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Republic of Philippines

Provincial Government of Palawan


PROVINCIAL LEGAL OFFICE
Puerto Princesa City

February 7, 2018

ATTY. JOSHUA U. BOLUSA


Provincial Administrator
This Province

Sir:

In response to your letter dated January 15, 2018 asking for a categorical legal
opinion on the eligibility of the Provincial Government of Palawan to grant CNA
Incentive to covered employees in view of applicable guidelines issued for the
purpose and the current state of compliance by the PGP and the request for a
categorical walkthrough of the matter being sought clarification, this office
submits the following comments/legal opinion to wit:

I. AS TO THE CONDITIONS FOR THE GRANT OF CNA

FIRST, before the issuance of CNA Incentive there must first exist a valid
Collective Negotiation Agreement executed between the representatives of
the management and the employees’ organization accredited by the CSC as
the sole and exclusive negotiating agent for the purpose of collective
negotiations.1 At the current, there exists a valid Collective Negotiation
Agreement2 between the Provincial Government (PGP) and the Palawan
Provincial Government Employees Association (PPGEA).

The Palawan Provincial Government Employees Association (PPGEA), at the


current, is the only duly organized and existing legitimate government
organization with Registry Certificate No. 599 dated July 7, 1999 issued by the
Department of Labor and Employment (DOLE) and Civil Service Commission
(CSC). And under the Collective Negotiation Agreement, PGP recognizes
PPGEA as the duly accredited, sole and exclusive representative of all provincial
government rank-and-file employees.

SECOND, the grant of the CNA Incentive must be stipulated in the CNA or in
supplements thereto3. Article VI Section 1 of the Collective Negotiation
Agreement between PGP and PPGEA provides:

“Section 1. COLLECTIVE NEGOTIATION AGREEMENT (CNA)


INCENTIVE. The PGP shall ensure the implementation of Department
of Budget and Management (DBM) Budget Circular No. 2006-1
dated February 1, 2006 regarding the grant of CNA Incentive and
DBM Budget Circular No. 2015-2 dated November 23, 2015
providing for Supplemental Guidelines on the Grant of CNA
1
Section 4.1.1 DBM Circular No. 2017-3 (a), November 16, 2017
2
Collective Negotiation Agreement is herein attached as Annex “A
3
Section 4.1.1 DBM Circular No. 2017-3 (b), November 16, 2017

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Incentive FY 2015 granting both management and rank-in-file
employees of agencies with approved and successfully
implemented CNAs. All related issuances regarding the grant of
CNA Incentives, although in themselves are to be released by the
DBM, are nevertheless part of this Agreement, unless otherwise
provided.

THIRD AND FINAL, any Local Government Units should have accomplished, as of
October 31, 2017 at least an average of 70% of all the targets under its
programs/activities/projects approved in the LGU budget for FY 20174. The
Provincial Planning and Development Office through a certification based on
the Financial and Physical Performance Evaluation Report of Fifty Eight (58)
offices/departments for the rating period ending September 2017, the Average
Performance Rating of the Provincial Government was posted at 3.63 which is
equivalent to 100% physical performance of targets based on the Budget
Operations Manual (UBOM) for Local Government Units performance rating
guidelines.5

II. FUND SOURCES TO BE USED IN THE GRANT CNA INCENTIVE

The CNA Incentive shall be sourced solely from the allowable MOOE allotments
in FY 2017, provided the same have become available as a result of cost-cutting
and systems improvement measures undertaken by the agencies, which are
identified in their respective CNA and supplements thereof. Such funds sources
shall be limited to the following MOOE items as defined in the Government
Accounting and Auditing Manual: a) Traveling Expenses; b) Communication
Expenses; c) Repairs and Maintenance; d) Transportation and Delivery Expenses;
e) Supplies and Materials and; f) Utility Expenses.6

The Provincial Government of Palawan and the Palawan Provincial Government


Employees’ Association unified executive issuances and memorandums
pertaining to cost cutting and system improvement measures and integrate the
same as a supplement to the Collective Negotiation Agreement.7

In consonance, the Provincial Budget Office certified that as per records of the
Provincial Budget Office, there is an appropriation savings amounting to Thirty
Two Million Seven Hundred Fifty Thousand Pesos (₱32,750,000.00) coming from
savings in traveling expenses, supplies and materials, communication expenses,
transportation and delivery expenses and repairs and maintenance which is free
from any obligation, encumbrance, thus available for re-appropriation.8

III. GRANT OF CNA INCENTIVE

CNA Incentive shall be given to civilian personnel occupying regular,


contractual or casual positions rendering services on full-time or part-time basis
in the Provincial Government whether or not covered by Republic Act (RA) No.

4
Section 4.1.2 (d) of DBM Circular No. 2017-3 , November 16, 2017
5
Provincial Planning and Development Office Certification is herein attached as Annex “B”
6
Section 4.3.6 of DBM Circular No. 2017-3 , November 16, 2017
7
Joint Guidelines on Cost-cutting and Systems Improvement Measure is herein attached as Annex “C”
8
Provincial Budget’s Office certification is herein attached as Annex “D”

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6758 otherwise known as the “Compensation and Position Classification Act of
1989.”9:

a. Rank-and-file employees who are members of an employees’


organization accredited by the Civil Service Commission (CSC) as
the sole and exclusive negotiating agent (hereinafter referred to as
“negotiating agent”)in accordance with rules and regulations
issued by the Public Sector Labor Management Council (PSLMC);10

b. Rank-and-file employees who are non-members of the CSC-


accredited sole and exclusive negotiating agent but want to enjoy
or accept benefits under the CNA, subject to payment of agency
fee to the negotiating agent in accordance with PSLMC Resolution
No. 1 , s. 1993;

c. Those who perform managerial functions.

Moreover, Item (4)(h)(ii)(aa) of Congress Joint Resolution (JR) No. 4, s. 2009


provides:

“(aa) Collective Negotiation Agreement (CNA) Incentive – This may


be granted management and rank-and-file employees of agencies
with approved and successfully implemented CNAs in recognition
of their efforts in accomplishing performance targets at lesser cost,
in attaining more efficient and viable operations through cost-
cutting measures and systems improvement xxx.”

As a clarification, the term civilian personnel occupying contractual positions


refer to Contractual personnel or those whose employment in the government is
in accordance with a special contract to undertake a specific work or job,
requiring special or technical skills not available in the employing agency, to be
accomplished within a specific period, which in no case shall exceed one year,
and performs or accomplishes the specific work or job, under his own
responsibility with a minimum of direction and supervision from the hiring agency
Civil Service Commission vs. Javier, 546 SCRA 485, G.R. No. 173264 February 22,
2008) The CNA Incentive do not apply to Contract of Service or those the
engagement of the services of an individual, private firm, other government
agency, non-governmental agency or international organization as consultant,
learning service provider or technical expert to undertake special project or job
within a specific period. It also provides that the term of contract between the
agency and the individual contractor shall be for a maximum period of one
year, renewable at the option of the Head of the procuring entity, but in no
case shall exceed the term of the latter. Likewise the CNA Incentive is not
applicable to Job Orders which refer to piece work (pakyaw) or intermittent or
emergency jobs such as clearing of debris on the roads, canals, waterways, etc.
after natural/ man-made disasters/occurrences and other manual/trades and
crafts services such as carpentry, plumbing, electrical, and the like. These jobs
are of short duration and for a specific piece of work.

IV. ROLE OF THE EMPLOYEES ORGANIZATION-MANAGEMENT CONSULTATIVE


COMMITTEE

9
Section 3.0 of DBM Circular No. 2017-3 , November 16, 2017
10
Section 3.1 of DBM Circular No. 2017-3 , November 16, 2017

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The Employer’s Organization-Management Consultative Committee shall
determine if the Provincial Government complied with the conditions under
DBM Circular No. 2017-3 dated November 16, 2017. Upon findings of
compliance, the Committee shall review the agency’s financial records and
submit recommendations on the following, for approval of the Governor. The
recommendations shall provide among others:

a. The total amount of allowable MOOE allotments which has become


available as a result of cost-cutting and systems improvement measures
identified in the CNAs and supplements thereto, and which was the result
of the joint efforts of management and employees;

b. An internal guidelines which lays down:

i. a specific criteria for determining who are entitled;

ii. the distribution of the amount available and the rate of the CNA
Incentive in accordance with the following facts:

 the rate of the CNA Incentive was determined based on the


compliance with the conditions on the grant of CNA
Incentive and the availability of allowable allotments.

 The CNA Incentive may be given equally to all qualified


employees or at varying rates in consideration of the
employee’s or his/her office’s contribution to the
accomplishment of performance targets, efficiency,
productivity, or profitability, as determined by the agency
head upon recommendation of the Employees’ Organization
Management Consultative Committee.

 In all cases, the CNA Incentive shall not exceed ₱25,000.00


per qualified employee.

The Employer’s Organization-Management Consultative Committee through


Joint Resolution No. 1, Series of 2017 dated December 21, 2017 after their review
of the documents submitted favorably recommends the grant of CNA Incentive
specifying the internal guidelines to be followed in the grant of the same.11

Moreover the Sangguniang Panlalawigan through Provincial Ordinance No.


1907, Series of 201712 authorized the Gov. Jose Ch. Alvarez, to augment the
amount of thirty two million seven hundred fifty thousand pesos (₱32,750,000.00)
available savings from various Maintenance and Other Operating Expenses
(MOOE) to be used for payment of collective negotiation agreement incentive
to qualified officials and employees of the Provincial Government and for
enhancement of various programs and activities of the office of the Provincial

11
Employee’s Organization Consultative Committee Joint Resolution No. 1, Series of 2017 dated December 21,
2017 is herein attached as Annex “E”
12
Provincial Ordinance No. 1907 Series of 2017 is herein attached as Annex “F”

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Governor. In accordance thereto, the Sangguniang Panlalawigan through
Provincial Resolution No. 1347913 Series of 2017 authorizing Gov. Jose Ch. Alvarez
to grant the payment of Collective Negotiation Agreement (CNA) Incentive for
fiscal year 2017 in the amount of twenty five thousand pesos (₱25,000.00) each
to all qualified employees of the Provincial Government of Palawan.

In view of the foregoing and the documents submitted, this Office is of the
opinion that the Provincial Government substantially complied with the
conditions provided for in DBM Circular No. 2017-3, November 16, 2017 for the
grant of CNA Incentive to qualified personnel of the Provincial Government.

Respectfully submitted.

FOR AND BY AUTHORITY OF


THE PROVINCIAL LEGAL OFFICER:

ATTY. ARIEL A. ABIS


Attorney IV

13
Provincial Resolution No. 13479 Series 2017 is herein attached as Annex “G”

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