EN BANC
G.R. No. 218363, May 31, 2016
ENGR. ARTEMIO A. QUINTERO, JR., GENERAL MANAGER, CAUAYAN CITY WATER DISTRICT (CCWD) CAUAYAN CITY, ISABELA, Petitioner, v. COMMISSION ON AUDIT, Respondent.
D E C I S I O N
MENDOZA, J.:
This petition for certiorari under Rule 64 of the Revised Rules of Court seeks to reverse and set aside the July 18, 2014 Decision1 and the March 9, 2015 Resolution2 of the Commission on Audit (COA), which affirmed the April 25, 2011 Decision3 of the COA Regional Office No. II (Regional Office), upholding Notice of Disallowance (ND) No. 2010-01-101,4 dated March 9, 2010, representing the overpayment of salary and year-end bonus of petitioner Engr. Artemio A. Quintero, Jr. (Quintero), the General Manager (GM) of Cauayan City Water District (CCWD).
On March 28, 2008, the Board of Directors (BOD) of CCWD passed Board Resolution No. 004, Series of 2008,5 which upgraded the monthly salary of the GM from P25,392.00 to P45,738.00 on the basis of Section 2 of Republic Act (R.A.) No. 9286.6 The CCWD's Plantilla of Personnel and Salary Adjustment was thereafter submitted to the Department of Budget and Management (DBM) for approval. After going over the plantilla, the DBM informed Quintero through a letter that although Section 2 of R.A. No. 9286 empowered the BOD of LWDs to fix the compensation of the GM, it should comply with the compensation standardization policy laid down in R.A. No. 6758 or the Salary Standardization Law (SSL).7
After the COA'S audit and advice,8 on December 2009, Quintero voluntarily stopped receiving his salary based on the adjusted rates.9 On March 9, 2010, the COA, through Auditor Mercedes V. Reyes, issued ND No. 2010-01-101 disallowing the overpayment in Quintero's adjusted salary, which amounted to P364,659.50.10
Disagreeing with the findings of the COA Auditor, Quintero appealed before the COA Regional Office.
The Regional Office Ruling
In its April 25, 2011 decision, the COA Regional Office upheld ND No. 2010-01-101 and stated that the BOD of CCWD should have taken into consideration the provisions of R.A. No. 6758 or the SSL when it issued the resolution fixing the salary of its GM. The Regional Office pointed out that if it were the intent of the Congress to exempt the local water district (LWD) from the coverage of R.A. No. 6758, then it should have expressly provided it in R.A. No. 9286.
Also, the COA Regional Office disagreed with Quintero that the upgraded salary of the GM was subject to Section 7 of Executive Order (E.O.) No. 81111 on non-diminution in the salary of incumbent employees. The Regional Office noted that the provision of the E.O. presupposed that the basic salary given was sanctioned under the law because no vested right could be derived from the upgrading of salary made in contravention of the law. It explained that the BOD of CCWD could upgrade Quintero's salary of P25,392.00, but it should be within the provision of R.A. No. 6758 which fixed it at no more than P35,615.00 a month for the year 2008 and 2009.
Unsatisfied with the decision, Quintero appealed before the COA.
The COA Ruling
In its July 18, 2014 decision, the COA upheld the decision of its Regional Office. Although it agreed with Quintero that the BOD had the authority to fix the compensation of the GM, it stated that the said authority was not absolute as the compensation of the GM should conform to the provisions of R.A. No. 6758, or the SSL, and to existing rules and regulations. Further, the COA reiterated that no vested right could be derived from the salary increase of Quintero as it emanated from an erroneous interpretation of law.
Aggrieved, Quintero moved for reconsideration of the decision but his motion was denied by the COA in its March 9, 2015 resolution.
Hence, this present petition raising the following:
chanRoblesvirtualLawlibrary
Basically, the main issue to be resolved is whether the salary increase of Quintero was rightfully disallowed by the COA.ISSUES
A] WHETHER OR NOT COA COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DECLARING THAT THE CCWD BOARD HAS NO AUTHORITY TO FIX THE SALARY OF THE GENERAL MANAGER, THAT RA 9286 IS NOT INCONSISTENT WITH THE PROVISIONS OF THE SSL.
B] WHETHER OR NOT COA COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN NOT RECOGNIZING THAT SECTION 23 OF PD 198, AS AMENDED BY RA 9286, IS NOT AN EXCEPTION TO THE SSL.
C] WHETHER OR NOT ENGR. ARTEMIO A. QUINTERO SHOULD BE HELD LIABLE TO REFUND THE AMOUNT RECEIVED AND DISALLOWED.12ChanRoblesVirtualawlibrary
At the first meeting of the Board, or as soon thereafter practicable, the Board shall appoint, by a majority vote, a general manager and shall define his duties and fix his compensation. Said officer shall serve at the pleasure of the Board.Section 2 of R.A. No. 9286 amended Section 23 of P.D. No. 198, which now provides:
At the first meeting of the Board, or as soon thereafter practicable, the Board shall appoint, by a majority vote, a general manager and shall define his duties and fix his compensation. Said officer shall not be removed from office, except for cause and after due process.A reading of the above-cited provisions reveals that R.A No. 9286 reiterated the power of the BOD to set the salary of the GM and that it merely amended the provisions of P.D. No. 198 to provide the GMs with security of tenure preventing their removal without cause and due process. Indubitably, the Congress empowered the BOD of LWDs to fix the salary of its GM.
The Salary Standardization Law applies to all government positions, including those in government-owned or controlled corporations, without qualification. The exception to this rule is when the government-owned or controlled corporation's charter specifically exempts the corporation from the coverage of the Salary Standardization Law. To resolve this case, We examine the provisions of Presidential Decree No. 198 exempting water utilities from the Salary Standardization Law. The petitioner asserts that it is Section 23 of Presidential Decree No. 198, as amended, which grants water utilities this exemption.Applying the pronouncements in Mendoza, the Court cannot counterance Quintero's position that the provisions of Section 23 of P.D. No. 198, as amended, should be deemed an exception to the SSL. In amending P.D. No. 198, R.A. No. 9286 merely provided security of tenure for the GM but it did not state that the LWDs were to be exempt from the coverage of the SSL. If Congress indeed intended to exempt the LWDs from the SSL, it could have easily provided for an exemption clause similar to the charters of other government-owned and controlled corporations which were legislated to be exempt from the provisions of R.A. No. 6758 or the SSL.
Section 23 of Presidential Decree No. 198, promulgated on May 25,1973, was originally phrased as follows:
chanRoblesvirtualLawlibrarySection 23. Additional Officers. — At the first meeting of the board, or as soon thereafter as practicable, the board shall appoint, by a majority vote, a general manager, an auditor, and an attorney, and shall define their duties and fix their compensation. Said officers shall service at the pleasure of the board.On April 2, 2004, Republic Act No. 9286 was passed amending certain provisions of Presidential Decree No. 198, including its Section 23, thus:
chanRoblesvirtualLawlibrarySec. 23. The General Manager. — At the first meeting of the Board, or as soon thereafter as practicable, the Board shall appoint, by a majority vote, a general manager and shall define his duties and fix his compensation. Said officer shall not be removed from office, except for cause and after due process.We are not convinced that Section 23 of Presidential Decree No. 198, as amended, or any of its provisions, exempts water utilities from the coverage of the Salary Standardization Law. In statutes subsequent to Republic Act No. 6758, Congress consistently provided not only for the power to fix compensation but also the agency's or corporation's exemption from the Salary Standardization Law. If Congress had intended to exempt water utilities from the coverage of the Salary Standardization Law and other laws on compensation and position classification, it could have expressly provided in Presidential Decree No. 198 an exemption clause similar to those provided in the respective charters of the Philippine Postal Corporation, Trade Investment and Development Corporation, Land Bank of the Philippines, Social Security System, Small Business Guarantee and Finance Corporation, Government Service Insurance System, Development Bank of the Philippines, Home Guaranty Corporation, and the Philippine Deposit Insurance Corporation.
Congress could have amended Section 23 of Presidential Decree No. 198 to expressly provide that the compensation of a general manager is exempted from the Salary Standardization Law. However, Congress did not. Section 23 was amended to emphasize that the general manager "shall not be removed from office, except for cause and after due process."18[Emphases Supplied]
The salaries petitioner Mendoza received were fixed by the Talisay Water District's board of directors pursuant to Section 23 of the Presidential Decree No. 198. Petitioner Mendoza had no hand in fixing the amount of compensation he received. Moreover, at the time petitioner Mendoza received the disputed amount in 2005 and 2006, there was no jurisprudence yet ruling that water utilities are not exempted from the Salary Standardization Law.Similar to the above-quoted case, Quintero had no hand in fixing the amount of the salary he received as it was fixed pursuant to the resolution issued by the BOD of CCWD. Also, at the time his salary increase was approved, there was no categorical pronouncement yet from the Court that the LWDs were subject to the coverage of the SSL.chanrobleslaw
Pursuant to De Jesus v. Commission on Audit, petitioner Mendoza received the disallowed salaries in good faith. He need not refund the disallowed amount.21[Emphasis Supplied]
Endnotes:
1 Concurred in by Chairperson Ma. Gracia M. Pulido Tan, Commissioner Heidi L. Mendoza and Commissioner Jose A. Fabia; rollo pp. 19-23.
2 Id. at 34.
3 Penned by Officer-in-Charge Atty. Elwin Gregorio A. Torre; id. at 29-33.
4 Id. at 92.
5 Id. at 77.
6 An Act Further Amending Presidential Decree No. 198, otherwise known as the "Provincial Water Utilities Act of 1973," as amended.
7Rollo, p. 29.
8 Id. at 87-91.
9 Id. at 7.
10 Id. at 30.
11 June 17, 2009.
12Rollo, p. 8.
13 The Provincial Water Utilities Act of 1973.
14Rollo, pp. 58-73.
15 Id. at 117-123.
16 June 17, 2009.
17 G.R. No. 195395, September 10, 2013, 705 SCRA 306.
18 Id. at 331-334.
19Javier v. COMELEC, G.R. No. 215847, January 12, 2016.
20Philippine International Trading Corporation v. COA, 635 Phil. 447, 459 (2010).
21Supra note 17, at 339.