DFPC asks SC to reverse COA ruling on disallowance

February 27, 2014 9:47 am 

By Perfecto T. Raymundo Jr.

MANILA, Feb. 26 (PNA) — The Duty Free Philippines Corporation (DFPC) on Wednesday asked the Supreme Court (SC) to step into the Notice of Disallowance (ND) of the Commission on Audit (COA) against the payment of the 14th month bonus of its officers and employees.

In an 11-page petition for review, the DFPC, represented by chief operating officer Lorenzo Formozo, urged the SC to reverse the COA ruling partially granting their petition declaring that "DFPC employees who have been receiving the 14th month bonus as of 01 July 1989, the effectivity date of the Salary Standardization Law, shall continue to receive the same but those hired after 01 July 1989 shall not be entitled thereto."

The DFP was created by Executive Order No. 46 dated Sept. 4, 1986. DFP shops are established and operated by the Department of Tourism (DOT), through the Philippine Tourism Authority (PTA).

Under Presidential Decree No. 564 dated Oct. 2, 1974, the PTA is a government-owned or controlled corporation (GOCC) attached to the DOT.

The manpower requirements of DFP were initially provided by Duty Free Philippines Services Inc. (DFPSI), a private contracting agency.

However, after Med-Arbiter Tomas F. Falconitin of the Department of Labor and Employment-National Capital Region promulgated his ruling dated April 22, 1997 declaring, among others, that DFP was the direct and immediate employer of the contractual employees provided by DFPS, DFP terminated its manpower services contract with DFPSI and assumed the obligations of employer of all these contractual personnel.

Director Janet D. Nacion of the COA issued on July 13, 2006 a ruling denying the request for reconsideration of the ND to the payment of the 14th month bonus of the DFP officers and employees in calendar year 2002 amounting to P14,864,500.13.

The DFPC, formerly DFP, moved on Dec. 22, 2006 for reconsideration. However, this was denied and the ND was upheld.

This prompted the DFPC to seek redress with the SC.

In the petition, the DFPC argued that the COA overlooked the fact that DFP is under obligation to continually pay the 14th month bonus of its employees, including those hired after July 1, 1989.

It said that the COA decision itself recognized the antecedent circumstances on the hiring of DFP employees beginning from its creation on Sept. 4, 1986 pursuant to EO No. 46.

"[I]t is quite clear that respondent acknowledged the fact that the manpower requirements of DFP were provided by a private contracting agency [the DFPSI] until December 1998, when Supreme Court affirmed the decision dated April 22, 1997 of [Falconitin]," the petition said.

"Despite this recognition, [the COA] resolved to sustain the disallowance of the payment of the 14th month bonus to DFP employees hired after 01 July 1989," it said.

"Respondent COA overlooked the fact that all the employees hired by DFPSI to work at DFP whether before or after 01 July 1989 were all given compensation packages and benefits comparable to those received by employees of the private sector and not of the government whose salaries and benefits are subject to the limitations of the Salary Standardization Law," it added.

The DFPC further argued that "there is no basis for the 01 July 1989 cut-off period considering that all the employees hired by DFPSI to work at DFP are similarly situated." (PNA)

SCS/PTR/UTB

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