GR 253395; (February, 2025) (Digest)
G.R. No. 253395 & G.R. No. 253967, February 18, 2025
Narciso M. Magante (DAMA), et al., Petitioners, vs. Commission on Audit, National Power Corporation (NPC) and Power Sector Assets and Liabilities Management Corporation (PSALM), Respondents. / Power Sector Assets and Liabilities Management Corporation, Petitioner vs. Commission on Audit (COA), et al., Respondents.
FACTS
On June 26, 2001, Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) was enacted to privatize the assets and liabilities of the National Power Corporation (NPC). Pursuant to EPIRA, the National Power Board (NPB) issued NPB Resolution No. 2002-124 (providing Guidelines on the Separation Program of NPC) and NPB Resolution No. 2002-125 (constituting a transition team) on November 18, 2002. All NPC personnel were to be terminated on January 31, 2003 and entitled to separation benefits. Members of the NPC Drivers and Mechanics Association (DAMA) and NPC Employees and Workers Union (NEWU) filed a Petition for Injunction before the Supreme Court ( G.R. No. 156208 ) to enjoin the implementation of the NPB Resolutions, contending they were not passed by a majority of the NPB members. The Court did not issue a temporary restraining order, so NPC proceeded with the terminations starting January 31, 2003. In a Decision dated September 26, 2006, the Supreme Court nullified NPB Resolution Nos. 2002-124 and 2002-125, holding they were not properly enacted. This 2006 Decision was silent on the effect of the nullity on the terminated employees. In a Resolution dated September 17, 2008, the Court clarified that the necessary consequence was the illegality of the dismissals, entitling the employees to reinstatement or separation pay in lieu thereof, plus backwages and other benefits from January 31, 2003, less any separation benefits already received. The 2006 Decision became final and executory on October 10, 2008. The Court granted a motion for execution and directed NPC to prepare a list of terminated employees and pay them. Due to NPC’s non-compliance, the employees moved for garnishment/levy of NPC and PSALM assets. PSALM manifested it was not a party to the case and its assets could not be garnished for NPC’s liabilities. The Supreme Court, in a June 30, 2014 Resolution, held PSALM directly liable for the obligation as part of the liabilities it assumed from NPC under EPIRA. The Court directed the Commission on Audit (COA) to compute and process the claims. COA, in Decision No. 2019-416, computed the total monetary award at P5,099,803,847.00, inclusive of interest, and directed PSALM to settle the claim. PSALM and the employee-petitioners separately assailed this COA Decision via Rule 65 petitions, which were consolidated.
ISSUE
Whether the Commission on Audit (COA) committed grave abuse of discretion in issuing Decision No. 2019-416 which computed the total monetary award due to the illegally dismissed NPC employees and directed PSALM to settle the claim.
RULING
No, the Commission on Audit did not commit grave abuse of discretion. The petitions were dismissed. The COA Decision was affirmed with modification regarding the computation of interest.
The Supreme Court held that PSALM is legally obligated to pay the separation benefits of the illegally dismissed NPC employees. This obligation is among the “NPC liabilities” transferred to and assumed by PSALM under Section 50 of the EPIRA. The Court’s 2014 Resolution, which became final and executory, conclusively settled PSALM’s direct liability. PSALM cannot relitigate this issue. The COA properly exercised its constitutional mandate to audit and settle all accounts pertaining to government funds under Presidential Decree No. 1445. Its computation of the monetary award, based on the final and executory judgments of the Supreme Court, was not arbitrary or capricious. However, the Court modified the interest computation. Legal interest shall be at the rate of twelve percent (12%) per annum from January 31, 2003 until June 30, 2013, and at the rate of six percent (6%) per annum from July 1, 2013 until full satisfaction, in accordance with established jurisprudence (Nacar v. Gallery Frames). The total principal award of P2,234,915,264.00, as computed by COA, was affirmed. PSALM was ordered to immediately pay the adjudged amounts to the rightful claimants. The Court emphasized the need to write finis to the nearly two-decade-long controversy.