CASE DIGEST
National Transmission
Corp. v. Commission on Audit
G.R. No. 246173, [June 22, 2021]
EN BANC, LOPEZ, M.V
Appeal to COA's
decision; Separation pay of Dismissed Employees; Rules on the Refund of
Benefits received under Disallowed amounts
The power of GOCCs to grant additional
benefits, including rounding-off fractional lengths of service to one whole
year for separation pay, is subject to limitations and requires presidential
approval. However, officers who relied on board resolutions in approving and
certifying the release of separation pay, and who implemented policies set by
the Board of Directors (BOD), were absolved from solidary liability for the
refund. Good faith was recognized in the absence of controlling jurisprudence
on the rounding-off issue at the time.
The petitioner, National Transmission Corporation (TransCo), is a government-owned-and-controlled corporation created under the Electric Power Industry Reform Act of 2001 (EPIRA) to assume the electrical transmission function of the National Power Corporation (NPC). TransCo was initially wholly-owned by the Power Sector Assets and Liabilities Management Corporation (PSALM). Pursuant to the EPIRA's directive, TransCo underwent privatization, and a 25-year concession contract was awarded to the National Grid Corporation of the Philippines (NGCP). As a result, certain TransCo employees were separated from service effective June 30, 2009. The separated employees were granted separation pay based on specific board resolutions and circulars issued by TransCo.
The COA disallowed the excess payment of separation pay amounting to P1,488,278.00, resulting from rounding off the fractional length of service equivalent to six months or more to one whole year, and also holding the approving and certifying officers solidarily liable for the return of such excess payment.
Whether or not COA Proper gravely
abused its discretion in disallowing the excess separation pay and holding the
approving and certifying officers solidarily liable.
NO. The Court partially granted the
petition. It affirmed the COA Proper's decision on the disallowance of the
excess payment but modified the ruling on the liability for the refund. The
Court agreed with COA Proper's disallowance of the excess separation pay
resulting from the rounding-off method, which results in an undue increase in
separation pay for government employees, stating that it lacked a legal basis.
The Court emphasized that TransCo did not have unbridled discretion to increase
benefits without presidential approval.
However, the Court absolved the
approving and certifying officers from solidary liability, citing good faith.
The Court recognized that these officers merely relied on board resolutions in
approving and certifying the release of separation pay. It was the Board of
Directors (BOD) that determined the policy for separation pay, and the officers
had the duty to implement these resolutions. The Court considered that at the
time of disbursements in 2009 and 2010, there was no definitive ruling on the
rounding-off issue, making it difficult for the officers to foresee its
illegality.
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