September 1982 - Philippine Supreme Court Decisions/Resolutions
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G.R. No. L-57387 September 30, 1982 - UNIVERSITY OF THE EAST v. UNIVERSITY OF THE EAST FACULTY ASSOCIATION, ET AL.
202 Phil. 881:
202 Phil. 881:
SECOND DIVISION
[G.R. No. L-57387. September 30, 1982.]
UNIVERSITY OF THE EAST, Petitioner, v. UNIVERSITY OF THE EAST FACULTY ASSOCIATION (UEFA) and THE PRESIDENTIAL EXECUTIVE ASSISTANT, Respondents.
Agustin O. Benitez for Petitioner.
Ceferino P. Padua for Private Respondent.
The Solicitor General for the other Respondent.
SYNOPSIS
This case involves the implementation of Presidential Decree No. 451, particularly, paragraph (a) of its Section 3 which provides" (a) That no increase in tuition or other school fees or charges shall be approved unless sixty (60%) per centum of the proceeds is allocated for increase in salaries or wages of the members of the faculty and all other employees of the school concerned, and the balance for institutional development, student assistance and extension services, and return to investment; Provided, That in no case shall the return to investments exceed twelve (12%) per centum of the incremental proceeds; and (b) That any such increase shall in no case exceed fifteen (15%) per centum of the rates charged during the preceding school year. This Tribunal is being urged to construe this provision in regard to three controverted points; (1) whether or not allowances and benefits, granted by the universities to the members of the faculty and their other employees, as these may be distinguishable from salaries and wages, may be charged by the university to the 60% of the incremental proceeds from increase in tuition fees they may be authorized by the Ministry of Education and Culture (MEC); (2) whether or not increase in salaries or wages or any allowances or benefits secured by collective bargaining, in addition to those mandated by other laws, may be charged against said 60%; and (3) whether or not newly appointed teachers or employees are entitled to participate in the increase and benefits prior to their appointments.
The Supreme Court held that: (1) increase of salaries, even those secured by collective bargaining, may be charged to the 60% incremental proceeds of the MEC authorized tuition fee increases; (2) allowances and benefits, either mandated by law or secured by collective bargaining, are chargeable to the return to investment referred to in the second purpose of Section 3(a), if the schools should happen to have no other resources than incremental proceeds of authorized tuition fee increases; and (3) new teachers should benefit from the residue of the incremental proceeds of tuition fee increases authorized before their employment.
Assailed decision affirmed.
The Supreme Court held that: (1) increase of salaries, even those secured by collective bargaining, may be charged to the 60% incremental proceeds of the MEC authorized tuition fee increases; (2) allowances and benefits, either mandated by law or secured by collective bargaining, are chargeable to the return to investment referred to in the second purpose of Section 3(a), if the schools should happen to have no other resources than incremental proceeds of authorized tuition fee increases; and (3) new teachers should benefit from the residue of the incremental proceeds of tuition fee increases authorized before their employment.
Assailed decision affirmed.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATIONS; PRESIDENTIAL DECREE NO. 451; SECTION 3; SALARY INCREASES, EVEN THOSE SECURED BY COLLECTIVE BARGAINING, ARE CHARGEABLE TO THE 60 PERCENT INCREMENTAL PROCEEDS OF MEC-AUTHORIZED TUITION FEE INCREASES. — Whereas in the original decision of respondent Presidential Executive Assistant, it was held that although the P1.30 per hour increase awarded the members of private respondent is chargeable to the faculty’s share in the incremental proceeds (60%) from the 1979 tuition fee increase under Presidential Decree No. 451, the same should not be considered "as a salary increase resulting from collective bargaining," in the said later resolution of said public respondent now under review, its was clarified "1. That the award of P1.30 salary increase, as modified by the Agreement of the Parties of November 16, 1969, should, from June 1,1978 to May 31, 1979, be treated as resulting from the collective bargaining negotiation, and that for the succeeding school years, that said salary increase together with the amount corresponding a faculty member’s share in ‘residue’ of the 60% incremental proceeds from the 1979-approved tuition fee increase under Presidential Decree No. 451, should be treated as being in full compliance with said decree." We read the latest Malacañang decision to mean that increase of salaries even those secured by collective bargaining may be charged to the 60% incramental proceeds of MEC authorized tuition fee increases.
2. ID.; ID.; ID.; ALLOWANCES AND BENEFITS ARE CHARGEABLE AGAINST RETURN TO INVESTMENTS WHERE SCHOOLS HAVE NO OTHER RESOURCES TO GRANT THE SAME. — In effect, the problem posed before Us is whether or not the reference in Section 3(a) to "increase in salaries or wages of the faculty and all other employees of the schools concerned" as the first purpose to which the incremental proceeds from authorized increases of tuition fees may be devoted, may be construed to include allowances and benefits. In the negative, it would follow that such allowances must be taken from resources of the school not derived from tuition fees. Without delving into the factual issue of whether or not there could be any such other resources, We note that among the items of the second purpose stated in provision in question is the return in investment. And the law provides only for a maximum, not a minimum. In other words, the schools may get a return to investments of not more than 12%, but if circumstances warrant, there is no minimum fixed by law which they should get. On this predicate, We are of the considered view that, if the schools happen to have no other resources to grant allowances and benefits, either mandated by law or secured by collective bargaining, such allowances and benefits should be charged against the return to investments referred to in the second purpose stated in Section 3(a) of P.D. 451.
3. ID.; ID.; ID.; NEW TEACHERS SHOULD BENEFIT FROM THE RESIDUE OF THE INCREMENTAL PROCEEDS OF TUITION FEE INCREASES AUTHORIZED PRIOR TO THEIR EMPLOYMENT. — On the issue of whether or not the new teachers should benefit from the residue of the incremental proceeds of tuition fee increases authorized before their employment, We see no objection thereto, albeit, as We understand it, the effect of such a ruling will not really affect the schools but rather the members of the faculty and employees already in the service who will necessarily suffer a diminution of their share in such residue, because instead of dividing the same only among themselves; they will have to include the new teachers in the distribution thereof.
2. ID.; ID.; ID.; ALLOWANCES AND BENEFITS ARE CHARGEABLE AGAINST RETURN TO INVESTMENTS WHERE SCHOOLS HAVE NO OTHER RESOURCES TO GRANT THE SAME. — In effect, the problem posed before Us is whether or not the reference in Section 3(a) to "increase in salaries or wages of the faculty and all other employees of the schools concerned" as the first purpose to which the incremental proceeds from authorized increases of tuition fees may be devoted, may be construed to include allowances and benefits. In the negative, it would follow that such allowances must be taken from resources of the school not derived from tuition fees. Without delving into the factual issue of whether or not there could be any such other resources, We note that among the items of the second purpose stated in provision in question is the return in investment. And the law provides only for a maximum, not a minimum. In other words, the schools may get a return to investments of not more than 12%, but if circumstances warrant, there is no minimum fixed by law which they should get. On this predicate, We are of the considered view that, if the schools happen to have no other resources to grant allowances and benefits, either mandated by law or secured by collective bargaining, such allowances and benefits should be charged against the return to investments referred to in the second purpose stated in Section 3(a) of P.D. 451.
3. ID.; ID.; ID.; NEW TEACHERS SHOULD BENEFIT FROM THE RESIDUE OF THE INCREMENTAL PROCEEDS OF TUITION FEE INCREASES AUTHORIZED PRIOR TO THEIR EMPLOYMENT. — On the issue of whether or not the new teachers should benefit from the residue of the incremental proceeds of tuition fee increases authorized before their employment, We see no objection thereto, albeit, as We understand it, the effect of such a ruling will not really affect the schools but rather the members of the faculty and employees already in the service who will necessarily suffer a diminution of their share in such residue, because instead of dividing the same only among themselves; they will have to include the new teachers in the distribution thereof.
D E C I S I O N
BARREDO, J.:
Petition for certiorari praying that this Court declare as not in accordance with the law and set aside as a grave abuse of discretion the decision of respondent Presidential Executive Assistant dated July 24, 1980, as well as his order dated June 26, 1981, denying reconsideration thereof, or, in the alternative, that We reverse said decision and resolution insofar as they have reversed or modified the decision of the Minister of Labor of July 2, 1979 and his resolution of August 3, 1979 on the motion for reconsideration thereof and affirm instead the latter decision.
This case involves the implementation of P.D. 451, particularly, paragraph (a) of its Section 3 which provides that:chanrobles virtual lawlibrary
"SEC. 3. Limitations. — The increase in tuition or other school fees or other charges as well as the new fees or charges authorized under the next preceding section shall be subject to the following conditions.:jgc:chanrobles.com.ph
"(a) That no increase in tuition or other school fees or charges shall be approved unless sixty (60%) per centum of the proceeds is allocated for increase in salaries or wages of the members of the faculty and all other employees of the school concerned, and the balance for institutional development, student assistance and extension services, and return to investments: Provided, That in no case shall the return to investments exceed twelve (12%) per centum of the incremental proceeds; and
"(b) That any such increase shall in no case exceed fifteen (15%) per centum of the rates charged during the preceding school year."cralaw virtua1aw library
We are being urged to construe this provision in regard to three controverted points: (1) whether or not allowances and benefits, granted by the universities to the members of the faculty and their other employees, as these may be distinguishable from salaries and wages, may be charged by the university to the 60% of the incremental proceeds from increase in tuition fees they may be authorized by the Ministry of Education and Culture (MEC); (2) similarly, whether or not increase in salaries or wages or any allowances or benefits secured by collective bargaining, in addition to those mandated by other laws, may be charged against said 60% and (3) whether or not newly appointed teachers or employees are entitled to participate in the increases and benefits prior to their appointments.
Upon the filing of the 41-page petition, We required comment from the respondents. Public respondent filed a 40-page comment thru the Solicitor General’s Office and the private respondent filed a 33-page one, with various annexes. To these comments, petitioner filed a reply of 30 pages. With permission of the Court first had, the Philippine Association of Colleges and Universities (PACU) filed its own comment of 27 pages. With the allegations in the petition and the said comment and reply, together with the decisions and resolutions of the Minister of Labor and herein public respondent, all of which were correspondingly included in the agenda, and since both parties insist on an early resolution of this case, We feel there is no further need to prolong the same, hence We have considered the same submitted for decision, assuming the comments of respondents to be their answers.cralawnad
Considering the nature of the issues submitted for Our resolution, We believe it is unnecessary to go into specific factual details as background for this decision. Suffice it to quote in this regard a portion of the following motion of petitioner dated July 14, 1981 asking for extension of time within which to file its petition:jgc:chanrobles.com.ph
"1. Petitioner is a private educational corporation organized and existing under Philippine law, with principal place of business at the UE Campus, C.M. Recto Avenue, Manila; respondent Association is s duly registered union of faculty members with principal place of business at the same address; and respondent official is here impleaded as a formal party, having rendered the Decision end Resolution subject-matter of the certiorari proceedings with petitioner intends to institute before the Honorable Supreme Court;
"2. Petitioner and respondent Association were parties to a conciliation-arbitration case which arose from a deadlock in collective bargaining for the renewal of their collective bargaining agreement for a period, June 1, 1978 to May 31, 1981; the case was docketed by the Office of the Minister of Labor, on June 21, 1979, as Case No. AJML-064-79, jurisdiction over which was assumed by said Office pursuant to Section 10 of PD 823, as amended, a sit-down strike having been staged by members of said Association at the time;
"3. In a Decision dated July 2, 1979, the Office of the Minister of Labor held, among others, as follows:chanrob1es virtual 1aw library
‘. . . Balancing, on the one hand, the interest of the faculty and the financial difficulties of the University, on the other, and after consultations with the parties during which issues were identified, attempts at effecting voluntary settlement made and counter-arguments heard, the following are hereby ordered as the full, complete, and final settlement of all pending issues in the current deadlock in collective bargaining negotiations between the University of the East Faculty Association (UEFA) and the University of the East:chanrob1es virtual 1aw library
‘1. On the issue of Across-the-Board Wage Increase:chanrob1es virtual 1aw library
a) P1.30 per hour across-the-board increase or its equivalent for monthly-paid faculty members chargeable to the incremental proceeds from the 1979 tuition fee increase under PD 451;
b) Participation in the residue of the 1979 tuition fee increase (within the 60%); and
c) Participation in the 60% incremental proceeds of subsequent tuition fee increases under PD 451 during the contract period.
d) Incorporation as part of the basic salary rate of the following:chanrob1es virtual 1aw library
1) 10% of 1974 salary rate (PD 451);
2) P1.00 — 1976 PD 451;
3) P1.00 — 1977 PD 451; and
4) P0.30 — wage supplement.
"4. Acting on the UEFA’s motion for reconsideration and the UE’s motion for clarification, the Office of the Minister of Labor, by Resolution dated August 3, 1979, disposed as follows:chanrob1es virtual 1aw library
‘IN VIEW OF THE FOREGOING, the motion for reconsideration of the Decision dated 2 July 1979, filed by the UEFA, should be, as it is hereby denied and the part of the Decision directing the incorporation of the four wage increments as part of the basic salary rate is hereby clarified as follows: (a) the incorporation Order shall apply only to faculty members who have been receiving the increments as of 1 June 1978, (b) the salary scales in the collective bargaining agreement shall be revised by adding the across-the-board increase of P1.30 per hour, or its monthly equivalent, to the existing salary rates therein, and (c) the salary increments shall be included in computing compensation for all teaching loads and in determining the amount of related fringe benefits of the faculty members concerned.’
"5. Invoking various statutory, constitutional and jurisdictional grounds, the UEFA appealed to the Office of the President on August 21, 1979, or some fourteen calendar days after its receipt of the Resolution of August 3, 1979; its main complaint, however, was directed against the MOL ruling that the across-the-board salary increase of P1.30 per hour was chargeable against the 60% incremental proceeds from tuition-fee increase granted in 1979 under PD 451;
"6. While the appeal was pending with Malacañang, another strike was staged by the faculty members, causing Malacañang and the Ministry of Labor to convoke an extraordinary conciliation conference which resulted in the following written agreement dated November 16, 1979:chanrob1es virtual 1aw library
‘The undersigned parties hereby agree to the following:chanrob1es virtual 1aw library
‘1. The UEFA accepts the award of the Minister of Labor in this case of P1.30 per hour salary increase or its equivalent for monthly-paid teachers chargeable to the 1979 incremental proceeds under PD 451 and it shall, therefore, be implemented immediately retroactive to June 1, 1978 in accordance with the award.
‘2. All other matters in connection with this case are deemed submitted for decision by the Office of the President.
‘3. The parties commit to maintain stable and normal employer-employee relations and not to take retaliatory actions against each other.’
"7. After the parties had filed additional memoranda, the Office of the President rendered a Decision, dated July 24, 1980, consisting of 49 pages, and disposing as follows:chanrob1es virtual 1aw library
‘In view of the foregoing, the appealed decision and resolution are hereby affirmed with the modifications and clarifications indicated above.’
In substance, the lengthy perorations in the Decision contained findings of facts and conclusions of law the more important of which were: that UE had no sufficient funds to justify UEFA ‘s demand for salary increases other than the P1.30 per hour granted in the MOL decision; that the said award should, however, be construed as a mere advance or partial payment of the faculty’s share in the incremental proceeds (60%) from the 1979 tuition-fee increases under PD 451 and not as a salary increase resulting from collective bargaining; and that schools cannot legally charge against the 60% incremental proceeds mandated allowances and fringe benefits for teaching and non-teaching personnel, despite the fact that the implementing rules promulgated by the Ministry of Education and Culture expressly authorized such charging;
"8. Present petitioner thereafter filed, on the last day of the extension period granted by Malacañang, a motion for partial reconsideration of the Decision; upon the other hand, respondent UEFA filed a series of motions for execution which were duly opposed by present petitioner; however, on December 29, 1980, or some 112 days after its receipt of the Malacañang decision, respondent UEFA in an apparent turnabout filed a motion for reconsideration of the decision and for admission of what it described as newly-discovered evidence, which present petitioner likewise opposed.
"9. On July 13, 1981, present petitioner received by registered mail copy of a Resolution dated June 26, 1981, covering 34 pages, and with a lengthy dispositive portion which reads:chanrob1es virtual 1aw library
‘IN VIEW OF THE FOREGOING, the motions of both parties for partial reconsideration of the decision of this Office dated July 24, 1980, and the motion of the University of the East for a restraining order, are all hereby denied for lack of merit, and the said decision reiterated and declared final and executory, as modified or clarified as follows:chanrob1es virtual 1aw library
‘1. That the award of the P1.30 salary increase, as modified by the Agreement of the Parties of November 16, 1979, should, from June 1, 1978 to May 31, 1979, be treated as resulting from the collective bargaining negotiation; and that for the succeeding schoolyears, the said salary increase together with the amount corresponding to a faculty members’ share in the ‘residue’ of the 60% incremental proceeds from the 1979-approved tuition fee increases under Presidential Decree No. 451, should be treated as being in full compliance with the said Decree;
‘2. That, in determining the amount of the aforesaid ‘residue’, decreed emergency allowances, 13th month pay, service incentive leave benefits, other employees’ statutory benefits, retirement cost and benefits, faculty development expenses and other expenses on matters properly falling under the second purpose mentioned in Section 3)a) of PD 451 (institutional services), employer’s SSS/Medicare/SIF (state insurance fund) contributions and other employer’s statutory obligations, and other employees’ fringe benefits, should not be deducted from or charged against the 1979 50% incremental proceeds under PD 451;
‘3. That new teachers, whether replacement or additional, should be allowed to share or participate in the 60% incremental proceeds from the 1974, 1976 and 1977 and/or 1979-approved tuition fee increases under PD 451 assessed and collected in the school-year of their employment and every school-year thereafter during the period of their employment as such; and
‘4. That the appealed decision as modified or clarified by the Inciong resolution of August 3, 1979, includes an order for the payment of the shares of the members of the University of the East Faculty Association in the 60% incremental proceeds from the 1980-approved tuition fee increases under PD 451.
‘Accordingly, UEFA’s motions for execution of the appealed decision of July 2, 1979, as modified or clarified by the Inciong resolution of August 3, 1979 and by the Agreement of the Parties of November 16, 1979, and as affirmed by the decision of this Office of July 24, 1980 with the modifications or clarifications indicated above, are hereby granted insofar as they relate to the above and to the awards and orders in the appealed decision not adversely affected by the said modifications or clarifications; and are denied with respect to the payment of alleged residues of the 60% incremental proceeds from the 1974; 1976 and 1977-approved tuition fee increases under PD 451.
‘The parties are hereby directed to renegotiate on UEFA’s demand for an additional across-the-board salary increase separate and distinct from the salary increase provided for under PD 451, based or UE’s operational incomes subsequent to schoolyear 1978-79.
‘The appropriate authorities below are hereby directed to conduct the necessary execution proceedings.
‘SO ORDERED.’" (Pp. 2-7, Record)
As can be gleaned from the pleadings of the parties, only the three issues aforestated are the main bones of contention between them. And to avoid unnecessary prolixity, We are going to resolve said issues mainly in general terms by going to the fundamental points directly.chanrobles lawlibrary : rednad
To make matters clearer, as may be observed from the last resolution of public respondent, importantly, whereas in his original decision, it was held that although the P1.30 per hour increase awarded the members of private respondent is chargeable to the faculty’s share in the incremental proceeds (60%) from the 1979 tuition fee increase under P.D. 451, the same should not be considered" as a salary increase resulting from collective bargaining", in the said later resolution, now under review, it was clarified "1. That the award of P1.30 salary increase, as modified by the Agreement of the Parties of November 16, 1979, should, from June 1, 1978 to May 31, 1979, be treated as resulting from the collective bargaining negotiation, and that for the succeeding school years, the said salary increase together with the amount corresponding a faculty member’s share in the ‘residue’ of the 60% incremental proceeds from the 1979-approved tuition fee increase under Presidential Decree No. 451, should be treated as being in full compliance with said decree."cralaw virtua1aw library
We are underscoring such modification because as We see it, it settles the second main issue. We have stated at the outset as to whether or not increase of salaries or wages or allowances or benefits secured by collective bargaining may be charged against the incremental proceeds (60%) under P.D. 451. We read the latest Malacañang decision to mean that increase of salaries even those secured by collective bargaining may be charged to the 60% incremental proceeds of MEC authorized tuition fee increases. That is precisely the stand of petitioner. With that point thus settled, We can now proceed to the other two issues.
It will be recalled that in the public respondent’s decision We are scrutizining, it was held that:jgc:chanrobles.com.ph
"2. That, in determining the amount of the aforesaid ‘residue’, decreed emergency allowances, 13th month pay, service incentive leave benefits other employees’ statutory benefits, retirement cost and benefits, faculty development expenses (and other expenses on matters properly falling under the second purpose mentioned in Section 3(a) of PD 451 (institutional services), employer’s SSS/Medicare/SIF (state insurance fund) contributions and other employer’s statutory obligations and other employees’ fringe benefits, should not be deducted from or charged against the 1979 60% incremental proceeds under PD 451;"
It is, of course, understandable and correct that in determining the "residue" of the incremental proceeds covered by the first purpose stated in paragraph (a) of Section 3 of P.D. 451, "matters properly falling under the second purpose" of said paragraph should not be deducted from or charged against the 1979 60% incremental proceeds under P.D. 451." That is clear enough from the letter of the provision itself. The issue is from or against what the other items specified in the abovequoted paragraph of respondent’s decision may be deducted or charged against.
In this connection, it can be readily seen in the provision in question that there are only two purposes to which the incremental proceeds from increase of tuition fees authorized by the Ministry of Education and Culture may be dedicated or devoted, namely; (1) "increase in salaries or wages of the members of the faculty and all other employees of the school concerned" and (2) "institutional development, student assistance and extensions of services, and return of investments;" provided the latter shall not exceed twelve (12%) per centum of the incremental proceeds. Resultingly, in none of the two purposes stated in the provision in question are the disputed items referred to provided for. And so, to reiterate, the question is, from and against what may they be taken or charged?chanrobles law library
At first glance, it would seem then that said items, which for short We shall refer to as "allowances and fringe benefits," must be taken by the educational institution concerned from funds or resources other than the incremental proceeds of MEC authorized tuition fee increases. But is that what is contemplated by P.D. 451? Stated otherwise, does P.D. 451 assume that private educational institutions have sources of funds other than the proceeds from increase of tuition fees from where they may award allowances and fringe benefits, whether voluntary, mandated by law or secured by collective bargaining?
In ascertaining what indeed was the perspective of P.D. 451 in this regard, it is imperative that We go into a review of the circumstances surrounding the issuance and implementation thereof as well as the actual financial situation of private educational institution in the whole country, who carry at least, on the tertiary level about 85% of the burden of providing educational opportunities to our people, bearing in mind that it is evidently beyond the capability of the government to maintain whether on a free or paying basis more than it can at present. In other words, the purpose of Our inquiry is to determine if the financial state of our private educational institutions can afford to give allowances and benefits, apart from increase in salaries and wages, to its faculty members and all other employees, without depending therefor on increase of tuition fees, and that P.D. 451 is predicated on the assumption that they can.
Historically, P.D. 451, as stated in its title is an amendment of Republic Act 6139 approved on August 31, 1970. But that law had an entirely opposite objective. As Section 1 thereof put it, "it is hereby declared the policy of this Act to regulate tuition and other fees charged by private schools in order to discourage the collection of exhorbitant and unreasonable fees." For, indeed, before the passage of said law, the unbridled discretion of private school owners to charge tuition fees practically converted the running of private educational institutions into a lucrative business that made tertiary education difficult, if not beyond the means of even the middle income sector of our people. The government had to see to it that tuition and other fees be controlled to afford educational opportunities to all levels of our people.
But under R.A. 6139, the procedure for regulation of the amount of tuition fees was tedious and cumbersome, inasmuch as pursuant thereto any increase in tuition fees had to be arrived at by consensus among all the parties concerned. the students, the school owners and the government. Thus, by way of illustration, Section 3 thereof provided:jgc:chanrobles.com.ph
"SEC. 3. Any private educational institution proposing to increase the tuition and/or other fees being charged and/or collected by it for any course shall adopt the following procedure:jgc:chanrobles.com.ph
"(a) At least 180 days before the school year, semester, or term in which the increase is to be effective, it shall serve written notice thereof on the student council or government, or in case of schools or courses below the college or university level, on the Association of Parents, or in default thereof, the Parents-Teachers Association of the school concerned.
"Likewise, notice of such proposal shall be sent by personal delivery or registered mail to the Director of Private Schools, copy furnished the Regional Superintendent of the Bureau of Private Schools. Appropriate circulars containing the proposal shall be posted by the school administration in at least two conspicuous place within the premises of the school concerned.
"The notice of the proposal to increase shall, among other things, state the following: (1) the current fees or charges and the amount of increase (2) the reason or reasons for the proposed increase (3) the semester, term or school year in which the increase is proposed to take effect, and (4) a statement that if no opposition is filed until the thirtieth day from the posting of the notice, the increase shall become effective under this Act.
"(b) If after such notice is made, a formal opposition against such increase is presented to the school administration within thirty days after receipt of said notice by at least a majority of the student governing body or at least twenty per cent of the parents, in case of schools below college or university level, then the Local School Council on Fees herein created shall be convened to act on the controversy. Copy of said opposition shall be served on the Director of Private Schools who shall immediately, upon receipt, transmit said opposition to the corresponding Regional Superintendent of private schools and direct that the Local School Council on Fees be immediately organized and convened by said Regional Superintendent.
If no opposition is filed within the period above provided, the increase shall be deemed authorized.
"The Local School Council on Fees shall be composed of the following: (1) one representative from the school administration to be chosen by the school concerned; (2) two representatives from the student body to be chosen by the student council, or student government, or two representatives from the Association of Parents or in default thereof, the Parents-Teachers Association in case of schools below the college or university level to be chosen by the said association; (3) one representative from the Faculty Club or Association; and (4) the Director of Private Schools or his authorized representative in the area who will act as Chairman. While sitting as a Board and in aid of its function, said Board may issue subpoenas to compel attendance of witnesses, may administer oaths, may examine any person under oaths and may require the production of any books or papers relevant to the case.
"(c) The Local School Council on Fees shall exert all efforts to negotiate, conciliate, and settle the case to the satisfaction of the interested parties. The terms of settlement agreed upon by the parties shall be final and binding, and copies of such settlement shall be sent to the Director of Private Schools and the Regional Superintendent of the Bureau of Private Schools. In the event all intra-school remedies for amicable settlement have been exhausted, and no agreement has been reached, then the said Council, by a majority vote, shall decide the case at least one hundred days before the opening of the school year, semester or term in which the proposed increase is to be effected. Its decision shall take into account the objectives of all schools as provided for in Article XIV, Section five of the Constitution, the sufficiency of facilities, the nature of courses and curriculum offered, the standard maintained, the volume of enrolment, the sufficiency of faculty development program and emoluments, facilities and student conveniences installed and others, in relation to the general cost by determining the cost of essential services to be rendered to the students in the quantity and quality required to meet the standards approved by the Department of Education and by allowing a maximum of twelve per cent on net worth: Provided, however, That unless required by extraordinary circumstances or events, no school, college or university shall increase annual tuition fees by more than fifteen per cent of the fees collected in the preceding school year.
"The decision shall be in writing and shall contain a concise statement of the facts and the grounds on which the decision is based."cralaw virtua1aw library
Needless to state, that law alleviated the situation for all concerned to a certain degree.chanrobles law library : red
Now, after the proclamation of martial law and the establishment of the New Society, the conditions appear to have drastically changed. In 1974, while evidently scanning the various aspects of development of the national welfare and the social conditions of our people and trying to assess the achievements up to then of the New Society, His Excellency, President Ferdinand E. Marcos, must have trained his eyes on the educational field. He must have asked the Ministry of Education to furnish him with a full report and its recommendations thereon. And after going over and studying the papers submitted to him, the President came to the conclusion that:jgc:chanrobles.com.ph
"Private schools, colleges and universities have been faced with increasingly serious problems arising from decreasing incomes due to slump in emolument and increasing operational costs brought about by the rise in prices of instructional materials and educational, as well as allied services;
"It is imperative that private educational institutions upgrade classroom instruction by improving their facilities and hiring competent teachers in all levels of education, provide salary and or wage increases and other benefits to their teaching, administrative and other personnel to keep up with the increasing costs of living;
"The procedure prescribed under R.A. No. 6139 for the increase of tuition and other school fees has been proved to be too cumbersome and time-consuming, and is not conducive to the growth and improvement of private educational institutions and the well-being of their employees, particularly those in the lower income groups,"
and found that "in order to alleviate the sad plight of private schools, their personnel and all those directly and indirectly dependent on school incomes it is advisable and necessary that the cumbersome and time-consuming procedures fixed under Republic Act No. 6139 for increasing tuition fees be simplified without opening the flood-gates to abuse of the right to increase tuition and other school fees." (Preamble, P.D. 451).
Finally, he saw no alternative but to issue P.D. 451 which We hereby quote integrally:jgc:chanrobles.com.ph
"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution do hereby decree and order the following as part of the law of the land:jgc:chanrobles.com.ph
"SECTION 1. Authority of Secretary of Education and Culture. — Within the limits and under the circumstances set forth in this Decree, the Secretary of Education and Culture shall have the authority to regulate the imposition of tuition and other school fees or charges by any and all private schools as defined under Act Numbered Two thousand seven hundred and six, as amended. No changes in the rates of tuition or other school fees or charges shall be effective without the prior approval of the Secretary of Education and Culture. New school fees or charges to be imposed by new or existing schools, whether for new courses or other matters, shall be at such reasonable rates as may be determined by the Secretary of Education and Culture based on the standard of such school.
"SEC. 2. Application and Documents Required. — Any private school which desires to revise its rates of tuition or other school fees or charges or to impose other fees or charges shall file application therefor with the Secretary of Education and Culture. The application shall include:jgc:chanrobles.com.ph
"(a) Statement of the itemized current rates of tuition and other charges and the corresponding itemized proposed changes thereon, as well as the new fees or charges proposed to be imposed, and of the proposed allocation of the incremental proceeds in accordance with Section 3(a) hereof. Such statements shall, when accomplished be under oath by the proper official(s) of the school concerned;
"(b) Financial statement showing the financial status of the school duly certified by a certified public accountant;
"(c) A copy of the last tax return, where required, filed with the Bureau of Internal Revenue.
"SEC. 3. Limitations. — The increase in tuition or other school fees or other charges as well as the new fees or charges authorized under the next preceding section shall be subject to the following conditions:jgc:chanrobles.com.ph
"(a) That no increase in tuition or other school fees or charges shall be approved unless sixty (60%) per centum of the proceeds is allocated for increase in salaries or wages of the members of the faculty and all other employees of the school concerned, and the balance for institutional development, student assistance and extension services, and return to investments: Provided, That in no case shall the return to investments exceed twelve (12%) per centum of the incremental proceeds; and
"(b) That any such increase shall in no case exceed fifteen (15%) per centum of the rates charged during the preceding school year.
"SEC. 4. Rules and Regulations. — The Secretary of Education and Culture is hereby authorized, empowered and directed to issue the requisite rules and regulations for the effective implementation of this Decree. He may, in addition to the requirements and limitations provided for under Sections 2 and 3 hereof, impose other requirements and limitations as he may deem proper and reasonable.
"SEC. 5. Prohibitions. — No school administration or office or division thereof shall hold or sponsor any benefit performance, movies, concerts, dramatic presentation, games and/or shows of whatever kind or nature whether for charity or otherwise. Any such act on the part of the school administration or office or division thereof shall be considered a circumvention of this law and shall be sufficient cause for the cancellation of the approval of any previous increase in tuition or other school fees and shall subject the school official concerned to such disciplinary action as the Secretary of Education and Culture may deem proper including the revocation on any degree conferred by authority of the Government.
"SEC. 6. Review of Financial Statements. — Financial statements submitted in accordance with the provisions of Section 2 hereof may be reviewed by the Commission on Audit at the instance of the Secretary of Education and Culture whenever he believes that the same is necessary for verification purposes. For this purpose, the Commission on Audit is authorized to examine the pertinent books and records of the school concerned.
SEC. 7. Additional Scholarships. — As a further condition to any grant of increase in tuition or other school fees, private schools with a total enrolment of at least one thousand, are hereby required to provide free scholarships to poor but deserving students at the ratio of one (1) free scholarship for every five hundred (500) pupils/students enrolled: Provided, That this requirement shall be exclusive of the present practice of private schools offering scholarship privileges to valedictorians and salutatorians and other pupils/students who have achieved scholastic distinctions. Neither shall other forms of scholarships such as those offered to athletes and working students be included in arriving at the proper number of poor but deserving pupils/students to be given free scholarships.
"SEC. 8. Penal Clause. — Any violation of the provisions of this Decree of the rules or regulations promulgated pursuant thereto or any final decision made by the Secretary of Education and Culture shall be punishable by a fine of five thousand (P5,000.00) pesos or imprisonment of two years or both at the discretion of the court which penalty shall be imposed on the official(x) of the private school or on any person acting for and in behalf of the school directly responsible for the violation. If the violator is a public official the same penalty shall be imposed without prejudice to any administrative action which may be taken against him.
"SEC. 9. Repealing Clause. — Republic Act No. 6139 is hereby repealed, and all laws, decrees, executive orders, directives and rules and regulations inconsistent herewith are likewise repealed, amended or modified accordingly.
"SEC. 10. Effectivity. — This Decree shall take effect immediately.
"Done in the City of Manila, this 11th day of May, in the year of Our Lord, nineteen hundred and seventy-four."cralaw virtua1aw library
In effect, the problem posed before Us is whether or not the reference in Section 3(a) to "increase in salaries or wages of the faculty and all other employees of the schools concerned" as the first purpose to which the incremental proceeds from authorized increases to tuition fees may be devoted, may be construed to include allowances and benefits. In the negative, which is the position of respondents, it would follow that such allowances must be taken from resources of the school not derived from tuition fees.chanrobles.com : virtual law library
Without delving into the factual issue of whether or not there could be any such other resources, We note that among the items of the second purpose stated in provision in question is return in investment. And the law provides only for a maximum, not a minimum. In other words, the schools may get a return to investment of not more than 12%, but if circumstances warrant, there is no minimum fixed by law which they should get.
On this predicate, We are of the considered view that, if the schools happen to have no other resources to grant allowances and benefits, either mandated by law or secured by collective bargaining, such allowances and benefits should be charged against the return to investments referred to in the second purpose stated in Section 3(a) of P.D. 451.
On the last issue of whether or not the new teachers should benefit from the residue of the incremental proceeds of tuition fee increases authorized before their employment, We see no objection thereto, albeit, as We understand it, the effect of such a ruling will not really affect the schools but rather the members of the faculty and employees already in the service who will necessarily suffer a diminution of their share in such residue, because instead of dividing the same only among themselves, they will have to include the new teachers in the distribution thereof. In other words, We affirm paragraph 3 of the Malacañang decision.
To be sure, it is true that the MEC has heretofore construed and applied P.D. 451 in a manner consistent with Our above rulings, but We hold that it is in the power of the Office of the President to modify, alter or reverse such construction.
IN VIEW OF ALL THE FOREGOING, with the clarifications above set forth, namely, (1) that there is no need for Us to disturb paragraph 1 of the Malacañang decision because it is, after all, not inconsistent with the position of petitioner; (2) that allowances and benefits should be chargeable to the return to investment referred to in the second purpose of Section 3(a), if the schools should happen to have no other resources them incremental proceeds of authorized tuition fee increases, which is a question of fact which can be determined by the proper authorities as controversies may actually arise in relation thereto, and (3) that paragraph 3 of the Malacañang decision is also affirmed, judgment is hereby rendered accordingly.chanrobles virtual lawlibrary
No costs.
Guerrero, and De Castro, JJ., concur.
Aquino, J., took no part.
Concepcion, Jr. and Escolin, JJ., concurs in the result.
Abad Santos, J., concurs in the result in that I vote to deny the petition for lack of merit.
This case involves the implementation of P.D. 451, particularly, paragraph (a) of its Section 3 which provides that:chanrobles virtual lawlibrary
"SEC. 3. Limitations. — The increase in tuition or other school fees or other charges as well as the new fees or charges authorized under the next preceding section shall be subject to the following conditions.:jgc:chanrobles.com.ph
"(a) That no increase in tuition or other school fees or charges shall be approved unless sixty (60%) per centum of the proceeds is allocated for increase in salaries or wages of the members of the faculty and all other employees of the school concerned, and the balance for institutional development, student assistance and extension services, and return to investments: Provided, That in no case shall the return to investments exceed twelve (12%) per centum of the incremental proceeds; and
"(b) That any such increase shall in no case exceed fifteen (15%) per centum of the rates charged during the preceding school year."cralaw virtua1aw library
We are being urged to construe this provision in regard to three controverted points: (1) whether or not allowances and benefits, granted by the universities to the members of the faculty and their other employees, as these may be distinguishable from salaries and wages, may be charged by the university to the 60% of the incremental proceeds from increase in tuition fees they may be authorized by the Ministry of Education and Culture (MEC); (2) similarly, whether or not increase in salaries or wages or any allowances or benefits secured by collective bargaining, in addition to those mandated by other laws, may be charged against said 60% and (3) whether or not newly appointed teachers or employees are entitled to participate in the increases and benefits prior to their appointments.
Upon the filing of the 41-page petition, We required comment from the respondents. Public respondent filed a 40-page comment thru the Solicitor General’s Office and the private respondent filed a 33-page one, with various annexes. To these comments, petitioner filed a reply of 30 pages. With permission of the Court first had, the Philippine Association of Colleges and Universities (PACU) filed its own comment of 27 pages. With the allegations in the petition and the said comment and reply, together with the decisions and resolutions of the Minister of Labor and herein public respondent, all of which were correspondingly included in the agenda, and since both parties insist on an early resolution of this case, We feel there is no further need to prolong the same, hence We have considered the same submitted for decision, assuming the comments of respondents to be their answers.cralawnad
Considering the nature of the issues submitted for Our resolution, We believe it is unnecessary to go into specific factual details as background for this decision. Suffice it to quote in this regard a portion of the following motion of petitioner dated July 14, 1981 asking for extension of time within which to file its petition:jgc:chanrobles.com.ph
"1. Petitioner is a private educational corporation organized and existing under Philippine law, with principal place of business at the UE Campus, C.M. Recto Avenue, Manila; respondent Association is s duly registered union of faculty members with principal place of business at the same address; and respondent official is here impleaded as a formal party, having rendered the Decision end Resolution subject-matter of the certiorari proceedings with petitioner intends to institute before the Honorable Supreme Court;
"2. Petitioner and respondent Association were parties to a conciliation-arbitration case which arose from a deadlock in collective bargaining for the renewal of their collective bargaining agreement for a period, June 1, 1978 to May 31, 1981; the case was docketed by the Office of the Minister of Labor, on June 21, 1979, as Case No. AJML-064-79, jurisdiction over which was assumed by said Office pursuant to Section 10 of PD 823, as amended, a sit-down strike having been staged by members of said Association at the time;
"3. In a Decision dated July 2, 1979, the Office of the Minister of Labor held, among others, as follows:chanrob1es virtual 1aw library
‘. . . Balancing, on the one hand, the interest of the faculty and the financial difficulties of the University, on the other, and after consultations with the parties during which issues were identified, attempts at effecting voluntary settlement made and counter-arguments heard, the following are hereby ordered as the full, complete, and final settlement of all pending issues in the current deadlock in collective bargaining negotiations between the University of the East Faculty Association (UEFA) and the University of the East:chanrob1es virtual 1aw library
‘1. On the issue of Across-the-Board Wage Increase:chanrob1es virtual 1aw library
a) P1.30 per hour across-the-board increase or its equivalent for monthly-paid faculty members chargeable to the incremental proceeds from the 1979 tuition fee increase under PD 451;
b) Participation in the residue of the 1979 tuition fee increase (within the 60%); and
c) Participation in the 60% incremental proceeds of subsequent tuition fee increases under PD 451 during the contract period.
d) Incorporation as part of the basic salary rate of the following:chanrob1es virtual 1aw library
1) 10% of 1974 salary rate (PD 451);
2) P1.00 — 1976 PD 451;
3) P1.00 — 1977 PD 451; and
4) P0.30 — wage supplement.
x x x
"4. Acting on the UEFA’s motion for reconsideration and the UE’s motion for clarification, the Office of the Minister of Labor, by Resolution dated August 3, 1979, disposed as follows:chanrob1es virtual 1aw library
‘IN VIEW OF THE FOREGOING, the motion for reconsideration of the Decision dated 2 July 1979, filed by the UEFA, should be, as it is hereby denied and the part of the Decision directing the incorporation of the four wage increments as part of the basic salary rate is hereby clarified as follows: (a) the incorporation Order shall apply only to faculty members who have been receiving the increments as of 1 June 1978, (b) the salary scales in the collective bargaining agreement shall be revised by adding the across-the-board increase of P1.30 per hour, or its monthly equivalent, to the existing salary rates therein, and (c) the salary increments shall be included in computing compensation for all teaching loads and in determining the amount of related fringe benefits of the faculty members concerned.’
"5. Invoking various statutory, constitutional and jurisdictional grounds, the UEFA appealed to the Office of the President on August 21, 1979, or some fourteen calendar days after its receipt of the Resolution of August 3, 1979; its main complaint, however, was directed against the MOL ruling that the across-the-board salary increase of P1.30 per hour was chargeable against the 60% incremental proceeds from tuition-fee increase granted in 1979 under PD 451;
"6. While the appeal was pending with Malacañang, another strike was staged by the faculty members, causing Malacañang and the Ministry of Labor to convoke an extraordinary conciliation conference which resulted in the following written agreement dated November 16, 1979:chanrob1es virtual 1aw library
‘The undersigned parties hereby agree to the following:chanrob1es virtual 1aw library
‘1. The UEFA accepts the award of the Minister of Labor in this case of P1.30 per hour salary increase or its equivalent for monthly-paid teachers chargeable to the 1979 incremental proceeds under PD 451 and it shall, therefore, be implemented immediately retroactive to June 1, 1978 in accordance with the award.
‘2. All other matters in connection with this case are deemed submitted for decision by the Office of the President.
‘3. The parties commit to maintain stable and normal employer-employee relations and not to take retaliatory actions against each other.’
"7. After the parties had filed additional memoranda, the Office of the President rendered a Decision, dated July 24, 1980, consisting of 49 pages, and disposing as follows:chanrob1es virtual 1aw library
‘In view of the foregoing, the appealed decision and resolution are hereby affirmed with the modifications and clarifications indicated above.’
In substance, the lengthy perorations in the Decision contained findings of facts and conclusions of law the more important of which were: that UE had no sufficient funds to justify UEFA ‘s demand for salary increases other than the P1.30 per hour granted in the MOL decision; that the said award should, however, be construed as a mere advance or partial payment of the faculty’s share in the incremental proceeds (60%) from the 1979 tuition-fee increases under PD 451 and not as a salary increase resulting from collective bargaining; and that schools cannot legally charge against the 60% incremental proceeds mandated allowances and fringe benefits for teaching and non-teaching personnel, despite the fact that the implementing rules promulgated by the Ministry of Education and Culture expressly authorized such charging;
"8. Present petitioner thereafter filed, on the last day of the extension period granted by Malacañang, a motion for partial reconsideration of the Decision; upon the other hand, respondent UEFA filed a series of motions for execution which were duly opposed by present petitioner; however, on December 29, 1980, or some 112 days after its receipt of the Malacañang decision, respondent UEFA in an apparent turnabout filed a motion for reconsideration of the decision and for admission of what it described as newly-discovered evidence, which present petitioner likewise opposed.
"9. On July 13, 1981, present petitioner received by registered mail copy of a Resolution dated June 26, 1981, covering 34 pages, and with a lengthy dispositive portion which reads:chanrob1es virtual 1aw library
‘IN VIEW OF THE FOREGOING, the motions of both parties for partial reconsideration of the decision of this Office dated July 24, 1980, and the motion of the University of the East for a restraining order, are all hereby denied for lack of merit, and the said decision reiterated and declared final and executory, as modified or clarified as follows:chanrob1es virtual 1aw library
‘1. That the award of the P1.30 salary increase, as modified by the Agreement of the Parties of November 16, 1979, should, from June 1, 1978 to May 31, 1979, be treated as resulting from the collective bargaining negotiation; and that for the succeeding schoolyears, the said salary increase together with the amount corresponding to a faculty members’ share in the ‘residue’ of the 60% incremental proceeds from the 1979-approved tuition fee increases under Presidential Decree No. 451, should be treated as being in full compliance with the said Decree;
‘2. That, in determining the amount of the aforesaid ‘residue’, decreed emergency allowances, 13th month pay, service incentive leave benefits, other employees’ statutory benefits, retirement cost and benefits, faculty development expenses and other expenses on matters properly falling under the second purpose mentioned in Section 3)a) of PD 451 (institutional services), employer’s SSS/Medicare/SIF (state insurance fund) contributions and other employer’s statutory obligations, and other employees’ fringe benefits, should not be deducted from or charged against the 1979 50% incremental proceeds under PD 451;
‘3. That new teachers, whether replacement or additional, should be allowed to share or participate in the 60% incremental proceeds from the 1974, 1976 and 1977 and/or 1979-approved tuition fee increases under PD 451 assessed and collected in the school-year of their employment and every school-year thereafter during the period of their employment as such; and
‘4. That the appealed decision as modified or clarified by the Inciong resolution of August 3, 1979, includes an order for the payment of the shares of the members of the University of the East Faculty Association in the 60% incremental proceeds from the 1980-approved tuition fee increases under PD 451.
‘Accordingly, UEFA’s motions for execution of the appealed decision of July 2, 1979, as modified or clarified by the Inciong resolution of August 3, 1979 and by the Agreement of the Parties of November 16, 1979, and as affirmed by the decision of this Office of July 24, 1980 with the modifications or clarifications indicated above, are hereby granted insofar as they relate to the above and to the awards and orders in the appealed decision not adversely affected by the said modifications or clarifications; and are denied with respect to the payment of alleged residues of the 60% incremental proceeds from the 1974; 1976 and 1977-approved tuition fee increases under PD 451.
‘The parties are hereby directed to renegotiate on UEFA’s demand for an additional across-the-board salary increase separate and distinct from the salary increase provided for under PD 451, based or UE’s operational incomes subsequent to schoolyear 1978-79.
‘The appropriate authorities below are hereby directed to conduct the necessary execution proceedings.
‘SO ORDERED.’" (Pp. 2-7, Record)
As can be gleaned from the pleadings of the parties, only the three issues aforestated are the main bones of contention between them. And to avoid unnecessary prolixity, We are going to resolve said issues mainly in general terms by going to the fundamental points directly.chanrobles lawlibrary : rednad
To make matters clearer, as may be observed from the last resolution of public respondent, importantly, whereas in his original decision, it was held that although the P1.30 per hour increase awarded the members of private respondent is chargeable to the faculty’s share in the incremental proceeds (60%) from the 1979 tuition fee increase under P.D. 451, the same should not be considered" as a salary increase resulting from collective bargaining", in the said later resolution, now under review, it was clarified "1. That the award of P1.30 salary increase, as modified by the Agreement of the Parties of November 16, 1979, should, from June 1, 1978 to May 31, 1979, be treated as resulting from the collective bargaining negotiation, and that for the succeeding school years, the said salary increase together with the amount corresponding a faculty member’s share in the ‘residue’ of the 60% incremental proceeds from the 1979-approved tuition fee increase under Presidential Decree No. 451, should be treated as being in full compliance with said decree."cralaw virtua1aw library
We are underscoring such modification because as We see it, it settles the second main issue. We have stated at the outset as to whether or not increase of salaries or wages or allowances or benefits secured by collective bargaining may be charged against the incremental proceeds (60%) under P.D. 451. We read the latest Malacañang decision to mean that increase of salaries even those secured by collective bargaining may be charged to the 60% incremental proceeds of MEC authorized tuition fee increases. That is precisely the stand of petitioner. With that point thus settled, We can now proceed to the other two issues.
It will be recalled that in the public respondent’s decision We are scrutizining, it was held that:jgc:chanrobles.com.ph
"2. That, in determining the amount of the aforesaid ‘residue’, decreed emergency allowances, 13th month pay, service incentive leave benefits other employees’ statutory benefits, retirement cost and benefits, faculty development expenses (and other expenses on matters properly falling under the second purpose mentioned in Section 3(a) of PD 451 (institutional services), employer’s SSS/Medicare/SIF (state insurance fund) contributions and other employer’s statutory obligations and other employees’ fringe benefits, should not be deducted from or charged against the 1979 60% incremental proceeds under PD 451;"
It is, of course, understandable and correct that in determining the "residue" of the incremental proceeds covered by the first purpose stated in paragraph (a) of Section 3 of P.D. 451, "matters properly falling under the second purpose" of said paragraph should not be deducted from or charged against the 1979 60% incremental proceeds under P.D. 451." That is clear enough from the letter of the provision itself. The issue is from or against what the other items specified in the abovequoted paragraph of respondent’s decision may be deducted or charged against.
In this connection, it can be readily seen in the provision in question that there are only two purposes to which the incremental proceeds from increase of tuition fees authorized by the Ministry of Education and Culture may be dedicated or devoted, namely; (1) "increase in salaries or wages of the members of the faculty and all other employees of the school concerned" and (2) "institutional development, student assistance and extensions of services, and return of investments;" provided the latter shall not exceed twelve (12%) per centum of the incremental proceeds. Resultingly, in none of the two purposes stated in the provision in question are the disputed items referred to provided for. And so, to reiterate, the question is, from and against what may they be taken or charged?chanrobles law library
At first glance, it would seem then that said items, which for short We shall refer to as "allowances and fringe benefits," must be taken by the educational institution concerned from funds or resources other than the incremental proceeds of MEC authorized tuition fee increases. But is that what is contemplated by P.D. 451? Stated otherwise, does P.D. 451 assume that private educational institutions have sources of funds other than the proceeds from increase of tuition fees from where they may award allowances and fringe benefits, whether voluntary, mandated by law or secured by collective bargaining?
In ascertaining what indeed was the perspective of P.D. 451 in this regard, it is imperative that We go into a review of the circumstances surrounding the issuance and implementation thereof as well as the actual financial situation of private educational institution in the whole country, who carry at least, on the tertiary level about 85% of the burden of providing educational opportunities to our people, bearing in mind that it is evidently beyond the capability of the government to maintain whether on a free or paying basis more than it can at present. In other words, the purpose of Our inquiry is to determine if the financial state of our private educational institutions can afford to give allowances and benefits, apart from increase in salaries and wages, to its faculty members and all other employees, without depending therefor on increase of tuition fees, and that P.D. 451 is predicated on the assumption that they can.
Historically, P.D. 451, as stated in its title is an amendment of Republic Act 6139 approved on August 31, 1970. But that law had an entirely opposite objective. As Section 1 thereof put it, "it is hereby declared the policy of this Act to regulate tuition and other fees charged by private schools in order to discourage the collection of exhorbitant and unreasonable fees." For, indeed, before the passage of said law, the unbridled discretion of private school owners to charge tuition fees practically converted the running of private educational institutions into a lucrative business that made tertiary education difficult, if not beyond the means of even the middle income sector of our people. The government had to see to it that tuition and other fees be controlled to afford educational opportunities to all levels of our people.
But under R.A. 6139, the procedure for regulation of the amount of tuition fees was tedious and cumbersome, inasmuch as pursuant thereto any increase in tuition fees had to be arrived at by consensus among all the parties concerned. the students, the school owners and the government. Thus, by way of illustration, Section 3 thereof provided:jgc:chanrobles.com.ph
"SEC. 3. Any private educational institution proposing to increase the tuition and/or other fees being charged and/or collected by it for any course shall adopt the following procedure:jgc:chanrobles.com.ph
"(a) At least 180 days before the school year, semester, or term in which the increase is to be effective, it shall serve written notice thereof on the student council or government, or in case of schools or courses below the college or university level, on the Association of Parents, or in default thereof, the Parents-Teachers Association of the school concerned.
"Likewise, notice of such proposal shall be sent by personal delivery or registered mail to the Director of Private Schools, copy furnished the Regional Superintendent of the Bureau of Private Schools. Appropriate circulars containing the proposal shall be posted by the school administration in at least two conspicuous place within the premises of the school concerned.
"The notice of the proposal to increase shall, among other things, state the following: (1) the current fees or charges and the amount of increase (2) the reason or reasons for the proposed increase (3) the semester, term or school year in which the increase is proposed to take effect, and (4) a statement that if no opposition is filed until the thirtieth day from the posting of the notice, the increase shall become effective under this Act.
"(b) If after such notice is made, a formal opposition against such increase is presented to the school administration within thirty days after receipt of said notice by at least a majority of the student governing body or at least twenty per cent of the parents, in case of schools below college or university level, then the Local School Council on Fees herein created shall be convened to act on the controversy. Copy of said opposition shall be served on the Director of Private Schools who shall immediately, upon receipt, transmit said opposition to the corresponding Regional Superintendent of private schools and direct that the Local School Council on Fees be immediately organized and convened by said Regional Superintendent.
If no opposition is filed within the period above provided, the increase shall be deemed authorized.
"The Local School Council on Fees shall be composed of the following: (1) one representative from the school administration to be chosen by the school concerned; (2) two representatives from the student body to be chosen by the student council, or student government, or two representatives from the Association of Parents or in default thereof, the Parents-Teachers Association in case of schools below the college or university level to be chosen by the said association; (3) one representative from the Faculty Club or Association; and (4) the Director of Private Schools or his authorized representative in the area who will act as Chairman. While sitting as a Board and in aid of its function, said Board may issue subpoenas to compel attendance of witnesses, may administer oaths, may examine any person under oaths and may require the production of any books or papers relevant to the case.
"(c) The Local School Council on Fees shall exert all efforts to negotiate, conciliate, and settle the case to the satisfaction of the interested parties. The terms of settlement agreed upon by the parties shall be final and binding, and copies of such settlement shall be sent to the Director of Private Schools and the Regional Superintendent of the Bureau of Private Schools. In the event all intra-school remedies for amicable settlement have been exhausted, and no agreement has been reached, then the said Council, by a majority vote, shall decide the case at least one hundred days before the opening of the school year, semester or term in which the proposed increase is to be effected. Its decision shall take into account the objectives of all schools as provided for in Article XIV, Section five of the Constitution, the sufficiency of facilities, the nature of courses and curriculum offered, the standard maintained, the volume of enrolment, the sufficiency of faculty development program and emoluments, facilities and student conveniences installed and others, in relation to the general cost by determining the cost of essential services to be rendered to the students in the quantity and quality required to meet the standards approved by the Department of Education and by allowing a maximum of twelve per cent on net worth: Provided, however, That unless required by extraordinary circumstances or events, no school, college or university shall increase annual tuition fees by more than fifteen per cent of the fees collected in the preceding school year.
"The decision shall be in writing and shall contain a concise statement of the facts and the grounds on which the decision is based."cralaw virtua1aw library
Needless to state, that law alleviated the situation for all concerned to a certain degree.chanrobles law library : red
Now, after the proclamation of martial law and the establishment of the New Society, the conditions appear to have drastically changed. In 1974, while evidently scanning the various aspects of development of the national welfare and the social conditions of our people and trying to assess the achievements up to then of the New Society, His Excellency, President Ferdinand E. Marcos, must have trained his eyes on the educational field. He must have asked the Ministry of Education to furnish him with a full report and its recommendations thereon. And after going over and studying the papers submitted to him, the President came to the conclusion that:jgc:chanrobles.com.ph
"Private schools, colleges and universities have been faced with increasingly serious problems arising from decreasing incomes due to slump in emolument and increasing operational costs brought about by the rise in prices of instructional materials and educational, as well as allied services;
"It is imperative that private educational institutions upgrade classroom instruction by improving their facilities and hiring competent teachers in all levels of education, provide salary and or wage increases and other benefits to their teaching, administrative and other personnel to keep up with the increasing costs of living;
"The procedure prescribed under R.A. No. 6139 for the increase of tuition and other school fees has been proved to be too cumbersome and time-consuming, and is not conducive to the growth and improvement of private educational institutions and the well-being of their employees, particularly those in the lower income groups,"
and found that "in order to alleviate the sad plight of private schools, their personnel and all those directly and indirectly dependent on school incomes it is advisable and necessary that the cumbersome and time-consuming procedures fixed under Republic Act No. 6139 for increasing tuition fees be simplified without opening the flood-gates to abuse of the right to increase tuition and other school fees." (Preamble, P.D. 451).
Finally, he saw no alternative but to issue P.D. 451 which We hereby quote integrally:jgc:chanrobles.com.ph
"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution do hereby decree and order the following as part of the law of the land:jgc:chanrobles.com.ph
"SECTION 1. Authority of Secretary of Education and Culture. — Within the limits and under the circumstances set forth in this Decree, the Secretary of Education and Culture shall have the authority to regulate the imposition of tuition and other school fees or charges by any and all private schools as defined under Act Numbered Two thousand seven hundred and six, as amended. No changes in the rates of tuition or other school fees or charges shall be effective without the prior approval of the Secretary of Education and Culture. New school fees or charges to be imposed by new or existing schools, whether for new courses or other matters, shall be at such reasonable rates as may be determined by the Secretary of Education and Culture based on the standard of such school.
"SEC. 2. Application and Documents Required. — Any private school which desires to revise its rates of tuition or other school fees or charges or to impose other fees or charges shall file application therefor with the Secretary of Education and Culture. The application shall include:jgc:chanrobles.com.ph
"(a) Statement of the itemized current rates of tuition and other charges and the corresponding itemized proposed changes thereon, as well as the new fees or charges proposed to be imposed, and of the proposed allocation of the incremental proceeds in accordance with Section 3(a) hereof. Such statements shall, when accomplished be under oath by the proper official(s) of the school concerned;
"(b) Financial statement showing the financial status of the school duly certified by a certified public accountant;
"(c) A copy of the last tax return, where required, filed with the Bureau of Internal Revenue.
"SEC. 3. Limitations. — The increase in tuition or other school fees or other charges as well as the new fees or charges authorized under the next preceding section shall be subject to the following conditions:jgc:chanrobles.com.ph
"(a) That no increase in tuition or other school fees or charges shall be approved unless sixty (60%) per centum of the proceeds is allocated for increase in salaries or wages of the members of the faculty and all other employees of the school concerned, and the balance for institutional development, student assistance and extension services, and return to investments: Provided, That in no case shall the return to investments exceed twelve (12%) per centum of the incremental proceeds; and
"(b) That any such increase shall in no case exceed fifteen (15%) per centum of the rates charged during the preceding school year.
"SEC. 4. Rules and Regulations. — The Secretary of Education and Culture is hereby authorized, empowered and directed to issue the requisite rules and regulations for the effective implementation of this Decree. He may, in addition to the requirements and limitations provided for under Sections 2 and 3 hereof, impose other requirements and limitations as he may deem proper and reasonable.
"SEC. 5. Prohibitions. — No school administration or office or division thereof shall hold or sponsor any benefit performance, movies, concerts, dramatic presentation, games and/or shows of whatever kind or nature whether for charity or otherwise. Any such act on the part of the school administration or office or division thereof shall be considered a circumvention of this law and shall be sufficient cause for the cancellation of the approval of any previous increase in tuition or other school fees and shall subject the school official concerned to such disciplinary action as the Secretary of Education and Culture may deem proper including the revocation on any degree conferred by authority of the Government.
"SEC. 6. Review of Financial Statements. — Financial statements submitted in accordance with the provisions of Section 2 hereof may be reviewed by the Commission on Audit at the instance of the Secretary of Education and Culture whenever he believes that the same is necessary for verification purposes. For this purpose, the Commission on Audit is authorized to examine the pertinent books and records of the school concerned.
SEC. 7. Additional Scholarships. — As a further condition to any grant of increase in tuition or other school fees, private schools with a total enrolment of at least one thousand, are hereby required to provide free scholarships to poor but deserving students at the ratio of one (1) free scholarship for every five hundred (500) pupils/students enrolled: Provided, That this requirement shall be exclusive of the present practice of private schools offering scholarship privileges to valedictorians and salutatorians and other pupils/students who have achieved scholastic distinctions. Neither shall other forms of scholarships such as those offered to athletes and working students be included in arriving at the proper number of poor but deserving pupils/students to be given free scholarships.
"SEC. 8. Penal Clause. — Any violation of the provisions of this Decree of the rules or regulations promulgated pursuant thereto or any final decision made by the Secretary of Education and Culture shall be punishable by a fine of five thousand (P5,000.00) pesos or imprisonment of two years or both at the discretion of the court which penalty shall be imposed on the official(x) of the private school or on any person acting for and in behalf of the school directly responsible for the violation. If the violator is a public official the same penalty shall be imposed without prejudice to any administrative action which may be taken against him.
"SEC. 9. Repealing Clause. — Republic Act No. 6139 is hereby repealed, and all laws, decrees, executive orders, directives and rules and regulations inconsistent herewith are likewise repealed, amended or modified accordingly.
"SEC. 10. Effectivity. — This Decree shall take effect immediately.
"Done in the City of Manila, this 11th day of May, in the year of Our Lord, nineteen hundred and seventy-four."cralaw virtua1aw library
In effect, the problem posed before Us is whether or not the reference in Section 3(a) to "increase in salaries or wages of the faculty and all other employees of the schools concerned" as the first purpose to which the incremental proceeds from authorized increases to tuition fees may be devoted, may be construed to include allowances and benefits. In the negative, which is the position of respondents, it would follow that such allowances must be taken from resources of the school not derived from tuition fees.chanrobles.com : virtual law library
Without delving into the factual issue of whether or not there could be any such other resources, We note that among the items of the second purpose stated in provision in question is return in investment. And the law provides only for a maximum, not a minimum. In other words, the schools may get a return to investment of not more than 12%, but if circumstances warrant, there is no minimum fixed by law which they should get.
On this predicate, We are of the considered view that, if the schools happen to have no other resources to grant allowances and benefits, either mandated by law or secured by collective bargaining, such allowances and benefits should be charged against the return to investments referred to in the second purpose stated in Section 3(a) of P.D. 451.
On the last issue of whether or not the new teachers should benefit from the residue of the incremental proceeds of tuition fee increases authorized before their employment, We see no objection thereto, albeit, as We understand it, the effect of such a ruling will not really affect the schools but rather the members of the faculty and employees already in the service who will necessarily suffer a diminution of their share in such residue, because instead of dividing the same only among themselves, they will have to include the new teachers in the distribution thereof. In other words, We affirm paragraph 3 of the Malacañang decision.
To be sure, it is true that the MEC has heretofore construed and applied P.D. 451 in a manner consistent with Our above rulings, but We hold that it is in the power of the Office of the President to modify, alter or reverse such construction.
IN VIEW OF ALL THE FOREGOING, with the clarifications above set forth, namely, (1) that there is no need for Us to disturb paragraph 1 of the Malacañang decision because it is, after all, not inconsistent with the position of petitioner; (2) that allowances and benefits should be chargeable to the return to investment referred to in the second purpose of Section 3(a), if the schools should happen to have no other resources them incremental proceeds of authorized tuition fee increases, which is a question of fact which can be determined by the proper authorities as controversies may actually arise in relation thereto, and (3) that paragraph 3 of the Malacañang decision is also affirmed, judgment is hereby rendered accordingly.chanrobles virtual lawlibrary
No costs.
Guerrero, and De Castro, JJ., concur.
Aquino, J., took no part.
Concepcion, Jr. and Escolin, JJ., concurs in the result.
Abad Santos, J., concurs in the result in that I vote to deny the petition for lack of merit.
