A.M. No. 91-6-007-CTA December 21, 1992
REQUEST OF CTA PRESIDING JUDGE ALEX Z. REYES

FACTS

In a letter-request dated May 21, 1991, Court of Tax Appeals (CTA) Presiding Judge Alex Z. Reyes requested that, for purposes of computing his compulsory retirement pay and terminal leave benefits under R.A. No. 910 , the last step increment of his salary grade be used. Judge Reyes was appointed Associate Judge of the CTA on July 31, 1980, and served until November 20, 1990. From November 21, 1990, until his retirement on November 24, 1991, he served as Presiding Judge. He cited the Position Allocation List and a salary schedule issued by the Department of Budget and Management (DBM). The Position Allocation List, effective July 1, 1989, allocated the position of CTA Presiding Judge to salary grade 30, with a salary rate of P227,700 per annum (P18,975 monthly), which he was receiving at retirement. The cited salary schedule for grade 30 showed eight step increments, with Judge Reyes receiving the first step. The Court Administrator did not favorably endorse the request, citing Joint Civil Service Commission and DBM Circular No. 1, Series of 1990, which grants step increments based on merit (for very satisfactory or outstanding performance for two consecutive rating periods) or length of service (for at least three years of continuous satisfactory service in a position). The Court Administrator gave reasons for non-endorsement: (1) Section 4(d) of the circular prohibits granting merit-based step increments for retirement purposes to enable a higher gratuity; (2) longevity pay under Section 42 of B.P. No. 129 , given on a similar premise as length-of-service increments, might no longer be available to judges; and (3) no record showed Judge Reyes received a merit step increment. Judge Reyes, in his reply, invoked the doctrine of liberal construction of retirement laws.

ISSUE

Whether the last step increment of salary grade 30 should be used as the basis for computing Judge Reyes’s retirement pay and terminal leave benefits.

RULING

The request is denied. The Court held that the doctrine of liberal construction of retirement laws does not apply where the applicable law and rules are clear and demonstrably against the claim. Section 4(d) of Joint Circular No. 1 explicitly prohibits granting a step increment based on merit to an official or employee on the ground of impending retirement to enable a higher retirement gratuity, except if they qualify under the established criteria. The criteria for merit require continuous service in assigned functions for at least two consecutive rating periods, and for length of service, at least three years in a particular position. Judge Reyes served as Presiding Judge for only one year and three days, and his request, coming after retirement, appears to fall under the prohibition. However, the Court disagreed with the contention that longevity pay under Section 42 of B.P. 129 is incompatible with step increments, stating there is no legal obstacle to judges receiving step increments based on merit, as merit is distinct from longevity or length of service, and both can be given simultaneously. The Court also noted practical considerations against discriminating against judges in compensation matters. The Court reserved ruling on whether longevity pay and step increments based on length of service can be given simultaneously. The Court declined to rule on the Solicitor General’s contention regarding the validity of the DBM’s Position Allocation List, as it was unnecessary for this case. The Court Administrator was ordered to prepare a plan for merit step increments for deserving judiciary members.