Betoy v. Board of Directors, NPC

7/23/2019 Betoy v. Board of Directors, NPC

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. Nos. 156556-57 October 4, 2011

ENRIQUE U. ETO!, Petitioner,vs.T"E O#R$ O% $IRECTORS, N#TION#& PO'ER CORPOR#TION, Respondent.

D E C I S I N

PER#&T#, J.:

Before this Court is a special civil action for certiorari ! and supple"ental petitionfor mandamus,# specificall$ assailin% National Po&er Board Resolutions No. #''#(!#) and No.#''#(!#*, as &ell as Sections !!, +), +, ), *# and -+ of Republic Act R.A./ No. 0!+-, other&ise1no&n as the Electric Po&er Industr$ Refor" Act of #''! EPIRA/. Also assailed is Rule ++ of theI"ple"entin% Rules and Re%ulations IRR/ of the EPIRA.

2he facts of the case are as follo&s3

n 4une , #''!, the EPIRA &as enacted b$ Con%ress &ith the %oal of restructurin% the electricpo&er industr$ and privati5ation of the assets of the National Po&er Corporation NPC/.

Pursuant to Section )+ of the EPIRA, a ne& National Po&er Board of Directors NPB/ &as created.n 6ebruar$ #7, #''#, pursuant to Section 77) of the EPIRA, the Secretar$ of the Depart"ent of

Ener%$ pro"ul%ated the IRR.

n the other hand, Section -+ of the EPIRA provides for separation benefits to officials ande"plo$ees &ho &ould be affected b$ the restructurin% of the electric po&er industr$ and theprivati5ation of the assets of the NPC, to &it3

Section -+. Separation Benefits of fficials and E"plo$ees of Affected A%encies. ( N(t)o*(+Goer*e*t e+o/ees )s+(ce or se(r(te ro te ser)ce (s ( res3+t o terestr3ct3r)* o te e+ectr)c)t/ )*3str/ (* r)(t)(t)o* o NPC (ssets 3rs3(*t to t)s #ct,s(++ be e*t)t+e to e)ter ( se(r(t)o* (/ (* oter be*e)ts )* (ccor(*ce )t e)st)*+(s, r3+es or re3+(t)o*s or be e*t)t+e to (()+ o te r))+ees ro)e 3*er ( se(r(t)o*+(* )c s(++ be o*e (* o*e-(+ o*t s(+(r/ or eer/ /e(r o ser)ce )* te

oer*e*t3 Provided, ho&ever, 2hat those &ho avail of such privile%es shall start their %overn"entservice ane& if absorbed b$ an$ %overn"ent(o&ned successor co"pan$. In no case shall there bean$ di"inution of benefits under the separation plan until the full i"ple"entation of the restructurin%and privati5ation.

Displaced or separated personnel as a result of the privati5ation, if 8ualified, shall be %ivenpreference in the hirin% of the "anpo&er re8uire"ents of the privati5ed co"panies. 9 9 9 *

Rule ++- of the IRR provided for the covera%e and the %uidelines for

http://www.lawphil.net/judjuris/juri2011/oct2011/gr_156556_2011.html#fnt1















the separation benefits to be %iven to the e"plo$ees affected.

n Nove"ber !, #''#, pursuant to Section -+ of the EPIRA and Rule ++ of the IRR, the NPBpassed NPB Resolution No. #''#(!#)7 &hich, a"on% others, resolved that all NPC personnel shallbe le%all$ ter"inated on 4anuar$ +!, #''+ and shall be entitled to separation benefits. n the sa"eda$, the NPB passed NPB Resolution No. #''#(!#* &hich created a transition tea" to "ana%e and

i"ple"ent the separation pro%ra".

As a result of the fore%oin% NPB Resolutions, petitioner Enri8ue :. Beto$, to%ether &ith thousands of his co(e"plo$ees fro" the NPC &ere ter"inated.

;ence, herein petition for certiorari &ith petitioner pra$in% for the %rant of the follo&in% reliefs fro"this Court, to &it3

!. Declarin% National Po&er Board Resolution Nos. #''#(!#) and #''#(!#* and its Anne9<B< Null and =oid, the fact >that? it &as done &ith e9traordinar$ haste and in secrec$ &ithoutthe able participation of the Napocor E"plo$ees Consolidated :nion NEC:/ to represent allcareer civil service e"plo$ees on issues affectin% their ri%hts to due process, e8uit$, securit$

of tenure, social benefits accrued to the", and as &ell as the disclosure of public transactionprovisions of the !07 Constitution because durin% its proceedin% the National Po&er Boardhad acted &ith %rave abuse of discretion and disre%ardin% constitutional and statutor$in@unctions on re"oval of public servants and non(di"inution of social benefits accrued toseparated e"plo$ees, thus, a"ountin% to e9cess of @urisdiction

#. Stri1in% do&n Section !!, Section ) and Section *# of RA 0!+- EPIRA/ for bein%violative of Section !+, Article =II of the !07 Constitution and, therefore, unconstitutional

+. Stri1in% Section +) of RA 0!+- EPIRA/ for bein% e9orbitant displa$ of State Po&er and&as not pre"ised on the &elfare of the 6IIPIN PEPE or principle of salus populi estsuprema lex

). Stri1in% do&n Section + for RA 0!+- EPIRA/ for bein% a prelude to CharterChange &ithout a valid referendu" for ratification of the entire voter citi5ens of the PhilippineRepublic

*. Stri1in% do&n all other provisions of RA 0!+- EPIRA/ found repu%nant to the !07Constitution

-. Stri1in% do&n all provisions of the I"ple"entin% Rules and Re%ulations IRR/ of theEPIRA found repu%nant to the !07 Constitution

7. Stri1in% do&n Section -+ of RA 0!+- EPIRA/ for classif$in% such provisions in the sa"e

vein &ith Procla"ation No. *' used a%ainst MSS e"plo$ees and its failure to classif$&hich condition co"es first &hether the restructurin% effectin% total reor%ani5ation of theelectric po&er industr$ "a1in% NPC financiall$ viable or the privati5ation of NPC assets&here "anpo&er reduction or s&eepin%la$(off or ter"ination of career civil servicee"plo$ees follo&s the disposal of NPC assets. 2his is a clear case of violation of theEQUALPROTECTION CLAUSE , therefore, unconstitutional









. Stri1in% do&n Rule ++ of the I"ple"entin% Rules >and? Re%ulations IRR/ for disre%ardin%the constitutional and statutor$ in@unction on arbitrar$ re"oval of career civil servicee"plo$ees and

0. 6or such other reliefs dee"ed e8uitable &ith @ustice and fairness to "ore than EI;22;:SAND ,'''/ EMPFEES of the National Po&er Corporation NPC/ &hose fate lies

in the sound disposition of the ;onorable Supre"e Court.0

In addition, petitioner also filed a supple"ental petition for mandamus pra$in% for his reinstate"ent.

2he petition is &ithout "erit.

Before an$thin% else, this Court shall first tac1le &hether it &as proper for petitioner to directl$8uestion the constitutionalit$ of the EPIRA before this Court.

Section *!/ and #/, Article =III of the !07 Constitution provides that3

SEC2IN *. 2he Supre"e Court shall have the follo&in% po&ers3

!. E9ercise ori%inal @urisdiction over cases affectin% a"bassadors, other public "inisters andconsuls, and over petitions for certiorari, prohibition, "anda"us, 8uo &arranto, and habeascorpus.

#. Revie&, revise, reverse, "odif$, or affir" on appeal or certiorari, as the la& or the rules ofcourt "a$ provide, final @ud%"ents and orders of lo&er courts in3

a/ All cases in &hich the constitutionalit$ or validit$ of an$ treat$, international or e9ecutivea%ree"ent, la&, presidential decree, procla"ation, order, instruction, ordinance, or re%ulation is in8uestion.!'

Based on the fore%oin%, this CourtGs @urisdiction to issue &rits of certiorari, prohibition, "anda"us,8uo &arranto, and habeas corpus, &hile concurrent &ith that of the Re%ional 2rial Courts and theCourt of Appeals, does not %ive liti%ants unrestrained freedo" of choice of foru" fro" &hich to see1such relief.!! 2he deter"ination of &hether the assailed la& and its i"ple"entin% rules andre%ulations contravene the Constitution is &ithin the @urisdiction of re%ular courts. 2he Constitutionvests the po&er of @udicial revie& or the po&er to declare a la&, treat$, international or e9ecutivea%ree"ent, presidential decree, order, instruction, ordinance, or re%ulation in the courts, includin%the Re%ional 2rial Courts.!#

It has lon% been established that this Court &ill not entertain direct resort to it unless the redressdesired cannot be obtained in the appropriate courts, or &here e9ceptional and co"pellin%circu"stances @ustif$ avail"ent of a re"ed$ &ithin and call for the e9ercise of our pri"ar$

@urisdiction.!+

2hus, herein petition should alread$ be dis"issed at the outset ho&ever, since si"ilarpetitions have alread$ been resolved b$ this Court tac1lin% the validit$ of NPB Resolutions No. #''#(!#) and No. #''#(!#*, as &ell as the constitutionalit$ of certain provisions of the EPIRA, this Courtshall disre%ard the procedural defect.

8(+))t/ o NP Reso+3t)o*s No. 2002-124 (* No. 2002-125

2he "ain issue raised b$ petitioner deals &ith the validit$ of NPB Resolutions No. #''#(!#) and No.#''#(!#*.

















In NPC Drivers and Mechanics Association NPC DAMA! v" Nationa# Po$er Cor%oration NPC!,!) thisCourt had alread$ ruled that NPB Resolutions No. #''#(!#) and No. #''#(!#* are void and of nole%al effect.

NPC Drivers involved a special civil action for In@unction see1in% to en@oin the i"ple"entation of thesa"e assailed NPB Resolutions. Petitioners therein put in issue the fact that the NPB Resolutions

&ere not concluded b$ a dul$ constituted Board of Directors since no 8uoru" in accordance &ithSection ) of the EPIRA e9isted. In addition, petitioners therein ar%ued that the assailed NPBResolutions cannot be %iven le%al effect as it failed to co"pl$ &ith Section )7 of the EPIRA &hichre8uired the endorse"ent of the 4oint Con%ressional Po&er Co""ission and the President of thePhilippines. Rulin% in favor of petitioners therein, this Court ruled that NPB Resolutions No. #''#(!#) and No. #''#(!#* are void and of no le%al effect for failure to co"pl$ &ith Section ) of theEPIRA, to &it3

e a%ree &ith petitioners. In enu"eratin% under Section ) those &ho shall co"pose the NationalPo&er Board of Directors, the le%islature has vested upon these persons the po&er to e9ercise their

@ud%"ent and discretion in runnin% the affairs of the NPC. Discretion "a$ be defined as <the act orthe libert$ to decide accordin% to the principles of @ustice and oneHs ideas of &hat is ri%ht and proper

under the circu"stances, &ithout &illfulness or favor. Discretion, &hen applied to publicfunctionaries, "eans a po&er or ri%ht conferred upon the" b$ la& of actin% officiall$ in certaincircu"stances, accordin% to the dictates of their o&n @ud%"ent and conscience, uncontrolled b$ the

@ud%"ent or conscience of others. It is to be presu"ed that in na"in% the respective depart"entheads as "e"bers of the board of directors, the le%islature chose these secretaries of the variouse9ecutive depart"ents on the basis of their personal 8ualifications and acu"en &hich "ade the"eli%ible to occup$ their present positions as depart"ent heads. 2hus, the depart"ent secretariescannot dele%ate their duties as "e"bers of the NPB, "uch less their po&er to vote and approveboard resolutions, because it is their personal @ud%"ent that "ust be e9ercised in the fulfil"ent ofsuch responsibilit$.

9 9 9 9

In the case at bar, it is not difficult to co"prehend that in approvin% NPB Resolutions No. #''#(!#)and No. #''#(!#*, it is the representatives of the secretaries of the different e9ecutive depart"entsand not the secretaries the"selves &ho e9ercised @ud%"ent in passin% the assailed Resolution, assho&n b$ the fact that it is the si%natures of the respective representatives that are affi9ed to the8uestioned Resolutions. 2his, to our "ind, violates the dut$ i"posed upon the specificall$enu"erated depart"ent heads to e"plo$ their o&n sound discretion in e9ercisin% the corporatepo&ers of the NPC. Evidentl$, the votes cast b$ these "ere representatives in favor of the adoptionof the said Resolutions "ust not be considered in deter"inin% &hether or not the necessar$ nu"berof votes &as %arnered in order that the assailed Resolutions "a$ be validl$ enacted. ;ence, therebein% onl$ three valid votes cast out of the nine board "e"bers, na"el$ those of DE Secretar$=incent S. Pere5, 4r. Depart"ent of Bud%et and Mana%e"ent Secretar$ E"ilia 2. Boncodin andNPC IC(President Rolando S. uilala, NP Reso+3t)o*s No. 2002-124 (* No. 2002-125 (re

o) (* (re o *o +e(+ eect.

!*

;o&ever, a supervenin% event occurred in NPC Drivers &hen it &as brou%ht to this CourtGs attentionthat NPB Resolution No. #''7(** &as pro"ul%ated on Septe"ber !), #''7 confir"in% and adoptin%the principles and %uidelines enunciated in NPB Resolutions No. #''#(!#) and No. #''#(!#*.

n Dece"ber #, #''0, this Court pro"ul%ated a Resolution!- clarif$in% the a"ount due the individuale"plo$ees of NPC in vie& of NPB Resolution No. #''7(**. In said Resolution, this Court clarifiedthe e9act date of the le%al ter"ination of each class of NPC e"plo$ees, thus3











6ro" all these, it is clear that our rulin%, pursuant to NPB Resolution No. #''#(!#), covers alle"plo$ees of the NPC and not onl$ the !- e"plo$ees as contended b$ the NPC. ;o&ever, asre%ards their ri%ht to reinstate"ent, or separation pa$ in lieu of reinstate"ent, pursuant to a validl$approved Separation Pro%ra", plus bac1&a%es, &a%e ad@ust"ents, and other benefits, the sa"eshall be co"puted fro" the date of le%al ter"ination as stated in NPC Circular No. #''+('0, to &it3

a/ 2he le%al ter"ination of 1e$ officials, i.e., the Corporate Secretar$, =ice(Presidents andSenior =ice(Presidents &ho &ere appointed under NP Board Resolution No. #''+(!#, shallbe at the close of office hours of 4anuar$ +!, #''+.

b/ 2he le%al ter"ination of personnel &ho availed of the earl$ leaversG sche"e shall be onthe last da$ of service in NPC but not be$ond 4anuar$ !*, #''+.

c/ 2he le%al ter"ination of personnel &ho &ere no lon%er e"plo$ed in NPC after 4une #-,#''! shall be the date of actual separation in NPC.

d/ 6or all other NPC personnel, their le%al ter"ination shall be at the close of officehoursshift schedule of 6ebruar$ #, #''+.!7

As to the validit$ of NPB Resolution No. #''7(**, this Court ruled that the sa"e &ill have aprospective effect, to &it3

hat then is the effect of the approval of NPB Resolution No. #''7(** on !) Septe"ber #''7J 2heapproval of NPB Resolution No. #''7(**, supposedl$ b$ a "a@orit$ of the National Po&er Board asdesi%nated b$ la&, that adopted, confir"ed and approved the contents of NPB Resolutions No.#''#(!#) and No. #''#(!#* &ill have a prospective effect, not a retroactive effect. 2he approval ofNPB Resolution No. #''7(** cannot ratif$ and validate NPB Resolutions No. #''#(!#) and No.#''#(!#* as to "a1e the ter"ination of the services of all NPC personnele"plo$ees on +! 4anuar$#''+ valid, because said resolutions &ere void.

2he approval of NPB Resolution No. #''7(** on !) Septe"ber #''7 "eans that the services of allNPC e"plo$ees have been le%all$ ter"inated on this date. All separation pa$ and other benefits tobe received b$ said e"plo$ees &ill be dee"ed cut on this date. 2he co"putation thereof shall,therefore, be fro" the date of their ille%al ter"ination pursuant to NPB Resolutions No. #''#(!#)and No. #''#(!#* as clarified b$ NPB Resolution No. #''+(!! and NPC Resolution No. #''+('0 upto !) Septe"ber #''7. Althou%h the validit$ of NPB Resolution No. #''7(** has not $et beenpassed upon b$ the Court, sa"e has to be %iven effect because NPB Resolution No. #''7(**en@o$s the presu"ption of re%ularit$ of official acts. 2he presu"ption of re%ularit$ of official acts "a$be rebutted b$ affir"ative evidence of irre%ularit$ or failure to perfor" a dut$. 2hus, until and unlessthere is clear and convincin% evidence that rebuts this presu"ption, &e have no option but to rulethat said resolution is valid and effective as of !) Septe"ber #''7.!

Based on the fore%oin%, this Court concluded that the co"putation of the a"ounts due the

e"plo$ees &ho &ere ter"inated andor separated as a result of, or pursuant to, the nullified NPBBoard Resolutions No. #''#(!#) and No. #''#(!#* shall be fro" their date of ille%al ter"ination upto Septe"ber !), #''7 &hen NPB Resolution No. #''7(** &as issued.

2hus, the resolution of the validit$ of NPB Board Resolutions No. #''#(!#) and No. #''#(!#* is,therefore, "oot and acade"ic in vie& of the CourtGs pronounce"ents in NPC Drivers.







Anent the 8uestion of the constitutionalit$ of Section -+ of RA 0!+-, as &ell as Rule ++ of the IRR,this Court finds that the sa"e is &ithout "erit.

A reor%ani5ation involves the reduction of personnel, consolidation of offices, or abolition thereof b$reason of econo"$ or redundanc$ of functions.!0 It could result in the loss of oneHs position throu%hre"oval or abolition of an office. ;o&ever, for a reor%ani5ation for the purpose of econo"$ or to

"a1e the bureaucrac$ "ore efficient to be valid, it "ust pass the test of %ood faith other&ise, it isvoid ab initio.#'

It is undisputed that NPC &as in financial distress and the solution found b$ Con%ress &as to pursuea polic$ to&ards its privati5ation. 2he privati5ation of NPC necessaril$ de"anded the restructurin% of its operations. 2o carr$ out the purpose, there &as a need to ter"inate e"plo$ees and re(hire so"edependin% on the "anpo&er re8uire"ents of the privati5ed co"panies. 2he privati5ation andrestructurin% of the NPC &as, therefore, done in %ood faith as its pri"ar$ purpose &as for econo"$and to "a1e the bureaucrac$ "ore efficient.

In 6reedo" fro" Debt Coalition v. Ener%$ Re%ulator$ Co""ission,#! this Court discussed &h$ there&as a need for a shift to&ards the privati5ation and restructurin% of the electric po&er industr$, to &it3

ne of the land"ar1 pieces of le%islation enacted b$ Con%ress in recent $ears is the EPIRA. Itestablished a ne& polic$, le%al structure and re%ulator$ fra"e&or1 for the electric po&er industr$.

2he ne& thrust is to tap private capital for the e9pansion and i"prove"ent of the industr$ as thelar%e %overn"ent debt and the hi%hl$ capital(intensive character of the industr$ itself have lon% beenac1no&led%ed as the critical constraints to the pro%ra". 2o attract private invest"ent, lar%el$forei%n, the @aded structure of the industr$ had to be addressed. hile the %eneration andtrans"ission sectors &ere centrali5ed and "onopolistic, the distribution side &as fra%"ented &ithover !+' utilities, "ostl$ s"all and unecono"ic. 2he pervasive fla&s have caused a lo& utili5ation of e9istin% %eneration capacit$ e9tre"el$ hi%h and unco"petitive po&er rates poor 8ualit$ of serviceto consu"ers dis"al to for%ettable perfor"ance of the %overn"ent po&er sector hi%h s$ste"losses and an inabilit$ to develop a clear strate%$ for overco"in% these shortco"in%s.

2hus, the EPIRA provides a fra"e&or1 for the restructurin% of the industr$, includin% the privati5ationof the assets of the National Po&er Corporation NPC/, the transition to a co"petitive structure, andthe delineation of the roles of various %overn"ent a%encies and the private entities. 2he la& ordainsthe division of the industr$ into four )/ distinct sectors, na"el$3 %eneration, trans"ission, distributionand suppl$. Corollaril$, the NPC %eneratin% plants have to be privati5ed and its trans"issionbusiness spun off and privati5ed thereafter.##

Petitioner ar%ues that bad faith is clearl$ "anifested as the reor%ani5ation has an e$e to replacecurrent favorite less co"petent appointees. In addition, petitioner contends that 8ualifications andbehavioral aspect &ere bein% set aside.#+

Section # of R.A. No. --*-#) cites certain circu"stances sho&in% bad faith in the re"oval ofe"plo$ees as a result of an$ reor%ani5ation, thus3

Sec. #. No officer or e"plo$ee in the career service shall be re"oved e9cept for a valid cause andafter due notice and hearin%. A valid cause for re"oval e9ist &hen, pursuant to a bona fidereor%ani5ation, a position has been abolished or rendered redundant or there is a need to "er%e,divide, or consolidate positions in order to "eet the e9i%encies of the service, or other la&ful causesallo&ed b$ the Civil Service a&. 2he e9istence of an$ or so"e of the follo&in% circu"stances "a$

















be considered as evidence of bad faith in the re"ovals "ade as a result of the reor%ani5ation, %ivin%rise to a clai" for reinstate"ent or reappoint"ent b$ an a%%rieved part$3

a/ here there is a si%nificant increase in the nu"ber of positions in the ne& staffin% patternof the depart"ent or a%enc$ concerned

b/ here an office is abolished and another perfor"in% substantiall$ the sa"e functions iscreated

c/ here incu"bents are replaced b$ those less 8ualified in ter"s of status of appoint"ent,perfor"ance and "erit

d/ here there is a reclassification of offices in the depart"ent or a%enc$ concerned and thereclassified offices perfor" substantiall$ the sa"e functions as the ori%inal offices and

e/ here the re"oval violates the order of separation provided in Section + hereof.

2he Solicitor eneral, ho&ever, ar%ues that petitioner has not sho&n an$ circu"stance to prove that

the restructurin% of NPC &as done in bad faith. e a%ree.

PetitionerGs alle%ation that the reor%ani5ation &as "erel$ underta1en to acco""odate ne&appointees is at "ost speculative and bereft of an$ evidence on record. It is settled that bad faith"ust be dul$ proved and not "erel$ presu"ed. It "ust be proved b$ clear and convincin%evidence,#* &hich is absent in the case at bar.

In addition, petitioner has no le%al or vested ri%ht to be reinstated as Section -+ of the EPIRA as &ellas Section *, Rule ++ of the IRR clearl$ state that the displaced or separated personnel as a resultof the privati5ation, if 8ualified, shall be %iven preference in the hirin% of the "anpo&er re8uire"entsof the privati5ed co"panies. Clearl$, the la& onl$ spea1s of preference and b$ no stretch of thei"a%ination can the sa"e a"ount to a le%al ri%ht to the position. :ndoubtedl$, not all the ter"inated

e"plo$ees &ill be re(hired b$ the selection co""ittee as the "anpo&er re8uire"ent of theprivati5ed co"panies &ill be different. As correctl$ observed b$ the Solicitor eneral, the selection of e"plo$ees for purposes of re(hirin% the" necessaril$ entails the e9ercise of discretion or

@ud%"ent.#- Such bein% the case, petitioner, cannot, b$ &a$ of "anda"us, co"pel the selectionco""ittee to include hi" in the re(hired e"plo$ees, "ore so, since there is no evidence sho&in%that said co""ittee acted &ith %rave abuse of discretion or that the re(hired e"plo$ees &ere "erel$acco""odated and not 8ualified.

8(+))t/ o Sect)o*s 11, 49, (* 52 o R# :1;6

Petitioner ar%ues that Sections !!,#7 ),# and *##0 of the EPIRA are unconstitutional for violatin%Section !+, Article =II of the !07 Constitution.

Section !+, Article =II of the !07 Constitution provides3

Sec. !+. 2he President, =ice(President, the Mem&ers o' the Ca&inet , and their deputies orassistants sha## not , unless other&ise provided in this Constitution, ho#d an( other o''ice ore"plo$"ent durin% their tenure. 2he$ shall not, durin% said tenure, directl$ or indirectl$ practice an$other profession, participate in an$ business, or be financiall$ interested in an$ contract &ith, or inan$ franchise, or special privile%e %ranted b$ the overn"ent or an$ subdivision, a%enc$, or













instru"entalit$ thereof, includin% %overn"ent(o&ned or controlled corporations or their subsidiaries.2he$ shall strictl$ avoid conflict of interest in the conduct of their office.

9 9 9 9.+'

In Civi# Li&erties Union v" E)ecutive Secretar( ,+! this Court e9plained that the prohibition contained in

Section !+, Article =II of the !07 Constitution does not appl$ to posts occupied b$ the E9ecutiveofficials specified therein &ithout additional co"pensation in an e)*o''icio capacit$ as provided b$la& and as re8uired b$ the pri"ar$ function of said officialGs office, to &it3

2he prohibition a%ainst holdin% dual or "ultiple offices or e"plo$"ent under Section !+, Article =II of the Constitution "ust not, ho&ever, be construed as appl$in% to posts occupied b$ the E9ecutiveofficials specified therein &ithout additional co"pensation in an e9(officio capacit$ as provided b$la& and as re8uired b$ the pri"ar$ functions of said officialsG office. 2he reason is that these postsdo not co"prise <an$ other office< &ithin the conte"plation of the constitutional prohibition but areproperl$ an i"position of additional duties and functions on said officials. 2o characteri5e these postsother&ise &ould lead to absurd conse8uences, a"on% &hich are3 2he President of the Philippinescannot chair the National Securit$ Council reor%ani5ed under E9ecutive rder No. !!* Dece"ber

#), !0-/. Neither can the =ice(President, the E9ecutive Secretar$, and the Secretaries of NationalDefence, 4ustice, abor and E"plo$"ent and ocal overn"ent sit in this Council, &hich &ouldthen have no reason to e9ist for lac1 of a chairperson and "e"bers. 2he respectiveundersecretaries and assistant secretaries, &ould also be prohibited.

9 9 9 9

2he ter" <pri"ar$< used to describe <functions< refers to the order of i"portance and thus "eanschief or principal function. 2he ter" is not restricted to the sin%ular but "a$ refer to the plural. 2headditional duties "ust not onl$ be closel$ related to, but "ust be re8uired b$ the officialGs pri"ar$functions. E9a"ples of desi%nations to positions b$ virtue of oneGs pri"ar$ functions are theSecretaries of 6inance and Bud%et, sittin% as "e"bers of the Monetar$ Board, and the Secretar$ of2ransportation and Co""unications, actin% as Chair"an of the Mariti"e Industr$ Authorit$ and theCivil Aeronautics Board.+#

2he desi%nation of the "e"bers of the Cabinet to for" the NPB does not violate the prohibitioncontained in our Constitution as the privati5ation and restructurin% of the electric po&er industr$involves the close coordination and polic$ deter"ination of various %overn"ent a%encies. Section #of the EPIRA clearl$ sho&s that the polic$ to&ard privati5ation &ould involve financial, bud%etar$ andenviron"ental concerns as &ell as coordination &ith local %overn"ent units, to &it3

SEC2IN #. Dec#aration o' Po#ic(" + It is hereb$ declared the polic$ of the State3

a/ 2o ensure and accelerate the total electrification of the countr$

b/ 2o ensure the 8ualit$, reliabilit$, securit$ and affordabilit$ of the suppl$ of electric po&er

c/ 2o ensure transparent and reasonable prices of electricit$ in a re%i"e of free and fairco"petition and full public accountabilit$ to achieve %reater operational and econo"icefficienc$ and enhance the co"petitiveness of Philippine products in the %lobal "ar1et

d/ 2o enhance the inflo& of private capital and broaden the o&nership base of the po&er%eneration, trans"ission and distribution sectors











e/ 2o ensure fair and non(discri"inator$ treat"ent of public and private sector entities

in the process of restructurin% the electric po&er industr$

f/ 2o protect the public interest as it is affected b$ the rates and services of electric utilitiesand other providers of electric po&er

%/ 2o assure sociall$ and environ"entall$ co"patible ener%$ sources and infrastructure

h/ 2o pro"ote the utili5ation of indi%enous and ne& and rene&able ener%$ resources inpo&er %eneration in order to reduce dependence on i"ported ener%$

i/ 2o provide for an orderl$ and transparent privati5ation of the assets and liabilities of theNational Po&er Corporation NPC/

@/ 2o establish a stron% and purel$ independent re%ulator$ bod$ and s$ste" to ensureconsu"er protection and enhance the co"petitive operation of the electricit$ "ar1et and

1/ 2o encoura%e the efficient use of ener%$ and other "odalities of de"and side"ana%e"ent.

As can be %leaned fro" the fore%oin% enu"eration, the restructurin% of the electric po&er industr$inherentl$ involves the participation of various %overn"ent a%encies. In Civi# Li&erties, this Courte9plained that "andatin% additional duties and functions to Cabinet "e"bers &hich are notinconsistent &ith those alread$ prescribed b$ their offices or appoint"ents b$ virtue of their special1no&led%e, e9pertise and s1ill in their respective e9ecutive offices, is a practice lon%(reco%ni5ed in"an$ @urisdictions. It is a practice @ustified b$ the de"ands of efficienc$, polic$ direction, continuit$and coordination a"on% the different offices in the E9ecutive Branch in the dischar%e of its"ultifarious tas1s of e9ecutin% and i"ple"entin% la&s affectin% national interest and %eneral &elfareand deliverin% basic services to the people.++

2he production and suppl$ of ener%$ is undoubtedl$ one of national interest and is a basicco""odit$ e9pected b$ the people. 2his Court, therefore, finds the desi%nation of the respective"e"bers of the Cabinet, as e)*o''icio"e"bers of the NPB, valid.

2his Court is not un"indful, ho&ever, that Section ) of the EPIRA is not cate%orical in proclai"in%that the concerned Cabinet secretaries co"pose the NPB Board onl$ in an e)*o''icio capacit$. It isonl$ in Section *# creatin% the Po&er Sector Assets and iabilities Mana%e"ent CorporationPSAM/ that the$ are so desi%nated in an e)*o''icio capacit$. Sections ) and - of the EPIRAprovides3

Sect)o* 4. TR#NSCO o(r o $)rectors.

All the po&ers of the 2RANSC shall be vested in and e9ercised b$ a Board of Directors. 2he Boardshall be co"posed of a Chair"an and si9 -/ "e"bers. 2he Secretar$ of the D6 shall be the e9(officio Chair"an of the Board. 2he other "e"bers of the 2RANSC Board shall include theSecretar$ of the DE, the Secretar$ of the DENR, the President of 2RANSC, and three +/"e"bers to be appointed b$ the President of the Philippines, each representin% u5on, =isa$as andMindanao, one of &ho" shall be the President of PSAM.

9 9 9 9.





Sect)o* 6. PS#&M o(r o $)rectors.

PSAM shall be ad"inistered, and its po&ers and functions e9ercised, b$ a Board of Directors &hichshall be co"posed of the Secretar$ of the D6 as the Chair"an, and the Secretar$ of the DE, theSecretar$ of the DBM, the Director(eneral of the NEDA, the Secretar$ of the D4, the Secretar$ ofthe D2I and the President of the PSAM as e9(officio "e"bers thereof.

Nonetheless, this Court a%rees &ith the contention of the Solicitor eneral that the constitutionalprohibition &as not violated, considerin% that the concerned Cabinet secretaries &ere "erel$i"posed additional duties and their posts in the NPB do not constitute <an$ other office< &ithin theconte"plation of the constitutional prohibition.

2he dele%ation of the said official to the respective Board of Directors &ere desi%nation b$ Con%ressof additional functions and duties to the officials concerned, i.e., the$ &ere desi%nated as "e"bersof the Board of Directors. Desi%nation connotes an i"position of additional duties, usuall$ b$ la&,upon a person alread$ in the public service b$ virtue of an earlier appoint"ent.+) Desi%nation doesnot entail pa$"ent of additional benefits or %rant upon the person so desi%nated the ri%ht to clai"the salar$ attached to the position. ithout an appoint"ent, a desi%nation does not entitle the officer

to receive the salar$ of the position. 2he le%al basis of an e"plo$eeGs ri%ht to clai" the salar$attached thereto is a dul$ issued and approved appoint"ent to the position, and not a "eredesi%nation.+*

;ence, Con%ress specificall$ intended that the position of "e"ber of the Board of NPB shall be e)*o''icio or auto"aticall$ attached to the respective offices of the "e"bers co"posin% the board. It isclear fro" the &ordin%s of the la& that it &as the intention of Con%ress that the sub@ect posts &ill bead@unct to the respective offices of the official desi%nated to such posts.

2he fore%oin% discussion, not&ithstandin%, the concerned officials should not receive an$ additionalco"pensation pursuant to their desi%nation as ruled in Civi# Li&erties, thus3

2he e9(officio position bein% actuall$ and in le%al conte"plation part of the principal office, it follo&sthat the official concerned has no ri%ht to receive additional co"pensation for his services in the saidposition. 2he reason is that these services are alread$ paid for and covered b$ the co"pensationattached to his principal office. It should be obvious that if, sa$, the Secretar$ of 6inance attends a"eetin% of the Monetar$ Board as an e9(officio "e"ber thereof, he is actuall$ and in le%alconte"plation perfor"in% the pri"ar$ function of his principal office in definin% polic$ in "onetar$and ban1in% "atters, &hich co"e under the @urisdiction of his depart"ent. 6or such attendance,therefore, he is not entitled to collect an$ e9tra co"pensation, &hether it be in the for" of a per die"or an honorariu" or an allo&ance, or so"e other such euphe"is". B$ &hatever na"e it isdesi%nated, such additional co"pensation is prohibited b$ the Constitution.

In relation thereto, Section !) of the EPIRA provides3

SEC. !). oard Per Diems and A##o$ances" + 2he "e"bers of the Board shall receive per die" foreach re%ular or special "eetin% of the board actuall$ attended b$ the" and, upon approval of theSecretar$ of the Depart"ent of 6inance, such other allo&ances as the Board "a$ prescribe.

Section !) relates to Section !! &hich sets the co"position of the 2RANSC Board na"in% theSecretar$ of the Depart"ent of 6inance as the e) o''icio Chair"an of the Board. 2he other "e"bersof the 2RANSC Board include the Secretar$ of the Depart"ent of Ener%$ and the Secretar$ of theDepart"ent of Environ"ent and Natural Resources. ;o&ever, considerin% the constitutionalprohibition, it is clear that such e"olu"ents or additional co"pensation to be received b$ the








"e"bers of the NPB do not appl$ and should not be received b$ those covered b$ the constitutionalprohibition, i.e., the Cabinet secretaries. It is to be noted that three of the "e"bers of the NPB are tobe appointed b$ the President, &ho &ould be representin% the interests of those in u5on, =isa$as,and Mindanao, &ho "a$ be entitled to such honorariu" or allo&ance if the$ do not fall &ithin theconstitutional prohibition.

;ence, the said cabinet officials cannot receive an$ for" of additional co"pensation b$ &a$ of perdie"s and allo&ances. Moreover, an$ a"ount received b$ the" in their capacit$ as "e"bers of theBoard of Directors should be rei"bursed to the %overn"ent, since the$ are prohibited fro" collectin%additional co"pensation b$ the Constitution.

2hese interpretations are consistent &ith the funda"ental rule of statutor$ construction that a statuteis to be read in a "anner that &ould breathe life into it, rather than defeat it,+- and is supported b$ thecriteria in cases of this nature that all reasonable doubts should be resolved in favor of theconstitutionalit$ of a statute.+7

Co*st)t3t)o*(+)t/ o Sect)o* ;4+ o te EPIR#

2he Constitutionalit$ of Section +) of the EPIRA has alread$ been passed upon b$ this Courtin -erochi v" De%artment o' Ener.( ,+0 to &it3

6inall$, ever$ la& has in its favor the presu"ption of constitutionalit$, and to @ustif$ its nullification,there "ust be a clear and une8uivocal breach of the Constitution and not one that is doubtful,speculative, or ar%u"entative. Indubitabl$, petitioners failed to overco"e this presu"ption in favor of the EPIRA. e find no clear violation of the Constitution &hich &ould &arrant a pronounce"ent thatSec. +) of the EPIRA and Rule ! of its IRR are unconstitutional and void.)'

In -erochi , this Court ruled that the :niversal Char%e is not a ta9 but an e9action in the e9ercise ofthe StateGs police po&er. 2he :niversal Char%e is i"posed to ensure the viabilit$ of the countr$Gselectric po&er industr$.

Petitioner ar%ues that the i"position of a universal char%e to address the stranded debts andcontract "ade b$ the %overn"ent throu%h the NCC(IPP contracts or Po&er :tilit$(IPP contracts orsi"pl$ the bilateral a%ree"ents or contracts is an added burden to the electricit$(consu"in% publicon their "onthl$ po&er bills. It &ould "ean that the electricit$(consu"in% public &ill suffer in carr$in%this burden for the errors co""itted b$ those in po&er &ho runs the affairs of the State. 2his is ane9orbitant displa$ of State Po&er at the e9pense of its people.)!

It is basic that the deter"ination of &hether or not a ta9 is e9cessive oppressive or confiscator$ is anissue &hich essentiall$ involves a 8uestion of fact and, thus, this Court is precluded fro" revie&in%the sa"e.

8(+))t/ o Sect)o* ;9)# o te EPIR#

Petitioner ar%ues that the abolish"ent of the ERB and its replace"ent of a ver$ po&erful 8uasi( @udicial bod$ na"ed the Ener%$ Re%ulator$ Co""ission ERC/, pursuant to Section + up toSection )+ of the EPIRA or RA 0!+-, &hich is tas1ed to dictate the da$(to(da$ affairs of the entireelectric po&er industr$, see"s a prelude to Charter Chan%e. Petitioner sub"its that under the !07Constitution, there are onl$ three constitutionall$(reco%ni5ed Co""issions, the$ are3 the CivilService Co""ission CSC/, the Co""ission on Audit CA/ and the Co""ission on ElectionsCMEEC/.)+




















PetitionerHs ar%u"ent that the creation of the ERC see"s to be a prelude to charter chan%e is fli"s$and finds no support in la&. 2his Court cannot subscribe to petitionerHs thesis that <in order for thene&l$(enacted RA 0!+- or EPIRA to beco"e a valid la&, &e should have to call first a referendu" toa"end or totall$ chan%e the PeopleGs Charter.<))

In an$ case, the constitutionalit$ of the abolition of the ERB and the creation of the ERC has alread$

been settled in /a%isanan n. m.a /a$ani n. Ener.( Re.u#ator( oard v" Commissioner 0earin,)* to &it3

All la&s en@o$ the presu"ption of constitutionalit$. 2o @ustif$ the nullification of a la&, there "ust be aclear and une8uivocal breach of the Constitution. KERB failed to sho& an$ breach of theConstitution.

A public office is created b$ the Constitution or b$ la& or b$ an officer or tribunal to &hich the po&erto create the office has been dele%ated b$ the le%islature. 2he po&er to create an office carries &ithit the po&er to abolish. President Cora5on C. A8uino, then e9ercisin% her le%islative po&ers, createdthe ERB b$ issuin% E9ecutive rder No. !7# on Ma$ !07.

2he 8uestion of &hether a la& abolishes an office is a 8uestion of le%islative intent. 2here should notbe an$ controvers$ if there is an e9plicit declaration of abolition in the la& itself. Section + of RA0!+- e9plicitl$ abolished the ERB. 9 9 9)-

Moreover, in /a%isanan, this Court ruled that because of the e9pansion of the ERCGs functions andconcerns, there &as a valid abolition of the ERB.)7

8(+))t/ o Sect)o* 6;)

Contrar$ to petitionerGs ar%u"ent, Section -+ of the EPIRA and Section ++ of the IRR of the EPIRAdid not i"pair the vested ri%hts of NPC personnel to clai" benefits under e9istin% la&s. Neither doesthe EPIRA cut short the $ears of service of the e"plo$ees concerned. If an e"plo$ee availed of the

separation pa$ and other benefits in accordance &ith e9istin% la&s or the superior separation pa$under the NPC restructurin% plan, it is but lo%ical that those &ho availed of such privile%e &ill starttheir %overn"ent service ane& if the$ &ill later be e"plo$ed b$ an$ %overn"ent(o&ned successorco"pan$ or %overn"ent instru"entalit$.

It is to be noted that this Court ruled in the case of 1errera v" Nationa# Po$er Cor%oration,)0 thatSection -+ of the EPIRA precluded the receipt b$ the ter"inated e"plo$ee of both separation andretire"ent benefits under the overn"ent Service Insurance S$ste" SIS/ or%anic la&, orCo""on&ealth Act C.A./ No. !-.*'

;o&ever, it "ust be clarified that this CourtHs pronounce"ents in

;errera that separated and retired e"plo$ees of the NPC <are not entitled to receive retire"entbenefits under C.A. No. !-,< referred onl$ to the %ratuit$ benefits %ranted b$ R.A. No. !-!-, *! &hich&as to be paid b$ NPC as the last e"plo$er. It did not proscribe the pa$"ent of retire"ent benefitsto 8ualified retirees under R.A. No. --',*# Presidential Decree P.D./ No. !!)-,*+ R.A. No. #0!,*) andother SIS and social securit$ la&s.

2he factual and procedural antecedents of ;errera reveal that it arose fro" a case bet&een NPCand several of its separated e"plo$ees &ho &ere as1in% additional benefits fro" NPC under R.A.No. !-!- after receivin% fro" the for"er separation benefits under Section -+ of R.A. No. 0!+-.
































:nable to resolve the issue &ith its for"er e"plo$ees a"icabl$, NPC filed a petition for declarator$relief, doc1eted as Civil Case SCA No. ('+(*'-!,** before the Re%ional 2rial Court of ue5on Cit$,raisin% the issue of &hether or not the e"plo$ees of NPC are entitled to receive retire"ent benefitsunder R.A. No. !-!- over and above the separation benefits %ranted b$ R.A. No. 0!+-. *-

:nder R.A. No. !-!-, a %ratuit$ benefit is %iven to 8ualified retirin% "e"bers of the SIS, &hich is

pa$able b$ the last e"plo$er. In addition to said %ratuit$ benefits, the 8ualified e"plo$ee shall alsobe entitled to a refund of retire"ent pre"iu"s paid, consistin% of personal contributions of thee"plo$ee plus interest, and %overn"ent share &ithout interest, pa$able b$ the SIS. It effectivel$a"ended Section !# c/ of C.A. No. !-, as follo&s3

c/ Retire"ent is li1e&ise allo&ed to an$ official or e"plo$ee, appointive or elective, re%ardless ofa%e and e"plo$"ent status, &ho has rendered a total of at least t&ent$ $ears of service, the lastthree $ears of &hich are continuous. 2he benefit shall, in addition to the return of his personalcontributions &ith interest co"pounded "onthl$ and the pa$"ent of the correspondin% e"plo$erGspre"iu"s described in subsection a/ of Section five hereof, &ithout interest, be onl$ ( r(t3)t/e<3)(+e*t to o*e o*t=s s(+(r/ or eer/ /e(r o te )rst te*t/ /e(rs o ser)ce, +3s o*e(* o*e-(+ o*ts> s(+(r/ or eer/ /e(r o ser)ce oer te*t/ b3t be+o t)rt/ /e(rs (*

to o*ts> s(+(r/ or eer/ /e(r o ser)ce oer t)rt/ /e(rs )* c(se o e+o/ees b(se o*te )est r(te rece)e (* )* c(se o e+ecte o)c)(+s o* te r(tes o (/ (s ro)e b/+(. 2his %ratuit$ is pa$able on the rates of pa$ as provided b$ la&. T)s r(t3)t/ )s (/(b+e b/ tee+o/er or o)cer co*cer*e )c )s ereb/ (3tor)e to ro)e te *ecess(r/(ror)(t)o* or (/ te s(e ro (*/ 3*ee*e )tes o (ror)(t)o*s or s()*s )* )ts(ror)(t)o*s. fficials and e"plo$ees retired under this Act shall be entitled to the co""utationof the unused vacation and sic1 leave, based on the hi%hest rate received, &hich the$ "a$ have totheir credit at the ti"e of retire"ent. 9 9 9*7 E"phasis supplied./

After trial, the R2C rendered a Decision rulin% a%ainst the NPC e"plo$ees, the decretal portion of&hich reads3

;ERE6RE, pre"ises considered, Republic Act No. 0!+- DID N2 SPECI6ICAF A:2;RILE

the National Po&er Corporation to %rant retire"ent benefits under Republic Act No. !-!- in additionto separation pa$ under Republic Act No. 0!+-.

S RDERED.*

Petitioners therein then sou%ht recourse directl$ to this Court on a pure 8uestion of la&. In thepreparator$ state"ent of the Petition for Revie& on Certiorari,*0 it is apparent that the case &asli"ited onl$ to the interpretation of Section -+ of R.A. No. 0!+-, in relation to R.A. No. !-!-, on the"atter of retire"ent benefits, to &it3

2his is a case of first i"pression +))te to the interpretation of Section -+, R.A. 0!+- EPIRA/,%rantin% separation pa$ to ter"inated NAPCR e"plo$ees, in relation to R.#. 1616, on the "atter

of retire"ent benefits. Respondents NAPCR and DEPAR2MEN2 6 B:DE2 ANDMANAEMEN2 erroneousl$ contend that the entitle"ent to the separation pa$ under R.A. 0!+-forfeits the retire"ent benefit under R.#. 1616. Petitioners "ost respectfull$ sub"it that since R.A.0!+- and R.#. 1616 are not inconsistent &ith each other and the$ have distinct noble purposes,entitle"ent to separation pa$ &ill not dis8ualif$ the separated e"plo$ee &ho is 8ualified to retirefro" receivin% retire"ent benefits allo&ed under another la&. 9 9 9-'

;o&ever, in the Decision dated Dece"ber !, #''0, it &as held that petitioners therein &ere not onl$entitled to receive retire"ent benefits under R.A. No. !-!- but also &ere <not entitled to receive

















retire"ent benefits under Co""on&ealth Act No. !-, as a"ended,< &hich, in effect, "i%ht lead tothe conclusion that the declaration enco"passed all other benefits %ranted b$ C.A. No. !- to its8ualified "e"bers.

In relation to R.A. No. !-!-, ;errera should have affected onl$ the pa$"ent of %ratuit$ benefits b$NPC, bein% the last e"plo$er, to its separated e"plo$ees. It &as even cate%oricall$ stated that

petitioners therein &ere <entitled to a refund of their contributions to the retire"ent fund, and the"onetar$ value of an$ accu"ulated vacation and sic1 leaves,<-! &hich is clearl$ con%ruous to the"andate of R.A. No. !-!-. 2he "atter of avail"ent of retire"ent benefits of 8ualified e"plo$eesunder an$ other la& to be paid b$ the SIS should not and &as not covered b$ the decision. In thefirst place, it &as never an issue.

In the case of Santos v. Servier Philippines, Inc.,-# citin% A8uino v. National abor RelationsCo""ission,-+ e declared that the receipt of retire"ent benefits does not bar the retiree fro"receivin% separation pa$. Separation pa$ is a statutor$ ri%ht desi%ned to provide the e"plo$ee &iththe &here&ithal durin% the period that heshe is loo1in% for another e"plo$"ent. n the other hand,retire"ent benefits are intended to help the e"plo$ee en@o$ the re"ainin% $ears of his life, lessenin%the burden of &orr$in% about his financial support, and are a for" of re&ard for his lo$alt$ and

service to the e"plo$er. A separation pa$ is %iven durin% oneHs em%#o(a&#e (ears, &hile retire"entbenefits are %iven durin% oneHs unem%#o(a&#e (ears" ;ence, the$ are not "utuall$ e9clusive.-)

Even in the deliberations of Con%ress durin% the passa%e of R.A. No. 0!+-, it &as "anifest that it&as not the intention of the la& to infrin%e upon the vested ri%hts of NPC personnel to clai" benefitsunder e9istin% la&s. 2o assure the &orried and uneas$ NPC e"plo$ees, Con%ress %uaranteed theirentitle"ent to a separation pa$ to tide the" over in the "eanti"e.-* More i"portantl$, to further alla$the fears of the NPC e"plo$ees, especiall$ those &ho &ere nearin% retire"ent a%e, Con%ressrepeatedl$ assured the" in several public and con%ressional hearin%s that on top of their separationbenefits, the$ &ould still receive their retire"ent benefits, as lon% as the$ &ould 8ualif$ and "eet there8uire"ents for its entitle"ent.

2he transcripts of the Public Consultative Meetin% on the Po&er Bill held on 6ebruar$ !-, #''!,

disclose the follo&in%3

9 9 9 9

2;E C;AIRMAN SEN. 4. SMENA/. ell, the other labor representation here is Mr. An%uluan.

MR. AN::AN3 Fes, Four ;onor.

2;E C;AIRMAN SEN. 4. SMENA/. 1a$. ill $ou present $our paperJ

MR. AN::AN3 e have prepared a paper &hich &e have sent to the honorable "e"bers of theBica". 9 9 9.

2;E C;AIRMAN SEN. 4. SMENA/. I donHt thin1 an$one is %oin% to deprive $ou of $our ri%htsunder the la&. Fou &ill en@o$ all $our ri%hts. Fou &ill receive retire"ent benefits, separation pa$, andall of the ri%hts that are provided to $ou b$ la&. hat &e have ob@ected to in the Senate is retire"entbenefits hi%her than &hat ever$bod$ else %ets, li1e !*' percent or sub@ect to the approval of theboard &hich "eans s1$ is the li"it. So, &e have ob@ected to that. But &hat $ou are entitled to underthe la&, $ou &ill %et under the la& and nobod$ &ill deprive $ou of that.--

















A $ear later, on 6ebruar$ !#, #''#, the 4oint Con%ressional Po&er Co""ission &as held. 2hetranscripts of the hearin% bare the follo&in%3

9 9 9 9

2;E C;AIRMAN REP. BADEES/. 2he$ &ill still be sub@ect to the sa"e conditions. Meanin%, NPC

has the discretion &hether to reabsorb or hire bac1 those that avail of the separation benefits.

SEN. SMENA 4/. No. But the$ are not bein% ( ( the plants are not bein% sold, so the$ are but&hat &e are %ivin% the" is a special concession of retirin% earl$.

No, o1a$. Fou consider . . .

2;E C;AIRMAN REP. BADEES/. e are *ot se(?)* o ret)ree*t ere, &e are spea1in% oftheirseparation benefits . . .

SEN. SMENA 4/. 1a$, separation benefits.

2;E C;AIRMAN REP. BADEES/. Precisel$, if the$ are considered ter"inated.

SEN. SMENA 4/. All ri%ht. Separation . . .

2;E C;AIRMAN REP. BADEES/. A retire"ent plan is a different pro%ra" than separation.

SEN. SMENA 4/. Separation benefits, o1a$.

2;E C;AIRMAN REP. BADEES/. All ri%ht.-7

2hus, it is clear that a separation pa$ at the ti"e of the reor%ani5ation of the NPC and retire"entbenefits at the appropriate future ti"e are t&o separate and distinct entitle"ents. Stated other&ise, aretire"ent plan is a different pro%ra" fro" a separation pac1a%e.

2here is a &hale of a difference bet&een R.A. No. !-!- and C.A. No. !-, to%ether &ith itsa"endator$ la&s. 2he$ have different le%al bases, different sources of funds and different intents.

In R.A. No. !-!-, &hich is the sub@ect issue in 1errera, the retirees are entitled to %ratuit$ benefits tobe paid b$ the last e"plo$er and refund of pre"iu"s to be paid b$ the SIS. n the otherhand, retire"ent benefits under C.A. No. !-, as a"ended b$ R.A. No. #0!, are to be paid b$ theSIS. Stated other&ise, under R.A. No. !-!-, &hat &ould be paid b$ the last e"plo$er, NPC, &ouldbe %ratuit$ benefits, and SIS &ould "erel$ refund the retire"ent pre"iu"s consistin% of personalcontributions of the e"plo$ee plus interest, and the e"plo$erHs share &ithout interest. :nder C.A.No. !-, as a"ended, it is the SIS &ho &ould pa$ the 8ualified e"plo$ees their retire"ent

benefits.

Indeed, &ith several a"end"ents to C.A. No. !-,- the Court finds it necessar$ to clarif$ ;erreraand cate%oricall$ declare that it affected onl$ those see1in% benefits under R.A. No. !-!-.-0 It couldnot have "eant to affect those e"plo$ees &ho retired, and &ho &ill retire, under the differenta"endator$ la&s of C.A. No. !- li1e R.A. No. --',7' P.D. No. !!)-7! and R.A. No. #0!.7#

At an$ rate, entitle"ent of 8ualified e"plo$ees to receive separation pa$ and retire"ent benefits isnot proscribed b$ the !07 Constitution. Section of Article I B/ of the !07 Constitution reads3















SEC. . No elective or appointive public officer or e"plo$ee shall receive additional, double orindirect co"pensation, unless specificall$ authori5ed b$ la&, nor accept &ithout the consent of theCon%ress, an$ present, e"olu"ent, office, or title of an$ 1ind fro" an$ forei%n %overn"ent.

Pensions or %ratuities shall not be considered as additional, double, or indirect co"pensation.7+

Moreover, retire"ent benefits under C.A. No. !- are not even considered asco"pensation. Section # e/ of C.A. No. !- cate%oricall$ states that O

Benefits %ranted b$ this Act b$ virtue of such life or retire"ent insurance s(++ *ot be co*s)ere(s coe*s(t)o* or eo+3e*t.7)

:nder the SIS la&, the retired e"plo$ees earned their vested ri%ht under their contract ofinsurance after the$ reli%iousl$ paid pre"iu"s to SIS. :nder the contract, SIS is bound to pa$the retire"ent benefits as it received the pre"iu"s fro" the e"plo$ees and NPC.

In Marasi.an v" Cru2 ,7* this Court ratiocinated that3

# ret)ree*t +( s3c (s C.#. 196 (* (e*(tor/ +(s )s )* te *(t3re o ( co*tr(ct betee*te oer*e*t (* )ts e+o/ees. hen an e"plo$ee @oins the %overn"ent service, he has ari%ht to e9pect that after renderin% the re8uired len%th of service and fulfilled the conditions stated inthe la&s on retire"ent, he &ould be able to en@o$ the benefits provided in said la&s. ;e re%ularl$pa$s the dues prescribed therefore. It &ould be cruel to den$ hi" the benefits he had beene9pectin% at the end of his service b$ i"posin% conditions for his retire"ent, &hich are not found inthe la&. It is believed to be a le%al dut$ as &ell as a "oral obli%ation on the part of the %overn"ent tohonor its co""it"ents to its e"plo$ees &hen as in this case, the$ have "et all the conditionsprescribed b$ la& and are therefore entitled to receive their retire"ent benefits.7-

2hus, &here the e"plo$ee retires and "eets the eli%ibilit$ re8uire"ents, he ac8uires a vested ri%htto benefits that is protected b$ the due process clause. Retirees en@o$ a protected propert$ interest

&henever the$ ac8uire a ri%ht to i""ediate pa$"ent under pre(e9istin% la&. 2hus, a pensionerac8uires a vested ri%ht to benefits that have beco"e due as provided under the ter"s of the publice"plo$eesH pension statute. No la& can deprive such person of his pension ri%hts &ithout dueprocess of la&, that is, &ithout notice and opportunit$ to be heard. 77=eril$, &hen an e"plo$ee hasco"plied &ith the statutor$ re8uire"ents to be entitled to receive his retire"ent benefits, his ri%ht toretire and receive &hat is due hi" b$ virtue thereof beco"es vested and "a$ not thereafter berevo1ed or i"paired. 3avv%hi3

Moreover, Section -+ of the EPIRA la&, if "isinterpreted as proscribin% pa$"ent of retire"entbenefits under the SIS la&, &ould be unconstitutional as it &ould be violative of Section !', ArticleIII of the !07 Constitution7 or the provision on non(i"pair"ent of contracts.

In vie& of the fact that separation pa$ and retire"ent benefits are different entitle"ents, as the$have different le%al bases, different sources of funds, and different intents, the <e9clusiveness ofbenefits< rule provided under R.A. No. #0! is not applicable. Section ** of R.A. No. #0! states3<henever other la&s provide si"ilar benefits for the sa"e contin%encies covered b$ this Act, the"e"ber &ho 8ualifies to the benefits shall have the option to choose &hich benefits &ill be paid tohi".<
















Accordin%l$, the Court declares that separated, displaced, retirin%, and retired e"plo$ees of NPCare le%all$ entitled to the retire"ent benefits pursuant to the intent of Con%ress and as %uaranteedb$ the SIS la&s. 2hus, the Court reiterates3

!? that the dispositive portion in ;errera holdin% that separated and retired e"plo$ees <arenot entitled to receive retire"ent benefits under Co""on&ealth Act No. !-,< referred onl$

to the %ratuit$ benefits under R.A. No. !-!-, &hich &as to be paid b$ NPC, bein% the laste"plo$er

#? that it did not proscribe the pa$"ent of the retire"ent benefits to 8ualified retirees underR.A. No. --', P.D. No. !!)-, R.A. No. #0!, and other SIS and social securit$ la&s and

+? that separated, rehired, retirin%, and retired e"plo$ees should receive, and continue toreceive, the retire"ent benefits to &hich the$ are le%all$ entitled.

Pet)t)o* or M(*(3s

As for petitionerGs pra$er that he be reinstated, suffice it to state that the issue has been rendered

"oot b$ the Decision and Resolutions of this Court in the case of NPC Drivers and Mechanics Association NPC DAMA! v" Nationa# Po$er Cor%oration NPC!70 and b$ the above dis8uisitions.

I* Co*c+3s)o*

hile &e co""end petitionerGs atte"pt to ar%ue a%ainst the privati5ation of the NPC, it is not theproper sub@ect of herein petition. Petitioner belabored on alle%in% facts to prove his point &hich,ho&ever, %o into polic$ decisions &hich this Court "ust not delve into less &e violate separation ofpo&ers. 2he &isdo" of the privati5ation of the NPC cannot be loo1ed into b$ this Court as it &ouldcertainl$ violate this %uarded principle. 2he &isdo" and propriet$ of le%islation is not for this Court topass upon.' Ever$ la& has in its favor the presu"ption of constitutionalit$, and to @ustif$ itsnullification, there "ust be a clear and une8uivocal breach of the Constitution, and not one that is

doubtful, speculative or ar%u"entative.!

As in National Po&er Corporation E"plo$ees Consolidated :nion NEC:/ v. National Po&erCorporation NPC/,#this Court held3

hether the StateHs polic$ of privati5in% the electric po&er industr$ is &ise, @ust, or e9pedient is notfor this Court to decide. 2he for"ulation of State polic$ is a le%islative concern. ;ence, the pri"ar$

@ud%e of the necessit$, ade8uac$, &isdo", reasonableness and e9pedienc$ of an$ la& is pri"aril$the function of the le%islature.+

;ERE6RE, pre"ises considered and sub@ect to the above dis8uisitions, the Petition forCertiorari and the Supple"ental Petition for Manda"us are Dis"issed for lac1 of "erit.

S RDERED.

$IOS$#$O M. PER#&T# Associate 4ustice

E CNC:R3
















REN#TO C. CORON#Chief 4ustice

#NTONIO T. C#RPIO Associate 4ustice

PRESITERO @. 8E&#SCO, @R. Associate 4ustice

TERESIT# @. &EON#R$O-$E C#STRO Associate 4ustice

#RTURO $. RION Associate 4ustice

&UC#S P. ERS#MIN Associate 4ustice

M#RI#NO C. $E& C#STI&&O Associate 4ustice

ROERTO #. ##$ Associate 4ustice

M#RTIN S. 8I&&#R#M#, @R. Associate 4ustice

@OSE PORTUG#& PEREA Associate 4ustice

@OSE C#TR#& MEN$OA# Associate 4ustice

M#RI# &OUR$ES P. #. SERENO Associate 4ustice

IEN8ENI$O &. RE!ES Associate 4ustice

ESTE&# M. PER&#S-ERN#E Associate 4ustice

C E R 2 I 6 I C A 2 I N

Pursuant to Section !+, Article =III of the Constitution, I certif$ that the conclusions in the aboveDecision had been reached in consultation before the case &as assi%ned to the &riter of the opinion

of the Court.

REN#TO C. CORON#Chief 4ustice

%oot*otes

! Rollo, pp. *(!7!.

#

Id. at #0*(+++.

+ Sec. ). National Po&er Board of Directors. :pon the passa%e of this Act, Section - ofRepublic Act No. -+0*, as a"ended, and Section !+ of Republic Act No. 7-+, as a"ended,referrin% to the co"position of the National Po&er Board of Directors, are hereb$ repealedand a ne& Board shall be i""ediatel$ or%ani5ed. 2he ne& Board shall be co"posed of theSecretar$ of 6inance as Chair"an, &ith the follo&in% as "e"bers3 the Secretar$ of Ener%$,the Secretar$ of Bud%et and Mana%e"ent, the Secretar$ of A%riculture, the Director(eneralof the National Econo"ic and Develop"ent Authorit$, the Secretar$ of Environ"ent and

http://www.lawphil.net/judjuris/juri2011/oct2011/gr_156556_2011.html#rnt1








Natural Resources, the Secretar$ of the Interior and ocal overn"ent, the Secretar$ of theDepart"ent of 2rade and Industr$, and the President of the National Po&er Corporation.

) Sec. 77. I"ple"entin% Rules and Re%ulations. 2he DE shall, in consultation &ithrelevant %overn"ent a%encies, the electric po&er industr$ participants, non(%overn"entor%ani5ations and end(users, pro"ul%ate the I"ple"entin% Rules and Re%ulations IRR/ of

this Act &ithin si9 -/ "onths fro" the effectivit$ of this Act, sub@ect to the approval b$ thePo&er Co""ission.

* E"phasis supplied.

- R:E ++. SEPARA2IN BENE6I2S

Sec. !. eneral State"ent on Covera%e.

2his Rule shall appl$ to all e"plo$ees in the National overn"ent service as of #-4une #''! re%ardless of position, desi%nation or status, &ho are displaced orseparated fro" the service as a result of the Restructurin% of the electricit$ industr$

and Privati5ation of NPC assets3 Provided, ho&ever, 2hat the covera%e for casual orcontractual e"plo$ees shall be li"ited to those &hose appoint"ents &ere approvedor attested b$ the Civil Service Co""ission CSC/.

Sec. #. Scope of Application. 2his Rule shall appl$ to affected personnel of DE,ERB, NEA and NPC.

Sec. +. Separation and ther Benefits.

a/ 2he separation benefit shall consist of either a separation pa$ and otherbenefits %ranted in accordance &ith e9istin% la&s, rules and re%ulations or aseparation plan e8uivalent to one and one half !(/ "onthsH salar$ for ever$

$ear of service in the %overn"ent, &hichever is hi%her3 Provided, 2hat theseparated or displaced e"plo$ee has rendered at least one !/ $ear ofservice at the ti"e of effectivit$ of the Act.

b/ 2he follo&in% shall %overn the application of Section +a/ of this Rule3

i/ ith respect to NPC officials and e"plo$ees, the$ shall beconsidered le%all$ ter"inated and shall be entitled to the benefits orseparation pa$ provided in Section +a/ herein &hen the restructurin%plan as approved b$ the NPC Board shall have been i"ple"ented.

ii/ ith respect to NEA officials and e"plo$ees, the$ shall be

considered le%all$ ter"inated and shall be entitled to the benefits orseparation pa$ provided in Section +a/ herein &hen a restructurin%of NEA is i"ple"ented pursuant to a la& enacted b$ Con%ress orpursuant to Section *a/*/ of Presidential Decree No. #-0.

ith respect to the affected Bureaus of the DE, their officials ande"plo$ees shall be considered le%all$ ter"inated and shall be entitled to thebenefits or separation pa$ provided in Section +a/ herein &hen the re(









or%ani5ational plan shall have been i"ple"ented as a result of theRestructurin% of the electric po&er industr$.

c/ 2he %overnin% board or authorit$ of the entities enu"erated in Section+b/ hereof shall have the sole prero%ative to hire the separated e"plo$eesas ne& e"plo$ees &ho start their service ane& for such positions and for

such co"pensation as "a$ be deter"ined b$ such board or authorit$pursuant to its restructurin% pro%ra". 2hose &ho avail of the fore%oin%privile%es shall start their %overn"ent service ane& if absorbed b$ an$%overn"ent a%enc$ or an$ %overn"ent(o&ned successor co"pan$.

d/ In no case shall there be an$ di"inution of benefits under the separationplan until the full i"ple"entation of the Restructurin% of the electric po&erindustr$ and the Privati5ation of NPC assets in accordance &ith the approvedRestructurin% and Privati5ation schedule.

e/ 6or this purpose, <Salar$,< as a rule, refers to the basic pa$ includin% thethirteenth !+th/ "onth pa$ received b$ an e"plo$ee pursuant to his

appoint"ent, e9cludin% per die"s, bonuses, overti"e pa$, honoraria,allo&ances and an$ other e"olu"ents received in addition to the basic pa$under e9istin% la&s

f/ i1e&ise, <Separation< or <Displace"ent< refers to the severance ofe"plo$"ent of an$ official or e"plo$ee, &ho is neither 8ualified undere9istin% la&s, rules and re%ulations nor has opted to retire under e9istin%la&s, as a result of the Restructurin% of the electric po&er industr$ orPrivati5ation of NPC assets pursuant to the Act.

Sec. ). 6undin%.

6unds necessar$ to cover the separation pa$ under this Rule shall be provided either b$ the overn"ent Service Insurance S$ste" SIS/ or fro" the corporate funds ofthe NEA or the NPC, as the case "a$ be and in the case of the DE and the ERB,b$ the SIS or fro" the %eneral fund, as the case "a$ be. 2he Bu$er orConcessionaire or the successor co"pan$ shall not be liable for the pa$"ent of theseparation pa$.

Sec. *. Preferential Ri%hts of E"plo$ees.

Displaced or separated personnel as a result of the Restructurin% of the electricpo&er industr$ and Privati5ation of NPC assets shall be %iven preference in thehirin% of "anpo&er re8uire"ents of the ne&l$(created offices or the privati5edco"panies3 Provided, 2hat the displaced or separated personnel "eet the

prescribed 8ualifications. ith respect to e"plo$ees &ho are not retained b$ NPC,the %overn"ent, throu%h the Depart"ent of abor and E"plo$"ent DE/, shallendeavor to i"ple"ent re(trainin%, @ob counselin%, and @ob place"ent pro%ra"s.

Sec. -. I"ple"entation.

2he DE, NEA, and NPC, shall issue %uidelines applicable to their respectivee"plo$ees to i"ple"ent this Rule &ithin ninet$ 0'/ da$s fro" effectivit$ of these



Rules3 Provided, 2hat in the case of ERC, the independent 8uasi(@udicial bod$created under the Act, the "anner of, and ti"etable for, i"ple"entation of itsor%ani5ation shall be %overned b$ Section + and Section +0 of the Act.

7 See rollo, pp. !0(#'). Pertinent portion of &hich reads3

RES=ED 6:R2;ER, 2hat pursuant to Section -+ of the EPIRA and Rule ++ of theIRR, all NPC Personnel shall be le%all$ ter"inated on 4anuar$ +!, #''+ and shall beentitled to separation benefits as provided in the uidelines hereunder adopted.

Rollo, pp. ##'(##+.

0 Id. at !7'(!7!. E"phasis in ori%inal./

!' Italics supplied.

!! 6rancisco, 4r. v. 6ernando, .R. No. !--*'!, Nove"ber !-, #''-, *'7 SCRA !7+, !70,citin% People v. Cuares"a, .R. No. -777, April !, !00, !7# SCRA )!*, )#+()#).

!# British A"erican 2obacco v. Ca"acho, .R. No. !-+*+, Au%ust #', #'', *-# SCRA *!!,*+).

!+ acson ;er"anas, Inc. v. ;eirs of Cenon I%nacio, .R. No. !-*07+, 4une #0, #''*, )-#SCRA #0', #0) and Santia%o v. =as8ue5, .R. Nos. 00#0(0', 4anuar$ #7, !00+, #!7 SCRA-++, -*#.

!) .R. No. !*-#', Septe"ber #-, #''-, *'+ SCRA !+.

!* Id. at !)(!*'. E"phasis Supplied./

!- NPC Drivers and Mechanics Association v. National Po&er Corporation, .R. No. !*-#',Dece"ber #, #''0, -'- SCRA )'0.

!7 Id. at )+#()++. E"phasis in ori%inal./

! Id. at )+)()+*. E"phasis in ri%inal./

!0 Canoni5ado v. A%uirre, +' Phil. #', #0- #'''/.

#' Dario v. Mison, .R. No. !0*), Au%ust , !00, !7- SCRA ) =ide3 D$tiapco v. CivilService Co""ission, .R. No.0#!+-, 4ul$ +, !00#, #!! SCRA Do"in%o v. Develop"entBan1 of the Philippines, .R. No. 0++**, April 7, !00#, #'7 SCRA 7-- and Pari(an v. CivilService Co""ission, .R. No. 0-*+*, ctober !*, !00!, #'# SCRA 77#.

#! .R. No. !-!!!+, 4une !*, #''), )+# SCRA !*7.

## Id. at !7!(!7#.

#+ Rollo, p. +'7.






































#) AN AC2 2 PR2EC2 2;E SEC:RI2F 6 2EN:RE 6 CI=I SER=ICE 66ICERS AND EMPFEES IN 2;E IMPEMEN2A2IN 6 =ERNMEN2 RERANILA2IN.

#* 6ernando v. Sto. 2o"as, .R. No. !!#+'0, 4ul$ #, !00), #+) SCRA *)-, **#.

#- Rollo, p. *#!.

#7 Sec. !!. 2RANSC Board of Directors. All the po&ers of the 2RANSC shall be vestedin and e9ercised b$ a Board of Directors. 2he Board shall be co"posed of a Chair"an andsi9 -/ "e"bers. 2he Secretar$ of the Depart"ent of 6inance D6/ shall be the e9 officioChair"an of the Board. 2he other "e"bers of the 2RANSC Board shall include theSecretar$ of the Depart"ent of Ener%$ DE/, the Secretar$ of the Depart"ent ofEnviron"ent and Natural Resources DENR/, the President of 2RANSC, and three +/"e"bers to be appointed b$ the President, each representin% u5on, =isa$as andMindanao.

2he "e"bers of the Board so appointed b$ the President of the Philippines shallserve for a ter" of si9 -/ $ears, e9cept that an$ person appointed to fill(in a vacanc$

shall serve onl$ the une9pired ter" of hisher predecessor in office. All "e"bers ofthe Board shall be professionals of reco%ni5ed co"petence and e9pertise in thefields of en%ineerin% , finance, econo"ics, la& or business "ana%e"ent. No "e"ber of the Board or an$ of his relatives &ithin the fourth civil de%ree of consan%uinit$ oraffinit$ shall have an$ interest, either as investor, officer or director, in an$ %enerationco"pan$ or distribution utilit$ or other entit$ en%a%ed in trans"ittin%, %eneratin% andsuppl$in% electricit$ specified b$ ERC

# SEC. ). National Po&er Board of Directors. :pon the passa%e of this Act, Section - ofR.A. -+0*, as a"ended, and Section !+ of RA 7-+, as a"ended, referrin% to theco"position of the National Po&er Board of Directors, are hereb$ repealed and a ne& Boardshall be i""ediatel$ or%ani5ed. 2he ne& Board shall be co"posed of the Secretar$ of6inance as Chair"an, &ith the follo&in% as "e"bers3 the Secretar$ of Ener%$, the Secretar$of Bud%et and Mana%e"ent, the Secretar$ of A%riculture, the Director( eneral of theNational Econo"ic and Develop"ent Authorit$, the Secretar$ of Environ"ent and NaturalResources, the Secretar$ of Interior and ocal overn"ent, the Secretar$ of the Depart"entof 2rade and Industr$, and the President of the National Po&er Corporation.

#0 Sec. *#. Po&er Sector Assets and iabilities Mana%e"ent Corporation, Meetin%s, uoru"and =otin%. 2he Corporation shall be ad"inistered, and its po&ers and functions e9ercised,b$ a Board of Directors &hich shall be co"posed of the Secretar$ of 6inance as theChair"an, the Secretar$ of Bud%et and Mana%e"ent, the Secretar$ of the Depart"ent ofEner%$, the Director(eneral of the National Econo"ic and Develop"ent Authorit$, theSecretar$ of the Depart"ent of 4ustice, the Secretar$ of the Depart"ent of 2rade andIndustr$ and the President of the PSAM Corp. as e9 officio "e"bers thereof.

2he Board of Directors shall "eet re%ularl$ and as fre8uentl$ as "a$ be necessar$to enable it to dischar%e its functions and responsibilities. 2he presence at a "eetin%of four )/ "e"bers shall constitute a 8uoru", and the decision of the "a@orit$ ofthree +/ "e"bers present at a "eetin% &here there is 8uoru" shall be the decisionof the Board of Directors.

+' Italics supplied

















+! .R. No. +0-, 6ebruar$ ##, !00!, !0) SCRA +!7.

+# Id. at ++!(++).

++ Id. at ++)(++*.

+) National A"nest$ Co""ission v. Co""ission on Audit, )! Phil. #70, #0) #'')/.

+* Id. at #0)(#0*.

+- 2hus, in Briad A%ro Develop"ent Corporation v. Dela Serna, .R. No. #'*, 4une #0,!00, !7) SCRA *#)/ e upheld the %rant of concurrent @urisdiction bet&een the Secretar$of abor or its Re%ional Directors and the abor Arbiters to pass upon "one$ clai"s, a"on%other cases, <the provisions of Article #!7 of this Code to the contrar$ not&ithstandin%,< asenunciated in E9ecutive rder No. !!!. ;oldin% that E.. !!! &as a curative la& intended to&iden &or1erGs access to the overn"ent for redress of %rievances, &e held,<QtheE9ecutive rder vests in Re%ional Directors @urisdiction, G>t?he provisions of Article #!7 of thisCode to the contrar$ not&ithstandin%,G it &ould have rendered such a proviso ( and the

a"end"ent itself ( useless to sa$ that the$ Re%ional Directors/ retained the self(sa"erestricted po&ers, despite such an a"end"ent. It is funda"ental that a statute is to be readin a "anner that &ould breathe life into it, rather than defeat it.< See also Philtread or1ers:nion v. Confessor, .R. No. !!7!-0, March !#, !007, #-0 SCRA +0+./

+7 In ;eirs of Ardona v. Re$es, .R. No. -'*)0, ctober #-, !0+, !#* SCRA ##!/ eupheld the constitutionalit$ of Presidential Decree No. *-), the Revised Charter of thePhilippine 2ouris" Authorit$, and Procla"ation No. #'*# declarin% certain "unicipalities inthe province of Cebu as tourist 5ones. 2he la& %ranted the Philippine 2ouris" authorit$ theri%ht to e9propriate ## hectares of land to establish a resort co"ple9 not&ithstandin% theclai" that certificates of land transfer and e"ancipation patents had alread$ been issued tothe" thereb$ "a1in% the lands e9propriated &ithin the covera%e of the land refor" area

under Presidential Decree No. #, and that the a%rarian refor" pro%ra" occupies a hi%herlevel in the order of priorities than other State policies li1e those relatin% to the health andph$sical &ell(bein% of the people, and that propert$ alread$ ta1en for public use "a$ not beta1en for another public use. e held that, <t/he petitioners have failed to overco"e theburden of an$one tr$in% to stri1e do&n a statute or decree &hose avo&ed purpose is thele%islative perception of the public %ood. A statute has in its favor the presu"ption of validit$.

All reasonable doubts should be resolved in favor of the constitutionalit$ of a la&. 2he courts&ill not set aside a la& as violative of the Constitution e9cept in a clear case People v. =era,-* Phil. *-/. And in the absence of factual findin%s or evidence to rebut the presu"ption ofvalidit$, the presu"ption prevails Er"ita(Malate ;otel, etc. v. Ma$or of Manila, #' SCRA)0 Morfe v. Mutuc, ## SCRA )#)/.<

In the sa"e "anner, &e upheld in Du"lao v. CMEEC .R. No. (*##)*, 4anuar$

##, !0', 0* SCRA +0#/ the first para%raph of Section ) of Batas Pa"bansa Bilan%*# providin% that an$ retired elective provincial, cit$ or "unicipal official, &ho hasreceived pa$"ent of the retire"ent benefits and &ho shall have been -* $ears ofa%e at the co""ence"ent of the ter" of office to &hich he see1s to be elected isdis8ualified to run for the sa"e elective local office fro" &hich he has retired.Invo1in% the need for the e"er%ence of $oun%er blood in local politics, &e affir"edthat the constitutional %uarantee is not violated b$ a reasonable classification basedupon substantial distinctions, &here the classification is %er"ane to the purpose ofthe la& and applies to all those belon%in% to the sa"e class. See also 2ropical

















;o"es, Inc, v. National ;ousin% Authorit$, No. ()-7#, 4ul$ +!, !07, !*# SCRA*)' Peralta v. CMEEC, No. ()770!, March !!, !07, # SCRA ** People v.=era, -* Phil. *- >!0+7?./

+ Sec. +). :niversal Char%e. ithin one !/ $ear fro" the effectivit$ of this Act, auniversal char%e to be deter"ined, fi9ed and approved b$ the ERC, shall be i"posed on all

electricit$ end(users for the follo&in% purposes3

a/ Pa$"ent for the stranded debts in e9cess of the a"ount assu"ed b$ the Nationalovern"ent and stranded contract costs of NPC and as &ell as 8ualified strandedcontract costs of distribution utilities resultin% fro" the restructurin% of the industr$

b/ Missionar$ electrification

c/ 2he e8uali5ation of the ta9es and ro$alties applied to indi%enous or rene&ablesources of ener%$ vis((vis i"ported ener%$ fuels

d/ An environ"ental char%e e8uivalent to one(fourth of one centavo per 1ilo&att(

hour P'.''#*1h/, &hich shall accrue to an environ"ental fund to be used solel$for &atershed rehabilitation and "ana%e"ent. Said fund shall be "ana%ed b$ NPCunder e9istin% arran%e"ents and

e/ A char%e to account for all for"s of cross(subsidies for a period not e9ceedin%three +/ $ears.

2he universal char%e shall be a non(b$passable char%e &hich shall be passed onand collected fro" all end(users on a "onthl$ basis b$ the distribution utilities.Collections b$ the distribution utilities and the 2RANSC in an$ %iven "onth shall bere"itted to the PSAM Corp. on or before the fifteenth !*th/ of the succeedin%"onth, net of an$ a"ount due to the distribution utilit$. An$ end(user or self(

%eneratin% entit$ not connected to a distribution utilit$ shall re"it its correspondin%universal char%e directl$ to the 2RANSC.

2he PSAM Corp., as ad"inistrator of the fund, shall create a Special 2rust 6und&hich shall be disbursed onl$ for the purposes specified herein in an open andtransparent "anner. All a"ount collected for the universal char%e shall be distributedto the respective beneficiaries &ithin a reasonable period to be provided b$ the ERC.

+0 .R. No. !*070-, 4ul$ !7, #''7, *#7 SCRA -0-.

)' Id. at 7#-.

)!

Rollo, p. !*0.

)# Sec. +. Creation of the Ener%$ Re%ulator$ Co""ission. 2here is hereb$ created anindependent, 8uasi(@udicial re%ulator$ bod$ to be na"ed the Ener%$ Re%ulator$Co""issions ERC/. 6or this purpose, the e9istin% Ener%$ Re%ulator$ Board ERB/ createdunder E9ecutive rder No. !7#, as a"ended, is hereb$ abolished.

2he Co""ission shall be co"posed of a Chair"an and four )/ "e"bers to beappointed b$ the President of the Philippines. 2he Chair"an and the "e"bers of the













Co""ission shall be natural(born citi5ens and residents of the Philippines, personsof %ood "oral character, at least thirt$(five +*/ $ears of a%e, and of reco%ni5edco"petence in an$ of the follo&in% fields3 ener%$, la&, econo"ics, finance,co""erce, or en%ineerin%, &ith at least three +/ $ears actual and distin%uishede9perience in their respective fields of e9pertise3 Provided, 2hat out of the four )/"e"bers of the Co""ission, at least one !/ shall be a "e"ber of the Philippine Bar

&ith at least ten !'/ $ears e9perience in the active practice of la&, and one !/ shallbe a certified public accountant &ith at least ten !'/ $ears e9perience in activepractice.

ithin three +/ "onths fro" the creation of the ERC, the Chair"an shall sub"it forthe approval b$ the President of the Philippines the ne& or%ani5ational structure andplantilla positions necessar$ to carr$ out the po&ers and functions of the ERC.

2he Chair"an of the Co""ission, &ho shall be a "e"ber of the Philippine Bar, shallact as the Chief E9ecutive fficer of the Co""ission.

All "e"bers of the Co""ission shall have a ter" of seven 7/ $ears3 Provided, 2hat

for the first appointees, the Chair"an shall hold office for seven 7/ $ears, t&o #/"e"bers shall hold office for five */ $ears and the other t&o #/ "e"bers shall holdoffice for three +/ $ears Provided, further, 2hat appoint"ent to an$ future vacanc$shall onl$ be for the une9pired ter" of the predecessor3 Provided, finall$, 2hat thereshall be no reappoint"ent and in no case shall an$ "e"ber serve for "ore thanseven 7/ $ears in the Co""ission.

2he Chair"an and "e"bers of the Co""ission shall assu"e office of the be%innin%of their ter"s3 Provided, 2hat, if upon the effectivit$ of this Act, the Co""ission hasnot been constituted and the ne& staffin% pattern and plantilla positions have notbeen approved and filled(up, the current Board and e9istin% personnel of ERB shallcontinue to hold office.

2he e9istin% personnel of the ERB, if 8ualified, shall be %iven preference in the fillin%up of plantilla positions created in the ERC, sub@ect to e9istin% civil service rules andre%ulations. Me"bers of the Co""ission shall en@o$ securit$ of tenure and shall notbe suspended or re"oved fro" office e9cept for @ust cause as specified b$ la&.

2he Chair"an and "e"bers of the Co""ission or an$ of their relatives &ithin thefourth civil de%ree of consan%uinit$ or affinit$, le%iti"ate or co""on la&, shall beprohibited fro" holdin% an$ interest &hatsoever, either as investor, stoc1holder,officer or director, in an$ co"pan$ or entit$ en%a%ed in the business of trans"ittin%,%eneratin%, suppl$in% or distributin% an$ for" of ener%$ and "ust, therefore, divestthrou%h sale or le%al disposition of an$ and all interests in the ener%$ sector uponassu"ption of office.

2he presence of at least three +/ "e"bers of the Co""ission shall constitute a8uoru" and the "a@orit$ vote of t&o #/ "e"bers in a "eetin% &here a 8uoru" ispresent shall be necessar$ for the adoption of an$ rule, rulin%, order, resolution,decision, or other act of the Co""ission in the e9ercise of its 8uasi(@udicial functions3Provided, 2hat in fi9in% rates and tariffs, an affir"ative vote of three +/ "e"bersshall be re8uired.

)+ Rollo, p. !*.





)) Id. at !*0.

)* .R. No. !*'07), 4une #0, #''7, *#- SCRA !.

)- Id. at (0.

)7 Id. at #*.

) Sec. -+. Separation Benefits of fficials and E"plo$ees of Affected A%encies. National%overn"ent e"plo$ees displaced or separated fro" the service as a result of therestructurin% of the electricit$ industr$ and privati5ation of NPC assets pursuant to this Act,shall be entitled to either a separation pa$ and other benefits in accordance &ith e9istin%la&s, rules or re%ulations or be entitled to avail of the privile%es provided under a separationplan &hich shall be one and one(half "onth salar$ for ever$ $ear of service in the%overn"ent3 Provided, ho&ever, 2hat those &ho avail of such privile%e shall start their%overn"ent service ane& if absorbed b$ an$ %overn"ent(o&ned successor co"pan$. In nocase shall there be an$ di"inution of benefits under the separation plan until the fulli"ple"entation of the restructurin% and privati5ation. Displaced or separated personnel as a

result of the privati5ation, if 8ualified, shall be %iven preference in the hirin% of the "anpo&erre8uire"ents of the privati5ed co"panies. 2he salaries of e"plo$ees of NPC shall continueto be e9e"pt fro" the covera%e of Republic Act No. -7*, other&ise 1no&n as <2he Salar$Standardi5ation Act.< ith respect to e"plo$ees &ho are not retained b$ NPC, the%overn"ent, throu%h the Depart"ent of abor and E"plo$"ent, shall endeavor toi"ple"ent re(trainin%, @ob counselin%, and @ob place"ent pro%ra"s.

)0 .R. No. !--*7', Dece"ber !, #''0, -' SCRA )7*.

*' An Act to Create and Establish a <overn"ent Service Insurance S$ste",< 2o Provide forits Ad"inistration and 2o Appropriate the Necessar$ 6unds 2herefor.

*!

An Act 6urther A"endin% Section 2&elve of Co""on&ealth Act Nu"bered ne ;undredEi%ht$(Si9, As A"ended, B$ Prescribin% 2&o ther Modes of Retire"ents and for therPurposes.

*# An Act 2o A"end Co""on&ealth Act Nu"bered ne ;undred and Ei%ht$(Si9 Entitled <An Act to Create and Establish a overn"ent Service Insurance S$ste", 2o Provide for its Ad"inistration and 2o Appropriate the Necessar$ 6unds 2herefor,< and to ProvideRetire"ent Insurance and 6or ther Purposes.

*+ A"endin%, E9pandin%, Increasin% and Inte%ratin% the Social Securit$ and InsuranceBenefits of overn"ent E"plo$ees and 6acilitatin% the Pa$"ent 2hereof :nderCo""on&ealth Act No. !-, As A"ended, and 6or ther Purposes.

*) An Act A"endin% Presidential Decree No. !!)-, As A"ended, E9pandin% and Increasin%the Covera%e and Benefits of the overn"ent Service Insurance S$ste", Institutin%Refor"s 2herein and 6or ther Purposes.

** Entitled as National Po&er Corporation v. 2he Napocor E"plo$ees and or1ers :nionNE:/, NAPCR E"plo$ees Consolidated :nion NEC:/, NPC E9ecutive fficers

Association, Inc. NPC(EA/, Esther alve5 and Efren ;errera, for and on their behalf andon behalf of other separated, unrehired, and retired e"plo$ees of the National Po&er



























Corporation, the Depart"ent of Bud%et and Mana%e"ent DBM/, the ffice of the Solicitoreneral S/, the Civil Service Co""ission CSC/, and the Co""ission on Audit CA/.

*- Ro##o, 1errera v" NPC , .R. No. !--*7'/, pp. )'()).

*7 :nderscorin% ours.

* Rollo, ;errera v. NPC, .R. No. !--*7'/, p. )). E"phasis supplied./

*0 Id. at !+.

-' Id. E"phasis supplied./

-! ;errera v. NPC, supra note )0, at )0*.

-# .R. No. !--+77, Nove"ber #, #'', *7# SCRA )7.

-+ .R. No. 7-*+, 6ebruar$ !!, !00#, #'- SCRA !!, !##.

-) Santos v. Servier Philippines, Inc., supra note -#, at )0-.

-* 2SN, 4oint Con%ressional Po&er Co""ission, 4anuar$ #+, #''#, !!3+! p."., p. !.

-- 2SN, Public Consultative Meetin% on the Po&er Bill, 6ebruar$ !-, #''!, pp. !!)(!!7.E"phasis and underscorin% supplied./

-7 2SN, 6ebruar$ !#, #''#, 4oint Con%ressional Po&er Co""ission, pp. !(#. E"phasissupplied./

-

R.A. No. --', R.A. No. 7#, R.A. No. !!#+, R.A. No. !*7+, R.A. No. !-!-, R.A. No. !#',R.A. No. +'0-, R.A. No. +!7*, R.A. No. +*)), R.A. No. +*0+, R.A. No. )'--, R.A. No. )7!,R.A. No. ))7, R.A. No. )0-, P.D. No. 7!#, P.D. No. !!)-, and R.A. No. #0!.

-0 U*er R.#. 1616, an$ official or e"plo$ee &ho has rendered at least #' $ears of service,the last three +/ $ears of &hich are continuous, and has been in the %overn"ent servicebefore Ma$ +!, !077, is entitled to %ratuit$ benefits. 2he benefit shall be co"puted and ()b/ te +(st e+o/er, s3bBect to te (()+(b)+)t/ o 3*s. In such a case, the SIS &illrefund the retireeHs personal contributions &ith interest and the correspondin% %overn"entcontributions &ithout interest. R.A. No. !-!- &as eventuall$ phased out i"pliedl$ b$ thefourth &hereas clause of P.D. !!)-. E"phasis supplied./

7' R.#. No. 660 refers to the annuit$ pension/ retire"ent benefit under a sche"e popularl$1no&n as Ma%ic 7. :nder said la&, a "e"ber of the SIS Retire"ent Insurance 6und "a$avail of said benefits &hen his a%e and $ears of service has a co"bined total of 7, as lon%as his last three $ears &ith the %overn"ent &as continuous. 2he benefits "a$ var$dependin% on the a%e of the retiree but all &ill receive a "onthl$ pension for life after *($earperiod after retire"ent.

7! A retirin% "e"ber under P.D. No. !!)- is entitled to either old a%e pension or cashpa$"ent, dependin% on his a%e and $ears in service. Retire"ent under P.D. No. !!)- canonl$ be availed b$ those &ho &ere in service after Ma$ +!, !077 but prior to 4une #), !007.



































2he Basic Monthl$ Pension BMP/ is available for retirees &ho are at least -' $ears old andhave rendered !* $ears of service. 2hose 8ualified under this option &ill receive a BasicMonthl$ Pension BMP/ %uaranteed for five */ $ears. After the *($ear %uaranteed period,heshe &ill receive a basic "onthl$ pension for life. A retiree "a$ also re8uest to converthisher five($ear %uaranteed BMP into a lu"p su" sub@ect to a si9 -/ percent discount rate.

7# R.#. No. 92:1, &hich too1 effect on 4une #), !007, increased the benefits under PD!!)-. U*er R.#. No. 92:1, a %overn"ent e"plo$ee &ho has rendered at least !* $ears ofservice and &ho has reached the a%e of -' is entitled to a retire"ent benefit. :nder Section!+ of R.A. No. #0!, the <Retire"ent benefit shall be3

!/ the lu"p su" pa$"ent as defined in this Act pa$able at the ti"e of retire"entplus an old(a%e pension benefit e8ual to the basic "onthl$ pension pa$able "onthl$for life, startin% upon e9piration of the five($ear */ %uaranteed period covered b$ thelu"p su" or <#/ cash pa$"ent e8uivalent to ei%hteen !/ "onths of his basic"onthl$ pension plus "onthl$ pension for life pa$able i""ediatel$ &ith no five($ear*/ %uarantee.

b/ :nless the service is e9tended b$ appropriate authorities, retire"ent shall beco"pulsor$ for an e"plo$ee at si9t$(five -*/ $ears of a%e &ith at least fifteen !*/$ears of service3 Provided, 2hat if he has less than fifteen !*/ $ears of service, he"a$ be allo&ed to continue in the service in accordance &ith e9istin% civil servicerules and re%ulations. E"phasis supplied./

7+ E"phasis supplied.

7) E"phasis supplied.

7* .R. No. ()'-), Ma$ #', !07, !*' SCRA !.

7-

Id. at 7 see also en.2on v" Dri#on, .R. No. !'+*#) and A.M. No. 0!((##*(CA, April !*,!00#, #' SCRA !++, !*#. E"phasis and underscorin% supplied./

77 -SIS v" Montesc#aros, .R. No. !)-)0), 4ul$ !), #''), )+) SCRA ))!, ))0.

7 Section !'. No la& i"pairin% the obli%ation of contracts shall be passed.

70 Supra note !).

' People v. =era, -* Phil. *-, !+* !0+7/.

! acson v. 2he E9ecutive Secretar$, +-! Phil. #*!, #-+ !000/.

# .R. No. !))!*, April #), #''7, *## SCRA !#.

+ Id. at #!(##.

























Betoy v. Board of Directors, NPC

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Transcript of Betoy v. Board of Directors, NPC