G.R. No. 156208 - NPC Drivers and Mechanics Association vs. National Power Corp.

The Electric Power Industry Reform Act (EPIRA) (Republic Act No. 9136) was enacted to reform the electric power industry, notably by privatizing the assets and liabilities of the National Power Corporation (NPC).
EPIRA provided for the creation of the National Power Board (NPB) composed of nine duly designated members, including key Cabinet secretaries and the President of NPC, to supervise the restructuring and privatization process.

In pursuit of NPC’s privatization and restructuring, the NPB issued Resolutions Nos. 2002-124 and 2002-125 that ordered the termination of all NPC employees effective January 31, 2003.
These resolutions covered “early-leavers” (employees who neither intended to be re‑hired nor who were employed after a set cut‑off date) and other categories affected by the restructuring program.

In its Main Decision dated September 26, 2006, the Supreme Court held that the resolutions were void since they were not properly passed by a majority of NPB members (only three out of nine members voted, while the other signatories were mere representatives).
Subsequent clarifications in the Resolution dated September 17, 2008 confirmed that although the terminations were illegal, the Court’s decision did not preclude the NPB from later passing a valid separation program resolution.
The illegal dismissal of NPC employees was recognized, entitling them to separation pay in lieu of reinstatement, back wages (including wage adjustments and other benefits), with a mandatory deduction for separation benefits already received.
The Court also approved a 10% charging lien for the petitioners’ counsel fees in accordance with the Labor Code limitations.

After the judgment became final and executory (final on October 10, 2008, with entry of judgment on October 27, 2008), the Court directed NPC/NPB to prepare a verified list of terminated employees and the corresponding entitlements including legal interest.
The RTC Clerk of Court and ex‑officio Sheriff issued a writ of execution and Notices of Garnishment addressed to entities holding NPC/PSALM funds (including Meralco, the National Transmission Commission, and Land Bank) to secure the satisfaction of the judgment.
The parties were subsequently required to submit detailed employee lists with data on hire dates, termination dates, positions, salaries, separation benefits received, and adjustments to validate the computation of the petitioners’ entitlement.
Further, the Court deferred execution pending determination of the employees’ correct records and directed a temporary lift on the garnishments until proper submissions were made.

The petitioners argued for immediate execution and garnishment, claiming full entitlement from illegal dismissal including separation pay, back wages, and wage adjustments.
Respondents, notably NPC and the Power Sector Assets and Liabilities Management Corporation (PSALM), contested that only a limited number of terminations occurred and asserted that the resolution (NPB Resolution No. 2007-55) had cured any irregularities.
PSALM specifically maintained that its liability should be limited only to those obligations transferred under EPIRA and not to additional separation benefits that arose after the law’s effectivity.
Meralco, forced by garnishment directives, raised concerns regarding the release of funds collected as universal charges, line rental costs, and deferred adjustments—funds earmarked for specific statutory purposes.

The EPIRA (Sections 49 and 50) mandated the transfer of all existing NPC liabilities to PSALM, making PSALM responsible for the payment of separation benefits and related employee entitlements.
The Deed of Transfer, which distinguished between “Transferred Obligations” (assumed by PSALM) and “Contingent Liabilities” (remaining with NPC), formed the contractual basis for PSALM’s acceptance of NPC’s liability.
The computation of the petitioners’ entitlement was to follow the formula: separation pay in lieu of reinstatement plus back wages plus wage adjustments, minus any separation pay already received under the restructuring plan, with legal interest accruing on the resultant amount.

Whether PSALM can be held directly liable for the judgment debt arising out of the illegal dismissal of the NPC employees.
Whether the RTC Clerk of Court and ex‑officio Sheriff may directly execute the judgment by garnishing NPC/PSALM assets without a separate, proper procedure.
What the appropriate formula and guidelines are for computing the petitioners’ entitlement, including separation pay, back wages, and wage adjustments, as well as the deduction of previously received benefits.
Whether the responsibility for enforcing the judgment should be channeled to the Commission on Audit (COA) given that it has exclusive jurisdiction over claims against government agencies and controlled corporations.
Whether the motions filed by NPC (and its affiliated motions) and PSALM—questioning the validity of employee lists, claiming limited termination figures, and challenging the immediate execution—are proper and should be entertained.
Whether the contents of secondary filings (such as Meralco’s motion for clarification regarding the garnishment of universal charges, line rental, and deferred adjustments) fall within the scope of enforceability of the judgment.