The Supreme Court affirmed that the National Electrification Administration (NEA) has primary jurisdiction over disputes involving the retirement benefits of electric cooperative general managers, as established in Dela Cruz v. First Bukidnon Electric Cooperative, Inc. (FIBECO). This ruling reinforces NEA’s authority to supervise and regulate electric cooperatives, including their officers. The court clarified that an electric cooperative general manager, dismissed for cause, forfeits retirement benefits, further emphasizing accountability within the electric cooperative system.

When Dismissal Dims Retirement Dreams: Who Decides the Fate of an Electric Cooperative Manager’s Benefits?

Engr. Jose S. Dela Cruz, formerly the general manager of First Bukidnon Electric Cooperative, Inc. (FIBECO), sought retirement benefits after reaching retirement age. However, FIBECO denied his application, citing his prior dismissal due to administrative offenses. The core legal question revolved around determining the proper jurisdiction to decide Dela Cruz’s claim: was it the labor tribunals (Labor Arbiter and National Labor Relations Commission) or the NEA?

The dispute began with an administrative complaint against Dela Cruz, leading to his dismissal, which the NEA confirmed. While illegal dismissal cases were being contested, Dela Cruz reached retirement age and applied for retirement benefits, believing he was entitled to them based on FIBECO resolutions and NEA memoranda. FIBECO argued that his dismissal disqualified him and that the NEA, not labor tribunals, had jurisdiction. This jurisdictional issue became the focal point of the legal battle.

The Labor Arbiter initially dismissed Dela Cruz’s claim for lack of jurisdiction, siding with FIBECO. The NLRC reversed this, asserting the labor tribunal’s jurisdiction over retirement benefit claims and remanding the case. Despite the NLRC’s resolution, the LA maintained that the NEA held exclusive jurisdiction. This inconsistency led to further appeals and ultimately reached the Court of Appeals (CA). The CA, while acknowledging the finality of the NLRC’s ruling on jurisdiction, denied Dela Cruz’s claim, citing his valid dismissal, which barred him from receiving retirement benefits.

Dela Cruz then elevated the matter to the Supreme Court, challenging the CA’s reliance on the earlier ruling that upheld his dismissal’s validity. He argued that the previous case only addressed the jurisdictional issue between the LA and NEA, not the merits of his dismissal. FIBECO maintained that the NEA had primary jurisdiction and supported the denial of benefits due to the valid dismissal.

The Supreme Court addressed two key issues: first, whether the CA erred in upholding the labor tribunal’s jurisdiction; and second, whether Dela Cruz was entitled to retirement benefits. The Court emphasized that jurisdiction is conferred by law and cannot be acquired by waiver or erroneous belief. The NLRC’s ruling on jurisdiction, even if not questioned, did not vest the labor tribunal with the authority to hear the claim if the law provided otherwise.

The Court then delved into the legal framework. Presidential Decree (PD) No. 269, as amended, and Republic Act (RA) No. 10531 clearly empower the NEA to supervise the management and operations of all electric cooperatives. Section 6 of RA No. 10531 grants the NEA the authority to issue rules and regulations, conduct investigations, and implement disciplinary measures affecting electric cooperatives and their officers. This broad authority includes resolving disputes related to the effective implementation of the Act.

Furthermore, Section 7 of the Implementing Rules and Regulations of RA No. 10531 explicitly grants the NEA primary and exclusive jurisdiction over administrative cases involving complaints against electric cooperative officers, including General Managers. This jurisdiction extends to disputes relating to the implementation of the Act. Thus, the Supreme Court underscored the NEA’s power to formulate and enforce rules concerning the retirement benefits of electric cooperative general managers, as demonstrated by NEA Memorandum No. 2005-015, which Dela Cruz based his claim on.

The court also cited the established principle that when a law confers jurisdiction, all incidental powers necessary for its effective exercise are included. Because the NEA has the power to regulate and supervise, it also has the power to resolve disputes about retirement. Therefore, the CA erred in affirming the labor tribunal’s jurisdiction over Dela Cruz’s retirement benefits claim.

Turning to the second issue, the Supreme Court affirmed the validity of Dela Cruz’s dismissal. The Court pointed out that the earlier case, G.R. No. 229485, upheld the NEA’s jurisdiction over the termination dispute, and the NEA’s Resolution No. 79, which dismissed Dela Cruz, had become final and executory. Therefore, the CA did not err in recognizing the validity of his dismissal.

The finality of Dela Cruz’s dismissal had significant implications on his retirement benefits. Section 3(a), Rule VII of the Rules of Procedure of the NEA explicitly states that the penalty of dismissal carries with it the forfeiture of retirement benefits. This rule reflects a policy aimed at maintaining integrity and accountability within electric cooperatives. Since NEA Resolution No. 79 did not provide for Dela Cruz’s entitlement to retirement benefits, the CA rightfully deleted the NLRC’s award of such benefits.

FAQs

What was the key issue in this case?	The central issue was determining which body, the labor tribunals or the National Electrification Administration (NEA), had jurisdiction over the retirement benefits claim of a dismissed electric cooperative general manager.
What did the Supreme Court decide regarding jurisdiction?	The Supreme Court ruled that the NEA has primary and exclusive jurisdiction over administrative matters involving electric cooperative general managers, including claims for retirement benefits.
Why does the NEA have jurisdiction over these claims?	The NEA’s jurisdiction stems from its broad supervisory and regulatory powers over electric cooperatives, as granted by Presidential Decree No. 269, Republic Act No. 10531, and related implementing rules.
What happens to retirement benefits if a general manager is dismissed?	According to the NEA’s rules, dismissal for cause typically results in the forfeiture of retirement benefits, unless otherwise specified in the decision.
What was the basis for denying Dela Cruz’s retirement benefits?	Dela Cruz was denied retirement benefits because he was validly dismissed from his position as general manager due to administrative offenses, and the NEA’s dismissal order did not provide for any exception regarding his retirement benefits.
Can parties agree to give a court jurisdiction if it doesn’t have it by law?	No, jurisdiction is determined by law and cannot be conferred by agreement, waiver, or erroneous belief of the parties or the court.
What is the effect of NEA Memorandum No. 2005-015?	NEA Memorandum No. 2005-015, the Revised Retirement Plan for Electric Cooperative General Managers, outlines the procedures and requirements for retirement benefits, further solidifying NEA’s regulatory role.
What is the significance of this ruling?	This ruling reinforces the NEA’s authority to oversee and regulate electric cooperatives, ensuring accountability and proper governance within the sector.

In conclusion, the Supreme Court’s decision in Dela Cruz v. FIBECO clarifies the NEA’s role in governing electric cooperatives and administering retirement benefits for their officers. This case underscores the importance of adhering to administrative processes and respecting the supervisory authority of regulatory bodies. It also highlights the consequences of dismissal for cause, particularly the potential forfeiture of retirement benefits.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: ENGR. JOSE S. DELA CRUZ, PETITIONER, VS. FIRST BUKIDNON ELECTRIC COOPERATIVE, INC. (FIBECO), RESPONDENT., G.R. No. 254830, June 27, 2022