G.R. No. 204800, October 14, 2014
NATIONAL TRANSMISSION CORPORATION, Petitioner, v. COMMISSION ON AUDIT, ATTY. JOSEPHINE A. TILAN, REGIONAL CLUSTER DIRECTOR AND MR. ROBERTO G. PADILLA, STATE AUDITOR IV, Respondents.
D E C I S I O N
Effective January 1, 2002, continuous and satisfactory services in government for purposes of granting loyalty award shall include services in one or more government agencies without any gap.
Services rendered in other government agencies prior to January 1, 2002 shall not be considered for purposes of granting the loyalty award.9chanrobleslaw
The above-quoted policy specifies that only the entire service in the particular agency where a government personnel is employed as of January 1, 2002 shall be considered part of the 10th year loyalty award. Services rendered in other government agencies before January 1, 2002 shall not be considered for purposes of completing the required 10-year loyalty award.
To illustrate this policy, may we cite an example:chanRoblesvirtualLawlibrary
Mr. X was employed at the National Computer Center (NCC) in May 1993 and transferred to the Department of Trade and Industry (DTI) in October 1995. Mr. X shall be entitled to the 10th year in government service Loyalty Award on October 2005. His services at [the] NCC can no longer be considered for purposes of granting the loyalty award.
However, even if X employee again transfers from DTI to another government agency on May 2004, she/he will still be entitled to receive the 10th year loyalty award by July 2005 since his services in DTI from October 1995 shall be considered. The entire service in the agency where a government personnel is employed as of January 1, 2002 shall be considered part of the 10th year loyalty award or 5th year milestone loyalty award.
Based on the sample service record you cited, said Transco employee is entitled to receive the 10th year loyalty award effective April 1, 2003 and Transco, where she/he is presently employed is obliged to pay said personnel. However, services rendered at DENR and Congress can no longer be considered for purposes of granting the loyalty award. Thus, on April 1, 2008, she/he will again be entitled to 5,000 Loyalty Award for completing the 15th year service in government.
On the other hand, if the grantee had already been paid by NPC of the 10-year Loyalty Award last October 3, 1998, Transco will only pay for the 5-year milestone Loyalty Award on October 3, 2003.11chanrobleslaw
The above transaction clearly violated the provisions of the above-mentioned EPIRA law and CSC Memorandum Circular. The attached schedule presents the total amount of loyalty award paid to NL-TRANSCO employees. Since the services of these retired employees were already terminated effective February 28, 2003 and received their separation benefits, they are considered new in the government service. Hence, for purposes of computing the rendition of continuous and satisfactory service for the grant of loyalty award, the same shall be reckoned from the date of reemployment which is March 1, 2003.
x x x x
The foregoing CSC Primer on Loyalty Award provides that services rendered prior to the reemployment of an employee who was separated from the service with separation benefits with or without gaps are not included for purposes of the grant of Loyalty Award. This is because such separation partakes of retirement. A retired government official or employee is considered to have already severed his relationship with the government. Thus, for purposes of computing the rendition of continuous and satisfactory service for the grant of Loyalty Award, the same shall be reckoned from the date of reemployment.14chanrobleslaw
Is a retired/resigned government employee entitled to loyalty award?
No. A retired/resigned government employee shall no longer be entitled to the grant of loyalty award since he has already severed his relationship with the Government (CSC Letter dated February 26, 1993 to Irenea F. Bahian)
Could an official or employee who retired/resigned but was reinstated or reemployed later in the service be entitled to the award?
Yes. The computation of length of service shall reckon from the date of reinstatement/reemployment in the particular agency granting the award. (CSC Letter February 4, 1993 to Pablo S. Sayson)
x x x x
Are the services rendered prior to the reemployment of an employee who was separated from the service with separation benefits, with or without gaps, considered for purposes of the grant?
No. Said separation from the service partakes the nature of retirement. (CSC Letter dated October 14, 1993 to Antonio R. Dizon)16chanrobleslaw
The separated employees were considered legally terminated when they availed the benefits and separation pay prescribed under said Act. (Sec. 3b (i), Rule 33 of the Implementing Rules and Regulation). Thus, when these separated employees were rehired either by NPC or TRANSCO, they are reconsidered as new. This is the main gist of Section 3c, Rule 33 of the same IRR which expressly provides that:chanRoblesvirtualLawlibrary“xxx The governing board or authority of the entities enumerated in Section 3(b) hereof shall have the sole prerogative to hire the separated employees as NEW EMPLOYEES who start their service for such position and for such compensation as may be determined by such board or authority pursuant to its restructuring program. Those who avail of the foregoing privileges shall start their government service anew if absorbed by any government agency or any government-owned successor company.”
This express provision of the IRR negated Item 4.4 of MC No. 06, S. 2002 which provides that the continuous and satisfactory service in government for purpose of granting loyalty award shall include services in one or more government agencies without any gap.20chanrobleslaw
WHEREFORE, foregoing premises considered and finding the instant petition to be devoid of merit, the same is hereby DENIED. Accordingly, this Commission affirms LAO-Corporate Decision Nos. 2007-056 and 2007-007 dated July 13, 2007 and February 27, 2007, respectively, and all persons found liable in ND No. 05-037 dated July 5, 2005 should refund the loyalty award received.24chanrobleslaw
- MISINTERPRETED CSC MEMORANDUM CIRCULAR 06, SERIES OF 2002 (MC 06), AND ERRONEOUSLY STATED THAT AN EMPLOYEE IS ENTITLED TO LOYALTY AWARD ONLY IF HE HAS CONTINUOUSLY RENDERED THE TEN-YEAR SERVICE IN ONE PARTICULAR GOVERNMENT AGENCY.
- MISTAKENLY RULED THAT THE CONTINUITY OF THE SERVICE OF EMPLOYEES SEPARATED FROM SERVICE DUE TO REORGANIZATION, IS RECOGNIZED ONLY WHEN THE SEPARATION PACKAGE PROVIDED UNDER THE EPIRA IS NOT CLAIMED.26
x x x. This Office agrees that NPC employees did not incur any “gap” after being separated from NPC on February 23, 2003 since they were rehired by TRANSCO immediately the following day or on March 01, 2003. x x x29chanrobleslaw
Pursuant to CSC Resolution No. 02-0295 dated Feb. 26, 2002, the Commission amends the policies on the grant of loyalty award. These policies were formulated to recognize the continuous and satisfactory service rendered in the government by officials and employees for a period of ten years. The revised policies are as follows:
- A loyalty award is granted to all officials and employees, in the national and local governments, including those in the state colleges and universities (SUCs) and government-owned and controlled corporations (GOCCs) with original charter, who rendered ten (10) years of continuous and satisfactory service in the government.
- The particular agency where the employee or official completed the ten (10) years of continuous and satisfactory service shall grant the award.
- An official or employee who incurred an aggregate of not more than 50 days authorized vacation leave without pay within the 10-year period shall be considered as having rendered continuous service for purposes of granting the loyalty award.
In the same way, an official or employee who incurred an aggregate of not more than twenty five (25) days authorized vacation leave without pay within the 5-year period may qualify for the 5-year milestone loyalty award.
- Effective January 1, 2002, continuous and satisfactory services in government for purposes of granting loyalty award shall include services in one or more government agencies without any gap.
Services rendered in other government agencies prior to January 1, 2002 shall not be considered for purposes of granting the loyalty award.31
Even in the deliberations of Congress during the passage of R.A. No. 9136, it was manifest that it was not the intention of the law to infringe upon the vested rights of NPC personnel to claim benefits under existing laws. To assure the worried and uneasy NPC employees, Congress guaranteed their entitlement to a separation pay to tide them over in the meantime. More importantly, to further allay the fears of the NPC employees, especially those who were nearing retirement age, Congress repeatedly assured them in several public and congressional hearings that on top of their separation benefits, they would still receive their retirement benefits, as long as they would qualify and meet the requirements for its entitlement.
The transcripts of the Public Consultative Meeting on the Power Bill held on February 16, 2001, disclose the following:chanRoblesvirtualLawlibrary
x x x x
THE CHAIRMAN (SEN. J. OSMENA). Well, the other labor representation here is Mr. Anguluan.
MR. ANGULUAN: Yes, Your Honor.
THE CHAIRMAN (SEN. J. OSMENA). Okay. Will you present your paper?
MR. ANGULUAN: We have prepared a paper which we have sent to the honorable members of the Bicam. x x x.
THE CHAIRMAN (SEN. J. OSMENA). I don't think anyone is going to deprive you of your rights under the law. You will enjoy all your rights. You will receive retirement benefits, separation pay, and all of the rights that are provided to you by law. What we have objected to in the Senate is retirement benefits higher than what everybody else gets, like 150 percent or subject to the approval of the board which means sky is the limit. So, we have objected to that. But what you are entitled to under the law, you will get under the law and nobody will deprive you of that.
A year later, on February 12, 2002, the Joint Congressional Power Commission was held. The transcripts of the hearing bare the following:chanRoblesvirtualLawlibrary
x x x x
THE CHAIRMAN (REP. BADELLES). They will still be subject to the same conditions. Meaning, NPC has the discretion whether to reabsorb or hire back those that avail of the separation benefits.
SEN. OSMENA (J). No. But they are not being - - the plants are not being sold, so they are - but what we are giving them is a special concession of retiring early.
No, okay. You consider . . .
THE CHAIRMAN (REP. BADELLES). We are not speaking of retirement here, we are speaking of their separation benefits . . .
SEN. OSMENA (J). Okay, separation benefits.
THE CHAIRMAN (REP. BADELLES). Precisely, if they are considered terminated.
SEN. OSMENA (J). All right. Separation . . .
THE CHAIRMAN (REP. BADELLES). A retirement plan is a different program than separation.
SEN. OSMENA (J). Separation benefits, okay.
THE CHAIRMAN (REP. BADELLES). All right.34chanrobleslaw
In the case of Santos v. Servier Philippines, Inc., citing Aquino v. National Labor Relations Commission, We declared that the receipt of retirement benefits does not bar the retiree from receiving separation pay. Separation pay is a statutory right designed to provide the employee with the wherewithal during the period that he/she is looking for another employment. On the other hand, retirement benefits are intended to help the employee enjoy the remaining years of his life, lessening the burden of worrying about his financial support, and are a form of reward for his loyalty and service to the employer. A separation pay is given during one's employable years, while retirement benefits are given during one's unemployable years. Hence, they are not mutually exclusive.
x x x x
Thus, it is clear that a separation pay at the time of the reorganization of the NPC and retirement benefits at the appropriate future time are two separate and distinct entitlements. Stated otherwise, a retirement plan is a different program from a separation package.
There is a whale of a difference between R.A. No. 1616 and C.A. No. 186, together with its amendatory laws. They have different legal bases, different sources of funds and different intents.40chanrobleslaw
SEC. 8. No elective or appointive public officer or employee shall receive additional, double or indirect compensation, unless specifically authorized by law, nor accept without the consent of the Congress, any present, emolument, office, or title of any kind from any foreign government.
Pensions or gratuities shall not be considered as additional, double, or indirect compensation.41
It is irrefutable that before TRANSCO issued its internal guidelines on the grant of the Loyalty Award, it first sought and awaited the CSC’s advice on the interpretation of applicable MC 06 provisions and the entitlement of separated NPC employees. It only issued its internal guidelines after the receipt of the CSC’s opinion on the matter. TRANSCO prudently observed the necessary measures to implement CSC MC 06. It also ensured that the recipients of the Award are qualified.42
Based on the sample service record you cited, said Transco employee is entitled to receive the 10th year loyalty award effective April 1, 2003 and Transco, where she/he is presently employed is obliged to pay said personnel. However, services rendered at DENR and Congress can no longer be considered for purposes of granting the loyalty award. Thus, on April 1, 2008, she/he will again be entitled to 5,000 Loyalty Award for completing the 15th year service in government.43chanrobleslaw
Considering, however, that all the parties here acted in good faith, we cannot countenance the refund of subject incentive benefits for the year 1992, which amounts the petitioners have already received. Indeed, no indicia of bad faith can be detected under the attendant facts and circumstances. The officials and chiefs of offices concerned disbursed such incentive benefits in the honest belief that the amounts given were due to the recipients and the latter accepted the same with gratitude, confident that they richly deserve such benefits.48chanrobleslaw
1 Rule XII, Section 1 of the COA’s Revised Rules states that “any decision, order or resolution of the Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty (30) days from receipt of a copy thereof in the manner provided by law and the Rules of Court.”
2 Penned by the Chairman Reynaldo A. Villar, with Commissioner Juanito G. Espino, Jr. and Assistant Commissioner Elizabeth S. Zosa concurring; Annex “A” to Petition, rollo, pp. 24-31.
3 Penned by the Chairperson Ma. Gracia M. Pulido Tan, with Commissioners Juanito G. Espino, Jr. and Heidi L. Mendoza, concurring; Annex “B” to Petition, id. at 32-34.
4 Supra note 2, at 24.
8Id. at 24-25.
9Id. at 25. (Underscoring omitted)
10 Annex “D” to Petition, Id. at 37-38.
11Id. at 38. (Underscoring in the original)
12 Supra note 2, at 25.
13 Annex “F” to Petition, rollo, pp. 44-47.
14Id. at 45-47. (Emphasis supplied)
15Id. at 46.
17 Annex “G” to Petition, rollo, pp. 51-52.
18 Annex “H” to Petition,id. at 53-57.
19Id. at 54.
20 Supra note 18, at 53-54.
22 Supra note 2, at 27-28.
23Id. at 24-31.
24Id. at 30-31. (Emphasis in the original)
25 Annex “L” to Petition, rollo, pp. 85-96.
26Rollo, p. 9.
27 Comment to Petition, id. at 105-122.
28Id. at 112.
29 Annex “J” to Petition, id. at 71.
30Id. at 118.
32 Supra note 2, at 27.
33 G.R. Nos. 156556-57, October 4, 2011, 658 SCRA 420..
34Betoy v. The Board of Directors, National Power Corporation, supra, at 461-462. (Emphasis supplied)
35 Supra note 2, at 27.
36 Betoy v. The Board of Directors, National Power Corporation, supra note 33, at 463.
37 Section 3(b)(i), Rule 33, Implementing Rules and Regulations (IRR) of the EPIRA Law.
38Betoy v. The Board of Directors, National Power Corporation, supra note 33, at 461.
39 Supra note 33.
40Id. at 460-463. (Emphasis supplied)
42Rollo, p. 14.
43Id. at 38. (Emphasis supplied.)
44Casal v. The Commission on Audit, 538 Phil. 634, 645 (2006).
46 356 Phil. 678 (1998).
47Casal v. The Commission on Audit, supra note 43.
48Blaquera v. Alcala, supra note 45, at 765-766. (Emphasis supplied)