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BCDA v COA G.R. No. 178160 February 26, 2009 Ponente: CARPIO, J. FACTS:
On March 13, 1992, Congress approved RA No. 7227 creating the Bases Conversion and Development Authority. Under Section 10, the functions of the board include the adoption of a compensation and benefit scheme at least equivalent to that of the Bangko Sentral ng Pilipinas. 20 December 1996, the Board of Directors of the BCDA adopted a new compensation and benefit scheme which included P 10, 000 year end benefit (YEB) to each contractual employee, regular permanent employee, and Board member. Board Chairman Victoriano Basco recommended to President Fidel V. Ramos the approval of this new compensation and benefit scheme. In 1999, the BSP gave a P30,000 YEB to its employees and increased it to P35,000 in the year 2000. In line with Section 10 of RA No. 7227, the BCDA Board increased their YEB from P10,000 to P30,000 for contractual and regular employees, Board members, and full time consultants. On 20 February 2003, State Auditor of COA issued Audit Observation Memorandum (AOM) No. 2003-‐004 stating that the grant of YEB to Board members was contrary to Department of Budget and Management (DBM) Circular Letter No. 2002-‐2 dated 2 January 2002. They disallowed the grant of YEB to
Board members and full time consultants. ISSUE: Whether or not BCDA Board members and full-‐time consultants are entitled to YEB { The COA’s Ruling }
HELD: 1. PETITIONER: The Board can grant the YEB to its members and full-‐time consultants, citing Section 10 of RA 7227.
In Decision No. 2007-‐020, the COA affirmed the disallowance of the YEB granted to Board members and full-‐time consultants and held that the presumption of good faith did not apply to them. Citing DBM Circular Letter No. 2002-‐02, COA states that members of the Board are not entitled to YEB because they are not salaried officials of the government. They should be made to refund the YEB.
SC: The Board’s power to adopt a compensation and benefit scheme is not unlimited.
Board is limited to the specified per diem authorized by law. DBM Circular Letter No. 2002-‐02 Members of the Board of Directors of agencies are not salaried officials of the government. Therefore, they are not entitled to YEB unless expressly provided by law. As to full-‐time consultants, they are not part of the BCDA personnel and are not paid the basic salary (there is no employer-‐employee relationship). This circular states that YEB is a personal benefit granted in addition to salaries. As fringe benefits, these shall be paid only when the basic salary is also paid. 2. PETITIONER: Board members and full-‐time consultants should be granted the YEB because it is consistent with Section 5 and 18, Art II of the Constitution.
SC: Art II is a statement of general ideological principles and policies. It is not a source of enforceable rights. Sections 5 and 18 are not self-‐executing provisions (from Court ruling in Tondo Medical Center Employees Association v. CA) 3. PETITIONER : The denial of YEB to the Board members and full-‐time consultants violates Section 1 Art III of the Constitution. BCDA claims that there is no substantial distinction between regular employees and Board members and full-‐time consultants. There is a distinction, but no difference.
SC: Every presumption should be indulged in favor of the constitutionality of RA 7227 and the burden of proof is on the BCDA to show that there is a clear and unequivocal breach of the Constitution.
Section 9 of RA 7227 Members of the board shall receive a per diem (“per day”; payment to cover a task/service) of not more than P5,000 for every board meeting: Provided, however, that the per diem collected per month does not exceed the equivalent of 4 meetings…
Section 5. The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the general welfare are essential for the enjoyment by all people of the blessings of democracy. Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.
Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.
4. PETITIONER: The Board can grant the YEB to its members and full-‐time consultants because RA 7227 does not expressly prohibit it from doing so. SC: A careful reading of Section 9 of RA 7227 (refer above) reveals that the Board is prohibited from granting its members other benefits. 5. PETITIONER: Board members and full-‐time consultants are entitled to YEB because a) President Ramos approved the granting of the benefit b) they have been receiving it since 1997 SC: The State is not estopped from correcting a public officer’s erroneous application of a statute, and an unlawful practice, no matter how long, cannot give rise to any vested right.
FINAL SC RULING: The Court notes that the Board members and full-‐time consultants received the YEB in good faith. Board members relied on:
. Section 10 of RA 7227, authorizing a compensation and benefit scheme.
. The fact that RA 7227 does not expressly prohibit it.
. Ramos approved it. Petition is partially granted. YEB is disallowed but the Board members and full-‐ time consultants of the BCDA are not required to refund the YEB they have already received.
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