G.R. No. 166570 ; December 18, 2009
EFREN M. HERRERA and ESTHER C. GALVEZ, for and on their behalf and on behalf of OTHER SEPARATED, UNREHIRED and RETIRED EMPLOYEES OF THE NATIONAL POWER CORPORATION, Petitioners, vs. NATIONAL POWER CORPORATION, THE DEPARTMENT OF BUDGET AND MANAGEMENT and THE OFFICE OF THE SOLICITOR GENERAL, Respondents.

FACTS

Petitioners are former employees of the National Power Corporation (NPC) who were separated from service on February 28, 2003, as a result of the restructuring of the electric power industry and privatization of NPC assets pursuant to Republic Act No. 9136 , the Electric Power Industry Reform Act of 2001 (EPIRA). All permanent NPC employees as of June 26, 2001, including petitioners, opted for and were paid separation pay equivalent to one and a half months’ salary for every year of service, as provided under Section 63 of the EPIRA. In addition to this separation package, petitioners claimed entitlement to retirement benefits under Commonwealth Act No. 186 , as amended by Republic Act Nos. 660 and 1616, which grant a gratuity based on years of service to government employees with at least 20 years of service. The NPC filed a Petition for Declaratory Relief before the Regional Trial Court (RTC) to obtain confirmation that the EPIRA did not authorize the grant of retirement benefits in addition to the separation pay. The RTC ruled in favor of NPC, holding that employees who received separation benefits under the EPIRA are no longer entitled to retirement benefits under existing laws. Petitioners elevated the case directly to the Supreme Court via a Petition for Review on Certiorari under Rule 45 on a pure question of law.

ISSUE

Whether or not NPC employees who were separated from the service because of the reorganization under the EPIRA are entitled to receive retirement benefits under Commonwealth Act No. 186 , as amended, in addition to the separation pay they received under Republic Act No. 9136 .

RULING

No. The Supreme Court denied the petition and affirmed the Decision of the Regional Trial Court. The Court held that petitioners are not entitled to receive retirement benefits in addition to the separation pay granted under the EPIRA. The Court ruled that Section 63 of the EPIRA provides separated employees with two mutually exclusive options: to receive separation pay and other benefits in accordance with existing laws, rules or regulations, or to avail of the separation plan under the EPIRA equivalent to one and one-half month’s salary for every year of service, whichever is higher. The Implementing Rules explicitly define “separation” or “displacement” under the Act as referring to employees who are neither qualified nor have opted to retire under existing laws. By opting for and receiving the enhanced separation package under the EPIRA, petitioners are barred from claiming retirement benefits under existing laws for the same act of involuntary separation. Furthermore, the grant of both separation pay and retirement benefits for the same service and arising from the same cause constitutes a double gratuity, which is prohibited by Section 8, Article IX-B of the 1987 Constitution , absent explicit statutory authorization. The EPIRA does not contain any clear and unequivocal language authorizing the payment of both benefits. Therefore, petitioners cannot receive retirement benefits on top of the separation pay already granted.