Case Digest: Bureau of Customs Employees Association (BOCEA), represented by its National President Romulo A. Pagulayan v. Hon. Ruffy B. Biazon, et al. G.R. No. 205836, July 12, 2022 Supreme Court, En Banc Ponente: Justice Ricardo R. Rosario

 

FACTS

The Bureau of Customs Employees Association (BOCEA), represented by its National President Romulo A. Pagulayan, filed a Petition for Certiorari and Prohibition questioning several administrative issuances issued by the Secretary of Finance and the Commissioner of Customs. These issuances implemented a 24-hour, three-shift work schedule for Bureau of Customs (BOC) personnel assigned in international airports and provided that overtime services rendered to airlines and other private entities would no longer be charged to such private entities but would instead be paid by the National Government.

BOCEA argued that the administrative issuances were issued with grave abuse of discretion because they effectively amended Section 3506 of the Tariff and Customs Code of the Philippines (TCCP). Under the TCCP, importers, exporters, shippers, airline companies, and other private entities requesting customs services beyond regular working hours were required to shoulder the overtime compensation of customs personnel. BOCEA maintained that only Congress could modify this statutory policy and that the Executive could not do so through administrative issuances.

The respondents, on the other hand, argued that the questioned issuances were valid exercises of executive and administrative authority over the Bureau of Customs. They asserted that the three-shift system was intended to provide continuous twenty-four-hour customs service while reducing unnecessary overtime expenses. They likewise argued that charging overtime solely to the government was a policy designed to promote tourism, trade, and ease of doing business. The case was directly brought before the Supreme Court because it involved the constitutionality and validity of executive acts.

ISSUE

Whether or not the petition for Certiorari and Prohibition directly filed before the Supreme Court was a proper remedy to question the validity of the administrative issuances issued by the respondents.

Whether or not the Executive validly exercised its administrative and ordinance-making powers in requiring Bureau of Customs personnel to observe a 24-hour shifting schedule through three eight-hour work shifts.

Whether or not the respondents could validly exempt airlines and other private entities from paying overtime compensation to customs personnel and instead require the National Government to bear such expenses notwithstanding Section 3506 of the Tariff and Customs Code of the Philippines.

HELD

The Supreme Court PARTLY GRANTED the petition. The Court held that although the petitioners did not strictly comply with the doctrine of exhaustion of administrative remedies, the Court exercised its expanded power of judicial review under Article VIII, Section 1 of the 1987 Constitution because the issues involved the validity of executive actions affecting a large number of government employees and raised questions of transcendental public importance.

The Court ruled that the administrative issuances establishing a 24-hour work schedule consisting of three eight-hour shifts were valid. The Executive, through the Secretary of Finance and the Commissioner of Customs, possesses administrative supervision over the Bureau of Customs and may prescribe reasonable work schedules to ensure the continuous and efficient delivery of customs services. The policy neither violated existing laws nor diminished the rights of customs personnel, but merely regulated the manner by which official working hours would be observed.

However, the Court declared invalid the administrative issuances insofar as they exempted airlines and other private entities from paying overtime compensation before the effectivity of Republic Act No. 10863 (Customs Modernization and Tariff Act). The Court held that Section 3506 of the Tariff and Customs Code expressly required the importer, exporter, shipper, airline, or other entity served to pay the overtime compensation of customs personnel. Administrative issuances cannot amend, repeal, or disregard a statute because executive regulations must conform to the law they seek to implement. The Executive exceeded its authority when it shifted the payment of overtime compensation to the National Government despite the clear legislative mandate.

The Court further explained that the enactment of Republic Act No. 10863, which took effect on June 16, 2016, eventually changed the statutory policy by providing that overtime services rendered by customs personnel shall thereafter be paid by the government. Nevertheless, before the law's effectivity, the controlling law remained Section 3506 of the Tariff and Customs Code, which required payment by the private entities served. Accordingly, the questioned administrative issuances were declared invalid only for the period from August 1, 2012 until June 16, 2016, while the three-shift work policy remained valid.