You are on page 1of 10

PERMISSIBLE

DELEGATION Issue: WoN private respondent PBOAP can increase the existing
Doctrine: Potestas delegata non delegari potest. What has been fares without filing a petition for that purpose and without the
delegated cannot be delegated. benefit of a public hearing.

1. Kilusang Mayo Uno Labor Center v. Garcia | Kapunan, J. Held: NO. The instant petition is hereby GRANTED and the
GR No. 115381, December 23, 1994 challenged administrative issuances and orders issued by
respondent LTFRB are hereby DECLARED contrary to law and
Facts: On June 26, 1990, Secretary Orbos of DOTC issued DOTC invalid insofar as the delegation to provincial bus and jeepney
Memorandum Order 90-395 to LTFRB Chairman Fernando operators the authority to increase or decrease the duly
allowing provincial bus operators to charge passengers within a prescribed transportation fares.
range of 15% above and 15% below the LTFRB official rate for a
period of one year. Guidelines and procedures for said fare range Respondent LTFRB, a regulatory body today, is vested with the
scheme shall be prepared by LTFRB and implementation shall power of fixing the rates of public services under Executive Order
start on Augst 6, 1990. LTFRB Chairman submitted a No. 202 dated June 19, 1987. Section 5 (c) of the said executive
memorandum to Secretary Orbos indicating that Section 16 (c) of order authorizes LTFRB "to determine, prescribe, approve and
the Public Service Act prescribes the requirements for the fixing periodically review and adjust, reasonable fares, rates and other
and determination of rates making the implementation of the fare related charges, relative to the operation of public land
range scheme not legally feasible. transportation services provided by motorized vehicles."

On February 17, 1993, the LTFRB issued Memorandum Circular Such delegation of legislative power to an administrative agency is
No. 92-009 promulgating the guidelines for the implementation of permitted in order to adapt to the increasing complexity of
the DOTC Department Order No. 92-587 which contains the policy modern life. As subjects for governmental regulation multiply, so
framework on the regulation of transport services. does the difficulty of administering the laws. Hence, specialization
even in legislation has become necessary. Given the task of
Sometime in March, 1994, private respondent PBOAP, availing determining sensitive and delicate matters as route-fixing and
itself of the deregulation policy of the DOTC allowing provincial rate-making for the transport sector, the responsible regulatory
bus operators to collect plus 20% and minus 25% of the body is entrusted with the power of subordinate legislation. With
prescribed fare without first having filed a petition for the purpose this authority, an administrative body and in this case, the LTFRB,
and without the benefit of a public hearing, announced a fare may implement broad policies laid down in a statute by "filling in"
increase of twenty (20%) percent of the existing fares. Said the details which the Legislature may neither have time or
increased fares were to be made effective on March 16, 1994. On competence to provide. However, nowhere under the aforesaid
said date, petitioner KMU filed a petition before the LTFRB provisions of law are the regulatory bodies authorized to delegate
opposing the upward adjustment of bus fares which was that power to a common carrier, a transport operator, or other
dismissed for lack of merit. Hence, the instant petition for public service.
certiorari.
In the case at bench, the authority given by the LTFRB to the
provincial bus operators to set a fare range over and above the
authorized existing fare, is illegal and invalid as it is
tantamount to an undue delegation of legislative authority. The present administrative procedure, to our mind, already
Potestas delegata non delegari potest. What has been mirrors an orderly and satisfactory arrangement for all parties
delegated cannot be delegated. This doctrine is based on the involved. To do away with such a procedure and allow just one
ethical principle that such as delegated power constitutes not party, an interested party at that, to determine what the rate
only a right but a duty to be performed by the delegate through should be will undermine the right of the other parties to due
the instrumentality of his own judgment and not through the process. The purpose of a hearing is precisely to determine what a
intervening mind of another. 11 The policy of allowing the just and reasonable rate is. Discarding such procedural and
provincial bus operators to change and increase their fares at constitutional right is certainly inimical to our fundamental law
will would result not only to a chaotic situation but to an and to public interest.
anarchic state of affairs. This would leave the riding public at
the mercy of transport operators who may increase fares every 2. Santiago v. COMELEC | Davide, Jr., J.
hour, every day, every month or every year, whenever it pleases GR No. 127325, March 19, 1997
them or whenever they deem it "necessary" to do so.
Facts: On December 6, 1996, private respondent Atty. Jesus S.
Moreover, rate making or rate fixing is not an easy task. It is a Delfin, founding member of the Movement for Peoples Initaitive
delicate and sensitive government function that requires dexterity (PIRMA), filed with public respondent COMELEC a Petition to
of judgment and sound discretion with the settled goal of arriving Amend the Constitution to Lift Term Limits of Elective Officials by
at a just and reasonable rate acceptable to both the public utility Peoples Initiative through the exercise of the power to directly
and the public. Several factors, in fact, have to be taken into propose amendments to the Constitution as granted under Section
consideration before a balance could be achieved. A rate should 2, Article XVII. He asked for an order from the COMELEC in fixing
not be confiscatory as would place an operator in a situation the time and dates for signature gathering all over the country
where he will continue to operate at a loss. Hence, the rate should among others which was granted. At the hearing of the Delfin
enable public utilities to generate revenues sufficient to cover Petition on December 12, 1996, petitioner-intervenors appeared
operational costs and provide reasonable return on the and filed a Motion to Dismiss on the ground that it is not the
investments. On the other hand, a rate which is too high becomes initiatory petition properly cognizable by the COMELEC. On
discriminatory. It is contrary to public interest. A rate, therefore, December 18, 1996, petitioners filed a special civil action for
must be reasonable and fair and must be affordable to the end user prohibition. Petitioners allege that the issue is of transedental
who will utilize the services. importance because the Delfin Petition would entail expenses to
the national treasury for general re-registration of voters
Given the complexity of the nature of the function of rate-fixing amounting to atleast P180M. Moreover, the constitutional
and its far-reaching effects on millions of commuters, government provision on peoples initiative to amend the Constitution can only
must not relinquish this important function in favor of those who be implemented by law to be passed by Congress and no law has
would benefit and profit from the industry. Neither should the been passed yet.
requisite notice and hearing be done away with. The people,
represented by reputable oppositors, deserve to be given full Issue: WoN the COMELEC has the power to provide rules and
opportunity to be heard in their opposition to any fare increase. regulations for the exercise of the right of initiative to amend the
Constitution.

Held: NONE. This petition must then be granted, and the be a showing that the delegation itself is valid. It is valid only
COMELEC should be permanently enjoined from entertaining or if the law (a) is complete in itself, setting forth therein the
taking cognizance of any petition for initiative on amendments to policy to be executed, carried out, or implemented by the
the Constitution until a sufficient law shall have been validly delegate; and (b) fixes a standard the limits of which are
enacted to provide for the implementation of the system. sufficiently determinate and determinable to which the
delegate must conform in the performance of his functions. A
From the proceedings of the Constitutional Commission, the sufficient standard is one which defines legislative policy,
conclusion then is inevitable that, indeed, the system of initaitive marks its limits, maps out its boundaries and specifies the
on the Constitution is not self-executory. Congress has the power public agency to apply it. It indicates the circumstances under
to provide for the rules implementing the exercise of the right. The which the legislative command is to be effected.
rules refer to the details on how the right is to be carried out.
Insofar as initiative to propose amendments to the Constitution is
The allegation of respondents that RA No. 6735 is the enabling law concerned, RA No. 6735 miserably failed to satisfy both
is untenable because it is incomplete, inadequate, or wanting in requirements in subordinate legislation. The delegation of the
essential terms and conditions insofar as initiative on power to the COMELEC is then invalid. It logically follows that the
amendments to the Constitution is concerned. It does not suggest COMELEC cannot validly promulgate rules and regulations to
an intiative on amendments to the Constitution because it does not implement the exercise of the right of the people to directly
provide details in the implementation of such unlike in intitative propose amendments to the Constitution through the system of
on national legislation and local initiative. Its lacunae on the initiative. It does not have that power under RA No. 6735. Reliance
substantive matter are fatal and cannot be cured by empowering on the COMELEC's power under Section 2(1) of Article IX-C of the
the COMELEC to promulgate such rules and regulations as may be Constitution is misplaced, for the laws and regulations referred to
necessary to carry out the purposes of the Act. therein are those promulgated by the COMELEC under (a) Section
3 of Article IX-C of the Constitution, or (b) a law where
The rule is that what has been delegated, cannot be delegated or as subordinate legislation is authorized and which satisfies the
expressed in a Latin maxim:potestas delegata non delegari potest. "completeness" and the "sufficient standard" tests.
The recognized exceptions to the rule are as follows:
(1) Delegation of tariff powers to the President under Section LIMITATION ON RULE MAKING POWER
28(2) of Article VI of the Constitution;
(2) Delegation of emergency powers to the President under 1. PASEI V. Torres | Bellosillo, J.
Section 23(2) of Article VI of the Constitution; GR No. 98472, August 19, 1993
(3) Delegation to the people at large;
(4) Delegation to local governments; and Facts: Article 25 of the Labor Code of the Philippines (P.D. 442, as
(5) Delegation to administrative bodies. amended) encourages private sector participation in recruitment
and placement of workers under guidelines, rules and regulations
Empowering the COMELEC, an administrative body exercising to be issued by the Secretary of Labor. On 20 January 1982,
quasi-judicial functions, to promulgate rules and regulations is President Marcos issued LOI 1190 withholding the grant of new
a form of delegation of legislative authority under no. 5 above. licenses to operate agencies for overseas employment effective 1
However, in every case of permissible delegation, there must January 1982 except as he may otherwise direct. On 19 March
1991, President Aquino issued EO 450 lifting the ban on new perception of petitioners, LOI 1190 does not actually ban the grant
applications for licenses to operate recruitment agencies subject to of licenses nor bar the entry of new licenses since anybody could
guidelines and regulations the Secretary of Labor may promulgate. still apply for license with the Minister of Labor and Employment,
On 8 April 1991, respondent Secretary of Labor and Employment although the grant thereof is subject to the prior authority of the
promulgated Department Order (DO) No. 9, Series of 1991, President. In fact, the LOI did not modify the rule-making power of
entitled "Guidelines Implementing Executive Order No. 450. In this the Minister of Labor and Employment under the Labor Code; it
petition for prohibition with preliminary injunction/restraining only added another tier of review. As we earlier stated, the LOI did
order filed 14 May 1991 petitioners pray that EO 450 be declared not suspend the enforcement of Art. 25 of the Labor Code; it
invalid for being contrary to LOI 1190. merely added another level of administrative review.

The case before us appears compounded by the circumstance that Neither can petitioners consider this additional review by the
the LOI in question was issued by former President Ferdinand E. President as an amendment of Art. 25, for this is within the scope
Marcos when he was clothed with legislative power, while the EO of the exercise of his constitutionally sanctioned control over the
revoking the LOI was issued by then President Corazon C. Aquino executive departments of government. Implicit in that power of
at a time when she had already lost her law-making power after control is the President's "authority to go over, confirm,
Congress convened on 27 July 1987. modify or reverse the action taken by his department
secretaries." Moreover, if we discern the intent of LOI 1190 from
Issue: Is LOI 1190 a law or an administrative action. the manner it was enforced, the unrebutted allegation of
respondent that 319 private employment agencies secured
Held: LOI 1190 is an administrative action. It simply imposes a administrative presidential approval from 1982 to 1989 shows
presidential review of the authority of the Minister of Labor and that then President Marcos merely intended to regulate, and not
Employment to grant licenses, hence, directed to him alone. Since ban altogether, new applications for licenses. For this reason,
this is undoubtedly an administrative action, LOI 1190 should Marcos could not have contemplated repealing Art. 25 of the Labor
properly be treated as an administrative issuance. Unlike Code.
Presidential Decrees which by usage have gained acceptance as
laws promulgated by the President, Letters of Instruction are 2. DAR v. Sutton | Puno, J.
presumed to be mere administrative issuances except when the GR No. 162070, October 19, 2005
conditions set out in Garcia-Padilla v. Enrile exist. Consequently, to
be considered part of the law of the land, petitioners must Facts: The case at bar involves a land in Aroroy, Masbate,
establish that LOI 1190 was issued in response to "a grave inherited by respondents which has been devoted exclusively to
emergency or a threat or imminence thereof, or whenever the cow and calf breeding. On October 26, 1987, pursuant to the then
interim Batasan Pambansa or the regular National Assembly fails existing agrarian reform program of the government, respondents
or is unable to act adequately on any matter." The conspicuous made a voluntary offer to sell (VOS) their landholdings to
absence of any of these conditions fortifies the opinion that LOI petitioner DAR to avail of certain incentives under the law. On June
1190 cannot be any more than a mere administrative issuance 10, 1988, a new agrarian law, RA No. 6657 (Comprehensive
Agrarian Reform Law or CARL of 1988) took effect. It included in
There is nothing in the LOI which repeals or runs counter to Art. its coverage farms used for raising livestock, poultry and swine.
25 of the Labor Code, as amended. Instead, contrary to the
On December 4, 1990, in an en banc decision in the case of Luz Constitutional Commission to exclude livestock farms from the
Farms v. Secretary of DAR, this Court ruled that lands devoted to land reform program of the government.
livestock and poultry- raising are not included in the definition of
agricultural land. Hence, we declared as unconstitutional certain Issue: WoN DAR AO No. 9, series of 1993, which prescribes a
provisions of the CARL insofar as they included livestock farms in maximum retention limit for owners of lands devoted to livestock
the coverage of agrarian reform. In view of the Luz Farms ruling, raising is constitutional.
respondents filed with petitioner DAR a formal request to
withdraw their VOS as their landholding was devoted exclusively Held: NO. In the case at bar, we find that the impugned A.O. is
to cattle-raising and thus exempted from the coverage of the CARL. invalid as it contravenes the Constitution. The A.O. sought to
regulate livestock farms by including them in the coverage of
On December 21, 1992, the Municipal Agrarian Reform Officer of agrarian reform and prescribing a maximum retention limit for
Aroroy, Masbate, inspected respondents' land and found that it their ownership. However, the deliberations of the 1987
was devoted solely to cattle-raising and breeding. He Constitutional Commission show a clear intent to exclude,
recommended to the DAR Secretary that it be exempted from the inter alia, all lands exclusively devoted to livestock, swine and
coverage of the CARL. On April 27, 1993, respondents reiterated to poultry-raising. The Court clarified in the Luz Farms case that
petitioner DAR the withdrawal of their VOS and requested the livestock, swine and poultry-raising are industrial activities and do
return of the supporting papers they submitted in connection not fall within the definition of "agriculture" or "agricultural
therewith. Petitioner ignored their request. activity." The raising of livestock, swine and poultry is different
from crop or tree farming. It is an industrial, not an agricultural,
On December 27, 1993, DAR issued A.O. No. 9, series of 1993, activity. Clearly, petitioner DAR has no power to regulate
which provided that only portions of private agricultural lands livestock farms which have been exempted by the
used for the raising of livestock, poultry and swine as of June 15, Constitution from the coverage of agrarian reform. It has
1988 shall be excluded from the coverage of the CARL. In exceeded its power in issuing the assailed A.O.
determining the area of land to be excluded, the A.O. fixed the
following retention limits, viz: 1:1 animal-land and a ratio of Administrative agencies are endowed with powers legislative in
1.7815 hectares for livestock infrastructure for every 21 heads of nature, i.e., the power to make rules and regulations. They have
cattle shall likewise be excluded from the operations of the CARL. been granted by Congress with the authority to issue rules to
regulate the implementation of a law entrusted to them. Delegated
On September 14, 1995, then DAR Secretary Garilao issued an rule-making has become a practical necessity in modern
Order partially granting the application of respondents for governance due to the increasing complexity and variety of public
exemption from the coverage of CARL by applying the retention functions. However, while administrative rules and regulations
limits outlined in DAR AO No. 9 and ordered the rest of the have the force and effect of law, they are not immune from judicial
respondents landholding to be segregated and placed under review. They may be properly challenged before the courts to
Compulsory Acquisition. Respondents moved for reconsideration ensure that they do not violate the Constitution and no grave
but was denied. They filed a notice of appeal with the Office of the abuse of administrative discretion is committed by the
President who upheld the assailed decsion. On appeal, the Court of administrative body concerned.
Appeals ruled in favor of the respondents and declared DAR AO
No. 9 void for being contrary to the intent of the 1987
The fundamental rule in administrative law is that, to be valid, of their drivers license and/or removal of their license plate by
administrative rules and regulations must be issued by police authorities for alleged traffic violation. Those complained of
authority of a law and must not contravene the provisions of were required to submit a Comment and one invoked Ordinance
the Constitution. The rule-making power of an administrative No. 7, Series of 1988 of Mandaluyong while another invoked a
agency may not be used to abridge the authority given to it by memorandum dated February 27, 1991 from the District
Congress or by the Constitution. Nor can it be used to enlarge Commander of the Western Traffic District of the PNP. Director
the power of the administrative agency beyond the scope General Cesar P. Nazareno of the PNP assured the Court in his own
intended. Constitutional and statutory provisions control with Comment that his office had never authorized the removal of the
respect to what rules and regulations may be promulgated by license plates of illegally parked vehicles and that he had in fact
administrative agencies and the scope of their regulations. directed full compliance with the above-mentioned decision in a
memorandum, copy of which he attached, entitled Removal of
In sum, it is doctrinal that rules of administrative bodies must be Motor Vehicle License Plates and dated February 28, 1991.
in harmony with the provisions of the Constitution. They cannot
amend or extend the Constitution. To be valid, they must conform Issue: WoN the exercise of the delegated power is valid.
to and be consistent with the Constitution. In case of conflict
between an administrative order and the provisions of the Held: NO. The measures in question do not merely add to the
Constitution, the latter prevails. requirement of PD 1605 but, worse, impose sanctions the decree
does not allow and in fact actually prohibits. In so doing, the
3. SolGen v. MMA | Cruz, J. ordinances disregard and violate and in effect partially repeal the
GR No. 102782, December 11, 1991 law. It is for Congress to determine, in the exercise of its own
discretion, whether or not to impose such sanctions, either
Facts: In Metropolitan Traffic Command, West Traffic District vs. directly through a statute or by simply delegating authority to this
Hon. Arsenio M. Gonong, G.R. No. 91023, promulgated on July 13, effect to the local governments in Metropolitan Manila. Without
1990, the Court held that the confiscation of the license plates of such action, PD 1605 remains effective and continues to prohibit
motor vehicles for traffic violations was not among the sanctions the confiscation of license plates of motor vehicles (except under
that could be imposed by the Metro Manila Commission under PD the conditions prescribed in LOI 43) and of driver's licenses as
1605 and was permitted only under the conditions laid down by well for traffic violations in Metropolitan Manila.
LOI 43 in the case of stalled vehicles obstructing the public streets.
It was there also observed that even the confiscation of drivers To sustain the ordinance would be to open the floodgates to other
licenses for traffic violations was not directly prescribed by the ordinances amending and so violating national laws in the guise of
decree nor was it allowed by the decree to be imposed by the implementing them. Thus, ordinances could be passed imposing
Commission. No motion for reconsideration of that decision was additional requirements for the issuance of marriage licenses, to
submitted. The judgment became final and executory on August 6, prevent bigamy; the registration of vehicles, to minimize
1990, and it was duly entered in the Book of Entries of Judgments carnapping; the execution of contracts, to forestall fraud; the
on July 13, 1990. validation of passports, to deter imposture; the exercise of
freedom of speech, to reduce disorder; and so on. The list is
After the said decision became final and executory, it received endless, but the means, even if the end be valid, would be ultra
several complaints from different persons against the confiscation vires.
Congress, the local government unit cannot contravene but must
The measures in question are enactments of local governments obey at all times the will of their principal. In the case before us,
acting only as agents of the national legislature. Necessarily, the the enactments in question, which are merely local in origin,
acts of these agents must reflect and conform to the will of their cannot prevail against the decree, which has the force and effect of
principal. To test the validity of such acts in the specific case now a statute.
before us, we apply the particular requisites of a valid ordinance as
laid down by the accepted principles governing municipal REQUISITES FOR A VALID DELEGATION OF LEGISLATIVE POWER
corporations. According to Elliot, a municipal ordinance, to be (not the issue in this case)
valid: 1) must not contravene the Constitution or any statute; 2) The Court holds that there is a valid delegation of legislative power
must not be unfair or oppressive; 3) must not be partial or to promulgate such measures, it appearing that the requisites of
discriminatory; 4) must not prohibit but may regulate trade; 5) such delegation are present. These requisites are: 1) the
must not be unreasonable; and 6) must be general and consistent completeness of the statute making the delegation; and 2) the
with public policy. presence of a sufficient standard. Under the first requirement, the
statute must leave the legislature complete in all its terms and
A careful study of the Gonong decision will show that the provisions such that all the delegate will have to do when the
measures under consideration do not pass the first criterion statute reaches it is to implement it. What only can be delegated is
because they do not conform to existing law. The pertinent law is not the discretion to determine what the law shall be but the
PD 1605. PD 1605 does not allow either the removal of license discretion to determine how the law shall be enforced. This has
plates or the confiscation of driver's licenses for traffic violations been done in the case at bar. As a second requirement, the
committed in Metropolitan Manila. The Commission was allowed enforcement may be effected only in accordance with a sufficient
to "impose fines and otherwise discipline" traffic violators only "in standard, the function of which is to map out the boundaries of the
such amounts and under such penalties as are herein prescribed," delegate's authority and thus "prevent the delegation from
that is, by the decree itself. Nowhere is the removal of license running riot." This requirement has also been met. It is settled that
plates directly imposed by the decree or at least allowed by it to be the "convenience and welfare" of the public, particularly the
imposed by the Commission. Notably, Section 5 thereof expressly motorists and passengers in the case at bar, is an acceptable
provides that "in case of traffic violations, the driver's license shall sufficient standard to delimit the delegate's authority.
not be confiscated." These restrictions are applicable to the
Metropolitan Manila Authority and all other local political 4. Boie-Takeda Chemicals, Inc v. de la Serna | Narvasa, C. J.
subdivisions comprising Metropolitan Manila, including the GR No. 92174, December 10, 1993
Municipality of Mandaluyong.
Facts: A routine inspection was conducted in the premises of
The requirement that the municipal enactment must not violate petitioner by Labor and Development Officer Ramos under
existing law explains itself. Local political subdivisions are able to Inspection Authority No. 4-209-89. Finding that petitioner had not
legislate only by virtue of a valid delegation of legislative power been including the commissions earned by its medical
from the national legislature (except only that the power to create representatives in the computation of their 13th month pay,
their own sources of revenue and to levy taxes is conferred by the Ramos served a Notice of Inspection Results on Boie-Takeda
Constitution itself). They are mere agents vested with what is through its president, Mr. Araneta, requiring Boie-Takeda within
called the power of subordinate legislation. As delegates of the ten (10) calendar days from notice to effect restitution or
correction of "the underpayment of 13th month pay for the year(s)
1986, 1987 and 1988 of medical representatives in the total Contrary to respondents' contention, Memorandum Order No. 28
amount of P558,810.89. did not repeal, supersede or abrogate P.D. 851. As may be gleaned
from the language of Memorandum Order No. 28, it merely
Petitioner wrote the Labor Department contesting the Notice of "modified" Section 1 of the decree by removing the P1,000.00
Inspection Results and contending that in the computation of the salary ceiling. The concept of 13th Month Pay as envisioned,
13th month pay to its medical representatives, the commission defined and implemented under P.D. 851 remained unaltered, and
paid should not be included since the law and its implementing while entitlement to said benefit was no longer limited to
rules speak of regular or basic salary. Regional Director Piezas employees receiving a monthly basic salary of not more than
directed petitioner to appear before his Office but no one appeared P1,000.00, said benefit was, and still is, to be computed on the
despite due notice. An order was promulgated directing petitioner basic salary of the employee-recipient as provided under P.D. 851.
to pay its medical represntatives and its managers the total Thus, the interpretation given to the term "basic salary" as defined
amount of P558,810.89 representing the underpayment of the 13th in P.D. 851 applies equally to "basic salary" under Memorandum
month pay for the yeas indicated above. Petitioner filed a motion Order No. 28.
for reconsideration but the assailed decision was affirmed with
modification that the sales commissions earned before August 13, 5. Victoria Milling Company, Inc. v. SSC | Barrera, J.
1989, the effectivity date of Memorandum Order No. 28 and its GR No. L-16704, March 17, 1962
Implementing Guidelines, shall be excluded in the computation of
the 13th month pay. Facts: SSS issued Circular No. 22, which mandated employers in
computing the premiums due the System to include in the
Issue: WoN respondent labor officials in computing the 13th month employees remuneration all bonuses and overtime pay, as well as
pay benefit committed grave abuse of discretion amounting to lack the cash value of other media of remunerarion. Upon receipt of a
of jurisdcition by giving effect to Section 5 of the Revised copy thereof, petitioner wrote SSS protesting against the circular
Guidelines on the Implementation of the Thirteenth Month Pay as contradictory to a previous Circular expressuly excluding
(PD No. 851) promulgated by the Secretary of Labor and overtime pay and bonus in the computation of the employers and
Employment. employees respective monthly premium contributions. Overruling
these objections, SSS ruled that the assailed circular is a mere
Held: YES. In including commissions in the computation of the administrative interpretation of the statute, a mere statement of
13th month pay, the second paragraph of Section 5 (a) of the general policy or opinion as to how the law should be construed.
Revised Guidelines on the Implementation of the 13th Month Pay Not satisfied with the ruling, petitioner filed an appeal.
Law unduly expanded the concept of "basic salary" as defined in
P.D. 851. It is a fundamental rule that implementing rules cannot Issue: WoN Circular No. 22 is not a rule or regulation, as
add to or detract from the provisions of the law it is designed to contemplated in Section 4(a) of RA 1161 empowering the SSC to
implement. Administrative regulations adopted under legislative adopt, amend and repeal subject to the approval of the President
authority by a particular department must be in harmony with the such rules and regulations as may be ncessary to carry out the
provisions of the law they are intended to carry into effect. They provisions and purposes of this Act.
cannot widen its scope. An administrative agency cannot amend
an act of Congress.
Held: The Commission's interpretation of the amendment agreement with the policy stated therein or its innate wisdom. On
embodied in its Circular No. 22 is correct. The express elimination the other hand, administrative interpretation of the law is at best
among the exemptions excluded in the old law, of all bonuses, merely advisory, for it is the courts that finally determine what the
allowances and overtime pay in the determination of the law means.
"compensation" paid to employees makes it imperative that such
bonuses and overtime pay must now be included in the 6. find out the case title
employee's remuneration in pursuance of the amendatory law.
7. Lupangco v. CA | Gancayco, J.
Circular No. 22 purports merely to advise employers members of GR No. 77372, April 29, 1988
the System of what, in the light of the amendment of the law, they
should include in determining the monthly compensation of their Facts: On October 6, 1986, PRC issued Resolution No. 105 as part
employees upon which the social security contributions should be of its Additional Instructions to Examinees, to all tohse applying
based, and that such circular did not require presidential approval for admission to take the licensure examinations in accountancy.
and publication in the Official Gazette for its effectivity. The resolution prohibits examiness to attend any review class,
briefing, conference or the line conducted by, or shall receive any
There can be no doubt that there is a distinction between an hand-out, review material, or any tip from any school, college or
administrative rule or regulation and an administrative university, or any review center or the like or any reviewer,
interpretation of a law whose enforcement is entrusted to an lecturer, instructor official or employee of any of the
administrative body. When an administrative agency promulgates aforementioned or similar institutions during the three days
rules and regulations, it "makes" a new law with the force and immediately preceding every examination day including the
effect of a valid law, while when it renders an opinion or gives a examination day. Any examinee violating the instruction shall be
statement of policy, it merely interprets a pre-existing law. Rules subject to sanctions prescribed by Section 8, Article 3 of the Rules
and regulations when promulgated in pursuance of the procedure and Regulations of the Commission.
or authority conferred upon the administrative agency by law,
partake of the nature of a statute, and compliance therewith may On October 16, 1986, petitioners, all reviewees preparing to take
be enforced by a penal sanction provided in the law. This is so the said examination filed in their own behald and in behalf of all
because statutes are usually couched in general terms, after others similarly situated like them with the RTC of Manila a
expressing the policy, purposes, objectives, remedies and complaint for injucntion with a prayer for the issuance of a writ of
sanctions intended by the legislature. The details and the manner preliminary injunction against PRC to restrain the latter from
of carrying out the law are often times left to the administrative enforcing the above-mentioned resolution and to declare the same
agency entrusted with its enforcement. In this sense, it has been unconstitutional.
said that rules and regulations are the product of a delegated
power to create new or additional legal provisions that have the PRC filed a motion to dismiss on the ground that the RTC had no
effect of law. jurisdiction to review and enjoin the enforcement of its resolution
but the latter declared that it had jurisdiction to try the case and
A rule is binding on the courts so long as the procedure fixed for enjoined the former from enforcing and giving effect to the
its promulgation is followed and its scope is within the statutory assailed Resolution. RTC found the assailed Resolution to be
authority granted by the legislature, even if the courts are not in unconstitutional
applies to a specific situation. This does not cover rules and
PRC filed with the CA a petition for the nullification of the RTCs regulations of general applicability issued by the administrative
decision, which was granted on the ground that the PRC and RTC body to implement its purely administrative policies and functions
are co-equal bodies and have no power to control each other or like Resolution No. 105 which was adopted by the respondent PRC
interfere with each others acts. as a measure to preserve the integrity of licensure examinations.

Issue: Is the RTC of the same category as the PRC so that it cannot Of course, we realize that the questioned resolution was adopted
pass upon the validity of the administrative acts of the latter? for a commendable purpose which is "to preserve the integrity and
purity of the licensure examinations." However, its good aim
Held: NO. What is clear from Presidential Decree No. 223 is that cannot be a cloak to conceal its constitutional infirmities. On its
the Professional Regulation Commission is attached to the Office of face, it can be readily seen that it is unreasonable in that an
the President for general direction and coordination. Well settled examinee cannot even attend any review class, briefing,
in our jurisprudence is the view that even acts of the Office of the conference or the like, or receive any hand-out, review material, or
President may be reviewed by the Court of First Instance (now the any tip from any school, college or university, or any review center
Regional Trial Court). or the like or any reviewer, lecturer, instructor, official or
employee of any of the aforementioned or similar institutions.
Upon the other hand, there is no law providing for the next course
of action for a party who wants to question a ruling or order of the The unreasonableness is more obvious in that one who is caught
Professional Regulation Commission. There is no provision in committing the prohibited acts even without any ill motives will
Presidential Decree No. 223, the law creating the Professional be barred from taking future examinations conducted by the
Regulation Commission, that orders or resolutions of the respondent PRC. Furthermore, it is inconceivable how the
Commission are appealable either to the Court of Appeals or to the Commission can manage to have a watchful eye on each and every
Supreme Court. examinee during the three days before the examination period.

It is an axiom in administrative law that administrative
authorities should not act arbitrarily and capriciously in the
In order to invoke the exclusive appellate jurisdiction of the Court issuance of rules and regulations. To be valid, such rules and
of Appeals as provided for in Section 9, paragraph 3 of B.P. Blg. regulations must be reasonable and fairly adapted to secure
129, there has to be a final order or ruling which resulted from the end in view. If shown to bear no reasonable relation to the
proceedings wherein the administrative body involved exercised purposes for which they are authorized to be issued, then
its quasi-judicial functions. In Black's Law Dictionary, quasi- they must be held to be invalid.
judicial is defined as a term applied to the action, discretion, etc., of
public administrative officers or bodies required to investigate
facts, or ascertain the existence of facts, hold hearings, and draw
conclusions from them, as a basis for their official action, and to
exercise discretion of a judicial nature. To expound thereon, quasi-
judicial adjudication would mean a determination of rights,
privileges and duties resulting in a decision or order, which