A.M. No. 03-9-02-SC - Re: Entitlement to Hazard Pay of SC Medical and Dental Clinic Personnel

Case Summary (A.M. No. 03-9-02-SC)

Administrative Circular and the Original Hazard Pay Rates

Administrative Circular No. 57-2004 initially classified SCMDS employees according to the level of exposure to hazards. It declared that employees rendering direct, actual, and frequent medical services—such as physicians, dentists, nurses, medical technologists, nursing and dental aides, and physical therapists—were subject to high-risk exposure. In contrast, it treated psychologists, pharmacists, optometrists, clerks, data encoders, utility workers, ambulance drivers, and administrative and technical support personnel as being subject to low-risk exposure.

Under the circular’s rates, employees exposed to high-risk hazards with Salary Grade 19 and below were granted hazard allowances equivalent to twenty-seven percent (27%) of their basic monthly salaries, while those with Salary Grade 20 and above received seven percent (7%). Employees exposed to low-risk hazards with Salary Grade 20 and above received five percent (5%), and those with Salary Grade 19 and below received twenty-five percent (25%), thereby producing a dual rate structure that depended both on exposure category and salary grade.

The factual backdrop also included a review by the Department of Health (DOH), which directed that SCMDS personnel should all be entitled to a uniform hazard pay rate irrespective of risk nature. Nonetheless, the circular retained a dual rate scheme of 25% and 5% for the SCMDS personnel, rather than fully aligning with that directive.

The Personnel’s Challenge and the Request to Reexamine the Circular

On 21 January 2005, eleven SCMDS personnel, including the requesting doctors and dentists, wrote to then Chief Justice Hilario Davide, Jr. They claimed to render front-line and hands-on services while receiving less hazard allowance allocations than personnel who were not directly delivering patient care. Their position was that the circular’s classification and resulting rates seemed to favor personnel in certain salary grade bands contrary to the purpose of R.A. No. 7305, which they asserted compensated health workers based on the degree of exposure to hazards, regardless of rank or status. They therefore requested reexamination of the subject circular.

Before the Court could act on that request, the DOH issued A.O. No. 2006-0011 on 16 May 2006. The administrative order provided amended hazard pay guidelines applicable to public health workers generally and established a new mechanism: it essentially set a 25% hazard pay rate for health workers with Salary Grade 19 and below, while setting hazard allowance for those with Salary Grade 20 and above to a fixed amount of P4,989.75 without further increases.

Subsequent Requests to Align the Court’s Circular With DOH A.O. No. 2006-0011

In response to A.O. No. 2006-0011, some of the SCMDS personnel sent another letter on 19 December 2007 to Chief Justice Reynato S. Puno. They suggested that A.C. No. 57-2004 should be amended to conform to A.O. No. 2006-0011, and they requested payment of hazard pay differentials that would accrue by virtue of such amendment.

Dr. Prudencio Banzon, Jr. indorsed the letter to Deputy Clerk of Court and Chief Administrative Officer Atty. Eden Candelaria. On 15 January 2008, Atty. Candelaria issued a memorandum finding merit in the request to amend the circular to conform to A.O. No. 2006-0011. She recommended, first, abolishing the circular’s high-risk/low-risk classification scheme and replacing it with the fixed rates under A.O. No. 2006-0011. Second, she recommended that the adjusted hazard allowance be charged against the Court’s regular savings.

The Court’s Referral for Comments and the Competing Office Positions

In its Resolution dated 22 January 2008, the Court referred Atty. Candelaria’s memorandum to the FMBO and OCAT for comment. OCAT took the position that the subject circular could not be amended as the personnel desired in accordance with A.O. No. 2006-0011. It argued, among others, that the mechanics of payment established by the administrative order were of doubtful validity and that the administrative order was not duly published, hence not binding on the Court. OCAT also contended that the administrative order did not conform to Section 21 of R.A. No. 7305, because R.A. No. 7305 required rates to be based on salary grade.

FMBO advanced a contrary view. It maintained that the subject circular may be amended pursuant to A.O. No. 2006-0011, reasoning that doing so would address the personnel’s claims of unreasonable and unfair allocation. FMBO also recommended that once the amendment was made, the hazard allowances due the SCMDS personnel be charged against savings from the Court’s regular appropriations.

Issues and the Court’s Determinative Legal Question

The Court ultimately denied the request to amend Administrative Circular No. 57-2004 in the manner advocated by the SCMDS personnel. The legal question, as framed in the Court’s reasoning, centered on whether the hazard pay allocation mechanism under A.O. No. 2006-0011 could be adopted by amending the Court circular without violating established administrative law principles and the statutory mandate of R.A. No. 7305.

Legal Basis: R.A. No. 7305’s Hazard Allowance Scheme and Its Mandatory Rates

The Court grounded its analysis on Section 21 of R.A. No. 7305, which provides for hazard allowances for public health workers in designated facilities and locations that expose them to great danger, contagion, radiation, volcanic activity, occupational risks or perils to life, as determined by the Secretary of Health or the Head of the unit with the Secretary’s approval. Section 21 sets the minimum rates and the salary-grade basis: at least twenty-five percent (25%) of the monthly basic salary for health workers receiving Salary Grade 19 and below, and five percent (5%) for health workers with Salary Grade 20 and above. The Court also referred to the implementing rules, which reproduced the same salary-grade rates. Rule 7.1.5 likewise required hazard pay at 25% for Salary Grade 19 and below and 5% for Salary Grade 20 and above.

From this text, the Court held that the law and implementing rules required that hazard allowances within the two salary grade brackets be allocated at the specified rates based on the covered employee’s salary grade. The Court underscored the statutory phrase “at least,” explaining that the law set minimum rates and that the DOH could prescribe higher rates by rule, as long as those higher rates remained within the limits authorized by the statute.

Reasoning: DOH A.O. No. No. 2006-0011 Exceeded Implementing Power

The Court held that the DOH did not possess authority broad enough to fix an exact hazard allowance amount for health workers with Salary Grade 20 and above that would deviate from the 5% benchmark prescribed by R.A. No. 7305 and its implementing rules. The Court relied on a fundamental doctrine in administrative law: delegated rule-making power is limited to the authority conferred by the statute. For that reason, a rule must not conflict with the authority granted by the legislature.

According to the Court, A.O. No. 2006-0011 exceeded that limited power. The order modified both the hazard pay rates and the mechanism for their allocation by prescribing a uniform rate and, in particular, a fixed and exact amount of hazard allowance for government health workers occupying positions with Salary Grade 20 and above. The Court stated that the effect of that measure could not be minimized, especially because R.A. No. 7305 intended a scalar allocation of hazard allowances among public health workers within the two salary grade brackets.

The Court elaborated that the law and the implementing rules structured hazard pay as a proportional allocation within each salary grade group. Section 19 of R.A. No. 7305 recognized the applicability of R.A. No. 6758 for the salary scale of public health workers. The Court reasoned that when hazard pay at a fixed percentage is applied to employees with varying basic salaries within the same bracket, the result preserves the intended scalar effect. The Court further reasoned that this same scalar allocation could only be achieved by multiplying basic monthly salary by the constant legal factor of 25% in the Salary Grade 19 and below bracket and 5% in the Salary Grade 20 and above bracket. Thus, the fixed amount prescribed in A.O. No. 2006-0011 was treated as an attempt to amend the statutory hazard pay rates and mechanism.

Voidness and Limits on Administrative Rule-Making

The Court stated that A.O. No. 2006-0011 was void on its face, but only insofar as it prescribed a predetermined exact cash amount of hazard allowance for public health workers with Salary Grade 20 and above. The Court explained that when an administrative agency exercises its specific power to implement a statute, it must remain bound by what the legislative enactment provides. The rule-making power was characterized as a delegated legislative function that could not be used to abridge congressional authority or enlarge the power beyond the scope intended.

The Court also emphas

Case Syllabus (A.M. No. 03-9-02-SC)

The case arose as an administrative matter involving successive requests from personnel of the Supreme Court Medical and Dental Services (SCMDS) Division for the grant of hazard allowance.
The Court addressed the latest request by eleven named SCMDS personnel to amend the Court’s Administrative Circular on hazard pay so that allocations would conform to the mechanism in Department of Health Administrative Order (A.O.) No. 2006-0011.
The Court ultimately denied the request and directed hazard pay payments to be made in accordance with Administrative Circular (A.C.) No. 57-2004.

Parties and Procedural Posture

The request was filed on behalf of eleven SCMDS personnel named as Ramon S. Armedilla, Celeste P. Vista, Consuelo M. Bernal, Remedios L. Patricio, Madonna Catherine G. Dimaisip, Elmer A. Runez, Marybeth V. Jurado, Mary Ann D. Barrientos, Angel S. Ambata, Nora T. Juat, and Geslaine C. Juan.
The matter was treated as a Court administrative case concerning internal compliance with R.A. No. 7305 and related implementing regulations.
The Court acted through a resolution-based process that referred internal memoranda for comment before issuing its final disposition.
Chief Justice Reynato S. Puno received the personnel’s suggestions in the course of the administrative requests.
The Court’s final action denied amendment of A.C. No. 57-2004 and reaffirmed its controlling effect for purposes of hazard pay computation for the concerned personnel.

Background and Prior Resolution

The Court’s Resolution of 9 September 2003 declared SCMDS personnel entitled to hazard pay under R.A. No. 7305.
The 2003 resolution paved the way for the issuance of Administrative Circular No. 57-2004 prescribing hazard allowance guidelines for the SCMDS personnel.
A.C. No. 57-2004 classified SCMDS employees based on their level of exposure to health hazards as high-risk or low-risk.
Under the initial scheme, hazard allowance rates differed by both risk exposure and salary grade.
The personnel later questioned whether the allocation under A.C. No. 57-2004 continued to reflect the intended basis of hazard compensation.

Administrative Circular Classification Scheme

A.C. No. 57-2004 provided that personnel subject to high-risk exposure included physicians, dentists, nurses, medical technologists, nursing and dental aides, and physical therapists who render direct, actual and frequent medical services.
A.C. No. 57-2004 categorized as low-risk exposure personnel such as psychologists, pharmacists, optometrists, clerks, data encoders, utility workers, ambulance drivers, and administrative and technical support personnel with indirect and/or infrequent exposure.
Under A.C. No. 57-2004, personnel exposed to high-risk hazards in Salary Grade 19 and below received twenty-seven percent (27%), while those in Salary Grade 20 and above received seven percent (7%) of basic monthly salary.
Under A.C. No. 57-2004, personnel exposed to low-risk hazards in Salary Grade 19 and below received twenty-five percent (25%), while those in Salary Grade 20 and above received five percent (5%) of basic monthly salary.
The hazard allowance scheme therefore produced different percentage rates depending on the combined effect of risk category and salary grade bracket.

Challenge to Hazard Pay Allocation

The personnel claimed that the classification and rates under the subject circular appeared to favor those with Salary Grade 19 and below.
They asserted that the purpose of hazard pay was to compensate health workers according to the degree of exposure to hazards regardless of rank or status.
The personnel believed that hazard allowance should be based on the degree of hazard actually exposed to, rather than the salary grade.
They asked for a reexamination and amendment of A.C. No. 57-2004.
Even before the Court could act on the earlier request, developments in the DOH framework prompted further requests for conformity.

Department of Health Administrative Order Development

The Court noted that Secretary Francisco Duque III issued Department of Health A.O. No. 2006-0011 on 16 May 2006.
The administrative order carried amended guidelines for hazard pay payment applicable to all public health workers regardless of nature of appointment.
A.O. No. 2006-0011 established a 25% hazard pay rate for health workers with Salary Grade 19 and below.
A.O. No. 2006-0011 fixed the hazard allowance of those occupying Salary Grade 20 and above at P4,989.75, with no further increases.
Some SCMDS personnel later suggested that A.C. No. 57-2004 be amended to align with the amended DOH guidelines.

Internal Motions and Recommendations

On 19 December 2007, the personnel sent another letter to Chief Justice Reynato S. Puno suggesting that the subject circular be amended to conform with A.O. No. 2006-0011.
SCMDS Senior Chief Staff Officer Dr. Prudencio Banzon, Jr. indorsed the letter to Deputy Clerk of Court and Chief Administrative Officer Atty. Eden Candelaria.
On 15 January 2008, Atty. Candelaria issued a Memorandum finding merit in the request to amend the subject circular.
The memorandum proposed abolishing the high-risk/low-risk classification under the circular and replacing it with the fixed rates under A.O. No. 2006-0011.
The memorandum recommended charging the adjusted hazard allowance against the regular savings of the Court.
The Court referred the memorandum to the Fiscal Management and Budget Office (FMBO) and the Office of the Chief Attorney (OCAT) for comment.

OCAT and FMBO Positions

The OCAT opposed the proposed amendment by arguing that A.C. No. 57-2004 could not be amended in the manner desired because the DOH administrative order’s payment mechanics were of doubtful validity.
The OCAT additionally argued that A.O. No. 2006-0011 had not been duly published and thus was not binding on the Court.
The OCAT further maintained that the administrative order did not conform to Section 21 of R.A. No. 7305, where rates of hazard pay were tied to salary grade.
The FMBO took the contrary view and supported amendment, asserting that A.O. No. 2006-0011 could resolve objections to alleged unfairness in the allocation.
The FMBO re