CA nixes P549-M salary hike for Napocor employees

MANILA, Philippines - Employees of the National Power Corp. (Napocor) lost their bid to collect P549.41 million in salary increase adjustments from the state-run firm in 2001.

In a 12-page decision released Monday, the special 15th Division of the Court of Appeals (CA) reversed an earlier ruling of the Quezon City regional trial court (RTC), which upheld the salary increases based on the step increment adjustment (SIA) under Napocor’s Circular 2001-51. 

The CA held that the employees had lost their clear right to claim salary increases after Napocor issued a board resolution superseding its earlier circular.

The ruling was penned by Associate Justice Melchor Sadang. Associate Justices Elihu Ybanez and Franchito Diamante concurred with the ruling. 

In explaining its decision, the CA cited Napocor’s board Resolution No. 2002-81 on July 24, 2002 disapproving the SIA upon recommendation of the Department of Budget and Management (DBM) due to lack of a legal basis.

The DBM stressed that the grant of step increase will duly increase the funding requirements for the separation benefits that will be given as a result of Napocor’s privatization.

The employees argued that they are entitled to the SIA under the subject circular and that the waivers that they signed are contrary to law because they resulted in a reduction of their salaries.

The CA said the issue had been addressed in a similar case by the Supreme Court, which ruled that the employees could not have acquired vested rights to the SIA since they were granted without the required approval of the DBM.

The case stemmed from an amended petition for mandamus and injunction filed with the local court by the Napocor Employees and Workers Union, which alleged that its members were among the 4,500 employees of Napocor who were all terminated with the passage of Republic Act 9136, otherwise known as the Electric Power Industry Reform Act (Epira).

Some of the employees were rehired under the Epira while others were not. The union argued that whether rehired or not, the employees were entitled to the SIA.