Paredes v. Commission on Audit
REITERATIONFacts
The Antecedents: Petitioner Sulpicio G. Paredes, a former Assistant City Auditor of Manila, received a monthly basic salary and a P500.00 monthly representation allowance authorized by R.A. No. 5353. Upon his retirement effective November 1, 1972, he was granted the money value of his terminal leave, computed based solely on his monthly basic salary. Procedural History: Petitioner filed a claim with the City Treasurer of Manila for the inclusion of his P500.00 monthly representation allowance in the computation of his terminal leave benefits. The claim was forwarded to the City Auditor and then to the Commission on Audit, which disallowed it. A motion for reconsideration was denied. The Petition: Petitioner filed a petition for review on certiorari with the Supreme Court, arguing that since the representation allowance was authorized by law (R.A. No. 5353), it should be considered part of his 'highest rate received' for terminal leave computation, and its exclusion did not violate the constitutional prohibition against additional or double compensation.
Issue(s)
Whether the monthly commutable representation allowance should be included in the computation of the money value of petitioner's terminal leave based on his 'highest rate received'.
Ruling
The Supreme Court affirmed the decision of the Acting Chairman of the Commission on Audit, disallowing the inclusion of the petitioner's monthly commutable representation allowance in the computation of the money value of his terminal leave. Costs were against the petitioner.
Ratio Decidendi
On Issue 1: The Court held that while the P500.00 commutable representation allowance was authorized by R.A. No. 5353 and did not constitute additional or double compensation, it should not be included in the computation of the money value of the terminal leave. The governing law for retirement benefits and terminal leave computation is Commonwealth Act No. 186, as amended. Section 12(c) of this Act mandates that the computation be based on the 'highest rate received.' Further, Section 2(c) of Commonwealth Act No. 186, as amended by Republic Act No. 1573, explicitly defines 'salary, pay, or compensation' to exclude 'bonuses, per diems, allowances and overtime pay, or salary, pay or compensation given in addition to the base pay of the position or rank as fixed by law or regulations.' Therefore, the representation allowance, being an allowance, is not considered part of the 'salary' for retirement and terminal leave purposes, regardless of whether it is commutable or not. The law clearly limits 'salary' to 'base pay.' The Acting Chairman of the Commission on Audit did not err in excluding the allowance from the computation.
Main Doctrine
The Supreme Court reiterated that for the computation of the money value of terminal leave under Commonwealth Act No. 186, as amended, the 'highest rate received' refers strictly to the monthly salary, which, as defined by the law itself, excludes allowances. Therefore, a commutable representation allowance, even if authorized by a separate law (R.A. No. 5353), cannot be added to the basic salary for the purpose of calculating terminal leave benefits.