Irene Cruz v.
Commission on Audit (COA) DOCTRINE: The date of hiring of an employee cannot be considered a
Oct. 23, 2001 | Pardo | Equal Protection
PETITIONER: Irene Cruz, et al. in their own behalf and in representation of their
co-employees, numbering 330 in the Sugar Regulatory Administration
RESPONDENTS: Commission on Audit (COA)
SUMMARY:
The Sugar Regulatory Administration (SRA), a gov’t owned corporation, adopted
resolutions since 1963 granting the payment of social amelioration benefits (SAB)
to all its employees sourced from corporate funds. In 1989, RA No. 6758 took
effect. In 1994, Ms Villarosa, the Resident Auditor of the Commission on Audit
in the SRA, upon examining the accounts of the SRA and pursuant to the said Act,
questioned the legality of the payment of SAB to all SRA employees. The DBM
also ruled that the SAB had no legal basis and was violative of RA No. 6758.
Accordingly, COA suspended the SAB. The affected employees appealed to the
Office of the President for the continuation of the grant of SAB. The Office of the
President, thru its Executive Secretary, issued a 1st indorsement granting post facto
approval or ratification of the SAB. The COA then allowed payment of the SAB
but only to those SRA employees hired before Oct. 31, 1989. Other employees
remained not entitled to the said benefits. The issue in this case is W/N the
classification of SRA employees based on the date of hiring (i.e. those hired
before and those after Oct. 31, 1989) is a valid classification. The Court ruled
in the negative. It held that the classification made by the COA as to who were
entitled to the SAB and who were not based merely on the date of hiring, i.e.,
those hired before and those after Oct. 31, 1989, has no legal basis. The date of
hiring of an employee cannot be considered a substantial distinction. Any
distinction among employees must be based on substantial distinctions, that
is, level or rank, degree of difficulty and amount of work. The employees,
based on the title or position, were exposed to the same type of work, regardless
of the date they were hired. The petition is therefore granted and the COA
Decision is set aside.
substantial distinction. The employees, based on the title or position, were exposed
to the same type of work, regardless of the date they were hired. Any distinction
among employees must be based on substantial distinctions, that is, level or rank,
degree of difficulty and amount of work.
FACTS:
1. This case is an appeal of the decision of the COA, denying the grant of
social amelioration benefits to employees of the Sugar Regulatory
Administration (SRA) hired after Oct. 31, 1989.
2. The SRA, a gov’t owned corporation, adopted resolutions since 1963
granting the payment of social amelioration benefits (SAB) to all its
employees sourced from corporate funds.
3. RA No. 6758 took effect in July 1989.
4. In May 1994, Ms. Villarosa, the Resident Auditor of the Commission on
Audit in the SRA, examined the accounts of SRA. Pursuant to Sec. 12 of
RA No. 6758, which provides that, “such other additional compensation,
in cash or kind, being received by incumbents only as of July 1, 1989, not
integrated into the standardized rates shall continue to be authorized,”
Ms. Villarosa questioned the legality of the payment of the SAB to all SRA
employees.
5. The Dept. of Budget & Management (DBM) also ruled that the grant of
SAB had no legal basis and was in violation of RA No. 6758.
6. Accordingly, the COA suspended the payment of SAB to all SRA
employees. The affected employees then appealed to the Office of the Pres.
for the continuation of the grant of SAB.
7. The COA claimed that upon effectivity of RA No. 6758, the SAB was no
longer allowed unless there was prior authority from the DBM or Office
of the Pres. or a legislative issuance.
8. The Office of the Pres., thru Exec Secretary Ruben Torres, issued a 1 st
indorsement, granting post facto approval or ratification of the SAB to
SRA employees.
 9. The COA then allowed payment of the SAB but only to those SRA
employees hired before Oct. 31, 1989. Other employees remained not
entitled to the said benefits.

ISSUES:
1. W/N the classification of SRA employees based on the date of hiring
(i.e. those hired before and those after Oct. 31, 1989) is a valid
classification. [NO]

RATIO:
1. The Court held that the classification made by the COA as to who were
entitled to the SAB and who were not based merely on the date of hiring,
i.e., those hired before and those after Oct. 31, 1989, has no legal basis.
2. The date of hiring of an employee cannot be considered a substantial
distinction. The employees, based on the title or position, were exposed
to the same type of work, regardless of the date they were hired. The date
of hiring is not among those factors to be taken into consideration in the
fixing of compensation or granting of benefits.
3. Any distinction among employees must be based on substantial
distinctions, that is, level or rank, degree of difficulty and amount of
work. To discriminate based solely on the date if hiring is to run against
the progressive and social policy of the law.
4. ‘When the law does not distinguish, the courts should not distinguish’ also
applies in this case.

DISPOSITION:
The Court GRANTS the petition and sets aside the COA Decision.