Gov’t rejects labor suit dues, warns vs power rate hikes

Buena Bernal
Gov’t rejects labor suit dues, warns vs power rate hikes
Finance Secretary Cesar Purisima says that the beneficiaries of the P60.2 billion in back wages were mostly rehired after their termination anyway

MANILA, Philippines – The public will bear the brunt – in the form of power rate increases – of the government’s unpaid back wages to “illegally dismissed” employees of the energy sector, said Finance Secretary Cesar Purisima, expressing the administration’s misgivings in settling its payables.

“This is no joke. We believe this is not a necessary expense of government and has no basis at all,”  the Cabinet official told the Senate Committee on Energy on Thursday, December 4.

The government owes P60.2 billion ($1.35 billion*) to around 9,021 employees of the National Power Corporation (Napocor) who were laid off due to the mandated restructuring under the Electric and Power Industry Reform Act of 2001.

The Power Sector Assets and Liabilities Management Corporation (PSALM) – which manages the assets of the power sector – was informed of Napocor’s outstanding obligation through a demand letter from a local trial court.

The trial court ordered the garnishment of P60.2 billion in Napocor’s properties, based on a ruling by the Supreme Court (SC) Third Division that said thousands of drivers and mechanics of Napocor were illegally dismissed. 

But the government has appealed the case to the SC en bancas it “has a huge financial impact on the welfare of the community.”

PSALM CEO and President Emmanuel Ledesma Jr said the garnishment of these properties will cause a 7%, 9%, and 13.3% power rate hike in Luzon, Visayas, and Mindanao, respectively.

The garnishment, which was temporarily halted by the SC, will also force PSALM to immediately pay its standing dues amounting to P329 billion

Gov’t: Revisit procedural fault

Lawyer Maximo Paulino Sison III from the Office of the Solicitor General (OSG) explained during the Senate hearing that the SC ruling on the illegal termination case of the Napocor Drivers and Mechanics Association (DAMA) was based on a “procedural” fault that must be revisited.

The SC Third Division ruled that Napocor’s board resolutions effectively dismissing DAMA members were void, given they were signed only by 3 board directors.

The rest of the signatories were alternates who sat down in the board meeting due to the absence of the actual directors, Sison explained.

But Purisima said it is physically impossible for a high-ranking government official to be present in all board meetings of government-owned and -controlled corporations he is a board member of.

He cited himself as an example, who sits in the board of around 30 entities. 

Napocor earlier explained that all the members of its board of directors with the exception of its president are Cabinet secretaries.

The SC doctrine, Purisima added, will unfairly delegitimize past decisions of GOCCs wherein directors authorized alternates to vote and sign on their behalf.

P60.2 billion ‘unfair’ amount

Purisima also explained that the petitioners before the SC who will be beneficiaries of the P60.2 billion in back wages were mostly rehired after their termination anyway. 

Of the 9,021 employees dismissed, 7,127 were rehired and 131 opted for early retirement. Over 3,300 were rehired a day after their termination, and 5,800 were rehired within a month. 

All those dismissed were likewise given separation benefits amounting to P1.09 million per employee or a month and a half’s worth of wages, Purisima said.

Purisima decried the P60.2 billion total payables of PSALM or an astounding P7.5 million per employee, when most of them have been rehired and are presently working with power entities of the government.

Senator Sergio Osmeña III, chair of the Senate Committee on Energy, said it is “impractical to take the [SC] decision seriously.”

He likewise asked all Cabinet members to submit a list of GOCCs they’re supposed to be represented in. –

*$1 = P44.65

Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.