The Power Sector Assets and Liabilities Management Corp. (PSALM) has so far turned over to the National Power Corp. (NPC) a total of P4.31 billion to cover the payment of backwages and other benefits due to nearly 2,000 former employees who were retrenched in 2003 as part of NPC’s downsizing as mandated under the Electric Power Industry Reform Act (EPIRA).
NPC started paying in February this year an estimated 1,958 claimants entitled to backwages and other benefits, in compliance with the Supreme Court (SC) ruling issued in 2017 ordering the state-run power firm to pay its retrenched employees, and the 2019 decision by the Commission on Audit (COA) giving the go-signal for the settlement of such claims.
As of August 10 this year, NPC has already released P3.79 billion to the claimants.
When the EPIRA was implemented almost two decades ago, many NPC employees were terminated as part of the firm’s reorganization and were given separation benefits. Some of the laid-off workers were rehired by either the NPC, National Transmission Corp. (Transco) or PSALM.
The employees who were terminated included members of the Drivers and Mechanics Association (DAMA), who then contested before the SC the decision of the National Power Board (NPB) to terminate their services.
PSALM is not a party to the case but became involved in this issue because the EPIRA had mandated PSALM to take over NPC’s assets and liabilities.
According to PSALM president-CEO Irene Besido Garcia, when the COA finally approved the settlement of the claims and validated the list of claimants, PSALM immediately raised the funding needed to settle the DAMA claims in support of the plight of the claimants who have waited for many years to be compensated.
Garcia said it was imperative for the government to ensure that justice is served to the DAMA claimants.
She reported that PSALM transferred to NPC an initial amount of P500 million in November last year to enable NPC to start complying with the SC and COA rulings, even though it still has a pending petition before the high court seeking to clarify several legal aspects of the COA’s 2019 decision.
“We already transferred substantial amounts to NPC to pay for the DAMA claims. The latest remittance was in July this year. So far, PSALM has transferred a total of P4,310,037,838.68 to NPC for the payment of the DAMA claims,” Garcia said.
Based on NPC’s records, 893 claimants have already received their cheques representing their monetary claims for backwages and other benefits. However, there are still some retrenched NPC employees entitled to backwages and other benefits that have yet to receive their payments because they or their representatives still have to submit the necessary documentation to substantiate their standing as claimants. They need to complete their documentary requirements so that NPC can process their claims.
PSALM and NPC have so far jointly endorsed to the COA the payment of 1,062 claims of which 1,056 were validated by COA as qualified claimants.
According to NPC, there are still 718 claimants with incomplete documents.
“There are delays in the compliance with the basic documentary requirements by some claimants. Furthermore, due to the COVID-19 pandemic and with some claimants residing outside Metro Manila or outside the country, there are mobility restrictions preventing them from submitting the required documentation especially considering that most claimants are of old age,” Garcia said.
Garcia said PSALM estimates that it will still need about P4.8 billion for 2022 to fully fund the DAMA claims.
“The P4.8 billion cash requirement will be covered by the balance of the 2021 approved supplemental budget amounting to P1 billion more or less, and prospectively by a P3.8 billion proposed DAMA budget for 2022,” Garcia said.
In September 2006, the SC declared as void and without legal effect the decision of the NPB on the termination of the DAMA claimants.
The High Tribunal issued a resolution in September 2008 stating that the separated NPC employees have the right to be reinstated or entitled to separation pay in lieu of reinstatement, along with backwages, wage adjustments, and other benefits.
The SC issued another resolution in November 2017 ordering the payment of the backwages and other benefits of those that were not reinstated, and directing the terminated workers to file their claims before the COA, which subsequently issued a decision in 2019 approving the release of their claims.