NPC EMPLOYEES CONSOLIDATED UNION (NECU), NPC EMPLOYEES AND WORKERS UNION (NEWU)-MINDANAO REGIONAL COUNCIL, NPC EMPLOYEES AND WORKERS UNION (NEWU)-NORTHERN LUZON REGIONAL COUNCIL…

NPC Employees Consolidated Union versus National Power Corporation

The Case

This is a petition for certiorari, prohibition, and mandamus under Rule 65 of the 1997 Rules of Civil Procedure, as amended, brought by the NPC Employees Consolidated Union, the NPC Employees and Workers Union Mindanao Regional Council, the NPC Employees and Workers Union Northern Luzon Regional Council, and several individual union officers and members against the National Power Corporation, the National Power Board, the Department of Energy, and their responsible officials. The petitioners assail a series of board resolutions, a circular, and a memorandum order approving the privatization and restructuring program of the National Power Corporation and its organizational realignment, claiming that these issuances caused the dismissal or dislocation of more than two thousand employees in violation of their security of tenure under the Civil Service. The case matters because it teaches how the Supreme Court treats a challenge to executive action that a subsequent statute has expressly authorized, and how the political question doctrine shields the wisdom of State policy from judicial scrutiny.

Procedural History

The petitioners went directly to the Supreme Court in an original action, filing a petition for certiorari, prohibition, and mandamus under Rule 65, alleging grave abuse of discretion amounting to lack of jurisdiction on the part of the National Power Corporation and the National Power Board. While the case was pending, Congress enacted the Electric Power Industry Reform Act, and the petitioners filed a Supplemental Petition challenging the constitutionality of that law. Several groups and individuals moved to be admitted as additional petitioners, adopting the Supplemental Petition in full, but the Court denied that motion, holding that the movants had no interest in the subject matter and were not real parties in interest. Because the Court merely noted the Supplemental Petition, it resolved only the issues raised in the original petition.

Facts

The National Power Corporation is a government-owned and controlled corporation, originally created in November 1936 and later given a revised charter, tasked with the development of hydroelectric generation and the production and transmission of electric power on a nationwide basis. Under the administration of President Marcos, the State monopolized power generation through the Corporation, and later, under President Aquino, the private sector was allowed to participate in generation through build-operate-transfer and similar schemes. Faced with some of the highest power rates in Asia and demand growing at ten percent annually, the government chose legislative restructuring of the power industry rather than additional capitalization for the Corporation.

On December 16, 1997, the National Power Board approved the Corporation's Privatization and Restructuring Program, a three-phase strategy culminating in the separation of personnel from government and their transfer to private companies. On February 10, 1999, the Board approved the 1999 Organizational Realignment and Reorganization Program, which was to be implemented on a simulation basis, for testing purposes only, and the Corporation carried out this simulated realignment through a circular dated February 17, 1999. On March 20, 2000, a memorandum order created a steering committee on corporate reorganization, and on March 27, 2000, the Board approved the realigned organizational structure.

Believing that these actions amounted to an actual reorganization that would result in the illegal dismissal of thousands of employees, the petitioners filed this petition, invoking their security of tenure. On June 8, 2001, while the case was pending, President Gloria Macapagal-Arroyo signed into law the Electric Power Industry Reform Act, which took effect on June 26, 2001 and expressly authorized the privatization of the assets of the National Power Corporation and its restructuring.

Issues

• Whether or not the restructuring of the National Power Corporation was done without legislative authority and is therefore null and void.
• Whether or not the respondents acted without or in excess of jurisdiction in issuing the challenged resolutions, circular, and memorandum order.
• Whether or not the restructuring violated the security of tenure of the employees under Section 2, paragraph 3, Article IX-B of the Constitution.
• Whether or not the reorganization was done in bad faith and is therefore invalid.
• Whether or not the core issue of the validity of the privatization of the National Power Corporation has been rendered moot and academic by the enactment of the Electric Power Industry Reform Act.

Applicable Provisions

Section 2, paragraph 3, Article IX-B of the Constitution provides:

No officer or employee of the civil service may be removed or suspended except for cause provided by law.

This is the security of tenure guarantee on which the petitioners anchored their claim that the realignment would illegally dismiss thousands of employees.

Section 2 of the Electric Power Industry Reform Act provides:

Declaration of Policy. It is hereby declared the policy of the State: (f) To provide for an orderly and transparent privatization of the assets and liabilities of the National Power Corporation (NPC).

This declaration of policy shows that Congress itself adopted privatization as State policy, displacing the premise of the petition.

Section 3 of the same law provides:

Scope. This Act shall provide a framework for the restructuring of the electric power industry, including the privatization of the assets of NPC, the transition to the desired competitive structure, and the definition of the responsibilities of the various government agencies and private entities.

This provision confirms that the restructuring the petitioners assailed is precisely what the statute now mandates.

Section 47 of the same law provides:

NPC Privatization. Except for the assets of the SPUG, the generation assets, real estate, and other disposable assets as well as IPP contracts of NPC shall be privatized in accordance with this Act.

This provision expressly commands the privatization of the Corporation's assets, rendering the challenge to the earlier board issuances of no practical consequence.

Ruling

On the first issue, the Court held that the enactment of the Electric Power Industry Reform Act, which took effect on June 26, 2001, has rendered the core issue of the validity of the privatization moot and academic. The Court ruled that a case is moot and academic when there is no more actual controversy between the parties or no useful purpose can be served in passing upon the merits, and that courts of justice are constituted to pass upon substantial rights and will not consider questions whose resolution will have no practical use or value.

On the second issue, the Court likewise found the challenge to the board issuances overtaken by the statute, which mandated not only the restructuring of the entire electric power industry but also the privatization of the Corporation. The Court quoted the declaration of policy, the scope provision, and the privatization provision of the law to show that Congress had expressly authorized what the petitioners attacked.

On the third issue, the security of tenure claim could no longer be adjudicated on the merits, because the statutory framework had superseded the factual and legal premises of the petition. The Court declined to pass upon the merits of a controversy that no longer presented a live dispute.

On the fourth issue, the allegation of bad faith in the reorganization was similarly rendered academic by the enactment of the law.

On the fifth issue, the Court answered in the affirmative and dismissed the petition. It added that whether the State's policy of privatizing the electric power industry is wise, just, or expedient is not for the Court to decide, because the formulation of State policy is a legislative concern, and the primary judge of the necessity, adequacy, wisdom, reasonableness, and expediency of any law is primarily the function of the legislature.

Doctrine

A case is moot and academic when there is no more actual controversy between the parties or no useful purpose can be served in passing upon the merits, and courts will not resolve questions that will have no practical use or value.

The formulation of State policy is a legislative concern. The primary judge of the necessity, adequacy, wisdom, reasonableness, and expediency of any law is the legislature, not the courts.

When a subsequent statute expressly authorizes the very executive action being challenged, the constitutional challenge to that action is overtaken and rendered moot, and the security of tenure guarantee under Section 2, paragraph 3, Article IX-B of the Constitution cannot be invoked to defeat a policy that Congress itself has ordained.

Disposition

The petition was denied for being moot, with costs against the petitioners.

Remember This

Memorize this line: the formulation of State policy is a legislative concern, and the primary judge of the necessity, adequacy, wisdom, reasonableness, and expediency of any law is the legislature. Examiners use this case to test the moot and academic doctrine and the political question doctrine, especially where a supervening statute authorizes the challenged executive act.