SC nullifies MCWD benefits

The Supreme Court recently upheld the decision of the Commission on Audit disallowing benefits and privileges provided in a collective bargaining agreement to employees of Metropolitan Cebu Water District.

In a nine-page decision penned by Associate Justice Angelina Gutierrez, the SC supported the COA's disallowing the benefits of MCWD workers such as their hospitalization benefits, mid-year bonus, 13th month pay, Christmas bonus, and longevity pay.

But for those who had already received their benefits, the SC ruled that they need not refund the received benefits and privileges as "they acted in good faith under the honest belief that the CBA authorized such payment."

From 1983 to 1986, the MCWD Board of Directors issued several resolutions giving the mentioned benefits and privileges to its personnel including monetization of leave credits, hospitalization privileges, Christmas bonuses and longevity allowance.

In 1989, the MCWD and MCWD Employees Union executed a CBA providing for the continuous grant of these benefits. On January 1, 1992, the parties renewed their CBA.

On November 13, 1995, an audit team headed by Bernardita Jabines of the COA-7, one of the respondents, audited the accounts and transactions of MCWD.

As a result, the Regional Director of COA 7, also a respondent, sent MCWD several notices disallowing the amount of P12,221,120.86 representing hospitalization benefits, mid-year bonus, 13th month pay, Christmas bonus and longevity pay.

MCWD general manager Dulce Abanilla interposed an appeal to respondent COA at Quezon City citing a COA Memorandum Circular No. 002-94 providing that "all benefits provided under the duly existing CBAs entered into prior to March 12, 1992, the date of official entry of judgment of the Supreme Court ruling in Davao City Water District, et al. vs. CSC and COA, shall continue up to the respective expiry dates of the benefits or CBA whichever comes earlier."

Then, on December 3, 1998, COA denied the petitioner's appeal saying as far as the CBA is concerned the critical moment is the date of the promulgation itself. Any transaction concluded after this date in violation of existing laws and regulations applicable to government entities is void and of no effect, conferring no demandable right, and creating no enforceable obligation.

Abanilla then moved for the reconsideration of the case but was denied by COA in a Resolution dated February 15, 2000, prompting her to file her petition before the SC.

She contended that COA acted with grave abuse of discretion in disallowing the above benefits and privileges and contravened the Labor Code provision on non-diminution of benefits.

But the Solicitor General said in his comment that "COA did not gravely abuse its discretion in denying petitioner's appeal considering that the terms and conditions of employment, such as the entitlement of government personnel, like the affected MCWD employees, to privileges and benefits are governed by the Civil Service Law, the General Appropriations Act and applicable issuances of the Department of Budget and Management, not by the Labor Code."

"The petition is bereft of merit," the SC ruled. -Liv G. Campo