(PABLO MANLAPIT, ET AL.,) VALENTIN C. GARCIA, PETITIONER, VS. LAND SETTLEMENT AND DEVELOPMENT CORPORATION, RESPONDENT.

Garcia versus Land Settlement and Development Corporation

The Case

This is a petition for certiorari brought by Valentin Garcia against the Land Settlement and Development Corporation, which the Court calls LASEDECO, to review a portion of a decision of the Court of Industrial Relations that denied him gratuity and back pay. The case matters because it fixes the rule on what a suspension and a recall to duty do to the status of a public employee, and it teaches that reinstatement after suspension is neither an appointment nor a dismissal, so it needs no approval by a board of directors.

Procedural History

The laid-off personnel of the National Land Settlement Administration, which the Court calls NLSA, filed a case in the Court of Industrial Relations to secure reappointment and to collect their gratuity and the money value of their unenjoyed vacation and sick leaves. The Court of Industrial Relations rendered a decision ordering payment of the gratuities and the cash value of the unenjoyed vacation and sick leaves of the petitioners. As to Valentin Garcia alone, however, that court found that his reinstatement had not been approved by the NLSA Board of Directors, that he therefore lost his status as an employee, and that it found no justification to alter the action taken by LASEDECO on his claim. Garcia appealed to the Supreme Court, alleging grave errors of law and serious abuse of judicial discretion.

Facts

Valentin Garcia was the Acting Officer-in-Charge and Accountant of the Koronadal Valley Project of the NLSA. The Manager suspended him for illegal disposition of cattle, a committee was created to investigate him, and a criminal complaint for malversation of public property was filed against him. The criminal complaint was dismissed for insufficiency of evidence, and the investigating committee recommended his exoneration. The Manager then reinstated Garcia, who promptly submitted a voucher covering his salary during the period of his suspension.

The NLSA Board of Directors, under Resolution No. 552, indorsed the voucher to the NLSA Auditor for amount and recommendation. The NLSA Auditor returned the papers to the Manager, explaining that under Commonwealth Act No. 441 the reinstatement of Garcia should first be approved by the Board of Directors before payment of his claim could be made. In the meantime, the executive order abolishing the NLSA and creating LASEDECO was promulgated, and Garcia submitted his claim to LASEDECO through its General Manager, who made a report to the LASEDECO Board of Directors ignoring the recommendation of the NLSA investigating committee.

On the strength of that report, the LASEDECO Board of Directors approved a resolution providing that Garcia be considered as dismissed from the service effective as of the date of his suspension, with the salary he received from the time of his recall to be considered as earned for services rendered during the pendency of the administrative case. Earlier, on April 17, 1950, the NLSA Board of Directors had laid off several officers and employees effective May 16, 1950, on account of lack of funds, granting them whatever benefits and privileges may be granted to laid-off officers and employees of the government or government-owned or controlled corporations.

Issues

• Whether or not Garcia lost his status as an employee of the NLSA because his reinstatement by the Manager was not approved by the Board of Directors.
• Whether or not the approval of the Board of Directors was required for his reinstatement under Commonwealth Act No. 441 or under the uniform charter for government corporations.
• Whether or not the later resolution of the LASEDECO Board of Directors could decree his dismissal and bar his claim to the gratuity granted to the other laid-off employees.

Applicable Provisions

Section 5 of Commonwealth Act No. 441, creating the NLSA, provides:

The Manager shall, subject to the approval of the Board, appoint such technical, clerical and other employees as may be necessary.

The Court reads this section as referring only to original appointments that create the relation of employer and employee, and as silent on reinstatements and removals.

Section 12, paragraph d, of Executive Order No. 399, the Uniform Charter For All Government Corporations, provides that the Manager has power:

with the approval of the Board, to remove, suspend or otherwise discipline, for cause, any subordinate employee of the Corporation.

The Court holds that this provision covers removals, suspensions, and disciplinary acts, but not reinstatements to duty.

Ruling

On the first issue, the Court held that the Court of Industrial Relations erred in ruling that Garcia lost his status as an employee because his reinstatement was not approved by the Board of Directors. When Garcia was suspended pending administrative investigation, he did not thereby cease to be an employee of the NLSA; otherwise, he could not have been subjected thereafter to administrative investigation by the NLSA management. When the Manager later recalled him to duty, Garcia underwent no change in his status and remained as much an employee as he was before suspension.

On the second issue, the Court held that the Board of Directors was not called upon to approve a reinstatement that had produced no change in the status of the employee and which was neither an appointment nor a dismissal. Section 5 of Commonwealth Act No. 441 refers to original appointments that create the relation of employer and employee, and the recall of Garcia could not have that effect because the relation already existed. As to the uniform charter, the Court held that the executive orders could not retroactively apply to Garcia, who was separated and laid off as early as May 1950, to his prejudice; and that even if they could apply, the provisions quoted do not refer to reinstatements to duty, since these are neither removals nor suspensions nor acts of discipline for cause.

On the third issue, the Court held that the conclusion is not altered by the LASEDECO resolution of May 31, 1951, adopted one year after Garcia was separated or laid off. Garcia was no longer in the service when LASEDECO was created, and was not of the personnel that LASEDECO took over from the NLSA; the LASEDECO Directors could not decree the dismissal of one who had never become their employee. His resubmission of his claim to LASEDECO did not constitute recognition that he was or had been a LASEDECO employee, because the claim was but a consequence of the transfer to LASEDECO of all assets, rights, choses in action, obligations and liabilities of the NLSA.

Doctrine

A suspension pending administrative investigation does not sever the employer-employee relation; the employee remains in the service, and his recall to duty produces no change in status. Reinstatement after suspension is neither an appointment nor a dismissal, so it requires no approval by the board of directors, and a statutory power to appoint subject to board approval, or to remove, suspend, or discipline for cause, does not reach reinstatements. A corporation that takes over the assets and liabilities of an abolished agency cannot decree the dismissal of a person who was no longer in the service when it was created and who never became its employee.

Disposition

The Court reversed the decision appealed from insofar as Valentin Garcia is concerned, remanded the records to the Court of Industrial Relations to ascertain the benefits to which he may be entitled on the same basis as the other laid-off personnel of the NLSA, and taxed the costs against LASEDECO.

Remember This

Memorize the line that a reinstatement after suspension is neither an appointment nor a dismissal, so it needs no board approval and the employee never lost his status. Examiners use this case on the status of suspended employees, on the scope of a manager's appointing and disciplinary powers, and on the non-retroactive application of charters to employees already separated.