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  • Central Bank Employees v. BSP

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    Rukmini Dasi Rosemary Guevara
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    This case involves a challenge to the constitutionality of a proviso in Section 15(c) of RA 7653, which exempts BSP employees with salary grades above 19 from the rates prescribed by the Salary Standardization Law. The Central Bank Employees Association argued the proviso violates equal protection by creating an unreasonable classification between exempt and non-exempt employees. The Supreme Court held the proviso was unconstitutional, finding its practical operation resulted in arbitrary and discriminatory treatment by paying higher-ranked employees more competitively while limiting lower-ranked employees to regimented SSL rates.

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    This case involves a challenge to the constitutionality of a proviso in Section 15(c) of RA 7653, which exempts BSP employees with salary grades above 19 from the rates prescribed by the Salary Standardization Law. The Central Bank Employees Association argued the proviso violates equal protection by creating an unreasonable classification between exempt and non-exempt employees. The Supreme Court held the proviso was unconstitutional, finding its practical operation resulted in arbitrary and discriminatory treatment by paying higher-ranked employees more competitively while limiting lower-ranked employees to regimented SSL rates.

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    6 views1 page

    Central Bank Employees v. BSP

    Uploaded by

    Rukmini Dasi Rosemary Guevara
    This case involves a challenge to the constitutionality of a proviso in Section 15(c) of RA 7653, which exempts BSP employees with salary grades above 19 from the rates prescribed by the Salary Standardization Law. The Central Bank Employees Association argued the proviso violates equal protection by creating an unreasonable classification between exempt and non-exempt employees. The Supreme Court held the proviso was unconstitutional, finding its practical operation resulted in arbitrary and discriminatory treatment by paying higher-ranked employees more competitively while limiting lower-ranked employees to regimented SSL rates.

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    © All Rights Reserved
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    of 1

    Central Bank Employees Association v.

    BSP (TRINA) employees have been prejudiced since 1994 when the proviso was implemented.
    December 15, 2004 | Puno, J. | Equal Protection Clause
    ISSUE/s:
    PETITIONER: Central Bank Employees Association Inc. (Now BSP) 1. WON the proviso is unconstitutional for being violative of equal protection clause.-
    RESPONDENTS: Bangko Sentral ng Pilipinas and the Executive Secretary YES

    SUMMARY: Almost eight years after the effectivity of R.A. No. 7653, petitioner RULING: Under the present standards of equal protection, §15(c), Art. II of RA 7653 is valid
    Central Bank (now BSP) Employees Association, Inc., filed a petition for prohibition but the enactment of subsequent laws (exempting all other rank-and-file employees of GFIs
    against BSP to restrain respondents from further implementing the last proviso in Section from the SSL) renders the continued application of the challenged provision a violation of the
    15(c), Article II of R.A. No. 7653, on the ground that it is unconstitutional. Said section equal protection clause.
    exempts employees, whose salary grades are above 19, of the Salary Standardization
    Law. The petitioners challenged the constitutionality of this proviso and alleged that it is RATIO:
    violative of the equal protection clause because of its unfair nature. The SC held that it is
    indeed violative of the EPC. 1. The constitutionality of a statute cannot, in every instance, be determined by a mere
    DOCTRINE: Equal protection clause does not prevent the Legislature from establishing comparison of its provisions with applicable provisions of the Constitution, since the
    classes of individuals or objects upon which different rules shall operate – so long as the statute may be constitutionally valid as applied to one set of facts and invalid in its
    classification is not unreasonable. Equality of operation of statutes does not mean application to another.
    indiscriminate operation on persons themselves, but on persons according to the 2. A statute valid at one time may become void at another time because of altered
    circumstances surrounding them. It guarantees equality, not identity of rights. circumstances. Thus, if a statute in its practical operation becomes arbitrary or
    con􏰀scatory, its validity, even though a􏰁rmed by a former adjudication, is open to
    FACTS: inquiry and investigation in the light of changed conditions.
    1. On July 3, 1993, RA 7653 (the New Central Bank Act) took effect. It abolished the 3. Courts are not confined to the language of the statute under challenge in determining
    old Central Bank of the Philippines and created a new one. whether that statute has any discriminatory effect. A statute nondiscriminatory on its
    face may be grossly discriminatory in its operation. Though the law itself be fair on its
    2. After 8 years, after the effectivity of RA 7653, petitioner Central Bank Employees
    face and impartial in appearance, yet, if it is applied and administered by public
    Association filed petition for prohibition against BSP and the Executive Secretary of authority with an evil eye and unequal hand, so as practically to make unjust and
    the O􏰁ce of the President, to restrain respondents from further implementing the last
    illegal discriminations between persons in similar circumstances, material to their
    proviso in Section 15(c), Article II of R.A. No. 7653, on the ground that it is
    rights, the denial of equal justice is still within the prohibition of the Constitution 35
    unconstitutional.
    (emphasis supplied, citations omitted)
    3. Section 15. Exercise of Authority. — In the exercise of its authority, the Monetary
    Board shall: 4. The SC sees no difference between a law which denies equal protection and a law
    which permits such denial. A law may appear to be fair on its face and impartial in
    appearance, yet, if it permits of unjust and illegal discrimination, it is within the
    (c)establish a human resource management system which shall govern the constitutional prohibition. In other words, statutes may be adjudged unconstitutional
    selection, hiring, appointment, transfer, promotion, or dismissal of all because of their effect in operation. If a law has the effect of denying the equal
    personnel. Such system shall aim to establish professionalism and protection of the law it is unconstitutional.
    excellence at all levels of the Bangko Sentral in accordance with sound 5. In the case at bar, the challenged proviso operates on the basis of the salary grade or
    principles of management. A compensation structure, based on job o􏰁cer-employee status. It is akin to a distinction based on economic class and status,
    evaluation studies and wage surveys and subject to the Board's approval, with the higher grades as recipients of a benefit specifically withheld from the lower
    shall be instituted as an integral component of the Bangko Sentral's human grades. Officers of the BSP now receive higher compensation packages that are
    resource development program: Provided, That the Monetary Board shall competitive with the industry, while the poorer, low-salaried employees are limited to
    make its own system conform as closely as possible with the principles the rates prescribed by the SSL. The implications are quite disturbing: BSP rank-and-
    provided for under Republic Act No. 6758 [Salary Standardization Act]. file employees are paid the strictly regimented rates of the SSL while employees
    Provided, however, That compensation and wage structure of employees higher in rank — possessing higher and better education and opportunities for career
    whose positions fall under salary grade 19 and below shall be in accordance advancement — are given higher compensation packages to entice them to stay.
    with the rates prescribed under Republic Act No. 6758. Considering that majority, if not all, the rank-and-file employees consist of people
    whose status and rank in life are less and limited, especially in terms of job
    4. The thrust of petitioner's challenge is that the above proviso makes an marketability, it is they — and not the officers — who have the real economic and
    unconstitutional cut between two classes of employees in the BSP, which are those financial need for the adjustment. This is in accord with the policy of the Constitution
    exempted under the Salary Standardization Law, and those who are not exempt "to free the people from poverty, provide adequate social services, extend to them a
    (Salary Grade 19 and below). decent standard of living, and improve the quality of life for all." Any act of Congress
    5. Petitioner alleges that the classification is not reasonable but arbitrary and capricious, that runs counter to this constitutional desideratum deserves strict scrutiny by this
    and violates the equal protection clause of the Constitution. Petitioner also stresses: Court before it can pass muster.
    (a) that R.A. No. 7653 has a separability clause, which will allow the declaration of the
    unconstitutionality of the proviso in question without affecting the other provisions;
    and (b) the urgency and propriety of the petition, as some 2,994 BSP rank-and-􏰀le

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