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G.R. No.

L-58870 December 18, 1987

CEBU INSTITUTE OF TECHNOLOGY (CIT), petitioner,


vs.
HON. BLAS OPLE, in his capacity as Minister, Ministry of Labor and Employment, JULIUS ABELLA,
ARSENIO ABELLANA, RODRIGO ALIWALAS, ZOSIMO ALMOCERA, GERONIDES ANCOG, GREGORIO
ASIA, ROGER BAJARIAS, BERNARDO BALATAYO, JR., BASILIO CABALLES, DEMOCRITO TEVES,
VOLTAIRE DELA CERNA, ROBERTO COBARRUBIAS, VILMA GOMEZ CHUA, RUBEN GALLITO,
EDGARDO CONCEPCION, VICTOR COQUILLA, JOSE DAKOYKOY, PATERNO WONG, EVELYN LACAYA,
RODRIGO GONZALES, JEOGINA GOZO, MIGUEL CABALLES, CONSUELO JAVELOSA, QUILIANO
LASCO, FRANKLIN LAUTA, JUSTINIANA LARGO, RONALD LICUPA, ALAN MILANO, MARIA MONSANTO,
REYNALDO NOYNAY, RAMON PARADELA, NATALIO PLAZA, LUZPURA QUIROGA, NOE RODIS,
COSMENIA SAAVEDRA, LEONARDO SAGARIO, LETICIA SERRA, SIEGFREDO TABANAG, LUCINO
TAMAOSO, DANILO TERANTE, HELEN CALVO TORRES, ERNESTO VILLANUEVA, DOLORES VILLONDO,
EDWARD YAP, ROWENA VIVARES, DOLORES SANANAM, RODRIGO BACALSO, YOLANDA TABLANTE,
ROMERO BALATUCAN, CARMELITA LADOT, PANFILO CANETE, EMMANUEL CHAVEZ, JR., SERGIO
GALIDO, ANGEL COLLERA, ZOSIMO CUNANAN, RENE BURT LLANTO, GIL BATAYOLA, VICENTE
DELANTE, CANDELARIO DE DIOS, JOSE MA. ESTELLA, NECITA TRINIDAD, ROTELLO ILUMBA,
TEODORICO JAYME, RAYMUNDO ABSIN, RUDY MANEJA, REYNA RAMOS, ANASTACIA BLANCO, FE
DELMUNDO, ELNORA MONTERA, MORRISON MONTESCLAROS, ELEAZAR PANIAMOGAN, BERNARDO
PILAPIL, RODOLFO POL, DEMOSTHENES REDOBLE, PACHECO ROMERO, DELLO SABANAL, SARAH
SALINAS, RENATO SOLATORIO, EDUARDO TABLANTE, EMMANUEL TAN, FELICISIMO TESALUNA,
JOSE VERALLO, JR., MAGDALENO VERGARA, ESMERALDA ABARQUEZ, MAC ARTHUR DACUYCUY
ACOMPANADA, TRINIDAD ADLAWAN, FE ELIZORDO ALCANTARA, REOSEBELLA AMPER, ZENAIDA
BACALSO, ELIZA BADANA, GEORGIA BAS, ERLINDA BURIAS, ELDEFONSO BURIAS, CORAZON
CASENAS, REGINO CASTANEDA, GEORGE CATADA, CARMENCITA G. CHAVEZ, LORETIA CUNANAN,
FLORES DELFIN, TERESITA ESPINO, ELVIE GALANZA, AMADEA GALELA, TERESITA. JUNTILLA,
LEONARDA KAPUNGAN, ADORACION LANAWAN, LINDA LAYAO, GERARDO LAYSON, VIRGILIO
LIBETARIO, RAYMOND PAUL LOGARTA, NORMA LUCERO, ANATOLIA MENDEZ, ELIODORO MENDEZ,
JUDALINE MONTE, ELMA OCAMPO, ESTEFA OLIVARES, GEORGE ORAIS, CRISPINA PALANG, GRETA
PEGARIDO, MELBA QUIACHON, REMEDIOS QUIROS, VIRGINIA RANCES, EDNA DELOS REYES,
VICENTE TAN, EMERGENCIA ROSELL, JULIETA TATING, MERCIA TECARRO, FELISA VERGARA,
WEMINA VILLACIN, MACRINA YBARSABAL, MILAGROS CATALAN, JULIETA AQUINDE, SONIA
ARTIAGA, MA. TERESITA OBANDO, ASUNCION ABAYAN, ESTHER CARREON, ECHEVARRE, BUENAFE
SAMSON, CONCEPCION GONZALES, VITALIANA VENERACION, LEONCIA ABELLAR, REYNITA
VILLACARLOS. respondents.

No. L-68345 December 18, 1987

DIVINE WORD COLLEGE OF LEGAZPI, petitioner,


vs.
The Honorable Deputy Minister of Labor and Employment, VICENTE LEOGARDO, JR., the HONORABLE
REGIONAL DIRECTOR (Regional Office No. 5) of the Ministry of Labor & Employment GERARDO S.
CASTILLO, CECILIA MANUEL and other alleged complainants, respondents.

Nos. L-69224-5 December 18, 1987

FAR EASTERN UNIVERSITY EMPLOYEES LABOR UNION, petitioner,


vs.
FAR EASTERN UNIVERSITY and the NATIONAL LABOR RELATIONS COMMISSION, respondents.

No. 70832 December 18, 1987

GREGORIO T. FABROS, ROGELIO B. DE GUZMAN, CRESENCIANO ESPINO, JOSE RAMOS SUNGA,


BAYLON BANEZ FERNANDO ELESTERIO, ISMAEL TABO, AMABLE TUIBEO CELSO TUBAY, RAFAEL
HERNANDEZ, GERONIMO JASARENO, MEL BALTAZAR, MA. LOURDES PASCUAL, T. DEL ROSARIO
ACADEMY TEACHERS and EMPLOYEES ASSOCIATION, DENNIS MONTE, BECKY TORRES, LOIDA
VELASCO, ROMLY NERY, DAISY N. AMPIG, PATRICIO DOLORES, ROGELIO RAMIREZ, and NILDA L.
SEVILLA, petitioners,
vs.
The HON. JAIME C. LAYA, in his capacity as Minister of Education, Culture and Sports, respondents.

No. L-76524 December 18, 1987

JASMIN BISCOCHO, ROWENA MARIANO, AGNES GALLEGO, MA. ANA ORDENES, ISABEL DE LEON,
LUZVIMINDA FIDEL, MARIQUIT REYES, SOTERA ORTIZ, ANGELINA ROXAS, BITUIN DE PANO,
ELIZABETH ORDEN, APOLLO ORDEN, GUILLERMA CERCANO, IMELDA CARINGAL, EFREN BATIFORA,
ROSIE VALDEZ, DELIA QUILATEZ, FELIX RODRIGUEZ, OSCAR RODRIGUEZ, JOVITA CEREZO,
JOSEFINA BONDOC, BELEN POSADAS, DOLORES PALMA, ANTONINA CRUS, CONRADO BANAYAT,
TERESITA LORBES, and CORAZON MIRANDA, petitioners,
vs.
THE HONORABLE AUGUSTO SANCHEZ, in his capacity as Minister of Labor and Employment, ESPIRITU
SANTO PAROCHIAL SCHOOL AND ESPIRITU SANTO PAROCHIAL SCHOOL FACULTY ASSOCIATION,
respondents.

No. 76596 December 18, 1987

RICARDO C. VALMONTE and CORAZON BADIOLA, petitioners,


vs.
THE HONORABLE AUGUSTO SANCHEZ, in his capacity as Minister of Labor and Employment, ESPIRITU
SANTO PAROCHIAL SCHOOL FACULTY ASSOCIATION, and ESPIRITU SANTO PAROCHIAL SCHOOL,
respondents.

CORTES, J.:

Six cases involving various private schools, their teachers and non-teaching school
personnel, and even parents with children studying in said schools, as well as the
then Minister of Labor and Employment, his Deputy, the National Labor Relations
Commission, and the then Minister of Education, Culture and Sports, have been
consolidated in this single Decision in order to dispose of uniformly the common legal
issue raised therein, namely, the allocation of the incremental proceeds of authorized
tuition fee increases of private schools provided for in section 3 (a) of Presidential
Decree No. 451, and thereafter, under the Education Act of 1982 (Batas Pambansa
Blg. 232).

Specifically, the common problem presented by these cases requires an interpretation


of section 3(a) of Pres. Decree No. 451 which states:

SEC. 3. Limitations. — The increase in tuition or other school


fees or other charges as well as the new fees or charges
authorized under the next preceding section shall be subject to
the following conditions;

(a) That no increase in tuition or other school fees or charges


shall be approved unless sixty (60%) per centum of the
proceeds is allocated for increase in salaries or wages of the
members of the faculty and all other employees of the school
concerned, and the balance for institutional development,
student assistance and extension services, and return to
investments: Provided That in no case shall the return to
investments exceed twelve (12%) per centum of the
incremental proceeds;

xxx xxx xxx

In addition, there is also a need for a pronouncement on the effect of the subsequent
enactment of B.P. Blg. 232 which provides for the allocation of tuition fee increases in
section 42 thereof.

In a nutshell, the present controversy was precipitated by the claims of some school
personnel for allowances and other benefits and the refusal of the private schools
concerned to pay said allowances and benefits on the ground that said items should
be deemed included in the salary increases they had paid out of the 60% portion of
the proceeds from tuition fee increases provided for in section 3 (a) of Pres. Decree
No. 451. The interpretation and construction of laws being a matter of judicial power
and duty [Marbury v. Madison, 1 Cranch 137 (1803); Endencia v. David, 93 Phil. 696
(1953)], this Court has been called upon to resolve the controversy.
In the process of reading and at times, having to decipher, the numerous pleadings
filed in the six cases, the Court found that the main issue has been approached by the
parties from almost diametrical points, thereby bringing into focus three sub-issues:
first, whether or not allowances and other fringe benefits of faculty members and other
school employees may be charged against the 60% portion of the tuition fee
increases provided for in section 3(a) of Pres. Dec. No. 451: second, whether or not
the same items may be charged against said portion under the provisions of B.P. Blg.
232: and, third, whether or not schools and their employees may enter into a
collective bargaining agreement allocating more than 60% of said incremental
proceeds for salary increases and other benefits of said employees. After these sub-
issues have been resolved, the Court will tackle the other incidents attending the
individual cases, seriatim.

The factual antecedents that brought these cases before this Tribunal are as follows:

I.. FACTUAL BACKGROUND OF EACH CASE

A.

CEBU INSTITUTE OF TECHNOLOGY CASE

This case originated from a Complaint filed with the Regional Office No. VII of the
Ministry of Labor on February 11, 1981 against petitioner Cebu Institute of
Technology (CIT) by private respondents, Panfilo Canete, et al., teachers of CIT, for
non-payment of: a) cost of living allowances (COLA) under Pres. Dec. Nos. 525,
1123, 1614, 1678 and 1713, b) thirteenth (13th) month pay differentials and c) service
incentive leave. By virtue of an Order issued by the then Deputy Minister of Labor
Carmelo C. Noriel, a labor-management committee composed of one representative
each from the Ministry of Labor and Employment (MOLE), the Minister of Education,
Culture and Sports (MECS), and two representatives each from CIT and from the
teachers was created. Said committee was to ascertain compliance with the legal
requirements for the payment of COLA, thirteenth (13th) month pay and service
incentive leave [Rollo, p. 84].

The position taken by CIT during the conference held by the labor management
committee was that it had paid the allowances mandated by various decrees but the
same had been integrated in the teacher's hourly rate. It alleged that the payment of
COLA by way of salary increases is in line with Pres. Dec. No. 451. It also claimed in
its position paper that it had paid thirteenth month pay to its employees and that it was
exempt from the payment of service incentive leave to its teachers who were
employed on contract basis [Rollo, pp. 85-86].

After the report and recommendation of the committee, herein public respondent, then
Minister of Labor and Employment issued the assailed Order dated September 29,
1981 and held that the basic hourly rate designated in the Teachers' Program is
regarded as the basic hourly rate of teachers exclusive of the COLA, and that COLA
should not be taken from the 60% incremental proceeds of the approved increase in
tuition fee. The dispositive portion of the Order reads:

PREMISES CONSIDERED, CIT is hereby ordered to pay its


teaching staff the following:

1) COLA under P.D.'s 525 and 1123 from February 1978 up to


1981;

2) COLA under P.D.'s l6l4,1634,1678 and l7l3;and


3) Service incentive leave from l978 upto l981.

CIT is further directed to integrate into the basic salaries of its


teachers and (sic) COLA under P.D.'s 525 and 1123 starting
on January 1981, pursuant to P.D. 1751. For purposes of
integration, the hourly rate shown in its Teachers' Program for
school year 198182 shall be considered as the basic hourly
rate.

SO ORDERED.

Petitioner assails the aforesaid Order in this Special Civil Action of certiorari with
Preliminary Injunction and/or Restraining Order. The Court issued a Temporary
Restraining Order on December 7, 1981 against the enforcement of the questioned
Order of the Minister of Labor and Employment.

B.

DIVINE WORD COLLEGE OF LEGAZPI CASE

Upon a complaint filed by ten faculty members for alleged non-compliance by herein
petitioner Divine Word College of Legazpi with, among others, Pres. Dec. No. 451,
i.e., allowances were charged to the 60% incremental proceeds of tuition fee
increase, the Labor Regulation Section of Regional Office No. V (Legazpi City) of the
Ministry of Labor and Employment conducted an inspection of the employment
records of said school. On the basis of the report on the special inspection that the
school did not comply with Pres. Dec. No. 451, herein respondent Regional Director
issued an Order dated May 30, 1983, requiring compliance by the Divine Word
College. The latter filed a Memorandum of Appeal from said Order which the Regional
Director treated as a Motion for Reconsideration. Upon failure of the school to comply
with the aforesaid Order, another Order (August 2, 1983) was issued by herein
respondent Regional Director requiring herein petitioner to pay the faculty members-
complainants (herein private respondents) the amounts indicated therein or the total
sum of Six Hundred Seventeen Thousand Nine Hundred Sixty Seven Pesos and
Seventy Seven Centavos (P 617,967.77). Petitioner's Motion for Reconsideration of
the Order was denied.

On appeal, the respondent Deputy Minister of Labor and Employment affirmed the
Order of the Regional Director, viz:

xxx xxx xxx

Coming now to the substantial merit of the case, we share the


view that the emergency allowances due the complainants
under the several presidential decrees (PD's 525, 1123, etc.)
cannot be charged by the respondent against the 60% of the
incremental proceeds from increase in tuition fees authorized
under PD 451, not only because as per decision of the
Supreme Court (UE vs. UE Faculty Association, et. al., G.R.
No. 57387, September 30, 1982) said allowances whether
mandated by law or secured by collective bargaining should
be taken only from the return to investment referred to in the
decree if the school has no other resources to grant the
allowances but not from the 60% incremental proceeds, but
also because to hold otherwise would, to our mind, inevitably
result in the loss of one benefit due the complainants-that is
the salary or wage increase granted them by PD 451.
In other words, we believe that by paying the complainants'
allowances out of the 60% incremental proceeds intended for
their salary increase they are practically being deprived of one
benefit-their share in the 60% incremental proceeds in terms
of salary or wage increase.

WHEREFORE, for the reasons abovestated, the Order


appealed from is hereby AFFIRMED, and the appeal
DISMISSED, for lack of merit.

SO ORDERED.

(Annex "K " to Petition; Rollo, p. 108, 110).

This special civil action of certiorari and Prohibition with Preliminary Injunction
questions the interpretation of, and application by the respondent Deputy Minister, of
the provisions of Pres. Dec. No. 45 1, as set forth in the assailed Order.

On March 25, 1985, after considering the allegations, issues and arguments adduced
in the Petition as well as the Comment thereon of the public respondent and
dispensing with the private respondents' Comment, the Court resolved to dismiss the
Petition for lack of merit (Rollo, p. 198). On April 26, 1985, petitioner filed a Motion for
Reconsideration with Motion to Consider the Case En Banc. On June 26, 1985 the
First Division of the Court referred the case to the Court En Banc for consolidation
with G.R. No. 70832, entitled "Gregorio T. Fabros, et al vs. Hon. Jaime C. Laya, etc. "
since it involves the same issue on the application of 60% incremental proceeds of
authorized tuition fee increases [Rollo, p. 235]. The Court EN BANC resolved to
accept the case. (Resolution of July 16, 1985). These cases were further consolidated
with other cases involving the same issues.

C.

FAR EASTERN UNIVERSITY CASE

On December 17, 1978, petitioner Union filed with the Ministry of Labor and
Employment a complaint against respondent University for non-payment of legal
holiday pay and under-payment of the thirteenth (13th) month pay. On July 7, 1979,
while the case was pending, the Union President, in his personal capacity, filed
another complaint for violation of Pres. Dec. No. 451 against the same respondent.

The two cases were forthwith consolidated and jointly heard and tried. On March 10,
1980, Labor Arbiter Ruben A. Aquino promulgated a decision the dispositive portion of
which is quoted hereunder:

RESPONSIVE TO THE FOREGOING, respondent is hereby


directed, within ten (10) days from receipt hereof, to:

1. To (sic) pay the paid legal holidays that it withdrew since


January 14, 1976 up to the present; and

2. Pay the 13th month pay differential of complainant's for the


covered period December 16, 1975 to December 17, 1978,
date of filing of complaint for non-payment of legal holiday pay
and under payment of the 13th month pay, and thereafter.
Barred forever are money claims beyond three (3) years from
the time the course (sic) of action occurred. Respondent's
formula on transportation allowance which was deducted from
the 13th month pay is thus subject to this prescriptive period,
for purposes of computation of differentials for the 13th month
pay.

The claim under PD 451 is hereby dismissed for lack of merit.

SO ORDERED.

(Annex " E " to Petition; Rollo, p. 55, 65-66).

Both parties appealed the decision of the Labor Arbiter. On September 18, 1984, the
respondent Commission disposed of the appeal in the following manner:

RESPONSIVE TO THE FOREGOING, the Decision of Labor


Arbiter Ruben A. Aquino in the instant case dated March 10,
1980 is hereby Modified in the sense that complainant's claims
for legal holiday pay and 13th month pay are likewise
dismissed for lack of merit and the dismissal of the claim under
P.D. 451 is hereby Affirmed en (sic) toto.

(Annex "A" to Petition: Rollo, p. 24, 35).

Petitioner's Motion for Reconsideration dated September 29, 1984 was denied for
lack of merit on November 8, 1984. Before this Court is the petition on certiorari filed
by the Union assailing the abovementioned decision of the Commissioner.

D.

FABROS CASE

This petition is in the nature of a class suit brought by petitioners in behalf of the
faculty members and other employees of more than 4000 private schools nationwide.
Petitioners seek to enjoin the implementation of paragraphs 7 to 7.5 of MECS Order
No. 5, series of 1985 on the ground that the said order is null and void for being
contrary to Pres. Dec. No. 451 and the rulings of the Supreme Court in the cases of
University of the East v. UE Faculty Association [G.R. No. L-57387, September 20,
1982, 117 SCRA 5541, University of Pangasinan Faculty Union v. University of
Pangasinan and NLRC [G.R. No. 63122, February 20, 1984, 127 SCRA 691 ], St.
Louis University Faculty Club v. NLRC and St. Louis University [G.R. No. 65585,
September 28, 1984, 132 SCRA 380].

On September 11, 1982, Batas Pambansa Blg. 232 (Education Act of 1982) was
signed into law. On the matter of tuition and other school fees of private schools,
section 42 of said law provides as follows:

Sec. 42. Tuition and other School Fees. — Each private


School shall determine its rate of tuition and other school fees
or charges. The rates and charges adopted by schools
pursuant to this provision shall be collectible, and their
application or use authorized subject to rules and regulations
promulgated by the Ministry of Education, Culture and Sports.
(Emphasis supplied).

Invoking section 42 of B.P. Blg. 232, among others, as its legal basis, the then
Minister of Education Jaime C. Laya promulgated on April 1, 1985 the disputed MECS
Order No. 25, s. 1985 entitled Rules and Regulations To Implement the Provisions of
B.P. Blg. 232. The Education Act of 1982, Relative to Student Fees for School Year
1985-1986. The relevant portions of said Order are quoted hereunder:

7. Application or Use of Tuition and

Other School Fees or Charges.

7.1. The proceeds from tuition fees and other school charges
as well as other income of each school shall be treated as an
institutional fund which shall be administered and managed for
the support of school purposes strictly: Provided, That for the
purpose of generating additional financial resources or income
for the operational support and maintenance of each school
two or more schools may pool their institutional funds, in whole
or in part, subject to the prior approval of their respective
governing boards.

7.2. Tuition fees shag be used to cover the general expenses


of operating the school in order to allow it to meet the
minimum standards required by the Ministry or any other
higher standard, to which the school aspires. They may be
used to meet the costs of operation for maintaining or
improving the quality of instruction/training/research through
improved facilities and through the payment of adequate and
competitive compensation for its faculty and support
personnel, including compliance with mandated increases in
personnel compensation and/or allowance.

7.3. Tuition fees shag be used to cover minimum and


necessary costs including the following: (a) compensation of
school personnel such as teaching or academic staff, school
administrators, academic non-teaching personnel, and non-
academic personnel, (b) maintenance and operating
expenses, including power and utilities, rentals, depreciation,
office supplies; and (c) interest expenses and installment
payments on school debts.

7.4. Not less than sixty (60) percent of the incremental tuition
proceeds shall be used for salaries or wages, allowances and
fringe benefits of faculty and support staff, including cost of
living allowance, imputed costs of contributed services,
thirteenth (13th) month pay, retirement fund contributions,
social security, medicare, unpaid school personnel claims and
payments as may be prescribed by mandated wage orders.
collective bargaining agreements and voluntary employer
practices, Provided That increases in fees specifically
authorized for the purposes listed in paragraph 4.3.3 hereof
shall be used entirely for those purposes. (Italics supplied).

7.5. Other student fees and charges as may be approved,


including registration, library, laboratory, athletic, application,
testing fees and charges shall be used exclusively for the
indicated purposes, including (a) the acquisition and
maintenance of equipment, furniture and fixtures, and
buildings, (b) the payment of debt amortization and interest
charges on debt incurred for school laboratory, athletic, or
other purposes, and (c) personal services and maintenance
and operating expenses incurred to operate the facilities or
services for which fees and charges are collected.

The Petition prayed for the issuance of a temporary restraining order which was
granted by this Court after hearing. The dispositive portion of the resolution dated May
28, 1985 reads as follows:

After due consideration of the allegations of the petition dated


May 22, 1985 and the arguments of the parties, the Court
Resolved to ISSUE, effective immediately and continuing until
further orders from this Court, a TEMPORARY RESTRAINING
ORDER enjoining the respondent from enforcing or
implementing paragraphs 7.4 to 7.5 of MECS Order No. 25, s.
1985, which provide for the use and application of sixty per
centum (60%) of the increases in tuition and other school fees
or charges authorized by public respondent for the school year
1985-1986 in a manner inconsistent with section 3(a), P.D. No.
451, (which allocates such 60% of the increases exclusively
"for increases in salaries or wages of the members of the
faculty and other employees of the school concerned.") and
directing accordingly that such 60% of the authorized
increases shall be held in escrow by the respective colleges
and universities, i.e., shall be kept intact and not disbursed for
any purpose pending the Court's resolution of the issue of the
validity of the aforementioned MECS Order in question.

(Rollo, p. 21).

In the same resolution, the Philippine Association of Colleges and Universities


(PACU) was impleaded as respondent.

Subsequent to the issuance of this resolution, four (4) schools, represented in this
petition, moved for the lifting of the temporary restraining order as to them. In
separate resolutions, this Court granted their prayers.

Ateneo de Manila University, De La Sale University (Taft Avenue) and De La Salle


University-South, through their respective counsels, manifested that for the school
year 1985-1986, tuition fee increase was approved by the MECS and that on the
basis of Pres. Dec. No. 451, 60% of the tuition fee increases shall answer for salary
increase. However, a budgeted salary increase, exclusive of living allowances and
other benefits, was approved for the same school year which when computed
amounts to more than the 60%.

This Court granted the motions in separate resolutions lifting the temporary restraining
order with respect to these schools in order that they may proceed with the
implementation of the general salary increase for their employees.

In the case of St. Louis University, its Faculty Club, Administrative Personnel
Association and the University itself joined in a petition seeking for leave that 49% of
the increase in tuition and other fees for school year 1985-1986 be released.
Petitioners manifested that the remaining balance shall continue to be held in escrow
by the University.

In a resolution dated January 28, 1986, the Court resolved as follows:

Accordingly, the Temporary Restraining Order issued by this


Court on May 28, 1985 is hereby ordered LIFTED with respect
to Saint Louis University of Baguio City in order that it may
proceed immediately with the implementation of salary
increases for its employees.

D.

BISCOCHO CASE

The Espiritu Santo Parochial School and the Espiritu Santo Parochial School Faculty
Association were parties to a labor dispute which arose from a deadlock in collective
bargaining. The parties entered into conciliation proceedings. The union went on
strike after efforts at the conciliation failed. Subsequently, a return to work agreement
was forged between the parties and both agreed to submit their labor dispute to the
jurisdiction of the Minister of Labor.

In the exercise of his power to assume jurisdiction, the Ministry of Labor and
Employment issued an Order dated April 14, 1986 which provides for the following:

IN CONSIDERATION OF ALL THE FOREGOING, the Ministry


hereby declares the strike staged by the Union to be legal and
orders the following:

a) the School to submit the pertinent record of employment of


Romualdo Noriego to the Research and Information Division of
the NLRC for computation of his underpayment of wages and
for the parties to abide by the said computation;

b) the School to submit all pertinent record of collections of


tuition fee increases for school year (sic) 1982-1983, 1983-
1984 and 1984-1985 to the Research and Information Division
of the NLRC for proper computation and for equal distribution
of the amount to all employees and teachers during the
abovementioned school year (sic) as their salary adjustment
under P.D. 461;

c) the parties to wait for the final resolution of the illegal


dismissal (case) docketed as NLRC NCR Case No. 5-1450-85
and to abide by the said resolution;

d) to furnish the MECS a copy of this order for them to issue


the guidelines in the implementation of PRODED Program;

e) the parties to execute a collective bargaining agreement


with an economic package equivalent to 90% of the proceeds
from tuition fee increases for school year 1985-1986 and
another 90% for school year 1986-1987 and 85% for school
year 1987-1988. The amount aforementioned shall be divided
equally to all members of the bargaining unit as their
respective salary adjustments. Such other benefits being
enjoyed by the members of the bargaining unit prior to the
negotiation of the CBA shall remain the same and shall not be
reduced.

f) the School to deduct the amount equivalent to ten (10%) per


cent of the backwages payable to all members of the
bargaining unit as negotiation fee and to deliver the same to
the Union Treasurer for proper disposition (Emphasis
supplied).

SO ORDERED.

(Rollo, pp. 16-17)

Pursuant to the said order, private respondent Union agreed to incorporate in their
proposed collective bargaining agreement (CBA) with the School the following:

2) The Union and School Administration will incorporate the


following in their CBA -

1) The computation of the tuition fee increase


shall be gross to gross from which the
corresponding percentage of 90% will be
taken. The resulting amount will be divided
among 141.5 employees for 1985-86 and
132.5 employees for 1986-87.

1/2 of the resulting increase will be added to


basic and divided by 13.3 to arrive at monthly
increase in basic. The other 1/2 will be divided
by 12.3 to arrive at monthly increase in living
allowance.

xxx xxx xxx

4) xxx

Upon request/demand of the Union, School win deduct from


backwages of managerial employees and others outside the
bargaining unit what Union win charge its own members in the
form of attorney's fees, special assessment and union
dues/agency fee.

5) The signing of the CBA and payment of backwages and


others shall be on November 26, 1986 at the Espiritu Santo
Parochial School Library.

(Rollo, pp. 3-4).

The herein petitioners, Jasmin Biscocho and 26 others, all employees and faculty
members of the respondent School, filed the present petition for prohibition to restrain
the implementation of the April 14, 1986 Order of respondent Labor Minister as well
as the agreements arrived at pursuant thereto. They contend that said Order and
agreements affect their rights to the 60% incremental proceeds under Pres. Dec. No.
451 which provide for the exclusive application of the 60% incremental proceeds to
basic salary.

Acting on the petitioners' prayer, this Court immediately issued a temporary


restraining order on November 25, 1986 ". . . enjoining the respondents from
enforcing, implementing and proceeding with the questioned order of April 14, 1986
and collective bargaining agreement executed between respondents Union and the
School Administration in pursuance thereof." [Rollo, p. 20].
F.

VALMONTE CASE

This Petition was filed by parents with children studying at respondent school, Espiritu
Santo Parochial School to nullify the Order dated April 14, 1986 issued by public
respondent, then Minister of Labor and Employment, specifically paragraphs (e) and
(f) thereof, quoted in the Biscocho case.

The award contained in the said Order is the result of the assumption of jurisdiction by
the public respondent over a labor dispute involving the private respondents school
and faculty association. The latter had earlier filed a notice of strike because of a
bargaining deadlock on the demands of its members for additional economic benefits.
After numerous conciliation conferences held while the union was on strike, the
parties voluntarily agreed that the public respondent shall assume jurisdiction over all
the disputes between them. As to the subject matter of the instant case, the public
respondent found that the latest proposals of the respondent school was to give 85%
of the proceeds from tuition fee increases for the school years to be divided among
the teachers and employees as salary adjustments. What the respondent faculty
association offered to accept was a package of 95% for school year 1985-1986, 90%
for school year 1986- 1987. The respondent school offered to strike the middle of the
two positions, hence the Order complained of by the petitioners [See Annex "A",
Petition; Rollo, pp. 9, 14-15; Comment of the Respondent Faculty Association: Rollo,
p. 26].

II. RESOLUTION OF THE COMMON LEGAL ISSUE

This long-drawn controversy has sadly placed on the balance diverse interests,
opposed yet intertwined, and all deserving, and demanding, the protection of the
State. On one arm of the balance hang the economic survival of private schools and
the private school system, undeniably performing a complementary role in the State's
efforts to maintain an adequate educational system in the country. Perched
precariously on the other arm of the same balance is the much-needed financial uplift
of schoolteachers, extolled for all times as the molders of the minds of youth, hence of
every nation's future. Ranged with them with needs and claims as insistent are other
school personnel. And then, anxiously waiting at the sidelines, is the interest of the
public at large, and of the State, in the continued availability to all who desire it, high-
standard education consistent with national goals, at a reasonable and affordable
price.

Amidst these opposing forces the task at hand becomes saddled with the resultant
implications that the interpretation of the law would bear upon such varied interests.
But this Court can not go beyond what the legislature has laid down. Its duty is to say
what the law is as enacted by the lawmaking body. That is not the same as saying
what the law should be or what is the correct rule in a given set of circumstances. It is
not the province of the judiciary to look into the wisdom of the law nor to question the
policies adopted by the legislative branch. Nor is it the business of this Tribunal to
remedy every unjust situation that may arise from the application of a particular law. It
is for the legislature to enact remedial legislation if that be necessary in the premises.
But as always, with apt judicial caution and cold neutrality, the Court must carry out
the delicate function of interpreting the law, guided by the Constitution and existing
legislation and mindful of settled jurisprudence. The Court's function is therefore
limited, and accordingly, must confine itself to the judicial task of saying what the law
is, as enacted by the lawmaking body.

FIRST SUB-ISSUE
A. Whether or not allowances and other fringe benefits of
employees may be charged against the 60% portion of the
incremental proceeds provided for in sec. 3(a) of Pres. Dec.
No. 451.

1. Arguments raised in the Cebu Institute of Technology case

In maintaining its position that the salary increases it had paid to its employees should
be considered to have included the COLA, Cebu Institute of Technology (CIT) makes
reference to Pres. Dec. No. 451 and its Implementing Rules. The line of reasoning of
the petitioner appears to be based on the major premise that under said decree and
rules, 60% of the incremental proceeds from tuition fee increases may be applied to
salaries, allowances and other benefits of teachers and other school personnel. In
support of this major premise, petitioner cites various implementing rules and
regulations of the then Minister of Education, Culture and Sports, to the effect that
60% of the incremental proceeds may be applied to salaries, allowances and other
benefits for members of the faculty and other school personnel [Petition citing
Implementing Rules and Regulations of Pres. Dec. No. 451 of various dates; Rollo,
pp. 318-320]. Petitioner concludes that the salary increases it had granted the CIT
teachers out of the 60% portion of the incremental proceeds of its tuition fee increases
from 1974-1980 pursuant to Pres. Dec. No. 451 and the MECS implementing rules
and regulations must be deemed to have included the COLA payable to said
employees for those years [Rollo, pp. 911].

With leave of Court, the Philippine Association of Colleges and Universities, filed its
Memorandum as Intervenor in support of the proposition that schools may pay the
COLA to faculty members and other employees out of the 60% of the increase in
tuition fees. In addition to the arguments already set forth in the memorandum of the
petitioner CIT, intervenor PACU attacks the Decision of this Court in University of the
East v. University of the East Faculty Association et. all G.R. No. 57387 as "not
doctrinal" and inapplicable to the CIT case. The Court held in the UE case, which was
promulgated on September 30, 1982, during the pendency of these cases, that:

... allowances and benefits should be chargeable to the return


to investment referred to in Sec. 3(a), if the schools should
happen to have no other resources than incremental proceeds
of authorized tuition fee increases ... (See Dispositive Portion
of the Decision)

Intervenor PACU alleges that the aforecited U.E. decision does not categorically rule
that COLA and other fringe benefits should not be charged against the 60%
incremental proceeds of the authorized tuition fee increase.

The Solicitor General, on the other hand, argues in support of the Order of the public
respondent that Pres. Dec. No. 451 allocates the 60% proceeds of tuition fee
increases exclusively for salary increases of teachers and non- teaching supportive
personnel of the school concerned, and that the Decree does not provide that said
salary increases would take the place of the COLA [Rollo, p. 244-245]. He cites as
authority for this stance, two (2) memoranda of the then President dated June 6, 1978
and March 30, 1979 both of which provide that the 60% incremental proceeds of
tuition fee increases "shall be allocated for the increase in the salaries of teachers and
supportive personnel. " Anent the U.E. case, the Solicitor General states that the
Supreme Court in deciding said case took note of the stand of the Office of the
President that the 60% incremental proceeds shall be solely applied to salaries of
faculty members and employees.

On August 7, 1986, considering the supervening events, including the change of


administration, that have transpired during the pendency of these cases, the Court
required the Solicitor General to state whether or not he maintains the action and
position taken by his predecessor-in-office. In his Compliance with said Resolution,
the Solicitor General Manifested the position that:

a. If the tuition fee increase was collected during the effectivity


oil Presidential Decree No. 451, 60% thereof shall answer
exclusively for salary increase of school personnel. Other
employment benefits shall be covered by the 12% allocated for
return of investment, this is in accordance with the ruling of
this Honorable Court in University of the East vs. U.E. Faculty
Association, et. al (117 SCRA 554), ... and reiterated in
University of Pangasinan Faculty Union v. University of
Pangasinan, et. al. (127 SCRA 691) and St. Louis Faculty
Club u. NLRC (132 SCRA 380).

b. If the salary increase was collected during the effectivity of


Batas Pambansa Blg. (sic) 232, 60% thereof shall answer not
only for salary increase of school personnel but also for other
employment benefits.

(Rollo, at pp. 513-514)

2. Arguments raised in the Divine Word College Case

Petitioner Divine Word College of Legazpi (DWC) advances the theory that the COLA,
13th month pay and other personnel benefits decreed by law, must be deemed
chargeable against the 60% portion allocated for increase of salaries or wages of
faculty and all other school employees. In support of this stance, petitioner points out
that said personnel benefits are not included in the enumeration of the items for which
the balance (less 60%) or 40% portion of the incremental proceeds may be alloted
under section 3(a) of Pres. Dec. No. 451 [Rollo, pp. 29-30. Petitioner likewise cites the
interpretation of the respondent Minister of Education, Culture and Sports embodied
in the Implementing Rules and Regulations of P.D. 451, DEC Issuance, May 13,
1987; Rollo, p. 30], that the 60% incremental proceeds of authorized tuition fee
increases may be applied to increases in emoluments and/or benefits for members of
faculty, including staff and administrative employees of the school as the valid
interpretation of the law, as against that made by the respondent Deputy Minister of
Labor in the assailed Order. If the latter interpretation is upheld, petitioner would go as
far as questioning the constitutionality of Pres. Dec. No. 451 upon the ground that the
same discriminates against the petitioner and other private schools as a class of
employers. According to the petitioner, the discrimination takes the form of requiring
said class of employers to give 60% of their profits to their employees in addition to
the COLA mandated by law, while other employers have to contend only with salary
increases and COLA [Petition; Rollo, p. 46].

With regard to the Decision of this Court in the U.E. case, petitioner claims exemption
therefrom upon the ground that the Court's interpretation of a law cannot be applied
retroactively to parties who have relied upon the previous administrative interpretation
which has not been declared invalid or unconstitutional [Petition; Rollo, pp. 50-51 1.
Petitioner further argues on this point that if the court had intended to invalidate the
MECS interpretation of the Decree, it should have positively stated so in the Decision
[Petition; Rollo, p. 50].

The Comment of the public respondents cite as settled jurisprudence applicable to the
case at bar, the ruling of this Court in the U.E. case, supra, which was reiterated in the
subsequent cases of University of Pangasinan Faculty Union v. University of
Pangasinan et all and St. Louis Faculty Club v. NLRC, et al.
Public respondents Deputy Minister of Labor and Employment and Regional Director
of the MOLE (Region V) likewise attack the validity of the Revised Implementing
Rules and Regulations of Pres. Dec. No. 451 cited by the petitioner insofar as said
rules direct the allotment of the 60% of incremental proceeds from tuition fee hikes for
retirement plan, faculty development and allowances. They argue that said rules and
regulations were invalid for having been promulgated in excess of the rule-making
authority of the then Minister of Education under Pres. Dec. No. 451 which mandates
that the 60% of incremental proceeds from tuition fee hikes should be allotted solely
for salary increases [Comment; Rollo, pp. 184-185]. Finally, with respect to the issue
on the allege unconstitutionality of Pres. Dec. No. 451, the public respondents posit
that a legislation (such as Pres. Dec. No. 451) which affects a particular class does
not infringe the constitutional guarantee of equal protection of the law as long as it
applies uniformly and without discrimination to everyone of that class [Comment;
Rollo, p. 14].

3. Arguments raised in the Far Eastern University case

It is the petitioner's contention that in respect of Pres. Dec. No. 451, the decision of
the NLRC is a defiance of the rulings of this Court in the cases of University of the
East v. U.E. Faculty, Association et al. and of University of Pangasinan Faculty Union
v. University of Pangasinan and NLRC (supra). The Union submits that monetary
benefits, other than increases in basic salary, are not chargeable to the 60%
incremental proceeds.

The respondent University in its Comment dated June 13, 1982 refers to Article 97(f)
of the Labor Code which provides a definition of the term "wages" to support its
position that "salaries or wages" as used in Pres. Dec. No. 451 should be interpreted
to include other benefits in terms of money.

As mentioned in the Cebu Institute of Technology case, the Solicitor General filed its
Compliance with this Court's resolution dated August 7, 1986 requiring him to
manifest whether public respondents maintain the position they have taken in these
consolidated cases. The resolution of September 25, 1986 required petitioners to
Comment on said Compliance.

The Comment dated December 6, 1986 was received by this Court after petitioner
Union was required to show cause why no disciplinary action should be taken against
them for failure to comply earlier. The Union agreed with the position taken by the
Solicitor General that under Pres. Dec. No. 451, 60% of the tuition fee increases, shall
answer exclusively for salary increase. However, it expressed disagreement with the
opinion that during the effectivity of B.P. Blg. 232, the 60% ncremental proceeds shall
answer not only for salary increases but also for other employment benefits. The
Union argues that whereas "Pres. Dec. No. 451 is a law on a particular subject, viz.,
increase of tuition fee by educational institutions and how such increase shall be
allocated B.P. Blg. 232 is not a law on a particular subject of increase of tuition fee . . .
; at most it is a general legislation on tuition fee as it touches on such subject in
general, " [Comment on Compliance; Rollo, p. 376], Suppletory to its argument that
B.P. Blg. 232 did not impliedly repeal Pres. Dec. No. 451, the Union also invokes the
principle that a special or particular law cannot be repealed by a general law.

RESOLUTION OF THE FIRST SUB-ISSUE

This Court has consistently held, beginning with the University of the East case, that if
the schools have no resources other than those derived from tuition fee increases,
allowances and benefits should be charged against the proceeds of tuition fee
increases which the law allows for return on investments under section 3(a) of Pres.
Dec. No. 451, therefore, not against the 60% portion allocated for increases in
salaries and wages (See 117 SCRA at 571). This ruling was reiterated in the
University of Pangasinan case and in the Saint Louis University case.

There is no cogent reason to reverse the Court's ruling in the aforecited cases.
Section 3(a) of Pres. Dec. No. 451 imposes among the conditions for the approval of
tuition fee increases, the allocation of 60% per cent of the incremental proceeds
thereof for increases in salaries or wages of school personnel and not for any other
item such as allowances or other fringe benefits. As aptly put by the Court in
University of Pangasinan Faculty Union v. University of Pangasinan, supra:

... The sixty (60%) percent incremental proceeds from the


tuition increase are to be devoted entirely to wage or salary
increases which means increases in basic salary. The law
cannot be construed to include allowances which are benefits
over and above the basic salaries of the employees. To
charge such benefits to the 60% incremental proceeds would
be to reduce the increase in basic salary provided by law, an
increase intended also to help the teachers and other workers
tide themselves and their families over these difficult economic
times. [Italics supplied] (127 SCRA 691, 702).

This interpretation of the law is consistent with the legislative intent expressed in the
Decree itself, i.e., to alleviate the sad plight of private schools and that of their
personnel wrought by slump in enrollment and increasing operational costs on the
part of the schools, and the increasing costs of living on the part of the personnel
(Preamble, Pres. Dec. No. 451). While coming to the aid of the private school system
by simplifying the procedure for increasing tuition fees, the Decree imposes as a
condition for the approval of any such increase in fees, the allocation of 60% of the
incremental proceeds thereof, to increases in salaries or wages of school personnel.
This condition makes for a quid pro quo of the approval of any tuition fee hike by a
school, thereby assuring the school personnel concerned, of a share in its proceeds.
The condition having been imposed to attain one of the main objectives of the Decree,
which is to help the school personnel cope with the increasing costs of living, the
same cannot be interpreted in a sense that would diminish the benefit granted said
personnel.

In the light of existing laws which exclude allowances from the basic salary or wage in
the computation of the amount of retirement and other benefits payable to an
employee, this Court will not adopt a different meaning of the terms "salaries or
wages" to mean the opposite, i.e. to include allowances in the concept of salaries or
wages.

As to the alleged implementing rules and regulations promulgated by the then MECS
to the effect that allowances and other benefits may be charged against the 60%
portion of the proceeds of tuition fee increases provided for in Section 3(a) of Pres.
Dec. No. 45 1, suffice it to say that these were issued ultra vires, and therefore not
binding upon this Court.

The rule-making authority granted by Pres. Dec. No. 451 is confined to the
implementation of the Decree and to the imposition of limitations upon the approval of
tuition fee increases, to wit:

SEC. 4. Rules and Regulations. — The Secretary of Education


and Culture is hereby authorized, empowered and directed to
issue the requisite rules and regulations for the effective
implementation of this Decree. He may, in addition to the
requirements and limitations provided for under Sections 2 and
3 hereof, impose other requirements and limitations as he may
deem proper and reasonable.

The power does not allow the inclusion of other items in addition to those for which
60% of the proceeds of tuition fee increases are allocated under Section 3(a) of the
Decree.

Rules and regulations promulgated in accordance with the power conferred by law
would have the force and effect of law [Victorias Milling Company, Inc. v. Social
Security Commission, 114 Phil. 555 (1962)] if the same are germane to the subjects
of the legislation and if they conform with the standards prescribed by the same law
[People v. Maceren, G.R. No. L-32166, October 18, 1977, 79 SCRA 450]. Since the
implementing rules and regulations cited by the private schools adds allowances and
other benefits to the items included in the allocation of 60% of the proceeds of tuition
fee increases expressly provided for by law, the same were issued in excess of the
rule-making authority of said agency, and therefore without binding effect upon the
courts. At best the same may be treated as administrative interpretations of the law
and as such, they may be set aside by this Court in the final determination of what the
law means.

SECOND SUB-ISSUE

B. Whether or not allowances and other fringe benefits may be charged against the
60% portion of the incremental proceeds of tuition fee increases upon the effectivity of
the Education Act of 1982 (B.P. Blg. 232).

1. Arguments raised in the Fabros case

In assailing MECS Order No. 25, s. 1985, petitioners argue that the matter of
allocating the proceeds from tuition fee increases is still governed by Pres. Dec. No.
451. It is their opinion that section 42 of B.P. Blg. 232 did not repeal Pres. Dec. No.
451 for the following reasons: first, there is no conflict between section 42 of B.P. Blg.
232 and section 3(a) of Pres. Dec. No. 451 or any semblance of inconsistency to
deduce a case of a repeal by implication: second, Pres. Dec. No. 451 is a specific law
upon a particular subject-the purposes and distribution of the incremental proceeds of
tuition fee increases, while B.P. Blg. 232 is a general law on the educational system;
as such, a specific law is not repealed by a subsequent general law in the absence of
a clear intention; and third, Pres. Dec. No. 451 is still the only law on the subject of
tuition fee increases there being no prescription or provision in section 42 of B.P. Blg.
232 or elsewhere in the law. They furthermore aver that the disputed MECS Order
which imposed additional burdens against the 60% incremental proceeds of tuition fee
increases are not provided in either Pres. Dec. No. 451 or B.P. Blg. 232. The logical
result as intimated by petitioners is that the inclusion of paragraph 7.4 and related
paragraphs 7 to 7.3 and 7.5 in the questioned MECS order contravenes the statutory
authority granted to the public respondent, and the same are therefore, void.

Respondent PACU takes the contrary view contending that MECS Order No. 25, s.
1985, complies with the mandate of section 42 of B.P. Blg. 232 which law had already
repealed Pres. Dec. No. 451. PACU notes that the University of the East case
invoked by petitioners is not applicable because the issue in that case does not
involve the effect of B.P. Blg. 232 on Pres. Dec. No. 451.

The Solicitor General, representing the public respondent, after giving a summary of
the matters raised by petitioner and respondent PACU, points out that the decisive
issue in this case is whether B.P. Big. 232 has repealed Pres. Dec. No. 451 because
on the answer to this question depends the validity of MECS Order No. 25, s. 1985.
Public respondent holds the view consistent with that of PACU on the matter of B.P.
Blg. 232 having repealed Pres. Dec. No. 451. To support this contention, the Solicitor
General compared the respective provisions of the two laws to show the
inconsistency and incompatibility which would result in a repeal by implication.

RESOLUTION OF THE SECOND SUB-ISSUE

On the matter of tuition fee increases section 42 of B.P. Blg. 232 provides:

SEC. 42. Tuition and Other School Fees. — Each private


school shall determine its rate of tuition and other school fees
or charges. The rates and charges adopted by schools
pursuant to this provision shall be collectible and their
application or use authorized, subject to rules and regulations
promulgated by the Ministry of Education, Culture and Sports.
(Emphasis supplied).

The enactment of B.P. Blg. 232 and the subsequent issuance of MECS Order No. 25,
s. 1985 revived the old controversy on the application and use of the incremental
proceeds from tuition fee increases. As can be gleaned from the pleadings and
arguments of the parties in these cases, one side, composed of the teachers and
other employees of the private schools, insist on the applicability of section 3(a) of
Pres. Dec. No. 451 as interpreted arid applied in the University of the East, University
of Pangasinan and St Louis University cases, while the private schools uphold the
view that the matter of allocating the incremental proceeds from tuition fee increases
is governed by section 42 of B.P. Blg. 232 as implemented by the MECS Rules and
Regulations. As stated, the latter's argument is premised on the allegation that B.P.
Blg. 232 impliedly repealed Pres. Dec. No. 451.

On the second sub-issue, therefore, this Court upholds the view taken by the Solicitor
General in the Fabros case, that the decisive issue is whether B.P. Blg. 232 has
repealed Pres. Dec. No. 451.

In recognition of the vital role of private schools in the country's educational system,
the government has provided measures to regulate their activities. As early as March
10, 1917, the power to inspect private schools, to regulate their activities, to give them
official permits to operate under certain conditions and to revoke such permits for
cause was granted to the then Secretary of Public Instruction by Act No. 2706 as
amended by Act No. 3075 and Commonwealth Act No. 180. Republic Act No. 6139,
enacted on August 31, 1970, provided for the regulation of tuition and other fees
charged by private schools in order to discourage the collection of exorbitant and
unreasonable fees. In an effort to simplify the "cumbersome and time consuming"
procedure prescribed under Rep. Act No. 6139 and "to alleviate the sad plight of
private schools," Pres. Dec. No. 451 was enacted on May 11, 1974. While this later
statute was being implemented, the legislative body envisioned a comprehensive
legislation which would introduce changes and chart directions in the educational
system, hence, the enactment of B.P. Blg. 232. What then was the effect of B.P. Blg.
232 on Pres. Dec. No. 451?

The Court after comparing section 42 of B.P. Blg. 232 and Pres. Dec. No. 451,
particularly section 3(a) thereof, finds evident irreconcilable differences.

Under Pres. Dec. No. 451, the authority to regulate the imposition of tuition and other
school fees or charges by private schools is lodged with the Secretary of Education
and Culture (Sec. 1), where section 42 of B.P. Blg. 232 liberalized the procedure by
empowering each private school to determine its rate of tuition and other school fees
or charges.

Pres. Dec. No. 451 provides that 60% of the incremental proceeds of tuition fee
increases shall be applied or used to augment the salaries and wages of members of
the faculty and other employees of the school, while B.P. Blg. 232 provides that the
increment shall be applied or used in accordance with the regulations promulgated by
the MECS.

A closer look at these differences leads the Court to resolve the question in favor of
repeal. As pointed out by the Solicitor General, three aspects of the disputed
provisions of law support the above conclusion. First, the legislative authority under
Pres. Dec. No. 451 retained the power to apportion the incremental proceeds of the
tuition fee increases; such power is delegated to the Ministry of Education and Culture
under B.P. Blg. 232. Second, Pres. Dec. No. 451 limits the application or use of the
increment to salary or wage increase, institutional development, student assistance
and extension services and return on investment, whereas B.P. Blg. 232 gives the
MECS discretion to determine the application or use of the increments. Third, the
extent of the application or use of the increment under Pres. Dec. No. 451 is fixed at
the pre-determined percentage allocations; 60% for wage and salary increases, 12%
for return in investment and the balance of 28% to institutional development, student
assistance and extension services, while under B.P. Blg. 232, the extent of the
allocation or use of the increment is likewise left to the discretion of the MECS.

The legislative intent to depart from the statutory limitations under Pres. Dec. No. 451
is apparent in the second sentence of section 42 of B.P. Blg. 232. Pres. Dec. No. 451
and section 42 of B.P. Blg. 232 which cover the same subject matter, are so clearly
inconsistent and incompatible with each other that there is no other conclusion but
that the latter repeals the former in accordance with section 72 of B.P. Blg. 232 to wit:

Sec. 72. Repealing clause. — All laws or parts thereof


inconsistent with any provision of this Act shall be deemed
repealed or modified, as the case may be.

Opinion No. 16 of the Ministry of Justice dated January 29, 1985, quoted below,
supports the above conclusion:

Both P.D. No. 451 and B.P. Blg. 232 deal with the imposition
of tuition and other school fees or charges and their use and
application, although the latter is broader in scope as it covers
other aspects of the education system. We note substantial
differences or inconsistencies between the provisions of the
two laws. P.D. No. 451 prescribes certain limitations in the
increase of tuition and other school fees and their application,
whereas the latter law, B.P. Blg. 232 s silent on the matter.
Under P.D. 451, rates of tuition/school fees need prior
approval of the Secretary of Education, Culture (now Minister
of Education, Culture and Sports), who also determines the
reasonable rates for new school fees, whereas under B.P. Blg.
232, each private school determines its rate of tuition and
other school fees or charges. P.D. No. 451 authorizes the
Secretary of Education and Culture to issue requisite rules and
regulations to implement the said Decree and for that purpose,
he is empowered to impose other requirements and limitations
as he may deem proper and reasonable in addition to the
limitations prescribed by the Decree for increases in tuition
fees and school charges, particularly, the limitations imposed
in the allocation of increases in fees and charges, whereas
under B.P. Blg. 232, the collection and application or use of
rates and charges adopted by the school are subject to rules
and regulations promulgated by the Ministry of Education,
Culture and Sports without any mention of the statutory
limitations on the application or use of the fees or charges.
The authority granted to private schools to determine its rates
of tuition and unconditional authority vested in the Ministry of
Education, Culture and Sports to determine by rules and
regulations the collection and application or use of tuition or
fees rates and charges under B.P. Big. 232 constitute
substantial and irreconcilable incompatibility with the
provisions of P.D. No. 451, which should be for that reason
deemed to have been abrogated by the subsequent
legislation.

Moreover, B.P. Blg. 232 is a comprehensive legislation dealing


with the establishment and maintenance of an integrated
system of education and as such, covers the entire subject
matter of the earlier law, P.D. No. 451. The omission of the
limitations or conditions imposed in P.D. No. 451 for increases
in tuition fees and school charges is an indication of a
legislative intent to do away with the said limitations or
conditions. (Crawford, supra, p. 674). It has also been said
that —

an act which purports to set out in full all that it


intends to contain, operates as a repeal of
anything omitted which was contained in the
old act and not included in the amendatory
act." (People vs. Almuete 69 SCRA 410;
People vs. Adillo 68 SCRA 90) (Ministry of
Justice, Op. No. 16, s. 1985).

Having concluded that under B.P. Big. 232 the collection and application or use of
tuition and other school fees are subject only to the limitations under the rules and
regulations issued by the Ministry, the crucial point now shifts to the said
implementing rules.

The guidelines and regulations on tuition and other school fees issued after the
enactment of B.P. Blg. 232 consistently permit the charging of allowances and other
benefits against the 60% incremental proceeds. Such was the tenor in the MECS
Order No. 23, s. 1983; MECS Order No. 15, s. 1984; MECS Order No. 25, s. 1985;
MECS Order No. 22, s. 1986; and DECS Order No. 37, s. 1987. The pertinent portion
of the latest order reads thus:

In any case of increase at least sixty percent (60%) of the


incremental proceeds should be allocated for increases in or
provisions for salaries or wages, allowances and fringe
benefits of faculty and other staff, including accruals to cost of
living allowance, 13th month pay, social security, medicare
and retirement contribution and increases as may be provided
in mandated wage orders, collective bargaining agreements or
voluntary employer practices.

The validity of these orders, particularly MECS Order No. 25, s. 1985, is attacked on
the ground that the additional burdens charged against ". . . the 60% of the proceeds
of the increases in tuition fees constitute both as [sic] an excess of statutory authority
and as (sic) a substantial impairment of the accrued, existing and protected rights and
benefits of the members of faculty and non-academic personnel of private schools."
Memorandum for Petitioners, Rollo, p. 1911. Petitioners alleged that these additional
burdens under the MECS Order are not provided in the law itself, either in section 42
of B.P. Blg. 232 or section 3(a) of Pres. Dec. No. 451, except increases in salaries in
the latter provision.

Section 42 of B.P. Blg. 232 grants to the Minister of Education (now Secretary of
Education) rule-making authority to fill in the details on the application or use of tuition
fees and other school charges. In the same vein is section 70 of the same law which
states:

SEC. 70. Rule-making Authority. — The Minister of Education,


Culture and Sports charged with the administration and
enforcement of this Act, shall promulgate the necessary
implementing rules and regulations.

Contrary to the petitioners' insistence that the questioned rules and regulations
contravene the statutory authority granted to the Minister of Education, this Court
finds that there was a valid exercise of rule-making authority.

The statutory grant of rule-making power to administrative agencies like the Secretary
of Education is a valid exception to the rule on non-delegation of legislative power
provided two conditions concur, namely: 1) the statute is complete in itself, setting
forth the policy to be executed by the agency, and 2) said statute fixes a standard to
which the latter must conform [Vigan Electric Light Co., Inc. v. Public Service
Commission, G.R. No. L-19850, January 30, 1964, and Pelaez v. Auditor General, G.
R. No. L-23825, December 24, 1965].

The Education Act of 1982 is "an act providing for the establishment and maintenance
of an integrated system for education " with the following basic policy:

It is the policy of the State to establish and maintain a


complete, adequate and integrated system of education
relevant to the goals of national development. Toward this
end, the government shall ensure, within the context of a free
and democratic system, maximum contribution of the
educational system to the attainment of the following national
development goals:

1. To achieve and maintain an accelerating rate of economic


development and social progress;

2. To assure the maximum participation of all the people in the


attainment and enjoyment of the benefits of such growth; and

3. To achieve and strengthen national unity and


consciousness and preserve, develop and promote desirable
cultural, moral and spiritual values in a changing world.

The State shall promote the right of every individual to relevant


quality education, regardless of sex, age, creed,
socioeconomic status, physical and mental conditions, racial
or ethnic origin, political or other affiliation. The State shall
therefore promote and maintain equality of access to
education as well as the enjoyment of the benefits of
education by all its citizens.

The State shall promote the right of the nation's cultural


communities in the exercise of their right to develop
themselves within the context of their cultures, customs,
traditions, interests and belief, and recognizes education as an
instrument for their maximum participation in national
development and in ensuring their involvement in achieving
national unity. (Section 3, Declaration of Basic Policy).

With the foregoing basic policy as well as, specific policies clearly set forth in its
various provisions, the Act is complete in itself and does not leave any part of the
policy-making, a strictly legislative function, to any administrative agency.

Coming now to the presence or absence of standards to guide the Minister of


Education in the exercise of rule-making power, the pronouncement in Edu v. Ericta
[G.R. No. L-32096, October 24, 1970, 35 SCRA 481, 497] is relevant:

The standard may be either expressed or implied. If the


former, the non-delegation objection is easily met. The
standard though does not have to be spelled out specifically. It
could be implied from the policy and purpose of the act
considered as a whole. In the Reflector Law, clearly the
legislative objective is public safety. What is sought to be
attained as in Calalang v. Williams is "safe transit upon the
roads." (Italics supplied).

Thus, in the recent case of Tablarin et al. v. Hon. Gutierrez, et al. (G.R. No. 78164,
July 31, 1987], the Court held that the necessary standards are set forth in Section 1
of the 1959 Medical Act, i.e., "the standardization and regulation of medical
education" as well as in other provisions of the Act. Similarly, the standards to be
complied with by Minister of Education in this case may be found in the various
policies set forth in the Education Act of 1982.

MECS Order No. 25, s. 1985 touches upon the economic relationship between some
members and elements of the educational community, i.e., the private schools and
their faculty and support staff. In prescribing the minimum percentage of tuition fee
increments to be applied to the salaries, allowances and fringe benefits of the faculty
and support staff, the Act affects the economic status and the living and working
conditions of school personnel, as well as the funding of the private schools.

The policies and objectives on the welfare and interests of the various members of the
educational community are found in section 5 of B.P. Blg. 232. which states:

SEC. 5. Declaration of Policy and Objectives. — It is likewise


declared government policy to foster, at all times, a spirit of
shared purposes and cooperation among the members and
elements of the educational community, and between the
community and other sectors of society, in the realization that
only in such an atmosphere can the true goals and objectives
of education be fulfilled.

Moreover, the State shall:

1. Aid and support the natural right and duty of parents in the
rearing of the youth through the educational system.

2. Promote and safeguard the welfare and interests of the


students by defining their rights and obligations, according
them privileges, and encouraging the establishment of sound
relationships between them and the other members of the
school community.

3. Promote the social and economic status of an school


personnel, uphold their rights, define their obligations, and
improve their living and working conditions and career
prospects.

4. Extend support to promote the viability of those institutions


through which parents, students and school personnel seek to
attain their educational goals.

On the other hand, the policy on the funding of schools in general, are laid down in
section 33:

SEC. 33. Declaration of Policy. — It is hereby declared to be a


policy of the State that the national government shall
contribute to the financial support of educational programs
pursuant to the goals of education as declared in the
Constitution. Towards this end, the government shall:

1. Adopt measures to broaden access to education through


financial assistance and other forms of incentives to schools,
teachers, pupils and students; and

2. Encourage and stimulate private support to education


through, inter alia, fiscal and other assistance measures.

Given the abovementioned policies and objectives, there are sufficient standards to
guide the Minister of Education in promulgating rules and regulations to implement the
provisions of the Education Act of 1982, As in the Ericta and Tablarin cases, there is
sufficient compliance with the requirements of the non-delegation principle.

THIRD SUB-ISSUE

C. Whether or not schools and their employees may enter into


a collective bargaining agreement allocating more than 60% of
said incremental proceeds for salary increases and other
benefits of said employees.

1. Arguments raised in the Biscocho and Valmonte cases

Assailed by the petitioners in the Biscocho and the Valmonte cases is the Order of the
respondent Minister of Labor directing the execution of a CBA between the school
and the respondent Espiritu Santo Parochial School Faculty Association which
provides for an economic package equivalent to 90% of the proceeds of tuition fee
increases for school year 1985-1986, another 90% for school year 1986-1987 and
85% for school year 1987-1988. Pursuant to said Order, petitioners in the Biscocho
case alleged that the parties had agreed to incorporate in their CBA a provision which
allocates one-half (1/2) of the 90% portion of the proceeds or 45% to increases in the
monthly basic salaries and the other one-half (1/2) or 45% to increases in monthly
living allowance.

The petitioners in the two cases seek the nullification of the MOLE Order for exactly
opposite reasons. In the Biscocho case, the controversy springs from what petitioners
perceive to be a diminution of the benefits to be received by the school employees
insofar as the CBA allocates only 45% for salary increases instead of 60%, which
petitioners claim to be the portion set aside by Pres. Dec. No. 451 for that purpose.
Parenthetically, the case questions the allocation of the remaining 45% of the 90%
economic package under the CBA, to allowances. Stripped down to its essentials, the
question is whether or not the 90% portion of the proceeds of tuition fee increases
alloted for the economic package may be allocated for both salary increases and
allowances.

On the other hand, petitioners in the Valmonte case believe that the MOLE cannot
order the execution of a CBA which would allocate more than 60% of the proceeds of
tuition fee increases for salary increases of school employees. Furthermore,
petitioners question the authority of the then Minister of Labor and Employment to
issue the aforequoted Order insofar as this allocates the tuition fee increases of the
respondent private school. According to them, only the Minister of Education, Culture
and Sports has the authority to promulgate rules and regulations on the use of tuition
fees and increases thereto, pursuant to the provisions of B.P. Blg. 232. They further
argue that the assailed Order collides with the provisions of Pres. Dec. No. 451
insofar as it allocates 90% of the tuition fee increases for salary adjustments of the
members of the bargaining unit which exceeds the 60% of the said increases
allocated by the Decree for the same purpose.

Before delving further into the questions raised, this Court notes that in the Valmonte
case, respondent Minister and respondent Faculty Association raise a procedural
objection to the filing of the Petition: the standing of the petitioners to bring this suit.
Both respondents decry the petitioners' lack of the interest required in Rule 65 of the
Rules of Court for the filing of the Petition for certiorari and Prohibition, since the latter
do not appear to be in any way aggrieved by the enforcement of the Order.
Petitioners-parents did not even participate in the proceedings below which led to the
issuance of the assailed Order.

This Court finds merit in the respondents' objection. Under Rule 65 of the Rules of
Court (Secs. 1 and 2), only a person aggrieved by the act or proceeding in question
may file a petition for certiorari and/or prohibition. The Valmonte petition fails to
indicate how the petitioners would be aggrieved by the assailed Order. It appears that
the petitioners are not parties and never at any time intervened in the conciliation
conferences and arbitration proceedings before the respondent Minister. The parties
therein, who stand to be directly affected by the Order of the respondent Minister, do
not contest the validity of said Order. The petition does not even state that petitioners
act as representative of the parents' association in the School or in behalf of other
parents similarly situated.

If indeed, petitioners Valmonte and Badiola are aggrieved by the said Order, they
should have intervened and moved for a reconsideration of respondent Minister's
Order before filing the instant petition. Petitioners failed to show that the case falls
under any one of the recognized exceptions to the rule that a motion for
reconsideration should first be availed of before filing a petition for certiorari and
prohibition.

In view of the foregoing, the resolution of the third sub-issue will be based mainly on
the arguments raised in the Biscocho case.

RESOLUTION OF THE THIRD SUB-ISSUE

The Biscocho case involves the issue on the allocation of the incremental proceeds of
the tuition fee increases applied for by the respondent Espiritu Santo Parochial School
for school years 1985-1986, 1986-1987, and 1987-1988. With the repeal of Pres. Dec.
No. 451 by B.P. Blg. 232, the allocation of the proceeds of any authorized tuition fee
increase must be governed by specific rules and regulations issued by the Minister
(now Secretary) of Education pursuant to his broadened rule making authority under
section 42 of the new law. Thus, insofar as the proceeds of the authorized tuition fee
increases for school year 1985-1986 are concerned, the allocation must conform with
the pertinent section of MECS Order No. 25, s. 1985, to wit:

7. Application or Use of Tuition and Other School Fees or


Charges.

xxx xxx xxx

7.4. Not less than sixty (60) percent of the incremental tuition
proceeds shall be used for salaries or wages, allowances and
fringe benefits of faculty and support staff, including cost of
living allowance, imputed costs of contributed services,
thirteenth (13th) month pay, retirement fund contributions,
social security, medicare, unpaid school personnel claims, and
payments as may be prescribed by mandated wage orders,
collective bargaining agreements and voluntary employer
practices: Provided, That increases in fees specifically
authorized for the purposes fisted in paragraph 4.3.3 hereof
shall be used entirely for those purposes.

xxx xxx xxx

With regard to the proceeds of the tuition fee increases for school year 1986-1987,
the applicable rules are those embodied in MECS Order No. 22, s. 1986 which made
reference to MECS Order No. 25, s. 1985, the pertinent portion of which is quoted
above.

Finally, as to the proceeds of the tuition fee increases for school year 1987- 1988,
DECS Order No. 37, s. 1987 must apply:

c. Allocation of lncremental Proceeds

(1) In any case of increase at least sixty percent (60%) of the


incremental proceeds should be allocated for increases in or
provisions for salaries or wages, allowances and fringe
benefits of faculty and other staff, including accruals to cost of
living allowance, 13th month pay, social security, medicare
and retirement contributions and increases as may be
provided in mandated wage orders, collective bargaining
agreements or voluntary employer practices.

(2) Provided, that in all cases of increase the allocation of the


incremental proceeds shall be without prejudice to the
Supreme Court cases on the interpretation and applicability of
existing legislations on tuition and other fees especially on the
allocation and use of any incremental proceeds of tuition and
other fees increases. (Emphasis supplied).

xxx xxx xxx

Based on the aforequoted MECS and DECS rules and regulations which implement
BP Blg. 232, the 60% portion of the proceeds of tuition fee increases may now be
allotted for both salaries and allowances and other benefits. The 60% figure is,
however, a minimum which means that schools and their employees may agree on a
larger portion, or in this case, as much as 90% for salaries and allowances and other
benefits. This is not in anyway to allow diminution or loss of the portion allotted for
institutional development of the school concerned. Thus, paragraph 7.5 of MECS
Order No. 25, series of 1985 specifically provides that other student fees and charges
like registration, library, laboratory or athletic fees shall be used exclusively for the
purposes indicated.

III RESOLUTION OF THE SPECIFIC ISSUES

CEBU INSTITUTE OF TECHNOLOGY CASE

Petitioner assigns three other errors in the petition for certiorari:

RESPONDENT MINISTER OF THE MINISTRY OF LABOR AND EMPLOYMENT


COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO A DENIAL OF
DUE PROCESS OF LAW IN DIRECTLY ISSUING THE ORDER DATED
SEPTEMBER 29,1981 WITHOUT CONDUCTING A FORMAL INVESTIGATION AND
ARBITRATION PROCEEDINGS.

PUBLIC RESPONDENT ERRED IN NOT DECLARING THAT PETITIONER IS


EXEMPTED AND/OR NOT OBLIGED TO PAY SERVICE INCENTIVE LEAVE.

PUBLIC RESPONDENT ERRED IN NOT DECLARING THAT PRIVATE


RESPONDENTS' CLAIMS FOR COLA AND SERVICE INCENTIVE LEAVE ARE
FULLY BARRED BY LACHES AND/OR EXTINGUISHED BY PRESCRIPTION.

1. Petitioner assails the Order of the Minister of Labor on the ground that the same
was issued without the benefit of a hearing and was merely based on the report of the
labor management committee which is allegedly without power to pass upon the
issues raised. On this premise, petitioner claims that it was denied its right to due
process.

Petitioner's contention is without merit. The Labor Management Committee was


empowered to investigate the complaint against the petitioner for non-payment of the
cost of living allowance, 13th month pay and service incentive leave from 1974-1981
[Annex "F"; Rollo, p. 37]. In the committee, petitioner was represented by its counsel,
registrar and assistant accountant and in the conferences that were held, the
representatives of the petitioner were present. Furthermore, the petitioner's position
paper submitted to the committee reflects that in all the deliberations, it was never
denied the right to present evidence and be heard on all the issues raised, particularly
to demonstrate that it had complied with the various COLA, 13th month pay and
service incentive leave decrees. The evidence presented during the conferences and
the position paper of the parties were made the basis of the committee's report and
recommendation which in turn became the basis of the order of the Minister of Labor
directing the petitioner to pay the complainants their COLA and service incentive
leave benefits.

It could not therefore be contended that the petitioner was deprived of his right to be
heard when it appears on the record that it was permitted to ventilate its side of the
issues. There was sufficient compliance with the requirements of due process. In the
face of the well- settled principle that administrative agencies are not strictly bound by
the technical rules of procedure, this Court dismisses the petitioner's claim that formal
investigative and arbitration proceedings should be conducted. "While a day in court
is a matter of right in judicial proceedings, in administrative proceedings it is otherwise
since they rest upon different principles." [Cornejo v. Gabriel and Provincial Board of
Rizal, 41 Phil. 188 (1920); Tajonera v. Lamaroza, G.R. Nos. L-48907 and L-49035,
December 19,1981, 110 SCRA 438].

2. Going now to the matter of service incentive leave benefits, petitioner claims that
private respondents are engaged by the school on a contract basis as shown by the
individual teachers contract which defines the nature, scope and period of their
employment; hence, they are not entitled to the said benefit according to Rule V of the
Implementing Rules and Regulations of the Labor Code to wit:

Sec. 1. Coverage. — This rule [on Service Incentive Leave]


shall apply to all employees, except:

xxx xxx xxx

(d) Field personnel and other employees whose performance


is unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis,
or those who are paid in a fixed amount for performing work
irrespective of the time consumed in the performance thereof;
(MOLE Rules and Regulations, Rule V, Book III)

The phrase "those who are engaged on task or contract basis" should however, be
related with "field personnel " applying the rule on ejusdem generis that general and
unlimited terms are restrained and limited by the particular terms that they follow,
[Vera v. Cuevas, G.R. No. L-33693, May 31, 1979, 90 SCRA 379]. Clearly,
petitioner's teaching personnel cannot be deemed field personnel which refers "to
non-agricultural employees who regularly perform their duties away from the principal
place of business or branch office of the employer and whose actual hours of work in
the field cannot be determined with reasonable certainty. [Par. 3, Article 82, Labor
Code of the Philippines]. Petitioner's claim that private respondents are not entitled to
the service incentive leave benefit cannot therefore be sustained.

3. As a last ditch effort to bar private respondents'claims, petitioner asserts that the
same are barred by laches and/or extinguished by prescription according to Article
291 of the Labor Code which provides:

Art. 291. Money claims. — All money claims arising from


employer-employee , relations accruing during the effectivity of
this Code shall be filed within three (3) years from the time the
cause of action accrued; otherwise, they shall be forever
barred.

All money claims accruing prior to the effectivity of this Code


shall be filed with the appropriate entities established under
this Code within one (1) year from the date of effectivity, and
shall be processed or determined in accordance with
implementing rules and regulations of the Code; otherwise,
they shall be forever barred.

xxx xxx xxx

Considering that the complaint alleging non-payment of benefits was filed only on
February 11, 1981, petitioner argues that prescription has already set in.
From the aforequoted provision, it is not fully accurate to conclude that the entire
claims for COLA and service incentive leave are no longer recoverable. This Court
finds no reason to disturb the following pronouncement of the Minister of Labor:

xxx xxx xxx

Simply stated, claims for COLA under P.D. 525, which took
effect on August 1, 1974, for the months of August, September
and October 1974 must be filed within one (1) year from
November 1, 1974, otherwise they shall be considered
prescribed; claims under the same decree that accrued on or
after November 1, 1974 should be initiated within three (3)
years from the date of accrual thereof, otherwise the same
shall be deemed extinguished. Although this particular claim
was filed on February 11, 1981, petitioners herein are entitled
to COLA under P.D. 525 from February 1978 up to the present
since the COLA that accrued in February 1978 has not yet
prescribed at the time that the claim was filed in February
1981. In the same vein, petitioners herein should be granted
COLA under P.D. 1123 from February 1978 up to 1981
inasmuch as said decree became effective only on May 11,
1977. Further, petitioners are entitled to the full amount of
COLA provided under P.D.'s 1614, 1634, 1678 and 1713. It
must be pointed out that the earliest of the just cited four (4)
decrees, i.e., P.D. 1614, just took effect on April 1, 1979. Thus,
the prescriptive period under Art. 292 of the Labor Code, as
amended, does not as yet apply to money claims under the
just mentioned decrees.

DIVINE WORD COLLEGE CASE

In assailing the disputed Order, petitioner contends that the public respondents acted
with grave and patent abuse of discretion amounting to lack of jurisdiction in that:

1. The Regional Director has no jurisdiction over money claims


arising from employer-employee relationship; and

2. The Regional Director and Deputy Minister of Labor


adopted the report of the Labor Standards Division without
affording the petitioner the opportunity to be heard.

1. Petitioner school claims that the case at bar is a money claim and should therefore
be within the original and exclusive jurisdiction of the Labor Arbiter pursuant to article
217 of the Labor Code, as amended.

It appears from the record, however, that the original complaint filed by ten (10)
faculty members of the Divine Word College was for non-compliance with Pres. Dec.
No. 451 and with Labor Code provisions on service incentive leave, holiday and rest
day pay and which complaint specifically prayed that an inspection of the College be
conducted.

Contrary to the petitioner's protestation of lack of jurisdiction, the Secretary of Labor


or his duly authorized representatives (which includes Regional Directors) are
accorded the power to investigate complaints for non- compliance with labor laws,
particularly those which deal with labor standards such as payment of wages and
other forms of compensation, working hours, industrial safety, etc. This is provided for
in article 128 of the Labor Code, as amended:
Art. 128. Visitorial and enforcement power. —

(a) The Secretary of Labor or his duly authorized


representatives including labor regulation officers, shall have
access to employers' records and premises at any time of the
day or night, whenever work is being undertaken therein, and
the right to copy therefrom, to question any employee and
investigate any fact, condition or matter which may be
necessary to determine violations or which may aid in the
enforcement of this Code and of any labor law, wage order or
rules and regulations issued pursuant thereto.

(b) The Secretary of Labor or his duly authorized


representatives shall have the power to order and administer,
after due notice and hearing, compliance with the labor
standards provisions of this Code based on the findings of
labor regulation officers or industrial safety engineers made in
the course of inspection, and to issue writs of execution to the
appropriate authority for the enforcement of their order, except
in cases where the employer contests the findings of the labor
regulations officer and raises issues which cannot be resolved
without considering evidentiary matters that are not verifiable
in the normal course of inspection. (Emphasis supplied).

Furthermore, Policy Instruction No. 6 which deals with the distribution of jurisdiction
over labor cases restates inter alia that "(L)abor standards cases arising from violation
of labor standards laws discovered in the course of inspection or complaints where
employer-employee relations still exist" are under the exclusive original jurisdiction of
the Regional Director.

Even assuming that respondent Regional Director was without jurisdiction to entertain
the case at bar, petitioner is now barred at this stage to claim lack of jurisdiction
having actively participated in the proceedings below. Petitioner never questioned the
jurisdiction of the respondent Regional Director.

2. The petitioner claims that it was never afforded the opportunity to be heard and was
therefore denied due process.

There is no dispute that an inspection of the College was conducted after a complaint
by some faculty members was filed with the Regional Office of the Ministry of Labor
and Employment. A report was submitted on the basis of the findings contained
therein. Petitioner was furnished a copy of said report to which it filed a comment.
Finding this to be without merit, the Regional Director issued an order giving petitioner
ten (10) days to manifest its compliance with the findings, otherwise, another would
be issued to enforce payment. Petitioner appealed but instead of resolving the
memorandum of appeal, which the Regional Director treated as a motion for
reconsideration, said Director issued another Order dated August 2, 1983 directing
the payment of the employees' share in the sixty (60%) percent incremental proceeds.
Petitioner moved for a reconsideration of the latest order which the Regional Director,
however, denied, thereby elevating the case to the Office of the Minister of Labor and
Employment.

The foregoing facts demonstrate that petitioner had the opportunity to refute the report
on the inspection conducted. It submitted a comment thereto, which was in effect its
position paper. The arguments therein and evidence attached thereto were
considered by respondent Regional Director in the order issued subsequently. They,
therefore, had ample opportunity to present their side of the controversy.
What due process contemplates is not merely the existence of an actual hearing. The
"right to be heard" focuses more on the substance rather than the form. In the case at
bar, petitioner was actually heard through the pleadings that it filed with the Regional
Office V. As it itself admitted in its petition that it was afforded the right to be heard on
appeal [See Rollo, p. 581, petitioner cannot therefore insist that it was denied due
process.

FAR EASTERN UNIVERSITY CASE

Two other issues are raised in this petition, to wit:

WHETHER OR NOT 'TRANSPORTATION ALLOWANCE' SHOULD BE


CONSIDERED AS 'EQUIVALENT TO 13TH-MONTH PAY UNDER PRES. DEC. NO.
851.

WHETHER OR NOT LEGAL HOLIDAY PAY BENEFIT COULD BE VALIDLY


WITHDRAWN AFTER BEING PRACTICED CONTINUOUSLY FOR EIGHT (8)
MONTHS.

1. The issue on the thirteenth (13th) month pay involves an interpretation of the
provisions of Pres. Dec. No. 851 which requires all employers "to pay all their
employees receiving a basic salary of not more than Pl,000 a month, regardless of the
nature of the employment, a 13th- month pay" (Sec. 1). However, "employer[s]
already paying their employees a 13th-month pay or its equivalent are not covered"
(Sec. 2). (Emphasis supplied)

The Rules and Regulations Implementing Pres. Dec. No. 851 provide the following:

SEC. 3. Employees. — The Decree shall apply to all


employers except to: ...

c) Employers already paying their employees 13th-month or


more in a calendar year or its equivalent at the time of this
issuance; ...

xxx xxx xxx

The term "its equivalent" as used in paragraph (c) hereof shall


include Christmas bonus, mid-year bonus, profit-sharing
payments and other cash bonuses amounting to not less than
1/12th of the basic salary but shall not include cash and stock
dividends, cost of living allowances and all other allowances
regularly enjoyed by the employer, as well as non-monetary
benefits. Where an employer pays less than 1/1 2th of the
employees basic salary, the employer shall pay the difference.

In the case at bar, the 13th month pay is paid in the following manner:

FOR REGULAR EMPLOYEES:

Transportation Allowance (TA)


50% of basic for the first year of service plus additional 5%
every year thereafter but not to exceed 100% of basic salary

Christmas Bonus (CB)

50% of basic salary for the first year of service plus additional
5% every year thereafter but not to exceed 100% of basic
salary.

For employees who have served the University for more than
10 years, the University pays them emoluments equivalent to
the 14 months salaries.

13th Month Pay Formula:

Monthly Rate x No. of

months served for the year

Less TA/CB = 13th Mo. pay

12 months

FOR CASUAL EMPLOYEES:

13th Month Pay Formula:

Add salaries from 16 December of previous year to 15th December of present year
[and] divide by 12 months = 13th Mo. Pay (Rollo, pp. 60, 72).

The University's answer to the Union's claim of underpayment of the 13th month pay
is that the "transportation allowance" paid to its employees partakes the nature of a
mid-year bonus which under section 2 of Pres. Dec. No. 851 and section 3(c) of the
Implementing Rules and Regulations is equivalent to the 13th month pay,

The Labor Arbiter ordered FEU to pay the 13th month pay differentials of the
complainants reasoning that:

CLEARLY, transportation allowance cannot be considered as


equivalent" of 13th month pay as it is neither a Christmas
bonus, mid-year bonus, profit sharing payment, or other cash
bonuses, pursuant to paragraphs (c) and (e), Section 3 of PD
851. The regularity of its payment further cements this
proposition.

PERFORCE, complainants are underpaid of their 13th month


pay in an amount equivalent to 50% of their basic salary for
the lst year of service, plus additional 5% every year thereafter
but not to exceed 100% of their basic salary which, per
respondent's formula, corresponds to their transportation
allowance. (Rollo, p. 61).

On appeal, the Third Division of the National Labor Relations Commission reversed
the Labor Arbiter's ruling by dismissing the complainant's claim for underpayment of
the 13th month pay for lack of merit. The NLRC ruled that:
From the above findings and conclusion, it is clear that insofar
as employees with ten (10) years of service or more are
concerned, they receive the equivalent of one (1) month pay
for Christmas bonus and another one (1) month pay as
transportation allowance or a total of fourteen (14) months
salary in a year. Obviously, this group of employees are fully
paid of their 13th month pay and are not therefore subject to
the instant claim. As it is only those with less than ten (10)
years of service are included or encompassed by the Labor
Arbiter's resolution on this particular issue. With this
clarification, we shall now proceed to discuss the crux of the
controversy, that is, the determination of whether or not the so
designated "transportation allowance" being paid to the
employees should be considered among those deemed
equivalent to 13th month pay. As adverted earlier, the Labor
Arbiter opined that it cannot be so considered as the
equivalent of 13th month pay.

xxx xxx xxx

In passing upon the issue, we deemed it best to delve deeper


into the nature and intendment of the transportation
allowances as designated by both the complainants and the
respondent. Complainants claim that the transportation
allowance they enjoy has always been called and termed
allowance and never as bonus since the time the same was
given to them. They assert that it simply was intended as an
allowance and not a bonus. It would appear however that
complainants do not dispute respondent's stand that
transportation allowance is being paid only every March of
each year as distinguished from other allowances that are
being paid on a monthly basis or on a bimonthly basis; that the
amount of transportation allowance to be paid is dependent on
the length of service of the employee concerned (i.e. 50%
basic in the first year and additional 5% for each succeeding
years, etc.); that the said method of computing the amount of
the transportation allowance to be paid the complainants is
Identical to that used in determining Christmas bonus
(respondent's exhibit 8) that the reason behind said
transportation allowance is to financially assist employees in
meeting their tax obligations as the same become due on or
about the month of March of each year.

xxx xxx xxx

We are inclined to believe and so hold that by the manner by


which said transportation allowance is being paid (only once a
year) as well as the method in determining the amount to be
paid (similar to Christmas bonus) and considering further the
reason behind said payment (easing the burden of taxpayer-
employee), the said transportation allowance given out by
respondent while designating as such, partakes the nature of a
mid-year bonus. It bears to note in passing that in providing for
transportation allowance, respondent was not compelled by
law nor by the CBA (Annex "A" of respondent's Appeal) as
nowhere in the CBA nor in the Labor Code can be found any
provision on transportation allowance. It was therefore a
benefit that stemmed out purely from the voluntary act and
generosity of the respondent FEU. Moreover, said
transportation allowance is only being paid once a year. On
the other hand, regular allowances not considered as 13th
month pay equivalent under P.D. 851, to our mind, refer to
those paid on regular intervals and catering for specific
employees' needs and requirements that recur on a regular
basis. Verily, if the intendment behind the disputed
transportation allowance is to answer for the daily recurring
transportation expenses of the employees, the same should
have been paid to employees on regular periodic intervals. All
indications, as we see it, point out to conclusion that the
disputed transportation allowance, while dominated as such
apparently for lack of better term, is in fact a form of bonus
doled out by the respondent during the month of March every
year.

Hence, we hold that it is one of those that can very well be


considered as equivalent to the 13th month pay (Rollo, pp. 73,
74, 75, 76).

This Court sustains the aforequoted view of public respondent. The benefit herein
designated as "transportation allowance" is a form of bonus equivalent to the 13th
month pay. Nevertheless, where this does not amount to 1/12 of the employees basic
salary, the employer shall pay the difference.

The evident intention of the law was to grant an additional income in the form of a
13th month pay to employees not already receiving the same. This Court ruled in
National Federation of Sugar Workers (NFSW) v. Ovejera [G.R. No. 59743, May 31,
1982, 114 SCRA 354].

Otherwise put, the intention was to grant some relief — not to


all workers — but only to the unfortunate ones not actually
paid a 13th month salary or what amounts to it, by whatever
name called: but it was not envisioned that a double burden
would be imposed on the employer already paying his
employees a 13th month pay or its equivalent — whether out
of pure generosity or on the basis of a binding agreement and,
in the latter case, regardless of the conditional character of the
grant (such as making the payment dependent on profit), so
long as there is actual payment. Otherwise, what was
conceived to be a 13th month salary would in effect become a
14th or possibly 15th month pay.

xxx xxx xxx

Pragmatic considerations also weigh heavily in favor of


crediting both voluntary and contractual bonuses for the
purpose of determining liability for the 13th month pay. To
require employers (already giving their employees a 13th
month salary or its equivalent) to give a second 13th month
pay would be unfair and productive of undesirable results. To
the employer who had acceded and is already bound to give
bonuses to his employees, the additional burden of a 13th
month pay would amount to a penalty for his munificence or
liberality. The probable reaction of one so circumstanced
would be to withdraw the bonuses or resist further voluntary
grants for fear that if and when a law is passed giving the
same benefits, his prior concessions might not be given due
credit; and this negative attitude would have an adverse
impact on the employees (pp.369,370).

The case of Dole Philippines, Inc. v. Leogardo [G.R. No. 60018, October 23, 1982,
117 SCRA 938 (1982)], citing the ruling in the above case also pointed out that:

To hold otherwise would be to impose an unreasonable and undue burden upon


those employers who had demonstrated their sensitivity and concern for the welfare
of their employees. A contrary stance would indeed create an absurd situation
whereby an employer who started giving his employees the 13th month pay only
because of the unmistakable force of the law would be in a far better position than
another who, by his own magnanimity or by mutual agreement, had long been
extending his employees the benefits contemplated under PD No. 851, by whatever
nomenclature these benefits have come to be known. Indeed, PD No. 851, a
legislation benevolent in its purpose, never intended to bring about such oppressive
situation. (p. 944)

2. Presidential Decree No. 570-A was issued on November 1, 1974 amending certain
articles of Presidential Decree No. 442 (Labor Code of the Philippines promulgated on
May 1, 1974 which took effect six months thereafter). Section 28 thereof provides
that:

Section 28. A new provision is hereby substituted in lieu of the


original provision of Article 258 of the same Code to read as
follows:

Art. 258. Right to holiday pay-

(a) Every worker shall be paid his regular holidays, except in


retail and service establishments regularly employing less than
ten (10) workers;

(b) The term "holiday" as used in this Chapter, shall include:


New Year's day, Maundy Thursday, Good Friday, the ninth of
April, the first of May, the twelfth of June, the fourth of July, the
thirtieth of November, the twenty fifth and thirtieth of December
and the day designated by law for holding a general election.

(c) When employer may require work on holidays. The


employer may require an employee to work on any holiday but
such employee shall be paid a compensation equivalent twice
his regular rate.

Presidential Decree No. 850 issued on December 16, 1975 also amending certain
articles of Pres. Dec. No. 442 adopted the aforequoted provision. Two months later,
on February 16, 1976, the Rules and Regulations Implementing the Labor Code, as
amended, was released the pertinent portion of which states that:

Section 2. Status of employees paid by the month. —


Employees who are uniformly paid by the month, irrespective
of the number of working days therein, with a salary of not less
than the statutory or established minimum wage shall be
presumed to be paid for all days in the month whether worked
or not.
For this purpose, the monthly minimum wage shall not be less
than the statutory minimum wage multiplied by 365 days
divided by twelve.

(e) Section 3. Holiday Pay. — Every employer shall pay his


employees their regular daily wage for any unworked regular
holiday.

As used in the Rule, the term 'holiday' shall exclusively refer


to: New Year's Day, Maundy Thursday, Good Friday, the ninth
of April, the first of May, the twelfth of June, the fourth of July,
the thirtieth of November, the twenty-fifth and thirtieth of
December and the day designated by law for a general
election or national referendum or plebiscite (MOLE Rules and
Reg. Book III, Rule IV, sec. 2 (1976).

After one week, on February 23, 1976, the Minister of Labor issued Policy Instruction
No. 9, to clarify further the right to holiday pay, thus:

The Rules Implementing PD 850 have clarified the policy in


the implementation of the ten (10) paid legal holidays. Before
PD 850. the number of working days a year in a firm was
considered important in determining entitlement to the benefit.
Thus, where an employee was working for at least 313 days,
he was definitely already paid. If he was working for less than
313, there was no certainty whether the ten (10) paid legal
holidays were already paid to him or not.

The ten (10) paid legal holidays law, to start with, is intended
to benefit principally daily employees. In the case of monthly,
only those whose monthly salary did not yet include payment
for the ten (10) paid legal holidays are entitled to the benefit.

Under the rules implementing PD 850, this policy has been


fully clarified to eliminate controversies on the entitlement of
monthly paid employees. The new determining rule is this: If
the monthly paid employee is receiving not less than P 240,
the maximum monthly minimum wage, and his monthly pay is
uniform from January to December, he is presumed to be
already paid the ten (10) paid legal holidays. However, if
deductions are made from his monthly salary on account of
holidays in months where they occur, then he is entitled to the
ten (10) legal holidays.

These new interpretations must be uniformly and consistently


upheld.

This issuance shall take effect immediately.

In the meantime, respondent University paid its employees holiday pay for the
following days:

DATE HOLIDAYS PAID

June 9, 1975 for the previous nine legal holidays


August, 1975 for the previous June 12 and July 4

Jan. 14, 1976 or the previous Nov. 30, Dec. 25

and 30 and Jan. 1

After January 14, 1976, however, the University ceased paying the holiday pay
allegedly by reason of Policy Instruction No. 9. Specifically, the University claimed that
the monthly salary of its employees was, as of 1976, more than P 240.00 without
deductions from their monthly salary on account of holidays in months where they
occurred and that therefore, by virtue of Policy Instruction No. 9, they were no longer
entitled to the ten paid legal holidays.

Petitioners, upon the other hand, contend that Policy Instruction No. 9 could not have
possibly been the reason that prompted the University to withdraw such benefits from
its faculty and employees because said implementing rule was issued only on April
23, 1976 or four months later.

The Labor Arbiter ruled in favor of the complainant Union for the reason that ". . . the
payment of the 10-paid legal holiday benefits from June 8, 1975 up to January 14,
1976 is considered an employer practice that can no longer be withdrawn." [Decision;
Rollo, p. 59].

As in the case of the 13th month pay, the NLRC reversed the Labor Arbiter's ruling.
The NLRC held that:

Apparently, Arbiter Ruben Aquino concluded that payment by


the respondent of the legal holiday pay preceded the effectivity
of the Rules and Regulations Implementing P.D. 850 and
which rules took effect on February 16, 1976. Hence, his
conclusion that the payment of the legal holiday pay stemmed
out from company practice and not from law. Tracing back,
however, the payments made by respondent of said holiday
pay will show that, if ever, the same was made pursuant to
P.D. 570-A which took effect on November 1, 1974.
Noteworthy is the undisputed fact that respondent first paid its
employees legal holiday pay in June 1975 corresponding to
nine (9) legal holidays. It bears to note that from the time of the
effectivity of P.D. 570-A which was in November of 1974 up to
June of 1975, the time respondent first paid legal holiday pay
for nine (9) legal holidays, there, were indeed more or less
nine legal holidays that transpired to wit: November 30, 1974,
December 25, 1974, December 30, 1974, January 1, 1975,
February 27, 1975 (Referendum Day), Maundy Thursday of
1975, Good Friday of 1975, April 9, 1975 and finally, May 1st
of 1975. We are therefore inclined to lend credence to
respondent's claim that the payment of legal holiday pay was
in fact made pursuant to law, P.D. 570-A in particular, it is not
one that arose out of company practice or policy.

Finding that said payment was made based on an honest


although erroneous interpretation of law, which interpretation
was later on corrected by the issuance (sic) of Policy
Instruction No. 9 and which issuance prompted respondent to
withdraw the holiday pay benefits extended to the employees
who were paid on a regular monthly basis, and finding further
that under Policy Instructions No. 9, said subject employees
are deemed paid their holiday pay as they were paid on a
monthly basis at a wage rate presumably above the statutory
minimum, we believe and so hold that the withdrawal of said
holiday pay benefit was valid and justifiable under the
circumstances (Rollo, pp. 33-4).

This Court cannot sustain the foregoing decision of public respondent. Said decision
relied on Section 2, Rule IV, Book Ill of the implementing rules and on Policy
Instruction No. 9 which were declared by this Court to be null and void in Insular Bank
of Asia and America Employee's Union (IBAAEU) v. Inciong (G.R. No. 52415,
October 23, 1984, 132 SCRA 6631. In disposing of the issue at hand, this Court
reiterates the ruling in that case, to wit:

WE agree with the petitioner's contention that Section 2, Rule


IV, Book Ill of the implementing rules and Policy Instruction
No. 9 issued by the then Secretary of Labor are nun and void
since in the guise of clarifying the Labor Code's provision on
holiday pay, they in fact amended them by enlarging the scope
of their exclusion.

xxx xxx xxx

It is elementary in the rules of statutory construction that when


the language of the law is clear and unequivocal the law must
be taken to mean exactly what it says. In the case at bar, the
provisions of the Labor Code on the entitlement to the benefits
of holiday pay are clear and explicit — it provides for both the
coverage of and exclusion from the benefits. In Policy
Instruction No. 9, the then Secretary of Labor went as far as to
categorically state that the benefit is principally intended for
daily paid employees, when the law clearly states that every
worker shall be paid their regular holiday pay. This is a flagrant
violation of the mandatory directive of Article 4 of the Labor
Code, which states that "All doubts in the implementation and
interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor
of labor. " Moreover, it shall always be presumed that the
legislature intended to enact a valid and permanent statute
which would have the most beneficial effect that its language
permits (Orlosky vs. Haskell, 155 A. 112). (pp. 673-4).

BISCOCHO CASE

At issue also in this petition is whether the 60% incremental proceeds may be
subjected to attorney's fees, negotiation fees, agency fees and the like.

The Court notes the fact that there are two classes of employees among the
petitioners: (1) those who are members of the bargaining unit and (2) those who are
not members of the bargaining unit. The first class may be further subdivided into two:
those who are members of the collective bargaining agent and those who are not.

It is clear that the questioned Order of the respondent Minister applies only to
members of the bargaining unit. The CBA prepared pursuant to said Order, however,
covered employees who are not members of the bargaining unit, although said CBA
had not yet been signed at the time this petition was filed on November 24, 1986.
Assuming it was signed thereafter, the inclusion of employees outside the bargaining
unit should be nullified as this does not conform to said order which directed private
respondents to execute a CBA covering only members of the bargaining unit.
Being outside the coverage of respondent Minister's order, and thus, not entitled to
the economic package involved therein, employees who are non- members of the
bargaining unit should not be assessed negotiation fees, attorney's fees, agency fees
and the like, for the simple reason that the resulting collective bargaining agreement
does not apply to them. It should be clear, however, that while non-members of the
bargaining unit are not entitled to the economic package provided by said order, they
are, in lieu thereof, still entitled to their share in the 60% incremental proceeds of
increases in tuition or other school fees or charges.

As far as assessment of fees against employees of the collective bargaining unit who
are not members of the collective bargaining agent is concerned, Article 249 of the
Labor Code, as amended by B.P. Blg. 70, provides the rule:

Art. 249. Unfair labor practices of employers.-

xxx xxx xxx

(e) ... Employees of an appropriate collective bargaining unit


who are not members of the recognized collective bargaining
agent may be assessed a reasonable fee equivalent to the
dues and other fees paid by members of the recognized
collective bargaining agent, if such non- union members
accept the benefits under the collective agreement . . .

Employees of the collective bargaining unit who are not members of the collective
bargaining agent have to pay the foregoing fees if they accept the benefits under the
collective bargaining agreement and if such fees are not unreasonable. Petitioners
who are members of the bargaining unit failed to show that the equivalent of ten
(10%) percent of their backwages sought to be deducted is unreasonable.

WHEREFORE, the Court rules:

CEBU INSTITUTE OF TECHNOLOGY CASE

In G.R. No. 58870, the Order of respondent Minister of Labor and Employment dated
September 29, 1981 is SUSTAINED insofar as it ordered petitioner Cebu Institute of
Technology to pay its teaching staff the following:

(1) Cost of living allowance under Pres. Dec.Nos.525 and


1123 from February 1978 up to 1981;

(2) Cost of living allowance under Pres. Dec. Nos. 1614, 1634,
1678 and 1713; and

(3) Service incentive leave due them from 1978.

The Temporary Restraining Order issued by this Court on December 7, 1981 is


hereby LIFTED and SET ASIDE. No costs.

DIVINE WORD COLLEGE CASE

The petition in G.R. No. 68345 is DENIED for lack of merit. The questioned Orders of
respondent Deputy Minister of Labor and Employment, dated December 19, 1983 and
July 4, 1984 are SUSTAINED insofar as said Orders denied the payment of the
emergency cost of living allowances of private respondents faculty teachers of the
Divine Word College of Legazpi out of the sixty (60%) incremental proceeds of tuition
and other school fee increases collected during the effectivity of Pres. Dec. No. 451.
The Rules and Regulations implementing Pres. Dec. No. 451 are hereby declared
invalid for being ultra vires No costs.

FAR EASTERN UNIVERSITY CASE

The Decision of public respondent National Labor Relations Commission dated


September 18, 1984 is REVERSED insofar as it affirmed in toto the dismissal of
petitioner Far Eastern University Employee Labor Union's claim under Pres. Dec. No.
451 and its claim for payment of holiday pay. Private respondent Far Eastern
University is therefore ordered to pay its employees the following:

(1) Their sixty (60) percent share in the increases in tuition and
other school fees or charges which shall be allocated
exclusively for increase in salaries or wages if the tuition or
other school fee increase was collected during the effectivity of
Pres. Dec. No. 451;

(2) Their claim for holiday pay which was withdrawn since
January 14, 1976 up to the present.

The Decision of respondent National Labor Relations Commission, however, is


SUSTAINED insofar as it denied petitioner's claim for thirteenth (1 3th month pay. No
costs.

FABROS CASE

In G.R. No. 70832, the Petition for certiorari and Prohibition is DISMISSED. MECS
Order No. 25. s. 1985, particularly paragraphs 7.0 to 7.5 thereof, which provide for the
use and application of sixty (60%) percent of the increases in tuition and other school
fees or charges, having been issued pursuant to B.P. Blg. 232 which repealed Pres.
Dec. No. 451, is hereby declared VALID. The Temporary Restraining Order issued by
this Court dated May 29, 1985 is LIFTED and SET ASIDE. No costs.

BISCOCHO CASE

The assailed portions of the Order of the Minister of Labor and Employment dated
April 14, 1986 are AFFIRMED. The collective bargaining agreement prepared
pursuant thereto should, however, be MODIFIED to cover only members of the
bargaining unit. Only petitioners who are members of the collective bargaining unit, if
they accept the benefits under the resulting collective bargaining agreement, shall be
charged ten (10%) percent of the payable backwages as negotiation fees. The
Temporary Restraining Order dated November 25, 1986 is LIFTED and SET ASIDE.
No costs.

VALMONTE CASE

The petition in G.R. No. 76596 is DISMISSED for lack of merit.

Effective September 1, 1982, the application and use of the proceeds from increases
in tuition fees and other schools fees or charges shall be governed by section 42 of
B.P. Blg. 232 as implemented by the Rules and Regulations issued by the then
Ministry, now Department of Education, Culture and Sports. SO ORDERED.