Legal Basis on the grant of CNA Incentives
Government employees are authorized to receive CNA incentives under Administrative Order No. 135, s. 2005, Congress Joint Resolution No. 4, s. 2009, specifically Item (4)(h)(ii)(aa), and Section 73 of the General Provisions of the General Appropriations Act (GAA) of FY 2021.
The Department of Budget and Management (DBM) is the agency authorized under AO No. 135 to formulate policies on the grant of CNA incentives. Thus, it issued Budget Circular No. 2021-3 to provide the guidelines on the grant of CNA incentives for Fiscal Year 2021.
Rules on the grant of CNA incentives
For 2021, the following are the rules in granting CNA incentives, pursuant to Section 73 of the 2021 GAA, as likewise indicated in Item 1.3 of BC No. 2021-3, to wit:
- There is a valid CNA executed between the agency and the recognized employee organization which includes a provision on cost-cutting measures to be undertaken collectively by the agency and its personnel;
- The one-time annual payment of CNA Incentive shall be made through a written resolution signed by agency representatives from both labor and management, and approved by the agency head;
- The CNA Incentive that may be granted shall be limited to the amount determined by the DBM; and
- The use of MOOE for the payment of CNA Incentive shall be subject to approval by the agency head and made only during the validity of appropriations. Any excess amounts therefrom after payment of the CNA Incentive shall revert to the General Fund.
Conditions on the grant of CNA incentives
The following are the conditions provided under BC No. 2021-3 in granting CNA incentives:
- There should be a valid and subsisting CNA executed between the representatives of the management and the employees’ organization
What is a CNA?
Collective Negotiation Agreement or CNA is a contract negotiated between an accredited employees’ organization as the negotiating unit and the employer/management on the terms and conditions of employment and its improvements that are not fixed by law.
Primer on CNA, Civil Service Commission
- The grant of the CNA Incentive must be stipulated in the CNA or in supplements thereof.
- The government agencies concerned should have accomplished their targets, as follows:
📌 For NGAs, including Constitutional Offices enjoying fiscal autonomy, SUCs, and GOCCs not covered by RA No. 101496, s. 2011 — should have accomplished, by September 30, 2021, at least an average of 70% of all the targets for all the organizational outcomes/ performance indicators under their respective FY 2021 budget approved by Congress, or the approved FY 2021 Corporate Operating Budget (COB), whichever is applicable.
📌 For GOCCs covered by RA No. 10149 — should have accomplished, by September 30, 2021, at least an average of 70% of all the targets under their respective Performance Scorecard, as agreed upon between the Governance Commission for GOCCs (GCG) and the GOCC pursuant to GCG Memorandum Circular No. 2017-027 dated June 30, 2017.
📌 For Local Water Districts — should have a positive net balance in the average net income for the period January 1 to September 30, 2021, to be validated by the Local Water Utilities Administration.
📌 For LGUs — should have accomplished, as of September 30, 2021, at least an average of 70% of all the targets under their programs/activities/projects approved in the LGU budget for FY 2021.
- The NGAs, including Constitutional Offices enjoying fiscal autonomy and SUCs, should have submitted to DBM their respective accountability reports as of September 30, 2021 pursuant to Commission on Audit (COA)-DBM Joint Circular No. 2014-18 dated July 2, 2014, as amended by COA-DBM JC No. 2019-19 dated January 1, 2019.
Who are entitled to CNA incentives?
The following civilian personnel occupying regular, contractual, or casual positions rendering services on full-time or part-time basis in national government agencies (NGAs), including Constitutional Offices enjoying fiscal autonomy, SUCs, GOCCs, LWDs, and LGUs, whether or not covered by Republic Act (RA) No. 67584 may be entitled to CNA incentives:
- Rank-and-file employees who are members of an employees’ organization accredited by the Civil Service Commission (CSC) as the sole and exclusive negotiating agent (hereinafter referred to as “negotiating agent”) in accordance with rules and regulations issued by the Public Sector Labor Management Council (PSLMC);
- Rank-and-file employees who are non-members of the CSC-accredited sole and exclusive negotiating agent but want to enjoy or accept benefits under the CNA, subject to payment of agency fee to the negotiating agent in accordance with PSLMC Resolution No. I5, s. 1993; and
- Those who perform managerial functions.
You May Want to Know: Who are prohibited from joining collective negotiations and therefore not entitled to CNA incentives?
How much CNA incentive may be granted (rate of CNA Incentives)?
According to the guidelines, the CNA Incentive shall not exceed P25, 000 per qualified employee.
However, the rate of CNA incentive shall not be pre-determined in the CNA since it is subject to compliance with the conditions setforth under the guidelines and the availability of the allowable allotments.
The CNA Incentive may be given equally to all qualified employees or at varying rates in consideration of the employee’s or his/her office’s contribution to the accomplishment of performance targets, efficiency, productivity, or profitability, as determined by the agency head upon recommendation of the
Employees’ Organization-Management Consultative Committee.
You May Want to Know: Is the CNA Incentive taxable?
Allowable source of funds for CNA Incentives
The CNA incentives are sourced solely from the following MOOE items after considering the FY 2021 operating requirements:
- Communication Expenses;
- Repairs and Maintenance;
- Supplies and Materials Expenses;
- Transportation and Delivery Expenses;
- Traveling Expenses; and
- Utility Expenses.
The above sources of CNA incentives should have become available as a result of cost-cutting and systems improvement measures undertaken collectively by the agency and its personnel, as identified in their respective CNA and supplements thereof.
These sources of funds are applicable to NGAs, including Constitutional Offices and SUCs, GOCCs, local water districts and LGUs.
Conversely, the following sources of funds are not allowed to be used to pay or increase CNA incentives:
- Balances of allotment for programs/activities/projects which were later discontinued or deferred; and
- Released allotments intended for acquisition of goods and services to be distributed/delivered to, or to be used by agency clients.
- Items under Personnel Services, other MOOE, and/or Capital Outlay.
When to grant or pay CNA incentives?
The CNA Incentive for the year shall be a one-time benefit to be granted not earlier than December 15, 2021.
Accounting for CNA incentives
The amount paid as CNA Incentive shall be recorded in the agency books under the account code “Collective Negotiation Agreement Incentive-Civilian,” “Other Benefits,” and “Collective Negotiation Agreement Incentive” for NGAs, LGUs, GOCCs, and LWDs, respectively.
Moreover, as provided under Section 73(d) of the General Provisions of the FY 2021 GAA, the payment of the CNA Incentive shall be subject to the approval by the Agency head and made only during the validity of appropriations. Any excess amount from the allowable MOOE allotments after payment of the CNA Incentive shall revert to the General Fund.
Agencies shall utilize the Modification Advice Form (MAF) for recording purposes of the payment of CNA Incentive in the agency books, as prescribed under National Budget Circular No. 583 dated January 4, 2021.
Modification Advice Form
Reporting Requirements
NGAs and SUCs are required to submit online to the DBM’s Budget and Management Bureau or Regional Office concerned not later than January 31, 2022, the annual report on the grant of the CNA Incentive using the following template.
Report on the Payment of Collective Negotiation Agreement Incentives
