Hulleza v Escalante, CA-GR SP No. 114642 Promulgated by Court of Appeals on Jan. 31, 2012. Facts: Leonilo B.

Hulleza was appointed City Engineer of Cadiz City, Negros Occidental on July 1, 2001. As city engineer, he is the head of the engineering department and in charge of all engineering and public works of the City of Cadiz. Mayor Escalante, Jr. issued two (2) Memorandum Orders which authorized Melecio D. Bacomo, City Planning and Development Coordinator, to sign documents which includes preparation of program, implementation and payment of all infrastructure projects of the City regardless of the source of funds. In view of the foregoing Memoranda, payments for the projects were released to the contractors concerned even without the required Certificate of Completion signed by the Hulleza. Hulleza also questioned the actuation of Mrs. Delilah Fernandez, the City Accountant of Cadiz, allowing payment of projects to contractors even without his signature appearing in the Certificate of Completion. He later on filed a complaint against Mrs. Fernandez before the Ombudsman of Cebu City but Mrs. Fernandez did not show up in the Conference. On July 2, 2007, Mayor Escalante issued Memorandum Order No. 112-SGE-20075, placing Hulleza under floating status until further notice. On the same day, Mayor Escalante issued another Memorandum Order designating Engineer Lauro Napud (Napud) as Officer-in-Charge of the City Engineer's Office. Hulleza filed a Complaint at the Office of the President against Mayor Escalante for Abuse of Authority, Dishonesty and Dereliction of Duty. This complaint was later dismissed by the Office of the President on the ground the Hulleza was not able to establish the validity of the charges under the requisite standard of substantial evidence. Issues/Held: (1) WON the issuance of the Floating Status Memorandum was in accordance with law. NO, it violated Section 2(3), Article IX-B of the 1987 Constitution and Article IX, Section 36 of P.D. No. 807 (Civil Service Decree of the Philippines). (2) WON Hulleza was constructively dismissed. Yes, the Court cited the case of Reyes vs. Belisario, G.R. No. 154652, August 14, 2009. (3) WON Hulleza is entitled to reinstatement with corresponding payment of RATA. Yes, Hulleza is entitled to reinstatement but he is only entitled to his RATA for a maximum of five years from the time of his floating status. Ratio: (1) Section 2(3), Article IX-B of the 1987 Constitution mandatorily dictates that, No officer or employee of the civil service shall be removed or suspended except for cause provided by law. Article IX, Section 36 of P.D. No. 807 (Civil Service Decree of the Philippines) likewise provides that, No officer or employee in the Civil Service shall be suspended or dismissed except for cause as provided by law and after due process. Loss of trust and confidence and the existence of a pending case are not among the valid grounds provided by law for removing or dismissing an employee from service. Moreso, records failed to show that petitioner was accorded due process prior to the issuance of the Floating Status Memorandum.

Moreover, a careful reading of the assailed Order reveals that the floating status of petitioner does not contain a definite date or period of duration. It simply states petitioner is hereby placed under floating status until further notice. Stated otherwise, petitioner's floating status shall be for an indefinite date and dependent on the discretion or mercy of respondent who may or may not issue an order restoring him to his former position. Instead of issuing the Floating Status Memorandum, the most prudent and appropriate action the respondent could have done was to place petitioner on preventive suspension pending the trial of the malversation case he filed against the latter. (2) The Court said in Reyes vs. Belisario: Additionally, the reassignments involved a reduction in rank as petitioners were consigned to a floating assignment with no specificity as to functions, duties, and responsibilities resulting in the removal from their supervision over their regular staff, subordinates, and even offices. Finally, the subsequent Order of respondent Administrator directing petitioners to desist from performing and exercising the functions of their respective positions constituted constructive dismissal. (3) In CSC v Gentalian, G.R. No. 152833, May 9, 2005, the Court held: An illegally dismissed government employee who is later ordered reinstated is entitled to backwages and other monetary benefits from the time of her illegal dismissal up to her reinstatement. The argument of Mayor Escalante that Hulleza is not entitled to RATA because a pre-requisite to its grant is the actual performance of duties and responsibilities in not meritorious. His reliance on a DBM Circular and the General Appropriations Act is misplaced. It is clear from the records that the issuance of a floating assignment to Hulleza has effectively prevented him from actively performing his duties as City Engineer. Hence, under this circumstance, he is still entitled to receive his RATA because his inability to perform the functions of his office is beyond his control and not of his own volition. Also, the Supreme Court in the case of Department of Budget and Management vs. Leones, explained that the GAA has no application to a local government official because their compensation and allowances are funded by their local appropriation laws. Dispositive: Mayor Escalante is guilty of abuse of authority in the performance his function beyond the contemplation of law by issuing the Floating Status Memorandum which amounted to the constructive dismissal of Hulleza. However Mayor Escalante is not guilty of the charge of Dishonesty and Dereliction of Duty for failure of Hulleza to prove the charges under the requisite standard of substantial evidence. Hulleza is reinstated with payment of monthly RATA for five years reckoned from the time he was placed on floating status.