Interpretation of Certain Provisions of RA 9728 (Freeport Area of Bataan Act of 2009) and Its IRR

DOJ OPINION NO. 045 , s. 2010 October 7, 2010 Hon. Justo Porfirio Ll. Yusingco Deputy Director General Philippine Economic Zone Authority Roxas Boulevard corner San Luis Street Pasay City Dear Hon. Yusingco : This has reference to your request for opinion on the query stated therein relative to the interpretation of certain provisions of Republic Act No. 9728, otherwise known as the "Freeport Area of Bataan (FAB) Act of 2009", and its Implementing Rules and Regulations (IRR). Specifically, opinion is requested on which agency, i.e., the Authority of the Freeport Area of Bataan (AFAB) or the Philippine Economic Zone Authority (PEZA),should pay the separation pay and retirement and other benefits of the former Bataan Economic Zone (BEZ) employees who were all retained, absorbed and employed by the AFAB when it took over BEZ from PEZA on June 29, 2010. The provisions of R.A. No. 9728 and its IRR adverted to, insofar as pertinent, respectively read, thus: Section 28. Transitory Provisions. All properties, assets, funds, rights, obligations, and liabilities are hereby transferred to the AFAB except for the liabilities that are not properly accounted for as per the reports coming from the Commission on Audit, which shall be retained by the PEZA. The AFAB shall be responsible for the operations, administration, management and development of the FAB. The AFAB shall effect the transfer herein provided in a manner that will ensure the least disruption of ongoing programs of the BEZ. The qualified and necessary personnel of the BEZ shall be transferred to and absorbed by the AFAB: Provided, That the tenure, rank, salaries and privileges of such personnel are not reduced or adversely affected. The personnel whose services are not retained by the AFAB shall be granted separation pay and retirement and other benefits they are entitled to under existing laws but in no case shall the separation pay be less than one (1) month for every year of service. TDcAIH In the period prior to the actual assumption of duties by the AFAB, all officers and employees of the BEZ shall continue to exercise their functions and discharge their duties and responsibilities. The BEZ shall be deemed abolished upon the organization of the AFAB. 1 xxx xxx xxx Section 155. 2 Existing Employees at BEZ. The AFAB shall, to the extent possible, retain the existing employee complement of the BEZ; Provided, That the tenure, rank, salaries and privileges of such personnel are not reduced or adversely affected. The personnel whose services are not retained by the AFAB shall be granted separation pay and retirement and other benefits they are entitled to under existing laws but in no case shall the separation pay be less than one (1) month for every year of service; Provided, That the separated employee has rendered at least one (1) year at the time of the effectivity of this Act. Funds necessary to cover the separation pay and retirement and other benefits shall be provided by the PEZA. The AFAB shall not be liable for payment of separation pay and retirement and other benefits. 3 The request, it appears, stemmed from the alleged persistence of AFAB, relying on the above-quoted provisions of Section 155 of the IRR, that it is PEZA that should pay the separation pay and retirement and other benefits of the former Bataan Economic Zone (BEZ) employees who were all retained, absorbed and employed by the AFAB when it took over BEZ from PEZA on June 29, 2010. Disputing the AFAB position, you claim that there is no provision in R.A. No. 9728 which says that PEZA should pay said benefits. On the contrary, and citing Section 28 of the subject law as well as portions from the legislative deliberation of Senate Bill No. 2118, which later became R.A. No. 9728, you maintain that should anyone of the former BEZ employees (now AFAB personnel) resign or retire from AFAB's employ, the latter should provide the former the mandatory separation pay or retirement and other benefits. Considering, however, your claim that the disagreement still subsists despite your explanation, you now elevate the matter to Us for opinion. With regret, we have to decline to render the requested opinion. At the outset, it must be stressed that, admittedly, the resolution of the issues raised would require us to pass upon the pertinent provisions of the "Freeport Area of Bataan (FAB) Act of 2009". Under Section 29 of the law, however, it is the Department of Trade and Industry (DTI), jointly with the Department of Finance (DOF), the local government unit (LGU) concerned, and the Department of the Interior and Local Government (DILG), that is mandated to issue hence, the power to interpret the IRR for the effective implementation of R.A. No. 9728. CSHDTE Pursuant to settled policy, the Secretary of Justice does not rule on issues which fall within the primary jurisdiction of another office/s over which rulings or actuations this Department exercises no revisory authority, unless the request comes from such office or agency (Sec. of Justice Op. Nos. 42 & 35, current series; No. 61, s. 2009; No. 13, s. 2008). Sound administrative practice, more than official courtesy, demands that said office be accorded first the opportunity to consider and resolve the issue raised. This time-honored policy is dictated not only by practical consideration but out of due respect and deference for the competence, expertise on, as well as familiarity with, the policies relating to the subject and the rightful exercise of jurisdiction by a co-equal and coordinate branch of government ( ibid., Nos. 74 & 26, s. 2009; Nos. 49 & 46, s. 2009). Besides, the opinion of the Secretary of Justice, being essentially advisory in nature, need not bind the above-mentioned offices primarily responsible for the implementation of R.A. No. 9728, if that be their pleasure, and, if they so decide, may formally adopt a position on the issue raised and assume responsibility therefor ( id. , No. 31, current series; No. 36, s. 2009). Moreover, the issue raised cannot be resolved without passing upon the propriety or impropriety of the actuations of the AFAB, an agency which is also beyond the revisory/supervisory authority of the Secretary of Justice. Time and again, the Secretary of Justice desisted from passing upon issues that have already been the subject of official action by other officials/offices over whose actuations he possesses neither supervisory nor revisory authority ( id. , Nos. 27, 25 & 6, current series; Nos. 70 & 55, s. 2009). Finally, even if we want to, we cannot. The issue raised undeniably involves the substantive rights of private parties, i.e., the AFAB employees. Since the opinion of the Secretary of Justice is merely advisory in nature, such opinion would not be binding upon the private parties who may be adversely affected thereby and who may, in all probability, take issue therewith and contest the same before the courts. As a matter of policy, therefore, the Secretary of Justice has consistently refrained from rendering opinion on questions that, as in this case, are justiciable in nature or can be the subject of litigation before the courts ( id. , Nos. 42, 41 & 40, current series; Nos. 19, 16 & 14, s. 2009). aESHDA Nonetheless, for your information and guidance only ,we would like to make the following comments and observations. Rules and regulations promulgated in pursuance of an authority conferred by law, partakes of the nature of a statute. Such rules, in a sense, may be said to be the product of a delegated power to create new or additional provisions that have the effect of law. ( id. , No. 10, s. 2009; No. 6, s. 2008; Nos. 48, 44 & 28, s. 2007) (Case ref. Commissioner of Internal Revenue vs. Solidbank Corporation, 416 SCRA 436, 448; Yazaki Torres Manufacturing, Inc. vs. Court of Appeals, 493 SCRA 86, 97) The rule-making power of administrative agencies, however, cannot be extended to amending or expanding the statutory requirement or to embrace matters not covered by the statute (People vs. Maceren, 79 SCRA 450, 458, citing cases).While they are not precluded from validly providing regulations necessary to effectively and efficiently implement their respective laws, the same are, however, subject to the conditions that the rules are germane to the objects and purposes of the law, conform to the standards that the law prescribes, and must relate solely to carrying into effect the general provisions of the law ( Vda. De Pineda vs. Pea, 187 SCRA 22, 29, citing cases).( id. , Nos. 28 & 19, s. 2007) Apart from the clear mandate of Section 155 that the funds referred to therein cover those separation and/or retirement "under this section",i.e., those "personnel whose services are not retained by the AFAB",a contrary view would be opposed to the provisions of the law it intends to implement, specifically Section 28 thereof, which not only states that "qualified and necessary personnel of the BEZ shall be transferred and absorbed by the AFAB",but also provides that those "whose services are not retained by the AFAB shall be granted separation pay and retirement and other benefits".It would also be not in conformity with the standards prescribed by law (Romulo, Mabanta, Buenaventura, Sayoc and De Los Angeles vs. Home Development and Mutual Fund, G.R. No. 131082, 19 June 2000, 333 SCRA 777, 785).( id. , No. 17, s. 2009; No. 10, s. 2008; see also, No. 14, s. 2009) Please be guided accordingly. CEASaT Very truly yours, (SGD.) LEILA M. DE LIMA Secretary Footnotes 1. R.A. No. 9728; stress ours. 2. Not "Section 157",as stated in the letter. 3. IRR of R.A. No. 9728; emphasis added.