Whether government-owned or controlled corporations and government agencies are required to pay 13th month pay under Presidential Decree No. 851
Summary
The Supreme Court En Banc dismissed a petition by government workers' unions challenging the exclusion of government agencies and corporations from Presidential Decree No. 851's 13th month pay requirement. The Alliance of Government Workers argued that the implementing regulations unlawfully exempted government entities not excluded by the decree's text. The Court held that P.D. No. 851 was intended only for private sector workers, as evidenced by its 'whereas' clauses referencing minimum wage protections applicable only to private employment. Under the 1973 Constitution, government-owned corporations became part of the civil service, subjecting their employees to legislative rather than collective bargaining determination of compensation. The decision affirmed that government workers cannot use strike threats or concerted action to secure benefits beyond those provided by law, distinguishing them from private sector employees who rely on collective bargaining.
Focus of dispute
Whether government-owned or controlled corporations and government agencies are required to pay 13th month pay under Presidential Decree No. 851
Legal facts
Alliance of Government Workers (AGW) and its affiliate unions representing employees of various government-owned corporations (PNB, MWSS, GSIS, SSS, PVTA, PNC, PUP) challenged Section 3 of the Rules and Regulations Implementing Presidential Decree No. 851, which exempted 'The Government and any of its political subdivisions, including government-owned and controlled corporations' from the requirement to pay 13th month pay. P.D. No. 851 required 'all employers' to pay employees receiving basic salary of not more than P1,000 monthly a 13th month pay by December 24 annually. Petitioners argued that the implementing rules unlawfully added exemptions not found in the decree itself.
Judgement and reasoning
{"Supreme Court En Banc": "DISMISSED the petition for lack of merit. The Court held that P.D. No. 851 was intended only for private sector workers, not government employees. The 'whereas' clauses showed legislative intent to protect private workers from inflation, referencing minimum wage rates that applied only to private sector. Government employees had already received salary increases in 1974 under P.D. No. 525. Under the 1973 Constitution, government-owned corporations are specifically included in the civil service (Section 1, Article XII-B), making their employees subject to civil service rules rather than collective bargaining. Terms and conditions of government employment are fixed by law, not collective bargaining. The Court ruled that allowing government workers to engage in concerted activities would be unfair to other civil service personnel denied such rights. Section 3 of the implementing regulations correctly interpreted the decree's intent."}