COA contests multimillion-peso perks for Cebu port authority workers

MANILA, Philippines—The Commission on Audit may sound like a scrooge for contesting and seeking the refund of P31.79 million in Christmas and midyear benefits that the Cebu Ports Authority had granted its employees in the past two years.

But the COA said it had good reason for seeking the return of the perks as well as the stopping of the release of any additional benefits, something that the ports authority has refused, saying it has to provide the bonuses in compliance with a court order.

The COA said that the midyear and yearend benefits and gift checks that Cebu Ports Authority employees received in 2009 and 2010 were unauthorized and violated the law prescribing the annual Christmas bonus to government officials, or Republic Act 6686.

The perks were also given without the Department of Budget and Management’s approval, the COA added.

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

But the COA found that other benefits were granted to the Cebu ports employees on top of the one-month basic salary and cash gift prescribed by the law.

These extra perks, called “traditional benefits,” composed of a midyear one-month basic salary bonus, a yearend two-month basic salary bonus and P50,000 cash gift, and amounted to P31.79 million for 2009 and 2010, COA said.

The Cebu Ports Authority had paid these benefits based on a ruling by the Cebu regional trial court that directed the agency to immediately release the traditional one-month midyear and two-month yearend benefits to employees, including P10,000 gift checks for each employee, to continue every year.

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

However, the COA said these questioned benefits were paid even if they were not in the corporate operating budget, which means 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 that 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 that stated that there was reasonable basis for declaring as legally infirm the grant of the traditional yearend bonuses.

The General Counsel said that RA 6686 and similar issuances had unmistakably nullified the grant of yearend benefits, regardless of whether they were previously permitted, except for those authorized under this law.

It said the law did not intend the grant of yearend benefits in addition to what were 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.

Given the opinion of its General Counsel, the COA said the officers and employees of the Cebu Ports Authority should refund the P31.79 million in disallowed benefits and gift checks.

It also said the ports agency should stop the practice of granting unauthorized traditional benefits and gift checks, and observe the provisions of RA 6686 and other related rules.

But the Cebu Ports Authority said it would continue to pay the traditional benefits and gift checks in compliance with the ruling of the Cebu RTC, lest it be cited in contempt.