Social Security System v. Commission on Audit
REITERATIONFacts
The Antecedents: The Social Security Commission (SSC) and the Alert and Concerned Employees for Better SSS (ACCESS), the sole and exclusive negotiating agent for SSS employees, executed a Collective Negotiation Agreement (CNA) on July 10, 1996. Article XIII of the CNA stipulated a P5,000.00 contract signing bonus for each official and employee of the SSS, to be funded by an allocation of P15,000,000.00 from the SSS budgetary appropriation. Procedural History: On February 18, 1997, the Department of Budget and Management (DBM) declared the contract signing bonus illegal. Subsequently, on July 1, 1997, the SSS Corporate Auditor disallowed fund releases for the bonus, deeming it an allowance in the form of additional compensation prohibited by the Constitution. ACCESS appealed this disallowance to the Commission on Audit (COA) on September 29, 1999. On July 5, 2001, COA affirmed the disallowance, ruling that the grant of the signing bonus was improper as the CNA provision had no legal basis, citing Section 16 of Republic Act No. 7658 which purportedly repealed the SSC's authority to fix personnel compensation. The Petition: The instant petition for certiorari under Rule 64 of the 1997 Rules of Civil Procedure was filed in the name of the Social Security System (SSS) by its officer-in-charge, through its legal staff, praying that the Court assess against the workers' social security fund the amount of P5,000.00 as contract signing bonus for each SSS official and employee. The SSS argued that a signing bonus could be granted if authorized by law, citing Section 3(c) of RA 1161, as amended, which allows the SSC to fix personnel compensation. COA, however, asserted that the SSC's authority was repealed by Sections 12 and 16 of RA 6758.
Issue(s)
Whether the petition filed in the name of the SSS by its officer-in-charge and internal legal staff is legally tenable. Whether the Social Security Commission (SSC) has the legal authority to grant a contract signing bonus to SSS employees under Republic Act No. 1161, as amended, considering the provisions of Republic Act No. 6758. Whether the contract signing bonus, as stipulated in the Collective Negotiation Agreement (CNA), is a valid and legal disbursement from the SSS trust fund.
Ruling
The petition is dismissed. The Decision No. 2001-123 of the Commission on Audit and the Notice of Disallowance No. 97-002-0101 (96) of the Social Security System Corporate Auditor are affirmed.
Ratio Decidendi
On the legal tenability of the petition: The Court found the petition fatally defective. It was filed in the name of the SSS without a directive from the Social Security Commission (SSC), the collegiate body empowered under RA 1161, as amended by RA 8282, to approve or review actions to sue in court. The appearance of the SSS internal legal staff as counsel was also questionable, as the Department of Justice is designated as the SSS's counsel under both RA 1161 and RA 8282. The Court reiterated the principle that no person, not even corporate officers, can validly sue on behalf of a corporation without a resolution from its governing body. The purported power of attorney and the signature of the legal counsel were deemed ineffectual due to the lack of proper authorization. On the authority of the SSC to grant a contract signing bonus: The Court held that Republic Act No. 6758 (RA 6758), the law standardizing compensation in the government, modified, if not repealed, Section 3(c) of RA 1161, as amended, concerning the SSC's authority to fix SSS employee compensation. RA 6758 aimed to standardize salary rates and repealed laws inconsistent with its system. While RA 6758 allowed incumbents as of July 1, 1989, to retain salaries and allowances above those authorized by RA 6758, the signing bonus in question was not an existing benefit as of July 1, 1989. It accrued only in 1996 when the CNA was executed, thus it could not qualify under the salutary provisions of RA 6758. On the validity of the contract signing bonus: The Court ruled that the signing bonus was not a valid disbursement from the SSS trust fund. The process of collective negotiation in the public sector does not encompass terms and conditions of employment requiring the appropriation of public funds, such as increases in emoluments not provided by law. The Court emphasized that the funds contributed to the SSS are trust funds belonging to the workers, and the trustee (SSS) has a duty to desist from acts diminishing the property rights of the beneficiaries. The signing bonus was characterized as a gesture of goodwill for concluding negotiations, but it was not a reasonable compensation for services rendered and appeared to be a price tag for peaceful negotiation, which is not a proper basis for disbursing trust funds.
Main Doctrine
The grant of a contract signing bonus to employees of a government-owned and controlled corporation, such as the Social Security System (SSS), is improper if it is not authorized by law and if it was not an existing benefit enjoyed by incumbents as of July 1, 1989, prior to the effectivity of Republic Act No. 6758. Furthermore, the filing of a petition for certiorari in the name of the SSS without proper authorization from its governing body, the Social Security Commission, and the appearance of its internal legal staff as counsel without the intervention of the Department of Justice, render the petition fatally defective.