Law Summary
Constitutional and Legal Basis for the CPCS
- Mandated under Section 5, Article IX-B of the 1987 Philippine Constitution to standardize compensation reflecting job responsibilities and qualifications.
- Supported by Presidential Decree No. 1597 (1978), Joint Resolution No. 4 (2009), and Republic Act No. 10149 (GOCC Governance Act of 2011).
- GCG empowered to classify GOCCs, conduct compensation studies, develop and recommend a competitive compensation system to the President.
- No GOCC is exempt from CPCS coverage regardless of conflicting laws.
Adoption and Approval of the CPCS and Index of Occupational Services (IOS)
- The CPCS and IOS Framework were developed by the GCG following thorough compensation studies.
- The President approved the CPCS and IOS for immediate effect across all covered GOCCs and related entities.
Collective Bargaining and Economic Terms Negotiations
- Recognizes constitutional rights of workers for self-organization and collective bargaining.
- Governing Boards of GOCCs are prohibited from negotiating economic terms of Collective Bargaining Agreements (CBAs) with their employees.
- Collective Negotiation Agreement (CNA) Incentives, traditionally for chartered GOCCs, extended to non-chartered GOCCs to ensure uniformity.
- Other incentives governed by Civil Service Commission (CSC) policies and relevant laws remain unaffected.
Implementation and Administration
- The Governance Commission for GOCCs (GCG) is mandated to implement and administer the CPCS.
- GCG responsible for issuing implementing rules and guidelines covering hiring rates, promotions, overtime pay, night shift differentials, merit increases, and Early Retirement Incentive Programs (ERIPs).
- Implementation should consider private sector practices and CPCS principles.
Funding and Financial Considerations
- Adjustments in compensation must align with the GOCC’s financial capability and approved Corporate Operating Budgets (COB).
- For GOCCs receiving government subsidies, COBs must be approved by both GCG and the Department of Budget and Management (DBM).
Protection Against Salary Reduction
- No reduction in authorized salaries for incumbent officers and employees as of December 31, 2015, during CPCS implementation.
Incentives Outside the CPCS
- The GCG may recommend additional incentives outside the CPCS for certain positions based on good GOCC performance.
- Such incentives require Presidential approval.
- Eligibility conditioned on full tax payments and fulfilment of dividend obligations under GOCC charters or laws.
Early Retirement Incentive Plan (ERIP)
- Available to all officers and employees covered by the CPCS who voluntarily retire or are separated due to GOCC restructuring.
- ERIP computed based on years of service multiplied by Basic Monthly Pay (BMP) with increasing multipliers:
- 1.00x BMP for first 20 years
- 1.25x BMP for 20 years and 1 day up to 30 years
- 1.50x BMP for over 30 years
Transitory Provisions
- GOCCs that are not under rationalization or reorganization, or those subject to pending abolition, dissolution, or privatization recommendations, shall maintain their existing compensation schemes despite CPCS effectivity.
Repeal of Inconsistent Laws
- All prior orders, circulars, issuances, board resolutions, and regulations inconsistent with this Order are repealed or modified accordingly.
Separability Clause
- Invalidity or unconstitutionality of any part of the Order shall not affect the validity of the remaining provisions.
Effectivity
- The Order takes effect immediately upon publication in a newspaper of general circulation.