You are on page 1of 58

PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT

CORPORATION/FRANCIS PALAFOX,petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and FRANCISCO MATA, respondents.

NOCON, J.:
Texans used to complain that when they tried to dig for water, all they struck was oil. On the
other hand, Filipinos have been heard to complain that every time they tried to dig for oil, all
they got was water and steam, to boot. In the 1970's, with the energy crisis having
become unmanageable, the government decided to harness steam to drive turbine engines
to generate electricity. When petitioner Philippine National Oil Company-Energy
Development Corporation started to develop the Bacon-Manito Geothermal Project in
Bonga, Sorsogon, one question which arose is whether or not an employee contracted to
drive for petitioner during the construction of the steam wells is considered a project
employee or a regular employee.
As summarized by the Solicitor General, the facts leading to the filing of the instant petition,
are as follows:
On November 11, 1980, petitioners hired private respondent Francisco Mata
as Service Driver on a daily wage of P39.74. Assigned to the PNOC-EDA
Bacon-Manito Geothermal Project in Bonga, Sorsogon, Sorsogon, he worked
there until September 1, 1985. On this day, his employment was terminated
through a letter advice dated September 1, 1985, signed by his supervisor,
B.B. Balista, allegedly for "contract expiration" (Exh "A", p. 10, Records),
even when the project was still a continuing one.
On November 8, 1985, private respondent complained of illegal dismissal,
and accused petitioners of withholding his backwages, overtime pay, and
separation pay (p. 1, Records). A dismissal of the complaint was sought on
jurisdictional ground, petitioner company asserting that it is a governmentowned and controlled corporation, hence, its employees must be governed
by the Civil Service Law and not by the Labor Code, and citing National
Housing Corporation v. Benjamin Juco and the NLRC (134 SCRA 176).
On February 26, 1987, Labor Arbiter Voltaire A. Balitaan dismissed the
complaint for lack of jurisdiction (pp. 116-118, Records). On appeal to public
respondent, however, the First Division, on September 16, 1988, set aside
the Labor Arbiter's decision, assumed jurisdiction over the case, and directed
the Arbitration Branch to conduct further proceedings (pp. 127-131, Records).
Petitioners maintained that private respondent was a project employee
whose employment was for a definite period and coterminous with the project
for which he was hired. It was for this reason that his employment was
terminated.
Finding for private respondent, Executive Labor Arbiter Vito C. Bose's
Decision of August 23, 1990, held:

There is no dispute that complainant was hired as service


driver assigned in the Administrative Department of
respondent since November 11, 1980 at its Bacon-Manito
Geothermal Project working regularly from 6:00 A.M. to 6:00
P.M. Monday thru Saturday until he was dismissed on
September 15, 1985 for alleged contract expiration. As driver
assigned in the Administrative Department servicing or
performing activities which are usually necessary or at least
desirable in the business of the company. He was actually a
company driver and not a contractual project employee as
what respondent perceived him to be.
Hence, contrary to the provisions of the Employment
Contract, complainant is a regular and permanent employee
of respondent entitled to the protective mantle of the security
of tenure provisions of the Labor Code, . . . .
. . . We entertain no doubt that respondent is guilty of illegal
dismissal for having terminated the services of complainant
without just or authorized cause. The alleged contract
expiration is not one of the valid or authorized causes for
dismissal . . . (pp. 6-7, Decision, pp. 175-176, Records).
and concluded:
WHEREFORE, judgment is hereby rendered finding respondent company
guilty of illegal dismissal and ordering the same to pay complainant thru this
Branch within ten (10) days from receipt of this order, the following:
1. Backwages P51,408.00
2. Overtime pay 2,100.00
3. Separation pay 3,570.00
4. Moral damages 20,000.00
5. Exemplary damages 20,000.00
6. Attorney's fee (10% of the award) 5,350.00

P102,428.80
=========
SO ORDERED (p. 8, Decision, p. 177, Records).
Dissatisfied, petitioners appealed to public respondent, on the following
grounds:
A. THAT THE EXECUTIVE LABOR ARBITER ERRED WHEN IT RULED
THAT FRANCISCO MATA WAS A REGULAR EMPLOYEE;
B. WHEN IT RULED THAT FRANCISCO MATA WAS TERMINATED
ILLEGALLY; and

C. WHEN IT AWARDED BACKWAGES, OVERTIME PAY, MORAL


DAMAGES, EXEMPLARY DAMAGES, AND ATTORNEY'S FEES' (P. 178,
Records).
Public respondent, through its Third Division, modified the appealed decision
in its Resolution of November 29, 1990, (as
follows) . . . . . .
xxx xxx xxx
WHEREFORE, premises considered, except to the awards of
backwages and separation pay which are hereby AFFIRMED,
all other claims are DISMISSED for lack of merit (pp. 4-7,
Resolution, annex "H", Petition).
On January 15, 1991, petitioners filed a Motion for Reconsideration based on
practically the same grounds (Annex "I", Petition). This was denied for lack of
merit by public respondent in the second question Resolution issued on
February 15, 1991 (Annex "J", Petition). 1
Thus, petitioners filed this petition for certiorari.
The three (3) issues presented to this Court are whether or not public respondent National
Labor Relations Commission committed grave abuse of discretion amounting to lack of
jurisdiction when it ruled that Francisco Mata was (a) a regular employee and (b) that he was
illegally terminated; and (c) when it awarded Francisco Mata backwages and separation
pay. 2
I
Petitioners claim that the fixed contract of employment which private respondent entered into
was read, translated to, comprehended and voluntarily accepted by him. No evidence was
presented to prove improper pressure or undue influence when he entered, perfected and
consummated said contract. And even if private respondent's services were necessary and
desirable in petitioner's business, nevertheless private respondent's term was limited, citing
as authority Brent School v. Zamora. 3
Private respondent, while admitting such fixed term contract of employment, counters that
the same was used as a vehicle to circumvent the law on security of tenure, as provided not
only by the Labor Code but likewise guaranteed by the Constitution.
Much can be learned from the leading case of Brent School v. Zamora, supra. In this case,
the Court analyzed the development of Article 280 from its first version as Article 319 and its
amendments under PD 850 and BP 130 and made the following observation:
Accordingly, and since the entire purpose behind the development of
legislation culminating in the present Article 280 of the Labor Code clearly
appears to have been, as already observed, to prevent circumvention of the
employee's right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral agreements
conflicting with the concept of regular employment as defined therein should

be construed to refer to the substantive evil that the Code itself has singled
out: agreements entered into precisely to circumvent security of tenure. It
should have no application to instances where a fixed period of employment
was agreed upon knowingly and voluntarily by the parties, without any force,
duress or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent, or where it satisfactorily
appears that the employer and employee dealt with each other on more or
less equal terms with no moral dominance whatever being exercised by the
former over the latter. Unless thus limited in its purview. the law would be
made to apply to purposes other than those explicitly stated by its framers; it
thus becomes pointless and arbitrary, unjust in its effects and apt to lead to
absurd and unintended consequences. 4 (Emphasis supplied)
As can be gleaned from the said case, the two guidelines, by which fixed contracts of
employments can be said NOT to circumvent security of tenure, are either:
1. The fixed period of employment was knowingly and voluntarily agreed
upon by the parties, without any force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstances
vitiating his consent;
or:
2. It satisfactorily appears that the employer and employee dealt with each
other on more or less equal terms with no moral dominance whatever being
exercised by the former on the latter.
Does petitioner's fixed contract of employment with private respondent satisfy any of the
guidelines above stated?
Yes, it does.
A careful examination of the last Employment Contract signed by respondent Mata shows
that he indeed signed the same. 5 In fact petitioners claim that all the previous employment
contracts were also translated for the benefit of private respondent, and it was only when he
understood the same that he signed said contracts. As per Guideline No. 1, given the
circumstances behind private respondent Mata's employment, private respondent is a project
employee.
As explained by petitioners in their memorandum:
[I]t must be clarified that the Bacon-Manito Geothermal Project is one big
"project consisting of several phases, namely the exploration, development
and operation stages. Mata was employed in connection with the wellcompletion project which was part of the exploration stage. Said wellcompletion which follows a drilling operation is now finished and completed.
The other projects in the development stage are still on-going but the project
for which Mata's services were required is now complete and
terminated. . . . 6 (Emphasis in petitioner's memorandum)
Paraphrasing Rada v. NLRC, 7 it is clear that private respondent Mata is a project employee
considering that he does not belong to a "work pool" from which petitioner PNOC would draw

workers for assignment to other projects at its discretion. It is likewise apparent from the facts of
the case that private respondent Mata was utilized only for one particular project, the wellcompletion project which was part of the exploration stage of the PNOC
Bacon-Manito Geothermal Project. Hence, private respondent Mata can be dismissed upon the
termination of the projects as there would be no need for his services. We should not expect
petitioner to continue on hiring private respondent in the other phases of the project when his
services will no longer be needed. 8

II
As a project employee, was he legally terminated?
Paragraph No. 5, Policy Instruction No. 20, 9 reads, as follows:
If a construction project or any phase thereof has a duration of more than one
year and a Project employee is allowed to be employed therein for at least
one year, such employee may not be terminated until the completion of the
project or of any phase thereof in which he is employed without a previous
written clearance from the Secretary of Labor. If such an employee is
terminated without a clearance from the Secretary of Labor, he shall be
entitled to reinstatement with backwages.
As to the manner private respondent was terminated, public respondent NLRC found it to be
as follows:
[I]n the case of Ochoco vs. NLRC, 120 SCRA 774, the Supreme Court ruled
that "if petitioner was employed as a project employee, private respondent
should have submitted a report of termination to the nearest public
employment office every time his employment is terminated due to the
completion of each project as required by Policy Instruction No. 20.
Applying the (Ochoco) doctrine to the instant case, respondent corporation
should have filed as many reports of termination as there were construction
projects actually finished, considering that petitioner had been hired since
1980 up to 1985. Not a single report was submitted by the respondent
company. This failure to submit reports of termination convinced Us more that
petitioner was indeed a regular employee. 10
The records do not show that petitioners obtained the necessary written clearance to
terminate the contract of employment of private respondent Mata. The latter is. therefore,
entitled to reinstatement with backwages.
Considering, however, that the Bacon-Manito project has already been completed and is,
presumably, now operating, 11 reinstatement of private respondent is impossible. He is, however,
entitled to backwages and separation pay. For this purpose, We adopt the Executive Labor
Arbiter's computation as to how much backwages and separation pay private respondent will get,
as follows:
[S]ince at the time of his dismissal complainant was receiving P56.00 dally
wage then his backwages for three (3) years amounted to P51,408.00
computed as follows: P56.00 daily wage x 25.5 normal days work in a month
x 12 mos. x 3 years.

xxx xxx xxx


[W]e feel that reinstatement is no longer feasible or advisable hence,
separation pay equivalent to one-half month pay for every year of service
should take its place. Since, complainant started working with respondent on
November 11, 1980 and stopped on September 18, 1985 or five (5) years.
the complainant's separation pay should be P3,570.00 (P1,428.00 monthly
rate x 5 years + 2). 12
Note, that while We have reversed the decision of the public respondent, We still affirm the
granting of backwages and separation pay due to the fact that petitioners did not secure the
necessary written clearance from the Secretary of Labor in terminating private respondent
Mata. The dispositive portions of the public respondent's resolutions which. actually
constitute the resolutions of public respondent NLRC have to be affirmed.
WHEREFORE, the petition is DISMISSED. It is hereby ORDERED that petitioners pay
private respondent Mata P51,408.00 as backwages and P3,570.00 as separation pay.
SO ORDERED.
ZAMBOANGA CITY WATER DISTRICT, petitioner,
vs.
PRESIDING COMMISSIONER MUSIB M. BUAT, COMMISSIONERS LEON G. GONZAGA,
JR., and OSCAR N. ABELLA, and PRIVATE RESPONDENTS LUIS C. MARIANO, FELIX
G. LAQUIO, FRANCISCO C. OLIVEROS, MARITTA S. DELOS REYES, FRANCISBELLO
D. CRUZ, EXEQUIEL M. DAYOT, JR., ERIC A. DELGADO, RICARDO M. FERRER,
JOVITO DUHAYLUNGSOD, ANTONIO F. ALCANTARA, RICARDO M. CORTEZ,
TEOBALDO M. FLORES, ZOILO J. CAPUY, BERNARDINO T. ALDINETE, ANGIEL M.
ESPINA, WINIFRIDO P. CASIMIRO, ENRIQUE M. MANUEL, JR., JOSE P. ATILANO,
ANTONIO F. DELOS REYES, JR., ELEUTERIO S. TARROZA, ANTONIO B. DESPALO,
ROLANDO B. GARCIA, CESAR P. REYES, GENEROSO L. CODINO, MARIO E.
FERNANDO, BERNARDO B. GEROLAGA, ANTONIO F. VESAGAS, ANTONIO L. TUBIG,
SAILILLA A. ABDULLA, NOEL A. FERNANDO, SEVERIANO CASIMIRO, RODOLFO
DESCALZO, ARTEMIO DE LEON, and SANTIAGO FERRER, respondents.
Virginia M. Ramos for petitioner.
Abelardo Climaco, Jr. for private respondents.

QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set
aside the Resolutions dated October 24, 1991 and February 19, 1992 of the National Labor
Relations Commission (NLRC) in NLRC CA No. M-000352.
I

The Zamboanga City Water District, petitioner herein, is a government-owned and controlled
corporation engaged in the business of supplying water in the City of Zamboanga. Private
respondents are all employees of petitioner.
In March 1987, a strike occurred in the company. It was conducted and participated in by
private respondents, for which reason they were separated from their employment. Petitioner
thereafter filed on March 17, 1987 a complaint. before the Labor Arbiter to declare the said
strike illegal (NLRC Case No. RAB-IX-03-0090-87). The following day, March 18, the
Zamboanga Utilities Labor Union (ZULU), to which private respondents belonged, filed
before the Labor Arbiter, a complaint against petitioner for illegal dismissal and unpaid wages
(NLRC Case No. RAB-IX-03-0092-87).
The two cases were consolidated and heard together, and on April 19, 1988, a consolidated
decision was rendered by the Executive Labor Arbiter declaring both the strike and the
dismissal of private respondents illegal and ordering the reinstatement of private
respondents to their former positions, without loss of seniority rights and privileges, but
without back wages.
Petitioner appealed to the NLRC. On July 17, 1990, the NLRC, through respondent
Commissioners, affirmed the decision of the Executive Labor Arbiter, with the sole
modification that the strike leader, respondent Felix Laquio herein, be suspended from work
without pay for a period of six months, effective ten days from receipt of the decision.
Petitioner received a copy of the decision of the NLRC on August 27 (Rollo, p. 32). Three
days later, private respondents filed with the Executive Labor Arbiter a motion for execution
of the said decision. On September 24, the Executive Labor Arbiter granted the writ of
execution and ordered petitioner to reinstate all private respondents.
On September 28, this Court issued a restraining order in G.R. Nos. 95219-20 enjoining,
until further orders, the execution of the NLRC Decision dated July 17, 1990. However, on
March 13, 1991, we dismissed the petition, affirmed the NLRC Decision dated July 17, 1990
and lifted the restraining order granted earlier.
Petitioner received a copy of the decision of the Supreme Court on April 10 and on April 16, it
reinstated 27 of the respondent employees. On the same day, petitioner informed the
Executive Labor Arbiter that respondent Laquio would be reinstated on October 16 after the
expiration of Laquio's six-month suspension.
On April 17, private respondents filed a motion to compel the immediate reinstatement of
respondent Laquio and the payment of their back wages. According to private respondents,
the decision of the NLRC was executory immediately upon receipt by petitioner of a copy
thereof on August 27, 1990.
On May 17, the Executive Labor Arbiter issued an order denying private respondents'
motion. Private respondents then appealed to the NLRC (NLRC CA No. M-00352). On
October 24, the NLRC set aside the questioned order of the Executive Labor Arbiter and
ordered respondent Laquio's reinstatement, if not yet reinstated, and granted full back wages
to him from March 6, 1991 up to the day prior to his actual reinstatement; and to the other
private respondents from March 21, 1989 up to April 15, 1991, including the period of
effectivity of the temporary restraining order of this Court in G.R. Nos. 95219-20.

Petitioner moved for a reconsideration, which the NLRC however denied on February 19,
1992.
Hence, this petition.
II
Petitioner contends that the NLRC had no jurisdiction to issue the resolutions in question
because jurisdiction over labor disputes is vested in the Civil Service Commission. It also
argues that the NLRC committed grave abuse of discretion amounting to lack or in excess of
jurisdiction when it ordered the payment of the salaries of private respondent during the
effectivity of the restraining order of this Court in G.R. Nos. 95219-20.
There is no dispute that petitioner, a water district with an original charter, is a governmentowned and controlled corporation. The established rule is that the hiring and firing of
employees of government-owned and controlled corporations are governed by the provisions
of the Civil Service Law and Civil Service Rules and Regulations (Tanjay Water District v.
Gabaton, 172 SCRA 253 [1989]; Hagonoy Water District v. National Labor Relations
Commission, 165 SCRA 272 [1988]; National Housing Corporation v. Juco, 134 SCRA 172
[1985]; Baguio Water District v. Trajano, 127 SCRA 730 [1984]. Jurisdiction over the strike
and the dismissal of private respondents is therefore lodged not with the NLRC but with the
Civil Service Commission.
Nevertheless, petitioner never raised the issue of lack of jurisdiction before the Executive
Labor Arbiter, the NLRC or even this Court in G.R. Nos. 95219-20. In fact, petitioner itself
filed the complaint before the Executive Labor Arbiter in NLRC Case No. RAB-IX-03-009087, sought affirmative relief therefrom and even participated actively in the proceedings
below. It is only now in this case before us, after the NLRC ordered payment of back wages,
that petitioner raises the issue of lack of jurisdiction. Indeed, it is not fair for a party who has
voluntarily invoked the jurisdiction of a tribunal in a particular matter to secure an affirmative
relief therefrom, to afterwards repudiate and deny that very same jurisdiction to escape a
penalty (Ocheda v. Court of Appeals, 214 SCRA 629 [1992]; Royales v. Intermediate
Appellate Court, 127 SCRA 470 [1984]; Tijam v. Sibonghanoy, 23 SCRA 29 [1968]).
Petitioner is thus estopped from assailing the jurisdiction of the NLRC and is bound to
respect all the proceedings below.
The second issue involves the determination of when private respondents should be
reinstated as ordered by the decision of the Executive Labor Arbiter dated April 19, 1988.
Their salaries start to toll from said date.
Petitioner claims that private respondents, except respondent Laquio, were entitled to
reinstatement only after April 10, 1991 when it received a copy of the decision of the
Supreme Court in G.R. Nos. 95219-20. Petitioner reinstated said private respondents on
April 16, 1991. In the case of respondent Laquio, petitioner reinstated him on October 16,
1991 after the expiration of the six-month suspension.
Petitioner argues that the execution of the NLRC decision dated July 17, 1990 was
suspended by the temporary restraining order issued by this Court in G.R. Nos. 95219-20.
The Executive Labor Arbiter agreed with petitioner's contention.

The NLRC was of the view that private respondents should have been reinstated on March
21, 1989 and paid their back wages from that date to April 15, 1991 including the period of
effectivity of the temporary restraining order of this Court in G.R. Nos. 95219-20. Respondent
Laquio on the other hand, should have been reinstated on March 6, 1991 and paid his back
wages from said date up to the day prior to his actual reinstatement.
The reckoning date of March 21, 1989 used by the NLRC was the date of effectivity of R.A.
No. 6715, amending the third paragraph of Article 223 of the Labor Code which provides.
xxx xxx xxx
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal. The employee shall either
be admitted back to work under the same terms and conditions prevailing
prior to his dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay
the execution for reinstatement provided herein (Emphasis supplied).
xxx xxx xxx
Under the said provision of law, the decision of the Labor Arbiter reinstating a dismissed or
separated employee insofar as the reinstatement aspect is concerned, shall be immediately
executory, even pending appeal. The employer shall reinstate the employee concerned
either by: (a) actually admitting him back to work under the same terms and conditions
prevailing prior to his dismissal or separation; or (b) at the option of the employer, merely
reinstating him in the payroll. Immediate reinstatement is mandated and is not stayed by the
fact that the employer has appealed, or has posted a cash or surety bond pending appeal.
The issuance of the temporary restraining order in G.R. Nos. 95219-20 did not nullify the
rights of private respondents to their reinstatement and to collect their wages during the
period of the effectivity of the order but merely suspended the implementation thereof
pending the determination of the validity of the NLRC resolutions subject of the petition.
Naturally, a finding of this Court that private respondents were not entitled to reinstatement
would mean that they had no right to collect any back wages. On the other hand, where the
Court affirmed the decision of the NLRC and recognized the right of private respondents to
reinstatement, as in G.R. Nos. 95219-20, private respondents are entitled to the wages
accruing during the effectivity of the temporary restraining order.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
IRINEO V. INTIA, JR., Postmaster General, Philippine Postal Corporation, and the
Legal Officers of the PPC-Main namely: WILFREDO B. SERRANO, MA. TERESA A.
LORICO-GONZALES, LEONARDO C. DARANTINAO, JR., HENRY C. FAUSTO, LEE P.
VICERAL, ROMAN T. COBRADO, JESSIE R. REOTUTAR, ROMUALDO L. RANAN, and
ELEN I. NAGTALON, petitioners,
vs.
THE COMMISSION ON AUDIT and the CORPORATE AUDITOR FOR PHILIPPINE
POSTAL CORPORATION, respondents.

ROMERO, J
In this special civil action under Rule 64 of the New Rules of Court, in relation to Rule 65
thereof, petitioner seek the reversal of the Decision 1 dated November 4, 1997 of public
respondent Commission on Audit (COA) which affirmed the disallowances made by respondent
Corporate Auditor for Philippine Postal Corporation (PPC) of the Representation and
Transportation Allowance (RATA) of certain officials of PPC. The dispositive portion of said
decision reads:
Upon all the foregoing considerations, this Commission affirms the
disallowances made by the Auditor as concurred in by the Director, Corporate
Audit Office II, this Commission. Accordingly, the instant appeal has to be, as
it is hereby denied for lack of merit.
The facts are as follows:
On April 7, 1992, Republic Act No. 7354, otherwise known as "The Postal Service Act of
1992," was enacted and approved creating the Philippine Postal Corporation and defining its
powers, functions, and responsibilities.
Pursuant to the powers granted to It by the said charter, the PPC Board of Directors issued
and approved Board Resolution No 9-50, 2 entitled "Approving the three-year progressive
increase of Representation and Travel Allowance (RATA) benefits equivalent to 40% of the basic
salary of the officials of the Philippine Postal Corporation, subject to the existing rules and
regulations." The resolution reads in part.
BOARD RESOLUTION NO. 95-50
RESOLVED, as it is hereby resolved that the three year progressive increase
of the . . . (RATA) benefits of officials of the Philippine Postal Corporation . . .
equivalent to 40% of their basic salary, be approved subject to the existing
rules and regulations.
RESOLVED FURTHER, that the increases of RATA for 1995 of the following
officials to be implemented in the following manner, be confirmed . . . (c) of
the 40% basic salaries of all officials holding positions below the Assistant
Postmaster Generals up to Division Managers.
RESOLVED STILL FURTHER that an additional fifty percent (50%) increase
of the remaining balance thereof be implemented in 1996;
RESOLVED STILL FURTHER that the increase of the aforesaid benefit
equivalent to 40% of the basic salary of all concerned officials be fully
implemented in 1997.
xxx xxx xxx
On April 26, 1995, to implement the foregoing board resolution, then Postmaster General
Eduardo P. Pilapil issued Circular No. 95-22, 3 entitled "Guidelines Implementing Board

Resolution No. 95-50 prescribing new rates of RATA of PPC officials. To reproduce the relevant
parts of the circular:

CIRCULAR NO. 95-22


1 The following Officials and employees are entitled to RATA:
xxx xxx xxx
1.6 Regional Operation Managers
1.7 Division Managers Chiefs of equivalent
2. Payment of RATA, whether commutable or reimbursable, shall be in
accordance with the rates prescribed below for the total allowances (50/50
share for each type of allowances):
Position 1995 1996 1997
xxx xxx xxx
2.7 Operation Managers
or equivalent (SG 26) P5,100 P5,400 P5,740
2.8 Division Managers Chiefs or equivalent
(SG 25) 4,700 4,900 5,234
(SG 24) 4,200 4,400 4,734
Meanwhile, Republic Act No. 8174, otherwise known as "The General Appropriations Act of
1996" was approved, Section 35 of which fixes the monthly RATA rates of government
officials, to wit:
Sec. 35. Representation and Transportation Allowances. The following
officials and those of equivalent rank as may be determined by the
Department of Budget and Management while in the actual performance of
their respective functions are hereby granted monthly commutable
representation amd transportation allowance payable from the programmed
appropriation provided for by their respective offices not exceeding the rates
indicated below, which shall apply to each type of allowance:
xxx xxx xxx
e. At P1,750 for assistant Bureau Regional directors or equivalent;
f. At P1,625 for Chief of Division, identified as such in the Personal Service
Itemization . . .

On October 23, 1996, respondent Corporate Auditor for Philippine Postal Corporation (PPC)
served the following Notices of Disallowance (ND) on PPC:
(a) ND No. 96-0002-101(96) dated September 23, 1996, covering the RATA
of petitioner for the month of April 1996 in the total amount of P65,650.00.
(b) ND No. 96-0004-101(96) dated September 23, 1996 covering the RATA of
petitioner for May 1996 amounting to P65,350.00.
On December 12, 1996, the Auditor served another notice, ND No. 96-0007-101(96) dated
November 27, 1996, covering the RATA of petitioners for June 1996 in the amount of
P64,525.00.
Subsequently, respondent Auditor served other Notices of Disallowance covering the RATA
allegedly paid in excess of that authorized under Section 35, R.A. 8174.
On February 7, 1997, the new Postmaster General, Ireneo V. Intia, Jr. requested respondent
Auditor to hold in abeyance the settlement of the above disallowances pending receipt of the
legal opinion they had sought from the Office of the Government Corporate Counsel
(OGCC). To this, respondent Auditor replied that the proper remedy of petitioners is appeal
under Section 37, Title VII of COA Manual on Certificate of Settlement and Balances (CSB).
Accordingly, petitioners filed their Memorandum of Appeal with respondent Commission for
the reversal of the Auditor's decision and the allowance of the implementation of PPC
Circular No. 95-22 as authorized by Board Resolution No. 96-50. They relied on the following
grounds:
1. Sections 21, 22, and 25 of R A No 7354 (The Postal Service Act of 1992),
expressly empower the PPC to established its own progressive
compensation; structure and fix the salaries and emoluments of personnel
including the grant of additional benefits like RATA without being subjected
to the rules and regulations of the Compensation and Position Classification
Office or the Salary Standardization Law (R.A. No. 6758).
2. The legal opinion of the Department of Budget and Management (DBM)
dated March 14, 1996 on which the COA based its decision and which states
that pursuant to Section 6 of P.D. No. 1527, the compensation structure of
PPC is subjected to review and approval by the DBM, is not correct because
Section 6 of P. D. 1597 is unconstitutional as it violates the rule against the
passage of irrepealable laws.
3. Section 13 of R.A. No 7354 categorically exempts PPC from submitting to
Congress its annual budget unless the PPC requires subsidy guaranty of its
liability from the National Treasury.
4. Paragraph 1 of the special provisions in R.A No. 8174 admits that
corporations exempted from the provisions of R.A. No. 6738 like PPC shall
pay the salaries and allowances not in accordance with the Salary
Standardization Law.

5. RATA is included in the term "emoluments," the payment of which PPC is


authorized to make under R.A. No. 7354.
On November 4, 1997, respondent Commission rendered the decision now subject of the
instant petition. The assailed decision is reproduced in part:
After a careful and judicious evaluation of the facts and pertinent laws, rules
and regulations herein obtaining, this Commission finds the appeal devoid of
merit. It must be noted that Sections 21, 22 and 25 of R.A. 7354 never
intended to exempt the PPC from the ambit of R.A 6758 What these specific
sections provide, especially Section 25, is the exemption of the PPC from the
coverage of the rules and regulations of the Compensation and Position
Classification Office which relates only to the qualification, position and salary
grade of the employees concerned and not to the payment of additional
benefits including the increase in the Representation and Transportation
Allowance (RATA) Section 22 when provides for a progressive corporation
(sic) structure for PPC personnel authorizes the Corporation to grant salary
increases subject to either of two conditions stated therein. As to the
constitutionality of Section 6 of P.D. No. 1587, the matter is beyond the
competence of this Commission to rule upon. Thus, in the absence of
contrary ruling by competent authority, this Commission finds no cogent
reason to hold the same as being unconstitutional as alleged by herein
appellants.
Insofar as the validity of resolution fixing the allowances (e.g. RATA) of its
employees by PPC's Board the Directors is concerned, this Commission fully
adopts the stand taken by the DBM in its legal opinion, dated March 14,
1996, which states that:
Accordingly, the Resolutions or Circulars, of the PPC granting
additional benefits or compensation to its employees without
the requisite review and approval by the President of the
Philippines upon recommendation of the DBM is believed to
be an ultra vires act of the corporation which cannot be given
legal effect and recognition. Additional benefits or
compensation that may be granted to government
officials/employees require a law and may not be done by a
mere expedient of a resolution or a circular of a GOCC, as in
the case of the PPC.
The above legal opinion according to the DBM is based on the following
reasons:
1. While there may be a semblance of exemption for the PPC from the rules
and regulations of the Compensation and Position Classification Bureau,
such exemption is subject to the qualification thatPPC's own system of
compensation and classification conforms as closely as possible with that
provided for under R.A. No. 6758.
2. Such PPC exemption should be appreciated in correlation with the
provision of Section 6 of P.D. 1597 . . .

While it is true that Section 13 of R.A. No. 7354 exempts the PPC from
submitting to Congress its annual budget unless it seeks subsidy/guaranty of
its liability from the National Treasury, it is also true that Section 18 of the
same Act provides that the PPC thru its board shall submit to both Houses of
Congress, together with the Auditor's Report on the relevant accounts, an
annual report generally dealing with the activities and operations of the
Corporation during the preceding year . . . The exemption under Section 13
of R.A. No. 7354 does not in any way intend or show that the Corporation is
exempt from R.A. 6758. 4
Aggrieved by the aforequoted decision, petitioner filed this petition before this Court,
assigning the following errors:
I. THE COMMISSION ERRED IN HOLDING THAT PPC IS NOT EXEMPT
FROM THE SALARY STANDARDIZATION LAW (R.A. NO. 3758).
II. THE COMMISSION ERRED IN CONFORMING WITH THE DBM THAT
THE RESOLUTION AND CIRCULAR OF THE PPC GRANTING
ADDITIONAL BENEFITS TO ITS EMPLOYEES WITHOUT THE REQUISITE
REVIEW AND APPROVAL BY THE PRESIDENT OF THE PHILIPPINES
THROUGH THE DBM IS AN ULTRA VIRES ACT OF THE CORPORATION.
III. THE COMMISSION ERRED WHEN IT RULED THAT THE MONTHLY
RATA OF PPC OFFICIALS MUST CONFORM TO THE AMOUNTS
PRESCRIBED IN SECTION 35 OF REPUBLIC ACT NO. 8174.
As to the first issue, petitioners argued that Sections 21, 22, and 25 of the PPC charter (R.A.
No. 7354) exempt it from the Salary Standardization Law or the Compensation and Position
Classification Office rules. The said provisions read:
Sec. 21. Powers and Function of the Postmaster General. As the Chief
Executive Officer, the Postmaster General shall have the following powers
and functions:
xxx xxx xxx
c) subject to the approval of the Board to determine the staffing pattern and
the number of personnel, define their duties and responsibilities, and fix their
salaries and emoluments in accordance with the approved compensations
structure of the Corporation.
xxx xxx xxx
Sec. 22. Merit System The Corporation shall establish a human resources
management system which shall govern the selection, hiring, appointment,
transfer, promotion, or dismissal of all personal. Such system shall aim to
establish professionalism and excellence at all levels of the postal
organization in accordance with sound principles of management.
A progressive compensation structure, which shall be based on job
evaluation studies and wage surveys and subject to the Board's approval,

shall be instituted as an integral component of the Corporation's human


resources development program. The Corporation, however, may grant
across the board salary increase or modify its compensation structure as to
result in higher salaries, subject to either of the following conditions.
a) there are evidences of prior improvement in employee productivity,
measured by such quantitative indicators as mail volume per employee and
delivery times.
b) a law raising the minimum wage has been enacted with application to all
government employees or has the effect of classifying some positions in the
postal service as below the floor wage.
Sec. 25. Exemption from Rules and Regulations of the Compensation and
Position Classification Office. All personnel and positions of the
Corporation shall be governed by Section 22 hereof, and as such shall
be exempt from the coverage of the rules and regulations of the
Compensation and Position Classification Office. The Corporation, however,
shall see to it that its own system conforms as closely as possible with that
provided for under Republic Act No. 6758.
Petitioners averred that since the PPC has the power under Sections 21 and of R.A. No.
7354 to fix its own compensation scheme and Section 25 of said charter expressly exempts
it from the rules of the Compensation and Position Classification Office, it is clear that PPC
Board Resolution No. 95-50 and PPC Circular 95-22 are valid corporate acts that can be the
basis of the payment of RATA to PPC officials without prior approval from the DBM.
As for the DBM legal opinion which was the basis for the disallowance of the payments of the
RATA, petitioner assailed the same for being erroneous. According to the DBM,
notwithstanding the exemption of PPC from the rules of CPCO granted under Section 25 of
R.A 7354, the DBM has the power to review and approve the compensation structure of PPC
because of Section 6 of P.D. No. 1597.
Sec. 6. Exemption from OCPC Rules and Regulations. Agencies, position or
groups of officials and employees of the national government, including
government-owned and controlled corporations, who are hereafter exempted
by law from OCPC coverage, shall observe such guidelines and policies as
may be issued by the President governing position classification, salary
rates, levels of allowances, project and other honoria, overtime rates, and
other forms of compensation and fringe benefits.Exemptions notwithstanding
agencies shall report to the President, through the Budget Commission, on
their position classification and compensation plans, policies, rates and other
related details following such specifications as may be prescribed by the
President. (emphasis supplied)
Petitioners, however, argued that Section 6, P.D. No. 1597 has already been repealed by
Section 35 of R.A. No. 7354 which reads:
Sec. 35. All acts, decrees, orders, executive orders, instructions, rules and
regulations, inconsistent with the provisions of this Act are repealed or
modified accordingly.

They pointed out further that R.A. No. 7354 (The Postal Service Act of 1992) P.D. No. 1597,
a general law which refers to all government agencies and GOCCs covered by and those
exempted from the rules of the CPCO. For these reasons, petitioners claimed that the power
of the DBM to review and approve PPC's resolution and circulars implementing the latter's
compensation plans its no longer in force.
Petitioner likewise posited that Section 6, P.D. No. 1597 has no legal effect, it being in the
nature of an irrepealable provision of law. They pointed to the phrase "agencies . . . of the
national government, including government-owned and controlled corporations, who are
hereafter exempted by law from coverage . . .," as violative of the Constitutional provision
that legislative power shall be vested in the legislature and the prohibition against the
passage of irrepealable laws. In effect, petitioner maintained. Section 6 limits the lawmaking
powers of Congress by providing for conditions to be applied to agencies or GOCCs that are
yet to be created.
Even assuming arguendo that Section 6, P.D. No. 1597 has legal effects, petitioners
theorized, it cannot be considered as requiring prior approval of the DBM since provision
only requires the PPC to observe the guidelines on compensation schemes and to report to
the President about its position classification and compensation system.
Furthermore, petitioners asserted that scrutinizing the Senate deliberations, it is clear that
the management and budgetary system of the PPC was being taken out of the control of the
DBM.
As to the applicability of Section 35 of R.A. No. 8174 limiting the amounts of RATA granted to
certain employees, petitioners argued that said provision does not apply to the monthly RATA
rates of PPC corporate officials, as PPC's budget is not covered by the Appropriations Act or
R.A No. 8174. This, they said, is clear from Section 13 of the PPC Charter (R.A. No 7354):
Sec. 13. Annual Budget . . . Unless the Corporation shall require a subsidy
and/or a guarantee of its liability from the National Treasury, its budget for the
year need not be submitted to Congress for approval and inclusion in the
General Appropriations Act.
On the other hand, in its comment, the Office of the Solicitor General argued Section 6 of
P.D. 1597 is valid and subsisting, there having been no express or implied repeal of the
assailed provision. Moreover, the Solicitor General explained that although Section 25 of the
PPC charter exempts the corporation from the CPCO rules and regulations, under Section 6
of P.D. No. 1597, however, it is still required to report the details of its compensation system
to the President through the DBM. The two provisions in question are thus compatible and
reconcilable.
With respect to the argument that the PPC is exempted from the coverage of CPCO rules
and regulations, the Solicitor General observed that the said exemption is not absolute as it
refers only to exemption from the application of rules and regulations relating to position and
compensation classification. Moreover, the Solicitor General added, the term "compensation"
in said law refers to the salary structure of government personnel and not to allowances.
From the foregoing, the issues of the present controversy may therefore be summed up as
follows: (1) whether the PPC Board of Directors can, by itself, grant through a resolution an
increase in allowances to its officials without said resolution going to the DBM for review and

approval and (2) whether the RATA granted to PPC officials falls within the amounts provided
in the General Appropriations Act.
This Court rules in the negative on both issues.
First, it is conceded that the PPC, by virtue of its charter, R.A. No. 7354, has the power to fix
the salaries and emoluments of its employees. This function, being lodged in the Postmaster
General, the same must be exercised with the approval of the Board of Directors. This is
clear from Sections 21 and 22 of said charter.
Petitioners correctly noted that since the PPC Board of Directors are authorized to approve
the Corporation's compensation structure, it is also within the Board's power to grant or
increase the allowances of PPC officials or employees. As can be gleaned from Sections 10
and 17 of P.D. No. 985 (A Decree Revising the Position Classification and Compensation
System in the National Government, and Integrating the Same), the term "compensation"
includes salaries, wages, allowances, and other benefits.
Sec. 10. The Compensation System The Compensation System consists
of (a) a Salary Schedule, (b) a Wage Schedule; (c) policies relating
to allowances, bonuses, pension plans, and other benefits accruing to
employees covered . . . (emphasis supplied).
Sec. 11. Powers and Functions. The Budget Commission principally
through the OCPC shall, in addition to those provided under other sections of
this Decree, have the following powers and functions:
xxx xxx xxx
(g) Provide the required criteria and guidelines, in consultation with agency
heads as may be deemed necessary and subject to the approval of the
Commissioner of Budget, for the grant of all types of allowances and
additional forms of compensation to employees in all agencies of the
government.
Besides, allowances such as RATA are included in the term "emoluments" which, under
Section 21 of RA 7354, the Postmaster General is authorized to grant to PPC personnel with
the approval of the Board of Directors. Black's Law Dictionary defines "emolument" as that
which is received as a compensation for services, or which is annexed to the possession of
office as salary, fees and perquisites.
The Commission on Audit was, therefore, in error when it held in its decision that "the
exemption of the PPC from the coverage of the rules and regulations of the Compensation
and Position Classification Office . . . relates only to the qualification, position and salary
grade of the employees concerned and not to the payment of additional benefits including
the increase in the Representation and Transportation Allowance (RATA).
While the PPC Board of Directors admittedly acted within its powers when it granted the
RATA increases in question, the same should have first been reviewed by the DBM before
they were implemented Sections 21, 22, and 25 of the PPC charter should be read in
conjunction with Section 6 of P.D. No. 1597:

Sec 6. Exemption from OCPC Rules and Regulations. Agencies, position or


groups of officials and employees of the national government, including
government-owned and controlled corporations, who are hereafter exempted
by law from OCPC coverage, shall observed such guidelines and policies as
may be issued by the President governing position classification, salary
rates, levels of allowances, project and other honoraria, overtime rates, and
other forms of compensation and fringe benefits.Exemption notwithstanding,
agencies shall report to the Presidents, through the Budget Commission, on
their position classification and compensation plans, policies, rates and other
related details following such specifications as may be prescribed by the
President. (emphasis supplied).
Contrary to petitioners' position, provision still applies and has not been repealed either
expressly or impliedly. Their reliance on the general repealing clause in Section 35 5 of R.A.
No. 7354 is erroneous. The holding of this Court inMecano vs. COA 6 is instructive: "The question
that should be asked is: What is the nature of this repealing clause? It is certainly not an express
repealing clause because it fails to identify or designate the act or acts that are intended to be
repealed. Rather, it is an example of a general repealing provision, as stated in Opinion No. 73, s.
1991. It is a clause which predicates the intended repeal under the condition that a substantial
conflict must be found in existing and prior acts. The failure to add a specific repealing clause
indicates that the intent was not to repeal any existing law, unless an irreconcilable inconsistency
and repugnancy exist in the terms of the new and old laws. This latter situation falls under the
category of an implied repeal."
As the Solicitor General correctly observed, there is no express repeal of Section 6 P.D. No.
1597 by R.A. No. 7354. Neither is there an implied repeal thereof because there is no
irreconcilable conflict between the two laws. On the one hand. Section 25 of R.A. No. 7354
provides for the exemption of PPC from the rules and regulations of the CPCO On the other
hand, Section 6 of P.D. 1597 requires PPC to report to the President, through the DBM, the
details of its salary and compensation system. Thus, while the PPC is allowed to fix its own
personnel compensation structure through its Board of Directors, the latter is required to
follow certain standards in formulating said compensation system. One such standard is
specifically stated in Section 25 of R.A. No. 7354:
Sec. 25. Exemption from Rules and Regulations of the Compensation and
Position Classification Office. All personnel and positions of the
Corporation shall be governed by Section 22 hereof, and as such shall
exempt from the coverage of the rules and regulations of the Compensation
and Position Classification Office. The Corporation, however, shall see it that
its own system conforms as closely as possible with that provided for under
Republic Act No. 6758. (emphasis supplied)
To sustain petitioners' claim that it is the PPC and PPC alone that should ensure that its
compensation system conforms as closely as possible with that of R.A. No. 6758 will result in
an invalid delegation of legislative power. If such interpretation is adopted, the law would, in
effect, be granting PPC unfettered discretion to fix its compensation structure, something the
legislature could not have intended.
As the Solicitor General put it, Section 6 of P.D. No. 1597 is the "detail" intended to fill the
gap in such laws as R.A. No. 7354 in order to ensure that delegation of legislative authority
will be "canalized within banks to keep it from overflowing."

It should be emphasized that the review by the DBM of any PPC resolution affecting the
compensation structure of as personnel should not be interpreted to mean that the DBM can
dictate upon the PPC Board of Directors and deprive the latter of its discretion on the matter.
Rather, the DBM's function is merely to ensure that the action taken by the Board of
Directors complies with the requirements of the law, specifically, that PPC's compensation
system "conforms as closely as possible with that provided for under R.A. No. 6758."
Sec. 25 of R.A. No. 7353 and Section 6 of P.D. No. 1597 can thus be read together and
harmonized to give effect to both provisions. This Court has held that statutes should be
construed in light of the objective to be achieved and the evil or mischief to be suppressed,
and they should be given such construction as will advance the object, suppress the
mischief, and secure the benefits intended. 7
Clearly, therefore, no implied repeal can be deduced in this case. Worth reiterating is the rule
in statutory construction that repeals by implication are not favored. When statutes are in
pari materia, they should be construed together. A law cannot be deemed repealed unless it
is clearly manifest that the legislature so intended it.
As regards petitioners' argument that P.D. No. 1597 cannot be given any legal effect as it is
unconstitutional because it is in the nature of an irrepealable law, suffice it to say that this
Court will refrain from striking down a law if the case can be decided on other grounds. The
Court will not touch the issue of unconstitutionality unless it is the very lis mota of the case.
Thus, the Supreme Court held. "It is a well-established rule that a court should not pass upon
a constitutional question and decide a law to be unconstitutional or invalid, unless such
question is raised by the parties and that when it is raised, if the record also present some
other ground upon which the court may raise its judgment, that course will be adopted and
the constitutional question will be left for consideration until such question will be
unavoidable. 8
With respect to the second issue of whether the RATA granted to PPC officials must fall
within the amounts provided for the in the General Appropriations Act as stated we rule in the
negative.
Sec. 13 of the PPC charter expressly provides for PPC's fiscal autonomy. Thus, unless PPC
requires a subsidy and/or a guarantee of its liability from the National Treasury, its annual
budget need not be submitted to Congress for approval and included in the General
Appropriations Act.
The intention of the lawmakers here is to promote the efficiency of the postal service by
allowing the PPC to use its profits from its operations to upgrade its facilities and equipment
and provide incentives for its personnel to render better services. Specifically, fiscal
autonomy allows the PPC to attract and keep professional and competent people within its
ranks.
To sum up, the PPC being a government-owned and controlled corporation with an original
charter, it falls within the scope of the Civil
Service. 9 Thus, as regards personnel matters, the Civil Service Law applies to the PPC. Its
Board of Directors is authorized under its charter to formulate and implement its own system of
compensation for its personnel, including the payment of RATA. In the exercise of such power, it
is not required to observe the rules and regulations of the Compensation and Position
Classification Office. Neither is it required to follow strictly the amounts provided for in the
General Appropriations Act as its annual budget is not covered thereby. However, since the PPC

charter expressly exempts it from the rules and regulations of the CPCO, said Board is not
required to follow the CPCO's guidelines in formulating a compensation system for the PPC
employees. 10

In other words, the general rule is that the PPC is covered by the Civil Service Law as
regards all personnel mattersexcept those affecting the compensation structure and position
classification in the corporation which are left to the PPC Board of Directors to formulate in
accordance with law. It must be stressed that the Board's discretion on the matter of
personnel compensation is not absolute as the same must be exercised in accordance with
the standard laid down by law, that is, its compensation system, including the allowances
granted by the Board to PPC employees, must strictly conform with that provided for other
government agencies under R.A. No. 6758 (Salary Standardization Law) in relation to the
General Appropriations Act. To ensure such compliance, the resolutions of the Board
affecting such matters should first be reviewed and approved by the Department of Budget
and Management pursuant to Section 6 of P.D. No. 1597.
WHEREFORE, premises considered, the petition is hereby DISMISSED and the assailed
decision dated November 4, 1997 is AFFIRMED with the following MODIFICATIONS:
(a) The exemption of the Philippine Postal Corporation from the coverage of the rules and
regulations of the Compensation and Position Classification Office includes, not only the
fixing of the qualification, position, and salary grade of the Corporation's employees but also
the payment of additional benefits, including increases in their Representation and
Transportation Allowance;
(b) The Representation and Transportation Allowance granted to the concerned employees
of the Corporation need not be limited to the amounts provided for in the General
Appropriations Act; and
(c) However, the compensation system set up must conforms as closely as possible with that
provided for other government agencies under R.A. No. 6758 in relation to the General
Appropriations Act and must, moreover, be reviewed and approved by the Department of
Budget and Management pursuant to Section 6 of P.D. No. 1597.
1wphi1.nt

SO ORDERED.
THE DEPARTMENT OF HEALTH (DR. JOSE N. RODRIGUEZ MEMORIAL HOSPITAL)
and CESAR J. VIARDO, M.D., in his capacity as Director of the Dr. Jose N. Rodriguez
Memorial Hospital, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER CORNELIO L.
LINSANGAN and CEFERINO R. LAUR, respondents.

HERMOSISIMA, JR., J.:


The eternal problem of jurisdiction over Government employees is again posed in this case:
Which Government agency the National Labor Relations Commission or the Civil Service
Commission has jurisdiction over contests relating to the civil service?

This is a Petition for Certiorari and Prohibition filed by the Department of Health in behalf of
the Dr. Jose N. Rodriguez Memorial Hospital (DJRMH) and its Director, Cesar J. Viardo,
seeking to review and set aside the Resolution of the National Labor Relations Commission
in NLRC NCR CA No. 002864-92 (NLRC Case No. 00-09-05194-90), dated September 7,
1993, which dismissed herein petitioners' appeal from the January 2, 1992 Decision of Labor
Arbiter Cornelio L. Linsangan.
The antecedent facts, culled from the assailed Decision rendered by Labor Arbiter Cornelio
Linsangan and that of the NLRC, respectively, as well as from the pleadings of the parties,
are not in dispute:
Private respondent Ceferino R Laur was a patient of the then Tala Leprosarium (now Jose N.
Rodriguez Memorial Hospital), having been admitted thereto in 1951 for treatment of
Hansen's disease, commonly termed leprosy. He was discharged in 1956 after he was
deemed to have been cured of his affliction.
In 1975, he was employed at the DJRMH as a patient-assistant by the then Hospital Director,
Dr. Artemio F. Runez, upon the recommendation of the Barangay Captain of Tala.
Specifically assigned as a member of the Patient-Assistant Police Force, he was accorded a
compensation/salary, initially, in the amount of P110.00. This was gradually increased
through the years, depending upon the availability of funds. His salary was chargeable to the
maintenance and operating expenses of the hospital.
On September 15, 1989, complaints for Alarm and Scandal, Oral Defamation, Grave
Threats, Concealment of Deadly Weapon, Violation of the Code of Ethics of Policemen, and
Conduct Unbecoming of a Police Officer were filed against said private respondent, pursuant
to a report made by his Chief of Police. Upon a finding of guilt of the aforesaid offenses, the
said private respondent was meted the penalty of suspension for sixty (60) days, with a stern
warning that a repetition of the same would result in his outright dismissal by petitioner Dr.
Cesar J. Viardo in his capacity as Chief of Hospital. 1
On July 15, 1990, private respondent Laur got involved in the mauling of one, Jake Bondoc,
along with two policemen, Corporal Ferrer and Patrolman Berdon, Private respondent's
account of the incident is to the effect that, while private respondent and his companions
were manning their posts at the hospital's Administration Building, a group of twelve (12)
young boys engaged another group of four male youngsters (4) in a stone-throwing
encounter. This resulted in damage to the windows of the nearby Holy Rosary College. The
caretaker of the college, Agustin Chan, while assessing the damage caused, was chased by
the smaller group and threw stones at him. Agustin Chan ran and took refuge at the
administration building where private respondent and the two policemen were on guard duty.
It was at this point that one of the policemen hit one of the stone throwers with a night stick. 2
A complaint filed by a certain Jake Bondoc, one of the young boys, against private
respondent and his companions provoked an investigation conducted on July 27, 1990,
during which complainant Bondoc pointed to private respondent as the party responsible for
his injuries even as Patrolman Berdon admitted to having hit Bondoc.
On August 21, 1990, private respondent was dismissed by the Chief of Hospital, Dr. Cesar J.
Viardo per Office Order No. 101, s-90, on the basis of the Public Assistance Complaints
Unit's (PACU) report/investigation finding private respondent and his companions to have
indeed mauled Jake Bondoc. The two policemen were merely suspended.

Consequently, on September 26, 1990, private respondent filed with the National Labor
Relations Commission a complaint for illegal dismissal with additional claims for payment of
wage differentials, holiday pay, overtime pay and 13th month pay, as well as payment of
moral and exemplary damages, attorney's fees and expenses of litigation and with prayer for
reinstatement without loss of seniority rights against Dr. Jose N. Rodriguez Memorial
Hospital (DJRMH) and Dr. Cesar J. Viardo. This was docketed as "NLRC NCR Case No. 0009-05194-90" and subsequently assigned to Labor Arbiter Cornelio Linsangan.
On January 2, 1993, Labor Arbiter Cornelio Linsangan rendered his Decision in private
respondent's favor, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering the respondent
hospital to:
1. reinstate complainant to his former position or if not possible, pay him
separation pay equivalent to one month salary for every year of service;
2. pay complainant the amount of P198,000.00 representing underpaid
wages, unpaid overtime, holiday pay and 13th month pay;
3. pay the complainant full backwages which as of this date amounts to
P49,088.00;
4. pay the complainant the amount of P20,000.00 as moral and exemplary
damages; and
5. pay the complainant attorney's fees equivalent to 10% of the total award.

Respondent Labor Arbiter Linsangan so ruled because first, he has determined that, contrary
to the petitioners' position that private respondent's employment was part of his medication
and rehabilitative therapy, private respondent was in truth an employee in contemplation of
the Labor Code, the existence of an employer-employee relationship between petitioner
hospital and private respondent being evident from the fact that private respondent's work is
necessary and desirable for the operation of the hospital. Private respondent was allegedly
performing such functions as were inherent to and undertaken by the members of the regular
police force. This, the respondent Labor Arbiter believes to be an indication that what private
respondent was assigned to do was definitely beyond his rehabilitative therapy. Second,
private respondent's dismissal was illegal because it was not for a just cause. The mauling
incident was not sufficiently established, and, even if so established, the same would not
justify his dismissal. Such dismissal was wanting in due process in view of the nonobservance of the procedure prescribed for a valid exercise of the power to dismiss under
Sections 2, 5 and 6 of Rule XIV of the Rules Implementing B.P. Blg. 130. 4
The aforesaid decision was appealed to the NLRC. In its Resolution, dated September 27,
1993, the NLRC dismissed the appeal, the dispositive portion of which reads:
WHEREFORE, respondents appeal is hereby dismissed for its failure to
perfect the same on time. 5
The petitioners, thus, instituted this petition for certiorari.

The principal issue presented in this case is whether or not respondents NLRC and Labor
Arbiter Cornelio L. Linsangan committed serious error in their decisions and acted without
jurisdiction when they took cognizance of the complaint filed by private respondent Ceferino
R Laur before the NLRC instead of the Civil Service Commission.
The petitioners mainly contend that since the DJRMH is a government hospital, its
employees are covered by Civil Service rules and regulations and not by the Labor Code.
Therefore, any controversy concerning the relationship between the employees on the one
hand and the hospital's administration on the other, as is the case of private respondent,
comes under the jurisdiction of the Merit Systems Board and the Civil Service Commission.
We find the petition to be impressed with merit
The petitioner-hospital, the DJRMH, originally known as the Tala Leprosarium, was one of
three leper colonies established under Commonwealth Act No. 161. Maintained to this day
as a public medical center and health facility attached to the Department of Health, the
DJRMH exercises strictly governmental functions relating to the management and control of
the dreaded communicable Hansen's disease, commonly known as leprosy. As it is clearly
an agency of the Government, the DJRMH falls well within the scope and/or coverage of the
Civil Service Law in accordance with paragraph 1., Section 2, Article IX B, 1987 Constitution
and the provisions of Executive Order No. 292, otherwise known as the Administrative Code
of 1987 and Presidential Decree No. 807, otherwise known as the Civil Service Decree of the
Philippines.
As the central personnel agency of the Government, the Civil Service Commission
administers the Civil Service Law. It is, therefore, the single arbiter of all contests relating to
the civil service. 6 The discharge of this particular function was formerly lodged in one of its
offices, the Merit Systems Protection Board (MSPB) which was vested with the power, among
others, "to hear and decide on appeal administrative cases involving officials and employees of
the civil service and its decision shall be final except those involving dismissal or separation from
the service which may be appealed to the Commission". 7 However, with the issuance of Civil
Service Commission Resolution No. 93-2387 on June 29, 1993, such appeals shall now be filed
directly with the Civil Service Commission. Pertinent portion of said resolution reads:
xxx xxx xxx
NOW, THEREFORE, pursuant to the provisions of Section 17 of Book V of
the Administrative Code of 1987 which authorizes the Commission, as an
independent constitutional body, to effect changes in its organization as the
need arises, the Commission Resolves as it is hereby Resolved to effect the
following changes:
1. Decisions in administrative cases involving officials and employees of the
civil service appealable to the Commission pursuant to Section 47 of Book V
of the Code including personnel actions such as contested appointments
shall now be appealed directly to the Commission and not the MSPB; 8
xxx xxx xxx

Worthy to note in this connection is the fact that the Labor Code itself provides that "the
terms and conditions of employment of government employees shall be governed by the
Civil Service Law, rules and regulations". 9

Conformably to the foregoing, it is, indeed, the Civil Service Commission which has
jurisdiction over the present controversy. Its decisions are subject to review by the Supreme
Court. 10
Jurisdiction is conferred by law. Where there is none, no agreement of the parties can
provide one. 11 Consequently, it was incorrect for the respondent labor arbiter to have proceeded
to hear the case, simply because private respondent Ceferino Laur happened to lodge his
complaint before his office, 12 or to hold that petitioners are estopped from assailing the
respondent labor authorities' jurisdiction over the present case simply because the petitioners
have earlier submitted themselves to the said jurisdiction by virtue of their participation in all the
stages of the proceedings in the office of respondent Labor Arbiter Linsangan and in the NLRC,
and that they failed to raise the issue of jurisdiction in the said proceedings. 13
Considering that the decision of a tribunal not vested with appropriate jurisdiction is null and
void, 14 the respondent labor arbiter's finding of an employer-employee relationship between the
petitioner government agency and the private respondent should serve no purpose whatsoever.
Respondent labor arbiter's order of payment of private respondent's monetary claims is likewise
null and should not be given effect.
WHEREFORE, finding the Dr. Jose N. Rodriguez Memorial Hospital to be within the scope of
the Civil Service Law and not of the Labor Code, the questioned decision of the respondent
labor arbiter dated January 2, 1992 and the resolution of the NLRC, dated September 7,
1993, are hereby REVERSED and SET ASIDE for having been rendered without jurisdiction.
The Temporary Restraining Order issued on February 28, 1994 is hereby made permanent.
SO ORDERED.

PHILIPPINE RETIREMENT AUTHORITY (PRA), petitioner,


vs.
JESUSITO L. BUAG and ERLINA P. LOZADA, respondents.
DECISION
PUNO, J.:
Before the Court is a Petition for Review on Certiorari involving alleged overpayment by the
petitioner Philippine Retirement Authority (PRA) of certain benefits and allowances to its
employees, particularly respondents herein. Petitioner PRA asks the Court to resolve the
legal question of whether disbursements made by PRA of compensation, allowances and
other benefits to its employees prior to the effectivity of R.A. No. 6758 or the Compensation
and Position Classification Act of 19891 is subject to the review of the Department of Budget
and Management.
Petitioner PRA is a government-owned and controlled corporation created on July 4, 1985
under Executive Order No. 1037.2 PRA became operational on September 8, 1986.3 Private
respondent Jesusito L. Buag is the former deputy general manager of petitioner PRA while
private respondent Erlina P. Lozada is the incumbent department manager of petitioner PRA.
As of July 1, 1989, in addition to their basic salaries, private respondents were each
receiving from PRA the following allowances and benefits: a) Cost of Living Allowance

(COLA), 40% of the basic salary; b) Amelioration Allowance, 10% of the basic salary; c)
additional COLA, P300.00 a month; d) rice subsidy, P400.00 per month; e) meal
subsidy, P525.00 a month; f) children allowance, P30.00 a month; and g) Representation
and Transportation Allowance (RATA) in various amounts.4
In a letter dated December 29, 1992, the Office of the President, through then Executive
Secretary Edelmiro A. Amante, Sr. approved the Corporate Operating Budget of petitioner
PRA for calendar year 1992 in the amount ofP25,288,091.00. In the same letter, the amount
of P9,129,833.00 representing unjustified/unauthorized allowances, fringe benefits and other
items was disallowed.5
In a letter dated February 1, 1993, PRA sought reconsideration from the Office of the
President on the disallowances, in particular, the amount of P1,324,822.00 out of
the P9,129,833.00 disallowed disbursements representing supposed over-provision and
payment of benefits and allowances to PRA employees. The amount ofP1,324,822.00 is
itemized as follows:6
a) Over-provision of RATA ....

P193,200.00

b) Transition Allowance .....

611,454.00

c) Provision for Hospitalization .

100,000.00

d) Provision for Provident Fund Contribution

420,168.00
TOTAL

P1,324,822.00

The Office of the President denied the request for reconsideration in a letter dated
September 23, 1993.7 On October 12, 1993, PRA filed a request for clarification of the order
denying the request for reconsideration.8 In reply thereto, the Office of the President
explained in a letter dated November 11, 1993 that the approved Corporate Operating
Budget of PRA for calendar year 1992 is subject to the following restrictions: 9
"1. The approval refers to expenditures/ceilings for each expenditure class and shall
not be construed as approval of specific items of expenditure;
2. Salaries, wages, allowances and benefits shall be in accordance with the
approved Position Allocation List, pursuant to the Compensation and Position
Classification Act of 1989 (R.A. 6758);
3. Payment of other benefits, such as bonuses, clothing, representation,
transportation allowances, and such other allowances shall be in accordance with
Sections 5.4, 5.5, and 5.6 of Corporate Compensation Circular No. 10, National
Compensation Circular (NCC) No. 66, dated September 12 1991, and NCC No. 67,
dated January 1, 1992; and
4. All expenditures shall be made within the limits of available funds realized by PRA
from corporate revenues."

Hence, petitioner PRA reduced the compensation of private respondents and stopped the
payment of RATA and other allowances to private respondents.
Feeling aggrieved, private respondents sought the legal opinion of the Department of Budget
and Management on the disallowance and reduction of amount of fringe benefits and other
allowances previously received by them. On January 11, 1995, the Department of Budget
and Management opined that "the total monthly compensation and allowances sought have
no legal basis."10 The Department of Budget and Management explained:
"[I]t is worthy to note that the salaries actually received by the concerned personnel as of
June 30, 1989 which were used as a basis in computing the allowances to be integrated and
in determining the transition allowance to be granted were not the basic salaries as certified
and authorized by the DBM. Hence, there appears to be over computation of allowances to
the integrated and transition allowances granted." (emphasis supplied)
Private respondents then elevated the matter to the Office of the President. The case was
docketed as O.P. Case No. 95-L-6336.
On December 18, 1995, the Office of the President reversed the ruling of the Department of
Budget and Management and awarded to the private respondents the allowances and
benefits claimed. It ruled that "the exemption of PRA from the jurisdiction of [the Department
of Budget and Management], as provided under the PRA charter, remained effective and
legally impervious to the assertions by [the Department of Budget and Management] of its
authority."11 As no prior approval or authority is required from the Department of Budget and
Management with respect to the compensation scheme of PRA and the grant of allowances
by it to its employees, the Office of the President held that disbursements made by PRA
representing compensation and allowances of PRA officials and employees prior to the
effectivity of July 1, 1989 were valid. It applied the principle of "non-diminution of benefits"
embodied in the transitory provisions of R.A No. 6758 and concluded that private
respondents are entitled to continue receiving the compensation and benefits previously
enjoyed by them. Thus, the Office of the President directed the Department of Budget and
Management to provide enough funds to cover the salaries and allowances of the PRA
officials and employees. The subsequent Motions for Reconsideration filed by the
Department of Budget and Management and by petitioner PRA were denied by the Office of
the President.
Consequently, petitioner PRA filed a Petition for Review with the Court of Appeals in
accordance with Rule 43 of the Rules of Court, as amended. On December 14, 1999, the
Court of Appeals rendered a decision affirming the ruling of the Office of the President. On
June 19, 2000, it denied petitioners Motion for Reconsideration.
In the instant petition, PRA, through the Office of the Government Corporate Counsel,
argues that the Court of Appeals erred in applying the transitory provisions of R.A. No. 6758
in upholding the continued grant of compensation and allowances received by private
respondents prior to the effectivity of said law. PRA maintained that these allowances and
benefits were not authorized or approved by the Department of Budget and Management,
contrary to E.O. No. 1037 (PRA Charter) in relation to P.D No. 985 12 and P.D. No. 159713.
PRA explains that prior to R.A. No. 6758, disbursements of compensation, allowances and
other benefits to PRA employees are subject to the review of the Department of Budget and
Management in accordance with P.D. No. 985 and P.D. No. 1597. PRA reasoned that the
transitory provisions of R.A. No. 6758 which authorize the continued grant of allowances and
benefits received by incumbents as of the effectivity of the said law is not applicable as the

law could not have contemplated the continued disbursement of unauthorized allowances
and benefits. Further, PRA manifests that while E.O. No. 1037 grants the PRA Board the
power to provide a compensation scheme for its employees and fix reasonable allowances
and benefits, PRA has not approved or acted on any matter in this respect.
Private respondents, on the other hand, argue that PRA has the requisite power and
authority to impose and implement a compensation scheme for its employees without need
of prior approval or authority from the Department of Budget and Management. They cite as
basis Section 6 (f) of E.O. No. 1037 which grants the PRA Board the power to "establish and
fix, review, revise and adjust the appropriate compensation scheme of the officers and
employees of [PRA] with reasonable allowances, bonuses and other incentives." They allege
that by virtue of this provision, prior to R.A. No. 6758, PRA was exempt from the regulatory
authority of the Office of Compensation and Position Classification, notwithstanding the
provisions of P.D. No. 985 and P.D. No. 1597. Moreover, private respondents argue that the
disallowances in question were based on Department of Budget and Management Corporate
Compensation Circular No. 10 (DBM-CCC No. 10), an issuance which was subsequently
rendered ineffective by this Court due to its non-publication in the Official Gazette. 14
The proper resolution of the case at bar involves a determination of the applicable law, rules
and regulations governing the imposition of allowable compensation, allowances and
monetary incentives to the employees of the PRA prior to the effectivity of R.A. No. 6758 and
the legal effects of the subsequent passage of R.A. No. 6758.
This issue is not without precedent.
In the case of Intia, Jr. v. Commission on Audit,15 the Philippine Postal Corporation (PPC)
argued that by virtue of the provisions of its charter, 16 PPC may unilaterally grant and/or
increase the Representation and Transportation Allowance of its officials without the prior
approval of the Department of Budget and Management. The PPC cited Section 21 (c) of its
charter which grants the PPC the power and authority to "fix salaries and emoluments [of its
employees] in accordance with the approved compensation structure of [PPC]." Further, the
PPC argued that Section 25 of its charter exempts the PPC "from the coverage of the rules
and regulations of the Compensation and Position Classification Office."
In ruling against PPC, this Court declared that the provisions of the PPC charter should be
read in conjunction with Section 6 of P.D. No. 1597.17 The said section reads:
"Sec. 6. Exemption from OCPC Rules and Regulations.Agencies, positions or groups of
officials and employees of the national government, including government-owned and
controlled corporations, who are hereafter exempted by law from OCPC coverage, shall
observe such guidelines and policies as may be issued by the President governing position
classification, salary rates, levels of allowances, project and other honoraria, overtime rates,
and other forms of compensation and fringe benefits. Exemptions notwithstanding, agencies
shall report to the President, through the Budget Commission, on their position classification
and compensation plans, policies, rates and other related details following such
specifications as may be prescribed by the President."
This Court ruled in Intia that contrary to PPCs assertion, Section 6 of P.D. No. 1597 still
applies and has not been repealed expressly or impliedly. Although its charter grants PPC
the power to fix the compensation and benefits of its employees and exempts PPC from the
coverage of the rules and regulations of the Compensation and Position Classification Office,
by virtue of Section 6 of P.D. No. 1597, the compensation system established by the PPC is

subject to the review of the Department of Budget and Management. In this respect, the
function of the Department of Budget and Management is to ensure that the proposed
compensation scheme is consistent with applicable laws and regulations. In reconciling the
provisions of the PPC Charter and the provisions of P.D. No. 1597, this Court explained:
18

"It should be emphasized that the review by the DBM of any PPC resolution affecting the
compensation structure of its personnel should not be interpreted to mean that the DBM can
dictate upon the PPC Board of Directors and deprive the latter of its discretion on the matter.
Rather, the DBMs function is merely to ensure that the action taken by the Board of
Directors complies with the requirements of the law, specifically that PPCs compensation
system "conforms as closely as possible with that provided for under R.A. No. 6758."
(emphasis supplied)
Similarly, under P.D. No. 1037, PRA was granted the power and authority to "establish and
fix, review, revise and adjust the appropriate compensation scheme of the officers and
employees of [PRA] with reasonable allowances, bonuses and other incentives as may be
recommended by the Chief Executive Officer/General Manager of the [PRA]." 19 Further,
Section 13 of P.D. No. 1037 also exempts officers and employees of PRA from the rules and
regulations of the Office of Compensation and Position Classification. 20
In accordance with the ruling of this Court in Intia, we agree with petitioner PRA that these
provisions should be read together with P.D. No. 985 and P.D. No. 1597, particularly Section
6 of P.D. No. 1597.21 Thus, notwithstanding exemptions from the authority of the Office of
Compensation and Position Classification granted to PRA under its charter, PRA is still
required to 1) observe the policies and guidelines issued by the President with respect to
position classification, salary rates, levels of allowances, project and other honoraria,
overtime rates, and other forms of compensation and fringe benefits and 2) report to the
President, through the Budget Commission, on their position classification and compensation
plans, policies, rates and other related details following such specifications as may be
prescribed by the President.
Despite the power granted to the Board of Directors of PRA to establish and fix a
compensation and benefits scheme for its employees, the same is subject to the review of
the Department of Budget and Management. However, in view of the express powers
granted to PRA under its charter, the extent of the review authority of the Department of
Budget and Management is limited. As stated in Intia, the task of the Department of Budget
and Management is simply to review the compensation and benefits plan of the government
agency or entity concerned and determine if the same complies with the prescribed policies
and guidelines issued in this regard. The role of the Department of Budget and Management
is supervisorial in nature, its main duty being to ascertain that the proposed compensation,
benefits and other incentives to be given to PRA officials and employees adhere to the
policies and guidelines issued in accordance with applicable laws.
The rationale for the review authority of the Department of Budget and Management is
obvious. Even prior to R.A. No. 6758, the declared policy of the national government is to
provide "equal pay for substantially equal work and to base differences in pay upon
substantive differences in duties and responsibilities, and qualification requirements of the
positions."22 To implement this policy, P.D. No. 985 provided for the standardized
compensation of government employees and officials, including those in government-owned
and controlled corporations. Subsequently, P.D. No. 1597 was enacted prescribing the duties

to be followed by agencies and offices exempt from coverage of the rules and regulations of
the Office of Compensation and Position Classification. The intention, therefore, was to
provide a compensation standardization scheme such that notwithstanding any exemptions
from the coverage of the Office of Compensation and Position Classification, the exempt
government entity or office is still required to observe the policies and guidelines issued by
the President and to submit a report to the Budget Commission on matters concerning
position classification and compensation plans, policies, rates and other related details. This
ought to be the interpretation if the avowed policy of compensation standardization in
government is to be given full effect. The policy of "equal pay for substantially equal work"
will be an empty directive if government entities exempt from the coverage of the Office of
Compensation and Position Classification may freely impose any type of salary scheme,
benefit or monetary incentive to its employees in any amount, without regard to the
compensation plan implemented in the other government agencies or entities. Thus, even
prior to the passage of R.A No. 6758, consistent with the salary standardization laws in
effect, the compensation and benefits scheme of PRA is subject to the review of the
Department of Budget and Management.
Private respondents argue, however, that by virtue of the effectivity of R.A. No. 6758, they
are entitled to receive the compensation and allowances previously granted to them as the
transitory provisions in the said law allow the continued payment of compensation and
allowances to incumbents as of July 1, 1989. They allege that by being incumbents as of
said date, the transitory provisions of R.A. No. 6758 should apply. The pertinent provisions
are Sections 12 and 17 of R.A. No. 6758, viz:
"Section 12. Consolidation of Allowances and Compensation.All allowances, except for
representation and transportation allowances, clothing and laundry allowances; subsistence
allowance of marine officers and crew on board government vessels and hospital personnel;
hazard pay; allowances of foreign service personnel stationed abroad; and such other
additional compensation not otherwise specified herein as may determined by the
[Department of Budget and Management], shall be deemed included in the standardized
salary rates herein prescribed. Such other additional compensation, whether in cash or in
kind, being received by incumbents only as of July 1, 1989 not integrated into the
standardized salary rates shall continue to be authorized.
.
Section 17. Salaries of Incumbents.Incumbents of positions presently receiving salaries
and additional compensation/fringe benefits including those absorbed from local government
units and other emoluments, the aggregate of which exceeds the standardized salary rate as
herein prescribed, shall continue to receive such excess compensation, which shall be
referred to as transition allowance. The transition allowance shall be reduced by the amount
of salary adjustment that the incumbent shall receive in the future.
."
The transitory provisions embody the legislative intent to protect incumbents who are
receiving salaries and allowances in excess of those granted under R.A. No. 6758 under the
principle of non-diminution of pay and consistent with the rule that laws should only be
applied prospectively in the spirit of justice and fair play.23However, we subscribe to
petitioners view that the foregoing transitory provisions do not contemplate a situation where
the grant of unauthorized or irregular compensation and benefits would be continued or
subsequently authorized by the passage of the law. It is a settled principle that in construing

legislative enactments, it is presumed that the legislature never intended undesirable


consequences or absurd results.24 Statutes must receive a sensible construction that will give
effect to the legislative intention and avoid an unjust or absurd conclusion. 25
Consequently, despite the passage of R.A. No. 6758 providing for the continued grant of
salaries and benefits to incumbents as of July 1, 1989, private respondents are not entitled
to receive salaries, benefits and allowances that were granted without the prior review and
approval of the Department of Budget and Management.
Upon the effectivity of R.A. No. 6758, it is not disputed that government-owned and
controlled corporations are included in the Compensation and Position Classification System
provided in R.A. No. 6758. Section 16 thereof repeals "[a]ll laws, decrees, executive orders,
corporate charters, and other issuances or parts thereof that exempt agencies from the
coverage of the [Compensation and Position Classification] System, or that authorize and fix
position classification, salaries, pay rates or allowances of specified positions, or groups of
officials and employees or of agencies."26 Although the applicable legal regime with respect
to salary standardization for governmentowned and controlled corporations is clear, the
resolution of the instant controversy would not be complete without a discussion on the
application of DBM-CCC No. 10 implementing the provisions of R.A No. 6758, initially issued
by the Department of Budget and Management and made effective on November 1, 1989.
It appears that one of the grounds for the disallowance of particular items in PRAs Corporate
Operating Budget for calendar year 1992 relied upon by the Office of the President in its
letters dated December 29, 1992 and November 11, 1993, which triggered the present
controversy, are the provisions of DBM-CCC No. 10.27
In the case of De Jesus v. Commission on Audit,28 this Court held that DBM-CCC No. 10 is
without legal force and effect due to the absence of prior publication in the Official Gazette or
in a newspaper of general circulation. The Court further ruled that such prior publication is a
condition sine qua non to the effectiveness and enforceability of DBM-CCC No. 10.29 As a
result of its nullification, DBM-CCC No. 10 was subsequently re-issued in its entirety on
February 15, 1999 and was published in the Official Gazette on March 1, 1999. 30
As to the legal effect of the nullification of DBM-CCC No. 10 and its subsequent re-issuance
and publication, this Court, in Philippine International Trading Corporation v. Commission on
Audit,31 ruled that the re-issuance and publication of DBM-CCC No. 10 does not cure its
previous defect and hence, cannot have retroactive effect. The Court cited precisely the
reason that publication is a condition precedent to the effectivity of the law to inform the
public of its contents before their rights are affected by the same. 32 Consequently,
disallowances made by the Commission on Audit in the said case that were based on DBMCCC No. 10, prior to its re-issuance and publication, were nullified by this Court.
Although cited as basis for the disallowance of particular benefits granted to private
respondents, the records of the case at bar do not clearly show what particular items
contested by private respondents are disallowed on the basis of DBM-CCC No. 10. At any
rate, for a complete resolution of the present controversy and to prevent any confusion or
misapplication, in accordance with this Courts ruling in Philippine International Trading
Corporation v. Commission on Audit,33 with respect to particular items of allowances or
benefits that have been disallowed by the Office of the President based on the provisions of
DBM-CCC No. 10 prior to its re-issuance and publication, the said items of disallowance
cannot be given legal effect in view of the nullity of DBM-CCC No. 10.

In sum, this Court rules that prior to R.A. No. 6758, the compensation and benefits scheme
of petitioner PRA is subject to the review authority of the Department of Budget and
Management. Hence, compensation, allowances and other benefits received by PRA officials
and employees without the requisite approval or authority of the Department of Budget and
Management are unauthorized and irregular and this defect cannot be cured by the
transitory provisions in R.A No. 6758. However, the function of the Department of Budget
and Management in this regard is simply to ensure that the proposed compensation and
benefits scheme complies with the requirements of applicable laws, rules and regulations.
With respect to particular items of allowances and benefits that have been disallowed in the
Corporate Operating Budget of PRA for Calendar Year 1992, which disallowance is based
solely on particular provisions of DBM-CCC No. 10, the said disallowances cannot be given
legal effect in view of the nullity of DBM-CCC No. 10 prior to its re-issuance and publication.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. SP No. 47818 is MODIFIED
as follows:
(a) Compensation and allowances granted to private respondents prior to the
effectivity of R.A. No. 6758 without the authority or approval of the Department of
Budget and Management are unauthorized and disallowed; and
(b) Particular items of disallowance of the Corporate Operating Budget of PRA for
Calendar Year 1992 representing various allowances and benefits in the amount
of P1,324,822.00 based solely on particular provisions of DBM-CCC No. 10, in view
of the nullity of DBM-CCC No. 10, are void.
The Department of Budget and Management is directed to effect the necessary adjustments
in the compensation, allowances and other benefits of private respondents in accordance
with the foregoing pronouncements.
SO ORDERED.
AIDA D. EUGENIO, petitioner,
vs.
CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. & HON. SALVADOR
ENRIQUEZ, JR.,respondents.

PUNO, J.:
The power of the Civil Service Commission to abolish the Career Executive Service Board is
challenged in this petition for certiorari and prohibition.
First the facts. Petitioner is the Deputy Director of the Philippine Nuclear Research Institute.
She applied for a Career Executive Service (CES) Eligibility and a CESO rank on August 2,
1993, she was given a CES eligibility. On September 15, 1993, she was recommended to
the President for a CESO rank by the Career Executive Service Board. 1
All was not to turn well for petitioner. On October 1, 1993, respondent Civil Service
Commission 2 passed Resolution No. 93-4359, viz:

RESOLUTION NO. 93-4359


WHEREAS, Section 1(1) of Article IX-B provides that Civil Service shall be
administered by the Civil Service Commission, . . .;
WHEREAS, Section 3, Article IX-B of the 1987 Philippine Constitution
provides that "The Civil Service Commission, as the central personnel
agency of the government, is mandated to establish a career service and
adopt measures to promote morale, efficiency, integrity, responsiveness,
progresiveness and courtesy in the civil service, . . .";
WHEREAS, Section 12 (1), Title I, Subtitle A, Book V of the Administrative
Code of 1987 grants the Commission the power, among others, to administer
and enforce the constitutional and statutory provisions on the merit system
for all levels and ranks in the Civil Service;
WHEREAS, Section 7, Title I, Subtitle A, Book V of the Administrative Code
of 1987 Provides, among others, that The Career Service shall be
characterized by (1) entrance based on merit and fitness to be determined as
far as practicable by competitive examination, or based highly technical
qualifications; (2) opportunity for advancement to higher career positions; and
(3) security of tenure;
WHEREAS, Section 8 (c), Title I, Subtitle A, Book V of the administrative
Code of 1987 provides that "The third level shall cover Positions in the
Career Executive Service";
WHEREAS, the Commission recognizes the imperative need to consolidate,
integrate and unify the administration of all levels of positions in the career
service.
WHEREAS, the provisions of Section 17, Title I, Subtitle A. Book V of the
Administrative Code of 1987 confers on the Commission the power and
authority to effect changes in its organization as the need arises.
WHEREAS, Section 5, Article IX-A of the Constitution provides that the Civil
Service Commission shall enjoy fiscal autonomy and the necessary
implications thereof;
NOW THEREFORE, foregoing premises considered, the Civil Service
Commission hereby resolves to streamline reorganize and effect changes in
its organizational structure. Pursuant thereto, the Career Executive Service
Board, shall now be known as the Office for Career Executive Service of the
Civil Service Commission. Accordingly, the existing personnel, budget,
properties and equipment of the Career Executive Service Board shall now
form part of the Office for Career Executive Service.
The above resolution became an impediment. to the appointment of petitioner as Civil
Service Officer, Rank IV. In a letter to petitioner, dated June 7, 1994, the Honorable Antonio
T. Carpio, Chief Presidential legal Counsel, stated:

xxx xxx xxx


On 1 October 1993 the Civil Service Commission issued CSC Resolution No.
93-4359 which abolished the Career Executive Service Board.
Several legal issues have arisen as a result of the issuance of CSC
Resolution No. 93-4359, including whether the Civil Service Commission has
authority to abolish the Career Executive Service Board. Because these
issues remain unresolved, the Office of the President has refrained from
considering appointments of career service eligibles to career executive
ranks.
xxx xxx xxx
You may, however, bring a case before the appropriate court to settle the
legal issues arising from issuance by the Civil Service Commission of CSC
Resolution No. 93-4359, for guidance of all concerned.
Thank You.
Finding herself bereft of further administrative relief as the Career Executive Service Board
which recommended her CESO Rank IV has been abolished, petitioner filed the petition at
bench to annul, among others, resolution No. 93-4359. The petition is anchored on the
following arguments:
A.
IN VIOLATION OF THE CONSTITUTION, RESPONDENT COMMISSION
USURPED THE LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT
ABOLISHED THE CESB, AN OFFICE CREATED BY LAW, THROUGH THE
ISSUANCE OF CSC: RESOLUTION NO. 93-4359;
B.
ALSO IN VIOLATION OF THE CONSTITUTION, RESPONDENT CSC
USURPED THE LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT
ILLEGALLY AUTHORIZED THE TRANSFER OF PUBLIC MONEY,
THROUGH THE ISSUANCE OF CSC RESOLUTION NO. 93-4359.
Required to file its Comment, the Solicitor General agreed with the contentions of petitioner.
Respondent Commission, however, chose to defend its ground. It posited the following
position:
ARGUMENTS FOR PUBLIC RESPONDENT-CSC
I. THE INSTANT PETITION STATES NO CAUSE OF ACTION AGAINST THE
PUBLIC RESPONDENT-CSC.
II. THE RECOMMENDATION SUBMITTED TO THE PRESIDENT FOR
APPOINTMENT TO A CESO RANK OF PETITIONER EUGENIO WAS A

VALID ACT OF THE CAREER EXECUTIVE SERVICE BOARD OF THE


CIVIL SERVICE COMMISSION AND IT DOES NOT HAVE ANY DEFECT.
III. THE OFFICE OF THE PRESIDENT IS ESTOPPED FROM
QUESTIONING THE VALIDITY OF THE RECOMMENDATION OF THE
CESB IN FAVOR OF PETITIONER EUGENIO SINCE THE PRESIDENT
HAS PREVIOUSLY APPOINTED TO CESO RANK FOUR (4) OFFICIALS
SIMILARLY SITUATED AS SAID PETITIONER. FURTHERMORE, LACK OF
MEMBERS TO CONSTITUTE A QUORUM. ASSUMING THERE WAS NO
QUORUM, IS NOT THE FAULT OF PUBLIC RESPONDENT CIVIL SERVICE
COMMISSION BUT OF THE PRESIDENT WHO HAS THE POWER TO
APPOINT THE OTHER MEMBERS OF THE CESB.
IV. THE INTEGRATION OF THE CESB INTO THE COMMISSION IS
AUTHORIZED BY LAW (Sec. 12 (1), Title I, Subtitle A, Book V of the
Administrative Code of the 1987). THIS PARTICULAR ISSUE HAD
ALREADY BEEN SETTLED WHEN THE HONORABLE COURT DISMISSED
THE PETITION FILED BY THE HONORABLE MEMBERS OF THE HOUSE
OF REPRESENTATIVES, NAMELY: SIMEON A. DATUMANONG,
FELICIANO R. BELMONTE, JR., RENATO V. DIAZ, AND MANUEL M.
GARCIA IN G.R. NO. 114380. THE AFOREMENTIONED PETITIONERS
ALSO QUESTIONED THE INTEGRATION OF THE CESB WITH THE
COMMISSION.
We find merit in the petition. 3
The controlling fact is that the Career Executive Service Board (CESB) was created in the
Presidential Decree (P.D.) No. 1 on September 1, 1974 4 which adopted the Integrated Plan.
Article IV, Chapter I, Part of the III of the said Plan provides:
Article IV Career Executive Service
1. A Career Executive Service is created to form a continuing pool of wellselected and development oriented career administrators who shall provide
competent and faithful service.
2. A Career Executive Service hereinafter referred to in this Chapter as the
Board, is created to serve as the governing body of the Career Executive
Service. The Board shall consist of the Chairman of the Civil Service
Commission as presiding officer, the Executive Secretary and the
Commissioner of the Budget as ex-officio members and two other members
from the private sector and/or the academic community who are familiar with
the principles and methods of personnel administration.
xxx xxx xxx
5. The Board shall promulgate rules, standards and procedures on the
selection, classification, compensation and career development of members
of the Career Executive Service. The Board shall set up the organization and
operation of the service. (Emphasis supplied)

It cannot be disputed, therefore, that as the CESB was created by law, it can only be
abolished by the legislature. This follows an unbroken stream of rulings that the creation and
abolition of public offices is primarily a legislative function. As aptly summed up in AM JUR
2d on Public Officers and
Employees, 5 viz:
Except for such offices as are created by the Constitution, the creation of
public offices is primarily a legislative function. In so far as the legislative
power in this respect is not restricted by constitutional provisions, it supreme,
and the legislature may decide for itself what offices are suitable, necessary,
or convenient. When in the exigencies of government it is necessary to
create and define duties, the legislative department has the discretion to
determine whether additional offices shall be created, or whether these
duties shall be attached to and become ex-officio duties of existing offices. An
office created by the legislature is wholly within the power of that body, and it
may prescribe the mode of filling the office and the powers and duties of the
incumbent, and if it sees fit, abolish the office.
In the petition at bench, the legislature has not enacted any law authorizing the abolition of
the CESB. On the contrary, in all the General Appropriations Acts from 1975 to 1993, the
legislature has set aside funds for the operation of CESB. Respondent Commission,
however, invokes Section 17, Chapter 3, Subtitle A. Title I, Book V of the Administrative Code
of 1987 as the source of its power to abolish the CESB. Section 17 provides:
Sec. 17. Organizational Structure. Each office of the Commission shall be
headed by a Director with at least one Assistant Director, and may have such
divisions as are necessary independent constitutional body, the Commission
may effect changes in the organization as the need arises.
But as well pointed out by petitioner and the Solicitor General, Section 17 must be read
together with Section 16 of the said Code which enumerates the offices under the
respondent Commission, viz:
Sec. 16. Offices in the Commission. The Commission shall have the
following offices:
(1) The Office of the Executive Director headed by an Executive Director,
with a Deputy Executive Director shall implement policies, standards, rules
and regulations promulgated by the Commission; coordinate the programs of
the offices of the Commission and render periodic reports on their operations,
and perform such other functions as may be assigned by the Commission.
(2) The Merit System Protection Board composed of a Chairman and two (2)
members shall have the following functions:
xxx xxx xxx
(3) The Office of Legal Affairs shall provide the Chairman with legal advice
and assistance; render counselling services; undertake legal studies and
researches; prepare opinions and ruling in the interpretation and application
of the Civil Service law, rules and regulations; prosecute violations of such

law, rules and regulations; and represent the Commission before any court or
tribunal.
(4) The Office of Planning and Management shall formulate development
plans, programs and projects; undertake research and studies on the
different aspects of public personnel management; administer management
improvement programs; and provide fiscal and budgetary services.
(5) The Central Administrative Office shall provide the Commission with
personnel, financial, logistics and other basic support services.
(6) The Office of Central Personnel Records shall formulate and implement
policies, standards, rules and regulations pertaining to personnel records
maintenance, security, control and disposal; provide storage and extension
services; and provide and maintain library services.
(7) The Office of Position Classification and Compensation shall formulate
and implement policies, standards, rules and regulations relative to the
administration of position classification and compensation.
(8) The Office of Recruitment, Examination and Placement shall provide
leadership and assistance in developing and implementing the overall
Commission programs relating to recruitment, execution and placement, and
formulate policies, standards, rules and regulations for the proper
implementation of the Commission's examination and placement programs.
(9) The Office of Career Systems and Standards shall provide leadership and
assistance in the formulation and evaluation of personnel systems and
standards relative to performance appraisal, merit promotion, and employee
incentive benefit and awards.
(10) The Office of Human Resource Development shall provide leadership
and assistance in the development and retention of qualified and efficient
work force in the Civil Service; formulate standards for training and staff
development; administer service-wide scholarship programs; develop training
literature and materials; coordinate and integrate all training activities and
evaluate training programs.
(11) The Office of Personnel Inspection and Audit shall develop policies,
standards, rules and regulations for the effective conduct or inspection and
audit personnel and personnel management programs and the exercise of
delegated authority; provide technical and advisory services to Civil Service
Regional Offices and government agencies in the implementation of their
personnel programs and evaluation systems.
(12) The Office of Personnel Relations shall provide leadership and
assistance in the development and implementation of policies, standards,
rules and regulations in the accreditation of employee associations or
organizations and in the adjustment and settlement of employee grievances
and management of employee disputes.

(13) The Office of Corporate Affairs shall formulate and implement policies,
standards, rules and regulations governing corporate officials and employees
in the areas of recruitment, examination, placement, career development,
merit and awards systems, position classification and compensation,
performing appraisal, employee welfare and benefit, discipline and other
aspects of personnel management on the basis of comparable industry
practices.
(14) The Office of Retirement Administration shall be responsible for the
enforcement of the constitutional and statutory provisions, relative to
retirement and the regulation for the effective implementation of the
retirement of government officials and employees.
(15) The Regional and Field Offices. The Commission shall have not less
than thirteen (13) Regional offices each to be headed by a Director, and such
field offices as may be needed, each to be headed by an official with at least
the rank of an Assistant Director.
As read together, the inescapable conclusion is that respondent Commission's power
to reorganize is limited to offices under its control as enumerated in Section
16, supra. From its inception, the CESB was intended to be an autonomous entity,
albeit administratively attached to respondent Commission. As conceptualized by the
Reorganization Committee "the CESB shall be autonomous. It is expected to view
the problem of building up executive manpower in the government with a broad and
positive outlook." 6 The essential autonomous character of the CESB is not negated by
its attachment to respondent Commission. By said attachment, CESB was not made to
fall within the control of respondent Commission. Under the Administrative Code of 1987,
the purpose of attaching one functionally inter-related government agency to another is to
attain "policy and program coordination." This is clearly etched out in Section 38(3),
Chapter 7, Book IV of the aforecited Code, to wit:
(3) Attachment. (a) This refers to the lateral relationship between the
department or its equivalent and attached agency or corporation for purposes
of policy and program coordination. The coordination may be accomplished
by having the department represented in the governing board of the attached
agency or corporation, either as chairman or as a member, with or without
voting rights, if this is permitted by the charter; having the attached
corporation or agency comply with a system of periodic reporting which shall
reflect the progress of programs and projects; and having the department or
its equivalent provide general policies through its representative in the board,
which shall serve as the framework for the internal policies of the attached
corporation or agency.
Respondent Commission also relies on the case of Datumanong, et al., vs. Civil Service
Commission, G. R. No. 114380 where the petition assailing the abolition of the CESB was
dismissed for lack of cause of action. Suffice to state that the reliance is misplaced
considering that the cited case was dismissed for lack of standing of the petitioner, hence,
the lack of cause of action.
IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the respondent
Commission is hereby annulled and set aside. No costs.

SO ORDERED.
RUBLE RUBENECIA, petitioner,
vs.
CIVIL SERVICE COMMISSION, respondent.

FELICIANO, J.:
Petitioner Ruble Rubenecia assails Civil Service Commission ("CSC" or "Commission")
Resolution No. 94-0533, dated 25 January 1994, aquitting him of a charge of insubordination
but finding him guilty of several other administrative charges and imposing upon him the
penalty of dismissal from the service. He also questions the validity of CSC Resolution No.
93-2387 dated 29 June 1993, which allegedly abolished the Merit System Protection Board
("MSPB") and authorized the elevation of cases pending before that body to the
Commission.
Teachers of Catarman National High School in Catarman, Northern Samar, filed before the
MSPB an administrative complaint against petitioner Rubenecia, the School Principal, for
dishonesty, nepotism, oppression and violation of Civil Service Rules. After a preliminary
inquiry, the MSPB on 15 January 1992 formally charged Rubenecia and required him to file
an answer with the CSC Regional Office in Tacloban City. On 24 February 1992, petitioner
Rubenecia, instead of filing an answer, requested that he be furnished with copies of the
documents submitted by complainants in support of the charges against him. 1
On 15 May 1992, the CSC Regional Director assigned to investigate the case invited
Rubenecia to the Regional Office and there identify and pick up the documents he desired.
The Regional Office had then just received the records of the case transmitted by the MSPB.
In response, Rubenecia requested that his visit to the CSC Regional Office be deferred
because of alleged problems in his school relating to the enrollment period. The CSC
reiterated on 10 June 1992 its order to Rubenecia to file his answer. In turn, petitioner
through counsel in a letter dated 9 July 1992, reiterated his request that the CSC Regional
Office furnish him copies of the documents submitted in connection with the charges against
him.
Although petitioner did not file his answer, the Regional Director set the case for hearing on
20 August 1992. This hearing, however, did not take place as the complainants did not there
show up. Petitioner Rubenecia appeared at that hearing, but filed no answer. In an order
issued on the same day, i.e., 20 August 1992, the Regional Office declared that the case was
deemed submitted for resolution on the basis of the documents theretofore filed.
On 25 August 1992, Rubenecia wrote to the Chairman of the Civil Service Commission,
praying that the case against him be dismissed and attaching to that letter many documents
in support of his claim of innocence.
On 28 September 1992, the Regional Director submitted an investigation report to the
Chairman, MSPB. Before the MSPB could render a decision, the Commission issued on 29
June 1993 Resolution No. 93-2387 which provided, among other things, that cases then
pending before the MSPB were to be elevated to the Commission for decision.

The Commission, accordingly, took over the case against petitioner and on 25 January 1994,
rendered its Resolution No. 94-0533 finding petitioner guilty and ordering his dismissal from
the service. Petitioner moved for reconsideration, asserting lack of jurisdiction on the part of
the Commission and attaching most if not all of the same documents he had annexed to his
letter-answer to support his assertion of innocence. The motion for reconsideration was
denied in a resolution of the Commission on 31 May 1994.
Two (2) principal issues are raised in this Petition for Certiorari:
(1) Whether or not the CSC had authority to issue its Resolution No. 93-2387
and assume jurisdiction over the administrative case against petitioner; and
(2) Whether or not petitioner had been accorded due process in connection
with rendition of CSC Resolution No. 94-0533 finding him guilty and ordering
his dismissal from the service.
I
In respect of the first issue, petitioner Rubenecia contends that the Commission had no
jurisdiction to take over the administrative case against him from the MSPB for the reason
that CSC Resolution No. 93-2387 was invalid. The argument of the petitioner is that since
the MSPB was a creation of law, it could be abolished only by law, and that Resolution No.
93-2387 was accordingly an ultra vires act on the part of the Commission.
Resolution No. 93-2387 reads in full:
WHEREAS, the Civil Service Commission recognizes the government-wide
call and the need for streamlining of operations which requires implification of
systems, cutting of red tape and elimination of unnecessary bureaucratic
layer;
WHEREAS, one of the powers and functions of the Commission provided for
in Section 12 (11) of Book V of the Administrative Code of 1987 is to hear
and decide administrative cases instituted by or broughtbefore it
directly or on appeal, including contested appointments and review decisions
and actions of its offices and of the agencies attach to it;
WHEREAS, Section 47 (1) of Book V of the Administrative Code of 1987
specifically provides that theCommission shall decide upon appeal all
administrative disciplinary cases involving the imposition of penalty
of suspension for more that thirty days, or fine in an amount exceeding thirty
days salary, demotion in rank or salary or transfer removal or dismissal from
office;
WHEREAS, under Section 16 (2) of Book V of the Code, the Merit System
Protection Board (MSPB),an office of the Commission, has the function to
hear and decide administrative cases involving officials and employees of the
civil service concurrently with the Commission;
WHEREAS, most decisions on administrative cases rendered by the
MSPB are later appealed to the Commission for review and final resolution;

WHEREAS, the existing procedure wherein most administrative cases are


first reviewed by the MSPB before they are elevated to the
Commission makes it difficult for these cases to be finally resolved within a
short period of time;
WHEREAS, the present situation requires immediate streamlining of the
operation of the Civil Service Commission to achieve as speedier delivery of
administrative justice and economical operation without impairing due
process and the substantive rights of the parties in administrative cases;
NOW, THEREFORE, pursuant to the provisions of Section 17 of Book V of
the Administrative Code of 1987 which authorizes the Commission, as an
independent constitutional body, to effect changes in its organization as the
need arises, the Commission Resolves as it is hereby Resolved to effect the
following changes;
1. Decisions in administrative cases involving officials and
employees of the civil serviceappealable to the
Commission pursuant to Section 47 of Book V of the Code
including personnel actions such as contested
appointments shall now be appealed directly to the
Commission and not to the MSPB; and
2. Decisions and administrative cases involving the officials
and employees of the Civil Service including contested
appointments which have already been appealed to the
MSPB and other pending administrative cases brought
directly before the MSPB, shall now be elevated to the
Commission for final resolution.
Parties in administrative cases pending before the MSPB shall be notified in
writing that their respective cases have already been elevated to the
Commission for final resolution. They shall have 15 days from receipt of
notice to submit their comments on or objections to the new procedures.
This Resolution shall take effect on 1 July 1993 and the new procedure shall
remain effective until rescinded by the Commission in another resolution.
Adopted this 29th day of June 1993.
Patricia A. Sto. Tomas
Chairman
Ramon P. Ereneta, Jr. Thelma P. Gaminde
Commissioner Commissioner
Juanito Demetrio
Board Secretary VI
(Emphasis supplied)

The Merit System Protection Board was originally created by P.D. No. 1409, dated 8 June
1978, Section 1 of which said: "There is hereby created in the Civil Service Commission a
Merit Systems Board." The Board was composed of "a commissioner and two (2) associate
commissioners" appointed by the CSC. 2 The powers and functions of this Board were set out in
Section 5 of P.D. No. 1409 in the following terms:
Sec. 5. Powers and Functions of the Board. The Board shall have the
following powers and functions, among others:
(1) Hear and decide administrative cases involving officers and employees of
the civil service.
(2) Hear and decide cases brought before it by officers and employees who
feel aggrieved by the determination of appointing authorities involving
appointment promotion, transfer, detail, reassignment and other personnel
actions, as well as complaints against any officers in the government arising
from abuses arising from personnel actions of these officers or from violation
of the merit system.
(3) Hear and decide complaints of civil service employees regarding
malpractices of other officials and employees.
(4) Promulgate, subject to the approval of the Civil Service Commission,
rules and regulations to carry out the functions of the Board.
(5) Administer oaths, issue subpoena and subpoena duces tecum, and take
testimony in any investigation or inquiry. The Board shall have the power to
punish for contempt in accordance with the rules of court under the same
procedure with the same penalties provided therein.
(6) Perform such other functions as may be assigned by the Civil Service
Commission.
xxx xxx xxx
Decisions of the Board involving removal of officers and employees from the service were
"subject to automatic review by the Commission;" all other decisions of the Board were also
subject to appeal to the Commission. 3
As noted, P.D. No. 1409 had "created in the Civil Service Commission [the] Merit Systems
Board." Section 16 of the present Civil Service Law found in the 1987 Administrative Code
followed the same line and re-created the Merit Systems Board as an office of the
Commission and gave it a new name: "Merit System Protection Board."
Section 16 of the present Civil Service Law reads as follows, in pertinent part:
Sec. 16. Offices in the Commission. The Commission shall have the following
offices:
(1) The Office of the Executive Director . . .

(2) The Merit System Protection Board composed of a Chairman and two (2)
members which have the following functions:
(a) Hear and decide on appeal administrative cases involving
officials and employees of the Civil Service. Its decision shall
be final except those involving dismissal or separation from
the service which may be appealed to the Commission;
(b) Hear and decide cases brought before it on appeal by
officials and employees who feel aggrieved by the
determination of appointing authorities involving personnel
actions and violations of the merit system. The decision of the
Board shall be final except those involving division chiefs or
officials of higher ranks which may be appealed to the
Commission;
(c) Directly take cognizance of complaints affecting functions
of the Commission, those which are unacted upon by the
agencies, and such other complains which required direct
action of the Board in the interest of justice;
(d) Administer oaths, issue subpoena and subpoena duces
tecum, take testimony in any investigation or inquiry, punish
for contempt in accordance with the same procedures and
penalties prescribed in the Rules of Court; and
(e) Promulgate rules and regulations to carry out the functions
of the Board subject to the approval of the Commission.
(3) The Office of Legal Affairs . . . . .
xxx xxx xxx
The 1987 Administrative Code thus made clear that the MSPB was intended to be an office
of the Commission like any of the other thirteen (13) offices in the Commission: e.g., the
Office of Legal Affairs; the Office of Planning and Management; the Central Administrative
Office, and so forth. The MSPB was, in other words, a part of the internal structure and
organization of the Commission and thus a proper subject of organizational change which
the Commission is authorized to undertake under Section 17 of the present Civil Service
Law:
Sec. 17. Organizational Structure. Each office of the Commission shall be
headed by a Director with at least one (1) Assistant Director, and may have
such divisions as are necessary to carry out their respective functions. As an
independent constitutional body, the Commission may effect changes in the
organization as the need arises. (Emphasis supplied).
Since it was part and parcel of the internal organization of the Commission, the MSPB
was not an autonomous entity created by law and merely attached for administrative
purposes to the Civil Service Commission. In Aida Eugenio v. Civil Service Commission, 4 the
Court invalidated a CSC Resolution which had transferred the Career Executive Service Board to
the Office for Career Executive Service of the CSC precisely because the Career Executive

Service Board was an autonomous entity created by a special law and attached, for
administrative purposes only, to the Civil Service Commission; that Board did not fall within the
control of the Civil Service Commission.

It will be noted that under the provisions of Section 16 (2) (a) and (b) quoted earlier, cases
originating outside the Civil Service Commission itself and appealed to the MSPB were, in
cases involving division chiefs and higher officials and cases where the penalty imposed was
dismissal or separation from the service, subject to further appeal to the Commission itself.
At the same time, cases filed originally with the MSPB could also be filed directly with the
Commission itself under Section 12 (11) of the Civil Service Law. It was this apparent
duplication or layering of functions within the Commission that the Commission sought to
rationalize and eliminate by enacting Resolution No. 93-2387 quoted in full earlier.
The change instituted by CSC Resolution No. 93-2387 consisted basically of the following:
decision in administrative cases appealable to the Commission pursuant to Section 47 of the
present Civil Service Law may now be appealed directly to the Commission itself and not to
the MSPB. Administrative cases already pending on appeal before the MSPB or previously
brought directly to the MSPB, at the time of the issuance of Resolution No. 93-2387, were
required to be elevated to the Commission for final resolution. The functions of the MSPB
relating to the determination of administrative disciplinary cases were, in other words, reallocated to the Commission itself. These changes were prescribed by the Commission in its
effort to "streamline the operation of the CSC" which in turn required the "simplification of
systems, cutting of red tape and elimination of [an] unnecessary bureaucratic layer." The
previous procedure made it difficult for cases to be finally resolved within a reasonable
period of time. The change, therefore, was moved by the quite legitimate objective of
simplifying the course that administrative disciplinary cases, like those involving petitioner
Rubenecia, must take. We consider that petitioner Rubenecia had no vested right to a twostep administrative appeal procedure within the Commission, that is, appeal to an office of
the Commission, the MSPB, and thereafter a second appeal to the Civil Service Commission
itself (i.e., the Chairman and the two [2] Commissioners of the Civil Service Commission), a
procedure which most frequently consumed a prolonged period of time.
We note also that Resolution No. 93-2387 did not purport to abolish the MSPB nor to effect
the termination of the relationship of public employment between the Commission and any of
its officers or employees. At all events, even if Resolution No. 93-2387 had purported to do
so, petitioner Rubenecia, who does not claim to be an officer or employee of the MSPB, has
no personality or standing to contest such termination of public employment. InFernandez
and De Lima v. Hon. Patricia A. Sto. Tomas, etc., et al., 5 the Court upheld Resolution No. 943710 of the Civil Service which effected certain changes in the internal organization and structure
of the Commission. The Court said:
We consider that Resolution No. 94-3710 has not abolished any public office
as that term is used in the law of public officers. It is essential to note that
none of the "changes in organization" introduced by Resolution No. 94-3710
carried with it or necessarily involved the termination of the relationship of
public employment between the Commission and any of its officers and
employees. We find it very difficult to suppose that the 1987 Revised
Administrative Code having mentioned fourteen (14) different offices of the
CSC, meant to freeze these offices and to cast in concrete, as it were, the
internal organization of the Commission until it might please Congress to
change such internal organization regardless of the ever changing needs of
the civil service as a whole. To the contrary, the legislative authority had

expressly authorized the Commission to carry out "changes in the


organization," as the need [for such changes] arises.
Petitioner Rubenecia also claims that the Civil Service Commission itself (as distinguished
from the MSPB) did not acquire jurisdiction over his case because he had not been notified
by individual written notice sent by mail that his case had been elevated to the Civil Service
Commission as required by Resolution No. 93-2387. We consider this objection
unmeritorious. CSC Resolution No. 93-2387, quoted earlier, did not require individual written
notice sent by mail to parties in administrative cases pending before the MSPB. Assuming
that Rubenecia had not in fact been sent an individual notice, the fact remains that
Resolution No. 93-2387 was published in a newspaper of general circulation (The Manila
Standard, issue of 16 July 1993 6 ); the Commission may accordingly be deemed to have
complied substantially with the requirement of written notice in its own Resolution. Moreover,
petitioner himself had insisted on pleading before the Commission, rather than before the MSPB;
he filed before the Commission itself his letter-cum-annexes which effectively was his answer to
the Formal Charge instituted before the MSPB. He cannot now be heard to question the
jurisdiction of the Commission.
II
We turn to petitioner's contention that he had been denied due process when the
Commission rendered its Resolution No. 94-0533 finding him guilty and ordering his
dismissal from the government service.
The fundamental rule of due to process requires that a person be accorded notice and an
opportunity to be heard. These requisites were respected in the case of petitioner
Rubenecia.
The Formal Charge prepared by the MSPB and given to petitioner Rubenecia constituted
sufficient notice which, in fact, had enabled him to prepare his defense. The Formal Charge
contained the essence of the complaint and the documents in support thereof and the
conclusion of the MSPB finding a prima facie case against Rubenecia. Rubenecia himself
admitted that he had been furnished with copies of an affidavit and testimonies of the
principal witnesses against him that were given during the preliminary hearing of the case
against Rubenecia. 7
We are also not persuaded by petitioner's complaint that he had not been furnished copies of
all the documents that had accompanied the Formal Charge. Rubenecia was given an
opportunity by the Investigating Officer, the Regional Director of CSC, to obtain those
documents from the CSC Regional Office. Rubenecia did not avail himself of that opportunity
and he cannot now be heard to complain that he was not given such documents. At all
events, as already noted, he sent a formal letter-answer to Chairman Sto. Tomas
controverting the charges against him and submitted voluminous documents in support of his
claim of innocence and prayed for dismissal of the Formal Charge. This letter-answer
constitutes proof that he did have notice of the accusations against him and was in fact able
to present his own defense.
Petitioner's answer to the Formal Charge was considered by the Investigating Officer. This
Officer, however, concluded in his report that "the evidence presented by respondent
[Rubenecia] could not outweigh that of the prosecution as contained in the records. 8

Finally, the motion for reconsideration filed by Rubenecia before the Commission cured
whatever defect might have existed in respect of alleged denial of procedural due
process. 9 Denial of due process cannot be successfully invoked by a party who has had the
opportunity to be heard on his motion for reconsideration. 10 In the instant case, petitioner was
heard not only in respect of his motion for reconsideration; he was also in fact afforded
reasonable opportunity to present his case before decision was rendered by the Commission
finding him guilty.
Rubenecia also claims that the Commission had erred in disregarding the "overwhelming
evidence" in his favor. The settled rule in our jurisdiction is that the findings of fact of an
administrative agency must be respected, so long as such findings of fact are supported by
substantial evidence, even if such evidence might not be overwhelming or even
preponderant. It is not the task of an appellate court, like this Court, to weigh once more the
evidence submitted before the administrative body and to substitute its own judgment for that
of the administrative agency in respect of sufficiency of evidence. 11 In the present case, in any
event, after examination of the record of this case, we conclude that the decision of the Civil
Service Commission finding Rubenecia guilty of the administrative charges prepared against him,
is supported by substantial evidence.
In Resolution No. 94-0533, the Commission drew the following conclusions in respect of the
charges against petitioner Rubenecia:
I. VIOLATION OF CIVIL SERVICE RULES AND REGULATIONS
The records show that Rubenecia committed the said offense. He himself
admitted that he did not accomplish his DTR but this was upon the
suggestion of the Administrative Officer. Rubenecia cannot use as an excuse
the alleged suggestion of an Administrative Officer. As the principal of a
national high School, he is expected to know the basic civil service law, rules,
and regulations.
II DISHONESTY
The Commission finds Rubenecia liable. He was charged for misrepresenting
that he was on "Official Travel" to Baguio City to attend a three-week seminar
and making it appear in his CSC Form No. 7 for the month of October 1988
that the has a perfect attendance for that month. Rubenecia in order to rebut
the same simply reiterated previous allegation that he attended the SEDP
Training in Baguio City during the questioned months without even an
attempt on his part to adduce evidence documentary or testimonial that
would attest to the truth of his allegation that he was indeed in Baguio during
those weeks for training purposes. A mere allegation cannot obviously prevail
over a more direct and positive statement of Celedonio Layon, School
Division Superintendent, Division of Northern Samar, when the latter certified
that he had no official knowledge of the alleged "official travel" of Rubenecia.
Moreover, verification with the Bureau of Secondary Schools reveals that no
training seminar for school principal was conducted by DECS during that
time. It was also proven by records that he caused one Mrs. Cecilia vestra to
render service as Secondary School Teacher from January 19, 1990 to
August 30, 1991 without any duly issued appointment by the appointing
authority.

III. NEPOTISM
With respect to the charge of Nepotism, Rubenecia alleged that he is not the
appointing authority with regard to the appointment of his brother-in-law as
Utilityman but merely a recommending authority. With this statement, the
Commission finds Rubenecia guilty. It should be noted that under the
provision of Sec. 59, of the 1987 Administrative Code, the recommending
authority is also prohibited from recommending the appointment to a nonteaching position of his relatives within the prohibited degree.
IV. OPPRESSION
Rubenecia is also guilty of Oppression. He did not give on time the money
benefits due to Ms. Leah Rebadulla and Mr. Rolando Tafalla, both Secondary
Teachers of CNHS, specifically their salary differentials for July to December
1987, their salaries for the month of May and half of June 1988; their
proportional vacation salaries for the semester of 1987-1988, and the salary
of Mr. Tafalla for the month of June, 1987. Rubenecia did not even attempt to
present countervailing evidence. Without being specifically denied, they are
deemed admitted by Rubenecia.
V INSUBORDINATION
He is not liable for Insubordination arising from his alleged refusal to obey the
"Detail Order" by filing a sick leave and vacation leave successively. The
records show that the two applications for leave filed by Rubenecia were duly
approved by proper official, hence it cannot be considered an act of
Insubordination on the part of Rubenecia when he incurred absences based
on an approved application for leave of absence.
Rubenecia is therefore found guilty of Dishonesty, Nepotism, Oppression and
Violations of Civil Service Rules and Regulations.
WHEREFORE, foregoing premises considered, the Commission hereby
resolves to find Ruble Rubenecia guilty of Dishonesty, Nepotism, Oppression
and Violation of Civil Service Rules and Ragulations. Accordingly, he is
meted, out the penalty of dismissal from the service. 12
We find no basis for overturning the above conclusions as the product merely of
arbitrary whims and caprice or of bad faith and malice.
We conclude that petitioner Rubenecia has failed to show grave abuse of discretion or any
act without or in excess of jurisdiction on the part of public respondent Commission in issuing
its Resolution No. 93-2387 dated 29 June 1993 and Resolution No. 94-0533 dated 25
January 1994.
WHEREFORE, for all the foregoing, the Petition for Certiorari is hereby DISMISSED for lack
of merit.
SO ORDERED.

SALVADOR C. FERNANDEZ and ANICIA M. DE LIMA, petitioners,


vs.
HON. PATRICIA A. STO. TOMAS, Chairman, and HON. RAMON B. ERENETA,
Commissioner, Civil Service Commission, respondents.

FELICIANO, J.:
In this Petition for Certiorari, Prohibition and Mandamus with Prayer for a Temporary
Restraining Order, petitioners Salvador C. Fernandez and Anicia M. de Lima assail the
validity of Resolution No. 94-3710 of the Civil Service Commission ("Commission") and the
authority of the Commission to issue the same.
Petitioner Fernandez was serving as Director of the Office of Personnel Inspection and Audit
("OPIA") while petitioner de Lima was serving as Director of the Office of the Personnel
Relations ("OPR"), both at the Central Office of the Civil Service Commission in Quezon City,
Metropolitan Manila. While petitioners were so serving, Resolution No. 94-3710 signed by
public respondents Patricia A.. Sto. Tomas and Ramon Ereneta, Jr., Chairman and
Commissioner, respectively, of the Commission, was issued on 7 June 1994. 1 Resolution No.
94-3710 needs to be quoted in full:
RESOLUTION NO. 94-3710
WHEREAS, Section 17 of Book V of Executive Order 292 provides that ". . .
as an independent constitutional body, the Commission may effect changes
in the organization as the need arises;"
WHEREAS, the Commission finds it imperative to effect changes in the
organization to streamline its operations and improve delivery of public
service;
WHEREAS, the Commission finds it necessary to immediately effect changes
in the organization of the Central Offices in view of the need to implement
new programs in lieu of those functions which were transferred to the
Regional Offices;
WHEREFORE, foregoing premises considered, the Commission hereby
RESOLVES to effect the following changes in its organization, specifically in
the Central Offices:
1. The OCSS [Office of Career Systems and Standards], OPIA [Office of
Personnel Inspection and Audit] and OPR [Office of Personnel Relations] are
merged to form the Research and Development Office (RDO).
2. The Office for Human Resource Development (OHRD) is renamed Human
Resource Development Office (HRDO).
3. The following functions and the personnel assigned to the unit performing
said functions are hereby transferred to HRDO:

a. Administration of the Honor and Awards program under


OCSS;
b. Registration and Accreditation of Unions under OPR; and
c. Accreditation of Agencies to take final action on
appointments under OPIA.
4. The Office for Central Personnel Records (OCPR) is renamed
Management Information Office (MIO).
5. The Information technology functions of OPM and the personnel assigned
to the unit are transferred to MIO.
6. The following functions of OPM and the personnel assigned to the unit
performing said functions are hereby transferred to the Office of the
Executive Director:
a. Financial Audit and Evaluation;
b. Internal Management and Improvement;
c. Research and Statistics; and
d. Planning and Programming.
7. The library service and its personnel under OCPR are transferred to the
Central Administrative Office.
8. The budget allocated for the various functions shall be transferred to the
Offices where the functions are transferred. Records, fixtures and equipment
that go with the functions shall be moved to where the functions are
transferred.
Annex A contains the manning list for all the offices, except the OCES.
The changes in the organization and in operations shall take place before
end of July 1994.
Done in Quezon City, July 07, 1994.
(Signed)
Patricia A. Sto. Tomas
Chairman
(Signed) Did not participate
Ramon P. Ereneta, Jr., Thelma P. Gaminde
Commissioner Commissioner

Attested by:
(Signed)
Carmencita Giselle B. Dayson
Board Secretary V 2
During the general assembly of officers and employees of the Commission held in the
morning of 28 July 1994, Chairman Sto. Tomas, when apprised of objections of petitioners,
expressed the determination of the Commission to implement Resolution No. 94-3710
unless restrained by higher authority.
Petitioners then instituted this Petition. In a Resolution dated 23 August 1994, the Court
required public respondents to file a Comment on the Petition. On 21 September 1994,
petitioners filed an Urgent Motion for Issuance of a Temporary Restraining Order, alleging
that petitioners had received Office Orders from the Commission assigning petitioner
Fernandez to Region V at Legaspi City and petitioner de Lima to Region III in San Fernando,
Pampanga and praying that public respondents be restrained from enforcing these Office
Orders. The Court, in a Resolution dated 27 September 1994, granted this Motion and
issued the Temporary Restraining Order prayed for by petitioners.
The Commission filed its own Comment, dated 12 September 1994, on the Petition and then
moved to lift the Temporary Restraining Order. The Office of the Solicitor General filed a
separate Comment dated 28 November 1994, defending the validity of Resolution No. 943710 and urging dismissal of the Petition. Petitioners filed separate Replies to these
Comments. The Commission in turn filed a Rejoinder (denominated "Comment [on] the
Reply").
The principal issues raised in this Petition are the following:
(1) Whether or not the Civil Service Commission had legal authority to issue
Resolution No. 94-3710 to the extent it merged the OCSS [Office of Career
Systems and Standards], the OPIA [Office of Personnel Inspection and Audit]
and the OPR [Office of Personnel Relations], to form the RDO [Research and
Development Office]; and
(2) Whether or not Resolution No. 94-3710 violated petitioners' constitutional
right to security of tenure.
I.
The Revised Administrative Code of 1987 (Executive Order No. 292 dated 25 July 1987)
sets out, in Book V, Title I, Subtitle A, Chapter 3, the internal structure and organization of the
Commission in the following terms:
Sec. 16. Offices in the Commission The Commission shall have the
following offices:
(1) The Office of the Executive Director . . .
(2) The Merit System Protection Board . . .
(3) The Office of Legal Affairs . . .

(4) The Office of Planning and Management . . .


(5) The Central Administrative Office . . .
(6) The Office of Central Personnel Records . . .
(7) The Office of Position Classification and
Compensation . . .
(8) The Office of Recruitment, Examination and
Placement . . .
(9) The Office of Career Systems and Standards shall provide leadership and
assistance in the formulation and evaluation of personnel systems and
standards relative to performance appraisal, merit promotion and employee
incentive benefits and awards.
(10) The Office of Human Resource Development . . .
(11) The Office of Personnel Inspection and Audit shall develop policies,
standards, rules and regulations for the effective conduct of inspection and
audit of personnel and personnel management programs and the exercise of
delegated authority; provide technical and advisory services to Civil Service
Regional Offices and government agencies in the implementation of their
personnel programs and evaluation systems.
(12) The Office of Personnel Relations shall provide leadership and
assistance in the development and implementation of policies, standards,
rules and regulations governing corporate officials and employees in the
areas of recruitment, examination, placement, career development, merit and
awards systems, position classification and compensation, performance
appraisal, employee welfare and benefits, discipline and other aspects of
personnel management on the basis of comparable industry practices.
(13) The Office of the Corporate Affairs . . .
(14) The Office of Retirement Administration . . .
(15) The Regional and Field Offices. . . . (Emphases in the original)
Immediately after the foregoing listing of offices of the Commission and their respective
functions, the 1987 Revised Administrative Code goes on to provide as follows:
Sec. 17. Organizational Structure. Each office of the Commission shall be
headed by a Director with at least one (1) Assistant Director, and may have
such divisions as are necessary to carry out their respective functions. As an
independent constitutional body, the Commission may effect chances in the
organization as the need arises.
xxx xxx xxx 3

(Emphasis supplied)

Examination of the foregoing statutory provisions reveals that the OCSS, OPIA and OPR,
and as well each of the other Offices listed in Section 16 above, consist of aggregations of
Divisions, each of which Divisions is in turn a grouping of Sections. Each Section, Division
and Office comprises a group of positions within the agency called the Civil Service
Commission, each group being entrusted with a more or less definable function or functions.
These functions are related to one another, each of them being embraced by a common or
general subject matter. Clearly, each Office is an internal department or organizational unit
within the Commission and that accordingly, the OCSS, OPIA and OPR, as well as all the
other Offices within the Commission constitute administrative subdivisions of the CSC. Put a
little differently, these offices relate to the internal structure of the Commission.
What did Resolution No. 94-3710 of the Commission do? Examination of Resolution No. 943710 shows that thereby the Commission re-arranged some of the administrative units (i.e.,
Offices) within the Commission and, among other things, merged three (3) of them (OCSS,
OPIA and OPR) to form a new grouping called the "Research and Development Office
(RDO)." The same Resolution renamed some of the Offices of the Commission, e.g., the
Office for Human Resource Development (OHRD) was renamed Human Resource
Development Office (HRDO); the Office for Central Personnel Records (OCPR) was
renamed Management Information Office (MIO). The Commission also re-allocated certain
functions moving some functions from one Office to another; e.g., the information technology
function of OPM (Office of Planning and Management) was transferred to the newly named
Management Information Office (MIO). This re-allocation or re-assignment of some functions
carried with it the transfer of the budget earmarked for such function to the Office where the
function was transferred. Moreover, the personnel, records, fixtures and equipment that were
devoted to the carrying out of such functions were moved to the Offices to where the
functions were transferred.
The objectives sought by the Commission in enacting Resolution No. 94-3710 were
described in that Resolution in broad terms as "effect[ing] changes in the organization to
streamline [the Commission's] operations and improve delivery of service." These changes in
internal organization were rendered necessary by, on the one hand, the decentralization and
devolution of the Commission's functions effected by the creation of fourteen (14) Regional
Offices and ninety-five (95) Field Offices of the Commission throughout the country, to the
end that the Commission and its staff may be brought closer physically to the government
employees that they are mandated to serve. In the past, its functions had been centralized in
the Head Office of the Commission in Metropolitan Manila and Civil Service employees all
over the country were compelled to come to Manila for the carrying out of personnel
transactions. Upon the other hand, the dispersal of the functions of the Commission to the
Regional Offices and the Field Offices attached to various governmental agencies
throughout the country makes possible the implementation of new programs of the
Commission at its Central Office in Metropolitan Manila.
The Commission's Office Order assigning petitioner de Lima to the CSC Regional Office No.
3 was precipitated by the incumbent Regional Director filing an application for retirement,
thus generating a need to find a replacement for him. Petitioner de Lima was being assigned
to that Regional Office while the incumbent Regional Director was still there to facilitate her
take over of the duties and functions of the incumbent Director. Petitioner de Lima's prior
experience as a labor lawyer was also a factor in her assignment to Regional Office No. 3
where public sector unions have been very active. Petitioner Fernandez's assignment to the
CSC Regional Office No. 5 had, upon the other hand, been necessitated by the fact that the

then incumbent Director in Region V was under investigation and needed to be transferred
immediately to the Central Office. Petitioner Fernandez was deemed the most likely
designee for Director of Regional Office No. 5 considering that the functions previously
assigned to him had been substantially devolved to the Regional Offices such that his
reassignment to a Regional Office would result in the least disruption of the operations of the
Central Office. 4
It thus appears to the Court that the Commission was moved by quite legitimate
considerations of administrative efficiency and convenience in promulgating and
implementing its Resolution No. 94-3710 and in assigning petitioner Salvador C. Fernandez
to the Regional Office of the Commission in Region V in Legaspi City and petitioner Anicia M.
de Lima to the Commission's Regional Office in Region III in San Fernando, Pampanga. It is
also clear to
the Court that the changes introduced and formalized through Resolution No. 94-3710 renaming of existing Offices; re-arrangement of the groupings of Divisions and Sections
composing particular Offices; re-allocation of existing functions (and related personnel;
budget, etc.) among the re-arranged Offices are precisely the kind of internal changes
which are referred to in Section 17 (Book V, Title I, Subtitle A, Chapter 3) of the 1987
Revised Administrative Code), quoted above, as "chances in the organization" of the
Commission.
Petitioners argue that Resolution No. 94-3710 effected the "abolition" of public offices,
something which may be done only by the same legislative authority which had created
those public offices in the first place.
The Court is unable, in the circumstances of this case, to accept this argument. The term
"public office" is frequently used to refer to the right, authority and duty, created and
conferred by law, by which, for a given period either fixed by law or enduring at the pleasure
of the creating power, an individual is invested with some portion of the sovereign functions
of government, to be exercised by that individual for the benefit of the public. 5 We consider
that Resolution No. 94-3710 has not abolished any public office as that term is used in the law of
public officers. 6 It is essential to note that none of the "changes in organization" introduced by
Resolution No. 94-3710 carried with it or necessarily involved thetermination of the relationship of
public employment between the Commission and any of its officers and employees. We find it
very difficult to suppose that the 1987 Revised Administrative Code having mentioned fourteen
(14) different "Offices" of the Civil Service Commission, meant to freeze those Offices and to cast
in concrete, as it were, the internal organization of the commission until it might please Congress
to change such internal organization regardless of the ever changing needs of the Civil Service
as a whole. To the contrary, the legislative authority had expressly authorized the Commission to
carry out "changes in the organization," as the need [for such changes] arises." 7 Assuming, for
purposes of argument merely, that legislative authority was necessary to carry out the kinds off
changes contemplated in Resolution No. 94-3710 (and the Court is not saying that such authority
is necessary), such legislative authority was validly delegated to the Commission by Section 17
earlier quoted. The legislative standards to be observed and respected in the exercise of such
delegated authority are set out not only in Section 17 itself (i.e., "as the need arises"), but also in
the Declaration of Policies found in Book V, Title I, Subtitle A, Section 1 of the 1987 Revised
Administrative Code which required the Civil Service Commission
as the central personnel agency of the Government [to] establish a
career service, adopt measures to promote efficiency
[and] responsiveness . . . in the civil service . . . and that personnel functions
shall be decentralized, delegating the corresponding authority to

thedepartments, offices and agencies where such functions can be


effectively performed. (Emphasis supplied)
II.
We turn to the second claim of petitioners that their right to security of tenure was breached
by the respondents in promulgating Resolution No. 94-3710 and ordering petitioners'
assignment to the Commission's Regional Offices in Regions III and V. Section 2(3) of Article
IX(B) of the 1987 Constitution declared that "no officer or employee of the Civil Service shall
be removed or suspended except for cause provided by law." Petitioners in effect contend
that they were unlawfully removed from their positions in the OPIA and OPR by the
implementation of Resolution No. 94-3710 and that they cannot, without their consent, be
moved out to the Regional Offices of the Commission.
We note, firstly, that appointments to the staff of the Commission are not appointments to a
specified public office but rather appointments to particular positions or ranks. Thus, a
person may be appointed to the position of Director III or Director IV; or to the position of
Attorney IV or Attorney V; or to the position of Records Officer I or Records Officer II; and so
forth. In the instant case, petitioners were each appointed to the position of Director IV,
without specification of any particular office or station. The same is true with respect to the
other persons holding the same position or rank of Director IV of the Commission.
Section 26(7), Book V, Title I, Subtitle A of the 1987 Revised Administrative Code recognizes
reassignment as a management prerogative vested in the Commission and, for that matter,
in any department or agency of government embraced in the civil service:
Sec. 26. Personnel Actions. . . .
xxx xxx xxx
As used in this Title, any action denoting the movement or progress of
personnel in the civil service shall be known as personnel action. Such action
shall include appointment through certification, promotion, transfer, reinstatement, re-employment, detail, reassignment, demotion, and
separation. All personnel actions shall be in accordance with such rules,
standards, and regulations as may be promulgated by the Commission.
xxx xxx xxx
(7) Reassignment. An employee may be re-assigned from one organizational
unit to another in the same agency, Provided, That such re-assignment
shall not involve a reduction in rank status and salary. (Emphasis supplied)
It follows that the reassignment of petitioners Fernandez and de Lima from their previous
positions in OPIA and OPR, respectively, to the Research and Development Office (RDO) in
the Central Office of the Commission in Metropolitan Manila and their subsequent
assignment from the RDO to the Commission's Regional Offices in Regions V and III had
been effected with express statutory authority and did not constitute removals without lawful
cause. It also follows that such re-assignment did not involve any violation of the
constitutional right of petitioners to security of tenure considering that they retained their
positions of Director IV and would continue to enjoy the same rank, status and salary at their

new assigned stations which they had enjoyed at the Head Office of the Commission in
Metropolitan Manila. Petitioners had not, in other words, acquired a vested right to serve at
the Commission's Head Office.
Secondly, the above conclusion is compelled not only by the statutory provisions relevant in
the instant case, but also by a long line of cases decided by this Court in respect of different
agencies or offices of government.
In one of the more recent of these cases, Department of Education Culture and Sports, etc.,
et al. v. Court of Appeals, et al., 8 this Court held that a person who had been appointed as
"Secondary School Principal II" in the Division of City Schools, District II, Quezon City, National
Capital Region, and who had been stationed as High School Principal in the Carlos Albert High
School in Quezon for a number of years, could lawfully be reassigned or transferred to the
Manuel Roxas High School, also in Quezon City, without demotion in rank or diminution of salry.
This Court held:
The aforequoted provision of Republic Act No. 4670 particularly Section 6
thereof which provides that except for cause and in the exigencies of the
service no teacher shall be transferred without his consent from one station
to another, finds no application in the case at bar as this is predicated upon
the theory that the teacher concerned is appointed not merely assigned
to a particular station. Thus:
The rule pursued by plaintiff only goes so far as
the appointed indicates a specification. Otherwise, the
constitutionally ordained security of tenure cannot shield her.
In appointments of this nature, this Court has consistently
rejected the officer's demand to remain even as public
service dictates that a transfer be made in a particular
station. Judicial attitude toward transfers of this nature is
expressed in the following statement in Ibaez, et
al. vs. Commission on Elections, et al. (G.R. No.
L-26558, April 27, 1967; 19 SCRA 1002 [1967]);
That security of tenure is an essential and
constitutionally guaranteed feature of our Civil
Service System, is not open to debate. The
mantle of its protection extends not only
against removals without cause but also
against unconsented transfer which, as
repeatedly enunciatEd, are tantamount to
removals which are within the ambit of the
fundamental guarantee. However, the
availability of that security of tenure
necessarily depends, in the first instance,
upon the nature of the appointment (Hojilla vs.
Marino, 121 Phil. 280 [1965].) Such that the
rule which proscribes transfers without
consent as anathema to the security of tenure
is predicated upon the theory that the officer
involved is appointed not
merely assigned to a particular
station(Miclat v. Ganaden, et al., 108 Phil. 439

[1960]; Jaro v. Hon. Valencia, et al., 118 Phil.


728 [1963]). [Brillantes v. Guevarra, 27 SCRA
138 (1969)]
The appointment of Navarro as principal does not refer to any particular
station or school. As such, she could be assigned to any station and she is
not entitled to stay permanently at any specific school. (Bongbong v. Parado,
57 SCRA 623) When she was assigned to the Carlos Albert High School, it
could not have been with the intention to let her stay in said school
permanently. Otherwise, her appointment would have so stated.
Consequently, she may be assigned to any station or school in Quezon City
as the exigencies of public service require even without consent. As this
Court ruled inBrillantes v. Guevarra, 27 SCRA 138,
143
Plaintiff's confident stride falters. She took too loose a view of
the applicable jurisprudence. Her refuge behind the mantle of
security of tenure guaranteed by the Constitution is not
impenetrable. She proceeds upon the assumption that she
occupies her station in Sinalang Elementary School by
appointment. But her first appointment as Principal merely
reads thus: "You are hereby appointed a Principal
(Elementary School) in the Bureau of Public Schools,
Department of Education", without mentioning her station.
She cannot therefore claim security of tenure as Principal of
Sinalang Elementary School or any particular station. She
may be assigned to any station as exigency of public service
requires, even without her consent. She thus has no right of
choice. 9 (Emphasis supplied; citation omitted)
In the very recent case of Fernando, et al. v. Hon. Sto. Tomas, etc., et
a1., 10 the Court addressed appointments of petitioners as "Mediators-Arbiters in the National
Capital Region" in dismissing a challenge on certiorari to resolutions of the CSC and orders of the
Secretary of Labor. The Court said:
Petitioners were appointed as Mediator Arbiters in the National Capital
Region. They were not, however, appointed to a specific station or particular
unit of the Department of Labor in the National Capital Region (DOLE-NCR).
Consequently, they can always be reassigned from one organizational unit to
another of the same agency where, in the opinion of respondent Secretary,
their services may be used more effectively. As such they can neither claim a
vested right to the station to which they were assigned nor to security of
tenure thereat. As correctly observed by the Solicitor General, petitioners'
reassignment is not a transfer for they were not removed from their position
as med-arbiters. They were not given new appointments to new positions. It
indubitably follows, therefore, that Memorandum Order No. 4 ordering their
reassignment in the interest of the service is legally in order.11 (Emphases
supplied)
In Quisumbing v. Gumban, 12 the Court, dealing with an appointment in the Bureau of
Public Schools of the Department of Education, Culture and Sports, ruled as follows:

After a careful scrutiny of the records, it is to be underscored that the


appointment of private respondent Yap is simply that of a District Supervisor
of the Bureau of Public Schools which does not indicate a specific
station (Rollo, p. 13). A such, she could be assigned to any station and she is
no entitled to stay permanently at any specific station (Bongbong v. Parado,
57 SCRA 623 [1974]; Department of Education, Culture and Sports v. Court
of Appeals [G.R. 81032, March 22, 1990] citingBrillantes v. Guevarra [27
SCRA 138 [1969]). 13
Again, in Ibaez v. Commission on Elections, 14 the Court had before it petitioners'
appointments as "Election Registrars in the Commission of Elections," without any intimation to
what city, municipality or municipal district they had been appointed as such. 15 The Court held
that since petitioners "were not appointed to, and consequently not entitled to any security of
tenure or permanence in, any specific station," "on general principles, they [could] be transferred
as the exigencies of the service required," and that they had no right to complain against any
change in assignment. The Court further held that assignment to a particular station after
issuance of the appointment was not necessary to complete such appointment:
. . . . We cannot subscribe to the theory that an assignment to a particular
station, in the light of the terms of the appointments in question, was
necessary to complete the said appointments. The approval thereof by the
Commissioner of Civil Service gave those appointments the stamp of
finality.With the view that the respondent Commission then took of its power
in the premises and the demand of the mission it set out to accomplish with
the appointments it extended, said appointments were definitely meant to be
complete as then issued. The subsequent assignment of the appointees
thereunder that the said respondent Commission held in reserve to be
exercised as the needs of each locality justified did not in any way detract
from the perfection attained by the appointments beforehand. And the
respective appointees were entitled only to such security of tenure as the
appointment papers concerned actually conferred not in that of any place
to which they may have been subsequently assigned. . . . As things stand, in
default of any particular station stated in their respective appointments, no
security of tenure can be asserted by the petitioners on the basis of the mere
assignments which were given to them. A contrary rule will erase altogether
the demarcation line we have repeatedly drawn
between appointment and assignment as two distinct concepts in the law of
public officers. 16 (Emphases supplied)
The petitioner, in Miclat v. Ganaden, 17 had been appointed as a "Welfare Office Incharge,
Division of Urban, Rural and Community Administration, Social Welfare Administration." She was
assigned as Social Welfare Incharge of the Mountain Province, by an office order of the
Administrator, Social Welfare Administration. After a little more than a year; petitioner was
assigned elsewhere and respondent Ganaden transferred to petitioner's first station in Baguio
City. The Court ruled that petitioner was not entitled to remain in her first station, In Jaro
v. Hon. Valencia, et al., 18 petitioner Dr. Jaro had been appointed "Physician in the Municipal
Maternity and Charity Clinics, Bureau of Hospitals." He was first assigned to the Municipal
Maternity and Charity Clinics in Batulati, Davao, and later to the corresponding clinic in Saug,
Davao and then to Catil, Davao. He was later assigned to the Municipality of Padada, also of
Davao Province. He resisted his last assignment and brought mandamus against the Secretary of
Health to compel the latter to return him to his station in Catil, Davao as Municipal Health Officer
thereof. The Court, applying Miclat v. Ganaden dismissed this Petition holding that his
appointment not being to any specific station but as a physician in the Municipal Maternity and

Charity Clinics, Bureau of Hospitals, he could be transferred or assigned to any station where, in
the opinion of the Secretary of Health, his services may be utilized more effectively. 19

Also noteworthy is Sta. Maria v. Lopez 20 which involved the appointment of petitioner Sta.
Maria as "Dean, College of Education, University of the Philippines." Dean Sta. Maria was
transferred by the President of the University of the Philippines to the Office of the President,
U.P., without demotion in rank or salary, thereby acceding to the demands of student activists who
were boycotting their classes in the U.P. College of Education. Dean Sta. Maria assailed his
transfer as an illegal and unconstitutional removal from office. In upholding Dean Sta. Maria's
claim, the Court, speaking through Mr. Justice Sanchez, laid down the applicable doctrine in the
following terms:
4. Concededly, transfers there are which do not amount to removal. Some
such transfer can be effected without the need for charges being preferred,
without trial or hering, and even without the consent of the employee.
The clue to such transfers may be found in the "nature of the
appointment." Where the appointment does not indicate a specific station, an
employee may be transferred or reassigned provided the transfer affects no
substantial change in title, rank and salary. Thus one who is appointed
"principal in the Bureau of Public Schools" and is designated to head a pilot
school may be transferred to the post of principal of another school.
And the rule that outlaws unconsented transfers as anathema to security of
tenure applies only to an officer who is appointed not merely assigned
to a particular station. Such a rule does not prescribe a transfer carried out
under a specific statute that empowers the head of an agency to periodically
reassign the employees and officers in order to improve the service of the
agency. The use of approved techniques or methods in personnel
management to harness the abilities of employees to promote optimum
public service cannot-be objected to. . . .
5. The next point of inquiry is whether or not Administrative Order 77 would
stand the test of validity vis-a-vis the principles just enunciated.
xxx xxx xxx
To be stressed at this point, however, is that the appointment of Sta. Maria is
that of "Dean, College of Education, University of the Philippines." He is not
merely a dean "in the university." His appointment is to a specific
position; and, more importantly, to a specific station. 21 (Citations omitted;
emphases supplied)
For all the foregoing we conclude that the reassignment of petitioners Fernandez and de
Lima from their stations in the OPIA and OPR, respectively, to the Research Development
Office (RDO) and from the RDO to the Commissions Regional Offices in Regions V and III,
respectively, without their consent, did not constitute a violation of their constitutional right to
security of tenure.
WHEREFORE, the Petition for Certiorari, Prohibition and Mandamus with Prayer for Writ of
Preliminary Injunction or Temporary Restraining Order is hereby DISMISSED. The

Temporary Restraining Order issued by this Court on 27 September 1994 is hereby LIFTED.
Costs against petitioners.
SO ORDERED.