National Power Corporation Drivers and Mechanics Association v. National Power Corporation
REITERATIONFacts
The Antecedents: Petitioners, representing employees and associations of the National Power Corporation (NPC), filed a special civil action for Injunction to prevent the implementation of National Power Board (NPB) Resolutions No. 2002-124 and No. 2002-125, dated November 18, 2002. These resolutions mandated the termination of all NPC employees on January 31, 2003, as part of the NPC's restructuring in line with Republic Act No. 9136 (EPIRA Law). The EPIRA Law, enacted on June 8, 2001, provided for the orderly and transparent privatization of NPC's assets and liabilities and restructured the electric power industry. A new NPB was constituted under the EPIRA Law. The Department of Energy (DOE) promulgated the Implementing Rules and Regulations (IRR) of the EPIRA Law, and the Energy Restructuring Steering Committee (Restructuring Committee) was created to manage the privatization and restructuring of NPC, TRANSCO, and PSALM. The Restructuring Committee proposed a new NPC Table of Organization and a 2002 NPC Restructuring Plan, which were reviewed and amended by the NPB. NPB Resolution No. 2002-124 provided guidelines for the NPC's Separation Program and personnel selection, mandating the termination of all NPC personnel on January 31, 2003. NPB Resolution No. 2002-125 constituted a Transition Team to implement the Separation Program. The NPC OIC-President circulated these resolutions, directing compliance and implementation. A memorandum was issued providing a checklist of documents for processing separation benefits. Procedural History: Petitioners filed a Petition for Injunction, contending that the assailed NPB Resolutions were void and without force and effect. They invoked Section 78 of the EPIRA Law, which states that the implementation of the Act shall not be restrained or enjoined except by an order from the Supreme Court. The Petition: Petitioners argued that the Resolutions were invalid because they were not passed by a majority of the duly constituted Board members. They claimed only three members (DOE Secretary, DBM Secretary, and NPC OIC-President) were qualified to vote, while the other four signatories were mere representatives or alternates, constituting an undue delegation of power. They also argued that the Resolutions did not comply with Section 47 of the EPIRA Law, which requires endorsement by the Joint Congressional Power Commission and approval of the President for NPC privatization, asserting that the abolition of positions is part of privatization. Petitioners further contended that the mass termination violated the constitutional mandate to promote full employment and security of tenure.
Issue(s)
Whether NPB Resolutions No. 2002-124 and No. 2002-125 were properly enacted, considering the prohibition against delegation of discretionary power. Whether the presence and votes of representatives of department secretaries, who are ex officio members of the National Power Board (NPB), invalidate the resolutions, specifically addressing the quorum requirement. Whether the assailed NPB Resolutions complied with the requirements of endorsement by the Joint Congressional Power Commission and approval of the President of the Philippines, although this issue was not addressed due to the resolutions being deemed void.
Ruling
The Supreme Court granted the Petition for Injunction, declaring National Power Board Resolutions No. 2002-124 and No. 2002-125 as VOID and WITHOUT LEGAL EFFECT. Respondents were enjoined from implementing these resolutions.
Ratio Decidendi
On the validity of NPB Resolutions No. 2002-124 and No. 2002-125: The Court agreed with the petitioners that the assailed Resolutions were void. The EPIRA Law enumerates specific department heads as members of the National Power Board (NPB), vesting in them the power to exercise judgment and discretion in running NPC's affairs. The Court held that these department secretaries could not delegate their duties as members of the NPB, nor their power to vote and approve board resolutions, because it is their personal judgment that must be exercised. The enactment of the Resolutions involved the exercise of discretion, not a ministerial act, making the rule against delegation of discretionary power applicable. The Court cited Binamira v. Garrucho for the principle that an officer to whom discretion is entrusted cannot delegate it to another unless the power to substitute has been given. The respondents' argument that administrative practice allows for the exercise of authority by appointed subordinates was deemed not tenable in this case, as the ruling in American Tobacco Company v. Director of Patents explicitly stated that such practice is permissible only when the judgment and discretion finally exercised are those of the officer authorized by law. In this instance, it was the representatives, not the secretaries themselves, who exercised judgment in passing the Resolutions, as evidenced by their signatures. On the invalidity of the resolutions due to lack of quorum: Therefore, the votes cast by these representatives should not be considered in determining the validity of the Resolutions. With only three valid votes (from the DOE Secretary, DBM Secretary, and NPC OIC-President) out of the nine board members, a quorum was not met, rendering the Resolutions void and of no legal effect. On the remaining issue of compliance with endorsement and approval requirements: The Court found it unnecessary to pass upon the other issues raised, given the void nature of the Resolutions.
Main Doctrine
National Power Board (NPB) Resolutions No. 2002-124 and No. 2002-125, which directed the termination of National Power Corporation (NPC) employees, were declared void and without legal effect due to the invalid enactment process, specifically the improper delegation of the power to vote and approve resolutions by department heads to their representatives, resulting in a lack of a valid quorum.