SC orders DBM to issue SARO for retirement claims of 28 CA justices

The SC denied the claim of the DBM that if ever there is basis for the claim, it should be sourced from the SAJ Fund. (Photo By Aerous – Own work, CC BY-SA 3.0)

MANILA — The Supreme Court has granted the petition filed by 28 retired Court of Appeals justices ordering the Department of Budget and Management (DBM) to immediately issue a special allotment release order (SARO) to cover their claims amounting to PHP23.02 million.

The retired appellate court justices elevated the case before the SC after the DBM rejected their request for the recomputation of their respective retirement gratuities and the granting of differentials in light of the series of salary increases brought about by the implementation of the Salary Standardization Law (SSL) 2 and SSL 3 between 2007 and 2011.

Since the retirement gratuity they received was computed solely on the basis of their salary at the time of their retirement, the justices asked for the payment of said differentials anchored on the salary increases given to incumbents of similar rank during the five-year-old period after their retirement.

In a 17-page decision dated July 10 penned by Associate Justice Presbitero Velasco Jr. prior to his retirement last August 8, the Court en banc unanimously granted the petition for mandamus filed by the Association of Retired Court of Appeals Justices Inc., led by retired Associate Justice Teodoro Regino against the DBM.

“A writ of mandamus is hereby issued against respondent Department of Budget and Management, directing it to immediately issue the necessary Special Allotment Release Order, with the corresponding Notice of Cash Allocation payable from the Pension and Gratuity Fund, to cover the funding requirements for the retirement gratuity differentials of the 28 retired Court of Appeals Justices, enumerated in Annex “D” of the petition, with a total amount of Twenty-Three Million, Twenty-Five Thousand, Ninety-Three And 75/100 Pesos (P23,025,093.75),” read the decision.

In granting the retired justices’ petition, the SC noted that Section 10, Article 8 of the 1987 Constitution provided that from the time a member of the SC or the CA retires, and for the entire five-year period following said retirement and continuing on during the residue of his or her natural life, he or she should not receive an amount less than what an incumbent receives as salary and RATA.

The SC also denied the claim of the DBM that if ever there is basis for the claim, it should be sourced from the SAJ Fund.

“DBM’s position is confined solely to SAJ allowances, but the claim of the petitioners is mainly based on the adjustments to the salaries of justices by reason of SSL and SSL 3 and not from the said SAJ allowances,” the SC pointed out.

It noted that while SAJ allowances were sourced from the SAJ Fund pursuant to Republic Act 9227 (An Act Granting Additional Compensation in the Form of Special Allowances for Justices, Judges And All Other Positions in the Judiciary With the Equivalent Rank of Justices of the Court of Appeals and Judges of the Regional Trial Court), the said SAJ allowances were fully converted to the basic monthly salary of the justices as of June 1, 2011.

Any increase that have been implemented after that date, according to the SC, forms part of basic salary as there is no more SAJ component to speak of.

“Even assuming that there is a portion in the retirement gratuity that had not been fully converted to BMS (basic monthly salary), such component can still not be sourced from the SAJ Fund, owing to the nature of the SAJ Fund as a special fund,” the SC noted.

“Moreover, this Court had already ruled that the SAJ component of the retirement gratuity and other terminal leave benefits should not be sourced from the SAJ Fund, but from the Pension Gratuity Fund,” it added.

The Court said the refusal of the DBM to issue corresponding SARO to pay for the claims of the retired CA justices is “tantamount to grave abuse of discretion.”

In denying their plea, the DBM insisted that their claims must be sourced from the Special Allowance for the Judiciary (SAJ) and not from the government’s Pension and Gratuity Fund,

The DBM, through the Office of the Solicitor General, argued before the SC that compelling the government to issue SAROs for the SAJ component of the retirement gratuities of the concerned CA justices will be in violation of the Article Vi, Section 29 (1) of the 1987 Constitution which mandates that “no money shall be paid out of the Treasury except in pursuance of an appropriation made by law.”

Furthermore, the OSG argued that from the 2007 General Appropriations Act (GAA) to the 2014 GAA, the law has specifically, clearly, and consistently provided that the SAJ component of the retirement benefits should be sourced from the SAJ fund, and not elsewhere.