The Supreme Court has ruled it was only on June 16, 2016 when the payment of overtime work of the Bureau of Customs (BOC) personnel assigned for eight hours on three shifts daily started to be charged to the government instead of the airline companies and other private entities that require their services.

With the ruling, the SC invalidated the 2012 administrative issuances of the BOC and the Department of Finance (DOF) which mandated the collection from the government of the overtime pay of customs personnel.

But the SC, in a unanimous full court decision written by Associate Justice Ricardo R. Rosario, affirmed the validity of the BOC and DOF issuances as far as the fixing of work hours are concerned not only at the Ninoy Aquino International Airport (NAIA) and other international airports but also in the seaports and other areas where customs personnel are needed.

The administrative issuances were challenged in a petition directly filed before the SC by the Bureau of Customs Employees Association (BOCEA) which, at the time of the filing of the petition on March 7, 2013, was represented by its national president Romulo A. Pagulayan.

BOCEA told the SC that the discontinuance of the practice of charging overtime pay against private airlines and other private entities “worsened the situation of the already economically dislocated customs personnel.” It said the administrative issuances by the BOC and the DOF are unconstitutional, patently illegal and issued with grave abuse of discretion.

The Tariff and Customs Code of the Philippines (TCCP), under Section 3506, provides: “Customs employees may be assigned by a Collector to do overtime work at rates fixed by the Commissioner of Customs when the service rendered is to be paid for by importers, shippers or other persons served. The rates to be fixed shall not be less than that prescribed by law to be paid to employees of private enterprise.”

The SC, in a previous decision, ruled: “The law (TCCP) is complete in itself that it leaves nothing more for the BOC to do: it gives authority to the Collector to assign customs employees to do overtime work; the Commissioner of Customs fixes the rates; and it provides that the payments shall be made by the importers, shippers or other persons served.”

But the SC, in its July 12, 2022 decision that was made public last Nov. 24 and resolved BOCEA’s petition, said that portions of the TCCP, including Section 3506, were repealed by Republic Act No. 10863, the Customs Modernization and Tariff Act, which became effective on June 16, 2016.

Section 1508 of RA 10863 mandates: “Customs personnel may be assigned by a District Collector to render overtime work and other customs services and shall be paid for such services by the Bureau (BOC), according to service fees fixed by the Commissioner and approved by the Secretary of Finance. The Bureau may charge additional customs service fees when applicable, subject to the rates prescribed under existing rules and regulations."

The SC said that Section 1508 of RA 10863 differs from Section 3506 of the TCCP. Among these, it said, are “ overtime work shall now be paid by the Bureau of Customs, and no longer by ‘importers, shippers or other persons served;’ the rate of service fees, including overtime pay, as fixed by the Commissioner of Customs explicitly requires approval by the Secretary of Finance; and the provision in Section 3506 of the TCCP stating that overtime pay in the Bureau of Customs should not be lower than that paid to employees in private enterprises no longer appears in Section 1508 of RA 10863.”

The SC also said:

“In sum, the Court rules that respondents (officials of BOC and DOF at the time of the filing of the petition) validly exercised the ordinance-making authority of the Executive to control work within the Bureau of Customs when they limited overtime work by implementing a shifting schedule through Customs Administrative Order No. 7-2011.

“On the other hand, respondents committed grave abuse of discretion correctible by certiorari when they prohibited Customs employees from collecting overtime pay from airline companies and other private entities prior to the effectivity of RA 10863 on 16 June 2016. It was only on such date when overtime work rendered by Customs employees became payable by the Bureau itself.

“Prior to 16 June 2016, the private airlines and other private entities served should have paid such overtime work actually rendered at rates not lower than those paid to employees of private enterprises, in accordance with Section 3506 of the Tariff and Customs Code.

“Because of the assailed administrative issuances, the national government was prejudiced to the extent of the overtime work it paid during the said four-year period.

“On the other hand, since their overtime work during the four-year period was already paid, albeit by the national government, Customs employees were prejudiced only to the extent of the difference -if any-between overtime rates in private enterprises and overtime rates actually paid to them by the Bureau during that time.

“In any event, these matters are best addressed to the trial courts because they entail the submission of evidence and the Supreme Court is not a trier of facts.

“WHEREFORE, the petition is PARTIALLY GRANTED. Customs Administrative Order (CAO) No. 7-2011, issued on 15 July 2011, prescribing the official hours of work at the Ninoy Aquino International Airport and other international airports, providing a shifting schedule of three 8-hour shifts for continuous 24-hour service, and stating the policy on night-shift differential pay is DECLARED VALID, until superseded by a later order.

“For the period starting from their date of effectivity on 1 August 2012 until the date of effectivity of Republic Act No. 10863 on 16 June 2016, the following administrative issuances are DECLARED INVALID: (1) Memorandum, dated 3 August 2012, issued by the Secretary of Finance Cesar V. Purisima; (2) Memorandum, dated 10 August 2012, issued by Customs Commissioner Rufino B. Biazon; and (3) CMC No. 195-2012, dated 28 August 2012, issued by Customs Commissioner Rufino B. Biazon.

“Prior to 16 June 2016, overtime work rendered by the personnel of the Bureau of Customs should continue to be paid by importers, shippers or other entities served, including private airlines, in accordance with the laws in force and the jurisprudence applicable at that time.

“Any resulting monetary prejudice to the government or to petitioners (BOCEA members) is essentially evidentiary in nature and must be raised in the proper administrative and/or judicial proceeding. SO ORDERED.”

TAGS: #SC #BOC #Customs employees