Republic v. Cortez (G.R. No. 187257. August 08, 2017)

CASE DIGEST: REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE OFFICE OF THE SOLICITOR GENERAL (OSG) AS THE PEOPLE'S TRIBUNE, AND THE NATIONAL POWER BOARD, PETITIONERS, VS. HON. LUISITO G. CORTEZ, PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 84, QUEZON CITY, ABNER P. ELERIA, MELITO B. LUPANGCO, NAPOCOR EMPLOYEES CONSOLIDATED UNION (NECU), AND NAPOCOR EMPLOYEES AND WORKERS UNION (NEWU), RESPONDENTS. [G.R. No. 187257, August 08, 2017].

FACTS: This case resolves the 16,500 Workers' Solicitous Motion for Reconsideration filed by respondents National Power Corporation Employees Consolidated Union (NECU) and the National Power Corporation Employees and Workers Union (NEWU)

A Petition for Mandamus was filed by NECU and NEWU with Branch 84, Regional Trial Court, Quezon City, praying that the National Power Corporation (NAPOCOR) be ordered to release the Cost of Living Allowance (COLA) and Amelioration (AA) allegedly withheld from them from July 1, 1989 to March 19, 1999. NECU and NEWU believed that they were among the government employees whose COLA and AA were not factually integrated into their basic salary upon the implementation of Republic Act No. 6758.

The trial court granted their Petition and awarded a total of P6,496,055,339.98 as alleged back COLA and AA with P704,777,508.60 as legal interest. A Writ of Execution was issued.

The Office of the Solicitor General and the Secretary of Budget and Management separately filed Petitions for Certiorari with the Supreme Court to nullify the trial court's issuances.

On February 7, 2017, the Court rendered a Decision granting the Petitions for Certiorari. The Supreme Court held, among others, that respondents NECU's and NEWU's COLA and AA for the period July 1, 1989 to March 19, 1999 were already factually integrated into their basic salaries, by virtue of Section 12 of Republic Act No. 6758 and Memorandum Order No. 198, series of 1994.

In a motion to reconsider, NECU and NEWU insist that law, jurisprudence, and evidence support their contention that their COLA and AA were deducted from their salaries from July 1, 1989 to March 19, 1999. In particular, they distinguish NAPOCOR workers into three (3) categories. The first category includes workers already employed when Republic Act No. 6758 took effect and whose COLA and AA were integrated into their basic salaries only up to 1993. The second category covers those hired after Republic Act No. 6758 took effect and whose COLA and AA were allegedly deducted from 1989 to 1999. The third category consists of employees hired after the effectivity of Republic Act No. 7648 and whose COLA and AA were allegedly deducted from 1994 to 1999.

ISSUE: NECU and NEWU attempt to sway the Court by-insisting that those hired after Republic Act No. 6758 took effect have never received their COLA and AA and that these allowances were deducted from their basic pay.

HELD: NECU and NEWU are wrong.

The Court clarified that those who were already receiving COLA and AA as of July 1, 1989, but whose receipt was discontinued due to the issuance of DBM-CCC No. 10, were entitled to receive such allowances during the period of the Circular's ineffectivity, or from July 1,1989 to March 16,1999. The same factual premise was present in Metropolitan Waterworks and Sewerage System, wherein this Court reiterated that those already receiving COLA as of July 1, 1989 were entitled to its payment from 1989 to 1999.

In neither of these cases did this Court suggest that the compensation of the employees after the promulgation of Republic Act No. 6758 would be increased with the addition of the COLA and AA. If the total compensation package were the same, then clearly the COLA or AA, or both were factually integrated.

Republic Act No. 6758 remained effective during the period of ineffectivity of DBM-CCC No. 10. Thus, the COLA and AA of NAPOCOR officers and employees were integrated into the standardized salaries effective July 1, 1989 pursuant to Section 12 of Republic Act No. 6758, which provides:
Section 12. Consolidation of Allowances and Compensation. - All allowances, except for representation and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized. Existing additional compensation of any national government official or employee paid from local funds of a local government unit shall be absorbed into the basic salary of said official or employee and shall be paid by the National Government.
Those who were hired after the implementation of Republic Act No. 6758, or after July 1, 1989, did not receive a lesser compensation package than those who were hired before July 1, 1989. To emphasize, respondents NECU's and NEWU's COLA and AA were integrated into their basic salary by virtue of Section 12 of Republic Act No. 6758.

Section 12 has never been ineffective or rendered unconstitutional. Thus, all allowances not covered by the exceptions to Section 12 are presumed to have been integrated into the basic standardized pay. The receipt of a transition allowance is not proof that only those who were hired before July 1, 1989 received their COLA and AA. As this Court explained in its February 7, 2017 Decision, the transition allowance was given only to comply with the non-diminution clause of the law. It was never meant as an additional compensation to the standardized pay.

The Court likewise clarified that upon the implementation of Republic Act No. 7648, NAPOCOR workers were covered by a new compensation plan. All prior questions on the non-publication of Department of Budget and Management Corporate Compensation Circular No. 10 would no longer apply to the determination of whether COLA and AA were withheld. Furthermore, the new compensation plan under Republic Act No. 7648 already incorporated all benefits previously integrated, including the COLA and AA.

The alleged "Exhibit C" presented by respondents NECU and NEWU as evidence to prove that the COLA and AA were factually deducted from their basic pay is unmeritorious. It appears to be a collection list submitted before the Regional Trial Court in compliance with the Writ of Execution dated March 23, 2009. The list specifies names of employees, a computation of their alleged entitlements to their COLA and AA, and deductions for attorney's fees and docket fees. However, these computations were made only after the trial court had ruled in their favor. This Court has already ruled that the trial court gravely abused its discretion in granting the judgment award. Thus, these computations do not prove conclusively that respondents NECU's and NEWU's COLA and AA were withheld from July 1, 1989 to March 19, 1999.

Respondents NECU and NEWU, all 16,500 of them, were in a position to submit to this Court any pay slip or Notice of Position Allocation and Salary Adjustment showing an actual deduction of the COLA and AA from July 1, 1989 to March 19, 1999. They have failed to do so. As it stands, respondents NECU and NEWU have failed to prove that their COLA and AA were factually deducted from their basic pay.

Interestingly, while the 16,500 Workers' Solicitous Motion for Reconsideration was pending, two (2) motions were filed by the law firm of Angara Abella Concepcion Regala & Cruz (ACCRA), formally entering its appearance as lead counsel on behalf of respondents NECU and NEWU.[33] These motions were an Entry of Appearance with Omnibus Motion for Leave of Court and Time to File Supplemental Motion for Reconsideration and a Motion for Leave to File and Admit Attached Supplemental Motion for Reconsideration.

The ACCRA pleadings do not contain a conforme from respondents NECU and NEWU or a withdrawal of appearance from their counsel, Atty. Napoleon Uy Galit (Atty. Galit). It also appears from ACCRA'S affidavits of service that there were no copies furnished to Atty. Galit or to respondents NECU and NEWU. While motions for reconsideration are not among the pleadings required to be verified,[36] this circumstance is highly unusual, especially considering that the grant of a motion for reconsideration in this case may result in a more than P7 billion judgment award.

Nonetheless, in view of the denial of the 16,500 Workers' Solicitous Motion for Reconsideration, this Court finds that it is no longer necessary to pass upon ACCRA'S pleadings.

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