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DECISION NO.

2016-113
June 14, 2016

Subject: Automatic review of Commission on Audit Regional Office No. V Decision No. 2011-N-
013 dated December 27, 2011 which lifted Notice of Disallowance Nos. 2009-002 and
2009-005, both dated February 18, 2010, relative to the excess overtime payments to
Mesdames Ma. Melissa G. Obispo and Asther S. Marinay, both of Bureau of Customs,
Collection District No. V, Legazpi City, in the amounts of P48,957.01 and P3,554.25,
respectively

DECISION

FACTS OF THE CASE

For automatic review is Commission on Audit (COA) Regional Office (RO) No. V Decision No. 2011-N-013 dated
December 27, 2011 which lifted Notice of Disallowance (ND) Nos. 2009-002 and 2009-005, both dated February 18, 2010,
pertaining to the excess overtime payments in 2009 to Mesdames Ma. Melissa G. Obispo and Asther S. Marinay, both of the
Bureau of Customs (BOC), Collection District No. V, Legazpi City, in the amounts of P48,957.01 and P3,554.25, respectively.

Records show that in 2009, Mesdames Obispo and Marinay rendered overtime services performing the task of Customs
Operations Officer and Utility Worker and correspondingly received an overtime pay in the amounts of P142,275.00 and
P48,632.25, respectively.

On post-audit, the Audit Team Leader (ATL) and the Supervising Auditor (SA) disallowed the amounts based on paragraph
3 of National Budget Circular (NBC) No. 410 dated April 28, 1989 which provides:

[T]he total amount of overtime pay which may be allowed an employee for a given calendar year shall not exceed
fifty percent (50%) of his basic salary.

The annual basic salary of Ms. Obispo is P186,636.00 and 50% thereof is P93,318.00. However, her total overtime pay
amounted to P142,275.01. Thus, P48,957.01 was disallowed under ND No. 2009-002. Similarly, Ms. Marinay’s annual basic salary
is P90,156.00, 50% of which is P45,078.00. Thus, the excess amount of P3,554.25 of the P48,632.25 overtime pay was disallowed
under ND No. 2009-005. Also named as person liable for the disallowance was Atty. Titus A. Sangil, the District Collector of
Customs.

Aggrieved thereby, Mesdames Obispo and Marinay filed an appeal memorandum dated September 1, 2010 with the Office
of the Regional Director (RD) COA RO V, Legazpi City. As legal basis for their entitlement to overtime pay, they cited Section
3506 of the Tariff and Customs Code of the Philippines (TCCP), which provides that “[C]ustoms employees may be assigned by a
Collector to do overtime work at rates fixed by the Commissioner of Customs when service rendered is to be paid by importers,
shippers, or other persons served. The rates to be fixed shall not be less than that prescribed by law to be paid to employees of
private enterprise.”

Likewise, appellants cited Customs Administrative Order (CAO) No. 2-82 dated July 7, 1982, outlining the Rules and
Regulations Governing Overtime Services and Pay, Travelling, Board and Lodging Expenses and/or meal allowances at all
seaports of entry. In the said order, there is no mention of any limit to the amount of overtime pay of Customs employees.

The RD rendered COA RO No. V Decision No. 2011-N-013 dated December 27, 2011, lifting the disallowance and ruling
that Mesdames Obispo and Marinay are entitled to the full amount of their overtime pay under the provisions of the TCCP and
CAO No. 2-82. The RD stressed that the provisions under NBC No. 410 on the 50% limitation on overtime pay is a general rule
and, therefore, admits of exceptions. One of these exceptions is CAO No. 2-82 dated July 7, 1982 which specifically provides the
rules on overtime services and pay of Customs employees. Hence, the automatic review.

ISSUE

The issue to be resolved is whether or not COA RO No. V Decision No. 2011-N-013 dated December 27, 2011, which lifted
ND Nos. 2009-002 and 2009-005, is proper.

DISCUSSION

This Commission fully concurs with the ruling of the RD, COA RO. No. V.

NBC No. 410 dated April 28, 1989 provides:

3.1. Overtime services rendered in all departments, bureaus, offices and agencies of the national government,
including state universities and colleges, government-owned and/or controlled corporations and local
government units shall be compensated as follows:
government units shall be compensated as follows:

3.1.1 As a general rule, the amount of overtime compensation which may be allowed an employee for a given
calendar year shall not exceed fifty percent (50%) of his basic salary;

Likewise, CAO No. 2-82 Section I, Paragraph 1 provides:

The District Collector may authorize Customs officials and employees of the District to render overtime services
when the interest of service so requires and the services rendered are to be paid by shipping companies, ship
owners/operators, importers, exporters, customs brokers or other parties served;

Section V-Limitation of Continuous Overtime Service and Overtime Allowance Period, likewise, states that:

Paragraph 1-No employee shall be allowed to render continuous services at one time for more than eighteen hours,
including regular time and ten hours straight overtime on Sundays and Holidays, which shall be followed by a relief
interval of six hours rest for which no overtime pay shall be collectible except in the following cases:

a) When an employee is assigned at an outport and no substitute is available;

b) When the vessel is scheduled to sail but does not sail on the scheduled time, the overtime services of Customs
personnel may be extended;

c) When an employee is waiting for its relief but no relief is available; and

d) When the relief is not possible because of continuous assumption of responsibility until completion of the
particular assignments involved. (Underscoring supplied)

Applying the foregoing provisions to the case at bar, it is clear that Mesdames Obispo and Marinay rendered overtime
services in the exigency of the service beyond the regular eight hour working time and, therefore, must be compensated in full.
NBC No. 410, a general rule, does not apply to customs employees who are covered by a specific rule, given the peculiarity of the
agency’s nature of work. It is CAO 2-82 that sets the limitation for customs employees as regards their overtime services and pay,
which does not provide a limitation as to the amount of overtime pay that customs employees can claim. As long as they rendered
overtime services based on the guidelines set forth under the said Customs rules and regulations, then, they are entitled to the
corresponding full amount of their overtime pay.

RULING

WHEREFORE, premises considered, Commission on Audit Regional Office No. V Decision No. 2011-N-013 dated
December 27, 2011 is hereby APPROVED. Accordingly, Notice of Disallowance Nos. 2009-002 and 2009-005, both dated
February 18, 2010, pertaining to the payment of excess overtime pay in the amounts of P48,957.01 and P3,554.25, respectively,
are LIFTED.

(SGD.) MICHAEL G. AGUINALDO


Chairperson

(SGD.) JOSE A. FABIA (SGD.) ISABEL D. AGITO


Commissioner Commissioner

Attested by:

(SGD.) NILDA B. PLARAS


Director IV
Commission Secretariat

Copy furnished:

Ms. Ma. Melissa G. Obispo


Customs Operations Officer

Ms. Asther S. Marinay


Utility Worker
Both of Bureau of Customs
Collection District No. V
Legazpi City
The Supervising Auditor
The Audit Team Leader
Audit Group D-Albay Province
Team 13-Bureau of Customs
Collection District No. V
Legazpi City

The Regional Director


COA Regional Office No. V
Rawis, Legazpi City

The Director
Information Technology Office
Systems and Technical Services Sector

The Assistant Commissioners


National Government Sector
Commission Proper Adjudication and Secretariat
Support Services Sector

All of this Commission

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ALSO3589ObispoCP.doc