Napocor settles backwages of retrenched employees in 2003

The National Power Corporation (Napocor) said that it starts paying today, Monday the backwages of former employees who were retrenched in 2003 due to the implementation of Republic Act 9136 of the Electric Power Industry Reform Act of 2001 (EPIRA). This is after the 2017 Supreme Court en banc resolution and the release of Commission on Audit’s Decision No. 2019-416.

Napocor President and CEO Pio J. Benavidez said that payment of claims shall be on an alphabetical basis according to the batches as validated by COA.

“The claimants or their authorized representatives shall be informed when they are to proceed to the Napocor Cashier’s Office to claim their checks. This is to ensure orderly distribution of payments and that the necessary health protocols are observed to prevent the transmission of COVID19,” Benavidez said.

It can be recalled that when EPIRA was implemented, thousands of Napocor employees were separated from service and were paid with separation benefits equivalent to 1.5 month of pay per year of service. Majority of these employees were rehired by Napocor, National Transmission Corporation (TransCo) and Power Sector Assets and Liabilities Management (PSALM) Corporation. However, around 1,763 employees were not reinstated.

Part of those employees who were not rehired included members of the Drivers and Mechanics Association (DAMA) who contested and filed a case before the court questioning the National Power Board Resolutions No. 2002-124 and No. 2002-125, being signed only by three duly constituted Directors of the Board, and the rest by their respective official alternates. The said resolutions were the documents that implemented the retrenchment.

In 2006, the high court declared the NP Board Resolutions void on the ground that department secretaries who are members of the National Power Board cannot delegate their duties to their official alternates. The Supreme Court en banc Resolution dated 21 November 2017 ordered the payment of back wages of more than 8,000 employees totaling to P34.7 billion.

Napocor abides with the said decision, however, it saw that it was necessary to verify the accuracy of the number of employees affected. Together with the PSALM Corporation, it sought the assistance of the Commission on Audit to validate not only the number of qualified employees who are entitled to payment but also the appropriate amount of back wages to be paid since all retrenched employees already received their separation pay.

On September 23, 2019, COA issued Decision No. 2019-416, giving Napocor the green light in releasing claims to certified rightful employees. The corporation also coordinated with the Bureau of Internal Revenue and the Government Service Insurance Corporation to make accurate computations on taxes and contributions.

“Today, the long wait for the claimants has finally ended. The 17 year wait for the claimants saw a long legal and procedural battle with the state-corporation who naturally had to defend and protect itself from the suit. It, unfortunately, created rifts and strained relations between Napocor and its former employees who are still considered a valued part of NPC’s 84-year existence. We have high hopes that the payment of these claims would start to heal the wounds between the parties and unite the Napocor community, past and present,” Benavidez said.