Case Name Central Bank Employees Association v.

BSP
Topic Equal Protection
Case No., Date G.R. No. 148208, December 15, 2004
Ponente J. Puno
Case Summary RA 7653 took effect which provided different compensation packages
for BSP officers and their rank-and-file employees. Petitioners contend
that it violates equal protection since there is no valid classification.

(SPOILER ALERT)

The Court ruled that it is valid by itself but due to subsequent

enactments, its continued operation has become violative of equal
protection.
Digest Author Ferrer Unlimited Digest Works

RELEVANT FACTS

• On July 3, 1993, RA 7653 took effect

• On June 8, 2001, petitioner Central Bank Employees Association, Inc. filed a petition for
prohibition against BSP and the Executive Secretary

o To restrain respondents from implementing the last proviso in Sec. 15(c), Art. 21,
RA 7653

o It is unconstitutional for making a cut between two classes of employees in the

BSP
§ BSP Officers
• Those exempted from the Salary Standardization Law (SSL)
§ Rank-and-file
• Those not exempted from the SSL

• Petitioner claimed:

o It is not germane to the purpose of the law

§ To establish professionalism and excellence at all levels in the BSP

o The classification is arbitrary, capricious, and violates the equal protection clause

o RA 7653 has a separability clause

§ Proviso may be declared unconstitutional without affecting other provisions

o Some 2,994 BSP rank-and-file employees have been prejudiced since 1994 when
the proviso was implemented
• Respondent BSP countered:

o The provision did not violate the equal protection clause

o It is constitutional if construed in harmony with other provisions of the same law and
the mandate of the Monetary Board
§ “Fiscal and administrative autonomy of BSP”
§ “Establish professionalism and excellence at all levels in accordance with
sound principles of management”
 RATIO DECIDENDI

Issue Ratio
W/N the YES.
proviso
violates equal A. Sec. 15(c), Art. 2, RA 7653 is valid under the present standards of equal
protection protection.

• Equal protection does not prevent the Legislature from establishing classes
of individuals or objects upon which different rules operate, so long as:
o The classification is not unreasonable
o It is germane to the purpose of the law
o It must apply to all those belonging to the same class.

• The exemption of officers from the SSL was intended to address the
BSP’s lack of competitiveness in attracting competent officers and
executives
o Not to discriminate against the rank- and-file.

• If the end result led to a disparity of treatment between the two groups in
salaries and benefits, the distinction has a rational basis and not
arbitrary.

• Moreover, all reasonable doubts should be resolved in favor of the

constitutionality of a statute.

B. But the enactment of subsequent laws renders the continued application a

violation of the equal protection clause

1. Relative Constitutionality

• A statute valid at one time may become void at another time because
of altered circumstances
o If a statute in its practical operation later becomes arbitrary or
confiscatory, its validity may consequently become open to
inquiry and investigation in the light of changed conditions.

2. Applicability of the Equal Protection Clause

• Courts are not confined to the language of the statute in determining

whether that statute has any discriminatory effect

• A statute nondiscriminatory on its face may be grossly discriminatory in

its operation

• No difference between a law which denies equal protection and a law which
permits of such denial

• A statute may be deemed unconstitutional because of their effect in

operation
o If it has the effect of denying equal protection, it is unconstitutional
3. Enactment of RAs 7907, 8282, 8289, 8291, 8523, 8763, and 9302 shows
the consequential unconstitutionality of the challenged proviso

• 11 years after the amendment of the BSP charter, the rank-and-file of

seven other GFIs were granted the exemption that was denied to the
rank-and-file of the BSP

• The said enactments alter the reasonability of the continued operation

of the proviso
o As a consequence of the passage of eight other laws

• The inequality of treatment cannot be justified that each exemption

rests “on a policy determination by the legislature.”

• There are no characteristics peculiar only to the seven GFIs or their

rank-and-file to justify the exemption which BSP rank-and-file
employees were denied.
o The disparity is discriminatory

• The reason behind the SSL exemption was linked to factors common to
the eight GFIs
o The pivotal role they play in the economy
o The necessity of hiring and retaining qualified and effective
personnel to carry out the GFI’s mandate
o The recognition that the compensation package of these GFIs is
not competitive, and fall substantially below industry standards

• The classification made was not based on any substantial distinction

vis-à-vis the particular circumstances of each GFI.

• The GFIs are a particular class of government entities

o The exemption granted to two GFIs makes express reference to
allowance and fringe benefits similar to those extended to the
employees and personnel of other GFIs

• The equal protection clause does not demand absolute equality but it
requires that all persons shall be treated alike, under like circumstances
and conditions both as to privileges conferred and liabilities enforced

• The seven subsequent charters has rendered the continued

application of the proviso violative of equal protection
 • The challenged proviso operates on the basis of the salary grade or
officer-employee status
o It is a distinction based on economic class and status
§ With the higher grades as recipients of a benefit specifically
withheld from the lower grades.
o Officers of the BSP now receive higher compensation
packages that are competitive with the industry, while the poorer,
low-salaried employees are limited to the rates prescribed by
the SSL

• The implications are disturbing

o BSP rank-and-file employees are paid the strictly regimented
rates of the SSL while employees higher in rank—possessing
higher and better education and opportunities for career
advancement—are given higher compensation packages to
entice them to stay

• It is the rank-and-file employees who have the real economic and

financial need for the adjustment
o Especially in terms of job marketability
o Majority of them consist of people whose status in life are limited

Quotable Quote:

The BSP rank-and-file employees merit greater concern from this Court for
representing the more impotent rank-and-file government employees who, unlike
employees in the private sector, have no specific right to organize as a collective
bargaining unit and negotiate for better terms and conditions of employment, nor
the power to hold a strike to protest unfair labor practices.

Not only are they impotent as a labor unit, but their efficacy to lobby in Congress
is almost nil as RA 7653 effectively isolated them from the other GFI rank-and-file
in compensation.

These BSP rank-and-file employees represent the politically powerless and they
should not be compelled to seek a political solution to their unequal treatment.

Unless the equal protection clause of the Constitution is a mere platitude, it is the
Court’s duty to save them from reasonless discrimination.

RULING

The continued operation/implementation of the last proviso of Sec. 15(c), Art. 2 of RA 7653 is
unconstitutional.