G.R. No. 218185 , September 14, 2021
ROSARIO J. ABRENICA, ET AL., AS REPRESENTED BY THE SAN LAZARO HOSPITAL (SLH) MEDICAL STAFF ASSOCIATION, PETITIONERS, VS. COMMISSION ON AUDIT AND NILDA B. PLARAS, DIRECTOR IV, COMMISSION ON AUDIT, COMMISSION PROPER EN BANC, RESPONDENTS.

FACTS

Petitioners are employees of San Lazaro Hospital (SLH) with Salary Grades (SG) 20 to 26. From January to June 2009, they received hazard allowances fixed at ₱4,989.75 per month. The Commission on Audit (COA) disallowed an aggregate amount of ₱1,094,188.98 through Notice of Disallowance (ND) No. 09-006-101MDS-(09) dated November 23, 2009, finding the rate not in accord with Section 21 of Republic Act (RA) No. 7305 (The Magna Carta of Public Health Workers) and its implementing rules, which prescribe hazard allowances equivalent to at least five percent (5%) of the monthly basic salary for health workers within SG 20 and above. Petitioners argued the payment was pursuant to Department of Health (DOH) Administrative Order (AO) No. 2006-0011, which fixed the hazard pay at ₱4,989.75, and that they received the benefits in good faith. The COA National Government Section (NGS) sustained the ND, citing the Court’s pronouncement in A.M. No. 03-9-02-SC (Re: Entitlement to Hazard Pay of SC Medical and Dental Clinic Personnel) that DOH AO No. 2006-0011 is “void on its face.” The COA Proper affirmed the NGS ruling in Decision No. 2014-158 dated August 15, 2014. Petitioners filed a motion for reconsideration on September 29, 2014, which the COA Proper dismissed in its Resolution dated February 27, 2015 for being filed out of time, ruling that the decision had attained finality.

ISSUE

1. Whether the motion for reconsideration of Decision No. 2014-158 was timely filed.
2. Whether the amounts of hazard pay given beyond the minimum rate prescribed by RA No. 7305 were validly disallowed.
3. Whether petitioners were validly held liable to refund the disallowed amounts.

RULING

1. On the timeliness of the motion for reconsideration: The Court ruled that the COA Proper gravely abused its discretion in dismissing the motion for reconsideration as out of time. Under Section 10, Rule X of the 2009 Revised Rules of Procedure of the COA, as amended, a motion for reconsideration may be filed within thirty (30) days from notice of the decision. Petitioners received the decision on August 28, 2014, and had until September 27, 2014 to file. Since September 27, 2014, was a Saturday, the motion filed on the next business day, September 29, 2014, was timely. However, the Court also ruled that the present Petition for Certiorari was filed out of time. The filing of the motion for reconsideration did not interrupt the period to file the petition because, under Section 3, Rule 64 of the Revised Rules of Court, such an interruption only occurs if the motion is allowed under the procedural rules of the Commission. The 2009 COA Rules allow only one motion for reconsideration and do not provide that its filing interrupts the period to appeal. Petitioners received the denial resolution on March 23, 2015, and filed the petition on May 4, 2015, beyond the 30-day period. Nonetheless, the Court relaxed the procedural rules to address the substantive issues due to their paramount public importance.
2. On the validity of the disallowance: The Court ruled that the disallowance was valid. The hazard pay granted at a fixed rate of ₱4,989.75 contravened the clear and mandatory provision of Section 21 of RA No. 7305 , which requires that hazard allowance be “at least five percent (5%) of the monthly basic salary of health workers receiving SG 20 and above.” DOH AO No. 2006-0011, which prescribed the fixed rate, is void for being contrary to the law. The Court’s pronouncement in A.M. No. 03-9-02-SC declaring the DOH AO void is a binding judicial interpretation of the law, not a mere administrative ruling. Subsequent DOH and DBM issuances did not legitimize the fixed rate but reiterated the salary-based percentage. Therefore, the COA correctly disallowed the excess payments.
3. On the liability to refund: The Court ruled that petitioners are liable to refund the disallowed amounts, but the liability is subject to the application of the doctrine of good faith. Citing Madera v. Commission on Audit, the Court held that approving and certifying officers are presumed to have acted in good faith when they relied on the validity of the DOH AO at the time of payment. Recipients, however, are liable to return the disallowed amounts because they received undue payment. The Court remanded the case to the COA Proper to determine the precise amounts to be refunded by each petitioner, applying the appropriate guidelines on solidary liability and considering evidence of good faith, such as their reliance on the DOH issuance. The COA must identify each petitioner’s participation and apply the rules on return consistent with recent jurisprudence.