THIRD DIVISION

NPC DRIVERS AND MECHANICS ASSOCIATION (NPC DAMA), represented by Its President ROGER S. SAN JUAN, SR., NPC EMPLOYEES & WORKERS UNION (NEWU) – NORTHERN LUZON REGIONAL CENTER, represented by its Regional President JIMMY D. SALMAN, in their own individual capacities and in behalf of the members of the associations and all affected officers and employees of National Power Corporation (NPC), ZOL D. MEDINA, NARCISO M. MAGANTE, VICENTE B. CIRIO, JR., NECITAS B. CAMAMA, in their individual capacities as employees of National Power Corporation, Petitioners, - versus- THE NATIONAL POWER CORPORATION (NPC), NATIONAL POWER BOARD OF DIRECTORS (NPB), JOSE ISIDRO N. CAMACHO as Chairman of the National Power Board of Directors (NPB), ROLANDO S. QUILALA, as President – Officer-in-charge/CEO of National Power Corporation and Member of National Power Board, and VINCENT S. PEREZ, JR., EMILIA T. BONCODIN, MARIUS P. CORPUS, RUBEN S. REINOSO, JR., GREGORY L. DOMINGO and NIEVES L. OSORIO, Respondents.

G.R. No. 156208 Present: CORONA, J., Chairperson, CHICO-NAZARIO, VELASCO, JR., DE CASTRO,* and BRION,** JJ. Promulgated: December 2, 2009

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R E S O L U T I O N

CHICO-NAZARIO, J.:

Under consideration are the following:

1. Petitioners’ Manifestation with Urgent Motion dated 9 February 2009;

2. Power Sector Assets and Liabilities Management Corporation’s (PSALM’s) Manifestation dated 24 February 2009;

3. National Power Corporation’s (NPC’s) Compliance dated 9 March 2009;

4. Petitioners’ Counter-Manifestation dated 13 March 2009;

5. Petitioners’ Comment/Manifestation and Urgent Motion dated 23 March 2009;

6. PSALM’s Submission dated 20 April 2009;

7. NPC’s Consolidated Comment dated 26 May 2009; and

8. Petitioners’ Reply to NPC’s Consolidated Comment dated 5 June 2009.

In Our decision dated 26 September 2006, we declared void and without legal effect National Power Board (NPB) Resolutions No. 2002-124[1] and No. 2002-125,[2] both dated 18 November 2002, which directed, inter alia, the termination from the service of all employees of the National Power Corporation (NPC) on 31 January 2003 in line with the restructuring of the NPC, and thereafter enjoined the implementation of said resolutions by granting the petition for injunction.[3]

The dispositive portion of the decision reads:

WHEREFORE, premises considered, National Power Board Resolutions No. 2002-124 and No. 2002-125 are hereby declared VOID and WITHOUT LEGAL EFFECT. The Petition for Injunction is hereby GRANTED and respondents are hereby ENJOINED from implementing said NPB Resolutions No. 2002-124 and No. 2002-125.[4]

In a resolution dated 24 January 2007, for lack of merit, we denied with finality the motion for reconsideration of respondent NPC.[5]

In a resolution dated 17 September 2008, the Court resolved to:

(1) PARTIALLY GRANT the Motion for Clarification and/or Amplification of petitioners by affirming that, as a logical and necessary consequence of our Decision dated 26 September 2006 declaring null and without effect NPB Resolutions No. 2002-124 and No. 2002-125 and enjoining the implementation of the same, petitioners have the right to reinstatement, or separation pay in lieu of reinstatement, pursuant to a validly approved Separation Program; plus backwages, wage adjustments, and other benefits accruing from 31 January 2003 to the date of their reinstatement or payment of separation pay; but deducting therefrom the amount of separation benefits which they previously received under the null NPB Resolutions;

(2) PARTIALLY GRANT the Motion for Approval of Charging (Attorney’s) Lien of Atty. Aldon and Atty. Orocio and ORDER the entry in the records of this case of their ten percent (10%) charging lien on the amounts recoverable by petitioners from respondent NPC by virtue of our Decision dated 26 September 2006; and

(3) ORDER that Entry of Judgment be finally made in due course in the case at bar.[6]

In a letter dated 29 September 2008, Attys. Victoriano V. Orocio (Orocio) and Cornelio P. Aldon (Aldon) requested that Entry of Judgment be made in the instant case and a resolution implementing the same be issued immediately.[7]

On 27 October 2008, an Entry of Judgment was made in the case stating, among other things, that the judgment herein has become final and executory on 10 October 2008 and has been recorded in the Book of Entries of Judgments.[8]

On 14 November 2008, petitioners filed an Urgent Motion for Execution. They ask that the motion be granted by:

(1) Directing/Ordering the Office of the Clerk and Ex-Officio Sheriff of the Regional Trial Court of Quezon City as being the appropriate forum for the computation of the actual amounts due to the petitioners as well as the total amount of the charging lien of Atty. Cornelio P. Aldon and Atty. Victoriano V. Orocio, to determine and find out the names and number of all NPC personnel/employees terminated and/or separated as a result of or pursuant to the nullified NPB Board Resolution(s) No. 2002-124 and 2002-125, and the amounts due to each of them by way of separation pay, backwages, wage adjustments and other benefits in accordance with applicable jurisprudence on illegal dismissal cases, as well as interests due from the time the decision became final and executory, including the totality of the said amounts for the purpose of determining the 10% charging lien of Attorneys Aldon and Orocio, by summoning and issuing proper subpoenas to the Vice-Pres., Human Resources and to the Senior Department Manager for Finance of the NPC and directing the said responsible NPC officials to make and submit such list and computations under oath;

(2) Directing/Ordering the said Office of the Clerk of Court and Ex-Officio Sheriff of the Regional Trial Court of Quezon City after and on the basis of the said list and computations submitted by said NPC officials, to issue the corresponding writ of execution; and

(3) Directing said Office to undertake any and all actions necessary to implement and execute the decision and resolution in this case thru said writ of execution and, thereafter, to submit a report thereon to this Court.[9]

Finding petitioners’ Motion for Urgent Execution meritorious, we granted the same per resolution dated 10 December 2008, and issued the following order:

1. The Chairman and Members of the National Power Board and the President of the National Power Corporation (NPC) to cause the preparation of a list, under oath, of (a) the names of all NPC personnel/employees terminated and/or separated as a result of or pursuant to the nullified NPB Board Resolutions No. 2002-124 and No. 2002-125, and (b) the amounts due to each of them by way of separation pay, backwages, wage adjustments and other benefits in accordance with applicable jurisprudence on illegal dismissal cases, as well as interests due from the time the decision became final and executory. From the totality of the amounts due to the illegally dismissed NPC personnel/employees, the same officers are directed to compute the 10% charging lien thereon of Atty. Cornelio P. Aldon (Aldon) and Atty. Victoriano V. Orocio (Orocio) pursuant to the Resolution dated 17 September 2008 of this Court;

2. The Chairman and Members of the National Power Board and the President of the NPC to pay or cause to be paid immediately the amounts due to the petitioners and all other illegally dismissed NPC personnel/employees, as well as the amount of charging lien to Atty. Aldon and Atty. Orocio, in accordance with the list and computations prepared under oath pursuant to paragraph 1 hereof; and

3. The Chairman and Members of the National Power Board and the President of the NPC to respectively submit proof of their compliance of the orders of this Court as stated in paragraphs 1 and 2 hereof within thirty (30) days from receipt of this Resolution.[10]

In their Manifestation with Urgent Omnibus Motions dated 9 February 2009, petitioners asked the Court to: (1) cite the Chairman and the Members of the National Power Board and the President of the NPC in contempt for their willful failure to comply with paragraphs 1 and 2 of the Resolution dated 10 December 2008 which is a mockery of the Court’s Order and gross disrespect of its authority; (2) appoint the Clerk of Court and Ex-Oficio Sheriff of the Regional Trial Court (RTC) of Quezon City, together with his/her deputies, to enforce by execution the Court’s resolution dated 10 December 2008 by garnishing/levying upon the assets of NPC, including but not limited to the assets of Power Sector Assets and Liabilities Management Corporation (PSALM), based on the list and computations submitted and attested to by the responsible NPC officials hereafter to be summoned; (3) immediately summon the concerned and responsible NPC officials, namely: Mr. Eduardo P. Elroy, Vice-President, Human Resources, Mr. Paquito F. Garcia, Sr., Department Manager, Human Resources & Administration and Ms. Wilma V. Ortega, Manager, Compensation and Benefits Management Division (CBMD), Human Resources Department, NPC, to attest jointly and severally under oath as to the existence of a 212-page list[11] containing the names of NPC personnel/employees terminated and/or separated from the service as a result of the nullified NPB Board Resolutions No. 2002-124 and No. 2002-125 with the amounts due to them and the charging lien due Attys. Orocio and Aldon, and to submit under oath jointly and severally the certified true copies thereof to the Court.[12]

On 11 February 2009, Ora Limpao, Abdullah Ali, Moctar D. Amundia, Macawali D. Minalang, Aliola Cawi, Talib Manudi and Masiding Tanggo, through counsel Casan B. Macabanding, filed a Motion for Implementation of the Issued Writ of Execution. They informed the Court that demand letters have been sent to the National Power Board and to the NPC showing the computations of the amount due each of them. Despite this, no action has been taken thereon. They therefore ask that an order be issued directing the Sheriff of the RTC of Quezon and/or Sheriff of Lanao del Sur, 12^th Judicial Region, Marawi City, to seize and attach cash and properties of the NPC and to apply the same to their claim of P16,120,706.00, and to deduct therefrom the attorney’s lien of Attys. Aldon and Orocio.[13]

On 17 February 2009, the NPC asked for additional 30 days to address the Court’s resolution dated 10 December 2008[14] which petitioners opposed.[15]

On 25 February 2009, PSALM filed a Manifestation stating that petitioners did not furnish it a copy of their Manifestation with Urgent Omnibus Motions dated 9 February 2009 wherein they prayed that the Clerk of Court and Ex-Oficio Sheriff of the RTC of Quezon City be appointed to enforce the Court’s Resolution dated 10 December 2008 by garnishment/levy upon the assets of NPC, including but not limited to the assets of PSALM. Not being a party in the case, PSALM said it is not bound by the judgment rendered by the Court. It added that PSALM is mandated to privatize the transferred NPC generation assets, real estate and other disposable assets, and to apply the proceeds thereof to the payment of all existing and outstanding NPC financial obligations and stranded contract costs in an optimal manner. Nothing in the EPIRA[16] allows garnishment and levy of PSALM’s assets to satisfy a judgment against NPC. Petitioners are not employees of PSALM but of respondent NPC. PSALM cannot be made liable for the financial obligations of NPC to its employees for it is not one of those liabilities transferred to, and assumed by, PSALM at the effectivity of the EPIRA. It explains that since the privatization proceeds are earmarked specifically for the liquidation of NPC’s financial obligations transferred to, and assumed by, PSALM, same are not within the reach of any execution and garnishment. The garnishment and/or levying of PSALM’s assets and privatization proceeds will amount to diverting them for the purpose originally contemplated by the EPIRA. Such garnishment and/or levy will amount to a disbursement without proper appropriation as required by law. Finally, it argues that the present executory course of action taken by petitioners is a deviation from the Court’s Resolution dated 17 September 2008 which leaves the computation of the actual amounts due them and the enforcement of payment thereof to the proper forum in appropriate proceedings for the Court is not a trier of facts.[17]

In its Compliance[18] dated 9 March 2009, NPC informed the Court that only the services of its top level employees were terminated on 31 January 2003 pursuant to the nullified NPB Resolutions No. 2002-124 and No. 2002-125 contrary to the submissions made by petitioner in its Manifestation and Omnibus Motions dated 9 February 2009. More specifically, it said only the services of sixteen (16) NPC employees occupying the positions of Senior Vice-President, Vice-President and Department Manager, were terminated on 31 January 2003, but were rehired on 1 February 2003 after receiving a full separation package pursuant to the EPIRA. It explained that any additional payment of separation pay, backwages and other benefits to these 16 employees would be iniquitous and would constitute unjust enrichment as they were never unemployed.

It further stated that NPB Resolutions No. 2002-124 and No. 2002-125 were nullified because they were signed by alternates. This infirmity, it explained, was rectified and effectively mooted with the issuance of NPB Resolution No. 2007-55[19] dated 14 September 2007 which adopted, confirmed and approved the principles and guidelines enunciated in NPB Resolutions No. 2002-124 and No. 2002-125. It likewise pointed out that the validity of NPB Resolution No. 2007-55 has not yet been passed upon by the Court.

On 13 March 2009, petitioners filed a Counter-Manifestation[20] to PSALM’s Manifestation dated 24 February 2009 stating that a writ of execution may be issued against non-parties, including the PSALM, under, among others, the following situations: (1) one who is privy to the judgment debtor; (2) a successor-in-interest; and (3) under the principle of piercing the veil of corporate fiction. Petitioners explained that PSALM is privy to NPC because the former was principally organized to manage the orderly sale, disposition, and privatization of NPC generation assets, real estate and other disposable assets, and Independent Power Producers (IPP) contracts with the objective of liquidating all NPC financial obligations and stranded contract costs in an optimal manner. PSALM, also being a successor-in-interest of NPC, is now the owner of the financial obligations/liabilities of NPC and shall be considered as one with NPC and the liability of the latter shall attach to the former. Further, it said PSALM is a mere alter ego or business conduit of NPC as evidenced by the fact that majority of the members of the NPB also constitutes the majority of the PSALM Board and that the NPB and the PSALM Board have held joint board meetings to resist payment in relation to the 10 December 2008 Resolution. Petitioners disclosed that the NPB and the PSALM Board recently issued a joint letter-instruction to the power consumers of NPC that all payments for power sales shall be directly remitted to PSALM. They further claimed that this letter-instruction violates the EPIRA Law because the payment for power sales to NPC is not enumerated among the funds, assets, contribution and other properties that constitute the property of PSALM, and that these payments constitute gross income revenue and not net profits of NPC. As a garnishee, PSALM need not be summoned or impleaded as a party to the case.

On 24 March 2009, petitioners filed their Comment/Manifestation and Urgent Motions (1) To include for Contempt Respondents’ Counsels and (2) To Summon the Vice-President, Human Resources and Administration, NPC to Attest and Certify Certain Official Documents.[21] Petitioners point out that respondents, in their compliance, raise two new issues, to wit: (1) there are only 16 NPC personnel (top executives) who were illegally terminated; and (2) the issuance of NPB Resolution No. 2007-55 on 14 September 2007 effectively rectified and mooted the infirmity of the nullified NPB Resolutions No. 2002-124 and No. 2002-125.

On the first issue, petitioners explain that respondents’ misrepresentation that there were only 16 NPC personnel whose services were terminated on 31 January 2003 is true but is only half-true. They have intentionally suppressed and conveniently omitted in their Compliance to mention and inform the Court of the fact that while under NPB Resolution No. 2002-124 the services of all NPC personnel/employees were deemed legally terminated as of 31 January 2003, for various reasons, their actual termination was effected on different dates, as follows: (a) top executives – 31 January 2003; (b) early-leavers – 15 January 2003; (c) those no longer employed in NPC after 26 June 2001 – date of actual separation; (d) all other personnel – 28 February 2003. In support thereof, they mentioned NPB Resolution No. 2003-11, NPC Circular No. 2003-09 and the Memorandum dated 26 February 2009 of Dr. Eduardo R. Eroy, Vice-President, Human Resources and Administration (HRA), NPC. They revealed that NPB Resolution No. 2003-11 is one of the resolutions ratified and confirmed by NPB Resolution No. 2007-55.

As to the second issue, petitioners argue that since NPB Resolutions No. 2002-124 and No. 2002-125 are null and without legal effect, the same cannot be rectified and ratified since only voidable acts can be validated.

In our Resolution dated 15 April 2009, the Court, among other things, required NPC to file its Comment on Petitioner’s Manifestation with Urgent Omnibus Motions dated 9 February 2009 and Comment/Manifestation and urgent motions dated 23 March 2009, and on PSALM’s Manifestation dated 24 February 2009. The Court deferred action on petitioners’ motion for implementation of the issued writ of execution dated 10 February 2009 pending filing by NPC of the afore-said comments.[22]

On 5 May 2009, PSALM filed a Submission to petitioners’ Counter-Manifestation dated 13 March 2009.[23] It argued that a writ of execution can be issued only against a party and not against one who did not have his day in court. It said it is neither a successor-in-interest nor an alter-ego or business conduit of NPC. Being employees of NPC, PSALM cannot be made liable for the financial obligations of NPC to its employees. It claims that petitioners’ claim on the supposed conduct of joint board meetings of NPC and PSALM Boards is purely conjectural and without factual basis. The sending of letters to distribution utilities, like MERALCO, is a consequence of the implementation of the EPIRA as to the ownership by PSALM of all NPC generation assets, IPP Contracts, etc. On the claim that payment for power sales by customers are not one of those under the EPIRA as constituting properties of PSALM and that they constitute gross income and not net profits of NPC, PSALM argues that same is absurd because as owner of the generation assets, it is entitled to the income derived from the sale of electricity. Said income partakes of the nature of fruits which belong to the owner of the asset. Finally, it argued that not being a party in the case or judgment debtor, its properties cannot be garnished.

On 27 May 2009, petitioners Ora Limpao, Abdullah Ali, Moctar D. Amundia, Macawali D. Minalang, Aliola Cawi, Talib Manudi and Masiding Tanggo filed a Manifestation and Motion reiterating their prayer in their Motion for Implementation of the Issued Writ of Execution motion dated 11 February 2009.[24]

On 28 May 2009, respondent NPC filed its Consolidated Comment[25] on Petitioners’ Manifestation with Urgent Omnibus Motions dated 9 February 2009 and Comment/Manifestation and urgent motions dated 23 March 2009, and on PSALM’s Manifestation dated 24 February 2009.

On PSALM’s Manifestation, NPC agreed with PSALM that execution of its properties is improper as it is not a party in the case.

On petitioners’ Manifestation and Comment, NPC contends that petitioners are either confused or deviously sneaking into the present controversy facts, issues and reliefs that have not been litigated or resolved in the instant case. It argues that it involves the nullification of NPB Resolutions Nos. 2002-124 and 2002-125 did not affect the reorganization of the NPC because other resolutions pursuant thereto remain valid. The Court even declared in its 17 September 2008 Resolution that the “NPC can still pursue its reorganization although it cannot implement the same by terminating petitioners’ employment on 31 January 2003 pursuant to NPB Resolutions No. 2002-124 and 2002-125.” Under Resolutions No. 2002-124 and No. 2002-125, only the services of 16 top level employees were terminated. As admitted by petitioners, the services of other NPC employees were terminated on 28 February 2003 pursuant to NPB Resolution No. 2003-11. The validity of this latter resolution has not been the subject of the present controversy.

On 5 June 2009, petitioners filed their Reply to NPC’s Consolidated Comment.[26] Petitioners reiterated their Counter-Manifestation dated 13 March 2009 to PSALM’s Manifestation dated 24 February 2009. In addition, they explained that the purpose of the EPIRA in creating PSALM is to sell and dispose the assets of NPC and to use the proceeds therefrom to liquidate all the financial obligations and liabilities of the NPC. It quoted Congressman Arnulfo P. Fuentebella’s opinion which was in response to a legal opinion of Cyril C. del Callar, former NPC President, as to the function of PSALM. The opinion partly reads: The function of PSALM is limited and akin to that of a liquidator of NPC assets as stated in Section 50 of the EPIRA that the principal purpose of PSALM is to manage the orderly sale, disposition, and privatization of NPC generation assets, real estate and other disposable assets, and IPP contracts with the end in view of liquidating all NPC financial obligations and stranded contract costs in an optimal manner.

Petitioners insists it is the NPC and its counsel (Office of the Solicitor General), not them, that are guilty of raising new issues without valid and legal justification. They explained that the Court had settled the following issues: (1) NPB Resolutions No. 2002-124 and No. 2002-125 are null and without legal effect; (2) as a consequence of the declaration of nullity of said resolutions, petitioners have the right to reinstatement or to separation in lieu of reinstatement pursuant to a validly approved Separation Program plus backwages, wage adjustments and other benefits accruing from January 2003 to the date of their reinstatement or payment of separation pay; and (3) 10% charging lien of Attys. Aldon and Orocio.

All these notwithstanding, NPC raised two new issues in a desperate effort to circumvent, frustrate and delay the final and executory orders of the Court, to wit: (1) there are only 16 NPC personnel (top executives) who were illegally terminated on 31 January 2003; and (2) the issuance of NPB Resolution No. 2007-55 on 14 September 2007 effectively rectified and mooted the purported infirmity of the nullified NPB Resolutions No. 2002-124 and No. 2002-125. NPC’s raising these issues after the Court’s decision and resolution have become final and executory is a clear case of afterthought and act of desperation. Petitioners claim that the NPC had all the time to raise said issues before the decision and resolution became final and executory, but it did not. Thus, it is guilty of estoppel. Petitioners added that the NPC in its Motion for Reconsideration and Motion for Leave to File Second Motion for Reconsideration admitted that “the nullification of National Power Board Resolution Nos. 2002-124 and 2002-125 have far reaching implications and dreadful aftermath. For one, it would entail a financial liability on the part of respondent in the amount of not less than FOUR BILLION SEVEN HUNDRED ONE MILLION THREE HUNDRED FIFTY-FOUR THOUSAND SEVENTY-THREE PESOS (P4,701,354,073.00), representing the backwages and wage adjustments of employees. (as of October 2006)” This admission, petitioners contend, belies NPC’s claim that only 16 were illegally terminated pursuant to NPB Resolutions No. 2002-124 and No. 2002-125 considering that such amount cannot obviously cover only 16 employees but thousands of NPC personnel.

Moreover, petitioners alleged that the NPC, through its numerous pleadings, made them and the Court believe that pursuant to the null NPB Resolutions No. 2002-124 and No. 2002-125, all NPC personnel were legally terminated as of 31 January 2003. The issue that only 16 employees were terminated on 31 January 2003 was never raised before the Court’s decision and resolution became final and executory. Now, after eight long years, NPC suddenly tells the Court that only 16 employees were terminated as of 31 January 2003. Such behavior shows lack of candor, honesty and fairness to the Court and to petitioners.

Petitioners pray that: (1) all the respondents and their counsels be held in contempt of court and punished accordingly until or unless they immediately execute the decision/resolution of the Court; (2) to summon and/or direct Mr. Edmund P. Anguluan, the present Vice-President, Human Resources and Administration of NPC, to fully and strictly comply with paragraph 1 of the 10 December 2008 Resolution - the list should include all personnel who were terminated pursuant to or as a result of the null NPB Resolutions No. 2002-124 and No. 2002-125 regardless of their actual dates of termination; and (3) to appoint and authorize the Clerk of Court and Ex-Oficio Sheriff of the RTC of Quezon City to enforce by execution the Court’s 10 December 2008 Resolution by garnishment/levy upon the assets of NPC, including but not limited to the assets of PSALM, based on the list and computations submitted and attested to by the aforenamed Vice-President of NPC.

The principal question to be resolved is: should the execution of our decision and resolution which have become final and executory on 10 October 2008 be stopped or be prevented because of the new issues raised by NPC? The two new issues are: (1) whether or not our decision affects only 16 employees or all the employees of NPC; and (2) whether or not NPB Resolutions No. 2002-124 and No. 2002-125 can be ratified by NPB Resolution No. 2007-55[27] which was issued on 14 September 2007.

On the first issue, NPC contends it has complied with the directive of the Supreme Court to list all employees terminated/separated as a result of, or pursuant to, NPB Resolutions No. 2002-124 and No. 2002-125. It stated that only its top-level employees, numbering sixteen (16), occupying the positions of Senior Vice-President, Vice-President and Department Manager were terminated on 31 January 2003 pursuant to the aforesaid resolutions contrary to the position of petitioners that all employees of NPC were terminated/separated on 31 January 2003. NPC added that these 16 employees who were terminated/separated on 31 January 2003 were rehired after receiving a full separation package pursuant to the EPIRA law. Thus, payment of any backwages and other benefits to these 16 employees are unnecessary and unwarranted.

It is unquestionable that when we promulgated our decision on 26 September 2006 and our subsequent resolutions dated 24 January 2007, 17 September 2008 and 10 December 2008, we were referring to all employees of the NPC, not only the 16 top-level employees, as those whose services were terminated on 31 January 2003. This was based on the nullified NPB Resolution No. 2002-124 which reads in part:

RESOLVED, FURTHER, That, pursuant to Section 63 of the EPIRA and Rule 33 of the IRR, all NPC personnel shall be legally terminated on January 31, 2003, and shall be entitled to the separation benefits as provided in the Guidelines hereunder adopted.[28]

When the instant case was commenced with the filing of the petition, what was sought to be enjoined was the termination of all, not sixteen (16), NPC employees on 31 January 2003 in line with the restructuring of the NPC. All the while, the Court and the parties were on the same wavelength tackling the issue of whether the termination of all NPC employees pursuant to NPB Resolutions No. 2002-124 and No. 2002-125, is valid. In fact, it is NPC’s stand that pursuant to NPB Resolutions No. 2002-124 and No. 2002-125, all NPC personnel were legally terminated as of 31 January 2003. It is only after when our decision and resolution on the matter became final and executory did NPC reveal that not all, but only 16 top-level employees, were terminated on 31 January 2003.

We find such action of NPC and its counsel improper. Why only now at this stage of the proceedings? NPC cannot possibly deny that the employees subject of the instant case involves all the personnel/employees of the NPC. As correctly pointed out by petitioners, NPC’s statement in its Motion for Reconsideration and Motion for Leave to File Second Motion for Reconsideration that the nullification of NPB Resolutions No. 2002-124 and No. 2002-125 has far reaching implications and dreadful aftermath for it would entail a financial liability on its part in the amount of not less than P4,701,354,073.00 proves that what NPC is alluding to is the termination of all the employees of the NPC for the simple reason that said amount cannot be for the backwages, separation pay and other benefits of just 16 employees but thousands of NPC personnel.

Under NPB Resolution No. 2002-124, the services of all NPC personnel/employees were deemed legally terminated as of 31 January 2003. However, because it was no longer tenable for NPC to complete the legal separation of NPC employees on 31 January 2003, NPB Resolution No. 2003-11 dated 22 January 2003 was issued showing the effectivity of termination of personnel on 28 February 2003. NPC intentionally did not inform the Court that the separation of other employees holding the positions of below Vice-President levels, supervisors and rank-and-file was 28 February 2003 pursuant to NPB Resolution No. 2003-11 dated 22 January 2003. Furthermore, under NPC Circular No. 2003-09,[29] the dates of legal termination of all employees were as follows: (a) key officials – 31 January 2003; (b) early-leavers – 15 January 2003; (c) those no longer employed in NPC after 26 June 2001 – date of actual separation; and (d) all other personnel – 28 February 2003. To further show that what is covered by the Court’s resolution dated 10 December 2008 are all the NPC employees, petitioners attached a memorandum[30] from Eduardo R. Eroy, Vice-President, HRM, NPC, to NPC President Froilan A. Tampinco explaining the amount of backwages, separation pay and other benefits to be received by the NPC terminated NPC employees.

From all these, it is clear that our ruling, pursuant to NPB Resolution No. 2002-124, covers all employees of the NPC and not only the 16 employees as contended by NPC. However, as regards their right to reinstatement, or separation pay in lieu of reinstatement, pursuant to a validly approved Separation Program, plus backwages, wage adjustments, and other benefits, the same shall be computed from the date of legal termination as stated in NPC Circular No. 2003-09, to wit:

a) The legal termination of key officials, i.e., the Corporate Secretary, Vice Presidents and Senior Vice Presidents who were appointed under NP Board Resolution No. 2003-12, shall be at the close of office hours of January 31, 2003.

b) The legal termination of personnel who availed of the early leavers’ scheme shall be on the last day of service in NPC but not beyond January 15, 2003.

c) The legal termination of personnel who were no longer employed in NPC after June 26, 2001 shall be the date of actual separation in NPC.

d) For all other NPC personnel, their legal termination shall be at the close of office hours/shift schedule of February 28, 2003.[31]

but deducting therefrom the amount of separation benefits which they previously received under the null NPB Resolutions.

On the second issue, NPC contends that when NPB Resolution No. 2007-55[32] dated 14 September 2007 was issued, the same ratified and confirmed NPB Resolutions No. 2002-124 and No. 2002-125. The purported infirmity of NPB Resolutions No. 2002-124 and No. 2002-125 was rectified and effectively mooted. In so doing, all the principles and guidelines enunciated in both resolutions have been adopted, confirmed and approved. In effect, what NPC is saying is that the decision/resolution can no longer be executed since it has corrected the infirmity or mistake that caused the nullification of NPB Resolutions No. 2002-124 and No. 2002-125 by the issuance of NPB Resolution No. 2007-55.

As answer thereto, petitioners argue that NPB Resolutions No. 2002-124 and No. 2002-125 cannot be ratified because only voidable acts can be ratified. Petitioners contend that both resolutions are void.

Petitioners’ contention that NPB Resolutions No. 2002-124 and No. 2002-125 are void is correct. In our decision of 26 September 2006, the Court was very categorical in declaring that NPB Resolutions No. 2002-124 and No. 2002-125 are VOID and WITHOUT LEGAL EFFECT. The Court has ruled that said resolutions are void for violating Section 48 of the EPIRA Law which requires the persons enumerated therein to personally exercise their judgment and discretion. An illegal act is void and cannot be validated.[33] In the instant case, the approval of both resolutions was an illegal act for it violated the EPIRA Law.

What then is the effect of the approval of NPB Resolution No. 2007-55 on 14 September 2007? The approval of NPB Resolution No. 2007-55, supposedly by a majority of the National Power Board as designated by law, that adopted, confirmed and approved the contents of NPB Resolutions No. 2002-124 and No. 2002-125 will have a prospective effect, not a retroactive effect. The approval of NPB Resolution No. 2007-55 cannot ratify and validate NPB Resolutions No. 2002-124 and No. 2002-125 as to make the termination of the services of all NPC personnel/employees on 31 January 2003 valid, because said resolutions were void.

The approval of NPB Resolution No. 2007-55 on 14 September 2007 means that the services of all NPC employees have been legally terminated on this date. All separation pay and other benefits to be received by said employees will be deemed cut on this date. The computation thereof shall, therefore, be from the date of their illegal termination pursuant to NPB Resolutions Nos. 2002-124 and 2002-125 as clarified by NPB Resolution No. 2003-11 and NPC Resolution No. 2003-09 up to 14 September 2007. Although the validity of NPB Resolution No. 2007-55 has not yet been passed upon by the Court, same has to be given effect because NPB Resolution No. 2007-55 enjoys the presumption of regularity of official acts. The presumption of regularity of official acts may be rebutted by affirmative evidence of irregularity or failure to perform a duty.[34] Thus, until and unless there is clear and convincing evidence that rebuts this presumption, we have no option but to rule that said resolution is valid and effective as of 14 September 2007.

We now resolve the issue of whether or not the assets of PSALM can be the subject of execution it being a non-party in this case.

In their Manifestation with Urgent Omnibus Motions dated 9 February 2009, petitioners prayed that the decision/resolution of the court be enforced by execution by garnishment/levy upon the assets of NPC, including but not limited to the assets of PSALM. In opposition thereto, PSALM stated that not being a party to the case, it is not bound by the decision rendered by the Court. It explained that there is nothing in the EPIRA Law that allows garnishment and/or levy of its assets to satisfy a judgment rendered against NPC. Not being employees of PSALM, the latter states that it cannot be made liable for the financial obligations of NPC to its employees. PSALM explains that when the EPIRA Law was passed on 26 June 2001, ownership of all existing NPC generation assets, IPP contracts, real estate and all other disposable assets were transferred to it by operation of law. All existing liabilities and outstanding financial obligations of NPC arising from loans, issuances of bonds, securities and other instrument of indebtedness were legally transferred and assumed by PSALM. It stressed that the liability of NPC arising from employer-employee relationship is not one of those transferred to, and assumed by, PSALM. The EPIRA, it said, did not contemplate such kind of liability. Further, it claims that its assets and the privatization proceeds cannot be the subject of execution because these were already earmarked specifically for the liquidation of NPC’s financial obligations transferred to, and assumed by, PSALM.

Sections 49 and 50 of the EPIRA Law read:

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 NPC 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.

SEC. 50. Purpose and Objective, Domicile and Term of Existence. – The principal purpose of the PSALM Corp. is to manage the orderly sale, disposition, and privatization of NPC generation assets, real estate and other disposable assets, and IPP contracts with the objective of liquidating all NPC financial obligations and stranded contract costs in an optimal manner.

The PSALM Corp. shall have its principal office and place of business within Metro Manila.

The PSALM Corp. shall exist for a period of twenty-five (25) years from the effectivity of this Act, unless otherwise provided by law, and all assets held by it, all moneys and properties belonging to it, and all its liabilities outstanding upon the expiration of its term of existence shall revert to and be assumed by the National Government.

Under the EPIRA Law, PSALM shall take ownership of all existing NPC generation assets, liabilities, IPP contracts, real estate and all other disposable assets. PSALM acquired ownership over said properties of NPC via the EPIRA Law. It did not deny such fact and even admitted the same.

PSALM argues that the present judgment obligation of NPC arising from employer-employee relationship was neither an existing financial liability nor a contractual liability of NPC at the effectivity of the EPIRA Law. From a reading of said section 49, it appears that only existing NPC generation assets, liabilities, IPP contracts, real estate and all other disposable assets shall be transferred to PSALM. We, however, rule that the word “existing” is to be construed as to qualify only the term “NPC generation assets.” In arriving at said ruling, Section 49 must be read in conjunction with Section 50. The interpretation of the word “existing” should be understood in light of PSALM’s purpose and objective during its term of existence (25 years from the effectivity of the law). It would be absurd to interpret the word “existing” as referring to the assets and liabilities of NPC only existing at the time when the EPIRA Law took effect (26 June 2001). It is more sensible and equitable that the word “existing” applies only to “NPC generation assets” because of the intent and purpose of the EPIRA Law which is to privatize NPC generation assets, real estate, and other disposable assets and IPP contracts. Upon the effectivity of the EPIRA Law, most of the assets of NPC, from which it got its income, was transferred to PSALM. When the privatization of NPC’s assets is in progress, NPC may still incur liabilities, as what happened in the instant case. Who then shall answer for these liabilities? How can NPC answer for its liabilities if PSALM had already acquired almost all of its assets? It would be, under the circumstances, unfair and unjust if PSALM gets nearly all of NPC’s assets but will not pay for liabilities incurred by NPC during this privatization stage. It must be remembered that the restructuring of the NPC was due to the EPIRA Law. It is also the EPIRA Law that authorized PSALM to take ownership of NPC’s assets and liabilities. And since the restructuring of NPC, which this Court found to be void, was the cause of NPC’s liability, it is but reasonable for PSALM to assume the liabilities of NPC during the privatization of the NPC’s assets.

It is well settled that courts are not to give a statute a meaning that would lead to absurdities. If the words of a statute are susceptible of more than one meaning, the absurdity of the result of one construction is a strong argument against its adoption, and in favor of such sensible interpretation. We test a law by its result. A law should not be interpreted so as not to cause an injustice. There are laws which are generally valid but may seem arbitrary when applied in a particular case because of its peculiar circumstances. We are not bound to apply them in slavish obedience to their language.[35] The court may consider the spirit and reason of the statute, where a literal meaning would lead to absurdity, contradiction, injustice, or would defeat the clear purpose of the lawmakers.[36] Taking into consideration the legislative intent and applying the rule of reason, we hold that the word “existing” should be interpreted to only qualify the term “NPC generation assets” and not the word “liabilities.”

On PSALM’s contention that since it was not a party to the case and that the petitioners are not its employees, the properties that it acquired from NPC cannot be levied, is untenable. The issue here is about PSALM’s assets that were acquired from NPC. As explained above, PSALM took ownership over most of NPC’s assets. There was indeed a transfer of interest over these assets – from NPC to PSALM – by operation of law. These properties may be used to satisfy our judgment. This being the case, petitioners may go after such properties. The fact that PSALM is a non-party to the case will not prevent the levying of the said properties, including their fruits and proceeds. However, PSALM should not be denied due process. The levying of said properties and their fruits/proceeds, if still needed in case NPC’s properties are insufficient to satisfy our judgment, is without prejudice to PSALM’s participation in said proceedings. Its participation therein is necessary to prevent the levying of properties other than that it had acquired from NPC. Such a proceeding is to be conducted in the proper forum where petitioners may take the appropriate action.

Section 19, Rule 3 of the 1997 Revised Rules of Civil Procedure reads:

Sec. 19. Transfer of interest. – In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party.

Under this section, the Court may, upon motion, direct the person to whom the interest is transferred to be substituted in the action or joined with the original party. In petitioners’ Manifestation with Urgent Omnibus Motions dated 9 February 2009, they prayed that the properties acquired by PSALM from NPC be also levied/garnished. We consider this prayer to be tantamount to a motion to join PSALM as a party-respondent in this case in so far as to the properties, and any income arising therefrom, that PSALM acquired from NPC. It is in this light that we order the Clerk of Court of this division to implead or join PSALM as a party-respondent in this case. As above-explained, PSALM shall not be denied due process for it can participate in the proper forum by preventing the levying of properties other than that it had acquired from NPC.

We now go to the implementation of our decision. Petitioners submitted to this Court a list[37] supposedly containing names of employees separated from the NPC pursuant to the nullified NPB Board Resolutions No. 2002-124 and No. 2002-125 and the respective amounts they will receive. The computation of the benefits due them started on 1 February 2003/1 March 2003 to 30 June 2009. Even if we are to consider said list to be an official document released with authority by the NPC, we unfortunately cannot use the same to determine, at this point, the amounts due each of the affected NPC employees for the simple reason that amounts due should only be from the date of the employees’ illegal termination (31 January 2003 for key officials; last day of service in NPC but not beyond 15 January 2003 for early leavers; date of actual separation for personnel no longer employed at the NPC after 26 June 2001; and 28 February 2003 for all other NPC personnel)[38] up to 14 September 2007 when NPB Resolution No. 2007-55 was issued. This list which should contain the names of all, not only 16, the affected NPC employees shall be submitted by the Chairperson and the Members of the National Power Board and the President of the NPC to the proper person to execute this judgment within ten (10) days from receipt of this resolution.

The instant petition for injunction was filed directly to this Court as mandated by Section 78[39] of the EPIRA Law. In as much as this Court does not have a sheriff of its own to execute our decision, we deem it appropriate, pursuant to Section 6,[40] Rule 135 of the Rules of Court and considering that the principal office of NPC is located in Quezon City, to authorize the Clerk of Court of the Regional Trial Court and Ex-Officio Sheriff of Quezon City to execute our judgment which became final and executory on 10 October 2008 and for which an entry of judgment was made on 27 October 2008. After receipt of the list containing the names of the affected NPC employees and benefits due each of them, the Clerk of Court of the Regional Trial Court and Ex-Officio Sheriff of Quezon City is directed to forthwith execute our judgment.

WHEREFORE, premises considered, the Court resolves to GRANT petitioners’ Manifestation with Urgent Omnibus Motions dated 9 February 2009 by:

1. ORDERING the Chairperson and the Members of the National Power Board and the President of the National Power Corporation, and their respective counsels, to SHOW CAUSE why they should not be held in contempt of court for their willful failure to comply with paragraphs 1 and 2 of the Resolution dated 10 December 2008 by claiming that the Court’s decision nullifying NPB Board Resolutions No. 2002-124 and No. 2002-125 covered only sixteen employees when it is clear that the Court’s decision covered all personnel/employees affected by the restructuring of the NPC;

2. ORDERING the Clerk of Court of this Division to implead or join PSALM as a party-respondent in this case;

3. ORDERING the Chairperson and the Members of the National Power Board and the President of the National Power Corporation to comply with the Court’s Resolution dated 10 December 2008. The list shall contain all the names of all, not 16, NPC personnel/employees affected by the restructuring of the NPC. The computation of the amounts due the employees who were terminated and/or separated as a result of, or pursuant to, the nullified NPB Board Resolutions No. 2002-124 and No. 2002-125 shall be from their date of illegal termination up to 14 September 2007 when NPB Resolution No. 2007-55 was issued. Said list shall be submitted to the Clerk of Court of the Regional Trial Court and Ex-Officio Sheriff of Quezon City within ten (10) days from receipt of this resolution. They are also ordered to submit to this Court their compliance to said order within thirty (30) days from receipt of this resolution; and

4. DIRECTING the Clerk of Court of the Regional Trial Court and Ex-Officio Sheriff of Quezon City to cause the immediate execution of our Decision. Said Clerk of Court is further directed to submit to this Court his/her compliance to this directive within thirty (30) days from receipt of this resolution.

SO ORDERED.

MINITA V. CHICO-NAZARIO

Associate Justice

WE CONCUR:

RENATO C. CORONA

Associate Justice

Chairperson

PRESBITERO J. VELASCO, JR. Associate Justice	TERESITA J. LEONARDO-DE CASTRO Associate Justice
ARTURO D. BRION Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

Associate Justice

Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO

Chief Justice

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* Associate Justice Teresita J. Leonardo-De Castro was designated to sit as additional member replacing Associate Justice Antonio Eduardo B. Nachura per Raffle dated 13 April 2009.

** Associate Justice Arturo D. Brion was designated to sit as additional member replacing Associate Justice Diosdado M. Peralta per Raffle dated 3 August 2009.

[1] Rollo, pp. 165-188.

[2] Id. at 189-191.

[3] Id. at 297-308.

[4] Id. at 307.

[5] Id. at 330.

[6] Id. at 532.

[7] Id. at 535-537.

[8] Id. at 545-548.

[9] Id. at 555-556.

[10] Id. at 559-560.

[11] Id. at 578-790.

[12] Id. at 564-573.

[13] Id. at 791-795.

[14] Id. at 802-807.

[15] Id. at 809-825.

[16] Electric Power Industry Reform Act of 2001.

[17] Rollo, pp. 830-843.

[18] Id. at 844-851.

[19] Id. at 854.

[20] Id. at 856-864.

[21] Id. at 868-877.

[22] Id. at 889-890.

[23] Id. at 892-907.

[24] Id. at 915-917.

[25] Id. at 918-932.

[26] Id. at 933-940.

[27] Id. at 854.

[28] Id. at 169.

[29] Id. at 881-886.

[30] Id. at 887.

[31] Id. at 881-882.

[32] Id. at 854.

[33] Republic v. Acoje Mining Co., Inc., 117 Phil. 379, 383-384 (1963).

[34] Sevilla v. Cardenas, G.R. No. 167684, 31 July 2006, 497 SCRA 428, 443.

[35] Belo v. Philippine National Bank, 405 Phil. 851, 874 (2001).

[36] In Re: Request of Justice Bernardo P. Pardo for Adjustment of his Longevity Pay, A.M. No. 02-1-12-SC, 14 March 2007, 518 SCRA 263, 267.

[37] Rollo, pp. 1025-1148.

[38] See NPC Circular No. 2003-09; rollo, pp. 881-886.

[39] SEC. 78. Injunction and Restraining Order. – The implementation of the provisions of this Act shall not be restrained or enjoined except by an order issued by the Supreme Court of the Philippines.

[40] SEC. 6. Means to carry jurisdiction into effect. – When by law jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other means necessary to carry it into effect may be employed by such court or officer; and if the procedure to be followed in the exercise of such jurisdiction is not specifically pointed out by law or by these Rules, any suitable process or mode of proceeding may be adopted which appears conformable to the spirit of said law or rules.