Chapter 7 SALARY AND PERQUISITES COMPENSATION and perquisites are attached to public office for a number of reasons. For one thing, they are intended to attract competent men to the government service, which they would not otherwise Join if they were required to devote their time and efforts for free. For another, remuneration, if ade- quate, will lessen the temptation for graft as there ‘would be little need for the public officer to augment his income through illegal methods. (This, in fact, is why the more sensitive the office, the higher the sal- ary.) Another purpose would be to lend the necessary prestige to the office, as where the head of state is provided with an official residence where he may receive visiting dignitaries, especially from foreign countries. Most important ofall, of course, is the ne- cessity to pay, and indeed reward, the public officer for the loyal and dedicated service rendered by him to the people and, by so doing, improve his motiva- tion and efficiency. In Sevilla v. Gocon,! the Supreme Court stressed that “ordinarily, no one would assume the heavy duties and responsibilities of a position without receiving or at least expecting to receive in the future the corresponding compensation therefor. It is im- 1423 SCRA 98, 356 SALARY AND PERQUISITES 387 proper for a principal to expect a subordinate to ‘continue performing the functions of a values educa- tion teacher when someone else had already been appointed to the position and was receiving the cor- responding salary.” ‘The Supreme Court, tritely commenting on what is viewed as a regretful reality of public life, has ac- tually declared that “government service demands great sacrifice. One who cannot live with the modest salary of a public office has no business staying in the service. He is free to seek greater pastures. The pub- lic trust character of the office proscribes him from employing its facilities or using oficial time for pri- vate business or purpose. Our ruling is aligned with the Code of Conduct and Ethical Standards for Pub- lic Officials and Employees which demands that every public servant shall at all times uphold public interest over his personal interest."= Salary Contrary to common impression, salary is not an essential element of a public office. In fact, there is such a thing as an honorary office, to which no compensation is attached and where the incumbent is prepared and willing to serve gratis. Even so, this is the exception rather than the rule as the majority of public functionaries cannot, because of their eco- nomic necessities, afford such generosity. Source of Salary The salary of a public officer may be provided by the Constitution or by statute. For example, Section 17 of the Transitory Provisions of the Constitution 2 Reyes v. Anosa, 267 SCRA 523,358 “Tue LaW OF PUBLIC OFFICERS prescribes that, “unless the Congress provides other- ‘wise, the President shall receive an annual salary of three hundred thousand pesos; the Vice-President, the President of the Senate, the Speaker of the House of Representatives, and the Chief Justice of the Su- preme Court, two hundred forty thousand pesos each; the Senators, the Members of the House of Representatives, the Associate Justices of the Su- preme Court, and the Chairmen of the Constitutional Commissions, two hundred four thousand pesos each; and the Members of the Constitutional Com- missions, one hundred eighty thousand pesos each.” On the other hand, the salaries of justices of the Sandiganbayan are ‘provided for in Presidential De- cree 1606. The Constitution may sometimes provide for the inital salary of a public officer and allow the legislature to change it later, subject to certain limi- tations. Thus, it is also provided in the Constitution that the salaries of the foregoing constitutional offi cers shall be fixed by law and shall not be decreased during their tenure or continuance in office.? Where the law confers upon an entity the power to fix the salaries and emoluments of its employees, said entity may include representation and trans- portation allowances among the emoluments that may be given, subject to the standards laid down by said law.4 In De Jesus v. Civit Service Commission,® peti tioners questioned a resolution of the Civil Service Commission preventing them, in their capacity a8 board directors of a water district, to receive com- pensation, earlier awarded to themselves by board 2 Ace Vl, Section 6; Article VI, Section 10; Article IX, A. Section 3; se Iti, Je ¥- Commission on Audit, 308 SCRA 559 “Intia dv. Commission on Audit, 306 SCRA 899, S471 SoRA 624 ‘SaLany AND PenguisiTes 359 resolution, other than per dies, They contended that, in providing for such a proscription, the Com- mission had usurped an authority which does not pertain to it. The Supreme Court rejected their con- tention, stating that “to sustain them would be to allow the board of an administrative agency, by merely issuing a resolution, to derogate the broad and extensive powers granted by the Constitution to ‘ constitutional commission.” Citing Baybay Water District v. Commission on Audit? the Supreme Court said — “Under section 13 of this Decree [PD 198), per diem is pre- cisely intended to be the compensation of members of [te] beer ofairectors of water districts. Indeed, words and phrases in a Satute must be given their natural, ordinary and commoniy- accepted meaning, due regard being given to the context ‘which the words and phrases are used. By spcifing the con- pensation which a director is entitled to receive and by limiting {he amount he/she is allowed to recrve in a month, and, in the sume paragraph, providing No director shall receive other com Fensation’ than the amount provided for per dims, the law gute Clearly indicates that directors of water districts are suthorard to reeeive only the per diem authorised by law and no ter compensation or allowance in whatever form A similar ruling was held by the Supreme Court, in De Jesus v. Commission on Audi? where it held that “Section 13 of PD 198 is clear enough that it needs no interpretation. It expressly prohibits the grant of compensation other than the payment of per diems, thus preempting the exercise of any discretion by water districts in paying other allowances and 374 SCRA 482. 7 403 SCRA 666; see also Molen, Jr. v. Commission of Au- dl, 453 SCRA 769: Querubin v. Regional Cluster Director, Legal and Adjudication Orice, COA Regional Office No, VI, Pavia, lao City, 433 SCRA 769; Abellanosa v. Commission on Audit and the National Housing Authority, G.R. No, 185806, July 24,2012.360 ‘Tue Law oF PUBLIC OFriceRs bonuses.” In the same case, the Court stressed that the Commission on Audit has auditing jurisdiction ‘over government-owned or controlled corporations with original charters like the Local Water Utilities ‘Administration [LWUA], albeit on a post-audit basis, In this connection, it is to be recalled that in Civil Liberties Union v. Executive Secretary,® the Supreme Court clarified that, despite its declaration of Execu- tive Order No. 284, which allowed cabinet members, undersecretaries or assistant secretaries to hold ‘multiple positions, as unconstitutional, said officers ‘were nonetheless allowed to retain the per diems, allowances or emoluments received by them in con- nection with their multiple positions, because they acted as de facto oficers. As such, they are entitled to said compensation for actual services. In Abanilla v. Commission on Audit,? the Su- preme Court upheld the disallowance by the Com- mission on Audit of certain benefits and privileges granted to the personnel of a local water district, or a overnment-owned or controlled corporation with an original charter. Said benefits and privileges were granted to them by said district's board of directors and by virtue of a collective bargaining agreement. Citing Alliance of Government Workers v. Minister of Labor and Employment,'° the Court said that ‘in government employment, however, it is the legisla- ture and, where properly given delegated power, the administrative heads of government which fix the terms and conditions of employment. And this is effected through statutes or administrative circulars, rules and regulations, not through collective bargain- ing agreements.” However, the Supreme Court added #198 scRA 317, 2 468 SCRA 87. 16128 SORA 1 SALARY AND PenquismEs 361 that ‘while we sustain the disallowance of the above benefits by respondent COA, however, we find that the MCWD affected personnel who received the above mentioned benefits and privileges acted in good faith tnder the honest belief that the CBA authorized such payment. Consequently, they need not refund them.” This good faith principle has since been reiter- ated in several other cases. Thus, in Zamboanga City Water District v. Commission on Audit, the Court declared — ‘Although the disbursements made by ZCWD may have been made without legal basis, the petitioner may be absolved from refunding the disbursements if (is shown that they were ‘made in good faith. Good faith, in relation tothe requirement of fefund of disallowed benefits or allowances, is that state of mind Senoting honesty of intention, and from from knowledge of fcrcumstances which ought put the holder upon inguin en honest intention to abstain from taking any unconscienious advantage of another, even though technicalities of lam, together With absence of all information, notice, or benefit or belief of facts which render transactions unconteentiows” A similar ruling was made in Metropolitan Naga Water District v. Commission on Audit,!? where the 8 GAR. No, 213472, January 26, 2016. % GR. No. 218072, March 8, 2016; see also Quintero v. Commission on Audit, O.R. No. 218963, Nay 31, 2016; Duty Free Philippines Corporation v. Commission on Audit, G.R. No, 210901, July 12, 2016; Philippine Health Insurance Corporation ¥. Commission on Audit, G.R. No, 213453, November 29, 2016; Singson v. Commission ‘on Audit, G.R. No. 159355, August 2010, 627 SCRA 36, citing Molen, Jr. v. Commission on Audit, 493 Phil, 874 (2005); Querubin v. Regional Cluster Director, Legal and Adjudication Office, COA Regional Office VI, Pei lilo City, G.R. No. 159299, July 7, 2004, 433 SCRA 769; esus v, Commission on Audit, 466 Phil. 912 (2004); Pilipine International Trading Corporation ¥. Coramission on Audit, 61, Phil '737 (2003); Veloso’ v. Commission on Audit, CR. NO. 199677, September 6, 2011; Zamboanga City Water District v.362 ‘Tue LAW oF Pusuc OFriceRs Court said “good faith may also be appreciated in favor of the MNWD officers who approved the same, ‘They merely acted in accordance with the resolution passed by the Board authorizing the back payment of COLA tothe employees.” ‘There have been instances though when the Court had required public employees to return funds ‘unlawfully received by them, as in the cases of De Guzman v. Commission on’ Audit!2 and Philippine Export Processing Zone Authority v. Commission on ‘Audiy# where the public offcers and employees were determined to have received salaries and benefits in bad faith, Limitations ‘The constitutional limitations on the power of the legislature to alter salaries are the following: (1) The salaries of Senators and Members of the House of Representatives shall be determined by law. No increase in said compensation shall take effect, until after the expiration of the full term of all the ‘Members of the Senate and the House of Represen- tatives.'5 (2) As noted earlier, the salaries of the Presi- dent and the Vice-President shall be determined by law and shall not be decreased during their tenure. No increase in said compensation shall take effect Commission on Aut, G.R. No. 213472, January 26, 2016 National Transmission Corporation v. Commission on’ Audit GR No. 22365, November 22, 2016 SQ. No, 217999, July 26, 2016, MGR No, 189767, July 3, 2012; see Paraico-Aban ¥ ‘Commission on Audit, .R. No, 217968, January 12, 2016. Anite i, Section 10, SALARY AND Penguistes 363, until after the expiration of the term of the incum- bent during which such increase was approved." (8) The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and of judges of lower courts shall be fixed by law. During their continuance in office, their salary shall not be decreased.” In the case of Nitafan v. Commissioner of Intemal Revenue,'* the Supreme Court ruled that the salaries of the Justices of the Supreme Court are subject to withholding tax, thereby discarding its earlier rulings in Perfecto v. Meer!® and Endencia v. David.2 ‘The debates, interpellatons and opinions expressed re- garding the constitutional provision in question until i was finally approved by the Commission disclosed thatthe tre in: tent of the framers of the 1987 Constittion, in adopting as to make the salaries of the members of the Judiary taxable ‘The ascertainment of that intent Is but In keeping with the fun damental principe of constitutional constriction thatthe intent ofthe framers of the organic law and of the people adopting it should be given effect. The primary task in nattational cons truction isto ascertain and thereafter assure the realizaton of the purpose of the framers and of the peop in the adoption of the Constitution. It may also be safely sumed thatthe people in ratifying the Constitution were guided mainly by the expana- tion offered by the framers “Besides, construing Section 10, Article Vl ofthe 1987, Constitution, which, for clarity is again reproduced hereunder, “The salary of the Chief Justice and ofthe Associate Justices of the Supreme Court, and of judges of lower courts shal be fed by law. During thei continuance in of- Tee, their salary shall not be decreased” (talies supplied) ' article Vil, Section 6. ¥ Artiele Vii, Section 10. 19 152 SCRA 284. 19 85 Phil. 522. 2993 Phil. 696.364 ‘Tue Law oF PuBtic OFFICERS “itis plain that the Constitution authorizes Congress to pass a law fixing another rate of compensation of Justices and ‘Tueges but such rate must be higher than that which they are ceiving at the time of enactment, or if lower, it would be a cable only to those appointed after its approval. It would be a Strained construction to read into the provision an exemption {tom taxation inthe light ofthe discussion in the Constitutional Commission “With the foregoing interpretation, and as stated heretofore, the raling tha the impositon of income tax upon the salary of judges is diminution thereof, and so violates the Constitution’ in Perfecto v, Meer, as alfred in Endenca v. David, must be decared discarded. The framers of the fundamental law, as the alte ego ofthe people, have expressed in clear and unm terms the meaning and import of Section 10, Article Vill, of the 1987 Constitution that they have adopted, “Stated otherwise, we accord due respect to the intent of te people, through the discussions and deliberations of thet repreomiatves, i the spirt that all etiene should bear thet ‘iquot pat of the cost of maintaining. the government and Should share the burden o general income taxation equitably (4) The salary of the Chairman and the Com- missioners of the Constitutional Commissions shall be fixed by law and shall not be decreased during their tenure.2! (5) The salaries of the Ombudsman and his Deputies, which shall be the same as those provided for the Chairmen and Members, respectively, of the Constitutional Commissions, shall not be decreased during their term of office.2? In addition, the Constitution likewise provides that the Congress shall provide for the standardiza- tion of compensation of government officials and employees, including those in government-owned or controlled corporations with original charters, taking 2 article I, 8 Section 3, 2 Article XI, Section 10 SSaLaky AND PERQUISITES 365, into account the nature of the responsibilities per- taining to, and the qualifications required for their positions.”? Moreover, it is likewise provided that no elective or appointive public officer or employee shall receive additional, double, or indirect compensation, unless specifically authorized by law, nor accept without the consent of Congress, any present, emo- Iument, office, or title of any kind from any foreign government.2* Ofcourse, the right of the legislature to alter the salaries of all public officers is subject to the funda- mental requirements of due process. “Nevertheless, this power is subject to one im- portant restriction, to wit, that no reduction or aboli- tion of salary can operate retroactively to affect sala- ries already earned or accrued. Such salaries are regarded as vested property rights and as such will come under the protection of due process. To be valid, the law should have prospective effect only, to cover salaries yet to be earned and therefore not yet considered property to the public officer."25 Section 8 of Article XVI of the Constitution fur- ther provides that the “State shall, from time to time, review to upgrade the pensions and other benefits due to retirees of both the government and the pri- vate sectors.” 2 Article IX, B, Section 5. 2 Article IX, B, Section 8 25 Kapisanan ng mga Manggagawa sa Government Service Insurance System (KMG) v. Commission on Audit, 437 SCRA3T 1; see also Molen, Jr. v. Commission on Audit, 453 SCRA 769, {iting Baybay Water District v. Commision on Audit, 374 SCRA366 ‘Tue Law oF PuBuc OFFICERS: Salary and Due Process Where the salary is granted by statute, it may be withdrawn by statute. The rule is that one does not have a vested right to a salary, which, unless it is protected by the Constitution, may be subjected to any change deemed fit by the legislature which gran- ted it in the first place. Thus, even as the salary may be increased, it may also be reduced and, in fact, altogether be abolished in the discretion of the law- making body. In the latter event, the functionary who is prejudiced as a result cannot complain. He cannot invoke due process because the right to a salary is not a property right. If the office itself can be abol- ished by the statute that created it, there is no rea- son why the legislature cannot exercise the lesser power of modifying the incidents of the office, in- cluding the salary attached to it25 Nevertheless, it bears reiteration that this power is subject to one important restriction, to wit, that no reduction or abolition of salary can operate retroac- tively to affect salaries already earned or accrued. Such salaries are regarded as vested property rights and as such will come under the protection of due process. To be valid, the law should have prospective effect only, to cover salaries yet to be earned and therefore not yet considered property to the public officer.” It is important to note that the erroneous appli- cation and enforcement of the law by public officers does not estop the Government from making subse- quent correction of stich errors. Where the law ex- pressly limits the grant of certain benefits to a speci- Mechem, Section 856, 2 isk, Jeflerson, 116 US 131 SALARY AND PenguistTEs: 367 fied class of persons, such limitation must be en- forced even if it prejudices certain parties due to a previous mistake committed by public officials in gganting such benefit. 26 Right to Salary ‘The right to salary is based on the right to the office itself and accrues from the date of actual commencement of the discharge of official duties ° ‘An appointment issted in accordance with pertinent laws and rules shall take effect immediately upon its issuance by the appointing authority, and if the appointee has assumed the duties of the position, he shall be entitled to receive his salary at once, without awaiting the approval of his appointment by the Commission.*° It goes without saying that a public official is not entitled to any compensation if he has not rendered any service.®! It has been held that the ex officio position being actually and in legal contem- plation part of the principal offic, it follows that the official concerned has no right to receive additional compensation for his services in said position.22 2 Kapisanan ng mea Manggagawva sa Government Service Insurance ‘System (KMG) v. Commission on Auéit, 437 SCRA 371; see also Molen, Jr. v, Commission of Audit, 453 SCRA 769, citing Baybay Water District v. Commission on Audit, 974 SCRA 482 (2002), 2 Mechem, Section 867 39 Civil Service Commission v. Joeon, Jr. 429 SCRA 773. 31 Acosta v. Court of Appeals, 334 SCRA 486; Sales v. Mathay, 129 SCRA 180; Reyes. Hernandks, 71 Pal 397 ional Amnesty Commission v. Commission on Audt, 437 SoRA 655; Bitola, J. v. Commission on Aud 428 SCRA 437; see also Leynes v. Commission on Audit, 418 SCRA I where the Supreme Court, clarifying the prohibition in National Compensation Circular No. 67 [issued by the Commission on Audit) is only against the dual or multiple collection of RATA, Fuled that when a national official is on detail with another368 “Tae Law oF Pusuc OFriceRs Parenthetically, it is important to note that the Department of Budget and Management is vested with the authority to review the salaries of govern- ment personnel, particularly with respect to the standardization of the same. Thus— “The rationale forthe review authority of the Department of ‘Budget and Management is obvious. Even prior to RA No. 6758, the declared poly of the national goverment is to provide ‘equal pay for Substantially equal work and to base diferences in ‘ay upon substantve difeences in duties and responsibilities, fand qualifeation requirements of the postions.’ To implement this policy, PID. No. 985 provided fr the standardized compen- ‘ston of government employees and offical, including those in {goerment-owned and controlled corporations. Subsequenty, PD. No. 1597 was enacted prescribing the dutics to be followed by agencies and offces exempt from the coverage of rules and regulations of te Office of Compensation and Position Classit- Caton. The intention, therefore wae to provide a compensation standardization seheie such thet notwithstanding any exemp: ‘ons from the coverage ofthe Oils of Compensation and Pos ton Classification, the exempt government entity oF office is still required to cbsere the policies and guidelines issued by the President and to submit a report to the Budget Commission on ‘matters conceing. position dassifieation snd compensation plans, polis, rates and other related details. This ought to be fhe interpretation if the avowed policy of compensation stan- dardzation in government is tobe given full effect. The polly of ‘equal py for substantially equal work will be an empty directie IF goversment ents exempt from the coverage of the Office of Compensation and Peston Classification may freely impose aay typeof salary scheme, benefit or monetary incentive to its em piojes in any amount, without regard to the compensation plan Implemented inthe other government agencies or entities, Thus, cen prior to the passage of RA. No, 6758, consistent with the salary standardization laws in effect, the compensation ad benefits scheme of the PRA is subject to the review of the De partment of Budget and Management 8 rational ageney, he should get his RATA only from his parent rational agency and not from the other national agency he's etaled to. ' Philippine Retiement Authority v, Buitag, 397 SCRA 27 SALARY AND PequisEes 369 It is significant that, in Cruz us. Court of Ap- peals;# the Supreme Court acknowledged the au- thority of the Department of Budget and Manage- ment even over the authority of constitutional offices and officers with fiscal autonomy to reclassify, up- ‘grade, and create positions. It said — ‘Being a member of the fiscal autonomy group does not vest the apeney with the authority to reclassify uperade, and treate postions without approtal of the DBM, While the rem brs ofthe Group are authored to formulate sind implement the organizational ‘structures of their respective ofces and deter= tune the compensation of ther personnel, such authority isnot bseute and must be exercised within the parameters of the Unie Position Classification and Compensation System era lished under RA 6758 mere poplar known as the Comnpenss> ton Standardization Law” In the case of the de jure officer who has been unlawfully prevented from assuming the office, the salary accrues to him from the date of the depri- vation of the office.2$ It has already been remarked that the de facto officer cannot himself benefit from his status and so is not allowed as a rule to collect salaries for services rendered.% The exception is where he had acted in good faith and there is no officer de jure claiming the office.%” Thus, in the case of Rodriguez v. Tan,3* dis- cussed earlier, a de facto senator was allowed to re- tain the salaries collected by him prior to his ouster, likewise on the justification of good faith, It should be remembered though that this decision was not GAR. No, 119185, dated January 30,1956. 35 Monroy v. Court of Appeals, 20 SCRA 620. 2 See Chapter 3; Matthews v Superior, 53 Mis. 715. 7 Patterson v. Benson, 112 Pac. 32. 38 93 Phil. 724; see also Menzon v. Pell, 197 SCRA 251 and Civil Liberties Union v. Executive Seretary, 194 SCRA 317370 ‘Tue LaW oF Pusuc OFFICERS applied in the Monroy? case for reasons already ex- plained. In Amores v. HRET“® the Supreme Court held that “[jt not being contested, however, that private respondent was eventually proclaimed as a party-list representative of CIBAC and rendered services as such, he is entitled to keep the compensation and emoluments provided by law for the position until he is properly declared ineligible to hold the same.” In any event, the right of the de jure officer to his salary should be asserted against the de facto officer who had collected it and not against the gov- emnment,*! except only where the government contin- ued paying the salary to the de facto officer even after the adjudication of title in favor of the officer de jure Under Section 33 of the 2017 RRACCS, a decla- ration by the Commission that an order of preventive suspension is void on its face entitles the respondent oficial or employee to immediate reinstatement and payment of back wages corresponding to the period of the illegal preventive suspension without awaiting the outcome of the main case. The phrase “void on its face” in relation to a preventive suspension order imports any of the following circumstances — [i] the order was issued by one who is not authorized by Jaw; [i] the order was not premised on any of the conditions under Section 29 iii] the order of preven- tive suspension was issued without a formal charge or notice of charge or with defective formal charge/notice of charge; or iv] while the order is 2 Monry v. Court of Appeals, 20 SCRA 620, GR No, 189600, June 29, 2010. + Mecher, Section 333. “Salre County v. Anderson, 20 Kans, 298. ‘SALARY AND PeRQUISTES a7 lawful in the sense that it is based on the enumer- ated grounds, but the duration of the imposed pre- ventive suspension has exceeded the prescribed periods, in which case, the payment of back wages shall correspond to the excess period only. A declara- tion of invalidity of a preventive suspension order not based on any of the reasons enumerated in Section 33 (a) shall result in the reinstatement of the res- pondent. The payment of back wages shall, however, avait the final outcome of the principal case. If the decision rendered in the principal case is for exon- eration or when the penalty imposed is reprimand, the respondent shall be paid back wages. Otherwise, no back wages shall be awarded. ‘Accordingly, it has been held that, where a pub- lic officer under investigation or prosecution is pre- ventively suspended but subsequently exonerated, he is entitled to payment of the salaries correspond- ing to the period of his preventive suspension.”° The payment of back salaries may be decreed if the res- pondent is found innocent of the charges which caused the suspension and when the suspension is not justified. Applying this rule literally, the Su- preme Court held in the case of Malanyaon v. Lis- ing’S that where an accused died pending his trial for corrupt practices, his heirs were not entitled to pay- “9 See Macabuhay v. Manuel, 101 SCRA 834; see also dis- ‘cussion in Chapter 4 on Preventive Suspension and Decision; Caniete v. Secretary of Education, Culture and Sports, 333 SCRA 849; Gloria v. Court of Appeals, 306 SCRA 287; Brugada v. Secretary of Education, Culture and Sports, 450 SCRA 224; see also Bangalisan v. Court of Appeals, 242 Phil. $85, 276 SCRA {619 (1997); De la Cruz v. Court of Appeals, 364 Phil. 786, 05, ‘SCRA 303 (999); Alipat v. Court of Appeals, 368 Phil, 264, 208, SCRA 781 (1999); Secretary of Education, Culture and Spots v Court of Appeals, 342 SCRA 40. ‘+ Secretary of Education v. Court of Appeals, 342 SCRA 40. +6106 SCRA 237.372 ‘Twp Law oF Pusuc Orricens ment of back salaries accruing during his preventive suspension because he had not been exonerated, ‘This decision in effect presumed him guilty instead of innocent, in disregard of the Bill of Rights. ‘At any rate, the phrase “full exoneration” con- templates a finding of not guilty for the offense. Downgrading of the charge to a lesser offense shall not be construed as “full exoneration."*6 Back salaries are also payable to an officer ille- tally dismissed or otherwise unjustly deprived of his alice, the right to recover accruing from the date of deprivation‘? An illegally dismissed official or em- ployee whose reinstatement has later been ordered is. entitled to all the rights and privileges that accrue to him by virtue of the office he held** In the case of San Luis v, Court of Appeals, the Supreme Court limited to five years the amount of backwages that may be recovered by an illegally dismissed employee. However, in the case of Cristobal v. Meichor,*® the Supreme Court allowed only one-half of the back salaries due because of the failure of the petitioner to prove that he was not gainfully employed elsewhere “6 CSC Resolution No. 080502, Sections 5 fa and [bh 4 Salcedo v. Court of Appeals, 81 SCRA 408; Aldovina v. ‘Atunan, 230 SCRA 825, “De Guzman v. Civil Service Commission, 231 SCRA 168. ‘© 174 SCRA 258; Wooden v. Civil Service Commission, £71 ‘SCRA 512; Relic v. Civil Service Commission, 392 SCRA 435, PAGCOR v. Salas, 986 SCRA 94; Caniete v. Secretary of Educa: tion, Culture and Sports, 333 SCRA 849; Marohiombsar v. Cou? of Appeals, 326 SCRA 62; Gloria v. Court of Appeals, 306 SCRA 287; Jacinto v. Court of Appeals, 261 SCRA 87; Bangalisan ¥. (Court of Appeals 276 SCRA 619; Tan v. Office of the President, 229 SCRA 677; San Luis v. Court of Appeals, 174 SCRA 258; Lagarapan v.Aseilo, 154 SCRA 377; Ginson ¥. Municipality of Mucia, 158 SCRA 1; Gementizav. Court of Appeals, 113 SCRA 477; Cristobal. Nelcher, 78 SCRA 175, 2 78SCRA 175, SALARY AND PeRQUISTES 373, during the period when he was denied reinstatement in his office. In Garcia v. Chairman, Commission on ‘Audit! the Supreme Court likewise deviated from the general rule previously laid down on the recovery of backwages for five years, and awarded full back- wages for almost nine years, to compensate the peti- tioner therein for the “painful stigma” he went through, occasioned by his wrongful accusation of and removal for dishonesty. In said case, the peti- tioner was granted executive clemency, by reason, among others, of his acquittal in the criminal case which was filed against him for the same acts for which he was administratively charged and sepa rated from office, It bears reiteration that the executive clemency granted in Garcia was on the basis of the President's exercise of his power of control, and not of his par- doning power. ‘The ruling was different in Sabello v. Department of Education, Culture and Sports; which involved an employee who was dismissed from the service after conviction of a crime and who was ordered reinstated after being granted a pardon. It was held in said case that he was not entitled to back salaries since he was not illegally dismissed nor acquitted of the charge against him. In the case of Castro v. Gloria,® the Supreme Court explained— ‘The issue regarding payment of back salaries during the period that a member of the chil service is out of werk but sub- Sequently ordered reinstated ie stled in our jurisdiction, Such payment of salaries corresponding to the pefod when an em 151 226 SCRA 356, 52259 Phil. 1109, 1114 [1989), © 369 SCRA 417: Gesite v. Court of Appeals, 444 SCRA SI.374 ‘Tue Law oF PuBuic Orricers, ployee isnot allowed to work may be decreed if he is found inno. ‘cent ofthe charges. However, ifthe employee is not completely tonerated of the charges [Bangalasin v. CA, 276 SCRA 619; ‘Aipat v. CA, 308 SCRA 781), such as when the penalty of dis- imiseal is reduced to mere suspension, he would not be ented to the payment of his back salaries, In Yacia v. City of Baguio [3 SCRA 419) the decision of the Commissioner of Civil Service or- dering the dismissal of a government employee on the ground of Gishonesty was immedistely executed pending appeal. But, on ‘appeal, the Ci Service Board of Appeals modified the penalty of ismissal to & fine equivalent to six months pay. This Court ruled thet the employee's claim for back wages, for the period during which he was not allowed to work because of the execu Son ofthe decison of the Commission, should be denied. 22%. ‘The general proposition is that a public offical is not entitied to any compensation if he has not rendered any service. AS he ‘works, he shall eam. Since petitioner did not work during the period for which he is now claiming, there can be no legal or ‘equitable basis to order the payment of such salaries. [Sales Mathay, 129 SCRA 180; Reyes v. Hernandez, 71 Phil. 397] Accordingly, in Balitaosan v. Secretary of Educa- tion, Culture and Sports, the Supreme Court de- clared as follows— “The fact is that petitioner participated in the mass action which in turn resulted in the filing of charges against him and his subsequent dismissal later on. His reinstatement was nat the result of exoneration but an act of liberality by the Court of Appeals. Accordingly, petitioner’ claim for backwages for the period during which he was not allowed to work must be denied ‘The general rule is that a public oficial is not entitled 0 any compensation iT he has not rendered any service. No work, fo pay. Since petitioner did not render any service during the petiod for which he is now claiming his salaries, there is no legal ‘Sr equitable bass to order the payment thereof” In Constantino-David v. Pangandaman-Gania, the Supreme Court clarified— 410 SCRA 233. 5 409 SCRA 80; ste also Civil Service Commission v. Ges tallan, 458 SCRA 278, ‘SALARY AND PeRguisEs 375 “In Gabriel v. Domingo [189 SCRA 674), this Court held that an illegally dismissed government employee who is later ordered ‘reinstated is entitled to back wages and other monetary benefits fom the time of his illegal dismissal up to his reinstatement ‘This is only fair and sensible because an employee who is rein stated after having been illegally dismissed is considered as not having left his office and should be given a comparable compen sation atthe time of his reinstatement ‘Respondent cannot be faulted for her inabilty to work or to render any service from the time she was illegally dismissed ‘up © the time of her reinstatement. The poley of ‘no work, no pay’ cannot be applied to her, for such distressing sate of afais tas not of her own making or liking even as her family suffered tremendously as a consequence of her removal and while she was jobless. Verily, to withhold her back salaries and. other benefits during her illegal dismissal would put to naught the constitutional guarantee of security of tenure for those in the il service, ‘We also agree with the Court of Appeals that MSU cannot bbe made to pay all accruing back salaries and other benefits in favor of respondent. There are allegations to the effect that oficials of MSU disobeyed in bad faith the art of execution issued by the CSC. In Gabriel v. Domingo [189 SCRA 674), we held that ifthe legal dismissal, including the refusal to reinstate fan employee after a finding of unlawul termination, is found to hhave been made in bad faith or due to personal malice of the superior officers then they willbe held personally accountable for the employee's back salaries; othenvise the goverment dis- Dbursee funds to answer for such arbitrary dismiseal. This rule is also enunciated in Secs. 38 and 39 of Bo0k I, E.0. 292, and in Sees. 53, 55, 56 and 58 of Rule XIV of the Omnibus il Serice Rules and Regulations, “Accordingly, MSU as a government institution must com: ppensate respondent with back salaries and other benefits only from the time of her illegal dismissal, which according to the ‘case record, began sometime in October 1998, untl the motion for reconsideration of the MSU was denied and a writ of exeeu- tion for respondent's reinstatement as Director I! and Manila Information and Liaisoning Officer was issued. The reckoning Period is not 8 March 200% as determined by the appellate court but 19 July 2001 when CSC Resolution No. 01-1225 was prom- ulgated wherein the motion for reconsideration of the MSU was denied with finality and the latter was explicitly commanded to allow respondent to assume and exercise the functions of Dizec-316 ‘Tur Law oF Pusuic Orncers tor tard Manila Information and Liaisoning Officer. For a final decision af the CSC is immediately executory unless a motion for reconsideration i fled inthe meantime. “The backwages and other benefits accruing after 19 July 2001 are tobe tested separately since they must be collected in the proper forum wherein the assertions of malice and ill wil in the failure to reinstate respondent to her post are threshed out and the concerned parties given the fall opportunity to be heard. Until such separate proceeding has been instituted and decided, itis premature to fx the ability for this portion of respondent's buck wages and other benefits upon either the government as represented by MSU or the accountable officers thereol.” A claim for back salaries cannot stand by itself It must be coupled with a claim for reinstatement.s Claims for back salaries are subject to the prescrip- tive period of one year.5” In Celerian v. Tantuico,s8 the Supreme Court had occasion to rule that, ‘where it has been sufficiently shown that a public official was wrongfully prevented from entering the office and carrying out his duties, then he may recover his salary for the duration thet he was thus prevented from assuming his post.” It is interesting to note that, in this case, the Supreme Court said that “that proposition should apply with equal force to a temporary appointee because what is material is not the nature of the appointment but the act of wrongful deprivation of office.” In the Constantino-David case, the Supreme Court explained that it ‘cannot be refuted that in September 1998 she was terminated from the service on the alleged ground of expiration of her term and stopped from performing the functions of her post ‘Madrigal. Lecaro, 191 SCRA 20, ® Gutierre . Bachrach Motor Co,, Ine nl 3 outers Ine., 105 Phil. 9. 409 SCRA 80, ‘SALARY aND PeRQUisTES 377 tion, and subsequently reinstated to her job upon the declaration of the Civil Service Commission [CSC] that her dismissal from the service was illegal Clearly, the CSC gravely erred when thereafter it ruled that respondent did not actually assume and perform the duties of her position so as to deprive her of back wages and other benefits.” In another case, the Supreme Court declared that a reinstated employee, who was previously dis- missed in good faith, the dismissal not having been motivated by ill will or personal malice, is not enti tled to backwages and damages. Where an.employee has voluntarily accepted a lower position, which she continues to hold, estoppel bars relief seeking payment of a salary equivalent to that of a higher position.*! However, an employee who is reinstated to his former position but who has pending administrative and criminal charges against him may only be paid his back salaries when he is absolved of the charges.* It will be recalled that, in Baculi v. Office of the President, the Court declared that the respondent who had’ been declared innocent of the crime of qualified theft, which also served as basis for the administrative charge, should ‘not be considered to have left his office for all legal purposes, so that he is entitled to all the rights and privileges that accrued to him by virtue of the office held, including back wages." Accordingly, it ruled that the respondent ‘9 Octot v. Ybaiiez, 111 SCRA 79. 61 Manalo v. Gloria, 296 SCRA 130. ‘2 Palmera v. Civil Service Commission, 235 SCRA 87. ®G.R. No, 188681, March 8, 2017. Macabuhay v. Manuel, No, -40872, 29 December 1980, 101 SCRA 834; Cristobal v. Melchor, No. L-£3203, 29 December318 ‘THe Law oF Pusuc Orricers “should be paid his back salaries and other benefits forthe entire time that he should have been automati- cally reinstated at the rate owing to his position that he last received prior to his preventive suspension xox but excluding the interval 20x when he was brietly reinstated.” Section 58 of the 2017 Revised Rules on Admin- istrative Cases in the Civil Service provides — ‘a_In case the penalty imposed isa fine, the same shall be refunded "In case ofemoson, the respondent shall be entitled to restoration of former salary grade withthe same salary step and payment of salary diflerendals during the period the demotion ‘as imposed ‘e. In case the penalty imposed js suspension, the res- ppondent shall immediately be reinstated to former post without oss of seniority rights and with payment of back wages and all benefs which would have accrued as if the respondent has not been legally suspended “4 In case the penalty imposed ig dismissal, the respon ent shal immediately be reinstated without loss of seniority ‘Tights with payment of back wages and all benefits which would Inge acrued a if she/he has not been legally dismissed “e. The respondent who is exonerated on appeal shall be ented to the leave credits for the period the respondent had been out ofthe service” In any event, it is established that the illegally dismissed government employee shall be paid back salaries at the rate he was receiving when he was terminated unqualified by salary increases and with- ‘out deduction from earnings received elsewhere during the period of his illegal dismissal.e Back 1980, 101 SCRA 857; Taal v. Legaspi, No. 1-22537, 31 March 1965, 13 SCRA 566, ‘ Balguidr v. CF of Capi, Branch Tl, No. 1-40490, Octo- ‘er 28, 1977, 80 SCRA'125; sce also Gementiza v. Court of SSaLARY AxD Pesquisees 379 ‘wages represent the compensation that should have ‘been cared but were not collected because of the ‘unjust dismissal.® This includes other monetary benefits? attached to the employee's salary following, the principle that an illegally dismissed government employee who is later reinstated is entitled to all the rights and privileges that accrue to him by virtue of the office he held. These would include his RATA, ‘Meal Allowance and Rice Subsidy, separate from his salary, which he would have received had he not been illegally dismissed from service. Prohibited Disposition of Salary Public policy prohibits the attachment, garnish- ment or assignment of the salary of a public officer not only because such salary still belongs to the state as Jong as it has not yet been actualy collected by the public officer. “A rule, which has never been seriously questioned, is that money in the hands of public officers, although it may be due government employees, isnot liable to the creditors of these employees in the process of garnishment." In Tio v Appeals, No. L-41717-33, April 12, 1982, 113 SCRA 477, 489; Ginson \. Municipality of Murcia, etal, No. 46585, February 8, 1988, 158 SCRA 1, 8; Gabriel v. Domingo, GR. No. 87420, September 17, 1990, 189 SCRA 672, 679; and Del Casill v Civil Service Commission, G.R No, 112513, August 21, 1997, 278 SCRA 209, 215, 6 Malig-on v. Equitable General Services, Inc, G.R. No. 185269, June 29, 2010, 622 SCRA 326, 332. 8 Civil Service Commission x. Magnaye, Jr, O.R. No. 183337, April 23, 2010, 619 SCRA 347, 363, ft 'Galang 'v. Land Bank of the Philippines, GR. No, 175276, May 31, 2011, © Mechem, Sections 874-876; Director of Commerce and Industry v. Concepcion, 42 Phi. 384. People v. Enfertno, 476 SCRA SIS.380 ‘Ta LAW OF Puuic OrnceRs Hontanosas,"! the Supreme Court ruled that the “salary check of a government officer or employee such as a teacher does not belong to him before it is physically delivered to him. Until that time, the ‘check belongs to the government. Accordingly, before there is actual delivery of the check, the payee has no power over it; he cannot assign it without the consent of the government.” From the practical viewpoint, the more cogent reason is that these inhibitions would diminish the interest of the public functionary in his work since he would have nothing to look forward to as compen- sation for his services. Not surprisingly, his de- creased interest will result in impaired efficiency, not to mention a temptation to make up for lost income by corrupting his offce. An equally predictable con- sequence is outright abandonment of office, from ‘hich the fanctionary can no longer anyway hope to raw his salary. For the same reasons, a public officer is not le- gally bound by a pledge made by him while still a candidate tha, if elected, he will not collect his sal- ary or will donate it back to the government or give it to some other beneficiary.” Such a pledge can be no more than a campaign ploy and is therefore not en- forceable in a court of law. However, having collected the salary, he may thereafter comply with his pre- election pledge without any legal inhibition because such salary has become his private property which he may dispose of freely. Similarly, it has been ruled that a public offcer cannot agree to render services 1128 SCRA 697; see PD 807, Section 54 State, Purdy, 36 Wis, 218, SALARY AND PeRQUISTES 381 for less than the compensation provided for by law, 1 this would be against public policy.” Leaves In addition to salary, the public functionary is given vacation, sick and, in the case of women, ma- temnity leave privileges. The reason forthe last two is obvious. In the case of the first, the purpose is to recharge his batteries, as it were, or to revitalize him for his own benefit and that of the public service. ‘After the day-to-day routine of his work, his interest is likely to flag, his energies to dissipate, his effcien- cy to deteriorate. A few days of rest and relaxation are expected to provide him with the needed tonic to rejuvenate him, and improve the quality of his work. Under the Administrative Code of 1987, officers and employees in the Civil Service shall be entitled to leave of absence, with or without pay, as may be pro- vided by law and the rules and regulations of the Civil Service Commission in the interest of the serv- Vacation and sick leaves shall be cumulative and any part not taken during the calendar year in which earned shall be carried over to the succeeding years. They are also commutable to cash where the functionary voluntarily resigns, retires, or is sepa- rated from the service through no fault of his own, provided that the commutation shall not exceed three hundred days of accumulated leaves, exclusive of Saturdays, Sundays and holidays.” These leaves 1 Bodenbofer v. Hogan, 142 La. 21. 1 Bxecutive Order No. 292, Book V, Tie 1, Subtve A, Chapter 8, Section 60. 73 Republic Act 2625.382 ‘Tw Law or Pupuc Orricers. shall be with pay and shall consist of fifteen days [for each class] for each year of actual service. Executive Order No. 1077, which took effect on January 9, 1986, provides that any officer or em- ployee of the government who retires or voluntarily resigns or is separated from the service through no fault of his own and whose leave benefits are not covered by any special law, shall be entitled to the commutation ofall the accumulated vacation and/or sick leave to his credit, exclusive of Saturdays, Sun- days and holidays without limitations as to the number of days of vacation and sick leave that he ‘may accumulate, and that all officials and employees shall be required to go on vacation leave for a mini- ‘mum of five working days annually. ‘These leaves are also available, under certain conditions, to emergency, casual, seasonal and part- time employees or laborers and those on rotation or daily basis." ‘Any married woman in the government shell be entitled to sixty days maternity leave, with full pay if she has rendered two or more years of continuous service and half-pay if the period of service is shor- ter. This privilege covers unintentional abortions and miscarriages and is available as the need arises even ifit be more than once during the same calendar year. Commutation of the maternity leave is also allowed.7” Under Section 81 of the Local Government Code of 1991, or RA 7160, elective officials shall be enti- led to the same leave privileges as those enjoyed by appointive local officials, including the cumulation and commutation thereof, ™ ia. Commonwealth Act 647, as amended by Republic Act No 1864, ‘SaLARY AND PeRQUISTES 383 {All government officers or employees are entitled to commutation of all leave credits without limitation and regardless of the period when the credits were earned provided the claimant was in the service as of January 9, 1986," Moreover, it has been ruled that government employees, whether or not they have accumulated leave credits, are not required by law to work on Sat- urdays, Sundays and holidays, and thus cannot be declared absent on such non-working holidays. Ac- cordingly, they cannot and should not be deprived of their salary corresponding to said non-working days just because they were absent without pay on the day immediately prior thereto, or after said non- working days. A different rule would constitute a deprivation of property without due process of law.” ‘The Supreme Court has ruled that accrued leave benefits of employees shall not be forfeited despite the imposition of the penalty of dismissal.® While the determination of leave benefits is within the functions of the Civil Service Commission as the central personnel agency of the government, the duty to examine accounts and expenditures relating to such benefits properly pertains to the Commission on Audit, Even as the Supreme Court recognizes the Civil Service Commission's jurisdic- tion in this case, it is not exclusive as it is shared with the Commission on Audit.*! 7% Request of CTA Presiding Judge Alex Reyes, 216 SCRA 728, 2 Peralta v. Civil Service Commission, 212 SCRA 425, ‘© vllaros v. Orpiano, 412 SCRA 366; Fojas, Jr. v, Rolin, 378 SCRA 20; Section 58, Uniform Rules on Administrative Cases {n the Civil Service; see also Canada v. Suerte, 474 SCRA 379, ‘st Civil Service Commission v. Pobre, 438 SCRA 334384 “Tu Law oF PuBtic OFFiceRS. Insurance Officers and employees’ of the government, in- ‘luding barangay and other local government em- ployees and officials, enjoy life, retirement and acci- dent insurance as well as disability, pre-need insur- ance, unemployment and separation benefits under schemes administered by the Government Service Insurance System. They have as well medical care insurance and benefits which are handled by the Philippine Health Insurance Commission. Permanent and regular appointees, and elective officers, are cov- ered by compulsory insurance.*? Other functionaries who have been appointed for at least two months may avail themselves of optional insurance. Part of the premium in compulsory insurance is paid by the government, the balance being deducted from the salary of the insured. In addition to the benefits available from the in- surance policy, such as death and disability benefits, dividends are paid regularly to the members of the GSIS, who may also apply for salary, policy and real estate loans, as well as scholarship benefits for de- serving children. Retirement Retirement benefits are given to government em- ployees, in effect, to reward them for giving the best ‘years oftheir lives to the service of their country. It has thus been held that “the inflexible rule in cour jurisdiction is that social legislation must be liberally construed in favor of the beneficiaries. Re- ® See GSIS v. COA, 301 SCRA 731, "Commonwealth Act No. 185, as amended SIS v lil Service Commission, 245 SCRA 179, SSauany avo Pengusmes 385 tirement laws, in particular, are liberally construed in favor of the retiree because their objective is to provide for the retiree’s sustenance and, hopefully, even comfort, when he no longer has the capability to eam a livelihood. The liberal approach aims to achieve the humanitarian purposes of the Jaw in order that efficiency, security, and well-being of government employees may be enhanced. Indeed, retirement laws are liberally construed and adminis: tered in favor of the persons intended to be benefit- ted, and all doubts are resolved in favor of the retiree to achieve their humanitarian purpose." “Retirement has been defined as a withdrawal from office, public station, business, eccupation, or public duty. It involves a bilateral act ofthe parties, a voluntary agreement between the employer and the employee whereby the later, after reaching a certain age, agrees and/or consents to sever his employment with the former.” Retirement plans create & con- tractual obligation in which the promise to pay bene- fits is made in consideration af the continued fithfal service of the employee forthe requisite period. Be- fore a right to retirement benefits vests in an em- ployee, he must have met the stated conditions of eligibility with respect to the nature of employment, ‘age, and length of service. This is a condition prece: dent to his acquisition of rights thereunder.” “Where the employee retires and meets the eligi- bility requirements, he acquires a vested right to benefits that is protected by the due process clause. ' Philippine National Bank v. Dalmacio, GR No. 202308, uly 5, 2017. *% Brion v, South Phil Union Mission ofthe 7 Day Advent lst Church, 366 Phil 967, 974 (1999 or Reyes ¥. Court of Appeals, GR, No. 167002, December 12,2011386 ‘Tue Law oF PuBLic OFFICERS. Retirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law. Thus, a pensioner acquires a vested Tight to benefits that have become due as provided under the terms of the public employees’ pension statute. No law can deprive such person of his pen- sion rights without due process of law, that is, with- ‘out notice and opportunity to be heard.® Verily, when an employee has complied with the statutory requirements to be entitled to receive his retirement benefits, his right to retire and receive what is due him by virtue thereof becomes vested and may not, thereafter be revoked or impaired.”®? In GSIS v. Commission on Audit 2° the Court em- phasized — “Retirement benefits belong to a diferent class of benefs. Al the cases ited by the Movants Federico Pascual, etal. it Volved benefits such’ as cash gifts, representation allowances, Fee subsidies, uniform allowances, per diems, twansporaton Allowances, and the like. The foregoing allowances or fing: benefits are given in addition to one's salty, ether to reimburse him for expenses he might have incurred in relation to his work, or as a form of supplementary compensation. On the other hand, fetirement benetie are given to ane who Is separated fer fmployment either voluntarily or compulsorily. Such benefis, subject to certain requisites imposed by law and/or contract, ae {Gren tothe employee on the assumption that he can ne lange: ‘ork, They ae leo given asa form of reward forthe services he hid rendered. The purpose i not to enrich him but to help him Curing his non productive ears” “Retirement benefits are given to government employees to reward them for giving the best years of GSIS v. Montsclaros, G.R. No, 146494, July 14, 2004, 434 SCRA 441, 448, * Beoyv. Board of Directors, National Power Corporation, AR Nos, 186586-57, October 4, 2011. OR. No, 162372, September 11, 2012, SALARY AND PeRguistTes| 387 their lives to the service of their country. This is especially true with those in government service ‘occupying positions of leadership or positions requir- ing management skills because the years they devote to government service could be spent more profitably elsewhere, such as in lucrative appointments in the private sector. Hence, in exchange for their selfless dedication to government service, they should enjoy security of tenure and be ensured of a reasonable amount of support after they leave the government." Retirement benefits, gratuity and separation pay in the government service are invariably computed on the basis of the highest salary, emolument and allowances received by the retiring employee. Retire- ment laws are liberally interpreted in favor of the retiree because their intention is to provide for his sustenance and hopefully even comfort when he no Jonger has the stamina to continue earning his live hood.22 Retirement is compulsory for any member of the GSIS holding a regular and permanent appointment if: (a) he has attained the age of sixty-five years; (b) rendered at least fifteen years of service to the gov- ernment; and (c) the last three years of such service have been continuous. A retiree is entitled to a five- year lump sum payment of the present value of his ‘annuity and annuity thereafter to be paid monthly as long as he lives. Ifat the time of his retirement, disability or death, he had rendered at least twenty years continuous Government Service Insurance System v. Pauig, G.R. No. 210328, January 30, 2017. ‘52 Request of Clerk of Court Tess L. Gatmaitan for Pay- ment of Retirement Benefits of Hon. Associate Justice Jorge & Imperial, 313 SCRA 138.388 ‘Tw Law oF Pusuc OFFICERS, service, regardless of his age and employment status, ‘whether permanent, temporary or casual, he shall be entitled to one month salary for each year of service for the first twenty years; and one and a half month salary for each year of service over twenty up to thirty years; and two months salary for each year of service over thirty years based on the highest salary received. In addition, the GSIS shall refund to him his personal contributions for retirement premiums, plus interest, including the counterpart contribu- tions of the government, without interest.°> ‘There are actually several retirement modes un- der the provisions of existing laws. Under Republic ‘Act No, 8291, the retiree must have rendered at least 15 years of service and must be at least be 60 years of age upon retirement, and must not be a perma- nent total disability pensioner. Under said law, he has two options to choose from: [a] Lump-sum and Old Age Pension Lump-sum equivalent to 60 months of the Basic Monthly Pension payable at the time of retirement, and an old age pension benefit payable monthly for lif, ifthe retiree is stil living after the 5 ‘year guaranteed period or [b] Cash payment and Basic Monthly Pension, the cash payment for which shall be equivalent to 18 times the Basic Monthly Pension payable upon retirement and monthly pen sion for life payable from the date of retirement. Under the so-called Portability Law, or Republic Act No, 7699, the retiree, for purposes of complying with the required number of years under a certain retirement law, may combine his years of service in the private sector represented by his contributions to the Social Security System with his government service and contributions to the GSIS to satisfy the Commonwealth Act No. 186, as amended. ‘Satay avo Penquisites 389 required years of service under Presidential Decree Wo. 1146 and Republic Act No. 8291. However, if he has satisfied the required years of service under this GSIS retirement option, he would not be allowed to incorporate his contributions to the SSS anymore for availment of additional benefits. Under this scheme, in case of death, disability and old age, the periods of creditable services or contributions to the SSS and GSIS shall be summed up to entitle the retiree or decedent. to receive the benefits under either PD 1146 or RA 8291. If qualified under RA 8291, all the benefits shall apply except the cash payment. The reason for this is that the Portability Law or RA 7699 provides that only benefits common to both Systems (GSIS and SSS) shall be paid. Cash payment is not included in the benefits provided by the SSS. PD 1146 is available to retirees who have been in the government service after May 31, 1997 but before June 24, 1977. The retiree must have ren- dered at least 15 years of service, regardless of age. If the retiree is below 60 years old upon retirement, he may avail himself of retirement benefits only upon attaining his 60th birthday. The benefit would be any of the following: [a] Basic Monthly Pension — For those who are at least 60 years of age and have rendered 1S years of service, the basic monthly pen- sion is guaranteed for 5 years. After the 5-year guar- anteed period, the retiree will receive a basic monthly pension for life. A retiree may request the payment in. lump-sum of the Basic Monthly Pension for the guaranteed period of 5 years at a discounted rate of not less than 6%. [b] Cash Payment — For those who are at least 60 years of age and have rendered at east 3 years but less than 15 years of service, the cash payment shall be equal to 100% of the Average Monthly Compensation (AMC) for every year of ser-390 ‘Tue Law oF PuBuc OFriceRs Repl et No, 660 provides for a reenn kage or goverment employees who were inthe ence on or belore May 31, 1977. Under this lw, the ratiovs lat three years of ervice prior tore Gement must be eoniinuous, except in cases of death, sbi, bolton, and phase-out of poston dhe fo reorganization is appointment status must be permanent in neture. He must meet the age and serie requirements under the formula prescribed ole the lw, The inaximun monthly pension for thot above 57 years old shall be 80% of ne Average Monthy Salary received by the retiree uring the ast 2 years immediatly preceding his retirement. The maim pension for those aged 57 and below shall te 75% of the AMS, The benet shall be any one of the following: [a] Automatic Pension — Retirees below 60 years off shall be guaited for a monthly anny fhranted for 8 years with the option to Tequesta hear hump su every six month Ifthe retire Sul ising afer the Sear guaranteed period, he Shall be ented to a monthly pension for ie. [ inka tve-year lamp sum for those who are a teat 60 years od bt leas than 62 years on date o Tiremeit, the benef is'a 3-year lump sum, The fubeequenttvosvear lamp-stim shall be pad tothe rezee on his 6rd birthday. If the retiree is sil living ater the Sear guaranteed period, he shall be ented to « monthly pension for if. [e]'—~ Ava to thve who are atleast 69 years of ae or over on the date ef retirement. I tl ving aiter the Seat Biaranteed period, the retiree shall be entitled toa Font pension for If. Republic Act No. 1616 applies to retirees who were in the government service on or before May 31, 1977. Under this scheme, the retiree must have rendered at least 20 years of service regardless of age and employment status, and his last 3 years of ser SALARY AND PeRgUISITES 391 vice prior to retirement must be continuous, except in cases of death, disability, abolition or phase out of position due to reorganization. The benefits under this scheme are: [a] Gratuity payable by the last employer based on the total creditable service con- verted into gratuity months multiplied by the highest ‘compensation received. (There is no limit to the amount of gratuity benefit) and [b] Refund of retire- ment premiums consisting of personal contributions of the employee plus interest, and government share without interest, payable by the GSIS. Following the principle that retirement laws are liberally interpreted in favor of the retiree, the Su- preme Court ruled in Tantuico v. Domingo that the etirement pay accruing to a public officer may not be withheld and applied to his indebtedness to the government. ‘The petitioner in Dyeaico v. Social Security Sys- tem,95 who lived with the decedent for many years without the benefit of marriage, and with whom she had many children, got married to the decedent after the latter's retirement. Her claim for retirement bene- fits, or survivor's pension, was denied because, un- der the law [Section 12-Bid) of RA 8282, she could not be considered the primary beneficiary “at the time of [the decedent's} retirement.” The Supreme Court rejected said denial stating that “the proviso ‘as of the date of his retirement’ in section 12-B(@) of Rep. Act No. 8282, which qualifies the term ‘primary beneficiaries’ is unconstitutional for it violates the due process and equal protection clauses of the Constitution.” 230 SCRA 391 99 476 SCRA 538.392 ‘Tae Law oF Pupuc OFniceRs Im Cena v, Civil Service Commission,> the Su. preme Court declared as invalid the rule on limiting only to one year the extension of service of an em- ployee who has reached the compulsory retirement age of 65 years, but has less than 15 years of service ‘under Civil Service Memorandum Circular No. 27 s. 1990 stating that it “cannot likewise be accorded validity because it has no relation to or connection with any provision of PD 1146 supposed to be car- ried into effect. The rule was an addition to or exten- sion of the law, not merely a mode of carrying it into effect. The Civil Service Commission has no power to supply perceived omissions in PD 1146." However, in Toledo v. COMELEG9 the Supreme Court declared that “the one-year limitation on the extension of service of a government employee who has reached the compulsory retirement age of sixty- five imposed under Memorandum Circular No. 27 is valid and reasonable.” In said case, the Supreme Court explained that the “employee's ‘work perform ance is also a major factor in determining whether or not to allow a compulsory retiree to continue his or her service to complete the 15-year service.” Retirement pay accruing to a public officer may not be withheld and applied to his indebtedness to the government. Retirement benefits cannot be di- minished by Commission on Audit disallowances in view of the clear mandate of Section 39 of Republic % 211 SCRA 179; see University ofthe Philippines v. Cit Service Commission, 208 SCRA 174, where the Supreme Cau? nullifeé the action of the Civil Service Commission which coa- sidered the private respondent as resigned but entitled to reife ment and other benefits. See alo Rabor v. Civil Service Commis sion, 266 SCRA 618, which species the modification ofthe Cent lig by paragraph I of Civil Service Memorandum Circilar Xo 21, Series of 1990, 7319 SCRA 100, 'SMIARY AND PERQUIITES 393 Act No. 8291. ‘The Government Service Insurance System can seek restoration of the amounts errone- ously granted to and received by the employees who have already retired by means of a proper court action for their recovery, which may be enforced against the retirees’ assets and properties other than their retirement benefits.°* In GSIS v. Civil Service Commission?® the Su- preme Court explained the distinctions between a salary and a per diem insofar as they relate to the computation of retirement benefits. The Court said that, if the remuneration received by a public official in the performance of his duties does not constitute a mere “allowance for expenses” but appears to be his actual base pay, then no amount of categorizing the salary as a per diem would take the allowances received from the term services with compensation for the purpose of computing the number of years of, service in government. A per diem is a daily allow- ance given for each day an officer or emplayee of gov- ernment is away from his home base. It is intended to cover the cost of lodging and subsistence of off cers and employees when the latter are on duty out side of their permanent station. The term per diem may be construed either as compensation or as al- lowance. The clear intent of the Government Service Insurance Law was to exclude those extra incidental expenses or those incurred on a daily basis covered by the traditional definition of the term per diem. Per dliems are excluded in the definition of *com- pensation.” The law not only defines the word “com- pensation,” but it also distinguishes it from other % Government Service Insurance System v. Cmmission on Audit, 441 SCRA 522. "245 SCRA 179,394 “Tae Law oF Pusuic OFFicess forms of remunerations. GSIS Circular No. 1-89 is clear that services rendered on‘a per diem basis are not creditable for retirement purposes.10 thas been ruled that casual and temporary ser- vice in the government must necessarily be excluded from the creditable period of service for retirement ppurposes."0! In Re: Requests for Survivorship Pension Bene- fits 2 the Supreme Court ruled that “the surviving spouses of justices and judges who died prior to the effectivity of R.A. No. 9946 are entitled to survivor- ship benefits.” Thus — ‘The Court is mindful that RA. No. 9946 is a retirement law and socal eisaton enacted under the policy of the State to pemote social justice, thus, its interpretation must be liberal in keeping with its purposes. As the Court explained in Gruba, retirement Jaws are liberally construed in order to achieve the ‘humanitarian purposes of the law, thus — “Retirement laws, in particular, are liberally construsd {in favor of the retiree because their objective ie to prove for the retirees sustenance and, hopefully, even comfort, tvhen he no longer has the capability to earn a livelioed ‘The liberal approach aims to achieve the humanitarian Piurposes of the law in order that efficiency, security, and ‘wel-being of government employees may be enhanced. [n- eed, reuzement lens are liberally constried and adminis. tered in favor ofthe persons intended to be benefited, and all doubts are resolved In favor of the retiree to achieve thelr nameniacen purpose ‘Beginning It February 2010, oF upon the effectivity of RA No, 9966, the benefits under the’ old law had been upgraded hile at the same time the age and length of service reqite ‘ents were reduced, Likewise, pro rata monthly pension benefit was introduced fr the fat time in favor of justices or judges 1 GSISv, Civil Service Commission, 237 SCRA 809, 1 Goverament Service Insurance System v. Pauig. G- No, 210828, January 30, 2017. "SAN, No. 17-08-01-SC, September 19, 2027, ‘Sniasr ano PasguisTes 395 with less than 15 years of government strvice wha retire due ge oF Incapacity to discharge his or her duties, More impor. tantly, the new law provided for survivorship bent in favor of the stviving spouses of justices and judges who were feed! or tligible for optional retirement and died afer the eflectity of RA. No. 9946. ‘By virtue of the retroactivity clause in Section 3-8, the ‘venefts under RLA. No, 9946 are made o aply to justices and jdges who died prior othe efectviy of RA No. 9946." Phithealth ‘The Philippine Government has established a health care and health insurance program for the benefit of government and private employees, and even self-employed individuals. All employees com- pulsorily covered by the GSIS, including their de- pendents, are also automatically covered under the program, which guarantees health benefit packages for inpatient and outpatient care, which include, among others, allowances for hospital room and board, services of health care professionals, diagnos- ti, laboratory and other medical examinations, use of surgical or medical equipment and facilities, in- Patient education packages and prescription drugs land biologicals, but do not include, among others, non-prescription drugs and devices, alcohol abuse or dependency treatment, cosmetic surgery and opto- metric services. Outpatient care services include personal preventive services and emergency and transfer services.10 —o00o— sant? 8° Republic Act No, 7875, a amended by Republi Act 41