014 MAYNILAD WATER SUPERVISORS ASSOCIATION VS.
The LA granted MWSA claim while the NLRC reversed the LA
MAYNILAD WATER SERVICES (ABAS)
27 November, 2013| Perez, J. | CBA
PETITIONER: MAYNILAD WATER SUPERVISORS ASSOCIATION
RESPONDENTS: MAYNILAD WATER SERVICES
SUMMARY: MWSA used to have COLA as part of their benefits when
they were working for MWSS. During this time, the SC, in a decision, ruled
that a DBM CCC No. 10, a circular removing COLA, ineffective and
pursuant to this, MWSA wanted the COLA reinstated when they were
privatized by Maynilad.
ISSUE: WON Maynilad is bound by the concession agreement to pay the
COLA of the employees. – No.
The lack of the COLA in the concession agreement indicated the intent of
Maynilad to not include COLA. The court ruled that the petitioners cannot
use the De Jesus ruling because of two reasons. First, the company there
was a GOCC, petitioners work for a private company. Second, COLA was
integrated into the basic salary of employees by virtue of RA 6758 which
removed the need to have it stated in a separate provision.
DOCTRINE: The COLA is not in its nature an allowance because the same
is not paid pursuant to the employee’s fulfillment of duty. Therefore, it
should be included in the computation of the employee’s standard salary
rate.
FACTS:
1. Petitioner Maynilad Water Supervisors Association (MWSA) is an
association composed of former supervisory employees of
Metropolitan Waterworks and Sewerage System.
2. They claim that during their time there, they received a monthly cost
of living allowance (COLA) equivalent to 40% of their basic pay.
3. These benefits were discontinued when the DBM issued Corporate
Compensation Circular No. 10 wherein MWSS was privatized and the
COLA was no longer part of the benefits granted in the new
agreement.
4. It is notable in this juncture that the subject CCC No. 10 was rendered
ineffective by the SC in a 1998 decision. With that in mind, the
petitioners are now praying for the payment of the COLA from the
privatization up to the present.
5.
decision. The CA affirmed the NLRC decision.
ISSUE/s:
1. W/N Maynilad is bound by the concession agreement to pay the
COLA when it absorbed the employees of MWSS. – No. Maynilad
never intended to include COLA in the benefits it granted to the
absorbed employees.
RULING: WHEREFORE, premises considered, the instant Petition is hereby
DENIED and the 31 January 2011 Amended Decision and 12 September 2011
Resolution of the Court of Appeals in CA-G.R. SP No. 101911 is AFFIRMED
in toto.
RATIO:
1. It is clear from the concession agreement that COLA was not intended
to be paid to the absorbed employees. The declaration of CCC No. 10
due to its non-publication in the Official Gazette or in a newspaper of
general circulation is not even material as to give rise to the
employee’s right to demand payment of the COLA.
2. The employees are basing their arguments on the ruling in the De
Jesus case but the court opined that the same is inapplicable because
the factual circumstances are different.
3. Firstly, in De Jesus, the subject company was a GOCC and petitioners
in this case were employees of a private company.
4. Secondly, the parties in this present concession agreement could not
have thought of including COLA because since 1989, the government
had already resolved to remove COLA to the list allowances given to
government employees. This is through the enactment of RA 6758
which integrated COLA in the standard salary rate.
5. COLA is not in the nature of an allowance intended to reimburse
expenses incurred by officals. It is not payment in consideration of the
fulfillment of official duty. This being so, COLA should be integrated
into the standardized salary rates and separated from the fringe
benefits.
6. It is evident therefore, that at the time the MWSS employees were
absorbed by Maynilad, COLA was already integrated into their
montly salary.
7. To grant COLA in this case would create an absurd situation wherein
they would be receiving COLA twice