MANOLITO AGRA, EDMUNDO P. AGUILAR, IMELDA I. AMERICA, EVELYN R.

CONCEPCION, DIOSDADO A. CORSIGA, PERCIVAL G. CRISOSTOMO, CESAR E.

FAELDON, MA. REGINA C. FILOTEO, ZARINA O. HIPOLITO, JANICE F. MABILOG,
ROBERTO MARTINEZ, JONATHAN MENDROS, NORMAN MIRASOL, EDRICK V. MOZO,
LORENZO A. PENOLIAR, LOURDES QUINTERO, GLORIA GUDELIA SAMBO,
DEMOSTHENES V. ERENO, RHONEIL LIBUNAO, ILUGEN P. MABANSAG, JOSEPHINE
MAGBOO, MADELEINE ANN B. BAUTISTA, ULYSSES C. BIBON, ANGELINA RAMOS,
EDUARDO M. SUMAYOD, DOMINGO TAMAYO, HERACLEA M. AFABLE, ANNA LISSA
CREENCIA, CHONA O. DELA CRUZ, MERCY NANETTE C. IBOY, JEAN A. LUPANGO,
MARIE DELA O. NA-OBRE, PERLA LUZ OCAMPO, ROUCHELLEJANE PAYURAN, ABIGAIL
E. PORMENTO, THERESITA A. RIVERA, MILAGROS ROBLES, JOSEPHINE ROSILLO,
ARSENIA M. SACDALAN, PRECILA TUBIO, IRENE H. VIRAY, WILFREDO O. BUCSIT,
BONIFACIO DAVID, ROSARIO P. DIZON, EXEQUIEL EVALE, JR., RONALD M. MANALO,
HENRIETTA A. MARAMOT, FELICISIMO U. PULA, JONAS F. SALVADOR, ERNESTO
SILVANO, JR., ENRICO G. VELGADO, FEDERICO VILLAR, JR., ARNEL C. ABEN,
ABDULMALIK BACARAMAN, VIRGINIA BORJA, ANTONIO CARANDANG, JR., RINA RIEL
DOLINA, MANOLITO FAJARDO, ARVIN B. GARDUQUE, CAYETANO JUAREZ, MA.
SHERYL LABONETE, HERCONIDA T. LAZARO, MARITESS MARTINEZ, AURELIO L.
MENDOZA, ARNEL M. NOGOT, GERARDO G. POMOY, DENCIO RAMOS, CORAZON
TAGUDIN, ANAFEL B. TIO, AGATONA S. ZALATAR, MARGIE EULALIA CALMA, RENEE D.
MELLA, ARLIQUIN AMERICA, DEANNA B. AYSON, GERALDINE J. CALICA, CHESTER
FERNANDEZ, LUISA I. HERNANDEZ, CYNTHIA E. LISONDRA, ALONA S. LLVATA, CLAIRE
P. QUETUA, ROSEMARIE S. QUINTOS, RUTH S. RAMIREZ, LINO VERMUDO, JR.,
ROLANDO R. APOLONIO, CELIA I. ACCAD, MA. ALMA AYOS, PAMELA CASTILLO,
ARNOLD DUPA, LAURENCE FELICIANO, LEANDRO P. LIBRANDO, MARILOU B. LOPEZ,
AMELITA P. LUCERO, ESTERBELLE T. SIBALA, JONA ANDAL, ANDRES RATIO, MA.
THERESA Q. MALLANO, DANILO P. LIGUA, JOY ABOGADO, VIRGINIA C. STA. ANA,
ALBERNARD BAUTISTA, JUBANE DE PEDRO, PAUL DINDO C. DELA CRUZ, ALEJO B.
INCISO, SHERWIN MAADA, JESUS T. OBIDOS, JOEL B. ARELLANO, ALFREDO
CABRERA, MARY LYNN E. GELLOR, JOHN JOSEPH M. MAGTULOY, MICHELLE
MONTEMAYOR, RHINA ANGUE, NORBERTO BAYAGA, JR., JUSTINO CALVEZ, EDWIN
CONCEPCION, ALAN JOSEPH IBE, CESAR JACINTO, JOSERITA MADRID, IRENE
MARTIN, GINA T. QUINDO, RENATO SUBIJANO, NIELMA E. VERZOSA, ALL NATIONAL
ELECTRIFICATION ADMINISTRATION EMPLOYEES, REPRESENTED BY REGINA
FILOTEO, Petitioners,
vs.
COMMISSION ON AUDIT, Respondent.
D E C I S I O N
LEONARDO-DE CASTRO, J.:
This is a special civil action via certiorari under Rule 65 in relation to Rule 64 o the !""# Revised
Rules o Civil Procedure ro$ the Decision
!
o the Co$$ission on %udit &CO%' No. ())*+!*4
dated Octo,er ", ())*, -hich denied the .rant o rice allo-ance to e$plo/ees o the National
Electriication %d$inistration &NE%' -ho -ere hired ater 0une *), !"1" &petitioners' and CO%2s
Resolution
(
No. ())5+)!) dated 3e,ruar/ (4, ())5, -hich li4e-ise denied petitioners2 5otion or
Reconsideration.
On 0ul/ !, !"1", Repu,lic %ct No. 6#51 &the Co$pensation and Position Classiication %ct o
!"1"' too4 eect, Section !( o -hich provides6
Sec. !(. Consolidation o %llo-ances and Co$pensation. 7 %ll allo-ances, e8cept or
representation and transportation allo-ances9 clothin. and laundr/ allo-ances9 su,sistence
allo-ance o $arine oicers and cre- on ,oard .overn$ent vessels and hospital personnel9
ha:ard pa/9 allo-ances o orei.n service personnel stationed a,road9 and such other additional
co$pensation not other-ise speciied herein as $a/ ,e deter$ined ,/ the D;5, shall ,e
dee$ed included in the standardi:ed salar/ rates herein prescri,ed. Such other additional
co$pensation, -hether in cash or in 4ind, ,ein. received ,/ incu$,ents onl/ as o 0ul/ !, !"1"
not inte.rated into the standardi:ed salar/ rates shall continue to ,e authori:ed.
E8istin. additional co$pensation o an/ national .overn$ent oicial or e$plo/ee paid ro$ local
unds o a local .overn$ent unit shall ,e a,sor,ed into the ,asic salar/ o said oicial or
e$plo/ee and shall ,e paid ,/ the National <overn$ent. &E$phasis ours.'
Pursuant to its authorit/ to i$ple$ent Repu,lic %ct No. 6#51 under Section (* thereo, the
Depart$ent o ;ud.et and 5ana.e$ent &D;5' on Octo,er (, !"1" issued Corporate
Co$pensation Circular No. !) &D;5+CCC No. !)', other-ise 4no-n as the =I$ple$entin. Rules
and Re.ulations o R.%. No. 6#51.= Para.raph 5.5 o D;5+CCC No. !) reads6
5.5 The ollo-in. allo-ances>rin.e ,eneits authori:ed to <OCCs><3Is pursuant to the
aore$entioned issuances are not li4e-ise to ,e inte.rated into the ,asic salar/ and
allo-ed to ,e continued onl/ or incu$,ents o positions as o 0une *), !"1" -ho are
authori:ed and actuall/ receivin. said allo-ances>,eneits as o said date, at the sa$e
ter$s and conditions prescri,ed in said issuances?6@
5.5.! Rice Su,sid/9
5.5.( Su.ar Su,sid/9
5.5.* Death ;eneits other than those .ranted ,/ the <SIS9
5.5.4 5edical>dental>optical allo-ances>,eneits9
5.5.5 Children2s %llo-ance9
5.5.6 Special Dut/ Pa/>%llo-ance9
5.5.# 5eal Su,sid/9
5.5.1 Aon.evit/ Pa/9 and
5.5." Teller2s %llo-ance. &E$phasis added.'
% .roup o NE% e$plo/ees -ho -ere hired ater Octo,er *!, !"1"
*
clai$ed that the/ did not
receive $eal, rice, and children2s allo-ances. Thus, on 0ul/ (*, !""", the/ iled a special civil
action or $anda$us a.ainst NE% and its ;oard o %d$inistrators ,eore the Re.ional Trial
Court &RTC', ;ranch 11, Bue:on Cit/, doc4eted as SP. Civil %ction No. B+""+*1(#5, alle.in.
violation o their ri.ht to the eCual protection clause under the Constitution.
On Dece$,er !5, !""", the RTC rendered its Decision
4
in their avor, disposin. o the case in
the ollo-in. $anner6
DEERE3ORE, ore.oin. considered, the petition is here,/ <R%NTED directin. the respondent
NE%, its ;oard o %d$inistrators to orth-ith settle the clai$s o the petitioners and other
e$plo/ees si$ilarl/ situated and e8tend to the$ the ,eneits and allo-ances to -hich the/ are
entitled ,ut -hich until no- the/ have ,een deprived o as enu$erated under Section 5 o D;5
CCC No. !) and their inclusion in the Provident 3unds 5e$,ership, retroactive ro$ the date o
their appoint$ents up to the present or until their separation ro$ the service.
5
%t the instance o the co$plainants, the ;ranch Cler4 o Court o RTC ;ranch 11, Bue:on Cit/,
Ail/ D. Aa,arda, issued a CERTI3IC%TION
6
dated 0anuar/ (4, ())), -hich states6
This is to certi/ that the Decision dated Dece$,er !6, !"""
#
o the a,ove+entitled case -hich
reads the dispositive portion6
8 8 8 8
is no- inal and e8ecutor/.
This certiication ?is@ issued upon the reCuest o 5s. ;lesilda ;. %.uilar or -hatever le.al
purpose>s it $a/ serve.
1
%ter-ards, the Presidin. 0ud.e o RTC ;ranch 11, Bue:on Cit/ issued a Drit o E8ecution
"
in
SP. Civil %ction No. B+""+*1(#5 on 3e,ruar/ ((, ())).
!)
Thereater, the RTC issued a Notice o
<arnish$ent a.ainst the unds o NE% -ith Develop$ent ;an4 o the Philippines &D;P' to the
e8tent o P!6,51!,4(".)).
!!
NE% Cuestioned ,eore the Court o %ppeals the Orders o the lo-er court, and the case -as
doc4eted as C%+<.R. SP No. 6("!". On 0ul/ 4, ())(, the Court o %ppeals rendered a
Decision
!(
declarin. null and void the Dece$,er !!, ())) Resolution as -ell as the 0anuar/ 1,
())! Order o the RTC, and orderin. the i$ple$entation o a -rit o e8ecution a.ainst the unds
o NE%. Thus, NE% iled a Petition or Revie- on Certiorari -ith this Court, doc4eted as <.R. No.
!54()). 5ean-hile, the RTC held in a,e/ance the e8ecution o its Dece$,er !5, !""" Decision
pendin. resolution o this Court o the revie- on certiorari in National Electriication
%d$inistration v. 5orales.
!*
On 0ul/ (4, ())#, this Court reversed and set aside the Court o %ppeals decision and descri,ed
the su,seCuent events relatin. to the case in this $anner
!4
6
5ean-hile, in a letter dated 0une (1, ())), or$er D;5 Secretar/ ;enFa$in E. Dio4no inor$ed
NE% %d$inistrator Conrado 5. Estrella III o the denial o the NE% reCuest or a supple$ental
,ud.et on the .round that the clai$s under R.%. No. 6#51 -hich the RTC had ordered to ,e
settled cannot ,e paid ,ecause 5orales, et al. are not =incu$,ents o positions as o 0ul/ !,
!"1" -ho are actuall/ receivin. and enFo/in. such ,eneits.=
5oreover, in an Indorse$ent dated 5arch (*, ())), the Co$$ission on %udit &CO%' advised
NE% a.ainst $a4in. urther pa/$ents in settle$ent o the clai$s o 5orales, et al. %pparentl/,
CO% had alread/ !""#$ %&' ()!*+" "*+*)!, to those o 5orales, et al. in its earlier =Decision
No. "5+)#4= dated 0anuar/ (5, !""5. Portions o the Indorse$ent read as ollo-s6
This Oice concurs -ith the a,ove vie-. The court may have exceeded its jurisdiction when
it entertained the petition for the entitlement of the after-hired employees which had
already been passed upon by this Commission in COA ecision !o. "#-$%& dated January
'#( )""#. There, it -as held that6 =the adverse action o this Co$$ission sustainin. the
disallo-ance $ade ,/ the %uditor, NE%, on the pa/$ent o rin.e ,eneits .ranted to NE%
e$plo/ees -*,#$ .,&+ J%)/ 0, 0121 3& O(3&4#, 50, 0121 is here,/ reconsidered. %ccordin.l/,
su,Fect disallo-ance is lited.=
Thus( employees hired after the extended date of October *)( )"+"( pursuant to the above
COA decision cannot defy that decision by filin, a petition for mandamus in the lower
court. -residential ecree !o. )&&# and the )"+% Constitution prescribe that the only
mode for appeal from decisions of this Commission is on certiorari to the .upreme Court
in the manner provided by law and the /ules of Court. Clearly( the lower court had no
jurisdiction when it entertained the subject case of mandamus. And void decisions of the
lower court can never attain finality( much less be executed. 0oreover( COA was not
made a party thereto( hence( it cannot be compelled to allow the payment of claims on the
basis of the 1uestioned decision.
PRE5ISES CONSIDERED, the auditor o NE% should post+audit the dis,urse$ent vouchers on
the ,ases o this Co$$issionGs decision particularl/ the a,ove+cited CO% Decision No. "4+)#4
?sic@ and e8istin. rules and re.ulations, as i there is no decision o the court in the su,Fect
special civil action or $anda$us. %t the sa$e ti$e, $ana.e$ent should ,e inor$ed o the
intention o this Oice to Cuestion the validit/ o the court decision ,eore the Supre$e Court
throu.h the Oice o the Solicitor <eneral.
Parentheticall/, the records at hand do not indicate -hen 5orales, et al. -ere appointed. Even
the Dece$,er ?!5@, !""" RTC Decision is va.ue or it $erel/ states that the/ -ere appointed
ater 0une *), !"1", -hich could $ean that the/ -ere appointed either ,eore the cut+o date o
Octo,er *!, !"1" or ater. Thus, there is not enou.h ,asis or this Court to deter$ine that the
ore.oin. CO% Decision No. "5+)#4 adversel/ aects 5orales, et al.. 5oreover, the records do
not sho- -hether CO% actuall/ Cuestioned the Dece$,er !6, !""" RTC Decision ,eore this
Court.
!5
The Court ruled that respondents therein could not proceed a.ainst the unds o NE% =,ecause
the Dece$,er ?!5@, !""" RTC Decision sou.ht to ,e satisied is not a Fud.$ent or a speciic
su$ o $one/ suscepti,le o e8ecution ,/ .arnish$ent9 it is a special Fud.$ent reCuirin.
petitioners to settle the clai$s o respondents in accordance -ith e8istin. re.ulations o the
CO%.=
!6
The Court urther held as ollo-s6
In its plain te8t, the Dece$,er ?!5@, !""" RTC Decision $erel/ directs petitioners to =settle the
clai$s o ?respondents@ and other e$plo/ees si$ilarl/ situated.= It does not reCuire petitioners to
pa/ a certain su$ o $one/ to respondents. The Fud.$ent is onl/ or the peror$ance o an act
other than the pa/$ent o $one/, i$ple$entation o -hich is .overned ,/ Section !!, Rule *" o
the Rules o Court, -hich provides6
Section !!. Execution of special judgments. + Dhen a Fud.$ent reCuires the peror$ance o an/
act other than those $entioned in the t-o precedin. sections, a certiied cop/ o the Fud.$ent
shall ,e attached to the -rit o e8ecution and shall ,e served ,/ the oicer upon the part/
a.ainst -ho$ the sa$e is rendered, or upon an/ other person reCuired there,/, or ,/ la-, to
o,e/ the sa$e, and such part/ or person $a/ ,e punished or conte$pt i he diso,e/s such
Fud.$ent.
8 8 8 8
<arnish$ent is proper onl/ -hen the Fud.$ent to ,e enorced is one or pa/$ent o a su$ o
$one/.
The RTC e8ceeded the scope o its Fud.$ent -hen, in its 3e,ruar/ ((, ())) Drit o E8ecution, it
directed petitioners to =e8tend to ?respondents@ the ,eneits and allo-ances to -hich the/ are
entitled ,ut -hich until no- the/ have ,een deprived o as enu$erated under Sec. 5 o D;5
CCC No. !) and 8 8 8 to cause their inclusion in the Provident 3und 5e$,ership.= Dorse, it
countenanced the issuance o a notice o .arnish$ent a.ainst the unds o petitioners -ith D;P
to the e8tent o P!6,51!,4(".)) even -hen no such a$ount -as a-arded in its Dece$,er !6,
!""" Decision.
Eo-ever, in its su,seCuent Orders dated 5a/ !#, ())) and 0anuar/ 1, ())!, the RTC atte$pted
to set $atters ri.ht ,/ directin. the parties to no- a-ait the outco$e o the le.al processes or
the settle$ent o respondents2 clai$s.
That is onl/ ri.ht.
Dithout Cuestion, petitioner NE% is a <OCC ++ a Furidical personalit/ separate and distinct ro$
the .overn$ent, -ith capacit/ to sue and ,e sued. %s such <OCC, petitioner NE% cannot evade
e8ecution9 its unds $a/ ,e .arnished or levied upon in satisaction o a Fud.$ent rendered
a.ainst it. Eo-ever, ,eore e8ecution $a/ proceed a.ainst it, a clai$ or pa/$ent o the
Fud.$ent a-ard $ust irst ,e iled -ith the CO%.
Hnder Co$$on-ealth %ct No. *(#, as a$ended ,/ Section (6 o P.D. No. !445, it is the CO%
-hich has pri$ar/ Furisdiction to e8a$ine, audit and settle =all de,ts and clai$s o an/ sort= due
ro$ or o-in. the <overn$ent or an/ o its su,divisions, a.encies and instru$entalities,
includin. .overn$ent+o-ned or controlled corporations and their su,sidiaries. Dith respect to
$one/ clai$s arisin. ro$ the i$ple$entation o R.%. No. 6#51, their allo-ance or disallo-ance
is or CO% to decide, su,Fect onl/ to the re$ed/ o appeal ,/ petition or certiorari to this Court.
%ll told, the RTC acted prudentl/ in haltin. i$ple$entation o the -rit o e8ecution to allo- the
parties recourse to the processes o the CO%. It $a/ ,e that the tenor o the 5arch (*, ()))
Indorse$ent issued ,/ CO% alread/ spells doo$ or respondents2 clai$s9 ,ut it is not or this
Court to pree$pt the action o the CO% on the post+audit to ,e conducted ,/ it per its
Indorse$ent dated 5arch (*, ())).
In ine, it -as .rave error or the C% to reverse the RTC and direct i$$ediate i$ple$entation o
the -rit o e8ecution throu.h .arnish$ent o the unds o petitioners,
WHEREFORE, the petition is GRANTED. The 0ul/ 4, ())( Decision o the Court o %ppeals
is REVERSED !'$SET ASIDE. The Resolution dated Dece$,er !!, ())) and Order dated
0anuar/ 1, ())! o the Re.ional Trial Court, ;ranch 11, Bue:on Cit/ in Special Civil %ction No.
B+""+*1(#5 are REINSTATED.
!#
5eanti$e, the Civil Service Co$$ission issued Resolution No. ))!("5 dated 0une !, ())!
!1
and
interpreted Section !( o Repu,lic %ct No. 6#51 in this $anner6
5aterial to the resolution o this instant reCuest is Section !( o SSA 8 8 8.
8 8 8 8
The Co$$ission, 8 8 8 is o the vie- that this provision o la- does not i$pl/ that such other
additional co$pensation not inte.rated into the salar/ rates shall not ,e received ,/ e$plo/ees
appointed ater 0ul/ !, !"1". The -ord =onl/= ,eore the phrase =as o 0ul/ !, !"1"= does not
reer to incu$,ents ,ut Cualiies -hat additional co$pensation can ,e continued to.ether -ith
the Cuali/in. -ords =not inte.rated into the standardi:ed rates shall continue to ,e authori:ed.=
The correct interpretation thereore is that, additional co$pensation ,ein. received ,/
e$plo/ees not inte.rated into the standardi:ed rates as o 0ul/ !, !"1" shall continue to ,e
authori:ed and received>enFo/ed ,/ said e$plo/ees, -hether or not said e$plo/ee -as
appointed prior to or ater 0ul/ !, !"1".
% dierent interpretation -ill result in the creation o t-o classes o e$plo/ees, i.e., one class
receivin. less pa/ than another class or su,stantiall/ eCual -or4. Said interpretation -ill violate
Section ( o the SSA -hich provides, thus6
8 8 8 8
%dditionall/, this interpretation -ill also violate the constitutional precept that no person shall ,e
denied the eCual protection o la- &Section !, %rticle III o the !"1# Constitution'. %ppl/in. this
precept the Supre$e Court declared that =eCual protection o the la- is a.ainst unde avor on an
individual or class &Tiu vs. Court o %ppeals, <R No. !(#4!), 0anuar/ (), !"""'.
!"
The Oice o the <overn$ent Corporate Counsel &O<CC', in response to the reCuest o then
NE% %d$inistrator 5anuel Auis S. Sanche:, issued on %u.ust !4, ())! its Opinion No. !5#, s.
())!
()
declarin. that the RTC decision, not havin. ,een appealed, had ,eco$e the la- o the
case -hich $ust no- ,e applied. The pertinent portion o such opinion reads6
EON. 5%NHEA AHIS S. S%NCEEI
%d$inistrator
National Electriication %d$inistration
NE% Road, Dili$an, Bue:on Cit/
Re6 ReCuest or le.al opinion on the propriet/ and applica,ilit/ to NE% e$plo/ees hired ater 0ul/
!, !"1" o O<CC Opinion NO. )16, s. ())!
8 8 8 8
Pursuant to la-, su,Fect Decision ,eca$e inal and e8ecutor/ iteen &!5' da/s ater its rendition,
there ,ein. no appeal or $otion or reconsideration iled in the interi$, as certiied to ,/ %tt/. Ail/
D. Aa,arda, ;ranch 11, Bue:on Cit/, on 0anuar/ (4, ())).
The ore.oin. considered, this Oice thereore cannot opine other-ise save to uphold the
supre$ac/ and inalit/ o the aoreCuoted Decision o the Court on the $atter. Its Fud.$ent is
no- res Fudicata, hence, the controllin. le.al rule, as ar as Petitioners NE% e$plo/ees are
concerned, is that the/ $ust ,e e8tended the ,eneits and allo-ances =to -hich the/ are entitled
,ut -hich until no- the/ have ,een deprived o as enu$erated under Section 5 o D;5 CCC No.
!)! 8 8 8, retroactive ro$ the date o their appoint$ents up to the present or until their
separation ro$ the service.= This is the la- o the case -hich $ust no- ,e applied. %t an/ rate,
-e have stated in O<CC Opinion No. )16, S. ())! that even e$plo/ees hired ater 0ul/ !, !"1"
$a/ receive the su,Fect ,eneits provided there is deter$ination ,/ the D;5 that the sa$e have
not ,een actuall/ inte.rated into their ,asic salaries.
Eence, /our Cuer/ is thereore ans-ered in the air$ative.
(!
Pursuant to the a,ove opinion in its avor, the NE% ;oard o %d$inistrators issued Resolution
No. (" on %u.ust ", ())!
((
approvin. the entitle$ent to rice, $edical, children, $eal, and other
related allo-ances to NE% e$plo/ees hired ater Octo,er *!, !"1",
(*
and the pa/$ent o these
,eneits, char.ea,le to its Personnel Services Savin.s. This resolution -as the outco$e o the
$eetin. o the NE% ;oard o %d$inistrators on the sa$e date, and reads6
RESOAHTION NO. ("
8 8 8 8
RESOAJED TEERE3ORE TO %PPROJE, as it here,/ approves, the entitle$ent to rice,
$edical, children, $eal and other related allo-ances o NE% e$plo/ees hired ater Octo,er *!,
!"1" and pa/$ent o these ,eneits9
RESOAJED 3HRTEER TO CON3IR5, as it here,/ conir$s, the initial appropriation and
pa/$ent o One 5illion Si8 Eundred 3ort/ Si8 Thousand One Eundred T-ent/ Seven Pesos and
Thirt/ Centavos &P!,646,!(#.*)' or this purpose char.ea,le a.ainst the Personnel Services
Savin.s.
(4
Thus, NE% .ranted the Cuestioned allo-ances to its e$plo/ees -ho -ere not receivin. these
,eneits>allo-ances, includin. rice allo-ance a$ountin. to P!,165,1!!.14 coverin. the period
0anuar/ to %u.ust ())!.
(5
Eo-ever, the resident auditor o CO%, Car$elita 5. %.ullana &%.ullana', did not allo- the
pa/$ent o rice allo-ance or the period 0anuar/ to %u.ust ())! to NE% e$plo/ees -ho -ere
not incu$,ents as o 0une *), !"1", under Notice o Disallo-ance
(6
No. ())!+))4+!)! dated
Septe$,er 6, ())!. %.ullana indicated the =3acts and>or Reasons or Disallo-ance= as ollo-s6
Pa/$ent o Rice %llo-ance or the period 0anuar/, ())! to %u.ust, ())! to e$plo/ees -ho
-ere not incu$,ents as o 0une *), !"1" not allo-ed pursuant to R% K6#51 as i$ple$ented ,/
Corporate Co$pensation Circular No. !) prescri,in. the Rules and Re.ulations or the
I$ple$entation o the Revised Co$pensation and Position Classiication S/ste$ or
<overn$ent+O-ned and>or Controlled Corporations &<OCCs' and 3inancial Institutions &<3Is'
speciicall/ Sections 5.4 and 5.5 thereo. 8 8 8.
(#
NE%, throu.h then %ctin. %d$inistrator 3rancisco <. Silva, and assisted ,/ counsel, appealed
%.ullana2s disallo-ance to the CO% on Septe$,er (#, ())!,
(1
ar.uin. that the disallo-ance had
no ,asis in la- and in act, and that the su,Fect dis,urse$ent -as anchored on a court decision
that had ,eco$e inal and e8ecutor/.
The CO% denied the appeal ro$ the disallo-ance in a Decision
("
dated Octo,er ", ())*
&Decision No. ())*+!*4'. The CO% stated that6
The Director o 8 8 8 Corporate %udit Oice II reco$$ended the air$ance o the su,Fect
disallo-ance contendin. that Section !( o Repu,lic %ct &R%' No. 6#51 &Salar/ Standardi:ation
Aa-' 8 8 8 re$ains applica,le on the $atter since Depart$ent o ;ud.et and 5ana.e$ent+
Corporate Co$pensation Circular No. !), s. !"1" &D;5+CCC No. !)' -as declared ineective
,/ the Supre$e Court in the case o De 0esus, et al. vs. CO%, et al. &<.R. No. !)")(*, %u.ust
!*, !""1' due to its non+pu,lication in the Oicial <a:ette or in a ne-spaper o .eneral
circulation. She pointed out that the alle.ed discri$inator/ eect and violation o the polic/ to
provide eCual pa/ or su,stantiall/ eCual -or4 in the a,ove+Cuoted provision have ,een
suicientl/ considered in Philippine Ports %uthorit/ vs. CO%, (!4 SCR% 65* and later conir$ed
in Philippine International Tradin. Corporation vs. CO%, <.R. No. !*(5"*, 0une (5, !""",
-herein the Supre$e Court ruled that6
=8 8 8 -e $ust $ention that this Court has conir$ed in Philippine Ports %uthorit/ vs.
Co$$ission on %udit the le.islative intent to protect incu$,ents -ho are receivin. salaries and
allo-ances over and a,ove those authori:ed ,/ R% 6#51 to continue to receive the sa$e even
ater R% 6#51 too4 eect. In reservin. the ,eneit to incu$,ents, the le.islature has $aniested
its intent to .raduall/ phase out this privile.e -ithout upsettin. the polic/ o non+di$inution o pa/
and consistent -ith the rule that la-s should onl/ ,e applied prospectivel/ in the spirit o air
pla/.=
She also conor$ed to the O<CC Opinion No. 5(, s. !""" dated 5arch ((, !""", edi/in. the
i$plication o the De 0esus Case -hich enunciated thusl/6
=Not-ithstandin. the rulin. in the De 0esus Case, the applica,le la- is still Section !( o R.%.
No. 6#51 -hich allo-s additional co$pensation ,ein. received ,/ incu$,ents as o 0ul/ !, !"1"
not inte.rated into the standard rates to continue. The recent nulliication o D;5+CCC No. !)
applies avora,l/ onl/ to those incu$,ent e$plo/ees &hired prior to 0ul/ !, !"1"' and does not in
an/ -a/ chan.e the position or situation o those e$plo/ees hired ater the cut+o date. Dith the
issuance o R.%. 6#51, e$plo/ees hired ater 0ul/ !, !"1" $ust ollo- the revised and uniied
co$pensation and position classiication s/ste$ in the .overn$ent, or -hich the D;5 -as
directed to esta,lish and ad$inister and -hich shall ,e applied or all .overn$ent entities.
8 8 8 8
The ne- hirees havin. accepted their e$plo/$ent, a-are o such a condition that the/ are not
entitled to additional ,eneits and allo-ances, the/ -ould ,e estopped ro$ co$plainin..=
5oreover, the Director noted that -hen the rice allo-ance to the clai$ants -as .ranted in the
/ear ())!, the D;5 had alread/ pu,lished CCC No. !).
%nent the contention that the su,Fect decision o the RTC has ,eco$e the la- o the case -hich
$ust ,e applied, she stressed that the said doctrine is one o the policies onl/ and -ill ,e
disre.arded -hen co$pellin. circu$stances call or a redeter$ination o the point o la-. %s
cited in ;lac42s Aa- Dictionar/, 6th Edition, !""), =the doctrine is $erel/ a rule o procedure and
does not .o to the po-er o the court, and -ill not ,e adhered to -here its application -ill result
in unFust decision.=
8 8 8 8
PRE5ISES CONSIDERED, the instant appeal is here,/ DENIED and the disallo-ance in the
total a$ount oP!,165,1!!.14 is accordin.l/ air$ed.
*)
NE% iled a 5otion or Reconsideration o the said Decision, ,ut this -as denied in CO% Decision
No. ())5+)!)
*!
dated 3e,ruar/ (4, ())5, the pertinent portions o -hich read6
%ter a careul re+evaluation, this Co$$ission inds herein $otion devoid o $erit, the issues
raised therein ,ein. a $ere reiteration o the previous ar.u$ents o the $ovant in his appeal and
-hich -ere alread/ considered and passed upon ,/ this Co$$ission in the assailed decision.
DEERE3ORE, there ,ein. no ne- and $aterial evidence adduced as -ould -arrant a reversal
or $odiication o the decision herein sou.ht to ,e reconsidered, the instant $otion or
reconsideration has to ,e, as it is here,/, denied -ith inalit/.
*(
Thus, petitioners ca$e to this Court Cuestionin. the CO%2s decision and resolution on the
disallo-ance o their rice su,sid/.
Petitioners clai$ that the CO%2s reliance on D;5+CCC No. !) is totall/ $isplaced, alle.in. that
this interpretation had ,een =sCuarel/ de,un4ed= ,/ the Supre$e Court in a nu$,er o cases,
includin. Cru: v. Co$$ission on %udit.
**
3urther$ore, petitioners clai$ that in a si$ilar case
involvin. Opinion No. )16, s. ())! o the O<CC, it -rote6 =?It@ is our considered opinion that
e$plo/ees o CO%, -hether appointed ,eore or ater 0ul/ !, !"1", are entitled to the ,eneits
enu$erated under Section 5.5 o D;5+CCC No. !) 8 8 8.=
*4
De Cuote portions o Opinion No. )16, s. ())! o the O<CC ,elo-6
Please ,e inor$ed that our Oice had previousl/ rendered le.al opinions involvin. the sa$e
issue upon the reCuest o so$e o our client corporations si$ilarl/ situated. In our Opinion No.
55, Series o ())), -e stated6
=%t the outset -e -ould li4e to clari/ that the a$ount o the standardi:ed salar/ vis+L+vis the pre+
SSA salar/ &plus allo-ance' is not conclusivel/ deter$inant o -hether or not a certain allo-ance
is dee$ed inte.rated into the or$er. Section !( o R.%. 6#51 e8pressl/ provides6
8 8 8 8
The la- is thus clear. The .eneral rule is that all allo-ances are dee$ed included in the
standardi:ed rates set orth in R.%. 6#51. This is consistent -ith the pri$ar/ intent o the %ct to
eli$inate -a.e ineCuities. The la-, ho-ever, ad$its o certain e8ceptions and as stated in the
second sentence o the aorecited provision, such other additional co$pensation in cash or in
4ind not inte.rated into the standardi:ed rates ,ein. received ,/ incu$,ents as o 0ul/ !, !"1"
shall continue to ,e authori:ed. It is our vie-, ho-ever, that a .overn$ent a.enc/, in this case
NDC, does not have discretion to deter$ine -hat allo-ances received ,/ incu$,ent e$plo/ees
prior to SSA are dee$ed included or inte.rated in the standardi:ed rates. It is the D;5 -hich
has the $andate and authorit/ under the SSA to deter$ine -hat additional co$pensation shall
,e inte.rated and it is precisel/ -h/ it issued NCC No. !).=
The ore.oin. opinion is consistent -ith our Opinion No. 5(, Series o !""", -herein -e opined6
=8 8 8 Nonetheless, as Section !( o R% 6#51 e8pressl/ provides that such additional
co$pensation, -hether in cash or in 4ind, ,ein. received ,/ incu$,ent e$plo/ees as o 0ul/ !,
!"1" not inte.rated to the standardi:ed salar/ rates as $a/ ,e deter$ined ,/ the D;5 shall
continue to ,e authori:ed, the Cuestion ,eco$es a $atter o act, on -hether or not the
aore$entioned allo-ances have ,een inte.rated into the salaries o e$plo/ees.=
*5
&E$phases in
the Cuoted te8t.'
Petitioners clai$ that =the Civil Service Co$$ission, the Oice o the <overn$ent Corporate
Counsel and the hi.hest court o the land, the Supre$e Court, chose not to distin.uish the
entitle$ent o ,eneits to those hired ,eore and ater Octo,er *!, !"1" &or in this case, 0ul/ ?!@,
!"1"',= -hile =the CO% s-eepin.l/ does so ,/ Fust a -ave o the hand.=
*6
To support this clai$,
petitioners erroneousl/ cite 0avier v. Philippine Ports %uthorit/, C%+<.R. No. 6#"*#, 5arch !(,
())(, as a decision ,/ this Court, ,ut said decision -as rendered ,/ the Court o %ppeals.
Petitioners ar.ue that assu$in. that the/ are not entitled to the rice allo-ance in Cuestion, the/
should not ,e reCuired to reund the a$ounts received, on .rounds o airness and eCuit/. In
connection -ith this, petitioners alle.e as ollo-s6
Prior to Dece$,er *!, ())*, NE% consists o #() e$plo/ees $ore or less -ho received the rice
allo-ance. Hpon ?the@ restructurin. o NE% in Dece$,er ())*, all NE% e$plo/ees -ere le.all/
ter$inated. Out o #() e$plo/ees, onl/ *() e$plo/ees are no- let -ith to operate NE%. 5ost o
the &sic' the$ are rehired -hile $inorit/ o the$ are ne-l/ hired. Thus, the reund o
P!,165,1!!.14, shall ,e shouldered ,/ those -ho re$ained as NE% e$plo/ees. Secondl/, those
-ho received the said rice allo-ance accepted it in .ood aith ,elievin. that the/ are entitled to it
as a $atter o la-.
*#
In its Co$$ent
*1
dated Septe$,er (!, ())5, CO%2s lone ar.u$ent is that =?t@he assailed CO%
decision is not tainted -ith .rave a,use o discretion. The disallo-ance o pa/$ent or the rice
?su,sid/@ ,/ the CO% is in accord -ith the la- and the rules.= CO% $aintains that the la- on the
$atter, Section !( o Repu,lic %ct No. 6#51, is clear, as its last sentence provides reservation o
certain allo-ances to incu$,ents. CO% ar.ues in this -ise6
The Supre$e Court in Philippine Ports %uthorit/ vs. Co$$ission on %udit conir$ed the
le.islative intent to protect incu$,ents -ho are receivin. salaries and>or allo-ances over and
a,ove those authori:ed ,/ R.%. 6#51 to continue to receive the sa$e even ater the la- too4
eect. In reservin. the ,eneit to incu$,ents, the le.islature has $aniested its intent to
.raduall/ phase out this privile.e -ithout upsettin. the polic/ o non+di$inution o pa/ and
consistent -ith the rule that la-s should onl/ ,e applied prospectivel/ in the spirit o airness and
Fustice.
Thus, pursuant to its authorit/ under Section (* o R.%. No. 6#51, the D;5 8 8 8 issued on
Octo,er (, !"1", D;5+CCC No. !). Section 5.5 o D;5+CCC No. !) enu$erated the various
allo-ances>rin.e ,eneits authori:ed to <OCCs><3Is -hich are not to ,e inte.rated into the
,asic salar/ and allo-ed to ,e continued onl/ or incu$,ents o positions as o 0une *), !"1"
-ho are authori:ed and actuall/ receivin. said allo-ances>,eneits as o said date. %$on. these
-as the rice su,sid/>allo-ance.
Eence, in li.ht o the eectivit/ o D;5+CCC No. !) on 5arch !6, !""" ollo-in. its reissuance
&in its entiret/ on 3e,ruar/ !5, !"""' and pu,lication in the Oicial <a:ette on 5arch !, !""", the
disallo-ance ,/ the CO% o the rice allo-ance or the period ,e.innin. 0anuar/ ())! up to
%u.ust ())! is not tainted -ith .rave a,use o discretion ,ut in accord -ith the la- and the
rules.
*"
Petitioners, in their Repl/,
4)
anchor their petition on their alle.ation that the RTC Decision had
alread/ ,eco$e inal and e8ecutor/, could no lon.er ,e distur,ed, and $ust ,e respected ,/ the
parties. To support their clai$, the/ cite %rcenas v. Court o %ppeals
4!
-herein this Court held6
3or, it is a unda$ental rule that -hen a inal Fud.$ent ,eco$es e8ecutor/, it there,/ ,eco$es
i$$uta,le and unaltera,le. The Fud.$ent $a/ no lon.er ,e $odiied in an/ respect, even i the
$odiication is $eant to correct -hat is perceived to ,e an erroneous conclusion o act or la-,
and re.ardless o -hether the $odiication is atte$pted to ,e $ade ,/ the court renderin. it or
,/ the hi.hest Court o the land. The onl/ reco.ni:ed e8ceptions are the correction o clerical
errors or the $a4in. o so+called nunc pro tunc entries -hich cause no preFudice to an/ part/,
and, o course, -here the Fud.$ent is void. %n/ a$end$ent or alteration -hich su,stantiall/
aects a inal and e8ecutor/ Fud.$ent is null and void or lac4 o Furisdiction, includin. the entire
proceedin.s held or that purpose.
4(
&E$phasis ours.'
Petitioners li4e-ise cite Panado v. Court o %ppeals
4*
-herein the Court held that =?i@t is a8io$atic
that inal and e8ecutor/ Fud.$ents can no lon.er ,e attac4ed ,/ an/ o the parties or ,e
$odiied, directl/ or indirectl/, even ,/ the hi.hest court o the land.=
44
3ro$ the ore.oin.
Furisprudence, petitioners conclude that the acts o CO% in disallo-in. the clai$s and orderin.
reund o ,eneits alread/ received clearl/ constitute .rave a,use o discretion a$ountin. to lac4
o Furisdiction inas$uch as said acts rustrated the inal and e8ecutor/ decision o the trial court.
The pivotal issues as deter$ined ,/ the CO% are6
!. Dhether or not the i$$uta,ilit/ o inal decision doctrine $ust prevail over the
e8clusive Furisdiction o ?the CO%@ to audit and settle dis,urse$ents o unds9 and
(. Dhether or not the NE% e$plo/ees hired ater 0une *), !"1" are entitled to rice
allo-ance.
45
The CO% resolved these issues in this $anner6
%s to the irst issue, the i$$uta,ilit/ rule applies onl/ -hen the decision is pro$ul.ated ,/ a
court possessed o Furisdiction to hear and decide the case. Hndou,tedl/, the petition in the
.uise o a case or $anda$us is a $one/ clai$ allin. -ithin the ori.inal and e8clusive
Furisdiction o this Co$$ission. Notin. the propensit/ o the lo-er courts in ta4in. co.ni:ance o
cases iled ,/ clai$ants in violation o such pri$ar/ Furisdiction, the Supre$e Court issued
%d$inistrative Circular !)+())) dated Octo,er (*, ())) enFoinin. Fud.es o lo-er courts to
e8ercise caution in order to prevent =possi,le circu$vention o the rules and procedures o the
Co$$ission on %udit= and reiteratin. the ,asic rule that6 =%ll $one/ clai$s a.ainst the
<overn$ent $ust ,e iled -ith the Co$$ission on %udit -hich shall act upon it -ithin si8t/ da/s.
ReFection o the clai$ -ill authori:e the clai$ant to elevate the $atter to the Supre$e Court on
certiorari and in eect sue the State there,/.=
Hnder the doctrine o pri$ar/ Furisdiction, -hen an ad$inistrative ,od/ is clothed -ith ori.inal
and e8clusive Furisdiction, courts are utterl/ -ithout po-er and authorit/ to e8ercise concurrentl/
such Furisdiction. %ccordin.l/, all the proceedin.s o the court in violation o that doctrine and all
orders and decisions reached there,/ are null and void. It -ill ,e noted in the cited Supre$e
Court Circular that $one/ clai$s are co.ni:a,le ,/ the CO% and its decision is appeala,le onl/
to the Supre$e Court. The lo-er courts have nothin. to do -ith such .enus o transactions.
%nent the issue o entitle$ent to rice allo-ance ,/ e$plo/ees hired ater 0une *), !"1", this
Co$$ission is let -ith no option ,ut to air$ the disallo-ance in the ace o the e8plicit
provisions o D;5+CCC No. !). %ter its pu,lication on 5arch ", !""" in the Oicial <a:ette, rice
allo-ance -as allo-ed onl/ or incu$,ents as o 0ul/ !, !"1". O,viousl/, there is no violation o
the eCual protection clause as cited in the PITC case, supra, ,ecause -hatever incre$ents the
incu$,ents are enFo/in. over those o non+incu$,ents are transitor/, or the sa$e la- provides
that such dierence shall ,e deducted ro$ the salar/ increase the or$er should receive under
Section !#. Thus, the eCuali:ation or standardi:ation o -hat the t-o cate.ories o e$plo/ees
-ill ,e receivin. in ter$s o ,eneits is ensured.
PRE5ISES CONSIDERED, the instant appeal is here,/ DENIED and the disallo-ance in the
total a$ount oP!,165,1!!.14 is accordin.l/ air$ed.
46
De a.ree -ith the indin.s o the CO%.
In National Electriication %d$inistration v. 5orales, the order o .arnish$ent a.ainst the NE%
unds to i$ple$ent the RTC Decision -as in issue, and -e said that the CO% had e8clusive
Furisdiction to decide on the allo-ance or disallo-ance o $one/ clai$s arisin. ro$ the
i$ple$entation o Repu,lic %ct No. 6#51. De o,served therein that =the RTC acted prudentl/ in
haltin. i$ple$entation o the -rit o e8ecution to allo- the parties recourse to the processes o
the CO%.=
4#
In act, -e even stated there that =it is not or this Court to pree$pt the action o the
CO% on the post+audit to ,e conducted ,/ it per its Indorse$ent dated 5arch (*, ())).=
41
De ind that the CO% had ruled in accordance -ith la- and Furisprudence, and -e see no reason
to reverse its decision.
Section 5.5 o D;5+CCC No. !) is clear that rice su,sid/ is one o the ,eneits that -ill ,e
.ranted to e$plo/ees o <OCCs
4"
or <3Is
5)
onl/ i the/ are =incu$,ents= as o 0ul/ !, !"1". De
reproduce the irst para.raph o Section 5.5 ,elo-6
5.5 The ollo-in. allo-ances>rin.e ,eneits authori:ed to <OCCs><3Is pursuant to the
aore$entioned issuances are not li4e-ise to ,e inte.rated into the ,asic salar/ and allo-ed to
,e continued onl/ or incu$,ents o positions as o 0une *), !"1" -ho are authori:ed and
actuall/ receivin. said allo-ances>,eneits as o said date, at the sa$e ter$s and conditions
prescri,ed in said issuances?6@
5.5.! Rice Su,sid/9 8 8 8.
5!
De have deined an incu$,ent as =a person -ho is in present possession o an oice9 one -ho
is le.all/ authori:ed to dischar.e the duties o an oice.=
5(
There is no Cuestion that petitioners
-ere not incu$,ents as o 0une *), !"1". De have li4e-ise characteri:ed NE% as a <OCC in
National Electriication %d$inistration v. 5orales. Thus, Section 5.5 Cuoted a,ove, issued
pursuant to the authorit/ .iven to the D;5 under Section !( o Repu,lic %ct No. 6#51, -as
correctl/ applied ,/ the CO%.
De ind our pronounce$ents in Philippine National ;an4 v. Pal$a
5*
to ,e applica,le and
conclusive on this issue no- ,eore us6
Durin. these tou.h econo$ic ti$es, this Court understands, and in act s/$pathi:es -ith, the
pli.ht o ordinar/ .overn$ent e$plo/ees. Dhenever le.all/ possi,le, it has ,ent over ,ac4-ards
to protect la,or and avor it -ith additional econo$ic advanta.es. In the present case, ho-ever,
the Salar/ Standardi:ation Aa- clearl/ provides that the clai$ed ,eneits shall continue to ,e
.ranted onl/ to e$plo/ees -ho -ere =incu$,ents= as o 0ul/ !, !"1". Eence, $uch to its re.ret,
the Court has no authorit/ to reinvent or $odi/ the la- to e8tend those ,eneits even to
e$plo/ees hired ater that date.1awphi l
8 8 8 8
S3!,# D#(*"*"
The doctrine =stare decisis et non quieta movere &Stand ,/ the decisions and distur, not -hat is
settled'= is ir$l/ entrenched in our Furisprudence. Once this Court has laid do-n a principle o
la- as applica,le to a certain state o acts, it -ould adhere to that principle and appl/ it to all
uture cases in -hich the acts are su,stantiall/ the sa$e as in the earlier controvers/.
The precise interpretation and application o the assailed provisions o R% 6#51, na$el/ those in
Section !(, have lon. ,een esta,lished in Philippine Ports Authority v. COA. The essential
pronounce$ents in that case have urther ,een ortiied ,/ anila !nternational Airport Authority
v. COA, Philippine !nternational "rading Corporation v. COA, and #ocial #ecurity #ystem v.
COA.
This Court has consistentl/ held in those cases that allo-ances or rin.e ,eneits, -hether or not
inte.rated into the standardi:ed salaries prescri,ed ,/ R% 6#51, should continue to ,e enFo/ed
,/ e$plo/ees -ho &!' -ere incu$,ents and &(' -ere receivin. those ,eneits as o 0ul/ !, !"1".
In Philippine Ports Authority v. COA, the 8 8 8 Court said that the intention o the ra$ers o that
la- -as to phase out certain allo-ances and privile.es .raduall/, -ithout upsettin. the principle
o non+di$inution o pa/. The intention o Section !( to protect incum$ents -ho -ere
alread/ receiving those allo-ances on 0ul/ !, !"1", -hen R% 6#51 too4 eect -as e$phasi:ed
thus6
=%n incu$,ent is a person -ho is in present possession o an oice.
=The conseCuential outco$e, under sections !( and !#, is that i the incu$,ent resi.ns or is
pro$oted to a hi.her position, his successor is no lon.er entitled to his predecessor2s R%T%
privile.e 8 8 8 or to the transition allo-ance.=
3inall/, to e8plain -hat 0ul/ !, !"1" pertained to, -e held in the sa$e case as ollo-s6
=8 8 8. The date 0ul/ !, !"1" ,eco$es crucial onl/ to deter$ine that as o said date, the oicer
-as an incum$entand -as receiving the R%T%, or purposes o entitlin. hi$ to its continued
.rant. 8 8 8.=
In Philippine !nternational "rading Corporation v. COA, this Court conir$ed the le.islative
intention in this -ise6
=8 8 8 ?T@here -as no intention on the part o the le.islature to revo4e e8istin. ,eneits ,ein.
enFo/ed ,/ incum$entso .overn$ent positions at the ti$e o the passa.e o R% 6#51 ,/ virtue
o Sections !( and !# thereo. 8 8 8.=
The Court stressed that in reservin. the ,eneits to incu$,ents alone, the le.islature2s intention
-as not onl/ to adhere to the polic/ o non+di$inution o pa/, ,ut also to ,e consistent -ith the
prospective application o la-s and the spirit o airness and Fustice.
8 8 8 8
In consonance -ith stare decisis% there should ,e no $ore $is.ivin.s a,out the proper
application o Section !(. In the present case, the pa/$ent o ,eneits to e$plo/ees hired ater
0ul/ !, !"1", -as properl/ -ithheld, ,ecause the la- clearl/ $andated that those ,eneits should
,e reserved onl/ to incu$,ents -ho -ere alread/ enFo/in. the$ ,eore its enact$ent.
Dithholdin. the$ ro$ the others ensured that the co$pensation o the incu$,ents -ould not ,e
di$inished in the course o the latter2s continued e$plo/$ent -ith the .overn$ent
a.enc/.
54
&E$phasis ours, citations o$itted.'1avvphi 1
%s petitioners -ere hired ater 0une *), !"1", the CO% -as correct in disallo-in. the .rant o the
,eneit to the$, as the/ -ere clearl/ not entitled to it. %s Cuoted a,ove, -e have repeatedl/ held
that under Section !( o Repu,lic %ct No. 6#51, the onl/ reCuire$ents or the continuous .rant o
allo-ances and rin.e ,eneits on top o the standardi:ed salar/ rates or e$plo/ees o <OCCs
and <3Is are as ollo-s6 &!' the e$plo/ee $ust ,e an incu$,ent as o 0ul/ !, !"1"9 and &(' the
allo-ance or ,eneit -as not consolidated in the standardi:ed salar/ rate as prescri,ed ,/
Repu,lic %ct No. 6#51.
55
De here,/ reiterate our rulin. in Philippine National ;an4 v. Pal$a as re.ards Section !( o
Repu,lic %ct No. 6#51, as ollo-s6
In su$, -e rule thus6
!. Hnder Section !( o R% 6#51, additional co$pensation alread/ ,ein. received ,/ the
e$plo/ees o petitioner, ,ut not inte.rated into the standardi:ed salar/ rates ++
enu$erated in Section 5.5 o D;5+CC?C@ No. !), li4e =rice su,sid/, su.ar su,sid/, death
,eneits other than those .ranted ,/ the <SIS,= and so on ++ shall continue to ,e .iven.
(. Eo-ever, the continuation o the .rant shall ,e availa,le onl/ to those =incu$,ents=
alread/ receivin. it on 0ul/ !, !"1".
*. Thus, in PP% v. CO%, this Court held that PP% e$plo/ees alread/ receivin. the R%T%
.ranted ,/ AOI No. "# should continue to receive the$, provided the/ -ere alread/
=incu$,ents= on or ,eore 0ul/ !, !"1".
4. PITC v. CO% held that in enactin. R% 6#51, Con.ress -as adherin. to the polic/ o
non+di$inution o e8istin. pa/. Eence, i a ,eneit -as not /et e8istin. -hen the la- too4
eect on 0ul/ !, !"1", there -as nothin. to continue and no ,asis or appl/in. the polic/.
5. Neither -ould Cru: v. CO% ,e applica,le. In those cases, the CO% ar,itraril/ set a
speciic date, Octo,er *!, !"1"9 R% 6#51 had not $ade a distinction ,et-een those hired
,eore and those ater that date. In the present case, the la- itsel set 0ul/ !, !"1", as
the date -hen e$plo/ees should ,e =incu$,ents,= ,ecause that -as -hen R% 6#51 too4
eect. It -as not an ar,itraril/ chosen date9 there -as suicient reason or settin. it as
the cuto point.
56
Not-ithstandin. our rulin. a,ove, ho-ever, -e ta4e up as another $atter the reund ordered ,/
the CO% on the rice su,sid/ that petitioners had alread/ received. %s re.ards the reund, -e rule
in avor o petitioners and -ill not reCuire the$ to return the a$ounts an/$ore.
This is ,ecause, to ,e.in -ith, the oicials and ad$inistrators o NE% the$selves had ,elieved
that their e$plo/ees -ere entitled to the allo-ances, and this -as covered ,/ Resolution No. ("
o the NE% ;oard o %d$inistrators. The petitioners thus received in .ood aith the rice su,sid/
to.ether -ith other allo-ances provided in said Resolution. 3or reasons o eCuit/ and airness,
thereore, and considerin. their lon. -ait or this $atter to ,e resolved -ith inalit/, -e -ill no
lon.er reCuire a reund ro$ these pu,lic servants.
Our pronounce$ents on reund in De 0esus v. Co$$ission on %udit,
5#
-herein -e cited
;laCuera v. Eon. %lcala,
51
are applica,le6
Considerin., ho-ever, that all the parties here acted in .ood aith, -e cannot countenance the
reund o su,Fect incentive ,eneits or the /ear !""(, -hich a$ounts the petitioners have
alread/ received. Indeed, no indicia o ,ad aith can ,e detected under the attendant acts and
circu$stances. The oicials and chies o oices concerned dis,ursed such incentive ,eneits in
the honest ,elie that the a$ounts .iven -ere due to the recipients and the latter accepted the
sa$e -ith .ratitude, conident that the/ richl/ deserve such ,eneits.
This rulin. in &laquera applies to the instant case. Petitioners here received the additional
allo-ances and ,onuses in .ood aith under the honest ,elie that ADH% ;oard Resolution No.
*!* authori:ed such pa/$ent. %t the ti$e petitioners received the additional allo-ances and
,onuses, the Court had not /et decided &ay$ay 'ater (istrict. Petitioners had no 4no-led.e that
such pa/$ent -as -ithout le.al ,asis. Thus, ,ein. in .ood aith, petitioners need not reund the
allo-ances and ,onuses the/ received ,ut disallo-ed ,/ the CO%.
5"
&E$phasis supplied.'
%s in the cases a,ove Cuoted, -e cannot countenance the reund o the rice su,sidies .iven to
petitioners ,/ NE% or the period 0anuar/ to %u.ust ())! at this late ti$e, especiall/ since the/
-ere .iven ,/ the .overn$ent a.enc/ to its e$plo/ees in .ood aith.
DEERE3ORE, pre$ises considered, the petition is here,/ P%RTI%AAM <R%NTED. CO%
Decision No. ())*+!*4 dated Octo,er ", ())* and CO% Resolution No. ())5+)!) dated
3e,ruar/ (4, ())5 are here,/ %33IR5ED -ith the CA%RI3IC%TION that the petitioners shall no
lon.er ,e reCuired to reund the rice su,sidies or the period 0anuar/ to %u.ust ())!, -hich the/
had received ro$ NE% ,ut -ere later disallo-ed ,/ the CO%.
SO ORDERED.
TERESITA J. LEONARDO-DE CASTRO
%ssociate 0ustice
DE CONCHR6
RENATO C. CORONA
Chie 0ustice
ANTONIO T. CARPIO
%ssociate 0ustice
On leave
PRESBITERO J. VELASCO, JR.
N
%ssociate 0ustice
ARTURO D. BRION
%ssociate 0ustice
DIOSDADO M. PERALTA
%ssociate 0ustice
LUCAS P. BERSAMIN
%ssociate 0ustice
MARIANO C. DEL CASTILLO
%ssociate 0ustice
ROBERTO A. ABAD
%ssociate 0ustice
MARTIN S. VILLARAMA, JR.
%ssociate 0ustice
JOSE PORTUGAL PEREZ
%ssociate 0ustice
JOSE CATRAL MENDOZA
%ssociate 0ustice
MARIA LOURDES P. A. SERENO
%ssociate 0ustice
BIENVENIDO L. REYES
%ssociate 0ustice
ESTELA M. PERLAS-BERNABE
%ssociate 0ustice
C E R T I 3 I C % T I O N
Pursuant to %rticle JIII, Section !* o the Constitution, I certi/ that the conclusions in the a,ove
Decision had ,een reached in consultation ,eore the case -as assi.ned to the -riter o the
opinion o the Court.
RENATO C. CORONA
Chie 0ustice