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CENTRAL BANK EMPLOYEES ASSOCIATION v. BANGKO SENTRAL NG PILIPINAS

FACTS:

On July 3, 1993, Republic Act (R.A.) No. 7653, known as the New Central Bank Act, took effect, leading to the abolition of the old Central Bank of the Philippines and the establishment of the Bangko Sentral ng Pilipinas (BSP). Almost eight years later, on June 8, 2001, the Central Bank (now BSP) Employees Association, Inc. filed a petition for prohibition against the BSP and the Executive Secretary of the Office of the President. The petition sought to restrain the implementation of the final proviso in Section 15(c), Article II of R.A. No. 7653, claiming it was unconstitutional. The contested proviso mandated that the compensation and wage structure of BSP employees in Salary Grade 19 and below, the rank-and-file, should conform to the rates prescribed under the Salary Standardization Act (R.A. No. 6758). Petitioner argued that this created an unconstitutional division between two classes of BSP employees: (1) officers (exempt from the Salary Standardization Law) and (2) rank-and-file employees (subject to the Salary Standardization Law). They contended that the classification was based solely on salary grade and failed to achieve the primary goal of professional excellence within the BSP. Furthermore, with the amendments to the charters of other governmental financial institutions (GFIs), such as the GSIS, LBP, DBP, and SSS, which exempted all their employees from the Salary Standardization Law, the continued application of this proviso imposed invidious discrimination against the 2,994 rank-and-file employees of the BSP. The BSP and the Solicitor General defended the provision's validity, arguing that the classification was reasonable and aligned with the law's objectives of maintaining professionalism and excellence within the BSP.

ISSUES:

  • Whether the last paragraph of Section 15(c), Article II of Republic Act (R.A.) No. 7653, violates the constitutional mandate that "No person shall be denied the equal protection of the laws."

RULING:

  1. UNDER THE PRESENT STANDARDS OF EQUAL PROTECTION, SECTION 15(c), ARTICLE II OF R.A. NO. 7653 IS VALID.

    • Jurisprudential standards for equal protection challenges show that the classification created by the questioned proviso bears no constitutional infirmities. Congress is allowed a wide leeway in providing for a valid classification. The equal protection clause is not infringed by legislation which applies only to those persons falling within a specified class if the groupings are characterized by substantial distinctions that make real differences, one class may be treated and regulated differently from another.

    • The provision was intended to address the BSP's lack of competitiveness in terms of attracting competent officers and executives, and it was not intended to discriminate against the rank-and-file. Thus, the classification between officers and rank-and-file employees was found reasonable.

  2. THE ENACTMENT, HOWEVER, OF SUBSEQUENT LAWS - EXEMPTING ALL OTHER RANK-AND-FILE EMPLOYEES OF GFIs FROM THE SSL - RENDERS THE CONTINUED APPLICATION OF THE CHALLENGED PROVISION A VIOLATION OF THE EQUAL PROTECTION CLAUSE.

    • A statute valid at one time may become void at another time because of altered circumstances. Here, the passage of subsequent laws exempting all rank-and-file employees of other governmental financial institutions (GFIs) from the Salary Standardization Law (SSL) leeched all validity out of the challenged proviso.

    • Given that there exist no substantial distinctions to differentiate the BSP rank-and-file from those of the other GFIs, the continued application of the challenged provision constitutes invidious discrimination. The discriminatory treatment is not justified as it stems from an inadvertent legislative discrepancy without rational basis.

PRINCIPLES:

  • Equal Protection Clause The equal protection of the laws clause allows for legislative classification if it is reasonable, based on substantial distinctions that make real differences, and applies equally to each member of the class.

  • Relative Constitutionality A valid statute may become unconstitutional due to significant changes in circumstances or new legislation altering its context.

  • Concept of Indirect Discrimination A classification or state action, nondiscriminatory on its face, may still be unconstitutional if it operates in a discriminatory manner.

  • Judicial Duty of Scrutiny Courts must strike down any law or provision repugnant to the Constitution, especially when it perpetuates prejudice against persons accorded special protection by the Constitution.

  • Social Justice Imperatives The Constitution mandates affirmative action in favor of marginalized groups, ensuring that the law serves their protection and enhancement.