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G.R. No. L-58870 December 18, 1987

CEBU INSTITUTE OF TECHNOLOGY (CIT), petitioner,
vs.
HON. BLAS OPLE

FACTS:
A case was filed against CIT by, 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. CIT maintained 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 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. Minister of Labor and Employment issued the assailed Order 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.
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.

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.

ISSUE:
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.

RESOLUTION:

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.

In University of Pangasinan Faculty Union v. University of Pangasinan, supra:

... 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
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provided by law, an increase intended also to help the teachers and other workers tide themselves
and their families over these difficult economic times.

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.