MANILA, Philippines - The Supreme Court (SC) has upheld the Termination Electrification Pay Plan of the National Electrification Administration (NEA) in 2003 which served as the early retirement plan for hundreds of NEA employees.

In a 14-page decision penned by Associate Justice Presbitero Velasco, Jr. promulgated last January 31, the high court, sitting en banc, denied the petition of the United Claimants Association of NEA (UNICAN), et al. and upheld Resolution Nos. 46 and 59, dated July 10, 2003 an September 3, 2003, respectively, of the NEA Board of Directors that directed the termination of all of NEA's over 700 employees.

The high court held that the NEA Board had the power to issue the assailed resolutions terminating all of its employees under Rule 33, Sec. (b) (ii) of the Implementing Rules and Regulations of the Electric Power Industry Reform Act of 2001 (EPIRA Law), stressing that the power of reorganization includes the power of removal.

"Evidently, the termination of all the employees of NEA was within the NEA Board's powers and may not successfully be impugned absent proof of bad faith," the decision read.

The EPIRA law was enacted, taking effect on June 26, 2001, in order to enhance and accelerate nationwide electrification, including the privatization of the National Power Corporation (Napocor).

The Rules and Regulations to implement the EPIRA law were issued on February 27, 2002, Sec. 3(b)(ii), Rule 33 of which state that all the NEA employees and officers are considered terminated and all plantilla positions of NEA vacant.

Said section states:

(ii) With respect to NEA officials and employees, they shall be considered legally terminated and shall be entitled to the benefits or separation pay provided in Section 3(a) herein when a restructuring of NEA is implemented pursuant to a law enacted by Congress or pursuant to Section 5(a)(5) of Presidential Decree No. 269.

On August 28, 2002, then-President Gloria Macapagal Arroyo issued Executive Order (EO) No. 119 directing the NEA Board to submit a reorganization plan.

The Board, then chaired by the late Armed Forces Chief of Staff Angelo Reyes, subsequently issued the assailed resolutions.

The Department of Budget and Management (DBM) approved the NEA Termination Pay Plan on September 17, 2003.

An "Early Leavers Program" was implemented by NEA, which gave incentives to those who availed of early retirement and left the agency before the effectivity of the reorganization plan.

The high tribunal also held that petitioners failed to establish bad faith on the part of the NEA Board.