G.R. No. 253395 - Magante vs. Commission on Audit

Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) was enacted on June 26, 2001, to reform the electric power industry, particularly the privatization of the National Power Corporation’s (NPC) assets and liabilities.
EPIRA established the National Power Board (NPB), composed of seven Cabinet Secretaries and two agency heads (Director-General of NEDA and NPC President), to oversee this transition.

On November 18, 2002, NPB issued Resolution Nos. 2002-124 and 2002-125, providing guidelines on NPC’s separation program and formation of a transition team.
The resolution ordered termination of all NPC personnel effective January 31, 2003, entitled to separation benefits.

NPC employees, including the petitioners represented by various labor unions (DAMA, NEWU, NECU), filed a petition to enjoin implementation of the NPB resolutions, arguing that these were passed without a majority vote of the NPB members.
The Supreme Court (SC) did not issue a restraining order; thus, terminations proceeded.
In a September 26, 2006 ruling (G.R. No. 156208), the SC declared NPB Resolution Nos. 2002-124 and 2002-125 void due to non-compliance with required approvals.

The SC was initially silent on the effect of the nullification for the terminated employees.
On September 17, 2008, the SC resolved that the illegal dismissal of the employees necessitated entitlement to reinstatement or separation pay in lieu, backwages, wage adjustments, and all other benefits from the date of dismissal (January 31, 2003) until reinstatement or payment.
The Court also approved a 10% attorney’s charging lien for counsel Aldon and Orociao.

The SC’s final and executory decision (October 2008) and its mandate for NPC and NPB to pay affected employees met non-compliance issues.
The terminated employees sought garnishment of NPC assets, including those of PSALM.
PSALM contended it was not a party to the case and its assets were not liable since liabilities transferred to it under EPIRA do not include separation benefits.
The SC rejected this and held PSALM liable, since it assumed NPC’s liabilities upon privatization.

The Commission on Audit (COA), in Decision No. 2019-416 dated September 23, 2019, partially granted the petitioners’ money claims against NPC and PSALM.
COA ordered updating of claim computations, scheduling payment, validation of calculations, and directed support personnel for audit purposes.
COA ruled that re-hired employees are not entitled to backwages or salary differentials to prevent unjust enrichment.
Claims for attorney’s fees and agency fees were excluded from COA’s purview for adjudication.

Petitioners argued COA erred by excluding salary differentials for the ~7,000 re-hired workers, attorney’s fees of their counsel, and agency fees of their unions.
PSALM contended COA could and should determine the source of funds (solely from proceeds of NPC asset sales) and that payment of legal interest should depend on available funds.
PSALM also emphasized the need for validation of claims with complete documentation as per Presidential Decree No. 1445.
COA maintained its jurisdictional limits and explained that determination of source of funds and payment appropriations fell outside its mandate.

Procedural issues on the timeliness and method of filing petitions for certiorari against COA Decision No. 2019-416.
Whether COA committed grave abuse of discretion:

In refusing to grant salary differentials to re-hired NPC employees.
In failing to recognize attorney’s fees claim of Atty. Napoleon Galit and agency fees of NPC unions DAMA, NEWU, and NECU.
In declining jurisdiction over the money claims for salary differentials.

Whether PSALM is liable for the payment of NPC employees’ separation benefits and other monetary obligations.
Whether COA has the power to determine the source of funds for payment of the judgment obligation.
Proper computation and inclusions in the monetary awards (backwages, separation pay, wage adjustments, legal interest).
Compliance with documentary requirements for claim validation and computation.