GR 183517; (June, 2010) (Digest)
G.R. No. 183517 ; June 22, 2010
PHILIPPINE INTERNATIONAL TRADING CORPORATION, petitioner, vs. COMMISSION ON AUDIT, Respondent.
FACTS
Eligia Romero, an employee of the Philippine International Trading Corporation (PITC), a government-owned and controlled corporation, retired in 1983 under Republic Act No. 1616 and received gratuity. She was immediately re-hired and served until her compulsory retirement in 2000. Upon her 2000 retirement, she received benefits computed based on her basic salary. Romero later claimed retirement differentials, arguing that under Section 6 of Executive Order No. 756, issued during PITC’s reorganization, her benefits should have been computed based on her “highest salary received including allowances.” PITC sought guidance from the Office of the Government Corporate Counsel (OGCC) and the Commission on Audit (COA). The OGCC issued an opinion favoring a literal interpretation of E.O. No. 756, supporting the inclusion of allowances. Conversely, COA, in its assailed rulings, denied Romero’s claim.
ISSUE
Whether Section 6 of Executive Order No. 756, which provides for retirement benefits computed at “highest salary received including allowances,” is a permanent retirement scheme applicable to PITC employees like Romero, thereby entitling her to differentials.
RULING
No. The Supreme Court upheld the COA’s denial. The legal logic rests on statutory construction and the prohibition against the proliferation of retirement plans. First, E.O. No. 756 was a special law issued specifically to authorize PITC’s reorganization. Its Section 6 was an incentive for employees to retire or resign during that reorganization period, not a permanent, general retirement law for all PITC employees thereafter. Second, applying it as a permanent scheme would contravene Republic Act No. 4968 , which amended the Government Service Insurance Act ( CA No. 186 ). RA 4968 explicitly prohibits government agencies and corporations from creating any insurance or retirement plan other than the GSIS, to prevent unequal treatment among government employees. Allowing PITC to maintain a separate plan based on E.O. No. 756 would lead to an iniquitous proliferation of plans, which the law seeks to avoid. Romero’s proper retirement scheme was governed by the GSIS law, under which allowances not integrated into the basic salary are excluded from the computation of benefits. Therefore, COA correctly disallowed the claim for differentials.