767 Phil. 1
LEONEN, J.:
SECTION 1. All officials and employees of the National Government who have rendered at least four months of service from January 1 to October 31 of each year and who are employed in the government service as of October 31 of the same year shall each receive a Christmas bonus equivalent to one month basic salary and additional cash gift of One thousand pesos (P1,000.00). (Emphasis supplied)Republic Act No. 8441 amended Republic Act No. 6686 and increased the amount of cash gift to P5,000.00. Nonetheless, the clause, "who have rendered at least four months of service from January 1 to October 31 of each year and who are employed in the government service as of October 31 of the same year[,]" was maintained.
5.11 Year-End Bonus (YEB) and Cash Gift (CG)Department of Budget and Management Budget Circular No. 2003-002 dated January 1, 2003 states:General Guidelines
The guidelines on the grant of YEB and CG are provided under DBM Budget Circular No. 2010-1 dated April 28, 2010 which is applicable for FY 2010 and years thereafter.
Documentary Requirements
For Individual ClaimsGeneral Claims
- Clearance from money, property and legal accountabilities
- Certification from head of Office that the employee is qualified to receive the YEB and CG benefits pursuant to DBM Budget Circular No. 2003-2 dated May 9, 2003
- YEB and CG Payroll
- Payroll register (hard and soft copy)
- Letter to the Bank to credit employees account of their YEB and CG claims
- Deposit slips
Department of Budget and Management Budget Circular No. 2010-1 dated April 28, 2010 states that it covers the following:2.0 Coverage
All officials and employees whether permanent, temporary or emergency in nature and contractual personnel whose employment is in the nature of a regular employee, appointive or elective, now existing or hereafter created in all national government agencies, state universities and colleges, government-owned and controlled corporations, government financial institutions and local government units.
. . . .4.0
Pro-rated Share of the Remaining Balance of Cash Gift
4.1 All government personnel who have rendered more than four (4) months of service in a given year before their retirement/separation from the service may receive a proportionate share of the remaining balance of the cash gift in addition to the benefit provided under Item 3 hereof.
3.0 CoverageThese laws and circulars do not provide that retirees are entitled to the grant of the year-end bonus and cash gift pending receipt of their monthly pensions. At most, retirees are entitled to the year-end bonus and cash gift during the year of retirement. Paragraph 6.4 of Department of Budget and Management Budget Circular No. 2010-1 provides:
The following personnel are covered by this Circular:
3.1 Civilian government personnel occupying regular, contractual, or casual positions; appointive or elective; rendering services on full-time or part-time basis; 3.2 Military personnel of the Armed Forces of the Philippines, Department of National Defense; and uniformed personnel of the Philippine National Police, Bureau of Fire Protection, and Bureau of Jail Management and Penology under the Department of the Interior and Local Government; Philippine Coast Guard; and the National Mapping and Resource Information Authority; and 3.3 Barangay officials and employees.
Based on the foregoing, retired justices are not entitled to the annual year-end bonus and cash gift. However, a special law governs the retirement benefits of members of the judiciary.
6.0 Grant of Year-End Bonus (Based on Basic Pay) and Cash Gift . . . . 6.4 Personnel with a total or an aggregate of four (4) months of service, including leaves of absence with pay, and who retires or is separated without cause before October 31 of the year, shall be granted a proportionate share of the remaining half or balance of the Year-End Bonus and Cash Gift based on the following scheme, to be paid within the month of retirement/separation. The basic pay immediately prior to retirement/separation shall be the basis for the remaining half or balance of the Year-End Bonus. (Emphasis supplied)
Month of Retirement/Separation from the Service Percentage of Remaining Half or Balance of the Year-End Bonus and Cash Gift May 15% June 30% July 45% August 60% September 75% October 90%
SEC. 3. Upon retirement a Justice of the Supreme Court or of the Court of Appeals shall be automatically entitled to a lump sum payment of the monthly salary that said Justice was receiving at the time of his retirement for five years, and thereafter upon survival after the expiration of this period of five years, to a further annuity payable monthly during the residue of his natural life equivalent to the amount of the monthly salary he was receiving on the date of his retirement.Republic Act No. 1057[12] amended Republic Act No. 910 and inserted Section 3-A, which provides:
SEC. 2. Republic Act Numbered Nine hundred and ten is hereby further amended by inserting between its sections three and four a new section to be known as section Three-A thereof, and which shall read as follows:Republic Act No. 1797[13] amended Section 3-A of Republic Act No. 910 to read as:
"SEC. 3-A. In case the salary of Justices of the Supreme Court or of the Court of Appeals is increased or decreased such increased or decreased salary shall, for the purposes of this Act, be deemed to be the salary which a Justice who ceased to be such to accept another position in the Government was receiving at the time of his cessation in office: Provided, That any benefits that have already accrued prior to such increase or decrease shall not be affected thereby."
Section 3-A. In case the salary of Justices of the Supreme Court or of the Court of Appeals is increased or decreased, such increased or decreased salary shall, for the purposes of this Act, be deemed to be the salary or the retirement pension which a Justice who as of June twelve, nineteen hundred fifty-four had ceased to be such to accept another position in the Government or who retired was receiving at the time of his cessation in office: Provided, That any benefits that have already accrued prior to such increase or decrease shall not be affected thereby. (Emphasis supplied)Presidential Decree No. 1438[14] amended Republic Act No. 910 to include all retired justices and judges. This was further amended by Republic Act No. 9946.[15] At present, the following justices and judges are entitled to the retirement benefits under Republic Act No. 910:
(1) | Justices of this court; |
(2) | Justices of the Court of Appeals, the Sandiganbayan, and the Court of Tax Appeals; |
(3) | Judges of Regional Trial Courts, Metropolitan Trial Courts, Municipal Trial Courts, Municipal Circuit Trial Courts, Shari'a District Courts, and Shari'a Circuit Courts; and |
(4) | Judges of any other court established after the passage of Republic Act No. 9946.[16] |
SEC. 3. Upon retirement, a Justice of the Supreme Court or of the Court of Appeals, the Sandiganbayan or of the Court of Tax Appeals, or a Judge of the regional trial court, metropolitan trial court, municipal trial court in cities, municipal trial court, municipal circuit trial court, shari'a district court, shari'a circuit court, or any other court hereafter established shall be automatically entitled to a lump sum of five (5) years' gratuity computed on the basis of the highest monthly salary plus the highest monthly aggregate of transportation, representation and other allowances such as personal economic relief allowance (PERA) and additional compensation allowance he/she was receiving on the date of his/her retirement and thereafter upon survival after the expiration of five (5) years, to further annuity payable monthly during the residue of his/her natural life pursuant to Section 1 hereof: Provided, however, That if the reason for the retirement be any permanent disability contracted during his/her incumbency in office and prior to the date of retirement, he/she shall receive a gratuity equivalent to ten (10) years' salary and the allowances aforementioned: Provided, further, That should the retirement under Section 1(a) hereof be with the attendance of any partial permanent disability contracted during his/her incumbency and prior to the date of retirement, he/she shall receive an additional gratuity equivalent to two (2) years lump sum that he/she is entitled to under this Act; Provided, furthermore, That if he/she survives after ten (10) years or seven (7) years, as the case may be, he/she shall continue to receive a monthly annuity as computed under this Act during the residue of his/her natural life pursuant to Section 1 hereof: Provided, finally, That those who have retired with the attendance of any partial permanent disability five (5) years prior to the effectivity of this Act shall be entitled to the same benefits provided herein.Section 4 of Republic Act No. 9946 inserted[17] Section 3-A to Republic Act No. 910. Section 3-A provides:
Upon the death of a Justice or Judge of any court in the Judiciary, if such Justice or Judge has retired, or was eligible to retire optionally at the time of death, the surviving legitimate spouse shall be entitled to receive all the retirement benefits that the deceased Justice or Judge would have received had the Justice or Judge not died. The surviving spouse shall continue to receive such retirement benefits until the surviving spouse's death or remarriage.
SEC. 3-A. All pension benefits of retired members of the Judiciary shall be automatically increased whenever there is an increase in the salary of the same position from which he/she retired.
Under the law, therefore, from the moment a member of this Court or the Court of Appeals retirees and . . . during the residue of his or [her] natural life, he or she should not receive an amount less than what an incumbent receives as salary and RATA. It, of course, follows that he or she cannot receive more.The retired justices argued that although public officials or employees who retired before October 31 of a given year were excluded from the coverage of Republic Act No. 6686, the same rule should not apply to Supreme Count and Court of Appeals justices since Republic Act No. 910 governs their retirement benefits.[21]
WHEREFORE, the request of the retired Justices who qualify under Republic Act No. 910, as amended, is approved as follows:
1. Upon retirement, a five-year lump sum payment computed on the basis of the highest monthly salary plus the highest monthly aggregate of transportation, living, and representation allowances received by him as such Justice shall be automatically paid to the retiree.
2. In case the salary or representation, living and transportation allowances or both, of an incumbent Justice are increased, such increased salary and representation, living and transportation allowances shall be deemed to be the retirement benefit of the retired Justice, effective upon the date of said increases.
3. For purposes of retirement benefits, longevity pay forms part of basic salary.[20] (Underscoring in the original)
is relevant only insofar as it has increased the December salary or compensation of the incumbent Justices, which inures to the benefit of the retired Justices in accordance with their special retirement law. It bears emphasis, at this juncture, to say that we are not asking for the December bonus and gift granted by R.A. 6686 but pension differentials mandated by R.A. 1797 which form or become part of our pensions/annuities.[22] (Emphasis supplied, underscoring omitted)In other words, the year-end bonus and cash gift are increases in the salaries of incumbent justices; hence, retired justices should receive an equivalent amount in their pensions.
A.M. No. 99-7-01-SC. - Re: Report of Supreme Court and Court of Appeals Justices for increase/adjustment of their December 1998 pensions. - The Court Resolved to (a) GRANT the request of the retired Supreme Court and Court of Appeals Justices for the increase/adjustment of their pensions by an amount equivalent to the annual year-end bonus and gift effective December 1998; and (b) AUTHORIZE/DIRECT the Fiscal Management and Budget Office, this Court, to recompute/adjust said pensions and pay the pension differentials.[24] (Underscoring in the original)In the letter dated December 13, 1999,[25] Adoracion S. Yulo, Former Chief of the Finance Division of this court, requested clarification with regard to the payment of the year-end bonus and cash gift if the pensioner is re-employed either in an elective office or by appointment. She also inquired whether the year-end bonus and cash gift should be divided into 12 months and included in the monthly pension.[26]
Subsequently, Former Court of Appeals Presiding Justice Salome A. Montoya, through the letter[29] dated December 5, 2000, inquired with this court whether "retired Justices who have not yet outlived the 5[-] or 10-year period after retirement as the case may be, and are not receiving their monthly pensions from the Court, are also entitled to the annual year-end bonus and gift."[30]
(1) the increase/adjustment in these benefits effective December 1998 shall be divided by twelve (12) months and the quotient (the resulting amount) shall be released and tacked to their monthly pensions; (2) and, the payment of these additional benefits to retired Justices who have been elected to public office shall be subject to the provisions of Section 1 of Republic Act No. 910, as amended by Republic Act No. 5095, the last sentence of which reads:... It is also a condition of the pensions provided for herein that when a member of the judiciary entitled to the benefits of this Act shall assume an elective public office, he shall not, upon assumption of office and during his term, receive the monthly pension due him.[28]
The phrase "who are employed in the government service as of October 31 of the same year" which is merely reproduced by Rep. Act No. 8441 from Section 1 of Rep. Act No. 6686, reflects the intent of the law to grant the benefits subject therein only to incumbent officials. Thus, a strict interpretation of the law would exclude all retired Justices from its coverage.In the Resolution[33] dated January 16, 2001, this court granted the request of Former Presiding Justice Salome A. Montoya. The Resolution reads:
However, in clear implementation of the constitutionally mandated fiscal autonomy of the Judiciary and the policy of liberal interpretation of retirement laws and other laws granting monetary benefits to retired Justices, the Court approved the request of retired Supreme Court and Court of Appeals Justices for increase/adjustment of their December 1998 pensions in the Resolution of 28 March 2000 in A.M. No. 99-7-01-SC. In that Resolution, the Court directed the Fiscal Division of the Fiscal Management and Budget Office (FMBO) that "the increase/adjustment in these benefits effective December 1998 shall be divided by twelve (12) months and the quotient (the resulting amount) shall be released and tacked to their monthly pensions."[32] (Emphasis supplied)
The Court Resolved to:However, the issue of the grant of the year-end bonus and cash gift to retired justices did not end there. In the memorandum[35] dated December 13, 2002, Former Chief Justice Davide, Jr. requested Atty. Edna E. Diño to "study the legality of a grant of Christmas bonus, to retired Justices and Judges, chargeable against the Fiscal Autonomy Account or the savings in appropriations of the Supreme Court and the Lower Courts."[36] He also inquired whether the power of augmentation could be used to justify the grant.[37]
(a) NOTE the Memorandum dated 22 December 2000 of Atty. Edna E. Diño, Chief, Office of the Chief Attorney, this Court, re: Entitlement of Retired Court of Appeals Justices who are not yet receiving monthly pensions to annual year-end bonus and cash gift;
(b) RULE that all retired Supreme Court and Court of Appeals Justices shall receive equal pay/pension as the incumbents and that all new benefits granted the latter should likewise be granted the former; and
(c) GRANT the request of Court of Appeals Presiding Justice Salome A. Montoya that retired Justices "who have not yet outlived the 5[-] or 10-year period after retirement" and "are not receiving their monthly pensions from the Court" be entitled to the annual year-end bonus and gift.[34]
Sec. 3-a of the retirement law is sufficiently clear that whenever the salary of an incumbent Justice is increased, such increased salary shall be deemed to be the salary or the retirement pension which a Justice who retired was receiving at the time of his cessation in office. In other words, the increased salary of the incumbent becomes the basis of the salary of the retiree at the time of his cessation in office.[40]In 1997, Republic Act No. 8441 was passed. It states:
SECTION 1. Section 1 of Republic Act No. 6686 is hereby amended to read as follows:Thus, A.M. No. 91-8-225-CA appeared to have been superseded by Republic Act No. 8441. From the law itself, only the incumbents as of October 31 of a given year would be entitled to the year-end bonus and cash gift.SECTION 1. All officials and employees of the National Government who have rendered at least four months of service from January 1 to October 31 of each year and who are employed in the government service as of October 31 of the same year shall each receive a Christmas bonus equivalent to one month basic salary and additional cash gift of Five thousand pesos (P5,000) to be implemented over a period of three (3) years[.] (Emphasis supplied)
all retired Supreme Court and Court of Appeals Justices shall receive equal pay/pension as the incumbents and that all new benefits granted the latter should likewise be granted the former[.][42]The Resolution dated January 16, 2001 became the basis "for the grant of Christmas bonus to retired Justices of the Supreme Court, the Court of Appeals[,] and the Sandiganbayan."[43] However, retired judges of the lower courts were not entitled to the same benefit since Republic Act No. 910 only clearly stated Supreme Court and Court of Appeals justices.[44]
to observe the rule that retired Justices of the Supreme Court, the Court of Appeals, and the Sandiganbayan who are re-appointed to the Judiciary shall be entitled to one Christmas bonus only provided that should the justice concerned be entitled by law to two or more such bonuses, he/she shall receive whichever is higher or highest in amount.[47]At that time, Section 3-A of Republic Act No. 910 had not yet been amended to include all members of the judiciary. Thus, retired judges of the first- and second-level courts were not entitled to the annual year-end bonus and cash gift.
Retirement laws are social legislation. In general, retirement laws provide security to the elderly who have given their prime years in employment whether in the private sector or in government. These laws ensure the welfare of individuals who are approaching their twilight years and have limited opportunities for productive employment that give them a steady income stream. . . .
In government, lucrative retirement benefits are used as an incentive mechanism to encourage competent individuals to have careers in government. This Court often states:[Retirement benefits receivable by public employees are valuable parts of the consideration for entrance into and continuation in public office or employment. They serve a public purpose and a primary objective in establishing them is to induce competent persons to enter and remain in public employment and render faithful and efficient service while so employed. (Emphasis in the original). . . On several occasions, this Court has liberally interpreted retirement laws in keeping with its purpose. In Government Service Insurance System v. De Leon:Retirement laws, in particular, are liberally construed in favor of the retiree because their objective is to provide for the retiree's sustenance and, hopefully, even comfort, when he no longer has the capability to earn a livelihood. The liberal approach aims to achieve the humanitarian purposes of the law in order that efficiency, security, and well-being of government employees may be enhanced. Indeed, retirement laws are liberally construed and administered in favor of the persons intended to be benefited, and all doubts are resolved in favor of the retiree to achieve their humanitarian purpose.This general principle for retirement benefits applies to members of the Judiciary. However, Congress made a special law specifically for retiring justices and judges. This law on "retirement pensions of Justices arise[s] from the package of protections given by the Constitution to guarantee and preserve the independence of the Judiciary." Aside from guaranteeing judicial independence, a separate retirement law for justices and judges is designed to attract intelligent members of the Bar to join the Judiciary. It compensates for the opportunity cost of having profitable private practices.[50]
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based.[54]In A.M. No. 11-7-10-SC,[55] this court discussed that one aspect of the constitutional grant of fiscal autonomy is administrative supervision over courts and its personnel, thus:
The Judiciary's fiscal autonomy is realized through the actions of the Chief Justice, as its head, and of the Supreme Court En Banc, in the exercise of administrative control and supervision of the courts and its personnel. . . . . .Hence, the power to decide "who, what, where, when[,] and how"[57] to grant retirement benefits is within this court's exercise of administrative supervision over courts and its personnel. Any outside interference would violate this court's fiscal autonomy.
. . . .
Thus, under the guarantees of the Judiciary's fiscal autonomy and its independence, the Chief Justice and the Court En Banc determine and decide the who, what, where, when[,] and how of the privileges and benefits they extend to justices, judges, court officials and court personnel within the parameters of the Court's granted power; they determine the terms, conditions and restrictions of the grant as grantor.
. . . .
. . . Any kind of interference on how these retirement privileges and benefits are exercised and availed of, not only violates the fiscal autonomy and independence of the Judiciary, but also encroaches upon the constitutional duty and privilege of the Chief Justice and the Supreme Court En Banc to manage the Judiciary's own affairs.[56] (Emphasis in the original)
SEC. 3. Upon retirement, a Justice of the Supreme Court or of the Court of Appeals, the Sandiganbayan or of the Court of Tax Appeals, or a Judge of the regional trial court, metropolitan trial court, municipal trial court in cities, municipal trial court, municipal circuit trial court, shari'a district court, shari'a circuit court, or any other court hereafter established shall be automatically entitled to a lump sum of five (5) years' gratuity computed on the basis of the highest monthly salary plus the highest monthly aggregate of transportation, representation and other allowances such as personal economic relief allowance (PERA) and additional compensation allowance he/she was receiving on the date of his/her retirement and thereafter upon survival after the expiration of five (5) years, to further annuity payable monthly during the residue of his/her natural life pursuant to Section 1 hereof[.] (Emphasis supplied)The enumeration under Section 3 of Republic Act No. 9946 admittedly does not include the year-end bonus and cash gift. Nevertheless, the interpretation of retirement laws is part of this court's fiscal autonomy. In addition, the grant of the year-end bonus and cash gift is based on A.M. No. 91-8-225-CA and A.M. No. 99-7-01-SC.
SECTION 1. Section 1 of Republic Act No. 1125, as amended, is hereby further amended to read as follows:Since part of the retirement benefits granted to the retired Court of Appeals justices is the annual year-end bonus and cash gift pending receipt of monthly pensions, retired Court of Tax Appeals justices are entitled to the same.SECTION 1. Court; Justices; Qualifications; Salary; Tenure. - There is hereby created a Court of Tax Appeals (CTA) which shall be of the same level as the Court of Appeals, possessing all the inherent powers of a Court of Justice, and shall consist of a Presiding Justice and five (5) Associate Justices. . . . They shall have the same qualifications, rank, category, salary, emoluments and other privileges, be subject to the same inhibitions and disqualifications, and enjoy the same retirement and other benefits as those provided for under existing laws for the Presiding Justice and Associate Justices of the Court of Appeals.
Whenever the salaries of the Presiding Justice and the Associate Justices of the Court of Appeals are increased, such increases in salaries shall be deemed correspondingly extended to and enjoyed by the Presiding Justice and Associate Justices of the CTA. (Emphasis supplied)