Case Summary (G.R. No. 204948)
Key Dates
- May 22, 1985: DBP Executive Committee approved Resolution No. 0236 for COLA.
- April 13, 1988: DBP Board of Directors issued Resolution No. 0210 increasing COLA.
- July 1, 1989: Republic Act No. 6758 is enacted, which integrates allowances into standardized salaries.
- August 12, 1998: The ruling in De Jesus v. Commission on Audit declared Corporate Compensation Circular No. 10 ineffective due to lack of publication.
- May 9, 2003: DBP Resolution No. 0137 granted COLA for a historical period.
Applicable Law
The legal basis for the decision includes the 1987 Philippine Constitution as the applicable document since the case was decided in 2022. The focus of the decision rests on Republic Act No. 6758, the Compensation and Position Classification Act of 1989, particularly Section 12, which pertains to the integration of allowances into the standardized salary rates.
Background Facts
The DBP had initially granted additional COLA to its employees in 1985 and later increased it in 1988. However, the enactment of R.A. No. 6758 intended to standardize salaries and integrate various allowances, including COLA and AA, undermined past practices. Further, a significant ruling in 1998 rendered a related circular ineffective, leading to confusion over allowances' legality and payment.
Proceedings in Lower Courts
Respondents sought to claim back payments for COLA and AA following their cessation after the implementation of R.A. No. 6758. The Regional Trial Court (RTC) initially determined that some employees had valid claims for COLA and AA while others, who had availed of the Early Retirement Incentive Program (ERIP), were barred due to quitclaims they executed.
Court of Appeals Decision
The Court of Appeals modified the RTC's decision, indicating that even employees who accepted ERIP were entitled to COLA and AA since those allowances had not been integrated into their salaries as per existing regulations. The Appeals Court dismissed the claims of others still employed by DBP when payments were made pursuant to later DBP resolutions.
Legal Issue on Appeal
The primary legal issue presented to the Supreme Court was whether the respondents were entitled to payments for COLA and AA after the enforcement of R.A. No. 6758 and the Corporate Compensation Circular No. 10.
Supreme Court Ruling
The Supreme Court granted DBP's petition and reversed the decisions of the lower courts. It ruled that COLA and AA were integrated into the standardized salary rates per R.A. No. 6758. The Court emphasized that the legal framework declared that all allowances, including COLA and AA, should be
...continue readingCase Syllabus (G.R. No. 204948)
Background of the Case
- The case involves a petition for review on certiorari filed by the Development Bank of the Philippines (DBP) against Ronquillo and numerous other respondents regarding their entitlement to Cost of Living Allowance (COLA) and Amelioration Allowance (AA).
- The case stems from earlier decisions made by the Regional Trial Court (RTC) and the Court of Appeals (CA) concerning the claims for back payments of allowances after the implementation of Republic Act (R.A.) No. 6758.
Relevant Resolutions and Legislative Framework
- On May 22, 1985, DBP’s Executive Committee approved Resolution No. 0236, which established the guidelines for granting COLA to employees.
- A subsequent resolution on April 13, 1988, increased the COLA to P200.00 per month for all personnel.
- R.A. No. 6758, enacted on July 1, 1989, aimed to standardize salaries and consolidate allowances, effectively integrating most allowances into standardized salary rates, with specific exceptions.
- The Department of Budget and Management (DBM) issued Corporate Compensation Circular (CCC) No. 10, which discontinued various allowances, effective November 1, 1989.
Legal Developments
- The CA ruled in De Jesus, et al. v. Commission on Audit that CCC No. 10 was ineffective due to lack of publication, which raised questions about