The Supreme Court resolved that Court of Appeals Justice Angelita A. Gacutan’s service as National Labor Relations Commission (NLRC) Commissioner should be included in the computation of her longevity pay, but only from August 26, 2006, when Republic Act No. 9347 took effect. This decision clarifies that longevity pay under Section 42 of Batas Pambansa Big. 129 can be treated as part of salary and extended to certain officials in the Executive Department who are, by law, granted the same salary as their counterparts in the Judiciary. This ruling emphasizes that when laws expressly grant equivalent ranks and salaries to executive officials, the term ‘salary’ encompasses longevity pay, ensuring equal treatment and preventing judicial legislation.

Balancing Judicial Independence and Executive Parity: The Longevity Pay Puzzle

This case arose from multiple requests by Court of Appeals Justices for the inclusion of their prior government service in the computation of their longevity pay. The central legal question revolves around whether service in the Executive branch, specifically in positions with equivalent rank and salary to judicial posts, can be credited towards the longevity pay of a Justice. The legal framework hinges on interpreting Section 42 of Batas Pambansa Big. 129, which governs longevity pay for Justices and Judges, in conjunction with laws that grant equivalent salaries and benefits to certain executive officials.

The Court grappled with determining whether the term “salary” as used in these laws includes longevity pay, effectively extending the benefit beyond those serving directly in the Judiciary. This issue highlights the tension between the principle of judicial independence, which traditionally confines longevity pay to service within the Judiciary, and the legislative intent to provide parity in compensation between certain executive and judicial positions. Resolving this tension required the Court to delve into the legislative history and interpretative precedents to ascertain the scope and application of longevity pay in such cases.

In her Concurring and Dissenting Opinion, Justice Leonardo-De Castro thoroughly discussed the basis for her position, now adopted by the Court, emphasizing that longevity pay is treated as part of salary and extended to certain officials in the Executive Department. She stated, “That the language of the law itself, in this case, Section 42 of Batas Pambansa Big. 129, is the starting and referential point of discussion of longevity pay under that law is not in dispute.” This perspective acknowledges that while the explicit language of Section 42 refers to service in the Judiciary, other laws expressly require similar qualifications, confer equivalent ranks, and grant the same salaries and benefits to public officers in the Executive Department.

The intention of these laws, as noted by Justice Leonardo-De Castro, is “to establish a parity in qualifications required, the rank conferred, and the salaries and benefits given to members of the Judiciary and the public officers covered by the said laws.” This parity is intended to give equal treatment to specific public officers in the executive department and the Judges and Justices covered by Batas Pambansa Big. 129, recognizing the equal importance of their services in promoting justice and the proper functioning of our legal and judicial systems.

The Court’s analysis rests on several key arguments. First, the term “salary” covers both basic monthly pay and longevity pay. Second, the concept of longevity pay as “salary” should not be confused with “rank.” Third, the legislative intent of salary increases for certain Executive officials accords with “salary” being inclusive of longevity pay. Fourth, the Court’s long-standing interpretation of “longevity pay” as part of “salary” is correct. Finally, the executive contemporaneous construction of longevity pay is consistent with the law, as interpreted by the Supreme Court, and longevity pay is not a mere “benefit.”

The dissent, penned by Justice Brion, argued that the grant of longevity pay should be confined to services rendered within the judiciary. According to Justice Brion, “When the Court, in the June 16, 2015 Resolution, said that the judiciary is not in a position to determine past continuous, efficient, and meritorious service in the Executive, it was not a personal attack on Justice Gacutan’s illustrious career in Government. The observation was meant to expound on the concept that longevity pay for members of the judiciary is confined to services rendered within the judiciary.” This view emphasizes the clear and unambiguous language of Section 42 of BP 129, which grants longevity pay to a judge or justice who has rendered five years of continuous, efficient, and meritorious service in the Judiciary.

Justice Brion also cautioned against judicial legislation, stating that “the grant of longevity pay for past services in the NLRC, based on the grant of longevity pay to judges and justices of the judiciary, amounts to prohibited judicial legislation.” The dissent underscored the separation of powers principle and argued that granting longevity pay for executive service effectively expands the scope of the law beyond what was originally intended. Finally, the dissent noted that the grant would effectively be a misplaced exercise of liberality at the expense of public funds and to the prejudice of sectors who are more in need of these funds.

In the end, the Court granted CA Justice Gacutan’s Motion for Reconsideration, modifying the Resolution dated June 16, 2015. The Court held that Gacutan’s services as NLRC Commissioner should be included in the computation of her longevity pay, but reckoned only from August 26, 2006, when Republic Act No. 9347 took effect. This decision acknowledges that Republic Act No. 9347 expresses the intent to place the NLRC Commissioners in exactly the same footing as their counterparts in the Court of Appeals, and since “salary” includes longevity pay, Justice Gacutan’s longevity pay should be reckoned from the date Republic Act No. 9347 took effect.

This ruling clarifies the application of longevity pay to executive officials with equivalent judicial ranks and salaries. It confirms that “salary” encompasses longevity pay when laws explicitly grant equivalent ranks and salaries, ensuring equal treatment and preventing judicial legislation. This interpretation aligns with the legislative intent to provide parity in compensation and acknowledges the equal importance of services rendered by certain executive and judicial officers.

FAQs

What was the key issue in this case?	The key issue was whether service in the Executive branch, specifically as an NLRC Commissioner, could be included in the computation of a Court of Appeals Justice’s longevity pay. The Court had to interpret the scope of “salary” as used in laws granting equivalent salaries to certain executive and judicial positions.
What is longevity pay?	Longevity pay is a monthly additional pay equivalent to 5% of the monthly basic pay, granted to Justices and Judges for each five years of continuous, efficient, and meritorious service in the Judiciary. It is intended to reward long and dedicated service in the judiciary.
When did Republic Act No. 9347 take effect?	Republic Act No. 9347 took effect on August 26, 2006. This law amended Article 216 of the Labor Code, granting NLRC Commissioners the same rank and salary as Associate Justices of the Court of Appeals.
What was Justice Gacutan’s argument for including her NLRC service?	Justice Gacutan argued that since Republic Act No. 9347 granted NLRC Commissioners the same rank and salary as CA Justices, her prior service as NLRC Commissioner should be included in the computation of her longevity pay. She asserted that the law intended to place NLRC Commissioners on the same footing as CA Justices.
What was the Court’s final ruling on Justice Gacutan’s request?	The Court granted Justice Gacutan’s request to include her NLRC service in the computation of her longevity pay, but only from August 26, 2006, the date Republic Act No. 9347 took effect. The Court recognized that the law’s intent was to grant NLRC Commissioners the same compensation as CA Justices from that date forward.
What was the dissenting opinion’s main argument?	The dissenting opinion argued that longevity pay should be confined to services rendered within the Judiciary, based on the clear language of Section 42 of BP 129. The dissent cautioned against judicial legislation and argued that granting longevity pay for executive service effectively expands the scope of the law.
How does this ruling affect other government officials?	This ruling clarifies that certain executive officials with equivalent judicial ranks and salaries may be entitled to have their prior executive service included in the computation of their longevity pay, as long as there is a specific law granting such equivalence. The key is whether the law explicitly places them on the same footing as their judicial counterparts regarding compensation.
What is the significance of the term “salary” in this case?	The term “salary” is significant because the Court interpreted it to include longevity pay when laws grant executive officials the same “salary” as their judicial counterparts. This interpretation extends the benefit of longevity pay beyond those serving directly in the Judiciary.

In conclusion, the Supreme Court’s decision in this case provides valuable clarification on the application of longevity pay to executive officials with equivalent judicial ranks and salaries. It underscores the importance of legislative intent and the principle of parity in compensation, while also emphasizing the need to avoid judicial legislation and protect public funds. The ruling serves as a guide for interpreting laws granting equivalent compensation to executive and judicial officers, ensuring that the term “salary” is understood in its full scope, including longevity pay, when such equivalence is explicitly established.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: RE: LETTER OF COURT OF APPEALS JUSTICE VICENTE S.E. VELOSO FOR ENTITLEMENT TO LONGEVITY PAY FOR HIS SERVICES AS COMMISSION MEMBER III OF THE NATIONAL LABOR RELATIONS COMMISSION, A.M. No. 12-8-07-CA, July 26, 2016