G.R. No. 172593, April 20, 2016
NAPOLEON S. RONQUILLO, JR., EDNA G. RAÑA, ROMEO REFRUTO, PONCIANO T. ANTEGRO, ET AL., PETITIONERS, VS. NATIONAL ELECTRIFICATION ADMINISTRATION, EDITA S. BUENO, MARIANO T. CUENCO, AND DIANA M. SAN LUIS, RESPONDENTS.

FACTS

Petitioners are former employees of the National Electrification Administration (NEA). Before July 1, 1989, NEA paid its employees a Cost of Living Allowance (COLA) equivalent to 40% of their basic pay. Upon the effectivity of Republic Act No. 6758 (the Compensation and Position Classification Act of 1989) on July 1, 1989, NEA discontinued paying the COLA, as Section 12 of the law provides for the integration of all allowances into the standardized salary rates. The Department of Budget and Management (DBM) issued Corporate Compensation Circular No. 10 to implement RA 6758 for government corporations. This circular was initially struck down by the Supreme Court in De Jesus v. Commission on Audit for lack of publication. After this decision, several agencies, including NEA, paid back the discontinued allowances. NEA paid its employees’ COLA for the period July 1, 1989 to July 15, 1999. DBM subsequently re-issued and published Corporate Compensation Circular No. 10, effective March 16, 1999. Later, DBM issued Budget Circular 2001-03, stating that COLA is deemed integrated into the basic salary and its payment is unauthorized. Petitioners were separated from NEA in 2003 due to a reorganization under the Electric Power Industry Reform Act (EPIRA). They received separation pay but demanded back pay for their COLA covering the period from July 16, 1999 until their separation. NEA refused, citing Budget Circular 2001-03 and the need to use funds for separation pay of all affected employees. The Commission on Audit affirmed that NEA employees were no longer entitled to COLA after the final publication of Corporate Compensation Circular No. 10. Petitioners filed a Petition for Mandamus with the Regional Trial Court, which was denied. Their motion for reconsideration was also denied, prompting this direct appeal via a Petition for Review on Certiorari.

ISSUE

Whether petitioners are entitled to the payment of back COLA for the period July 16, 1999 until their separation from NEA in 2003.

RULING

No. The Supreme Court denied the petition. The Court held that under Section 12 of Republic Act No. 6758, the Cost of Living Allowance (COLA) has been integrated into the standardized salary rates of government workers. Its back payment to the former employees of the National Electrification Administration is, therefore, unauthorized. The explicit provision of Section 12 of RA 6758 prevails, as reiterated by DBM Budget Circular 2001-03, which states that allowances like COLA are deemed integrated into the basic salary and separate payment constitutes unauthorized and prohibited double compensation. The re-issuance and publication of DBM Corporate Compensation Circular No. 10 gave it full force and effect. Petitioners failed to establish a clear legal right to the discontinued COLA, which is a requisite for a writ of mandamus to issue. Their claim, being without legal basis, cannot be granted.