Godfrey Sabanal

Original Copy Case No. 13

Central Bank Employees Association vs. BSP, G.R. No. 148208, December 15, 2004
Facts:
The Central Bank (now BSP) Employees Association Inc, filed a Petition for Prohibition
against BSP and the Executive Secretary of the Office of the President, to restrain
respondents from further implementing the last provision in Section 15 (c), Article II of
RA No 7653, on the ground that it is unconstitutional.

Background:
July 3, 1993, RA No 7653 (The New Central Bank Act) took effect. It abolished the old
Central Bank of the Philippines and created a new BSP.
Article II, Section 15 (c) RA 7653: A compensation structure based on job evaluation
studies and wage surveys and subject to the Boards approval, shall be instituted as an
integral component of the Bank Sentrals human resource development program.
Provided that the Monetary Board shall make its own system conform as closely as
possible with the principles provided for under RA No 6758 (Salary Standardization
Act). Provided, however, that compensation and wage structure of employees whose
positions fall under salary grade 19 and below shall be in accordance with the rates
prescribed under RA No 6758. 7 Subsequent Laws were enacted exempting all other
rank-and-file employees of Government Financial Institutions from the SSL. These are:
RA No 7907 (1995) – LBP, RA No 8282 (1997) – SSS, RA No 8289 (1997) – SBGFC,
RA No 8291 – GSIS, RA No 8523 (1998) – DBP, RA No 8763 (2000) – HGC, and RA
No 9302 (2004) – PDIC.

Issue:
Whether or not Section 15(c) violates equal protection right of the BSP r&f employees

Held:
The last paragraph of Section 15 (c), Article II of RA No 7653, is unconstitutional.

Ruling:
With the passage of the subsequent laws amending the charter of the other government
financial institutions (GFIs), the continued operation of the last provisio of Sec 15 (c), Art
II of RA No 7653, constitutes invidious discrimination on the 2,994 rank-and-file
employees of Banko Sentral ng Pilipinas.
The prior view on the constitutionality of RA 7653 was confined to an evaluation of its
classification between the rank-and-file and the officers of the BSP, found reasonable
because there were substantial distinction that made real differences between the 2
classes.
The subsequent enactments, however, constitute significant changes in circumstance
that considerably alter the reasonability of the continued operation of the last provisio
of Sec 15 (c), Art II of RA No 7653. This relates to the constitutionality of classifications
between the rank-and-file of the BSP and the 7 other GFIs. The classification must not
only be reasonable, but must also apply equally to all members of the class. The
provisio may be fair on its face and impartial in appearance but it cannot be grossly
discriminatory in its operation, so as practically to make unjust distinctions between
persons who are without differences.
The inequality of treatment cannot be justified on the mere assertion that each
exemption rests on the policy determination by the legislature. The policy determination
argument may support the inequality of treatment between the rank-and-file and the
officers of the BSP, but it cannot justify the inequality of treatment between the rank-
and-file of the BSP and the 7 other GFIs who are similarly situated.
The issue is not the declared policy of the law per se, but the oppressive results of
Congress inconsistent and unequal policy towards the rank-and-file of the BSP and the
7 other GFIs. The challenge to the constitutionality of Sec 15 (c), Art II of RA No 7653 is
premised precisely on the irrational discriminatory policy adopted by Congress in its
treatment of persons similarly situated.
In the field of equal protection, the guarantee that “no person shall be denied the equal
protection of the laws” includes the prohibition against enacting laws that allow invidious
discrimination, directly or indirectly.
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
priveleges conferred and liabilities enforced. Favoritism and undue preference cannot
be allowed. For the principles is that equal protection and security shall be given to
every person under circumstance which, if not identical are analogous.