P60.2-B Napocor class suit seen to shake up energy sector

MANILA, Philippines - The P60.2-billion class suit filed against National Power Corp. (Napocor), the state-owned power generation company, is threatening to shake up the entire energy sector, its top official said.

Napocor president Ma. Gladys Cruz-Sta. Rita said their primary mandate of missionary electrification would be affected should the company’s assets be used to settle the claims. Napocor currently operates 297 Small Power Utilities Group (SPUG) plants and provides electricity to 770,000 households in 207 municipalities across 35 provinces.

Napocor lost the class suit filed against it by its former drivers and mechanics and has been ordered by the Supreme Court’s Third Division to pay the retrenched employees P60.2 billion in back wages and wage adjustments.

Sta. Rita said the case stemmed from the restructuring of Napocor.

“It started with restructuring of the electricity industry and the implementation of the Electric Power Industry Reform Act (EPIRA) in 2001,” she said.

Sta. Rita explained that as part of the implementation of EPIRA, Napocor retrenched thousands of employees who were paid their separation benefits. Majority of them were rehired by Napocor, National Transmission Co. and the Power Sector Assets and Liabilities Management Corp.

Employees who were not rehired included members of the Drivers and Mechanics Association (DAMA), who contested and filed a case before the court questioning the Napocor board’s resolutions signed only by three duly constituted directors and the rest by their respective official alternates, she said.

Sta. Rita said in 2006, the High Court declared Napocor’s decision as void and ordered the payment of back wages to more than 8,000 employees totaling to P34.7 billion.

“This amount swelled to P60.2 billion in 2014 as computed by the ex-officio sheriff of the Regional Trial Court of Quezon City. In addition to the claim is the P1.8 billion sheriff’s fee,” she said.

However, the Napocor president said the state-owned company still needs to verify the total number of employees entitled to receive payment.

“Napocor and PSALM likewise seek to clarify the amount of back wages and wage adjustments since Napocor’s computation, considering already the interest rate and the Commission on Audit’s finding, is much lesser than P60.2 billion,” Sta. Rita said.

Nevertheless, she said that its mandate to provide missionary electrification in far-flung areas would be affected. Provinces to be affected include Palawan, Marinduque, Mindoro Oriental and Occidental, Catanduanes, Siquijor, Batanes, Romblon, Masbate, Dinagat Island and the ARMM provinces of Basilan, Sulu and Tawi-tawi.