The Court of Appeals (CA) has reversed on a technicality a lower court decision ordering the management of the Manila International Airport Authority (MIAA) to integrate the cost-of-living allowance (COLA) and amelioration pay into the basic salaries of the more than 1,500 airport workers nationwide.

In a 10-page decision penned by Associate Justice Amy Lazaro-Javier and concurred in by Associate Justices Rebecca De Guia-Salvador and Sesinando Villon, the CA’s Fifth Division granted the appeal filed by MIAA “on ground of due process.”

The appellate court explained that the Pasay City Regional Trial Court (RTC), Branch 119, should have dismissed outright the petition of Samahang Manggagawa sa Paliparan ng Pilipinas for its failure to include the Department of Budget and Management (DBM) as defendant being an “indispensable party” to the case.

“As a real party in interest, DBM stands to be injured by the judgment in the case. It is well-settled that if a suit is not brought in the name of or against the real party in interest, it is dismissible on the ground that the complaint states no cause of action,” the CA ruled.

“Concomitantly, the case should have been dismissed outright for failure to implead the DBM as party defendant,” it added.

The CA said the DBM has the right to be heard on the issue since it is the government agency primarily tasked to enforce Republic Act (RA) 6758 or the Salary Standardization Law and its implementing rules.

The appellate court noted that it is also the DBM which is in charge of all disbursements of public funds, including the claim of airport workers for COLA and amelioration allowance.

However, the airport employees believe there was no basis to sue the DBM along with the MIAA considering that it was the budget department which issued in 1999 a circular directing the integration of their COLA and amelioration pay into the basic salaries.

Court records showed that airport workers filed a petition before the Pasay court seeking to compel MIAA, then headed by its general manager Alfonso Cusi, to implement Sections 4.1 and 4.2 of DBM Corporate Compensation Circular No. 10 series of 1999, by adding the COLA and amelioration  allowance into their basic salaries from July 16, 1999 up to the present.

In a decision issued on Sept. 18, 2006, the Pasay RTC granted the petition and sustained the arguments of the airport workers that the inclusion of COLA and amelioration allowance in their basic salary is mandated under RA 6758.

The lower court then ordered MIAA to appropriate funds to pay for their COLA and amelioration allowance that were not included to their basic salaries starting July 16, 1999 up to present. But the CA said the RTC ruling is void as it was issued in violation of the DBM’s right to due process.