G.R. No. 92174 December 10, 1993 BOIE-TAKEDA CHEMICALS, INC., Petitioner, vs. HON.

DIONISIO DE LA SERNA, Acting Secretary of the Department of Labor and Employment, FACTS: Presidential Decree No. 851, the Thirteenth Month Pay Law, defines defines "Basic Salary" as which shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost of living allowances profit sharing payments, and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee. While on the, Revised Guidelines on the Implementation of the 13th Month Pay Law promulgated by then Labor Secretary Franklin Drilon included the these salary-related benefits as part of the basic salary in the computation of the 13th month pay. Petitioners in this case were ordered to pay their employees due to underpayment of 13th month pay pursuant to the Revised Guidelines. Petitioners contended however under P.D. 851, the 13th month pay is based solely on basic salary. As defined by the law itself and clarified by the implementing and Supplementary Rules as well as by the Supreme Court in a long line of decisions, remunerations which do not form part of the basic or regular salary of an employee, such as commissions, should not be considered in the computation of the 13th month pay. This being the case, the Revised Guidelines on the Implementation of the 13th Month Pay Law issued by then Secretary Drilon providing for the inclusion of commissions in the 13th month pay, were issued in excess of the statutory authority conferred by P.D. 851. ISSUE: Whether or not the Revised Guidelines on the Implementation of the 13th Month Pay Law issued by then Secretary Drilon providing for the inclusion of commissions in the 13th month pay, were issued in excess of the statutory authority conferred by P.D. 851 DECISION: In including commissions in the computation of the 13th month pay, the second paragraph of Section 5(a) of the Revised Guidelines on the Implementation of the 13th Month Pay Law unduly expanded the concept of "basic salary" as defined in P.D. 851. It is a fundamental rule that implementing rules cannot add to or detract from the provisions of the law it is designed to implement. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law they are intended to carry into effect. They cannot widen its scope. An administrative agency cannot amend an act of Congress.

G.R. No. 131082 June 19, 2000 ROMULO, MABANTA, BUENAVENTURA, SAYOC & DE LOS ANGELES, Petitioner, v. HOME DEVELOPMENT MUTUAL FUND, Respondent. FACTS: Pursuant to Section 19 of P.D. No. 1752, as amended by R.A. No. 7742, petitioner, a law firm, was exempted for the period 1 January to 31 December 1995 from the Pag-IBIG Fund coverage by respondent Home Development Mutual Fund (hereafter HDMF) because of a superior retirement plan. On 1 September 1995, the HDMF Board of Trustees, pursuant to Section 5 of Republic Act No. 7742, issued Board Resolution No. 1011, Series of 1995, amending and modifying the Rules and Regulations Implementing R.A. No. 7742. As amended, Section 1 of Rule VII provides that for a company to be entitled to a waiver or suspension of Fund coverage, it must have a plan providing for both provident/retirement and housing benefits superior to those provided under the Pag-IBIG Fund. PETITIONER then filed with the respondent an application for Waiver or Suspension of Fund Coverage because of its superior retirement plan. The President and Chief Executive Officer of HDMF disapproved PETITIONER's application on the ground that the requirement that there should be both a provident retirement fund and a housing plan is clear in the use of the phrase "and/or," and that the Rules Implementing R.A. No. 7742 did not amend nor repeal Section 19 of P.D. No. 1752 but merely implement the law. ISSUE: Whether or not in promulgating the amendments to the rules and regulations which require the existence of a plan providing for both provident and housing benefits for exemption from the Fund Coverage, the respondent Board was merely exercising its rule-making power under Section 13 of P.D. No. 1752. DECISION: HDMF Board has rule-making power as provided in Section 51 of R.A. No. 7742 and Section 13 of P.D. No. 1752. However, it is well-settled that rules and regulations, which are the product of a delegated power to create new and additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative agency. It is required that the regulation be germane to the objects and purposes of the law, and be not in contradiction to, but in conformity with, the standards prescribed by law. In the present case, when the Board of Trustees of the HDMF required in Section 1, Rule VII of the 1995 Amendments to the Rules and Regulations Implementing R.A. No. 7742 that employers should have both provident/retirement and housing benefits for all its employees in order to qualify for exemption from the Fund, it effectively amended Section 19 of P.D. No. 1752. And when the Board subsequently abolished that exemption through the 1996 Amendments, it repealed Section 19 of P.D. No. 1752. Such amendment and subsequent repeal of Section 19 are both invalid, as they are not within the delegated power of the Board.

The HDMF cannot, in the exercise of its rule-making power, issue a regulation not consistent with the law it seeks to apply. Indeed, administrative issuances must not override, supplant or modify the law, but must remain consistent with the law they intend to carry out. 21 Only Congress can repeal or amend the law.

G.R. No. 143596 : December 11, 2003 JUDGE TOMAS C. LEYNES, Petitioner, v. THE COMMISSION ON AUDIT (COA), HON. GREGORIA S. ONG, DIRECTOR, COMMISSION ON AUDIT and HON. SALVACION DALISAY, PROVINCIAL AUDITOR, Respondents FACTS: Petitioner Judge Tomas C. Leynes, was formerly assigned to the Municipality of Naujan, Oriental Mindoro as the sole presiding judge of the Municipal Trial Court thereof. On May 7, 1993, the Sangguniang Bayan of Naujan, unanimously approved Resolution No. 101 increasing petitioner judges monthly allowance fromP944 to P1,600 starting May 1993. On February 17, 1994, Provincial Auditor Salvacion M. Dalisay sent a letter to the Municipal Mayor and the Sangguniang Bayan of Naujan directing them to stop the payment of the P1,600 monthly allowance or RATA to petitioner judge and to require the immediate refund of the amounts previously paid to the latter. She opined that the Municipality of Naujan could not grant RATA to petitioner judge in addition to the RATA the latter was already receiving from the Supreme Court. The COA Regional Director Gregoria S. Ong upheld the opinion of Provincial Auditor Dalisay and who added that Resolution No. 101, Series of 1993 of the Sangguniang Bayan of Naujan failed to comply with Section 3 of Local Budget Circular No. 53 dated September 1, 1993 outlining the conditions for the grant of allowances to judges and other national officials or employees by the local government units. Petitioner judge, on the other hand, asserts that the municipality is expressly and unequivocally empowered by RA 7160 the Local Government Code of 1991 to enact appropriation ordinances granting allowances and other benefits to judges stationed in its territory. Section 447 of the Local Government Code of 1991 imposes only one condition, that is, when the finances of the municipal government allow. Petitioner also asserts that the DBM cannot amend or modify a substantive law like the Local Government Code of 1991 through mere budget circulars. Petitioner emphasizes that budget circulars must conform to, not modify or amend, the provisions of the law it seeks to implement. ISSUE: Whether or not DBM can amend or modify a substantive law like the Local Government Code of 1991 through mere budget circulars DECISION: It is elementary in statutory construction that an administrative circular cannot supersede, abrogate, modify or nullify a statute. A statute is superior to an administrative circular, thus the Local Budget Circular issued by the Department of Budget outrightly prohibiting local government Units from granting allowances to judges whenever such allowances are also granted by the national government, violates Section 447 of the Local Government Code. In the present case, NCC No. 67, being a mere administrative circular, cannot repeal a substantive law like RA 7160.

G.R. No. 108358 January 20, 1995 COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. THE HON. COURT OF APPEALS, R.O.H. AUTO PRODUCTS PHILIPPINES, INC. and THE HON. COURT OF TAX APPEALS, respondents. FACTS: Executive Order No. 41 was promulgated declaring a one-time tax amnesty on unpaid income taxes, later amended to include estate and donor's taxes and taxes on business, for the taxable years 1981 to 1985. Availing itself of the amnesty, respondent R.O.H. Auto Products Philippines, Inc., filed, in October 1986 and November 1986, its Tax Amnesty Return No. 34-F00146-41 and Supplemental Tax Amnesty Return No. 34-F-00146-64-B, respectively, and paid the corresponding amnesty taxes due. Prior to this availment, petitioner Commissioner of Internal Revenue, assessed the respondent deficiency income and business taxes for its fiscal years ended 30 September 1981 and 30 September 1982 in an aggregate amount of P1,410,157.71. The taxpayer wrote back to state that since it had been able to avail itself of the tax amnesty, the deficiency tax notice should forthwith be cancelled and withdrawn. The request was denied by the Commissioner, on the ground that Revenue Memorandum Order No. 4-87, dated 09 February 1987, implementing Executive Order No. 41, had construed the amnesty coverage to include only assessments issued by the Bureau of Internal Revenue after the promulgation of the executive order on 22 August 1986 and not to assessments theretofore made. ISSUE: Whether or not revenue Memorandum Order No. 4-87 promulgated to implement Executive Order No 41 is valid DECISION: No, Memorandum Order No. 4-87 promulgated to implement Executive Order No 41 is not valid. The authority of the Minister of Finance (now the Secretary of Finance), in conjunction with the Commissioner of Internal Revenue, to promulgate all needful rules and regulations for the effective enforcement of internal revenue laws cannot be controverted. Neither can it be disputed that such rules and regulations, as well as administrative opinions and rulings, ordinarily should deserve weight and respect by the courts. Much more fundamental than either of the above, however, is that all such issuances must not override, but must remain consistent and in harmony with, the law they seek to apply and implement. Administrative rules and regulations are intended to carry out, neither to supplant nor to modify, the law.