G.R. No. 162372
October 19, 2011
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS, !ERMOGENES ". CONCE#CION, $R., %INSTON &. GARCIA, REYNA'"O #. #A'MIERY, 'EOVIGI'"O #. ARRE''ANO, E'MER T. AUTISTA, 'EONORA V. "E $ESUS, &U'GENCIO S. &ACTORAN, &'ORINO O. IA)E*, AI"A C. NOCETE, AURORA #. MAT!AY, ENRI+UETA "ISUANCO, AMA'IO MA''ARI, 'OUR"ES #ATAG, RIC!AR" M. MARTINE*, ASUNCION C. SIN"AC, G'ORIA ". CAE"O, ROMEO C. +UI'ATAN, ES#ERAN*A &A''ORINA, 'O'ITA ACANI, ARNU'&O MA"RIAGA, 'EOCA"IA S. &A$AR"O, ENIGNO U'AONG, S!IR'EY ". &'ORENTINO, - 'EA M. MEN"IO'A, Petitioners, vs.
COMMISSION ON AU"IT (COA, AMORSONIA . ESCAR"A, MA. CRISTINA ". "IMAGIA, - REYNA'"O #. VENTURA, Respondents. DECISION
'EONAR"O/"E 'EONAR"O /"E CASTRO, J.: This is a petition for review on certiorari under Rule 6 in relation to Rule 6! of the "##$ Rules of Court to annul and set aside the Co%%ission on &udit's Decision Nos. ())*+)6( and ())+)) dated arch "-, ())* and anuar/ ($, ()), respectivel/, for havin0 1een %ade without or in e2cess of 3urisdiction, or with 0rave a1use of discretion a%ountin0 a%ountin0 to lac4 or e2cess of 3urisdiction. The 5overn%ent Service Insurance S/ste% 5SIS7 is 3oined 1/ its 8oard of Trustees and officials, na%el/9 Chair%an :er%o0enes :er%o0enes D. Concepcion, r.;
. 5arcia 5arcia7; E2ecutive ul0encio S. >actoran, >lorino O. I1a@eA, and &ida C. Nocete; Senior allorina, >allorina, ?olita 8acani, &rnulfo adria0a, ?eocadia ?eocadia S. >a3ardo, 8eni0no 8ulaon0, Shirle/ D. >lorentino, and ?ea . endiola, to0ether with all other officials and e%plo/ees held lia1le 1/ the Co%%ission on &udit CO&7 as petitioners in this case. " The respondents in this petition are9 the CO&; its Director of Corporate &udit Office C&O7 I, &%orsonia 8. Escarda Escarda7, who rendered C&O I Decision No. ())(+))# dated a/ ($, ())(; the for%er Corporate &uditor of 5SIS, a. Cristina D. Di%a0i1a Di%a0i1a7, who issued the Notices of Disallowance su13ect of C&O I Decision No. ())(+))#; and the incu%1ent 5SIS Corporate &uditor Re/naldo P.
On a/ *), "##$, Repu1lic &ct No. -(#", otherwise 4nown as The 5overn%ent Service Insurance S/ste% &ct of "##$ the 5SIS &ct7 was enacted and approved, a%endin0 Presidential Decree No. ""6, as a%ended, e2pandin0 and increasin0 the covera0e and 1enefits of the 5SIS, and institutin0 refor%s therein. On Octo1er "$, ())), pursuant to the powers 0ranted to it under Section "n7 of the said law, the 5SIS 8oard of Trustees, upon the reco%%endation of the ana0e%ent+E%plo/ee Relations Co%%ittee ERCO7, approved 8oard Resolution No. *(6 wherein the/ adopted the 5SIS E%plo/ees ?o/alt/ Incentive Plan E?IP7, * to wit9 5SIS EP?OEES ?O&?T INCENTIIC 8ENE>IT 9 ?I F T5SG H?TIP?IED 8 :S INHS !/?S8PRCP =here 9 ?I F lo/alt/ incentive T5S F total 0overn%ent service :S F hi0hest %onthl/ salar/1enefit received !/?S F ! /ear lu%p su% under R& 66), R& #"), PD ""6 or R& -(#" 8PRCP F retire%ent 1enefit previousl/ received plus cash pa/%ent for e%plo/ees no lon0er Bualified to !/?S GDeter%ined as follows9 GG>or positions salar/ 0rade "+(6 >or positions S5 ($ up " + () /rs 2 ".! " + () /rs 2 ".(! (" + *) /rs 2 (.) (" + *) /rs 2 ".$!
*" /rs a1ove 2 (.! *" /rs a1ove 2 (.)) GGSu13ect to review. &pplica1le onl/ to present salar/ structure. I< IP?EENTIN5 PO?ICIES9 ". To 1e entitled to the plan, the e%plo/ee %ust 1e Bualified to retire with ! /ear lu%p su% under R& 66) or R& -(#" or had previousl/ retired under applica1le retire%ent laws (. The lo/alt/ incentive 1enefit shall 1e co%puted 1ased on 1oth total 0overn%ent service and hi0hest %onthl/ salar/1enefit received fro% 5SIS *. E%plo/ees with pendin0 ad%inistrative andor cri%inal case %a/ appl/ 1ut processin0 and pa/%ent of lo/alt/ incentive shall 1e held in a1e/ance until final decision on their cases . 5SIS lo/alt/ incentive plan can onl/ 1e availed once and e%plo/ees who retired under 5ERSIP'#$ are no lon0er Bualified !. There shall 1e no refund of retire%ent pre%iu%s in all cases 6. &pplication is su13ect to approval 1/ the President and 5eneral ana0er PROCEDHRE9 ". E%plo/ees availin0 of the E%plo/ee ?o/alt/ Incentive Plan %ust file hisher application under R& 66) or R& -(#" for the five !7 /ear lu%p su%, with :RS for indorse%ent to SI5 (. Option ( under R& -(#" %a/ 1e allowed 1ut the lo/alt/ incentive shall 1e co%puted 1ased on ! /ear lu%p su% *. The lo/alt/ incentive shall onl/ 1e paid after deductin0 the lu%p su% under R& 66), R& #"), ! PD ""66 or R& -(#" or retire%ent 1enefit previousl/ received plus cash pa/%ent . 5overn%ent service of previousl/ retired e%plo/ees shall 1e considered in co%putin0 the lo/alt/ incentive !. >or e2pedienc/, the processin0 of the plan shall 1e done 1/ the Social Insurance 5roup
E>>ECTIP was contrar/ to law. :owever, the 5SIS ?e0al Services 5roup opined that the 5SIS 8oard was le0all/ authoriAed to adopt the plan since Section (-17 of Co%%onwealth &ct No. "-6 as a%ended 1/ Repu1lic &ct No. #6- has 1een repealed 1/ Sections * and "n7 of Repu1lic &ct No. -(#". On anuar/ "6, ())", 8oard Resolution No. 6 # was approved, wherein E?IP was rena%ed 5SIS Retire%ent>inancial Plan R>P7 to confor% strictl/ to the wordin0s of Section "n7 of Repu1lic &ct No. -(#". Hpon 5arcia's assu%ption of office as President and 5eneral ana0er, Di%a0i1a reBuested to a0ain review the 5SIS R>P. This was denied 1/ 5arcia. ") 8elievin0 that the 5SIS R>P was %orall/ indefensi1le,"" Di%a0i1a sou0ht the assistance of CO& in deter%inin0 the le0alit/ andor %oralit/ of the said Plan in so far as it has Jadopted the 1est features of the two retire%ent sche%es, the !+/ear lu%p su% pa/%ent under KRepu1lic &ct No.L "6"6 and the %onthl/ pension of KRepu1lic &ct No.L 66) 1ased on the credita1le service co%puted at "!)M.' "( On &u0ust $, ())", CO&'s 5eneral Counsel Santos . &lBuiAalas &lBuiAalas7 issued a e%orandu% to CO& Co%%issioner Raul C. >lores re0ardin0 the 5SIS R>P. &lBuiAalas opined that the 5SIS R>P is a supple%entar/ retire%ent plan, which is prohi1ited under Repu1lic &ct No. #6-, or the Teves Retire%ent ?aw. :e also said that since there is no provision in the new Repu1lic &ct No. -(#" e2pressl/ repealin0 the Teves Retire%ent ?aw, the two laws %ust 1e har%oniAed a1sent an irreconcila1le inconsistenc/. &lBuiAalas pronounced that 8oard Resolution Nos. *6) and 6 are null and void for 1ein0 violative of Section (-17 of Co%%onwealth &ct No. "-6 as a%ended 1/ Repu1lic &ct No. #6-, which 1ars the creation of a supple%ental retire%ent sche%e; and Section "n7 of Repu1lic &ct No. -(#", which spea4s of an earl/ retire%ent plan or financial assistance. "* On &u0ust ", ())", " Co%%issioner >lores forwarded this e%orandu% to Di%a0i1a, who in turn forwarded it to 5arcia on &u0ust (*, ())". Di%a0i1a, in her letter attached to &lBuiAalas's e%orandu%, added that for lac4 of le0al 1asis, her office was disallowin0 in audit the portion of retire%ent 1enefits 0ranted under the 5SIS R>P, or the e2cess of the 1enefits due the retirees. She also said that 5SIS could
avail of the appeal process provided for under Sections - to !) of Presidential Decree No. "! and Section *$." of the anual on Certificate of Settle%ent and 8alances."! On &u0ust ($, ())", 5arcia responded "6to Di%a0i1a, ta4in0 e2ception to the notice of disallowance for 1ein0 hi0hl/ irre0ular and precipitate as it was 1ased on a %ere opinion of CO&'s counsel who had no authorit/ to declare the resolution of the 5SIS 8oard of Trustees as null and void. oreover, 5arcia asseverated that CO& had neither power nor authorit/ to declare as null and void certain resolutions approved 1/ the 8oard of 5overn%ent Corporations, as the power to do so was e2clusivel/ lod0ed 1efore the courts. :e also ar0ued that the notice of disallowance was pre%ature, and was tanta%ount to a pre+audit activit/, as it should refer onl/ to a particular or specific dis1urse%ent of pu1lic funds and not a0ainst a 0eneral activit/ or transaction. 5arcia averred that the 5SIS R>P was part and parcel of the co%pensation pac4a0e that 5SIS %a/ provide for its personnel, 1/ virtue of the powers 0ranted to its 8oard of Trustees under Section "%7 and n7 of Repu1lic &ct No. -(#". 5arcia said that the appeal process would co%%ence onl/ upon 5SIS's receipt of the particulars of the disallowances."$ >inall/, 5arcia reBuested Di%a0i1a to withdraw the notices of disallowance in the interest of industrial peace in the 5SIS. "=ithout respondin0 to 5arcia's &u0ust ($, ())" e%orandu%, Di%a0i1a issued the followin0 Notices of Disallowance on the 0rounds that9 Pursuant to le0al opinion of the 5eneral Counsel dated &u0ust $, ())", 8oard Resolution No. *6) dated Nov. (", ())) as a%ended 1/ No. 6 dated an. "6, ())" approvin0 the E%plo/ees ?o/alt/ Incentive Plan E?IP7 is null and void for 1ein0 directl/ in conflict with Section (-17 of C& No. "-6 as a%ended 1/ R& #6- which 1ars the creation of supple%ental retire%ent sche%e and of Section " n7 of R& -(#" which spea4s of an earl/ retire%ent plan or financial assistance."# Notices of Disallowance dated Septe%1er "#, ())" () Persons ?ia1le9 Notice of Disallowance No.Period covered9
Pa/ee
&%ount Disallowed
8oard of Trustees; ?ourdes Pata0 S
())"+)"+"( arina Santa%aria Dece%1er ()))
P6,-#!,!!.- Richard artineA ?ea . endiola
())"+)(+"( Rosita N. ?i% Dece%1er ()))
P(,(-",))!.!(
())"+)*+"( anuar/ ())"
anuel 5. O3eda
())"+)+"( arch ())"
>ederico Pascual
())"+)!+"( arch ())"
uanito 5a%ier, Sr.
())"+)6+"( a/ ())"
P",()",!-".(# Daniel i 3ares Ro%eo uilatan Richard artineA 8eni0no 8ulaon0 P"",,#!$.*( =inston >. 5arcia EsperanAa >allorina ?ea . endiola P **(,)*!.$# =inston >. 5arcia EsperanAa >allorina ?ea . endiola Shirle/ >lorentino P,$#(,(6)."$ EnriBueta Disuanco &urora P. atha/ ?ea . endiola
Notices of Disallowance dated Octo1er ((, ())" ("
Notice of Disallowance No.Period covered9 ul/ (, ())"
Pa/ee
&%ount Disallowed
Persons ?ia1le9 8oard of Trustees; 5loria Caedo
())"+)$+"(
Rustico 5. Delos &n0eles
P ",#6-,!"6.)" Re/naldo Pal%ier/
())"+)-+"(
?ourdes Delos &n0eles
P ,*(),!6$.## Re/naldo Pal%ier/ &%alio &. allari
())"+)#+"(
5loria ?. &nonuevo
P ",*)-,$)!.$! ?olita 8. 8acani
())"+")+"(
Elvira . &0caoili
P (,*"*,$(#." Re/naldo Pal%ier/ &%alio &. allari
())"+""+"(
Se0undina S. Dionisio
P $*,-$$.(" e2cept Richard artineA and ?ea . endiola7
Notices of Disallowance dated Octo1er (*, ())" ((
Notice of Disallowance No.Period covered9 ul/ (, ())"
Pa/ee
&%ount Disallowed
Persons ?ia1le9 8oard of Trustees; 5loria Caedo
())"+"(+"(
Daniel N. i3ares
P $,"-,)*"."$ Re/naldo Pal%ier/ Richard artineA
())"+"*+"(
elinda &. >lores
P ",!#,#$."( Re/naldo Pal%ier/ Richard artineA anuel P. 8ausa
())"+"+"(
De%ocrito . Silan0
P !*(,-6#.6!
())"+ "!+"(
anuel P. 8ausa
P ",#!!,!6".6$ Re/nal do Pal%ier / Richard artineA ?ourdes &. Delos &n0eles
EnriBueta Disuanco &rnulfo adria0a
Notices of Disallowance dated Nove%1er #, ())" (* Notice of
Pa/ee
&%ount
Persons ?ia1le9
Disallowance No.Period covered9
Disallowed
8oard of Trustees; =inston >. 5arcia P57; &suncion Sindac S
())"+"6+"( ?ourdes 5. Pata0 une (-, ())"
P $,--*,6(#.(- EnriBuita Disuanco ?ea . endiola
())"+"$+"( ul/ "$, ())"
P !,6-,$*#.(6 Richard artineA
Elvira H. 5eroni%o
Notices of Disallowance dated Nove%1er "*, ())" (
Notice of Disallowance No.Period covered9
Pa/ee
())"+()+"( odesto &. De ?eon &u0ust (-, ())" ())"+("+"( ul/ (), ())"
&ntonio S. De Castro
&%ount Disallowed
Persons ?ia1le9 8oard of Trustees; &suncion Sindac S
P (,--$,)!6.$! Daniel N. i3ares Ro%eo uilatan P #*",!-*."" Re/naldo Pal%ier/ Richard artineA
())"+((+"( Teresa O. ?o/ola &u0ust ($, ())"
P -!,"-.($ ?eocadi a S. >a3 ardo
())"+(*+"( Pa1lito 8. 5alveA &u0ust ($, ())"
P #*,-$.! Re/naldo Pal%ier/ Shirle/ >lorentino
On anuar/ *), ())(, 5SIS, to0ether with so%e of the petitioners herein, 0ave notice (! to the CO& C&O I that it was appealin0 the (" Notices of Disallowance it had received fro% Di%a0i1a on various dates. It a%ended (6 this Notice of &ppeal the followin0 da/, to include all 5SIS officials and e%plo/ees held lia1le and accounta1le under the said disallowances. ($ In their e%orandu% of &ppeal, (- the petitioners %ainl/ ar0ued that 5SIS had the power, under its charter, to adopt and i%ple%ent the 5SIS R>P. The/ alle0ed that their plan was not uniBue to 5SIS as other 0overn%ent a0encies also have their own retire%ent or financial assistance plans. The/ clai%ed that to then disallow their retire%ent plan would 1e tanta%ount to a violation of their constitutional ri0ht to 1e eBuall/ protected 1/ our laws. (# The petitioners also ar0ued that Repu1lic &ct No. -(#" had %odified or repealed all provisions of the Teves Retire%ent ?aw that were inconsistent with it and that 5SIS's officials could not 1e held lia1le or accounta1le for i%ple%entin0 the 5SIS R>P since this was done in the perfor%ance of their duties. *) On a/ ($, ())(, the CO&, throu0h Escarda, in C&O I Decision No. ())(+))#, *" affir%ed the disallowances %ade 1/ Di%a0i1a. Escarda sustained the CO& 0eneral counsel's opinion and said that while the 5SIS %a/ have the power to adopt an earl/ retire%ent or a financial assistance plan under its charter, it cannot supple%ent a retire%ent plan alread/ e2istin0 under the law. Escarda said that the purpose of an earl/ retire%ent plan is 0enerall/ to strea%line the or0aniAation 1/ encoura0in0 those who would not 1e Bualified for co%pulsor/ retire%ent to retire earl/ under the plan. :owever, Escarda clai%ed, the availees of the plan were e%plo/ees whose supposed %onthl/ pensions under the 5SIS R>P included services the/ had alread/ earned in other 0overn%ent a0encies. Thus, Escarda held that the 5SIS R>P was in realit/ a supple%entar/ retire%ent plan for these 5SIS e%plo/ees. >inall/, Escarda disa0reed with 5SIS's assertion that the Teves Retire%ent ?aw had 1een %odified or repealed as the repealin0 clause in Repu1lic &ct No. -(#" is a 0eneral repealin0 clause, which is frowned upon and is 0enerall/ not effective to repeal a specific law li4e the Teves Retire%ent ?aw. *( Hndaunted, the petitioners filed 1efore the CO& a Petition for Review ** of C&O I's decision, raisin0 the e2act sa%e issues it raised in its e%orandu% of &ppeal dated >e1ruar/ ", ())(, to wit9 I =hether or not petitionersappellants 5SIS and 5SIS 8oard of Trustees have the power and authorit/ to desi0n and adopt the Buestioned 5SIS Retire%ent >inancial Plan. II =hether or not petitionersappellant 5SIS officials who are %erel/ i%ple%entin0 the 5SIS &ct of "##$ and dul/ adopted 8oard Resolutions %ust 1e held responsi1le and accounta1le for the i%ple%entation of the 5SIS Retire%ent >inancial Plan. III
=hether or not the adoption of the 5SIS Retire%ent >inancial Plan violated Section (- 17 of C& No. "-6 as a%ended 1/ Repu1lic &ct No. #6-, and Section "n7 of Repu1lic &ct No. -(#", otherwise 4nown as the 5SIS &ct of "##$. I< =hether or not the CO& disallowance of the 5SIS Retire%ent >inancial Plan is lawful, and the C&O I Decision No. ())(+))# and the Notices of Disallowance issued 1/ 5SIS Corporate &uditor Di%a0i1a are proper. * On arch "-, ())*, CO& issued Decision No. ())*+)6(, *! wherein the issue was narrowed down to whether or not the 5SIS 8oard can reward the%selves with unusuall/ lar0e 1enefits in the face of an unusuall/ lar0e actuarial deficit which will result in the denial of 1enefits of future retirees in other 0overn%ent a0encies for who% the fund is principall/ intended. *6 CO& Aeroed in on the fact that to 1e entitled to the 5SIS R>P, the e%plo/ee %ust 1e Bualified to retire with !+/ear lu%p su% under R.&. No. 66) or R.&. No. -(#" or K%ust haveL previousl/ retired under the applica1le retire%ent laws. *$ The/ affir%ed Escarda's rulin0 and contended that what the still valid *- Teves Retire%ent ?aw per%its is the creation of an earl/ retire%ent or financial assistance plan, and the a1ove reBuire%ent i%posed under the 5SIS R>P does not appl/ to either plans. CO& added9 Hn%ista4a1l/, the Plan 1ein0 a supple%entar/ pensionretire%ent plan, it contravenes the Teves law. Not even the rena%in0 of KtheL E%plo/ees ?o/alt/ Incentive Plan E?IP7 to Retire%ent >inancial Plan R>P7, purportedl/ to confor% with the wordin0 of the law, could conceal its true nature or character as a supple%entar/ pensionretire%ent plan which incorporates the 1est features of R.&. Nos. 66) and -(#", creatin0 in effect a third retire%ent plan for 5SIS personnel onl/. This is all the %ore %ade %anifest 1/ the fact that even 8oard %e%1ers who are not Bualified at all to retire under an/ e2istin0 retire%ent laws could retire under the R>P. Stri4in0l/, 1/ pro%ul0atin0 another re0ular retire%ent sche%e, the 5SIS 8oard enlar0ed the field of its authorit/ and re0ulation as provided in the statute it is supposed to ad%inister. *# CO& said that the power of 5SIS in appl/in0 the law %ust not 1e a1used. CO& averred that 5SIS was found to 1e deficient actuariall/ 1/ >ifteen 8illion Pesos, and for it to reward its e%plo/ees, who were alread/ en3o/in0 salaries hi0her than their counterparts in other 0overn%ent a0encies, %eant that it would have to dip into its principal fund to the pre3udice of its %e%1ers, who were the ver/ raison d'etre for its esta1lish%ent.) &ddressin0 petitioners' clai% of discri%ination, CO& said that each of the 0overn%ent a0encies that had adopted its own retire%ent plans did so pursuant to a valid law and under factual circu%stances that were not present in the case of 5SIS. CO& also affir%ed the lia1ilit/ of the petitioners who were held accounta1le under the disallowances as the/ had failed to e2ercise the dili0ence of a 0ood father of a fa%il/ in the perfor%ance of their functions." >inall/, CO& averred that while its 0eneral counsel's opinion 1oosted its position, such was not the 1asis of the disallowance. (
The petitioners sou0ht reconsideration * of this decision and even as4ed to 1e heard in oral ar0u%ents, 1ut CO&, in its Decision No. ())+ )) dated anuar/ ($, ()), ! denied 1oth %otions and affir%ed its Decision No. ())*+)6( dated arch "-, ())* with finalit/. The petitioners are now 1efore us, as4in0 us to nullif/ CO&'s arch "-, ())* and anuar/ ($, ()) decisions, on the 0round that the/ were %ade with 0rave a1use of discretion a%ountin0 to lac4 or e2cess of 3urisdiction. 6 The petitioners posit the followin0 ar0u%ents to support their cause9 RESPONDENTS &CTED =IT:OHT OR IN ECESS O> HRISDICTION, OR =IT: 5R& DISCRETION &OHNTIN5 TO ?&C OR IN ECESS O> HRISDICTION, =:EN IN T:E >O??O=IN5 &NNER9 I Respondents sou0ht to interpret clear provisions of Repu1lic &ct No. -(#", otherwise 4nown as the 5SIS &ct of "##$, and declare null and void dul/ adopted resolutions of petitioner 5SIS which has the power and authorit/ to desi0n and adopt the Buestioned 5SIS Retire%ent >inancial Plan R>P7. II Respondents ruled that petitioners 5SIS officials who are %erel/ i%ple%entin0 the 5SIS &ct of "##$ and dul/ adopted 8oard Resolutions could 1e held responsi1le and accounta1le for the i%ple%entation of the 5SIS Retire%ent >inancial Plan R>P7. III Respondents held that the adoption of the 5SIS Retire%ent >inancial Plan R>P7 violated Section (- 17 of C& No. "-6, as a%ended 1/ Repu1lic &ct No. #6-, and Section "n7 of Repu1lic &ct No. -(#", otherwise 4nown as the 5SIS &ct of "##$. I< RespondentKsL disallowed the 5SIS Retire%ent >inancial Plan R>P7, and erroneousl/ affir%ed the Notices of Disallowance issued 1/ then 5SIS Corporate &uditor Di%a0i1a. < Respondents touched on new and irrelevant %atters which were not raised in the disallowances andor pleadin0s 1elow, and which were never validated. $
The cru2 of the present case 1oils down to the le0alit/ of 8oard Resolution Nos. *6), *(6, and 6, which we shall refer to si%pl/ as the 5SIS R>P, in li0ht of Repu1lic &ct No. -(#" or the 5SIS &ct of "##$, and Co%%onwealth &ct No. "-6 or the 5overn%ent Service Insurance &ct as a%ended 1/ Repu1lic &ct No. #6- the Teves Retire%ent ?aw7. 8elow are the pertinent provisions of the fore0oin0 laws9 Repu1lic &ct No. -(#" SECTION ". Powers and >unctions of the 5SIS. Q The 5SIS shall e2ercise the followin0 powers and functions9 2222 n7 to desi0n and adopt an Earl/ Retire%ent Incentive Plan ERIP7 andor financial assistance for the purpose of retire%ent for its own personnel; 2 2 2. Co%%onwealth &ct No. "-6 as a%ended 1/ the Teves Retire%ent ?aw9 SEC. (-. iscellaneous Provisions 2 2 2 17 :ereafter no insurance or retire%ent plan for officers or e%plo/ees shall 1e created 1/ an/ e%plo/er. &ll supple%entar/ retire%ent or pension plans heretofore in force in an/ 0overn%ent office, a0enc/, or instru%entalit/ or corporation owned or controlled 1/ the 0overn%ent, are here1/ declared inoperative or a1olished. 2 2 2. Repu1lic &ct No. #6- or the Teves Retire%ent ?aw Is Still 5ood ?aw The petitioners insist that under Section * of Repu1lic &ct No. -(#", which provides that all laws or an/ law or parts of law specificall/ inconsistent herewith are here1/ repealed or %odified accordin0l/, all provisions of the Teves Retire%ent ?aw that are inconsistent with Repu1lic &ct No. -(#" are dee%ed repealed or %odified. # =e do not su1scri1e to petitioner's interpretation of this law. This is 1ecause, unless the intention to revo4e is clear and %anifest, the a1ro0ation or repeal of a law cannot 1e assu%ed. !) The repealin0 clause contained in Repu1lic &ct No. -(#" is not an e2press repealin0 clause 1ecause it fails to identif/ or desi0nate the statutes that are intended to 1e repealed. It is actuall/ a clause, which predicated the intended repeal upon the condition that a su1stantial conflict %ust 1e found in e2istin0 and prior laws. !"
Since Repu1lic &ct No. -(#" %ade no e2press repeal or a1ro0ation of the provisions of Co%%onwealth &ct No. "-6 as a%ended 1/ the Teves Retire%ent ?aw, the reliance of the petitioners on its 0eneral repealin0 clause is erroneous. The failure to add a specific repealin0 clause in Repu1lic &ct No. -(#" indicates that the intent was not to repeal an/ e2istin0 law, unless an irreconcila1le inconsistenc/ and repu0nanc/ e2ists in the ter%s of the new and old laws. !( =e are li4ewise not convinced 1/ petitioners' clai% of repeal 1/ i%plication. It is a well+settled rule that to 1rin0 a1out an i%plied repeal, the two laws %ust 1e a1solutel/ inco%pati1le and clearl/ repu0nant that the later law cannot e2ist without nullif/in0 the prior law. !* &s this Court held in Reca@a, r. v. Court of &ppeals !9 Repeal of laws should 1e %ade clear and e2pressed. Repeals 1/ i%plication are not favored as laws are presu%ed to 1e passed with deli1eration and full 4nowled0e of all laws e2istin0 on the su13ect. Such repeals are not favored for a law cannot 1e dee%ed repealed unless it is clearl/ %anifest that the le0islature so intended it. 2 2 2. !! This Court sees no inco%pati1ilit/ 1etween the two laws 1ein0 discussed here. In reconcilin0 Section "n7 of Repu1lic &ct No. -(#" with the Teves Retire%ent ?aw, we are 0uided 1/ this Court's pronounce%ent in Philippine International Tradin0 Corporation v. Co%%ission on &udit!69 In reconcilin0 Section 6 of E2ecutive Order No. $!6 with Section (-, Su1section 17 of Co%%onwealth &ct No. "-6, as a%ended, upper%ost in the %ind of the Court is the fact that the 1est %ethod of interpretation is that which %a4es laws consistent with other laws which are to 1e har%oniAed rather than havin0 one considered repealed in favor of the other. Ti%e and a0ain, it has 1een held that ever/ statute %ust 1e so interpreted and 1rou0ht in accord with other laws as to for% a unifor% s/ste% of 3urisprudence Q interpretere et concordare le0i1us est opti%us interpretendi. Thus, if diverse statutes relate to the sa%e thin0, the/ ou0ht to 1e ta4en into consideration in construin0 an/ one of the%, as it is an esta1lished rule of law that all acts in pari %ateria are to 1e ta4en to0ether, as if the/ were one law. 2 2 2.!$ =hile Repu1lic &ct No. -(#" spea4s of an earl/ retire%ent incentive plan or financial assistance for the 5SIS e%plo/ees, Co%%onwealth &ct No. "-6 as a%ended 1/ the Teves Retire%ent ?aw tal4s a1out insurance or retire%ent plans other than our e2istin0 retire%ent laws. In other words, what the Teves Retire%ent ?aw conte%plates and prohi1its are separate retire%ent or insurance plans. In fact, the ver/ sa%e provision declared inoperative or a1olished all supple%entar/ retire%ent or pension plans. The 5SIS Retire%ent>inancial Plan is Null and
&ccordin0 to =e1ster's Third New International Dictionar/, earl/ %eans occurrin0 1efore the e2pected or usual ti%e, while incentive %eans servin0 to encoura0e, rouse, or %ove to action, or so%ethin0 that constitutes a %otive or spur. !It is clear fro% the fore0oin0 that Section "n7 of Repu1lic &ct No. -(#" conte%plates a situation wherein 5SIS, due to a reor0aniAation, a strea%linin0 of its or0aniAation, or so%e other circu%stance, which calls for the ter%ination of so%e of its e%plo/ees, %ust desi0n a plan to encoura0e, induce, or %otivate these e%plo/ees, who are not /et Bualified for either optional or co%pulsor/ retire%ent under our laws, to instead voluntaril/ retire. This is the ver/ reason wh/ under the law, the retire%ent plan to 1e adopted is in realit/ an incentive sche%e to encoura0e the e%plo/ees to retire 1efore their retire%ent a0e. The a1ove interpretation applies eBuall/ to the phrase financial assistance, which, contrar/ to the petitioners' assertion, should not 1e read independentl/ of the purpose of an earl/ retire%ent incentive plan. Hnder the doctrine of noscitur a sociis, the construction of a particular word or phrase, which is in i tself a%1i0uous, or is eBuall/ suscepti1le of various %eanin0s, %a/ 1e %ade clear and specific 1/ considerin0 the co%pan/ of words in which it is found or with which it is associated. In other words, the o1scurit/ or dou1t of the word or phrase %a/ 1e reviewed 1/ reference to associated words. !# Thus, the phrase financial assistance, in li0ht of the precedin0 words with which it is associated, should also 1e construed as an incentive sche%e to induce e%plo/ees to retire earl/ or as an assistance plan to 1e 0iven to e%plo/ees retirin0 earlier than their retire%ent a0e. Such is not the case with the 5SIS R>P. Its ver/ o13ective, KtLo %otivate and reward e%plo/ees for %eritorious, faithful, and satisfactor/ service,6) contradicts the nature of an earl/ retire%ent incentive plan, or a financial assistance plan, which involves a su1stantial a%ount that is 0iven to %otivate e%plo/ees to retire earl/. Instead, it falls e2actl/ within the purpose of a retire%ent 1enefit, which is a for% of reward for an e%plo/ee's lo/alt/ and len0th/ service, 6" in order to help hi% or her en3o/ the re%ainin0 /ears of his life. >urther%ore, to 1e a1le to appl/ for the 5SIS R>P, one %ust 1e Bualified to retire under Repu1lic &ct No. 66) or Repu1lic &ct No. -(#", or %ust have previousl/ retired under our e2istin0 retire%ent laws. This onl/ %eans that the e%plo/ees covered 1/ the 5SIS R>P were those who were alread/ eli0i1le to retire or had alread/ retired. Certainl/, this is not included in the scope of an earl/ retire%ent incentive plan or financial assistance for the purpose of retire%ent. The fact that 5SIS chan0ed the na%e fro% E%plo/ees ?o/alt/ Incentive Plan to Retire%ent>inancial Plan does not chan0e its essential nature. & perusal of the plan shows that its purpose is not to encoura0e 5SIS's e%plo/ees to retire 1efore their retire%ent a0e, 1ut to au0%ent the retire%ent 1enefits the/ would receive under our present laws. 6( =ithout a dou1t, the 5SIS R>P is a supple%entar/ retire%ent plan, which is prohi1ited 1/ the Teves Retire%ent ?aw. Conte v. Co%%ission on &udit 6* sBuarel/ applies in this c ase. In that case, the Social Securit/ S/ste% SSS7 issued Resolution No. !6, which provided financial incentive and induce%ent to SSS e%plo/ees who were Bualified to retire, to avail of retire%ent 1enefits under Repu1lic &ct No. 66), as a%ended which 5SIS would have to pa/7, rather than the retire%ent 1enefits under Repu1lic &ct No. "6"6, as a%ended which SSS would have to pa/7. Hnder SSS Resolution No. !6, those who retire under Repu1lic &ct No. 66) would 1e 0iven a financial assistance eBuivalent in a%ount to the difference 1etween what a retiree would have received under Repu1lic &ct No. "6"6, less
what he was entitled to under Repu1lic &ct No. 66). CO& disallowed in audit all clai%s for financial assistance under SSS Resolution No. !6 for 1ein0 si%ilar to those separate retire%ent plans or incentiveseparation pa/ plans adopted 1/ other 0overn%ent corporate a0encies, which resulted in the increase of 1enefits 1e/ond what was allowed under e2istin0 retire%ent laws. This Court sustained CO&'s disallowance and held that SSS Resolution No. !6 constituted a supple%entar/ retire%ent plan proscri1ed 1/ Section (-17 of Co%%onwealth &ct No. "-6, as a%ended 1/ Repu1lic &ct No. #6-. 6 The petitioners ar0ue that Conte finds no application in this case, since SSS had no authorit/ under its charter to adopt such a resolution, unli4e the 5SIS, which was cloa4ed with authorit/ to issue the Buestioned resolutions. >urther%ore, petitioners ar0ue that Repu1lic &ct No. -(#" 1eca%e effective in "##$, which was after this Court had alread/ decided the Conte case. =e find no %erit in the petitioners' ar0u%ents. The laws have not chan0ed, and the doctrine in Conte has not 1een overturned or a1andoned. The fact that Repu1lic &ct No. -(#" was approved and enacted after Conte is of no %o%ent, as what was interpreted in Conte was the provision in the Teves Retire%ent ?aw in issue here. oreover, we have alread/ discussed a1ove how such provision has neither 1een repealed nor %odified 1/ Section "n7 of Repu1lic &ct No. -(#". Thus, it is 3ust fittin0 that we find 0uidance in the application and interpretation of Section (-17 of Co%%onwealth &ct No. "-6, as a%ended 1/ Repu1lic &ct No. #6-, fro% the Conte case. &s we have held in that case9 Section (-17 Kof C.&. No. "-6L as a%ended 1/ R.&. No. #6- in no uncertain ter%s 1ars the creation of an/ insurance or retire%ent plan other than the 5SIS for 0overn%ent officers and e%plo/ees, in order to prevent the undue and ineBuitous proliferation of such plans. 2 2 2.6! The petitioners asseverate that %an/ laws such as Repu1lic &ct Nos. -(#", ""6", -(-(, 66-*, and $6", were validl/ enacted after the Teves Retire%ent ?aw; thus, the evil that it see4s to avoid is the proliferation of those retire%ent plans that are not so authoriAed 1/ law.66 The petitioners even 0o so far as co%parin0 the%selves to other 0overn%ent a0encies, which have adopted their own retire%ent sche%es at one ti%e or another such as the Develop%ent 8an4 of the Philippines, the Securities and E2chan0e Co%%ission, the National Power Corporation, the CO&, the Court of &ppeals, and even this Court. 6$ The petitioners the%selves ad%it that those retire%ent sche%es were adopted as a Kone+ti%eL 0rant K1/L reason of reor0aniAation6- pursuant to Repu1lic &ct No. 66-* 6# or the Earl/ Retire%ent ?aw. &s for the additional 1enefits e2tended to retirin0 3ustices or co%%issioners, suffice it to sa/ that the/ were also 0iven pursuant to laws passed 1/ Con0ress. oreover, those retire%ent plans en3o/ the presu%ption of validit/ and re0ularit/. In star4 contrast, the 5SIS R>P was not created 1ecause of a valid co%pan/ reor0aniAation. Its purpose did not include the 0rantin0 of 1enefits for earl/ retire%ent. Neither did it provide 1enefits for either voluntar/ or involuntar/ separation fro% 5SIS. It was intended for e%plo/ees who were alread/ eli0i1le to retire under e2istin0 retire%ent laws. =hile the 5SIS %a/ have 1een clothed with authorit/ to adopt an earl/ retire%ent or financial assistance plan, such authorit/ was li%ited 1/ the ver/ law it was see4in0 to i%ple%ent.
8orrowin0 this Court's words in the Conte case, it is 1e/ond cavil that Kthe 5SIS Retire%ent>inancial PlanL contravenes KSection (-17 of C.&. No. "-6 as a%ended 1/ R.&. No. #6- or the Teves Retire%ent ?awL, and is therefore invalid, void, and of no effect. To i0nore this and rule otherwise would 1e tanta%ount to per%ittin0 ever/ other 0overn%ent office or a0enc/ to put up its own supple%entar/ retire%ent 1enefit plan under the 0uise of such Jfinancial assistance.' $) ¬her co%pellin0 reason to nullif/ the 5SIS R>P is that it allows, and in fact %andates, the inclusion of the /ears in 0overn%ent service of previousl/ retired e%plo/ees, to wit9 PROCEDHRE9 2222 . 5overn%ent service of previousl/ retired e%plo/ees shall 1e considered in co%putin0 the lo/alt/ incentive. $" In Santos v. Court of &ppeals, $( we affir%ed the Court of &ppeals and the Civil Service Co%%ission's rulin0 that for the purpose of co%putin0 or deter%inin0 Santos' separation pa/, his /ears of service in his previous 0overn%ent office should 1e e2cluded and his separation pa/ should 1e solel/ confined to his services in his new 0overn%ent position. =e 0ave the rationale for this as follows9 Such would run counter to the polic/ of this Court a0ainst dou1le co%pensation for e2actl/ the sa%e services. ore i%portant, it would 1e in violation of the first para0raph of Section - of &rticle I+8 of the Constitution, which proscri1es additional, dou1le, or indirect co%pensation. Said provision reads9 No elective or appointive pu1lic officer or e%plo/ee shall receive additional, dou1le, or indirect co%pensation, unless specificall/ authoriAed 1/ law .$* Our rulin0 therein is li4ewise applica1le in this case. To credit the /ears of service of 5SIS retirees in their previous 0overn%ent office into the co%putation of their retire%ent 1enefits under the 5SIS R>P, notwithstandin0 the fact that the/ had received or had 1een receivin0 the retire%ent 1enefits under the applica1le retire%ent law the/ retired in, would 1e to countenance dou1le co%pensation for e2actl/ the sa%e services.$ To e%phasiAe CO&'s distaste $! for the hu0e retire%ent 1enefits of 5SIS's 1oard %e%1ers, officers, and e%plo/ees, who are alread/ receivin0 si0nificantl/ hi0her salaries than their counterparts in other 0overn%ent a0encies, CO& illustrated the 0larin0 discrepanc/ 1etween what a 5SIS e%plo/ee would 0et under the 5SIS R>P, and what a %ere 5SIS %e%1er would 0et under applica1le retire%ent laws9 5SIS EP?OEE vs 5SIS E8ER not covered 1/ K5SIS R>PL
