Planters Association of Southern Negros Inc. vs. Hon. Bernardo T. Ponferrada, Presiding Judge, Regional Trial Court of Negros Occidental, Branch 42

Section 12 of R.A. No. 6982, which substitutes the benefits under R.A. No. 809 and P.D. No. 621 with those under R.A. No. 6982, is qualified by Section 14's non-diminution clause; where substitution would reduce benefits already enjoyed by sugar farm workers, the benefits under R.A. No. 6982 must complement, not replace, the benefits under R.A. No. 809.

PASON is an organization of sugar farm plantation owners milling with private respondent BISCOM, which is engaged in milling raw sugar cane of various sugar plantations in its milling district. The controversy concerns the sugar industry's social amelioration program, which before R.A. No. 6982 was governed principally by R.A. No. 809 (the Sugar Act of 1952) and P.D. No. 621. R.A. No. 6982, effective May 24, 1991, imposed a P5.00 per picul lien on gross sugar production and contained Section 12, substituting prior liens and production sharing, and Section 14, a non-diminution clause. NACUSIP is a respondent in the case.

Private respondent Binalbagan-Isabela Sugar Company, Inc. (BISCOM) is engaged in milling raw sugar cane of various sugar plantations in its milling district. Petitioner Planters Association of Southern Negros Inc. (PASON) is an organization of sugar farm plantation owners milling with BISCOM. Before R.A. No. 6982, sugar farm workers received additional financial benefits under R.A. No. 809 and P.D. No. 621. R.A. No. 809, implementable in milling districts with an annual gross production of 150,000 piculs or more, institutionalized a production-sharing scheme, in the absence of any private agreement between planters and farm workers, depending on the mill's total production for the immediately preceding crop year; any increase in the planters' share was divided 40% to the planter and 60% to the farm workers. BISCOM applied R.A. No. 809 in 1983 when it reduced its milling share from 35% to 30%, and the 5% increase in participation in favor of the plant was divided between the planters and farm laborers under Section 9 of R.A. No. 809. P.D. No. 621, as amended, charged a P2.00 per picul lien on all sugar produced, pooled into a fund for subsequent distribution as bonuses to sugar workers.

On May 24, 1991, R.A. No. 6982 took effect. It imposed a P5.00 per picul lien on the gross production of sugar beginning sugar crop year 1991-1992, with an automatic additional lien of P1.00 for every two years for the succeeding ten years from the effectivity of the Act, subject to the discretion of the Secretary of Labor and Employment and upon recommendation of the Sugar Tripartite Council. Section 12 of R.A. No. 6982 provided that all liens and other forms of production sharing in favor of workers under R.A. No. 809 and P.D. No. 621, as amended, were substituted by the benefits under the new Act, except that cases arising from such laws pending in courts or administrative bodies at the time of effectivity would not be affected. Section 14, however, provided that notwithstanding Section 12, nothing in the Act shall be construed to reduce any benefit, interest, right, or participation enjoyed by the workers at the time of the enactment of the Act, and that no amount received by any beneficiary under the Act shall be subject to any form of taxation.

For crop year 1991-1992, the sugar farm workers' share in BISCOM under R.A. No. 809 amounted to P30,590,086.92. Under P.D. No. 621, the workers' benefit for the same crop year was computed on BISCOM's gross production of 1,595,184.46 piculs, less 30% BISCOM share of 478,555.33, leaving a 70% planter share of 1,116,626.13, multiplied by the P2.00 lien; the decision reflects the P.D. No. 621 amount as P2,233,285.26 and, in the total, as P2,233,258.16. Because the P2.00 lien under P.D. No. 621 was lesser than the P5.00 lien under R.A. No. 6982, BISCOM no longer imposed it pursuant to R.A. No. 6982. Before R.A. No. 6982 took effect, the total farm workers' benefit was P32,823,345.18 (P30,590,086.92 under R.A. No. 809 plus P2,233,258.16 under P.D. No. 621). Upon the effectivity of R.A. No. 6982, the total workers' benefit in BISCOM's milling district was computed as P5,583,145.61, based on gross production of 1,595,184.46 piculs, less 30% BISCOM share of 478,555.34, leaving a 70% planter share of 1,116,629.12, multiplied by the P5.00 lien.

Pending a definite ruling on the effect of R.A. No. 6982 on R.A. No. 809 and P.D. No. 621, the Secretary of Labor issued Department Order No. 2 (1992), directing the three milling districts in Negros Occidental—SONDECO, San Carlos, and BISCOM—to continue implementing R.A. No. 809 per the recommendation of the Sugar Tripartite Council. PASON then filed a Petition for Declaratory Relief with the Regional Trial Court of Negros Occidental, Branch 42, Bacolod City, against the implementation of Department Order No. 2. PASON theorized that, in view of the substitution of benefits under Section 12 of R.A. No. 6982, whatever monetary rewards were previously granted to sugar farm workers under R.A. No. 809 and P.D. No. 621 were deemed totally abrogated or superseded. The RTC observed that the evolution of legislation in the sugar industry had always had for its foremost concern the advancement of the sugar farm worker, with every law or decree enacted pursuant thereto providing for an increase in wages and benefits, because the sugar worker could hardly cope with his meager income amid rapidly changing, if not worsening, economic conditions.

• Unqualified Substitution: Petitioner argued that the word "substitution" in Section 12 should be taken in its literal sense because Congress clearly intended a substitution of benefits; under this view, workers in the subject milling district would receive only P5,583,145.61 under R.A. No. 6982, as against P32,823,345.18 under P.D. No. 621 and R.A. No. 809.
• Alternative Interpretation: Invoking the Opinion of the Secretary of Justice, petitioner contended in the alternative that the application of R.A. No. 809 could be maintained, but its benefits should not be implemented in addition to R.A. No. 6982; under this interpretation, the workers' share would amount to P30,590,086.92.
• Non-Diminution Limited to Pending Claims: Citing floor deliberations of Congress, petitioner insisted that the non-diminution of benefits in Section 14 pertains only to pending claims of workers at the time of the Act's effectivity, not to the benefits previously enjoyed under R.A. No. 809 and P.D. No. 621.
• Double Recovery: Petitioner alleged that the public respondent's interpretation would result in double recovery for the workers.

• Public Respondent — Complement, Not Substitute: The public respondent maintained that the benefits conferred by R.A. No. 6982 should complement those granted by R.A. No. 809, which cannot be superseded because Section 14 prohibits diminution of benefits; under this interpretation, the total workers' benefit would be P36,173,232.53 (P30,590,086.92 under R.A. No. 809 plus P5,583,145.61 under R.A. No. 6982).
• Private Respondent BISCOM — Maintain Prior Laws: Private respondent BISCOM proposed maintaining the application of R.A. No. 809 and P.D. No. 621, with the workers' total share at P32,823,345.18, and disregarding the new law.

• Substitution under Section 12: Whether Section 12 of R.A. No. 6982 mandates a total substitution of the benefits under R.A. No. 809 and P.D. No. 621, thereby abrogating or superseding them.
• Non-Diminution under Section 14: Whether Section 14 of R.A. No. 6982 qualifies Section 12 such that no substitution may reduce any benefit, interest, right, or participation already enjoyed by sugar farm workers at the time of the Act's effectivity.
• Complementary Benefits: Whether sugar farm workers in the BISCOM milling district are entitled to continue enjoying the benefits under R.A. No. 809 in addition to the benefits under R.A. No. 6982.
• Judicial Legislation: Whether the RTC's interpretation of R.A. No. 6982 constituted judicial legislation.

• Substitution under Section 12: No. Section 12's substitution is not unqualified; it must be read together with Section 14, which prohibits any reduction of benefits enjoyed at the time of R.A. No. 6982's enactment.
• Non-Diminution under Section 14: Yes. Section 14 qualifies Section 12 and bars substitution where it would diminish or reduce existing benefits.
• Complementary Benefits: Yes. The benefits under R.A. No. 6982 must complement, not replace, the benefits under R.A. No. 809 in the BISCOM milling district; otherwise the workers would suffer a diminution.
• Judicial Legislation: No. The RTC did not engage in judicial legislation; it gave effect to the State policy under Section 18, Article II of the 1987 Constitution.

• Substitution under Section 12: The Court applied the rule that each provision of law must be construed with every other part to produce a harmonious whole, with every word or phrase ascertained from the context of the statute, ut magis valeat quam pereat. Section 12 apparently mandates total substitution of benefits under R.A. No. 809 and P.D. No. 621 by those under R.A. No. 6982, but it cannot be construed apart from Section 14, which prohibits such substitution if its effect would reduce any benefit, interest, right, or participation enjoyed by the worker at the time R.A. No. 6982 took effect. Petitioner's unqualified substitution was untenable because it would give the workers only P5,583,145.61 under R.A. No. 6982 as against the P36,173,232.53 figure referred to in the decision, and would defeat the non-diminution policy.
• Non-Diminution under Section 14: The Court rejected petitioner's attempt to limit Section 14 to pending claims. The floor deliberations cited by petitioner, in which the sponsor explained that the non-diminution provision referred to pending or outstanding claims, could not override the clear policy of the Act and the Constitution. The glaring disparity of P27,240,199.57 between P32,823,345.18 and P5,583,145.61 did not warrant such an interpretation. The evolution of legislation in the sugar industry had always had for its foremost concern the advancement of the sugar farm worker, with every law or decree providing for an increase in wages and benefits, especially given the worker's meager income and worsening economic conditions. Thus, Section 14 protects benefits already enjoyed, not merely pending claims.
• Complementary Benefits: The Court held that the addition of the monetary rewards under R.A. No. 6982 to the benefits granted by R.A. No. 809 is what is called for. Although "addition" differs from "substitution," the circumstances of the subject milling districts—where workers enjoyed benefits under both R.A. No. 809 and P.D. No. 621 before R.A. No. 6982—necessitated granting the pecuniary advantage under R.A. No. 809 as a complement to R.A. No. 6982; otherwise the workers would suffer a diminution. The resulting increase was merely incidental to the non-diminution policy, and the labor provision should be liberally construed to further its purpose. The double-recovery argument was rejected: had R.A. No. 6982 not been enacted, workers would have been entitled to P32,823,345.18 under R.A. No. 809 and P.D. No. 621; under petitioner's alternative view of maintaining R.A. No. 809 alone (P30,590,086.92) to the exclusion of R.A. No. 6982, workers would lose P2,233,258.56 from that total. BISCOM's interpretation, maintaining R.A. No. 809 and P.D. No. 621 and disregarding the new law, would yield P32,823,345.18, but the public respondent's interpretation, yielding P36,173,232.53, was more in keeping with the spirit of R.A. No. 6982 to improve the living conditions of sugar workers. Between two statutory interpretations, that which better serves the purpose of the law should prevail.
• Judicial Legislation: The Court concluded that the RTC did not venture into judicial legislation but merely gave life to the avowed policy of the State under Section 18, Article II of the 1987 Constitution, which affirms labor as a primary social economic force and guarantees the rights of workers and promotes their welfare. The policy of R.A. No. 6982 under Section 1 was to strengthen the rights of workers in the sugar industry to their just share in the fruits of production by augmenting their income and institutionalizing a mechanism for a decent living, consistent with Section 3, Article XIII of the Constitution.

• Harmonization of Statutes (Ut Magis Valeat Quam Pereat) — Every provision of law must be construed in connection with every other part so as to produce a harmonious whole, and every meaning to be given to each word or phrase is ascertained from the context of the body of the statute. The Court applied this doctrine to reconcile Section 12 and Section 14 of R.A. No. 6982, refusing to read Section 12's substitution clause in isolation.
• Non-Diminution of Benefits — Section 14 of R.A. No. 6982 provides that nothing in the Act shall be construed to reduce any benefit, interest, right, or participation enjoyed by workers at the time of its enactment. The Court held that this clause qualifies Section 12 and prohibits any substitution that would reduce existing benefits; it protects benefits already enjoyed, not only pending claims.
• Complementary Application of Labor Benefits — Although "addition" differs from "substitution," where workers already enjoyed benefits under prior laws, the new law's benefits must be added to the old to avoid diminution. The Court applied this by requiring R.A. No. 6982 benefits to complement R.A. No. 809 benefits in the BISCOM milling district.
• Liberal Construction of Labor Laws — Labor provisions should be liberally construed to further their purpose. The Court applied this to interpret R.A. No. 6982 as complementing R.A. No. 809, because the resulting increase in monetary advantage was incidental to the non-diminution policy.
• Social Justice and Labor as a Primary Social Economic Force — The 1987 Constitution, Article II, Section 18, affirms labor as a primary social economic force and guarantees the rights of workers and promotes their welfare; Article XIII, Section 3, guarantees the right of workers to a just share in the fruits of production. The Court relied on these provisions to uphold the interpretation that best promotes the welfare of sugar farm workers.
• Purposeful Statutory Interpretation — Between two statutory interpretations, that which better serves the purpose of the law should prevail. The Court chose the interpretation that improved the living conditions of sugar workers, consistent with the policy of R.A. No. 6982.

• "It is a well-settled rule of legal hermeneutics that each provision of law should be construed in connection with every other part so as to produce a harmonious whole and every meaning to be given to each word or phrase is ascertained from the context of the body of the statute." — This states the Court's controlling method of statutory construction, used to reconcile the apparently conflicting Section 12 and Section 14 of R.A. No. 6982.
• "Section 12 therefore, which apparently mandates a total substitution by R.A. No. 6982 of all the benefits under R.A. No. 809 and P.D. No. 621 existing at the time of the effectivity of R.A. No. 6982, can not be construed apart from Section 14 which prohibits such substitution if the effect thereof would be to reduce any benefit, interest, right or participation enjoyed by the worker at the time R.A. No. 6982 took effect." — This is the ratio decidendi: the substitution clause is qualified by the non-diminution clause.
• "In view of the foregoing, the addition of the monetary rewards under R.A. No. 6982 to the benefits granted by R.A. No. 809, is what is called for in the case under consideration." — This states the operative remedy: the new benefits must be added to, not substituted for, the old benefits in the BISCOM milling district.
• "Sec. 18. The state affirms labor as a primary social economic force. It shall guarantee the rights of workers and promote their welfare." — This constitutional policy was invoked to justify the interpretation that promotes the welfare of sugar farm workers.

• Sotto vs. Sotto, 43 Phil. 688 (1922) — Cited in the Court's statutory-construction discussion, through Agpalo, for the principle that a statute must be construed as a harmonious whole and that each word or phrase is understood from its context.
• Araneta vs. Concepcion, 99 Phil. 709 (1956) — Cited in the same statutory-construction footnote, supporting the rule of harmonizing apparently conflicting provisions.
• Alliance of Nationalist and Genuine Labor Organization vs. Samahan ng mga Mangagawang Nagkakaisa sa Manila Bay Shipping Mills, et al., 258 SCRA 371, p. 375 — Cited for the liberal construction of labor provisions to further their purpose.
• Tropical Hut Employees Union-CGW vs. Tropical Hut Food Market, Inc., 181 SCRA 173 — Cited within the Alliance case as authority for the liberal-construction rule applied to labor legislation.
• Salenilla vs. Court of Appeals, 169 SCRA 829, 835 — Cited for the rule that between two statutory interpretations, the one that better serves the purpose of the law should prevail.

• Section 12, R.A. No. 6982 — Provides that all liens and other forms of production sharing in favor of sugar industry workers under R.A. No. 809 and P.D. No. 621, as amended, are substituted by the benefits under R.A. No. 6982, except pending cases. The Court held this substitution clause is qualified by Section 14.
• Section 14, R.A. No. 6982 — The non-diminution clause: notwithstanding Section 12, nothing in the Act shall be construed to reduce any benefit, interest, right, or participation enjoyed by workers at the time of enactment, and no amount received under the Act shall be taxed. The Court applied it to bar a substitution that would reduce benefits.
• Section 1, R.A. No. 6982 — Declares the State policy to strengthen the rights of workers in the sugar industry to their just share in the fruits of production by augmenting their income and institutionalizing a mechanism for a decent living. The Court used this policy to support a complementary interpretation.
• Section 7, R.A. No. 6982 — Imposes a P5.00 per picul lien on gross sugar production beginning crop year 1991-1992, with an automatic additional P1.00 for every two years for the succeeding ten years, subject to the Secretary of Labor and Employment's discretion and the Sugar Tripartite Council's recommendation. This created the new benefit at issue.
• Section 9, R.A. No. 809 — Provides that any increase in the planters' share shall be divided 40% to the planter and 60% to the farm workers. This was the prior production-sharing benefit.
• P.D. No. 621 — Charged a P2.00 per picul lien on all sugar produced, pooled into a fund for distribution as bonuses to sugar workers. This was the prior bonus benefit.
• Section 3, Article XIII, 1987 Constitution — Guarantees the right of workers to a just share in the fruits of production. The Court cited it as constitutional support for the non-diminution interpretation.
• Section 18, Article II, 1987 Constitution — Affirms labor as a primary social economic force and guarantees the rights of workers and promotes their welfare. The Court held the RTC gave life to this policy.
• Rule 45, Revised Rules of Court — The procedural basis for the Petition for Review on Certiorari. Mentioned as the mode of review.

Melo, Vitug, Panganiban and Gonzaga-Reyes, JJ., concur.