ISSUES:
• DENR Employees Union v. Abad, G.R. No. 204152, January 19, 2021
FACTS:
The petitioners, DENREU and K4, filed a petition challenging the constitutionality
of DBM Budget Circular No. 2011-5, which imposed a P25,000.00 ceiling on the
CNA incentives for the year 2011.
The COA subsequently disallowed the DENR's grant of CNA incentives for
exceeding the limit. The case involves a petition filed by DENR employees,
asserting their vested right to the CNA incentive and seeking an injunction
against the implementation of the circular.
The DBM Secretary argued that the circular was valid and necessary to prevent
agencies from accumulating savings for the incentive and hindering
government programs.
The Court allowed the petition for certiorari based on exceptions to the general
rule. The case involves a petition challenging the constitutionality of Budget
Circular No. 2011-5, which imposed a ceiling on CNA incentives for government
employees.
The petitioners argued that the circular was unconstitutional and went against
existing laws and jurisprudence. The DBM Secretary defended the circular,
stating that it fell within the scope of the DBM's authority to regulate
compensation.
The case involves a petition challenging certain provisions of Joint Circular No.
1 issued by the DBM and CSC. The petitioners argued that the provisions
violated their constitutional rights to negotiate and collectively bargain.
The DBM's role is to administer and regulate the payment of compensation to
RULING:
government employees and ensure compliance with established policies and
guidelines.
Christopher King Cayabyab
1. Whether the Department of Budget and Management (DBM) has the
authority to regulate and review compensation and benefits received
by officials and employees of government agencies.
2. Whether the DBM's authority to administer compensation systems of
government entities extends to the determination of rates for Collective
Negotiation Agreement (CNA) incentives.
3. Whether the Department of Budget and Management (DBM) acted
within its authority in imposing a budget ceiling for Collective
Negotiation Agreement (CNA) incentives.
4. Whether the employees of the Department of Environment and Natural
Resources (DENR) are liable for the refund of excess CNA incentives
received.
5. Whether or not DBM Budget Circular No. 2011-5 is required to be
published and filed with the U.P. Law Center-ONAR.
6. Whether or not DBM Budget Circular No. 2011-5 is merely interpretative
or internal in nature.
7. Whether the publication of an administrative circular is necessary for it
to be effective and enforceable.
8. Whether the belated publication of an administrative circular can have
retroactive effect to cure the infirmity of its issuance.
9. Whether the publication requirement for the implementing rules of
statutes is mandatory even if there was public consultation and
submission of comments by the parties.
10. Whether the retroactive application of Budget Circular No. 2011-5 to
CNA incentives already released to the employees violates due
process.
1. Yes, the DBM has the authority to regulate and review compensation
and benefits received by officials and employees of government
 agencies. The Court ruled in previous cases that while government
agencies have the power to establish and fix their own compensation
and benefits schemes, these are subject to the review and approval of
the DBM to ensure compliance with prescribed policies and guidelines.
The DBM's role is supervisory in nature, primarily to ascertain that
proposed compensation and benefits adhere to applicable laws and
policies.
2. Yes, the DBM's authority to administer compensation systems of
government entities extends to the determination of rates for CNA
incentives. Government Appropriations Acts have consistently limited
the rates of CNA incentives to reasonable rates as determined by the
DBM. The DBM is authorized to issue policy and procedural guidelines
for the implementation of CNA incentives.
3. The DBM acted within its authority in imposing a budget ceiling for CNA
incentives. Republic Act No. 10633 allows savings from allowable MOOE
allotments to be used for the grant of CNA incentives, subject to the
funding sources and amount being limited to the allowable MOOE
allotments and rates determined by the DBM. The DBM's imposition of a
P25,000 budget ceiling for CNA incentives is in accordance with the
law.
4. The employees of DENR are not liable for the refund of excess CNA
incentives received. The Court emphasizes the requirement of
publication as a condition precedent to the effectivity of a law. As the
law requiring the refund was not published, the DENR employees
cannot be held liable for the refund.
5. DBM Budget Circular No. 2011-5 is required to be published and filed
with the U.P. Law Center-ONAR. The fact that it was published on
February 25, 2012, two months after its issuance, and that it was not filed
with the U.P. Law Center-ONAR as mandated by the Administrative
Code of 1987, render its publication and filing non-compliant with the
law.
Christopher King Cayabyab
6. DBM Budget Circular No. 2011-5 is not merely interpretative or internal in
nature. Without the circular, there would be no maximum allowable
amount of P25,000.00 for the CNA incentive per qualified employee. It
substantially increases the burden of those governed and affects
substantial rights of individuals. Therefore, it cannot be exempted from
the requirement of prior publication and filing.
7. Yes, the publication of an administrative circular is necessary for it to be
effective and enforceable. The publication requirement is a
constitutional mandate of due process and a guarantee of the right to
information on matters of public concern. The omission of publication is
tantamount to denying the public knowledge and information of the
laws that govern them, thus violating due process.
8. No, the belated publication of an administrative circular cannot have
retroactive effect to cure the infirmity of its issuance. Laws and rules are
binding only when their existence and contents are confirmed by valid
publication. The fact that an administrative circular was published after
its effectivity does not cure the violation of due process, especially
when it aims to impose restrictions on previous fiscal years.
9. The publication requirement for implementing rules of statutes is
mandatory and cannot be dispensed with, even if there was public
consultation and submission of comments by the parties. The purpose of
publication is to give wide publicity so that all persons having an interest
in the proceedings may be notified thereof. Therefore, the failure to
publish the GRAM Implementing Rules in the Official Gazette or a
newspaper of general circulation renders them ineffective.
10. The retroactive application of Budget Circular No. 2011-5 to CNA
incentives already released to the employees violates due process.
While the Department of Budget and Management has the power to
impose conditions for grants of CNA incentives, in this case, the
conditions were imposed after the benefits had already been released
and received by the employees. The benefits had already vested in the
 employees' behalf, and the circular cannot be retroactively applied to ● Belated publication does not have retroactive effect to cure the
incentives granted before its publication. infirmity of an administrative circular.
● Notification of the existence of an administrative circular does not
PRINCIPLES: exempt it from compliance with the publication requirement.
● The publication requirement for implementing rules of statutes is
● The DBM has the sole power and discretion to administer the mandatory.
compensation and position classification system of the national ● Procedural due process requires wide publicity for administrative
government. issuances.
● Compensation and benefits received by government officials and ● Benefits that have already vested cannot be retroactively affected by
employees without the approval or authority of the DBM are subsequent regulations.
unauthorized and irregular.
● Government agencies have the power to establish and fix their own
compensation and benefits schemes, but these are subject to the
review and approval of the DBM to ensure compliance with prescribed
policies and guidelines.
● The DBM's role in reviewing compensation systems is supervisory in
nature, primarily to ensure compliance with applicable laws and
policies.
● The DBM's authority to administer compensation systems includes the
determination of rates for CNA incentives, which are limited to
reasonable rates as determined by the DBM.
● The principle of authority to impose budget ceilings - The DBM has the
authority to impose budget ceilings for CNA incentives pursuant to
Republic Act No. 10633.
● The principle of publication - Publication is necessary for the effectivity
of a law and must be complied with to fully inform the public of its
contents before their rights and interests are affected.
● The publication requirement is part of the constitutional mandate of
due process and ensures that the public is informed of the laws that
govern them.
● Laws and rules are binding only when their existence and contents are
confirmed by valid publication.

Christopher King Cayabyab