Constitutional and statutory legal basis
- Section 16, Article XII of the Constitution recognizes that GOCCs may be established in the interest of the common good, subject to economic viability.
- Section 5, Article IX-B of the Constitution requires Congress to standardize the compensation of government officials and employees, including those in GOCCs with original charters, considering the nature of responsibilities and qualifications required.
- Republic Act No. 10149 (GOCC Governance Act of 2011) mandates the Governance Commission for GOCCs (GCG) to classify GOCCs, conduct compensation studies, develop and recommend a competitive compensation system, and develop a CPCS for GOCC officers and employees, subject to President approval.
- Section 9 of Republic Act No. 10149 provides that no GOCC is exempt from the coverage of the CPCS developed by the GCG.
- Executive Order No. 203 (s. 2016) adopted the prior CPCS and a general index of occupational services for the GOCC sector covered by Republic Act No. 10149.
- Executive Order No. 36 (s. 2017) suspended the prior CPCS under EO No. 203 pending further study and review, focusing on removal of excessive, unauthorized, illegal, or unconscionable allowances and rationalization of requirements hampering implementability.
Coverage: who is governed and when
- Section 1 applies the CPCS and the IOS-G Framework to all GOCCs, including their subsidiaries.
- For Section 1, covered “GOCCs” include Government Financial Institutions (GFIs) and Government instrumentalities with Corporate Powers (GICPs) / Government Corporate Entities (GiCPs / GCEs), collectively referred to as GOCCs, unless excluded from coverage of Republic Act No. 10149.
- Section 1 states that the CPCS does not apply to GOCCs with approved abolition or deactivation orders.
- Section 1 authorizes the GCG to convert or revise the existing position classification system of the covered GOCCs to align with the CPCS.
- Section 1 provides that “AH positions” in GOCCs shall be allocated by the GCG to their proper position titles and job grades in the IOS-G.
CPCS adoption, position classification, and governance roles
- Section 1 approves the CPCS and the IOS-G framework for the GOCC sector and makes them applicable to covered GOCCs.
- The GCG is empowered to convert or revise existing position classification systems to achieve alignment with the CPCS.
- Section 1 requires allocation of AH positions into proper position titles and job grades within the IOS-G by the GCG.
- Section 8 designates the GCG as the implementing agency administering the CPCS.
- Section 8 empowers the GCG to issue implementing guidelines, including matters relating to affordability, step increments, hiring rates, overtime pay, night shift differential, merit increases, and separation pay programs, taking into account private sector practices and the guiding principles in the CPCS.
- Section 8 provides that guidelines for higher rates of Performance-Based Bonus for GOCCs in Categories 2 or 3 require approval of the President.
Collective bargaining limits on economic terms
- Section 2 recognizes workers’ constitutional rights to self-organization, collective bargaining, and negotiations.
- Section 2 prohibits the governing boards of all covered GOCCs from negotiating the economic terms and conditions of CNAs/CBAs with their officers and employees.
- Section 2 directs that CNA incentives must be guided by policies and guidelines established by the Department of Budget and Management (DBM).
- Section 2 provides that CNA incentives must be extended to non-chartered GOCCs to promote uniformity of allowable incentives within the GOCC sector.
Timing, non-diminution, and standardization rules
- Section 3 provides that the monthly basic salary structure of a GOCC and its allowances, benefits, and incentives become effective upon issuance of the corresponding authorization from the GCG.
- Section 3 allows the GCG En Bane to set a uniform effectivity date across GOCCs, provided it is not earlier than the order’s effectivity date.
- Section 4 establishes non-diminution of authorized salaries: there shall be no diminution in the existing authorized salaries of incumbent officers and employees in the concerned GOCCs.
- For Section 4, “authorized salaries” are limited to the salary structure duly authorized by the Office of the President (OP) and/or by law.
- Section 4 clarifies that approval by a GOCC governing board alone is not considered “authorized” for purposes of the non-diminution rule.
- Section 5 requires standardization: the existing compensation granted by GOCCs shall be standardized in accordance with the CPCS.
- Section 5 prohibits GOCC governing boards from granting any additional compensation outside the CPCS unless recommended by the GCG and approved by the President.
- Section 6 applies the CPCS rates on Provident Fund contributions to all GOCCs, subject to rationalization measures outlined in the CPCS.
- Section 7 mandates that all officers and employees automatically start at Step 1 of the prescribed Monthly Basic Salary Structures under the CPCS, unless otherwise provided in the CPCS.
- Section 7 allows adjustment of step increment progressions subject to implementing guidelines issued by the GCG.
Implementation deadlines, reporting, and periodic review
- Section 8 requires the GCG to submit a Consolidated CPCS Report to the OP through the Executive Secretary within ninety (90) days from the order’s effectivity.
- The Consolidated CPCS Report must summarize the authorizations issued by the GCG for all covered GOCCs and the status of implementation.
- Section 9 requires review of the CPCS by the GCG En Bane three (3) years after effectivity and every three (3) years thereafter.
- Section 9 requires the periodic review to consider performance of GOCCs, overall contribution to the national economy, and possible erosion in purchasing power due to inflation and other factors.
Funding rules, affordability limits, and operating constraints
- Section 10 ties compensation adjustments to the financial capability of each GOCC and its corporate operating budget (COB), as approved by the GOCC governing board and the DBM.
- Section 10 directs that required amounts for CPCS implementation shall be charged against the GOCC’s Personnel Services appropriations under its approved COB.
- Section 10 prohibits a GOCC from sourcing payment for CPCS implementation from:
- Loans;
- Sale of the GOCC’s asset(s) for the sole purpose of compensation adjustment; and
- Other schemes analogous to the foregoing.
- Section 10 prohibits GOCCs from increasing service fees for the purpose of augmenting deficiencies in amounts prescribed under the order.
- Section 10 requires that compensation adjustments must not adversely affect implementation of programs/projects or attainment of performance targets.
- Section 11 mandates affordability mechanisms:
- For GOCCs in Category 1, the GCG determines that a GOCC lacks adequate or sufficient funds, then it must partially implement the salary schedule at a lower uniform percentage across all positions.
- For GOCCs in Categories 2 and 3, if the GCG determines inadequate or insufficient funds, then the GOCC must adopt the salary schedule of lower tiers or of Category 1.
Mandatory action, reorganizations, and separation pay
- Section 12 requires mandatory action for non-implementation: any GOCC that fails or refuses to implement the CPCS rates or the lower amounts applicable under Section 11 must undergo a mandatory action.
- Section 12 provides that mandatory action includes being reorganized, merged, streamlined, abolished, or privatized pursuant to Section 5(a) of Republic Act No. 10149, upon recommendation of its Supervising Agency.
- Section 12 mandates separation incentive pay for affected personnel: officers and employees affected by the mandatory action are entitled to separation incentive pay rates unless the GCG recommends lower rates to the OP.
- Section 12 sets separation incentive pay rates tied to Monthly Basic Salary (MBS) and years of service:
- First 20 years: 1.00 x MBS x No. of years
- 20 years and 1 day to 30 years: 1.25 x MBS x No. of years
- 30 years and 1 day and above: 1.50 x MBS x No. of years
- Section 13 authorizes early retirement incentive (ERI) and involuntary separation incentive pay (SIP):
- The GCG is authorized to grant ERI to officers and employees who voluntarily elect to be retired.
- The GCG is authorized to grant SIP to those involuntarily separated from service.
- Section 13 requires ERI and SIP to follow the rates under Section 12, unless adjusted rates are recommended to and approved by the OP.
- Section 13 provides that ERI and SIP are in addition to retirement or separation benefits under existing laws.
Repeal, separability, and continuing effect
- Section 14 repeals Executive Order No. 203.
- Section 14 repeals or modifies accordingly all other orders, rules and regulations, and issuances or parts thereof that are inconsistent with the order.
- Section 15 provides separability: if any provision is declared invalid or unconstitutional, the remaining provisions not affected remain valid and subsisting.