SC disallows P8-B Napocor allowances


THE Supreme Court (SC) has ruled that there was no legal basis to grant the back payment of additional Cost of Living Allowance (COLA) and Amelioration Allowance (AA) to National Power Corp. (Napocor)
personnel worth billions of pesos from July 1, 1989 to March 16, 1999.

In a full-court ruling, the SC held that the Regional Trial Court (RTC) “should have been more prudent in granting the immediate execution, considering that the execution of the judgment award involves the payment of almost P8.5 billion in public funds.”

“Wherefore, the petitions for certiorari and prohibition… are granted. The decision dated November 28, 2008, joint order dated March 20, 2009 and writ of execution dated March 23, 2009 of the [RTC] of

Quezon City, Branch 84… vacated and set aside. The Temporary Restraining Order [TRO] dated April 15, 2009 is made permanent. So ordered,” the ruling said.

The case stemmed from a petition for mandamus filed by the president of the National Power Corporation Employees Consolidated Union (NECU) and the president of the National Power Corporation Employees and Workers Union (NEWU) before the RTC.

It sought to direct the Napocor, its president and its board of Directors to release and pay the COLA and AA to all Napocor employees.

On August 21, 1989, Congress enacted Republic Act 6758, or the Compensation and Position Classification Act of 1989, to standardize compensation and benefits of public employees, effective July 1, 1989.

The law applied to all positions, whether appointive or elective, including those in government-owned and -controlled corporations.

It also provided that all allowances and other additional compensations not otherwise stated “shall be deemed included” in the prescribed standardized salary rates.

On November 28, 2008, the RTC rendered its decision in favor of NECU and NEWU.

According to the trial court, the determination of whether the COLA and AA had been factually integrated was already resolved when the Napocor Committee certified that the COLA and AA of the employees from July 1, 1989 to December 31, 1993 were not factually integrated into
their standardized salaries.

The trial court also cited “De Jesus, Philippine Ports Authority (PPA) Employees Hired After July 1, 1989, and Metropolitan Waterworks and Sewerage.”

On April 14, 2009, the Office of the Solicitor General (OSG) filed a very urgent plea for a TRO to enjoin the implementation of the trial court’s November 28, 2008 decision.

Thus, in a resolution dated April 15, 2009, the SC issued a TRO against the writ of execution until the case was brought again before the High Court.

In its ruling dated February 7, 2017 that was released only recently, the SC held that the trial court operated on the mistaken assumption that the OSG represented Napocor.

At this point in the proceedings, the [OSG] had already withdrawn its appearance as counsel for Napocor and entered its appearance as the People’s Tribune.”

“In presenting an adverse position, the OSG could not be deemed to have admitted the material allegations of the complaint.”

It further held that “money claims and judgments against the government must first be filed with the Commission on Audit.”

“Trial courts have already been strongly cautioned against the issuance of writs of execution in cases involving the disbursement of public funds in Supreme Court Administrative Circular No.10-2000,” the SC said.


Please follow our commenting guidelines.

Comments are closed.