THE Supreme Court (SC) has reversed a decision issued by a Regional Trial Court (RTC) in Quezon City allowing the back payment of additional cost-of-living allowance (Cola) and amelioration allowance (AA) to National Power Corp. (Napocor) personnel amounting to P8.5 billion from July 1, 1989, to March 16, 1999.
In a 44-page decision penned by Associate Justice Marvic Leonen, the 15-man High Tribunal held that the trial court should have been cautious in coming out with such a ruling since it would entail release of billions in public funds.
“The Regional Trial Court should have been more prudent in granting the immediate execution, considering that the execution of the judgment award involves the payment of almost P8.5 billion in public funds. As previously discussed, there was no legal basis to grant the back payment of additional Cola and AA to Napocor personnel from July 1, 1989, to March 16, 1999,” the Court ruled.
The Court ruling stemmed from the petition filed by the National Power Board and the Department of Budget and Management (DBM) seeking the reversal of the RTC in Quezon City Branch 84’s November 28, 2008, decision, its joint order dated March 20, 2009, and writ of execution dated March 23, 2009, that all granted the petition for mandamus filed the president of the Napocor Employees Consolidated Union (Necu) and the president of the Napocor Employees and Workers Union (Newu) before the RTC.
The petition sought to direct the Napocor, its president and board of directors to release and pay the Cola and AA to all Napocor employees.
It can be recalled that on August 21, 1989, Congress enacted Republic Act 6758, or the Compensation and Position Classification Act of 1989, to standardize compensation and benefits of public employees, effective July 1, 1989.
The law applied to all positions, whether appointive or elective, including those in government-owned and -controlled corporations.
It also provided that all allowances and other additional compensation, not otherwise stated, “shall be deemed included” in the prescribed standardized salary rates.
However, Necu and Newu insisted that their Cola and AA from July 1, 1989, to December 31, 1993, were not factually integrated into their standardized salaries.
On November 28, 2008, the RTC rendered its decision in favor of Necu and Newu.
According to the trial court, the determination of whether the Cola and AA had been factually integrated was already resolved when the Napocor Committee certified that the Cola and AA of the employees from July 1, 1989, to December 31, 1993, were not included in their standardized salaries.
On April 14, 2009, the Office of the Solicitor General (OSG) filed a very urgent plea for a TRO to enjoin the implementation of the trial court’s November 28, 2008, decision.
Thus, in a resolution dated April 15, 2009, the SC issued a temporary restraining order (TRO) against the writ of execution until the case was brought again before the high court following the trial court’s ruling on the main petition.
The Court held that “money claims and judgments against the government must first be filed with the Commission on Audit [COA].”
“Trial courts have already been strongly cautioned against the issuance of writs of execution in cases involving the disbursement of public funds in Supreme Court Administrative Circular 10-2000,” it added.
The SC also ruled that Cola and AA of the employees were integrated with the salaries of the employees after the promulgation of RA 6758.
“Republic Act 6758 remained effective during the period of ineffectivity of DBM-CCC [Department of Budget and Management-Climate Change Commission] 10. Thus, the Cola and AA of Napocor officers and employees were integrated into the standardized salaries effective July 1, 1989, pursuant to Section 12 of RA 6758,” the SC said.
“To grant any back payment of COLA and AA despite their factual integration into the standardized salary would cause salary distortions in the civil service. It would also provide unequal protection to those employees whose COLA and AA were proven to have been factually discontinued from the period of R.A. 6758’s effectivity,” the SC also said.