Case Summary (G.R. No. 193969-193970)
Applicable Law
The case involves the implementation of the Electric Power Industry Reform Act (EPIRA) under Republic Act No. 9136, enacted on June 26, 2001, establishing regulations for the privatization of the NPC’s assets.
Background of the Case
The controversy stemming from the implications of the NPC's privatization unfolded over nearly two decades, marked by numerous rulings and clarifications by the Supreme Court. The COA's Decision No. 2019-416, dated September 23, 2019, relates to several money claims lodged by NPC employees terminated under purportedly void resolutions from the National Power Board, which the Supreme Court had previously declared null and void.
Summary of Events
The Supreme Court's resolution on September 26, 2006, addressed the validity of National Power Board Resolutions No. 2002-124 and No. 2002-125 that led to the termination of approximately 9,272 NPC employees. In 2008, the Court established that the terminations were illegal, thus entitling affected employees to reinstatement or separation pay, backwages, and benefits due from January 31, 2003. Following resolutions enabled the validation of claims involving attorney's fees and separation benefits due to the affected employees.
COA's Findings
The COA, in its Decision No. 2019-416, partly granted the money claims of the terminated NPC employees. It elucidated the computation of each employee's entitlements based on prior decisions. Moreover, the COA clarified that those re-hired, or transferred under the EPIRA provisions, were not entitled to backwages or salary differentials.
Legal Contentions and Rulings
Petitioners' Claims: The petitioners contended that the COA erred by denying backwages and salary differentials to over 7,000 re-hired employees. They argued the COA failed to recognize their classification as a class suit with jurisdiction over all 9,272 claims.
PSALM's Argument: PSALM challenged COA's decisions, asserting it should not be mandated to source funds from avenues other than NPC’s privatization proceeds. PSALM further insisted that legal interest payment was contingent on available funds and that each claim must be individually substantiated before approval.
Supreme Court's Ruling
In the concurrent rulings of the petitions filed by both parties, the Supreme Court observed procedural deficiencies in G.R. No. 253395, ruling that the assertions therein largely echoed an appeal against COA's final orders, thus necessitating adherence to a timeline that had been exceeded. However, it opted against dismissing the petition on procedural sufficiency to favor substantive justice due to the potential impact on affected employees.
The Court reinforced its earlier findings that PSALM assumed NPC's liabilities, emphasizing that obligations in
...continue readingCase Syllabus (G.R. No. 193969-193970)
Background and Legislative Framework
- The case concerns the implementation and consequences of the Electric Power Industry Reform Act (EPIRA), Republic Act No. 9136, enacted on June 26, 2001.
- EPIRA mandated the privatization and restructuring of the electric power industry including the assets and liabilities of the National Power Corporation (NPC).
- The National Power Board (NPB) was created by EPIRA, composed of seven Cabinet Secretaries and two agency heads, notably including the President of NPC.
- In 2002, NPB adopted Resolutions Nos. 2002-124 and 2002-125, initiating the NPC Separation Program which terminated NPC personnel effective January 31, 2003, with entitlements to separation benefits.
Initial Legal Challenge and Supreme Court Declaratory Rulings
- NPC employees and unions, including petitioners from various unions (DAMA, NEWU, NECU), challenged the validity of the NPB resolutions citing the lack of majority approval during the NPB meeting.
- The Supreme Court (SC) did not issue a temporary restraining order; termination proceeded nonetheless.
- On September 26, 2006, SC declared NPB Resolution Nos. 2002-124 and 2002-125 null and void for lack of proper enactment, although initially silent on effects regarding separated employees.
- Clarification in 2008 established that the employees were illegally dismissed and entitled to reinstatement or separation pay plus backwages and benefits from January 31, 2003, less separation pay already received.
- Finality of the decision occurred in October 2008; the Court directed immediate payment to claimants and execution of the judgment.
Compliance Difficulties and Role of PSALM and COA
- NPC and NPB were slow to comply with payment directives; employees sought garnishment of NPC and PSALM assets.
- PSALM asserted it should not be bound by the judgment and that EPIRA does not authorize garnishment of its assets for NPC liabilities.
- The SC rejected PSALM's argument, affirming PSALM's liability for NPC's obligations under EPIRA.
- COA issued Decision No. 2019-416 partially granting entitlement to petitioners contingent on fund availability and usual accounting rules.
- COA's computation followed SC guidelines but excluded re-hired or absorbed employees from claims to avoid unjust enrichment.
- COA mandated validation of claims and supervised payments, but refrained from authority on attorney’s and agency fees.
Specific Claims and Controversies
- Petitioners contend COA erred by not granting salary differentials to rehired NPC workers and failing to recognize attorneys' and unions' fees.
- PSALM contends COA erred by not limiting payments from privatization