G.R. No. 148208 - Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas

On July 3, 1993, Republic Act No. 7653 (The New Central Bank Act) took effect, reorganizing the old Central Bank of the Philippines into the Bangko Sentral ng Pilipinas (BSP) with fiscal and administrative autonomy.
Article II, Section 15(c) of RA 7653 authorized the Monetary Board to establish a human‐resource system, including an independent compensation structure, “subject to” conformity with Republic Act No. 6758 (the Salary Standardization Law, hereafter SSL):

First proviso: BSP system to conform “as closely as possible” to SSL principles.
Second proviso: BSP employees in Salary Grades 19 and below must remain on SSL rates.

Presidential Decree No. 985 (1976) created a unified compensation and position‐classification system for all government personnel, including GOCCs and GFIs, subject to specific exemptions.
Republic Act No. 6758 (1989) repealed most prior exemptions and reasserted that all government employees—including those in GOCCs and GFIs—must be covered by the SSL, except in “truly exceptional cases” (Sec. 9) for top‐level GOCC/GFI officials.

From 1995 to 2004, Congress amended the charters of seven other GFIs (LBP, SSS, SBGFC, GSIS, DBP, HGC, PDIC), expressly exempting all their employees—officers and rank‐and‐file—from SSL coverage.
These amendments granted each institution the power to fix its own compensation and classification systems, “exempt from existing laws, rules and regulations on compensation.”

On June 8, 2001, the Central Bank Employees Association filed a petition for prohibition to enjoin BSP and the Executive Secretary from implementing the second proviso of Sec. 15(c), Const. Art. III, §1, contending it:

Unjustly classifies BSP employees into two classes (exempt officers vs. non-exempt rank‐and‐file).
Violates equal protection by subjecting rank‐and‐file to SSL while other GFI rank‐and‐file are fully exempt.

BSP defended the proviso as a valid, rational differentiation to attract and retain key executives; the Solicitor General likewise argued it bore a real basis and adhered to sound management policy.

Whether the last proviso of Sec. 15(c), Art. II of RA 7653—exempting only BSP officers (SG 20 and above) from the SSL—violates the Equal Protection Clause by classifying BSP personnel without substantial distinctions.
Whether, in light of subsequent exemptions granted to all employees of other GFIs, continued enforcement of the proviso amounts to invidious discrimination against BSP rank‐and‐file employees.