GR 160396; (September, 2005) (Digest)
G.R. No. 160396, September 6, 2005
PHILIPPINE PORTS AUTHORITY (PPA) EMPLOYEES HIRED AFTER JULY 1, 1989, Petitioners, vs. COMMISSION ON AUDIT (COA), ET AL., Respondents.
FACTS
The Philippine Ports Authority (PPA) discontinued payment of Cost of Living Allowance (COLA) and amelioration allowance to its personnel in 1989 pursuant to the Salary Standardization Law (RA 6758) and Corporate Compensation Circular (CCC) No. 10, which integrated these allowances into basic salaries effective July 1, 1989. However, in De Jesus v. COA, the Supreme Court declared CCC No. 10 ineffective due to lack of publication. Consequently, the PPA Board passed a resolution to pay back allowances for the period from July 1, 1989, to March 16, 1999 (the date of CCC No. 10’s publication).
The COA General Counsel opined that only employees who were incumbents as of July 1, 1989, and were receiving the allowances at that time were entitled to the backpay. The COA affirmed this view, denying the claim of PPA employees hired after July 1, 1989. Hence, these employees filed the present petition.
ISSUE
Whether PPA employees hired after July 1, 1989, are entitled to payment of back COLA and amelioration allowance for the period when CCC No. 10 was ineffective.
RULING
Yes, the petitioners are entitled. The Court ruled that the disallowance of the allowances to employees hired after July 1, 1989, was based on an erroneous interpretation of Section 12 of RA 6758. The first sentence of Section 12 provides that all allowances are “deemed included” in the standardized salary. The second sentence, which authorizes continued payment of “additional compensation… being received by incumbents only as of July 1, 1989,” applies only to allowances that are not integrated into the standardized salary.
Since CCC No. 10—the implementing rule that would have identified which allowances were integrated—was invalid for non-publication, the legal effect was that the intended integration of COLA and amelioration allowance did not take effect from July 1, 1989, to March 16, 1999. During this period, these allowances remained “unintegrated” and were therefore distinct benefits separate from the basic salary. As such, the second sentence of Section 12, which restricts payment to incumbents as of July 1, 1989, is inapplicable. The entitlement to these allowances during the period of non-integration extends to all qualified employees, regardless of their date of hiring, as they formed part of the compensation package for the positions they occupied. The COA decision was reversed.