For so many years now, government employees have been fighting for the payment of the allowances, fringe benefits and COLA that were discontinued following the passage of R.A. 6758, otherwise known as the Salary Standardization Law and the issuance of Department of Budget and Management (DBM) Circular No. 10 implementing said law that deemed the said allowances already integrated in the standardized salaries.
Despite the rulings of the Supreme Court (SC) in De Jesus vs. Court of Appeals (G.R. No. 109023, August 12, 1998, 294 SCRA 152) and PPA vs. COA (G.R. NO. 160396, September 6, 2005, 469 SCRA 397) that DBM CCC 10 is ineffective for lack of publication and therefore could not affect government employees’ entitlement to such benefits, some government agencies and government owned and controlled corporations continue to deny payment of these benefits to their employees, prompting them to still go to court to compel the offices concerned to pay their benefits, thereby incurring expenses and delays.
This latest decision of the SC promulgated on March 14, 2008 and penned by Justice Ruben T. Reyes will hopefully end with finality the saga of the poor employees in these government agencies and government owned and controlled corporations some of whom have retired and passed away without even enjoying the benefits due them.
This is the case of MWSS employees who have been receiving allowances, fringe benefits and COA equivalent to 40 percent of the basic monthly salary or P300.00 a month, whichever is higher. When R.A. 6758 was passed, DBM issued Corporate Circular 10 implementing said law and providing, among others, the discontinuance without qualification of all allowances and fringe benefits including COLA of government employees over and above their basic salaries starting November 1, 1989.
On August 12, 1998 however the SC in De Jesus vs. CA, G.R. No. 109023 declared said DBM Circular 10, ineffective for lack of publication. The DBM later remedied the fatal defect when it published the circular in the March 1999 issue of the Official Gazette.
After vigorous complaints and requests from government employees, the Office of the Government Corporate Counsel issued a Memorandum opining that; (1) employees in government owned and controlled corporations are entitled to the payment of the COLA and Amelioration Allowance without the need of any prior determination by the DBM of whether or not these allowances have, indeed, been integrated into the standardized salaries; and (2) The incumbents, as well as non-incumbents, including those hired in corporations established after the passage of R.A. 6758 are entitled to avail of these benefits from the time said benefits were disallowed, discontinued or withdrawn up to 15 days from publication in the Official Gazette of DBM (CCC 10).
MWSS Board however granted only a total of 30% COLA. Shortchanged, the employees went to court on Mandamus demanding the balance. But MWSS denied their request. It argued that the employees have not proven any clear right to the allowance because it was already deemed integrated into their salaries. It averred that its partial grant of the benefits is a mere act of generosity to them, not in payment of a legally enforceable right. MWSS also argued that it needs to obtain prior DBM approval before it can pay the balance. Was MWSS correct?
No. The issues hoisted by MWSS have long been settled. In the en banc case of De Jesus vs. Court of Appeals, DBM Circular 10 was declared ineffective for lack of publication. Being ineffective DBM Circular 10 cannot affect government employees’ entitlement to fringe benefits, allowances and COLA from 1989 to 1999 even without prior determination from DBM on whether or not the COLA was deemed integrated into their salaries. De Jesus was affirmed in the recent case of PPA vs. COA where it was held that the COLA of government employees from 1989 to 1999 was not deemed integrated into their salaries. In other words, during the period that DBM CCC 10 was in legal limbo, the COLA and the amelioration allowance were not effectively integrated into the standardized salaries. The integration became effective only on March 16, 1999 upon its publication. Thus in between these two dates, they were still entitled to receive the two allowances. All — not only incumbents as of July 1, 1989 — should receive back pay corresponding to the said benefits, from July 1, 1989 to the new effectivity date of the DBM CCC 10 — March 16, 1999.
The ruling in De Jesus and PPA is clear. Employees of government owned and controlled corporations, whether incumbent or not, are entitled to the COLA and other allowances from 1989 to 1999 as a matter of right. The arguments of the MWSS that its employees have not proven any clear legal right to the allowance and that they need prior DBM approval are without merit (MWSS vs. Bautista et. al., G.R. 171351, March 14, 2008).
Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call tel. 7249445.–Jose C. Sison, Philippine Star
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