Water utilities are not covered by republic act no

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Water utilities are not covered by Republic Act No. 10149, otherwise known as the “GOCC Governance Act of 2011.” This recognizes that despite being government- owned or controlled corporations, water utilities are governed by a special law, that is, Presidential Decree No. 198 or the “Provincial Water Utilities Act of 1973.” Given that water utilities are government- owned or controlled corporations existing under the Provincial Water Utilities Act of 1973, the question whether water utilities are covered by the Salary Standardization Law remains. The Salary Standardization Law applies to all government positions, including those in government-owned or controlled corporations, without qualification. The exception to this rule is when the government-owned or controlled corporation’s charter specifically exempts the corporation from the coverage of the Salary Standardization Law. To resolve this case, We examine the provisions of Presidential Decree No. 198 exempting water utilities from the Salary Standardization Law. The petitioner asserts that it is Section 23 of Presidential Decree No. 198, as amended, which grants water utilities this exemption. We are not convinced that Section 23 of Presidential Decree No. 198, as amended, or any of its provisions, exempts water utilities from the coverage of the Salary Standardization Law. In statues subsequent to Republic Act No. 6758, Congress consistently provided not only for the power to fix compensation but also agency’s or corporation’s exemption from the Salary Standardization Law. If Congress had intended to exempt water utilities from the coverage of the Salary Standardization Law and other laws on compensation and position classification, it could have expressly provided in Presidential Decree No. 198 an exemption clause similar to those provided in the respective charters of the Philippine Postal Corporation, Trade Investment and Development Corporation Land Bank of the Philippines, Social Security System, Small Business Guarantee and Finance Corporation, Government Service Insurance System, Development Bank of the Philippines, Home Guaranty Corporation, and the Philippine Deposit Insurance Corporation. Congress could have amended Section 23 of Presidential Decree No. 198 to expressly provide that the compensation of a general manager is exempted from the Salary
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POLITICAL LAW CASE DIGESTS 158 Standardization Law. However, Congress did not. Section 23 was amended to emphasize that the general manager “shall not be removed from office, except for cause and after due process.” This does not mean that water utilities cannot fix the compensation of their respective general managers. Section 23 of Presidential Decree No. 198 clearly provides that a water utility’s board of directors has the power to define the duties and fix the compensation of a general manager. However, the compensation fixed must be in accordance with the position classification system under the Salary Standardization Law.
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