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Administrative Rules Must Be Read in Harmony

To remind ourselves of the importance of harmonization in policy making, let us study this August 12, 2015 Supreme Court Decision in the consolidated cases of Winston F. Garcia et al. vs. Angelita Tolentino et. al & Melina I. Garcia et al. vs. Winston F. Garcia, et al.


On May 30, 1997, Republic Act No. 8291 was passed, mandating the mandatory GSIS coverage of all government employees regardless of employment status. Prior to its passage, contractual employees were not entitled to leave benefits. Instead, they received 20% premium pay. As such, their salaries were 20% higher than the salaries of regular employees occupying equivalent positions, provided that the total amount does not exceed 120% of the latter’s minimum salary.

On April 30, 1999, GSIS and DBM issued Joint Circular No. 99-3. It stated, among others, that effective January 1999, the government share in the premiums of mandatory contributions for contractual employees were to be paid out of their 20% premiums. Pursuant to the circular, the DENR issued a memorandum that they will impose premium deductions starting October 1999, to include arrears from January to September 1999. Aggrieved, the affected DENR employees questioned the validity of Joint Circular No. 99-3, arguing that it was a diminution in pay.


Whether the deduction of the government share in GSIS contribution under Joint Circular No. 99-3 is repugnant to RA 8291.


It is not. The 20% premium pay was granted to balance the inequitable situation of contractual employees who were not entitled to leave credits as a matter of right. However, on August 23, 1999, the Civil Service Commission issued Memorandum Circular No. 14, s. 1999 granting contractual employees leave benefits in the same manner as regular employees. Thus, premium pay was rendered unnecessary and funds initially set aside for it in the 1999 General Appropriations Act remain as public funds and may be re-channelled to answer for other personnel benefits costs, including the government’s share in GSIS contributions.

But Joint Circular No. 99-3 cannot be given retroactive effect. Take note that it was issued on April 30, 1999. CSC Memorandum Circular No. 14, s. 1999 was only issued on August 23, 1999 or almost 4 months after the JC. At the time of the circular’s issuance, contractual employees did not have leave credits yet and were still entitled to the 20% premium pay. To deduct the government share in GSIS contributions from their premium pay even before they were granted leave benefits would effectively make employees assume full payment of the contributions, which is against RA 8291.

Every statute must be construed and harmonized with other statutes to form a uniform system of jurisprudence. Prior statutes relating to the same subject are to be compared with new provisions and if possible, must be harmonized. The same principle is applicable to administrative rules and regulations issued by government agencies in their duty to implement laws.

Therefore, the payment of the government share from the premium pay of contractual employees cannot be made earlier than the issuance of CSC Memorandum Circular No. 14, s. 1999.

To read the complete text of the case, click here.

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