Power Sector Assets and Liabilities Management Corp. v. Commission on Audit

EN BANC

[G.R. No. 253038. November 9, 2021.]

POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION, petitioner, vs.COMMISSION ON AUDIT, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court en banc issued a Resolution datedNOVEMBER 9, 2021, which reads as follows: HTcADC

"G.R. No. 253038 (Power Sector Assets and Liabilities Management Corporation v. Commission on Audit). — On June 3, 1997, Binga Hydroelectric Plant, Inc. (BHEPI) hired Alfonso Fianza (Alfonso) 1 as Officer for Social Acceptance at the Binga Hydroelectric Power Plant (BHPP). On November 10, 1998, BHEPI dismissed Alfonso upon the termination of its Rehabilitate-Operate-and-Leaseback Contract with the National Power Corporation (NPC). In February 1999, BHEPI was placed under corporate rehabilitation. Thus, the Securities and Exchange Commission (SEC) Management Committee (ManCom) took over BHEPI's management. 2

On May 24, 1999, Alfonso filed a complaint for illegal dismissal with a monetary claim against BHEPI and Mr. Anthony Escolar, Chairman, and Mr. Ronald Lautchang, Officer-In-Charge, both of SEC ManCom, before the Labor Arbiter (LA). On February 28, 2000, the LA found that BHEPI constructively dismissed Alfonso. Consequently, the LA ordered the immediate reinstatement of Alfonso to his former position without loss of seniority rights and benefits, as well as the payment of P422,500.00, plus attorney's fees of 10% of the total monetary award. On August 1, 2000, the SEC ManCom reinstated Alfonso. 3 On October 2, 2000, however, Alfonso received a Notice of Termination effective 30 days from receipt thereof. In the same year, the SEC ManCom turned over the management of BHEPI to NPC.

On appeal, the National Labor Relations Commission (NLRC) reversed the LA findings and held that the employment relationship between BHEPI and Alfonso was not sufficiently established. Hence, Alfonso was not constructively dismissed. The Court of Appeals (CA) affirmed the NLRC's decision. Aggrieved, Alfonso elevated the case to the Supreme Court. On June 26, 2013, the Court reinstated the LA decision that BHEPI constructively dismissed Alfonso. The Court's decision then became final and executory. On February 24, 2014, the LA issued a Writ of Execution which states:

As to the respondents to whom this Writ of Execution shall be served upon, it is therefore now clear that they are the following:

1. The then [sic] principal employer of the complainant BHEPI as represented by Mr. Catalino Tan;

2. The SEC ManCom through Mr. Anthony Escolar;

3. The NPC;

4. The [Power Sector Assets and Liabilities Management Corporation] PSALM Corporation;

5. Under the doctrine of successor-employer, the present company operating and managing the same plant, the SN/Aboitiz Power Benguet, Inc. x x x shall also be included as solidarily liable for the judgment award. 4

On November 5, 2014, the LA recomputed the monetary award at P750,750.00. 5 On September 1, 2015, Alfonso wrote a letter to Power Sector Assets and Liabilities Management Corporation (PSALM) claiming payment of the judgment award. However, PSALM denied the claim on the grounds that it was not a party to the case where Alfonso's right was adjudicated, and that its liability pertained only to those employees affected by the BHPP's privatization as of July 10, 2008. Moreover, PSALM argued that assuming it is liable, the claim should first be filed before the Commission on Audit (COA) pursuant to Presidential Decree No. 1445 or the Government Auditing Code of the Philippines.

Accordingly, Alfonso filed a petition for money claim against PSALM before the COA. 6 Yet, PSALM denied liability because Alfonso's claim does not arise from loans, issuances of bonds, securities, and other instruments of indebtedness that were transferred to it from NPC upon the effectivity of Republic Act (RA) No. 9136 or the Electric Power Industry Reform Act of 2001. Also, PSALM reiterated that its liability extends only to the employees terminated by virtue of BHPP's privatization as of July 10, 2008, while Alfonso's employment was terminated as early as November 2, 2000. Lastly, PSALM was not a party in the labor proceedings and cannot be made to pay without violating its right to due process. 7

On July 9, 2018, the COA granted Alfonso's monetary claim based on the successor-employer doctrine. The COA ruled that the change of ownership entailed PSALM's assumption of the remaining and unsettled liabilities of BHEPI, which included Alfonso's monetary claim, 8 thus:

SEC. 49 of Republic Act (RA) No. 9136, otherwise known as the Electrical Power Industry Reform Act (EPIRA) of 2001 or the EPIRA Law, provides that PSALM shall take ownership of all existing NPC generation assets, liabilities, independent power producer (IPP) contracts, real estate and all other disposable assets. One of the assets of NPC which was transferred to PSALM pursuant to the EPIRA Law is the BHEPI.

SEC. 56 of the same law further states that NPC liabilities transferred to PSALM shall constitute a claim against the latter. Thus, notwithstanding the fact that PSALM was not impleaded as respondent in the Complaint for Illegal Dismissal filed by Mr. Fianza before the LA, and was made liable only in the Orders of the LA dated February 24, 2014 and November 5, 2014, or after the SC decision became final and executory, the same shall not affect the obligation of PSALM to pay the monetary award.

In line with the successor-employer doctrine, PSALM is deemed to have absorbed Mr. Fianza as an employee of its predecessor, x x x. In this regard, the change of ownership entails the assumption as well of all remaining and unsettled liabilities of BHEPI. Verily, Section 49 of the EPIRA Law itself ensures adherence to the said time-honored principle.

It bears emphasizing that Mr. Fianza was employed by BHEPI as Officer for Social Acceptance, x x x. He worked for the benefit of BHEPI and served in said capacity from 1997 until he was illegally terminated by BHEPI in 1998. In other words, this claim stemmed from his employment as Officer for Social Acceptance of BHEPI way back in 1997, and before the BHEPI was transferred, pursuant to the EPIRA Law, by NPC to PSALM. Thus, this claim should be considered as standing obligation of NPC when all of its assets and liabilities were transferred to PSALM.

As a rule, when one corporation sells or otherwise transfers all of its assets to another corporation, the latter is not liable for the debts and liabilities of the transferor. However, by the express provision of the EPIRA Law, PSALM shall assume the liabilities of NPC which include the herein money claim.

RULING

WHEREFORE, x x x the Petition for Money Claim of Mr. Alfonso L. Fianza, x x x against Power Sector Assets and Liabilities Management Corporation for payment of money judgment amounting to P750,750.00 is hereby GRANTED, subject to availability of funds and the usual accounting and auditing rules and regulations. (Emphases supplied.) 9

PSALM sought reconsideration but was denied. 10 Hence, this petition for certiorari ascribing grave abuse of discretion on the part of the COA when it granted Alfonso's monetary claim. 11

The Court's Ruling

We dismiss the petition.

Section 3, Rule 64 of the Rules of Court provides that a judgment or final order or resolution of the COA may be brought to the Supreme Court on certiorari under Rule 65, within 30 days from notice. A motion for reconsideration filed before the COA shall interrupt the period. The aggrieved party may file the petition for certiorari within the remaining period which should not be less than five (5) days, to wit:

SEC. 3. Time to file petition. — The petition shall be filed within thirty (30) days from notice of the judgment or final order or resolution sought to be reviewed. The filing of a motion for new trial or reconsideration of said judgment or final order or resolution, if allowed under the procedural rules of the Commission concerned, shall interrupt the period herein fixed. If the motion is denied, the aggrieved party may file the petition within the remaining period, but which shall not be less than five (5) days in any event, reckoned from notice of denial. (Emphases supplied.)

In this case, PSALM received the COA decision on March 15, 2019. 12 As such, PSALM had 30 days or until April 14, 2019 to file a petition for certiorari under Rule 64 before the Supreme Court. Notably, PSALM moved for a reconsideration on April 12, 2019 or two (2) days before the expiration of the reglementary period. 13 On August 4, 2020, PSALM received the COA resolution denying its motion. 14 Considering that the remaining period should not be less than five (5) days, PSALM had until August 9, 2020 within which to file a petition for certiorari. Yet, PSALM filed the petition only on September 3, 2020 or way beyond the reglementary period. 15 Worse, PSALM did not proffer any explanation, or justification for the belated filing of the petition and simply ignored the rules. Thus, the petition was filed out of time and must be dismissed.

At any rate, the COA did not commit grave abuse of discretion in granting Alfonso's monetary claim. Verily, RA No. 9136 was enacted to provide a framework for the restructuring of the electric power industry, including the privatization of the assets of NPC, the transition to the desired competitive structure, and the definition of the responsibilities of the various government agencies and private entities. 16 Section 49 of RA No. 9136 created PSALM, a government-owned and -controlled corporation which will own all existing assets and liabilities of NPC, to wit:

SEC. 49. Creation of Power Sector Assets and Liabilities Management Corporation. — There is hereby created a government owned and -controlled corporation to be known as the "Power Sector Assets and Liabilities Management Corporation," hereinafter referred to as the "PSALM Corp.," which shall take ownership of all existing NPC generation assets, liabilities, IPP contracts, real estate and all other disposable assets. All outstanding obligations of the National Power Corporation arising from loans, issuances of bonds, securities and other instruments of indebtedness shall be transferred to and assumed by the PSALM Corp. within one hundred eighty (180) days from the approval of this Act. (Emphases supplied.)

In NPC DAMA, et al. v. NPC, et al., 17 the Court explained that the term "existing" in Section 49 of R.A. No. 9136 qualified "liabilities" to mean that only those liabilities existing at the time of the law's effectivity were subject of the transfer. Here, the management of BHEPI was transferred to NPC in 2000. The Labor Arbiter adjudged Alfonso's money claim against BHEPI on February 28, 2000, which the Court affirmed on June 26, 2013. On the other hand, RA No. 9136 took effect on June 26, 2001, transferring all the assets and liabilities of NPC to PSALM. Corollary, when PSALM took ownership of NPC's assets and liabilities pursuant to the express provisions of the law, the liability of NPC for Alfonso's money claim was considered existing. As the COA aptly ruled, Alfonso's claim should be considered as a standing obligation of NPC upon the transfer of its assets and liabilities to PSALM, which is only reasonable, considering that NPC's corporate funds are now within PSALM's control. To be sure, the liability for the money claim was initially imposed upon BHEPI as Alfonso's employer. Thereafter, the NPC took over BHEPI's management. Later, NPC's assets and liabilities were transferred to PSALM. Clearly, the responsibility for Alfonso's money claim ultimately rests with PSALM. Under RA No. 9136, PSALM is statutorily mandated not only to privatize NPC's generation assets but also to manage the proceeds obtained from privatization, including its net profits and use these proceeds to settle all of NPC's financial obligations, without exception. 18 Thus, even if PSALM was not a party to the labor proceedings in which the money claim was awarded, the law requires PSALM to settle the judgment award.

FOR THESE REASONS, the petition is DISMISSED." (112)

By authority of the Court:

(SGD.) MARIFE M. LOMIBAO-CUEVASClerk of Court

 

Footnotes

1. Referred to as Alfonzo L. Fianza, rollo, p. 29, Decision No. 2108-327.

2.Id. at 5-6.

3.Id. at 6.

4.Id. at 7.

5.Id.

6.Id. at 91-102.

7.Id. at 103-116.

8.Id. at 29-36.

9.Id. at 34-35.

10.Id. at 43.

11.Id. at 8.

12.Id. at 4.

13.Id. at 5.

14.Id. at 5.

15.Id. at 1.

16. RA No. 9136, Section 3.

17. 821 Phil. 62, 84 (2017).

18.Id. at 98-99.