INTERPRETATIVE LEGISLATION Distinction between RULE and INTERPRETATION GROUP 7 CORREA, Maan ESTIGOY, Charmaine FAJARDO, Joshua Friedrich MASCARIN, Liberale Fulvia What is RULE? What is INTERPRETATION? DISTINCTIONS Power to create new law Need for express delegation Presence of statutory sanction Binding force and effect POWER TO CREATE NEW LAW ADMINISTRATIVE RULE ADMINISTRATIVE INTERPRETATION OF LAW EMBODIES NEW LAW (IN NATURE OF SUBORDINATE LEGISLATION) CLARIFY OR PROVIDE GUIDELINES ON THE LAW THEY INTERPRET NEED FOR EXPRESS DELEGATION ADMINISTRATIVE RULE May be issued only when given a express statutory delegation . ADMINISTRATIVE INTERPRETATION OF LAW May be issued as a necessary incident of the administration of a regulatory statute. PRESENCE OF STATUTORY SANCTION ADMINISTRATIVE RULE Depends if the statutes place specific "sanctions" behind the regulations authorized. Have the force and effect of law unless they are ultra vires or were issued under an unconstitutional delegations. ADMINISTRATIVE INTERPRETATION OF LAW Has no statutory sanction. BINDING FORCE AND EFFECT ADMINISTRATIVE RULE ADMINISTRATIVE INTERPRETATION OF LAW Have the same force and effect as valid statutes and is binding upon the courts Is merely advisory and subject to judicial Determination Victorias Milling Company, Inc. vs. Social Security Commission FACTS: On October 15, 1958, the Social Security Commission (SSC) issued Circular No. 22, directing employers to include all bonuses, overtime pay, and the cash value of any other remuneration in computing the premiums due for social security contributions, effective November 1, 1958. This circular contradicted a previous Circular No. 7, which expressly excluded overtime pay and bonuses from the computation. Victorias Milling Company, Inc. (VMC), protested against Circular No. 22 for allegedly conflicting with Circular No. 7, lacking presidential approval, and for not being published in the Official Gazette. The SSC overruled these objections, stating Circular No. 22 was an administrative interpretation of the statute and did not require presidential approval nor publication to be effective. VMC, dissatisfied, appealed to the Supreme Court. Hence, the petition. ISSUE: Whether or not Circular No. 22 is a rule or regulation or a mere administrative interpretation of Republic Act No. 1161. RULING: The Supreme Court ruled that Circular No. 22 is NOT an administrative rule or regulation that imposes a new duty or obligation but is an interpretative policy or opinion on how the amended Social Security Law should be construed. Therefore, it does not require presidential approval nor publication in the Official Gazette to be effective. The Court affirmed the resolution of the SSC, agreeing that bonuses and overtime pay must be included in the computation of social security contributions based on the amendment of the law that redefined “compensation” for the purposes of the Act. DOCTRINES: Distinction Between Administrative Rule/Regulation and Interpretation: There is a distinction between an administrative rule or regulation and an administrative interpretation of a law. When an administrative agency promulgates rules and regulations, it "makes" a new law with the force and effect of a valid law. When it renders an opinion or gives a statement of policy, it merely interprets a pre-existing law. DOCTRINES: Binding Nature of Rules and Regulations: Properly promulgated rules and regulations partake of the nature of a statute because they are the product of a delegated power to create new or additional legal provisions that have the effect of law. A rule is binding on the courts as long as the procedure fixed for its promulgation is followed and its scope is within the statutory authority granted by the legislature. DOCTRINES: Advisory Nature of Administrative Interpretation: An administrative interpretation of the law is at best merely ADVISORY, as it is the court that ultimately determine what the law means. DOCTRINES: Circular No. 22 as Interpretative: Circular No. 22 is an administrative interpretation intended to inform employers of the Social Security Commission's understanding of the amended law. It clarifies what should be included in the monthly compensation of employees for social security contributions and did not require presidential approval or publication in the Official Gazette to be effective. DOCTRINES: Interpretation of "Compensation" within a Specific Law: While terms are generally interpreted according to their wellaccepted meaning in law, when a term is specifically defined in a particular law, that definition must be adopted in enforcing that particular law. A term or phrase may have one meaning for one purpose and another meaning for some other purpose. Republic Act 1161 specifically defined what "compensation" should mean "For the purposes of this Act". YOUR TURN Scenario 1: An administrative body issues a circular that adds a new requirement for compliance that was not explicitly stated in the original law. Question: Is this more likely an administrative rule/regulation or an administrative interpretation? ANSWER: ADMINISTRATIVE RULE/REGULATION. Administrative rules and regulations can add new legal provisions that have the effect of law. YOUR TURN Scenario 2: An administrative agency clarifies how it understands a specific term in a law after an amendment changes the term's definition. The agency then informs affected parties of its understanding. Question: Is this action more aligned with issuing an administrative rule/regulation or providing an administrative interpretation? ANSWER: ADMINISTRATIVE INTERPRETATION. Circular No. 22 was issued to inform those concerned with the Social Security Commission's interpretation of the amended law. YOUR TURN Scenario 3: An administrative body creates a detailed set of procedures for implementing a law, including potential penalties for non-compliance. Question: Does this scenario describe an administrative rule/regulation or an administrative interpretation? ANSWER: ADMINISTRATIVE RULE/REGULATION. Compliance with rules and regulations may be enforced by a penal sanction provided in the law. YOUR TURN Scenario 4: A government commission releases a statement explaining its view on how a recently amended law should be understood and applied. The statement aims to guide those affected by the law. Question: Is this more likely an administrative rule/regulation or an administrative interpretation? ANSWER: ADMINISTRATIVE INTERPRETATION. Circular No. 22 merely stated the opinion of the Social Security Commission as to how the law should be construed. YOUR TURN Scenario 5: An agency issues a directive that, if not followed, would lead to penalties based on specific legal provisions in the law. Question: Would the directive be considered an administrative rule/regulation, or an administrative interpretation? ANSWER: ADMINISTRATIVE INTERPRETATION. Penalties incurred for noncompliance are due to violation of specific legal provisions, not noncompliance with an interpretative circular. END OF DISCUSSION. THANK YOU!!!
