Admin Case Digest 2.docx

BUKLOD NG KAWANING EIIB, vs. HON. EXECUTIVE SECRETARY RONALDO B. ZAMORA (GR 142801, July 10, 2001) Doctrine: Buklod ng Kawaning EIIB vs. Zamora 7 ruled that the President, based on existing laws, had the authority to carry out a reorganization in any branch or agency of the executive department.||| Facts: The Economic Intelligence and Investigation Bureau (EIIB) of the Ministry of Finance was created on June 30, 1987 by Executive Order No. 127. On January 7, 2000, then President Joseph Estrada issued Executive Order No. 191 deactivating the EIIB. Its function was transferred to the newly created Task Force Aduana, which utilized the personnel, facilities and resources of existing departments, agencies and bureaus. Thus, no new employees were hired. Its personnel came from other agencies and detailed with the Task Force. On March 29, 2000, Executive Order No. 223 was issued separating all EIIB personnel from the service effective April 30, 2000. Aggrieved, petitioners, employees of the EIIB, without exhausting administrative remedies and the hierarchy of courts, resorted to this recourse challenging Executive Orders Nos. 191 and 223. Petitioners contend that the issuance of the afore-mentioned executive orders is: (a) a violation of their right to security of tenure; (b) tainted with bad faith as they were not actually intended to make the bureaucracy more efficient but to give way to Task Force "Aduana," the functions of which are essentially and substantially the same as that of EIIB; and (c) a usurpation of the power of Congress to decide whether or not to abolish the EIIB. Arguing in behalf of respondents, the Solicitor General maintains that: (a) the President enjoys the totality of the executive power provided under Sections 1 and 7, Article VII of the Constitution, thus, he has the authority to issue Executive Order Nos. 191 and 223; (b) the said executive orders were issued in the interest of national economy, to avoid duplicity of work and to streamline the functions of the bureaucracy; and (c) the EIIB was not "abolished," it was only "deactivated." Issue: a.) Does the President have the authority to reorganize the executive department? And, b) How should the reorganization be carried out? Held: a.) In the whereas clause of E.O. No. 191, former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General Appropriations Act), a provision similar to Section 62 of R.A. 7645 quoted in Larin, thus; "SECTION 77. Organized Changes. — Unless otherwise provided by law or directed by the President of the Philippines, no changes in key positions or organizational units in any department or agency shall be authorized in their respective organizational structures and funded from appropriations provided by this Act." The general rule has always been that the power to abolish a public office is lodged with the legislature. The exception, however, is that as far as bureaus, agencies or offices in

the executive department are concerned, the President's power of control may justify him to inactivate the functions of a particular office, 19 or certain laws may grant him the broad authority to carry out reorganization measures. Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), "the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of the Office of the President." For this purpose, he may transfer the functions of other Departments or Agencies to the Office of the President. b.) In the instructive words laid down by this Court in Dario v. Mison, 39 through Justice Abraham F. Sarmiento: Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. As a general rule, a reorganization is carried out in "good faith" if it is for the purpose of economy or to make bureaucracy more efficient. In that event, no dismissal (in case of dismissal) or separation actually occurs because the position itself ceases to exist. And in that case, security of tenure would not be a Chinese wall. Be that as it may, if the 'abolition,' which is nothing else but a separation or removal, is done for political reasons or purposely to defeat security of tenure, otherwise not in good faith, no valid 'abolition' takes and whatever 'abolition' is done, is void ab initio. There is an invalid 'abolition' as where there is merely a change of nomenclature of positions, or where claims of economy are belied by the existence of ample funds.

Also, Petitioners claim that the deactivation of EIIB was done in bad faith because four days after its deactivation, President Estrada created the Task Force Aduana. We are not convinced. While basically, the functions of the EIIB have devolved upon the Task Force Aduana, we find the latter to have additional new powers. Consequently, it cannot be said that there is a feigned reorganization. In Blaquera v. Civil Service Commission, 37 we ruled that a reorganization in good faith is one designed to trim the fat off the bureaucracy and institute economy and greater efficiency in its operation. Lastly, we hold that petitioners' right to security of tenure is not violated. Nothing is better settled in our law than that the abolition of an office within the competence of a legitimate body if done in good faith suffers from no infirmity. Valid abolition of offices is neither removal nor separation of the incumbents. DRIANITA BAGAOISAN, vs. NATIONAL TOBACCO ADMINISTRATION, represented by ANTONIO DE GUZMAN and PERLITA BAULA Facts: President Joseph Estrada issued on 30 September 1998 Executive Order No. 29, entitled "Mandating the Streamlining of the National Tobacco Administration (NTA)," a government agency under the Department of Agriculture. The order was followed by another issuance, on 27 October 1998, by President Estrada of Executive Order No. 36, amending Executive Order No. 29, insofar as the new staffing pattern was concerned,

by increasing from four hundred (400) to not exceeding seven hundred fifty (750) the positions affected thereby. In compliance therewith, the NTA prepared and adopted a new Organization Structure and Staffing Pattern (OSSP) which, on 29 October 1998, was submitted to the Office of the President. On 11 November 1998, the rank and file employees of NTA Batac, among whom included herein petitioners, filed a letter-appeal with the Civil Service Commission and sought its assistance in recalling the OSSP. On 04 December 1998, the OSSP was approved by the Department of Budget and Management (DBM) subject to certain revisions. On even date, the NTA created a placement committee to assist the appointing authority in the selection and placement of permanent personnel in the revised OSSP. The results of the evaluation by the committee on the individual qualifications of applicants to the positions in the new OSSP were then disseminated and posted at the central and provincial offices of the NTA. On 10 June 1996, petitioners, all occupying different positions at the NTA office in Batac, Ilocos Norte, received individual notices of termination of their employment with the NTA effective thirty (30) days from receipt thereof. Finding themselves without any immediate relief from their dismissal from the service, petitioners filed a petition for certiorari, prohibition and mandamus, with prayer for preliminary mandatory injunction and/or temporary restraining order, with the Regional Trial Court (RTC) of Batac, Ilocos Norte, and prayed. The RTC, on 09 September 2000, ordered the NTA to appoint petitioners in the new OSSP to positions similar or comparable to their respective former assignments. A motion for reconsideration filed by the NTA was denied by the trial court in its order of 28 February 2001. Thereupon, the NTA filed an appeal with the Court of Appeals. The appellate court rendered a decision reversing and setting aside the assailed orders of the trial court. On 18 November 2002, after the NTA had filed its comment of 23 September 2002, the Court issued its resolution denying the petition for failure of petitioners to sufficiently show any reversible error on the part of the appellate court in its challenged decision so as to warrant the exercise by this Court of its discretionary appellate jurisdiction. A motion for reconsideration filed by petitioners was denied in the Court's resolution of 20 January 2002. On 21 February 2003, petitioners submitted a "Motion to Admit Petition For En Banc Resolution" of the case. Issue: whether the NTA may be reorganized by an executive fiat, not by legislative action. Held: It is important to emphasize that the questioned Executive Orders No. 29 and No. 36 have not abolished the National Tobacco Administration but merely mandated its reorganization through the streamlining or reduction of its personnel. Article VII, Section 17, 10 of the Constitution, expressly grants the President control of all executive departments, bureaus, agencies and offices which may justify an executive action to

inactivate the functions of a particular office or to carry out reorganization measures under a broad authority of law. 11 Section 78 of the General Provisions of Republic Act No. 8522 (General Appropriations Act of FY 1998) has decreed that the President may direct changes in the organization and key positions in any department, bureau or agency pursuant to Article VI, Section 25, 12 of the Constitution, which grants to the Executive Department the authority to recommend the budget necessary for its operation. Evidently, this grant of power includes the authority to evaluate each and every government agency, including the determination of the most economical and efficient staffing pattern, under the Executive Department. n the present instance, involving neither an abolition nor transfer of offices, the assailed action is a mere reorganization under the general provisions of the law consisting mainly of streamlining the NTA in the interest of simplicity, economy and efficiency. It is an act well within the authority of President motivated and carried out, according to the findings of the appellate court, in good faith, a factual assessment that this Court could only but accept. ROSA LIGAYA C. DOMINGO vs. HON. RONALDO D. ZAMORA Facts: On March 5, 1999, former President Joseph E. Estrada issued Executive Order No. 81 3 ("EO 81" for brevity) entitled "Transferring the Sports Programs and Activities of the Department of Education, Culture and Sports to the Philippine Sports Commission and Defining the Role of DECS in School-Based Sports.” Pursuant to EO 81, former DECS Secretary Andrew B. Gonzales ("Secretary Gonzales" for brevity) issued Memorandum No. 01592 on January 10, 2000 temporarily reassigning, in the exigency of the service, all remaining BPESS Staff to other divisions or bureaus of the DECS and In their Petition, petitioners argue that EO 81 is void and unconstitutional for being an undue legislation by President Estrada. Petitioners maintain that the President's issuance of EO 81 violated the principle of separation of powers. Petitioners also challenge the DECS Memoranda for violating their right to security of tenure. Petitioners seek to nullify EO 81 and the DECS Memoranda. Petitioners pray that this Court prohibit the PSC from performing functions related to school sports development. Petitioners further pray that, upon filing of the petition, this Court issue a temporary restraining order against respondents to desist from implementing EO 81. During the pendency of the case, Republic Act No. 9155 ("RA 9155" for brevity), otherwise known as the "Governance of Basic Education Act of 2001," was enacted on August 11, 2001. RA 9155 expressly abolished the BPESS and transferred the functions, programs and activities of the DECS relating to sports competition to the PSC. Issue: he issue to resolve is whether EO 81 and the DECS Memoranda are valid. Held: Executive Order No. 292 ("EO 292" for brevity), otherwise known as the Administrative Code of 1987, expressly grants the President continuing authority to reorganize the Office of the President. Section 31 of EO 292 provides:

"SEC. 31. Continuing Authority of the President to Reorganize his Office. — The President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may take any of the following actions: (1) Restructure the internal organization of the Office of the President Proper, including the immediate Offices, the Presidential Special Assistants/Advisers System and the Common Support System, by abolishing, consolidating or merging units thereof or transferring functions from one unit to another; (2) Transfer any function under the Office of the President to any other Department or Agency as well as transfer functions agencies to the Office of the President from other Departments or Agencies;" and (3) Transfer any agency under the Office of the President to any other department or agency as well as transfer agencies to the Office of the President from other Departments or Agencies;"(Emphasis supplied.) Since EO 81 is based on the President's continuing authority under Section 31 (2) and (3) of EO 292, 8 EO 81 is a valid exercise of the President's delegated power to reorganize the Office of the President. The law grants the President this power in recognition of the recurring need of every President to reorganize his office "to achieve simplicity, economy and efficiency." The Office of the President is the nerve center of the Executive Branch. To remain effective and efficient, the Office of the President must be capable of being shaped and reshaped by the President in the manner he deems fit to carry out his directives and policies. After all, the Office of the President is the command post of the President. This is the rationale behind the President's continuing authority to reorganize the administrative structure of the Office of the President. However, the President's power to reorganize the Office of the President under Section 31 (2) and (3) of EO 292 should be distinguished from his power to reorganize the Office of the President Proper. Under Section 31 (1) of EO 292, the President can reorganize the Office of the President Proper by abolishing, consolidating or merging units, or by transferring functions from one unit to another. In contrast, under Section 31 (2) and (3) of EO 292, the President's power to reorganize offices outside the Office of the President Proper but still within the Office of the President is limited to merely transferring functions or agencies from the Office of the President to Departments or Agencies, and vice versa. This distinction is crucial as it affects the security of tenure of employees. The abolition of an office in good faith necessarily results in the employee's cessation in office, but in such event there is no dismissal or separation because the office itself ceases to exist. On the other hand, the transfer of functions or agencies does not result in the employee's cessation in office because his office continues to exist although in another department, agency or office. In the instant case, the BPESS employees who were not transferred to PSC were at first temporarily, then later permanently reassigned to other

offices of the DECS, ensuring their continued employment. At any rate, RA 9155 now mandates that these employees "shall be retained by the Department. 4. AQUILINO T. LARIN vs. THE EXECUTIVE SECRETARY Facts: Petitioner was convicted by the Sandiganbayan of the crimes of violation of Section 268 (4) of the National Internal Revenue Code and Section 3 (e) of Republic Act 3019. The fact of his conviction was reported to the President of the Philippines and acting by authority of the latter, then Sr. Deputy Executive Secretary Leonardo A. Quisumbing issued Memorandum Order No. 164 which provides for the creation of an Executive Committee to investigate the administrative charge against petitioner. The Committee directed the petitioner to respond to the administrative charge. Meanwhile, the President issued the challenged Executive Order No. 132 which mandated the streamlining of the Bureau of Internal Revenue. The Excise Tax Service or the Specific Tax Service, of which petitioner was the Assistant Commissioner, was one of those offices that was abolished by the said executive order. The President found petitioner guilty of grave misconduct and imposed upon him the penalty of dismissal with forfeiture of all benefits and disqualification for reappointment in the government service. In this petition, petitioner challenges the authority of the President to dismiss him from office arguing that insofar as presidential appointees who are Career Executive Service Officers are concerned, the President exercises only the power of control and not the power to remove. On the other hand, respondents contended that since petitioner is a presidential appointee, he falls under the disciplining authority of the President. They also contended that E.O. No. 132 and its implementing rules were validly issued pursuant to Sections 48 and 62 of Republic Act No. 7645. Respondents claimed that he was removed from office because he was found guilty of grave misconduct in the administrative cases filed against him. Issue: Whether or not the petitioner's dismissal from office is valid. Held: At the outset, it is worthy to note that the position of Assistant Commissioner of the BIR is part of the Career Executive Service. The fact that petitioner is a presidential appointee does not give the appointing authority the license to remove him at will or at his pleasure for it is an admitted fact that he is likewise a career service officer who under the law is the recipient of tenurial protection, thus, may only be removed for a cause and in accordance with procedural due process. Initially, it is argued that there is no law yet which empowers the President to issue E.O. No. 132 or to reorganize the BIR. We do not agree. Under its preamble, E.O. No. 132 lays down the legal bases of its issuance, namely: a) Section 48 (clearly mentions the acts of "scaling down, phasing out and abolition" of

offices only and does not cover the creation of offices or transfer of functions) and 62 of R.A. No. 7645, (evidently shows that the President is authorized to effect organizational changes including the creation of offices in the department or agency concerned.) b) Section 20, Book III of E.O. No. 292. (This provision speaks of such other powers vested in the President under the law.) What law then which gives him the power to reorganize? It is Presidential Decree No. 1772, which amended Presidential Decree No. 1416. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials. While the President's power to reorganize can not be denied, this does not mean however that the reorganization itself is properly made in accordance with law. Wellsettled is the rule that reorganization is regarded as valid provided it is pursued in good faith. Thus, in Dario vs. Mison, this Court has had the occasion to clarify that: "As a general rule, a reorganization is carried out in 'good faith' if it is for the purpose of economy or to make bureaucracy more efficient. In that event no dismissal or separation actually occurs because the position itself ceases to exist. And in that case the security of tenure would not be a Chinese wall. Be that as it may, if the abolition which is nothing else but a separation or removal, is done for political reasons or purposely to defeat security of tenure, or otherwise not in good faith, no valid abolition takes place and whatever abolition is done is void ab initio. There is an invalid abolition as where there is merely a change of nomenclature of positions or where claims of economy are belied by the existence of ample funds." In this regard, it is worth mentioning that Section 2 of R. A. No. 6656 lists down the circumstances evidencing bad faith in the removal of employees as a result of the reorganization: a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; b) Where an office is abolished and another performing substantially the same functions is created; c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; e) Where the removal violates the order of separation provided in Section 3 hereof."

A reading of some of the provisions of the questioned E.O. No. 132 clearly leads us to an inescapable conclusion that there are circumstances considered as evidences of bad faith in the reorganization of the BIR.

Furthermore, it is perceivable that the non-reappointment of the petitioner as Assistant Commissioner violates Section 4 of R.A. No. 6656. Under said provision, officers holding permanent appointments are given preference for appointment to the new positions in the approved staffing pattern comparable to their former positions or in case there are not enough comparable positions to positions next lower in rank. It is undeniable that petitioner is a career executive officer who is holding a permanent position. Hence, he should have been given preference for appointment in the position of Assistant Commissioner. We should not lose sight of the second paragraph of Section 4 of R.A. No. 6656 which explicitly states that no new employees shall be taken in until all permanent officers shall have been appointed for permanent position.