The Supreme Court (SC) reversed a trial court ruling for the payment of back allowances to employees of state-run National Power Corporation (Napocor) covering a 10-year period amounting to nearly P8.5 billion.
The case involves additional Cost of Living Allowance (COLA) and Amelioration Allowance (AA) to Napocor employees from July 1, 1989 to March 16, 1999.
In a 44-page decision penned by Associate Justice Marvic Leonen, the high court reversed the ruling of the Quezon City Regional Trial Court (RTC) Branch 84 in November 2008 which granted the petition of the Napocor Employees and Workers Union (NEWU) and Napocor Employees Consolidated Union (NECU).
The RTC ruled that the employees were entitled to the allowances as a matter of right, and ordered the release of the funds.
The Office of the Solicitor General (OSG) appealed the decision, stressing that the employees "were duly notified that their COLA and AA were already integrated into their standardized salaries."
The trial court, however, denied the appeal and granted NEWU and NECU's motion for execution of judgment on March 20, 2009. Three days later, the RTC issued a Certificate of Finality of Judgment and a Writ of Execution.
The OSG then elevated the case with the SC, and pleaded for issuance of a temporary restraining order (TRO), which the high court granted on April 15, 2009.
In its decision, the SC said the RTC "should have been more prudent in granting the immediate execution, considering that the execution of the judgment award involves the payment of almost P8.5-billion in public funds."
"[T]here was no legal basis to grant the back payment of additional COLA and AA to Napocor personnel from July 1, 1989 to March 16, 1999," the SC said, stressing that entitlement to back payment of allowances must be raised in a separate action before the Commission on Audit (COA) for the satisfaction of any judgment award.