Sunday, May 31, 2015

Illegal Suspension: Award Of Moral And Exemplary Damages

See - Illegal Suspension: Award Of Moral And Exemplary Damages As Well As Attorneys Fees…


"x x x.

Under the Labor Code, Labor Arbiters are authorized by law to award moral and exemplary damages:
Art. 217. Jurisdiction of Labor Arbiters and the Commission. – (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:
. . . .
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations[.]
The nature of moral damages is defined under our Civil Code. Article 2220 states that “[w]illful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.” In Primero v. Intermediate Appellate Court, this court stated that damages, as defined in the Civil Code, is recoverable in labor cases. Thus, moral damages:
. . . cannot be justified solely upon the premise (otherwise sufficient for redress under the Labor Code) that the employer fired his employee without just cause or due process. Additional facts must be pleaded and proven to warrant the grant of moral damages under the Civil Code, these being, to repeat, that the act of dismissal was attended by bad faith or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy; and, of course, that social humiliation, wounded feelings, grave anxiety, etc., resulted therefrom.
The employee is entitled to moral damages when the employer acted a) in bad faith or fraud; b) in a manner oppressive to labor; or c) in a manner contrary to morals, good customs, or public policy.1
Bad faith “implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity.” Cathay Pacific Airways v. Spouses Vazquez[ established that bad faith must be proven through clear and convincing evidence. This is because “[b]ad faith and fraud . . . are serious accusations that can be so conveniently and casually invoked, and that is why they are never presumed. They amount to mere slogans or mudslinging unless convincingly substantiated by whoever is alleging them.”Here, there was clear and convincing evidence of bad faith adduced in the lower tribunals.
PAL’s actions in implicating Montinola and penalizing her for no clear reason show bad faith. PAL’s denial of her request to clarify the charges against her shows its intent to do a wrongful act for moral obliquity. If it were acting in good faith, it would have gathered more evidence from its contact in Honolulu or from other employees before it started pointing fingers. PAL should not have haphazardly implicated Montinola and denied her livelihood even for a moment.
PAL apparently granted Montinola procedural due process by giving her a notice of administrative charge and conducting a hearing. However, this was more apparent than real. The notice of administrative charge did not specify the acts committed by Montinola and how these acts violated PAL’s Code of Discipline. The notice did not state which among the items confiscated by the US customs officials were originally found in Montinola’s possession. Worse, the panel of PAL officers led by Atty. Pascual did not entertain any query to clarify the charges against her.
There is denial of an opportunity to be heard if the employee is not clearly apprised of the acts she committed that constituted the cause for disciplinary action. The Omnibus Rules Implementing the Labor Code requires that “a written notice [be] served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side.” Reasonable opportunity has been described as “every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense.”
When the alleged participation of the employee in the illicit act which serves as a basis for the disciplinary action is not clear from the notice, the opportunity to be heard will not be reasonable. The notice fails to meet reasonable standards. It does not have enough information to enable the employee to adequately prepare a defense.”
x x x
“Montinola was found by PAL to be guilty of all the charges against her. According to PAL, “[t]hese offenses call for the imposition of the penalty of Termination, however, we are imposing upon you the reduced penalty of One (01) year Suspension.” It is not clear how she could violate all the prestations in the long list of rules she allegedly violated. There is also no clear explanation why termination would be the proper penalty to impose. That the penalty was downgraded, without legal explanation, to suspension appears as a further badge of intimidation and bad faith on the part of the employer.
Nothing in PAL’s action supports the finding that Montinola committed specific acts constituting violations of PAL’s Code of Discipline.
This act of PAL is contrary to morals, good customs, and public policy. PAL was willing to deprive Montinola of the wages she would have earned during her year of suspension even if there was no substantial evidence that she was involved in the pilferage.
Moral damages are, thus, appropriate. In Almira v. B.F. Goodrich Philippines, this court noted that unemployment “brings untold hardships and sorrows on those dependent on the wage-earner.” This is also true for the case of suspension. Suspension is temporary unemployment. During the year of her suspension, Montinola and her family had to survive without her usual salary. The deprivation of economic compensation caused mental anguish, fright, serious anxiety, besmirched reputation, and wounded feelings. All these are grounds for an award of moral damages under the Civil Code.”
x x x
“Montinola is also entitled to exemplary damages.
Under Article 2229 of the Civil Code, “[e]xemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.” As this court has stated in the past: “Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is socially deleterious in its consequence by creating negative incentives or deterrents against such behaviour.”
If the case involves a contract, Article 2332 of the Civil Code provides that “the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.” Thus, in Garcia v. NLRC, this court ruled that in labor cases, the court may award exemplary damages “if the dismissal was effected in a wanton, oppressive or malevolent manner.”
It is socially deleterious for PAL to suspend Montinola without just cause in the manner suffered by her. Hence, exemplary damages are necessary to deter future employers from committing the same acts.”
x x x

Attorney's fees

See - Illegal Suspension: Award Of Moral And Exemplary Damages As Well As Attorneys Fees... - The Lawyer's Post

"x x x.

Article 2208 of the Civil Code enumerates the instances when attorney’s fees can be awarded:
ART. 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen’s compensation and employer’s liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered.
In all cases, the attorney’s fees and expenses of litigation must be reasonable. (Emphasis supplied)
x x x."


Saturday, May 30, 2015

BP 22: Effect of dishonor of check after SEC Order of Suspension of Payments…

See - BP 22: Effect of dishonor of check after SEC Order of Suspension of Payments…


"X X X.

The Court of Appeals erred in applying the ruling in Tiong vs. Co (G.R. No. 133608, 26 August 2008, 563 SCRA 239, 249-251), citing that the facts of this case are not on all fours with the said ruling:

“However, what the CA failed to consider was that the facts of Tiong were not on all fours with those of the present case and must be put in the proper context.  In Tiong, the presentment for payment and the dishonor of the checks took place before the Petition for Suspension of Payments for Rehabilitation Purposes was filed with the SEC. There was already an obligation to pay the amount covered by the checks. The criminal action for the violations of B.P. 22 was filed for failure to meet this obligation. The criminal proceedings were already underway when the SEC issued an Omnibus Order creating a Management Committee and consequently suspending all actions for claims against the debtor therein. Thus, in Tiong, this Court took pains to differentiate the criminal action, the civil liability and the administrative proceedings involved.

In contrast, it is clear that prior to the presentment for payment and the subsequent demand letters to petitioner, there was already a lawful Order from the SEC suspending all payments of claims. It was incumbent on him to follow that SEC Order.  He was able to sufficiently establish that the accounts were closed pursuant to the Order, without which a different set of circumstances might have dictated his liability for those checks.

Considering that there was a lawful Order from the SEC, the contract is deemed suspended. When a contract is suspended, it temporarily ceases to be operative; and it again becomes operative when a condition occurs – or a situation arises – warranting the termination of the suspension of the contract.

In other words, the SEC Order also created a suspensive condition. When a contract is subject to a suspensive condition, its birth takes place or its effectivity commences only if and when the event that constitutes the condition happens or is fulfilled. Thus, at the time private respondent presented the September and October 1997 checks for encashment, it had no right to do so, as there was yet no obligation due from petitioner.

Moreover, it is a basic principle in criminal law that any ambiguity in the interpretation or application of the law must be made in favor of the accused. Surely, our laws should not be interpreted in such a way that the interpretation would result in the disobedience of a lawful order of an authority vested by law with the jurisdiction to issue the order.

Consequently, because there was a suspension of GSMC’s obligations, petitioner may not be held liable for the civil obligations of the corporation covered by the bank checks at the time this case arose. However, it must be emphasized that her non-liability should not prejudice the right of El Grande to pursue its claim through remedies available to it, subject to the SEC proceedings regarding the application for corporate rehabilitation.

X X X."


Torts; Damages Outside Warsaw Convention …

See - Damages Outside Warsaw Convention Not Covered By 2-Year Prescription Period…


"x x x.

In United Airlines v. Uy, this Court distinguished between the (1) damage to the passenger’s baggage and (2) humiliation he suffered at the hands of the airline’s employees. The first cause of action was covered by the Warsaw Convention which prescribes in two years, while the second was covered by the provisions of the Civil Code on torts, which prescribes in four years.

Similar distinctions were made in American jurisprudence. In Mahaney v. Air France, a passenger was denied access to an airline flight between New York and Mexico, despite the fact that she held a confirmed reservation. The court therein ruled that if the plaintiff were to claim damages based solely on the delay she experienced – for instance, the costs of renting a van, which she had to arrange on her own as a consequence of the delay – the complaint would be barred by the two-year statute of limitations. However, where the plaintiff alleged that the airlines subjected her to unjust discrimination or undue or unreasonable preference or disadvantage, an act punishable under the United States laws, then the plaintiff may claim purely nominal compensatory damages for humiliation and hurt feelings, which are not provided for by the Warsaw Convention. In another case, Wolgel v. Mexicana Airlines, the court pronounced that actions for damages for the “bumping off” itself, rather than the incidental damages due to the delay, fall outside the Warsaw Convention and do not prescribe in two years.

In the Petition at bar, private respondent’s Complaint alleged that both PAL and Singapore Airlines were guilty of gross negligence, which resulted in his being subjected to “humiliation, embarrassment, mental anguish, serious anxiety, fear and distress.” The emotional harm suffered by the private respondent as a result of having been unreasonably and unjustly prevented from boarding the plane should be distinguished from the actual damages which resulted from the same incident. Under the Civil Code provisions on tort, such emotional harm gives rise to compensation where gross negligence or malice is proven.

The instant case is comparable to the case of Lathigra v. British Airways.

In Lathigra, it was held that the airlines’ negligent act of reconfirming the passenger’s reservation days before departure and failing to inform the latter that the flight had already been discontinued is not among the acts covered by the Warsaw Convention, since the alleged negligence did not occur during the performance of the contract of carriage but, rather, days before the scheduled flight.

In the case at hand, Singapore Airlines barred private respondent from boarding the Singapore Airlines flight because PAL allegedly failed to endorse the tickets of private respondent and his companions, despite PAL’s assurances to respondent that Singapore Airlines had already confirmed their passage. While this fact still needs to be heard and established by adequate proof before the RTC, an action based on these allegations will not fall under the Warsaw Convention, since the purported negligence on the part of PAL did not occur during the performance of the contract of carriage but days before the scheduled flight. Thus, the present action cannot be dismissed based on the statute of limitations provided under Article 29 of the Warsaw Convention.

Had the present case merely consisted of claims incidental to the airlines’ delay in transporting their passengers, the private respondent’s Complaint would have been time-barred under Article 29 of the Warsaw Convention. However, the present case involves a special species of injury resulting from the failure of PAL and/or Singapore Airlines to transport private respondent from Singapore to Jakarta – the profound distress, fear, anxiety and humiliation that private respondent experienced when, despite PAL’s earlier assurance that Singapore Airlines confirmed his passage, he was prevented from boarding the plane and he faced the daunting possibility that he would be stranded in Singapore Airport because the PAL office was already closed.

These claims are covered by the Civil Code provisions on tort, and not within the purview of the Warsaw Convention. Hence, the applicable prescription period is that provided under Article 1146 of the Civil Code:

Art. 1146. The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi-delict.

Private respondent’s Complaint was filed with the RTC on 15 August 1997, which was less than four years since PAL received his extrajudicial demand on 25 January 1994. Thus, private respondent’s claims have not yet prescribed and PAL’s Motion to Dismiss must be denied.

Moreover, should there be any doubt as to the prescription of private respondent’s Complaint, the more prudent action is for the RTC to continue hearing the same and deny the Motion to Dismiss. Where it cannot be determined with certainty whether the action has already prescribed or not, the defense of prescription cannot be sustained on a mere motion to dismiss based on what appears to be on the face of the complaint. And where the ground on which prescription is based does not appear to be indubitable, the court may do well to defer action on the motion to dismiss until after trial on the merits.”

x  x x."


Qualified Theft - The Lawyer's Post

See- In Qualified Theft, Check Is Not Cash... - The Lawyer's Post

"x x x.

“Prefatorily, fundamental is the precept in all criminal prosecutions, that the constitutive acts of the offense must be established with unwavering exactitude and moral certainty because this is the critical and only requisite to a finding of guilt. 
Theft is present when a person, with intent to gain but without violence against or intimidation of persons or force upon things, takes the personal property of another without the latter’s consent. It is qualified when, among others, and as alleged in the instant case, it is committed with abuse of confidence. 
The prosecution of this offense necessarily focuses on the existence of the following elements: 
(a) there was taking of personal property belonging to another; 
(b) the taking was done with intent to gain; 
(c) the taking was done without the consent of the owner; (d) the taking was done without violence against or intimidation of persons or force upon things; and 
(e) it was done with abuse of confidence. 
In turn, whether these elements concur in a way that overcomes the presumption of guiltlessness, is a question that must pass the test of relevancy and competency in accordance with Section 3 Rule 128 of the Rules of Court.
x x x."




"x x x.


   It is an established doctrine that injunction will not lie to enjoin a criminal prosecution because public interest requires that criminal acts be immediately investigated and prosecuted for the protection of society. However, it is also true that various decisions of this Court have laid down exceptions to this rule, among which are:
a. To afford adequate protection to the constitutional rights of the accused;
b. When necessary for the orderly administration of justice or to avoid oppression or multiplicity of actions;
c. When there is a pre-judicial question which is sub[-]judice;
d. When the acts of the officer are without or in excess of authority;
e. Where the prosecution is under an invalid law, ordinance or regulation
f. When double jeopardy is clearly apparent;
g. Where the court has no jurisdiction over the offense;
h. Where there is a case of persecution rather than prosecution;
i. Where the charges are manifestly false and motivated by the lust for vengeance;
j. When there is clearly no prima facie case against the accused and a motion to quash on that ground has been denied; and
[k.] Preliminary injunction has been issued by the Supreme Court to prevent the threatened unlawful arrest of petitioners.

x x x."



"x x x.


     When the law speaks of "next of kin", the reference is to those who are entitled, under the statute of distribution, to the decedent’s property; or one whose relationship is such that he is entitled to share in the estate as distributed, or, in short, an heir. In resolving, therefore, the issue of whether an applicant for letters of administration is a next of kin or an heir of the decedent, the probate court perforce has to determine and pass upon the issue of filiation. A separate action will only result in a multiplicity of suits.

x x x."


See - Executive Order No. 181, s. 2015 | Official Gazette of the Republic of the Philippines

WHEREAS, Item (4)(a)(iv) of the Senate and House of Representatives Joint Resolution (JR) No. 4 (s. 2009) includes Incentives as a component of the Total Compensation Framework for government personnel. Item (4)(h)(ii) thereof also provides for the grant of Incentives as rewards for exceeding agency financial and operational performance targets, and to motivate employee efforts toward higher productivity;
WHEREAS, Section 1(a) of Executive Order No. 80 (s. 2012) stipulates the grant of the Productivity Enhancement Incentive (PEI) as a component of the Performance-Based Incentive System, at P 5,000 across the board; and
WHEREAS, under Item 3 of the Special Provisions on the Miscellaneous Personnel Benefits Fund (MPBF) of Republic Act (RA) No. 10651, entitled “An Act Appropriating Funds for the Operation of the Government of the Republic of the Philippines from January One to December Thirty-One, Two Thousand and Fifteen, and for Other Purposes,” the amount of Thirty Billion Six Hundred Forty Seven Million Four Hundred Sixty Four Thousand Pesos (P30,647,464,000.00) has been appropriated for the grant of the PEI to employees of the National Government, including State Universities and Colleges (SUCs), subject to the guidelines to be issued by the President.
NOW, THEREFORE, I, BENIGNO S. AQUINO III, President of the Philippines, by virtue of the powers vested in me by the Constitution and applicable laws, do hereby order.
Section 1. The One-Time Grant of the FY 2015 PEI Equivalent to One Month Basic Salary. The PEI for FY 2015, equivalent to either P5,000 or one month basic salary as of May 31, 2015, is authorized to be granted by agencies, which meet the conditions stipulated in this Order, to their respective qualified personnel:
a. National Government Agencies (NGAs) including SUCs;
b. The Congress of the Philippines, Judiciary, Civil Service Commission (CSC), Commission on Audit (GOA), Commission on Election (COMELEC), and the Office of the Ombudsman (OMB), subject to Section 8 hereof;
c. Government-Owned or -Controlled Corporations (GOCCs), including Local Water Districts (LWDs), and Government Financial Institutions (GFIs); and
d. Local Government Units (LGUs).
Section 2. Personnel Covered. This Order shall apply to the following government personnel:
a. Civilian personnel occupying regular, contractual, or casual positions, whether appointive or elective, on full-time or part-time basis, provided they have employer-employee relationship with the agencies concerned and whose compensation are charged against Personnel Services appropriations; and
b. Military Personnel of the Armed Forces of the Philippines, Department of National Defense; and uniformed personnel of the Philippine National Police, Bureau of Fire Protection, and Bureau of Jail Management and Penology under the Department of the Interior and Local Government (DILG); the Philippine Coast Guard; and the National Mapping and Resource Information Authority.
Section 3. Exclusions. The following individuals hired by the government without employer-employee relationship and paid from non-Personnel Services appropriations are excluded from the coverage of this Order. Said individuals may include, but not be limited to, the following:
a. Consultants and experts hired to perform specific activities or services with expected outputs;
b. Laborers hired through job contracts (pakyaw) and those paid on piecework basis;
c. Student laborer and apprentices; and
d. Individuals and groups whose services are engaged through job orders, contracts of services, or others similarly situated.
Section 4. Conditions to be Met by Agencies Before They Could Grant the One-Time PEI at One Month Basic Salary. The PEI for FY 2015 equivalent to one month basic salary is authorized to be granted only by agencies that comply with the following conditions:
a. For NGAs including SUCs, and GOCCs not covered by RA No. 10149 (GOCCs Governance Act of 2011):
a.1 Achievement of at least 90% of the FY 2014 targets under at least two (2) performance indicators (quantity, qualify, or timeliness) for at least one (1) Major Final Output (MFO) under Operations”;
a.2 Compliance with the posting of the Transparency Seal as required under Section 91, General Provisions of the FY 2014 General Appropriations Act (R.A. No. 10633); and
a.3 Compliance with the posting or publication of the Citizen’s Charter or its equivalent as required under the Anti-Red Tape Ad of 2007 (R.A. No. 9485).
b. For GOCCs covered under RA No. 10149:
b.1 Achievement of at least 90% of the FY 2014 targets under at least two (2) performance indicators (quantity, quality, or timeless) for at least one (1) Major Final Output (MFO) under “Operations” or the targets under the Performance Scorecard as agreed upon between the Governance Commission for GOCCs (GCG) and the GOCC pursuant to GCG Memorandum Circular No. 2013-02 (Reissued) dated June 24, 2014.
b.2 Compliance with the posting of the Transparency Seal as required under Section 91, General Provisions of the FY 2014 General Appropriations Act (R A No. 10633); and
b.3 Compliance with the posting or publication of the Citizen’s Charter or its equivalent as required under the Anti-Red Tape Act of 2007 (RA No. 9485).
c. For Local Water Districts (LWDs):
c.1     Positive net balance in the average net income for the 12 months of operations prior to May 31, 2015.
d. For Local Government Units (LGUs):
d.1 Compliance with the requirements under the Good Financial Housekeeping (formerly the Seal of Good Housekeeping) component of the FY 2014 Seal of Good Local Governance (DILG Memorandum Circular No. 2014-39).
Upon compliance with the above conditions, as verified accordingly under the succeeding section, an agency is authorized to grant PEI to its employees who have qualified under the Employee Service Requirement under Section 6 hereof. Otherwise, agencies unable to comply with the above conditions may grant the PEI only at the fixed amount of P5, 000 to qualified employees.
Section 5. Validation of Compliance with the Conditions in Section 4 hereof. Compliance with the following conditions shall be validated by the following oversight agencies, to be consolidated by the Inter-Agency Task Force created under Administrative Order No. 25 (s. 2011) (AG 25 IATF):
a. Major Final Output or Performance Scorecard
a.1 The Department of Budget and Management (DBM) for NGAs and GOCCs not covered by RA 10149;
a.2 The GCG for GOCCs covered by RA 10149; and
a.3 The Commission on Higher Education (CHED) for SUCs.
b. Transparency Seal – the DBM for all agencies concerned
c. Citizen’s Charter – the CSC for all agencies concerned
In the case of the positive net balance in the average net income of LWDs. the Local Water Utilities Administration (LWUA) shall be responsible for validating compliance. Finally, the DILG shall validate the compliance of LGUs with the Good Financial Housekeeping under the Seal of Good Local Governance (SGLG).
Section 6. Employee Service Requirement. To be entitled to the FY 2015 PEI at one month basic salary, employees must have (1) rendered at least a total or an aggregate of four (4) months of service as of May 31, 2015, including leaves of absence with pay, and who are still in the service as of May 31, 2015; and (2) obtained at least a satisfactory performance rating.
a. Employees who have rendered less than the total or an aggregate of four (4) months of satisfactory service as of May 31, 2015, may still be paid the full amount of the PEI upon completion of the four (4) months and satisfactory service rating requirements before the end of FY 2015.
b. Employees hired after May 31, 2015 may aim be paid the full amount of the PEI upon completion of the four (4) months and satisfactory service rating requirements before the end of FY 2015.
c. Employees with less than four (4) months service in FY 2015, or whose performance ratings are unsatisfactory are not entitled to the PEI.
Section 7. Other Guidelines on the Payment FY 2015 PEI.
a. The PEI of an employee on part-time basis shall be pro-rated corresponding to the services rendered. If employed on part-time basis with two (2) or more agencies, an employee shall be entitles to proportionate amounts corresponding to the services in each agency, provided that the PEI shall not exceed the authorized amount.
b. The PEI of an employee who transferred from one agency to another shall be granted by the new agency.
c. The PEI of an employee on detail with another government agency shall be granted by the mother agency.
d. A compulsory retiree on service extension as of May 31, 2015 may be granted the PEI subject to the pertinent guidelines herein.
e. Personnel charged with administrative and/or criminal charges and meted penalty in FY 2015 shall net be entitled to the PEI. These granted the PEI and later on found guilty and meted the penalty in 2015 shall refund the PEI. If the penalty meted cut is only a reprimand, such penalty shall not disqualify the employee concerned to the grant of the PEI.
Section 8. Applicability to the Legislative and Judicial Branches, and Other Offices Vested with Fiscal Autonomy. Pursuant to item 4(h)(ii)(bb) of the Senate and House of Representatives Joint Resolution No. 4, s. 2008, the Senate President, Speaker of the House Representatives, Chief Justice of the Supreme Court, the Ombudsman, and the heads of the CSC, COA and COMELEC may else grant their personnel the FY 2015 PEI at a maximum of one month basic salary pursuant to item 3 of the Special Provisions on the Miscellaneous Personnel Benefit Fund (MPBF) of RA 10651 or the General Appropriations Act (GAA) of 2015, subject to pertinent budgeting and accounting laws, rules and regulations.
Section 9. Funding Sources. Funds for the payment of the PEI shall be sourced as follows:
a. For the Executive branch and SUCs – DBM shall release the amount needed from the MPBF under the FY 2015 GAA, subject to the result of the validation done by the oversight agencies concerned;
b. For the Congress, Judiciary, CSC, GOA COMELEC and the OMS – DBM shall release the amount needed from the MPBF under the FY 2015 GAA, subject to their respective adopted guidelines;
c. For GOCCs, GFls, and LWDs – from their respective approved corporate operating budgets for FY 2015. In case of insufficient funds, the PEI may be granted at a lower rate but at a uniform percentage of the authorized amount;
d. For LGUs – from LGU funds, subject to the Personnel Services limitation in LGU budgets pursuant to Section 325 (a) and 331 (b) of RA No. 7160 (The Local Government Code of 1991). In case of insufficient funds, the PEI may be granted at a lower rate but at a uniform percentage of the authorized amount.
Section 10. When to Pay the FY 2015 PEI. Payment of the FY 2015 PEI shall be made not earlier than June 1, 2015.
Section 11. Resolution of Cases. Cases not covered by the Provisions of this Order as well as issues arising from the implementation of the provisions of this Order shall be referred to the DBM for final resolution. DBM may likewise issue guidelines as may be necessary for the proper implementation of this Order.
Section 12. Responsibility of Agency Heads. Agency heads shall be responsible for the implementation of the provisions of this Order in their respective offices. They shall be held administratively, civilly, and/or criminally liable, as the case may be, for the payment of the PEI not in accordance with the provisions of this Order without prejudice to the refund by the employees concerned of any unauthorized or excess payment thereof.
Section 13. Separability. If any provision of this Order is declared invalid or unconstitutional,   the   other   provisions not   affected thereby shall remain valid and subsisting.
Section 14. Repeal. All orders, Proclamations, rules, regulations, or parts thereof, which are inconsistent with any of the Provisions of this Order are hereby repealed or modified accordingly.
Section 15. Effectivity. This Order shall take effect immediately upon publication in a newspaper of general circulation.
DONE, in the City of Manila, this 15th day of May, in the year of Our Lord, Two Thousand and Fifteen.
By the President:
Executive Secretary