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COA junks P10M claim of retrenched SBMA workers

THE Subic Bay Metropolitan Authority (SBMA) is not liable for the P10.17 million claim for unpaid back wages, separation pay, moral damages, and attorney’s fees filed by six former employees of the Freeport Service Corp. (FSC) for alleged illegal dismissal.

Commission on Audit chairperson Gamaliel A. Cordoba and commissioners Roland Café Pondoc and Mario G. Lipana declared that while FSC was a former subsidiary of the SBMA, the latter has no legal obligation to the claimants since FSC’s termination of its commercial operations in 2010 was valid.

Claimants Frederick De Guzman, Susan Garcia, Virginia Frianeza, Soledad Florentino, Rina Calma, and Sherill Ann Aquino based their claim on a May 26, 2016 decision of the National Labor Relations Commission (NLRC) – Quezon City that awarded full back wages from 2010, separation pay, moral damages of P30,000 and exemplary damages of P30,000 for each claimant, and attorney’s fees.

The NLRC-QC ruling supplanted the NLRC-Region 3 decision that declared the employees’ retrenchment valid since FSC had a valid cause to terminate operations to prevent further losses since it was already bankrupt.

It awarded the claimants P11.227 million less the P1.054 million in separation pay that was already paid to them.

The petition for money claim was filed with the COA on March 2, 2017 to compel SBMA and its officials to pay up but the Court of Appeals Thirteenth Division issued a decision dated August 4, 2017 upholding the validity of FSC’s retrenchment of its workforce to prevent business losses.

A separate ruling by the CA Eleventh Division on June 22, 2018 annulled the NLRC-QC decision and held that retrenchment and termination of operations is a management prerogative.

An appeal filed by the petitioners was dismissed by the Supreme Court on July 3, 2019 for deficient documentary support.

“In its ruling, the CA held that the retrenchment of the petitioners was valid as it was made to prevent losses to the employer. Thus, based on the above CA decisions, and due to the fact that the petitioners were already paid their separation pay by the FSC, this Commission finds no basis to grant this money claim,” the COA declared.