G.R. No. 192708 October 2, 2017
MANILA PUBLIC SCHOOL TEACHERS’ ASSOCIATION (MPSTA), ET AL., Petitioners, vs. MR. WINSTON F. GARCIA, ET AL., Respondents.

FACTS

Petitioners, public school teachers and their associations, challenged several Government Service Insurance System (GSIS) policies: the Premium-Based Policy (PBP), which computed benefits based on paid premiums rather than actual service length; the Automatic Policy Loan and Policy Lapse; and the Claims and Loans Interdependency Policy (CLIP), which linked loan privileges to the payment status of other accounts. These policies were implemented via GSIS Board Resolutions. The core dispute arose from massive premium contribution deficiencies. Republic Act No. 8291 increased the employer (government) share from 9.5% to 12%, but the Department of Education (DepEd) lacked the corresponding budget appropriation, leading to billions in unpaid employer premiums. Simultaneously, discrepancies existed between DepEd and GSIS records regarding the remittance of automatically deducted employee shares.

ISSUE

The primary issue was whether the GSIS Board Resolutions implementing the PBP, CLIP, and related policies were valid and enforceable against the teacher-members.

RULING

The Supreme Court ruled that the assailed GSIS Board Resolutions were invalid for lack of due publication. The Court emphasized that these resolutions were not mere internal rules but substantially altered the members’ contractual rights and obligations under the GSIS law. The PBP, for instance, fundamentally changed the basis for computing benefits from actual service under Section 10 of R.A. 8291 to creditable service based solely on paid premiums. Such a significant amendment to the statutory scheme required publication in the Official Gazette or a newspaper of general circulation to be effective, pursuant to the doctrine established in Tañada v. Tuvera. The GSIS admitted the resolutions were not published. Consequently, they created no binding legal effect. The Court further clarified that the employer’s (DepEd’s) failure to remit its share could not prejudice the rights of employee-members who had fulfilled their obligation through salary deductions. The obligation to remit premiums lies with the employer-agency, and members should not bear the burden of the employer’s default or of administrative reconciliation failures between government entities. The GSIS was ordered to compute benefits based on actual service and to cease implementing the invalidated policies.