Eileen Eika M.

Dela Cruz

POLITICAL LAW

G.R. No. 181704

BUREAU OF CUSTOMS EMPLOYEES ASSOCIATION (BOCEA),
represented by its National President (BOCEA National Executive Council) Mr. Romulo A.
Pagulayan, Petitioner,
vs.
HON. MARGARITO B. TEVES, in his capacity as Secretary of the Department of Finance,
HON. NAPOLEON L. MORALES, in his capacity as Commissioner of the Bureau of Customs,
HON. LILIAN B. HEFTI, in her capacity as Commissioner of the Bureau of Internal
Revenue, Respondents.

Facts:
On January 25, 2005, Pres. GMA signed RA 9335 or Attrition Act 2005 (an act to improve the
revenue collection performance of the bureau of internal revenue and the bureau of customs
through the creation of a rewards and incentives fund, a revenue performance evaluation board
and for other purposes). The rewards and incentives funds source will be from the collection of
the BIR and the BOC in excess of their revenue targets for the year, as determined by the
Development Budget and Coordinating Committee. Any incentive or reward will be taken from
the fund and allocated to the BIR and the BOC in proportion to their contribution of excess
collection from their targeted tax revenue. Petitioners contended that the said act is clouded with
constitutional issues which would be in violation of the fundamental rights of the BOC
Employees Association members. In 2008, high-ranked officials of the BIR and the BOC had
their lower ranked and rank and file employees to sign performance contracts pursuant to RA
9335 and its IRR. BOC Employees Association said that the revenue target was impossible to
meet due to the Governments own policies on reduced tariff rates and tax breaks to big
businesses, the occurrence of natural calamities and because of other economic factors. They also
claimed that some employees were coerced to sign the performance contracts: they were
threatened that if they do not sign, they would face possible reassignment, reshuffling, or
worse, be placed on floating status. On March 3, 2008 a petition was filed by the BOC
Employees Association about the unconstitutional effects of RA 9335 and its IRR.
Issues: Whether there was undue delegation of legislative power to the board; Whether RA 9335
and its IRR violated the rights of the members of the BOC Employees Association to equal
protection of laws, security of tenure and due process; Whether the Act was a Bill of Attainder

Eileen Eika M. Dela Cruz

POLITICAL LAW

Held:
There was no undue delegation of legislative power. The court holds that it is doubtful that the
legislature can promulgate laws that will deal adequately with and respond promptly to the
intricacies of everyday life. Herein arises the need for delegation to administrative bodies. All
that is needed for the valid exercise of subordinate legislation is that the regulation be relevant to
the objects and purposes of the law and that the regulation not be in contradiction to and is within
standards prescribed by law. To check if a law is valid, two tests must be done: the completeness
test and the sufficient standard test. For the former, a law is complete when it states the policy to
be executed or carried out by the delegate. For the latter test, a law has sufficient standard when
it provides enough guidelines and limitations that will state the limits of the delegates authority,
announces the legislative policy and identifies the conditions it should be implemented under.
These are the recognized sufficient standards by the court: public interest, justice and equity,
public convenience and welfare and simplicity, economy and welfare. The court declares that the
act is infused with public interest. It also finds that the act is complete in all its essential terms
and conditions and also contains sufficient standard.
The Act did not violate the right to equal protection. RA 9335 deals with the optimization of the
revenue-generation capability and collection of the BIR and BOC. The law is concerned with
only this two agencies because they both have the primary function of generating revenues for
the government through tax, customs duties, fees and charges collection. The Act did not violate
the right to secure tenure (employee cant be dismissed from causes other than those provided by
law and only after due process is given to the employee) of BIR and BOC employees. Under RA
9335 the court saw that the condition for removal is reasonable, which is: if the collection falls
7.5% below target, but other than this, all relevant factors regarding the collection is also taken
into account. The action for removal is subject to civil service laws, rules and regulations and
compliance with substantive and procedural due process. The issue about due process is also
answered by sec 7 of RA 9335. An employee of the agencies concerned is not just simply given a
target but is also given consideration for all factors that might affect collection. The employees
right to be heard and to appeal is not taken from him or her which doesnt take the right to due
process.

Eileen Eika M. Dela Cruz

POLITICAL LAW

RA 9335 is not a bill of attainder because it does not seek to inflict punishment which is an
essential element. The essential elements of a bill of attainder are specification of an individual
or a group of individuals, imposition of punishment (penal or otherwise) and the lack of judicial
trial. RA 9335 only lays down grounds for termination, it still follows constitutional rights and
processes are still recognized and followed.