (10) paid legal holidays. Before PD 850,
the number of working days a year in a firm was considered
important in determining entitlement to the benefit. Thus, where
an employee was working for at least 313 days, he was definitely
already paid. If he was working for less than 313, there was no
certainty whether the ten (10) paid legal holidays were already
paid to him or not.
The ten (10) paid legal holidays law, to start with, is intended
to benefit principally daily employees. In the case of monthly,
only those whose monthly salary did not yet include payment for
the ten (10) paid legal holidays are entitled to the benefit.
Under the rules implementing PD 850, this policy has been
fully clarified to eliminate controversies on the entitlement of
monthly paid employees. The new determining rule is this: If the
monthly paid employee is receiving not less than P240, the
maximum monthly minimum wage, and his monthly pay is
uniform from January to December, he is presumed to be already

paid the ten (10) paid legal holidays. However, if deductions are
made from his monthly salary on account of holidays in months
where they occur, then he is entitled to the ten (10) legal holidays.
These new interpretations must be uniformly and consistently
upheld.
This issuance shall take effect immediately.
In the meantime, respondent University paid its employees

holiday pay for the following days:
DATE HOLIDAYS PAID

June 9, 1975 for the previous nine legal holidays
August, 1975 for the previous June 12 and July 4
Jan. 14, 1976 for the previous Nov. 30, Dec. 25 and
30 and Jan. 1
After January 14, 1976, however, the University ceased

paying the holiday pay allegedly by reason of Policy
Instruction No. 9. Specifically, the University claimed that
the monthly salary of its employees was, as of 1976, more
than P240.00
685
VOL. 156, DECEMBER 18, 1987 685

without deductions from their monthly salary on account of

holidays in months where they occurred and that therefore,
by virtue of Policy Instruction No. 9, they were no longer
entitled to the ten paid legal holidays.
Petitioners, upon the other hand, contend that Policy
Instruction No. 9 could not have possibly been the reason
that prompted the University to withdraw such benefits
from its faculty and employees because said implementing
rule was issued only on April 23, 1976 or four months later.
The Labor Arbiter ruled in favor of the complainant
Union for the reason that ". . . the payment of the 10-paid
legal holiday benefits from June 8, 1975 up to January 14,
1976 is considered an employer practice that can no longer
be withdrawn." [Decision; Rollo, p. 59].
As in the case of the 13th month pay, the NLRC
reversed the Labor Arbiter's ruling. The NLRC held that:
Apparently, Arbiter Ruben Aquino concluded that payment by the

respondent of the legal holiday pay preceded the eff ectivity of
the Rules and Regulations Implementing P.D. 850 and which

rules took effect on February 16, 1976. Hence, his conclusion that
the payment of the legal holiday pay stemmed out from company
practice and not from law. Tracing back, however, the payments
made by respondent of said holiday pay will show that, if ever,
the same was made pursuant to P.D. 570-A which took effect on
November 1, 1974. Noteworthy is the undisputed fact that
respondent first paid its employees legal holiday pay in June 1975
corresponding to nine (9) legal holidays. It bears to note that from
the time of the effectivity of P.D. 570-A which was in November
of 1974 up to June of 1975, the time respondent first paid legal
holiday pay for nine (9) legal holidays, there, were indeed more or
less nine legal holidays that transpired to wit: November 30,
1974, December 25, 1974, December 30, 1974, January 1, 1975,
February 27, 1975 (Referendum Day), Maundy Thursday of 1975,
Good Friday of 1975, April 9, 1975 and finally, May 1st of 1975.
We are therefore inclined to lend credence to respondent's claim
that the payment of legal holiday pay was in fact made pursuant
to law, P.D. 570-A in particular, it is not one that arose out of
company practice or policy.
Finding that said payment was made based on an honest
although erroneous interpretation of law, which interpretation
was later on corrected by the issuance (sic) of Policy Instruction
No. 9 and
686

which issuance prompted respondent to withdraw the holiday pay

benefits extended to the employees who were paid on a regular
monthly basis, and finding further that under Policy Instructions
No. 9, said subject employees are deemed paid their holiday pay
as they were paid on a monthly basis at a wage rate presumably
above the statutory minimum, we believe and so hold that the
withdrawal of said holiday pay benefit was valid and justifiable
under the circumstances (Rollo, pp. 33-4).
This Court cannot sustain the foregoing decision of public

respondent. Said decision relied on Section 2, Rule IV, Book
III of the implementing rules and on Policy Instruction No.
9 which were declared by this Court to be null and void in
Insular Bank of Asia and America Employee's Union
(IBAAEU) v. Inciong (G.R. No. 52415, October 23, 1984,
132 SCRA 663]. In disposing of the issue at hand, this
Court reiterates the ruling in that case, to wit:
WE agree with the petitioner's contention that Section 2, Rule IV,

Book III of the implementing rules and Policy Instruction No. 9
issued by the then Secretary of Labor are null and void since in
the guise of clarifying the Labor Code's provision on holiday pay,
they in f act amended them by enlarging the scope of their
exclusion.
x x x
It is elementary in the rules of statutory construction that

when the language of the law is clear and unequivocal the law
must be taken to mean exactly what it says. In the case at bar,
the provisions of the Labor Code on the entitlement to the
benefits of holiday pay are clear and explicit—it provides for both
the coverage of and exclusion from the benefits. In Policy
Instruction No. 9, the then Secretary of Labor went as far as to
categorically state that the benefit is principally intended for
daily paid employees, when the law clearly states that every
worker shall be paid their regular holiday pay. This is a flagrant
violation of the mandatory directive of Article 4 of the Labor
Code, which states that "All doubts in the implementation and
interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor of
labor." Moreover, it shall always be presumed that the legislature
intended to enact a valid and permanent statute which would
have the most beneficial effect that its language permits (Orlosky
vs. Haskell, 155 A. 112). (pp. 673-4).
687
VOL. 156, DECEMBER 18, 1987 687

BISCOCHO CASE
At issue also in this petition is whether the 60%
incremental proceeds may be subjected to attorney's fees,
negotiation fees, agency fees and the like.
The Court notes the fact that there are two classes of
employees among the petitioners: (1) those who are
members s of the bargaining unit and (2) those who are not
members of the bargaining unit. The first class may be
further subdivided into two: those who are members of the
collective bargaining agent and those who are not.
It is clear that the questioned Order of the respondent
Minister applies only to members of the bargaining unit.
The CBA prepared pursuant to said Order, however,
covered employees who are not members of the bargaining
unit, although said CBA had not yet been signed at the
time this petition was filed on November 24, 1986.
Assuming it was signed thereafter, the inclusion of
employees outside the bargaining unit should be nullified
as this does not conform to said order which directed
private respondents to execute a CBA covering only
members of the bargaining unit.
Being outside the coverage of respondent Minister's
order, and thus, not entitled to the economic package
involved therein, employees who are non-members of the
bargaining unit should not be assessed negotiation fees,
attorney's fees, agency fees and the like, for the simple
reason that the resulting collective bargaining agreement
does not apply to them. It should be clear, however, that
while non-members of the bargaining unit are not entitled
to the economic package provided by said order, they are,
in lieu thereof, still entitled to their share in the 60%
incremental proceeds of increases in tuition or other school
fees or charges.
As far as assessment of fees against employees of the
collective bargaining unit who are not members of the
collective bargaining agent is concerned, Article 249 of the
Labor Code, as amended by B.P. Blg. 70, provides the rule:
Art. 249. Unfair labor practices of employers.—
x x x x
688

(e) x x x Employees of an appropriate collective

bargaining unit who are not members of the
recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the dues
and other fees paid by members of the recognized
collective bargaining agent, if such non-union
members accept the benefits under the collective
agreement. . .
Employees of the collective bargaining unit who are not

members of the collective bargaining agent have to pay the
foregoing fees if they accept the benefits under the
collective bargaining agreement and if such fees are not
unreasonable. Petitioners who are members of the
bargaining unit failed to show that the equivalent of ten
(10%) percent of their backwages sought to be deducted is

unreasonable.
WHEREFORE, the Court rules:
CEBU INSTITUTE OF TECHNOLOGY CASE

In G.R. No. 58870, the Order of respondent Minister of
Labor and Employment dated September 29, 1981 is
SUSTAINED insofar as it ordered petitioner Cebu
Institute of Technology to pay its teaching staff the
following:
(1) Cost of living allowance under Pres. Dec. Nos. 525

and 1123 from February 1978 up to 1981;
(2) Cost of living allowance under Pres. Dec. Nos.
1614, 1634, 1678 and 1713; and
(3) Service incentive leave due them from 1978.
The Temporary Restraining Order issued by this Court on

December 7, 1981 is hereby LIFTED and SET ASIDE. No
costs.
DIVINE WORD COLLEGE CASE

The petition in G.R. No. 68345 is DENIED for lack of
merit. The questioned Orders of respondent Deputy
Minister of Labor and Employment, dated December 19,
1983 and July 4, 1984 are SUSTAINED insofar as said
Orders denied the payment of the emergency cost of living
allowances of private
689
VOL. 156, DECEMBER 18, 1987 689

respondents faculty teachers of the Divine Word College of

Legazpi out of the sixty (60%) incremental proceeds of
tuition and other school fee increases collected during the
effectivity of Pres. Dec. No. 451. The Rules and
Regulations implementing Pres. Dec. No. 451 are hereby
declared invalid for being ultra vires. No costs.
FAR E ASTERN UNIVERSITY CASE

The Decision of public respondent National Labor
Relations Commission dated September 18,1984 is
REVERSED insofar as it affirmed in toto the dismissal of
petitioner Far Eastern University Employee Labor Union's
claim under Pres. Dec. No. 451 and its claim for payment
of holiday pay, Private respondent Far Eastern University

is therefore ordered to pay its employees the following:
(1) Their sixty (60) percent share in the increases in

tuition and other school fees or charges which shall
be allocated exclusively for increase in salaries or
wages if the tuition or other school fee increase was
collected during the effectivity of Pres. Dec. No.
451;
(2) Their claim for holiday pay which was withdrawn
since January 14, 1976 up to the present.
The Decision of respondent National Labor Relations

Commission, however, is SUSTAINED insofar as it denied
petitioner's claim for thirteenth (13th) month pay. No costs.
FABROS CASE
In G.R. No. 70832, the Petition for Certiorari and
Prohibition is DISMISSED. MECS Order No. 25. s. 1985,
particularly paragraphs 7.0 to 7.5 thereof, which provide
for the use and application of sixty (60%) percent of the
increases in tuition and other school fees or charges, having
been issued pursuant to B.P. Blg. 232 which repealed Pres.
Dec. No. 451, is hereby declared VALID. The Temporary
Restraining Order issued by this Court dated May 29, 1985
is LIFTED and SET ASIDE. No costs.
690

Cebu Institute of Technology (CIT) us. Ople
BISCOCHO CASE
The assailed portions of the Order of the Minister of Labor
and Employment dated April 14, 1986 are AFFIRMED.
The collective bargaining agreement prepared pursuant
thereto should, however, be MODIFIED to cover only
members of the bargaining unit. Only petitioners who are
members of the collective bargaining unit, if they accept
the benefits under the resulting collective bargaining
agreement, shall be charged ten (10%) percent of the
payable backwages as negotiation fees. The Temporary
Restraining Order dated November 25, 1986 is LIFTED
and SET ASIDE. No costs.
VALMONTE CASE
The petition in G.R. No. 76596 is DISMISSED for lack of

merit.
Effective September 11, 1982, the application and use of
the proceeds from increases in tuition fees and other
schools fees or charges shall be governed by section 42 of
B.P. Blg. 232 as implemented by the Rules and Regulations
issued by the then Ministry, now Department of
Education, Culture and Sports.
SO ORDERED.
Teehankee (C.J.), Yap, Melencio-Herrera, Gutierrez,

Jr., Paras, Feliciano, Gancayco, Bidin and Sarmiento, JJ.,
concur.
Fernan, J., no part. Formerly counsel for Cebu
Institute of Technology.
Narvasa, J., no part. Made public statements in
some of the issues prior to joining the Court.
Cruz, J., no part as this is connected with the UE
case in which I am directly involved.
Padilla, J., no part; respondent school's counsel in
G.R. Nos. 76521 & 76596 is my brother.
Notes.—Mandamus to compel payment of back salary

does not lie, unless right of petition to backpay is well-
defined. (Sales vs. Mathay, 129 SCRA 180.)
691
VOL. 156, DECEMBER 18, 1987 691

Fortuno vs. Palma
Regular professors and teachers are entitled to ECOLA

during the semestral breaks, their "absence" from work not
being of their own will. (University of Pangasinan Faculty
Union us. University of Pangasinan, 127 SCRA 691.)
——o0o——
© Copyright 2018 Central Book Supply, Inc. All rights reserved.

Cebu Institute of Technology vs. Ople

Hochgeladen von

Dokumentinformationen

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Cebu Institute of Technology vs. Ople

Hochgeladen von

Copyright:

Verfügbare Formate

2/20/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 156

VOL. 156, DECEMBER 18, 1987 629

CEBU INSTITUTE OF TECHNOLOGY (CIT),

630 SUPREME COURT REPORTS ANNOTATED

LEONARDO SAGARIO, LETICIA SERRA, SIEGFREDO

CARMELITA LADOT, PANFILO CANETE, EMMANUEL

VOL. 156, DECEMBER 18, 1987 631

MILAGROS CATALAN, JULIETA AQUINDE, SONIA

VITALIANA VENERACION, LEONCIA ABELLAR,

DIVINE WORD COLLEGE OF LEGAZPI, petitioner, vs.

FAR EASTERN UNIVERSITY EMPLOYEES LABOR

GREGORIO T. FABROS, ROGELIO B. DE GUZMAN,

632 SUPREME COURT REPORTS ANNOTATED

JASMIN BISCOCHO, ROWENA MARIANO, AGNES

RICARDO C. VALMONTE and CORAZON BADIOLA,

Constitutional Law; Courts; The function of the Court is

VOL, 156, DECEMBER 18, 1987 633

Cebu Institute of Technology (CIT) vs. Ople

remedial legislation if that be necessary in the premises. But as

meaning of the terms "salaries or wages" to mean the opposite, i.e,

634 SUPREME COURT REPORTS ANNOTATED

Cebu Institute of Technology (CIT) vs. Ople

Same; Same; Same; Same; Same; Implementing rules and

regulations promulgated by the MECS. A closer look at these

VOL. 156, DECEMBER 18, 1987 635

Cebu Institute of Technology (CIT) vs. Ople

apportion the incremental proceeds of the tuition fee increases;

Civil Procedure; Certiorari and/or Prohibition only persons

636 SUPREME COURT REPORTS ANNOTATED

Cebu Institute of Technology (CIT) vs. Ople

dent Minister, do not contest the validity of said Order. The

Labor Law; Employees; Incentive Leave Benefits; Petitioner's

VOL. 156, DECEMBER 18, 1987 637

Cebu Institute of Technohgy (CIT) vs. Ople

Same; Power to Investigate; Secretary of Labor or his duly

never questioned the jurisdiction of the respondent Regional

Six cases involving various private schools, their teachers

638 SUPREME COURT REPORTS ANNOTATED

thereafter, under the Education Act of 1982 (Batas

SEC. 3. Limitations.—The increase in tuition or other school fees

In addition, there is also a need for a pronouncement on the

VOL. 156, DECEMBER 18, 1987 639

benefits of faculty members and other school employees

I. FACTUAL BACKGROUND OF EACH CASE

A. CEBU INSTITUTE OF TECHNOLOGY CASE

This case originated from a Complaint filed with the

640 SUPREME COURT REPORTS ANNOTATED

payment of COLA by way of salary increases is in line

PREMISES CONSIDERED, CIT is hereby ordered to pay its

1) COLA under P.D.'s 525 and 1123 from February 1978 up

Petitioner assails the aforesaid Order in this Special Civil

B. DIVINE WORD COLLEGE OF LEGAZPI CASE

VOL. 156, DECEMBER 18, 1987 641

Legazpi with, among others, Pres. Dec. No. 451, i.e.,

Hundred Sixty Seven Pesos and Seventy Seven Centavos

Coming now to the substantial merit of the case, we share the

In other words, we believe that by paying the complainants'

642 SUPREME COURT REPORTS ANNOTATED

salary or wage increase.

This special civil action of Certiorari and Prohibition with

the Comment thereon of the public respondent and

C. FAR EASTERN UNIVERSITY CASE

VOL. 156, DECEMBER 18, 1987 643

Aquino promulgated a decision the dispositive portion of