Return Christmas, midyear bonuses, COA tells Cebu port employees

The Commission on Audit may sound like Scrooge, demanding that Cebu Ports Authority (CPA) employees refund P31.79 million of the Christmas and mid-year bonuses they received in the past two years, but the COA says it has good reason for seeking the return of the perks.

The COA said the mid-year and year-end benefits and gift checks that CPA employees received in 2009 and 2010 were unauthorized and violated the law prescribing the annual Christmas bonus to government officials, or Republic Act No. 6686.

The perks were also given without Department of Budget and Management approval, it added.

It noted that under RA 6686, the only Christmas bonus and cash gift that government employees are allowed to receive are those listed under that law.

The COA found that other benefits were granted to the Cebu port employees on top of the one-month basic salary and cash gift prescribed by RA 6686.

These perks, called “traditional benefits,” consist of a mid-year one-month basic salary bonus, a year-end two-month basic salary bonus and P50,000 cash gift, and totaled P31.79 million in 2009 and 2010, it added.

The COA is also seeking to stop the release of any additional bonuses, something the CPA has refused to do, saying it has to give the bonuses to comply with a court order.

The CPA paid out the extra benefits based on a ruling by the Cebu regional trial court directing the CPA to immediately release the traditional mid-year one-month and year-end two-month benefits to its employees, including P10,000 gift checks each, to continue every year.

The ports agency had also been providing the traditional benefits on the ground that its employees had enjoyed them even before RA 6686 was enacted.

The COA, however, said the questioned benefits were paid out even if they were not in the corporate operating budget, which meant they were not in the budget approved by budget officials. It noted that previous corporate budgets contained these benefits, but the DBM had “consistently disapproved” them for lack of legal basis.

“We believe these traditional benefits and gift checks, regardless of the difference in terminology or nomenclature, are additional benefits not authorized under RA 6686,” it said.

It also pointed out that the COA’s Office of the General Counsel had issued an opinion stating that there was reasonable basis for declaring as legally infirm the grant of the traditional year-end bonuses.

The General Counsel said that RA 6686 and similar issuances unmistakably nullify the grant of year-end benefits, regardless of whether they were previously permitted, except for those authorized under the law.

It said the law did not intend for the grant of year-end benefits in addition to what was previously received for the same purpose by the Cebu port employees. Otherwise, the provisions of the law would be rendered useless.

It added that the fact the employees had been enjoying these perks over the years did not create a vested right over these benefits. It cited as well a Supreme Court ruling that rejected the argument that benefits could not be reduced, and said the Cebu court’s ruling could not be considered conclusive and binding upon the COA.