REMEDIOS T. BLAQUERA, HERMINIO GUTIERREZ, AUGUSTO R. ORAA, VIRGINIA MALLILLIN, NENA T. AQUINO, RIZALYN DELA CRUZ, SATURNINO Y. CANMANGONAN, ALICIA S. UMEREZ, PRESENTACION C. DIE…

The petitioners and intervenors who are permanent employees in the
Department of Environment and Natural Resources (DENR) filed this petition for
prohibition and mandamus with a prayer for the issuance of a writ of
preliminary injunction and/or restraining order, to stop the
respondents from removing them from their positions in the DENR pursuant to the 1987
reorganization of that department under Executive Order No. 192 dated June 10,
1987.

To carry out said reorganization, and pursuant to Executive Order
No. 165 of May 5, 1987 which abolished the Commission on Government
Reorganization and trans­ferred its remaining functions^[1] to
the Department of Budget and Management (DBM for brevity), DENR Secretary
Fulgencio S. Factoran, Jr. submitted to the DBM a staff­ing pattern consisting
of 28,106 positions. The DBM approved only
22,956 positions and the petitioners’ positions were among those trimmed off
the new plantilla. As the lean plantilla did not meet the
manpower requirements of the DENR, Secretary Factoran submitted a staffing
pattern consisting of 24,614 positions.

On July 4, 1988, the DBM released a revised staffing pattern
containing 23,612 positions only which was 1,002 positions less than what the
DENR Secretary requested and which still did not include the positions of the
petitioners.

On July 29, 1988, the DENR requested the DBM to restore 839
positions which DBM had disapproved earlier. The request was approved on September 14, 1988 after long negotiations
between the DENR and DBM, subject to the
condition that these positions shall be coterminous with the appointees but not
to exceed three (3) years. The
implications of this are:

“1. If the appointee desires to retire, resign,
transfer to other office or leave his employment for any reason whatsoever, the
position is automatically abolished, even if the three-year period has not
lapsed.

“2. By the end of the 3rd year, the employee
holding a coterminous position is automatically separated.” (p. 7, Rollo.)

Meanwhile, on June 10, 1988, Republic Act No. 6656 “An Act to
Protect the Security of Tenure of Civil Service Officers and Employees In the
Implementation of Government Reorganization,” was passed. Section 11 thereof orders all departments
and agencies to complete the 1987 reorganization of the executive branch within
ninety (90) days from the approval of the law, or on or before September 8,
1988.

The directors of the affected bureaus (the Envi­ronmental
Management Bureau, Forestry Management Bureau, Parks and Wildlife Bureau, Mines
and Geosciences Bureau) requested the DENR and DBM Secretaries to convert the
coterminous positions to permanent. The
DENR Secretary favorably endorsed their request citing changes in the functions
of the DENR as justification for the request (Annex B). The request was reiterated by the DENR
Assistant Secretary for Services Management but it was denied on December 19,
1990 by DBM Secretary Guillermo Carague.

The DENR Secretary’s motion for reconsideration was not acted
upon by Secretary Carague.

Meanwhile, the General Appropriations Act of FY 1991 (R.A. No.
7078) provided for the salaries of the coterminous employees in the DENR until
December 31, 1991.

On August 6, 1991, DENR Secretary Factoran submit­ted a
memorandum to President Aquino, through Executive Secretary Franklin Drilon,
requesting that the 597 coterminous positions of the DENR (which would expire
on September 15, 1991) be extended up to December 31, 1991, without prejudice to DBM’s action
on his (Secretary Factoran’s) motion for reconsideration. The Office of the President granted the
request.

But as Secretary Factoran’s request for reconsid­eration of
Secretary Carague’s order remained unacted upon, the petitioners filed in this
Court on December 19, 1991, the present petition for prohibition^[2]
and mandamus^[3]
with a prayer for the issuance of a restrain­ing order/preliminary injunction.

The grounds relied upon by the petitioners are:

1. That the impending mass dismissal of
petitioners from em­ployment on December 31, 1991 would violate their right to
security of tenure and the provisions of Repub­lic Act No. 6656;

2. That the appointment of the petitioners to
the so-called coterminous positions deprived them of the right to due process;

3. The creation of positions “coterminous with
the incumbent but not exceeding three years” is not in accordance with civil
service laws, rules and regulations; and

4. Respondent DBM Secretary has no discretion
but to grant respondent DENR Secretary’s request for regularization of the
cotermi­nous positions.

Upon receipt of the petition, the Court issued a temporary
restraining order directing the DENR Secretary to “cease and desist from
terminating the services of the petitioners effective December 31, 1991 and
from preventing them from performing their duties and functions as officials
and employees of the DENR corresponding
to their respective positions” (p. 51, Rollo).

On January 23, 1992, petitioners filed an “Urgent Motion to Cite
Respondents for Contempt” for
failure to pay their salaries, allowances and such other benefits due them
while they continue to perform their respective duties and responsibilities in
the DENR. On March 2, 1992, petitioners
filed a Supplemental Motion for Contempt
on the ground that besides not paying their salaries, respondents made them
sign new appointments making them “coterminous with the incumbent.”
These acts of the respondents allegedly violate the Restraining Order issued by
this Court on December 27, 1991.

In its Comment, the Office of the Solicitor Gener­al denied that
public respondents have violated the temporary restraining order. Respondent DENR Secretary complied with the
TRO by not terminating the services of the petitioners. Non-payment of the petitioners’ sal­aries
was due to the lack of an appropriation of funds for their salaries. Besides, the TRO did not require the DBM to appropriate funds for
their salaries. The DBM did not violate
the TRO when it required petitioners to sign new appointments making
their positions cotermi­nous with the incumbent for it (DBM) was not directed
by the TRO to desist from committing any act.

On January 23, 1992, Reynaldo Alcances, Marinela Cecilia T.
Pascua and Dolores T. Tolentino, through the petitioners’ counsel, asked to be
included as petition­ers because their names had been inadvertently omitted
from the list of petitioners. Their
motion may be granted for they are similarly situated as the original
petitioners who have continued to work in the DENR beyond December 31, 1991.

On February 24, 1992, a Motion for Leave to Inter­vene was filed by
Conrado Salvador and Miguel Caisip which was not opposed by the
petitioners. Before the Court could
grant them leave to intervene, they filed a complaint in Intervention on July
20, 1993.

On March 6, 1992, Alfredo S. Marchadesch, Jr. and Carolina S. Cavan
withdrew as petitioners because they had accepted new appointments in the DENR.

On April 13, 1992, the public respondents, through the Solicitor
General, filed their Comment on the peti­tion.

The petitioners argue that their dismissal on December 31, 1991,
would violate their right to security of
tenure safeguarded by paragraph (3), Section 2 of Article IX-B of the
Constitution, and the 2nd paragraph, Section
3 of Article XIII thereof. They also
invoke Sections 1 and 11 of Republic Act No. 6656, which pro­vide that
“departments and agencies of the government have only ninety (90) days from the
approval of the Act to undertake the complete implementation of their
respective reorganization plan, hence, the DENR had only up to September 8,
1988, to reorganize. Their dismissal on December 31, 1991, goes beyond the
period allowed by law for the reorganization of the DENR.

We find merit in the petition.

It may be recalled that upon her assumption of office as President
of the Philippines after the EDSA Revolution, President Corazon Aquino invested
herself under Sections 1 and 2, Article III of the Freedom Constitution
(Proclamation No. 3, March 25, 1986) with power and authority to reorganize the
Government “by proclamation or executive order or by designation or appointment
and qualification of the successor of any elective and appointive officials under the 1973 Constitution.”
The reorganization was to be completed within one year from February 25, 1986,
or by February 25, 1987.

“SEC. 1. In the reorganiza­tion
of the government, priority shall be given to measures to promote economy,
efficiency, and the eradication of graft and corruption.

“SEC. 2. All elective and
appointive officials and employees under the 1973 Constitution shall continue
in office until otherwise provided by proclamation or executive order or upon
the designation or appointment and qualification of their successors, if such
is made within a period of one year from
February 25, 1986.” (Underscoring ours.)

However, “in order to obviate unnecessary anxiety and demoralization among the deserving officials and employees, particularly in the
Career Civil Service” arising from the reorganization of the government, the
President issued E.O. No. 17 on May
28, 1986 providing guidelines for the implementation of the reorganization “to
protect career civil servants whose qualifications and performance meet the standards of service demanded by the new
Government, and to ensure that only those found corrupt, inefficient and
undeserving are separated from the government service.” The head of each
Ministry (now Department) was tasked to “see to it that the separation and
replacement of officers and employees is made only for justifiable reasons”
which are:

“SEC. 3. The following
shall be the grounds for separation/re­placement of personnel:

“1. Existence of a case for summary dismissal
pursuant to Sec­tion 40 of the Civil Service Law;

“2. Existence of a probable cause for violation
of the Anti-Graft and Corrupt Practices Act as determined by the Ministry Head
concerned;

“3. Gross incompetence or inefficiency in the
discharge of functions;

“4. Misuse of public office for partisan
political purposes;

“5. Any other analogous ground showing that the
incumbent is unfit to remain in the service or his separation/replacement is in
the interest of the service.” (E.O. No. 17.)

Excluded from the protection of E.O. No. 17 are:

“Sec. 11. This Executive Order shall not apply to
elective officials or those designated to replace them, presidential appoint­ees,
casual and contractual employees, or officials and employees removed pursuant
to disciplinary proceedings under the Civil Service Law and Rules, and to those
laid off as a result of the reorganization
undertaken pursuant to Executive Order No.
5.” (Emphasis supplied.)

As a result of the ratification of the 1987 Con­stitution by the
nation, the reorganization deadline in Proclamation No. 3 (February 25, 1987)
was advanced to February 2, 1987.

Although the security of tenure of government employees is protected by Section 2, subpar.
(3), Title B, Article IX of the 1987 Constitution, thus:

“Sec. 2. (3) No officer or
employee of the civil service shall be removed or suspended except for cause
provided by law.”

Section 16 of Article XVIII (Transitory
Provisions) of the Constitution still allows the separation of employ­ees “not
for cause but as a result of the reorganization pursuant
to Proclamation No. 3 x
x x and the
reorganiza­tion following the ratification of
this Constitution.” Section 16 is quoted hereunder:

“SEC. 16. Career civil serv­ice
employees separated from the service not for cause but as a result of the
reorganization pursu­ant to Proclamation No. 3 dated March 25, 1986 and the reorganiza­tion
following the ratification of this Constitution
shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of
general application in force at the time of their separation. In lieu thereof, at the option of the
employees, they may be considered for employment in the Government or in any of
its subdivisions, instrumentalities, or agencies, including government-owned or
controlled corporations and their subsidiaries. This provision also applies to career officers whose resignation,
tendered in line with the existing policy, had been accepted.” (Underscoring
ours.)

E.O. No. 192 dated June 10, 1987 “PROVIDING FOR THE
REORGANIZATION OF THE DEPARTMENT OF ENVIRONMENT, ENERGY AND NATURAL RESOURCES,
RENAMING IT THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, AND FOR OTHER
PURPOSES” is a “reorganization following the ratifica­tion of this
Constitution.” Although impliedly sanc­tioned under Section 16 of the
Transitory Provisions of the 1987 Constitution, it must nevertheless pass the test of good faith to be valid. Good faith, we ruled in Dario vs. Mison^[4] is a basic ingredient for the
validity of any government reorganization. It is the golden thread that holds together the fabric of the
reorganization. Without it, the cloth
would disintegrate.

“Reorganization is a recog­nized valid
ground for separation of civil service
employees, subject only to the condition
that it be done in good faith. No less than the Constitution itself in Section
16 of the Transitory Provisions, together with Sections 33 and 34 of Executive
Order No. 81 and Section 9 of Republic Act No. 6656, support this conclusion
with the declaration that all those not so appointed in the implementation of
said reorgani­zation shall be deemed separated from the service with the
concomitant recognition of their entitlement to appropriate separation benefits
and/or retirement plans of the reorganized government agency.” (Domingo vs.
Development Bank of the Phils., 207 SCRA 766.)

A reorganization in good faith is one designed to trim the fat
off the bureaucracy and institute economy and greater efficiency in its
operation. It is not a mere tool of the
spoils system to change the face of the bureaucracy and destroy the livelihood
of hordes of career employees in the civil service so that the new?powers-that-be
may put their own people in control of the machinery of government.

“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, 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 the existence of
ample funds.” (Dario vs. Mison, 176 SCRA 84, 92-93.)

“There
is no dispute over the power to reorganize – whether traditional, progressive,
or whatever adjective is appended to it. Howev­er, the essence of constitutional government is adherence
to basic rules. The rule of law
requires that no government official should feel free to do as he pleases using
only his avowedly sincere intentions and conscience to guide him. The fundamental standards
of fairness embodied in the bona fide
rule cannot be disregarded. More partic­ularly, the
auto-limitations imposed by the President when
she proclaimed the Provisional Constitution
and issued executive orders as sole law
maker and the standards and restrictions
prescribed by the present Constitution and
the Congress estab­lished under it, must
be obeyed. Absent this
compliance, we cannot say that a reorganization is bona fide.” (Mendoza vs.
Quisumbing, 186 SCRA 108.)

“In fact, the right of the State
to reorganize the Government resulting in
the separation of career civil service
employees under the 1987 Constitution is
beyond dispute, but as emphasized in the
Mison case (G.R. Nos. 81954, 81967 and 82023, August 8, 1989) and
in the cases of Bondoc vs. Sec. of Science and Technology (G.R. No. 83025),
Quisumbing vs. Tupas (G.R. No. 87401) and Hamed vs. Civil Service Commission
(G.R. No. 89069), all of which having been promulgated on July 19, 1990, said
reorganiza­tion, ouster, and appointments of
successors must be made in GOOD FAITH.”
(Emphasis supplied; Siete vs. Santos, 190 SCRA 50, 51-52.)

There appears to be no sufficient justification for the
reorganization of the DENR, as revised by the DBM. The fact that Section 25 of E.O. No. 192 changed the status of
all the officers and employees of the DENR from permanent or regular to mere
“hold-overs,” flagrantly violating the employees’ right to due process, taints
the reorganization process. Section 25
provides:

“SEC. 25. New Structure and
Pattern. – Upon approval of this
Executive Order, the officers and employees of
the Department shall in a hold-over capacity,
continue to perform their respective duties
and responsibilities and receive the corresponding salaries and
benefits unless in the meantime they are separated from government service.

“x x x Those incumbents whose positions
are not included therein, or, who are
not reappointed, shall be deemed separated
from the service. x x x.”

In Domingo vs. DBP, 207 SCRA 766, the Court
emphasized that a reorganization “does not justify a detrac­tion from the mandatory
requirement of notice and hearing” (underlining ours) to the affected officials
and employees.

“Section 2 of Republic Act No. 6656 provides that ‘no officer or
employee in the career service shall be removed except for a valid cause and
after due notice and hearing.’ thus, there is no question that while dismissal
due to a bona fide reorganization is
recognized as a valid cause, this does
not justify a detraction from the mandatory
requirement of notice and hearing. x x x.” (Emphasis supplied; Domingo vs.
Development Bank of the Philippines, 207 SCRA 766.)

In Mendoza vs. Quisumbing, 186 SCRA 108, the Court noted the
pernicious effect of the “hold-over” provision (Sec. 24) in Executive Order No.
117 reorganizing the Department of Education and Culture which uprooted
thousands of school teachers and employees, thus:

“x x x Pursuant to the above provision [Sec. 24, E.O. No. 117],
around 400,000 school teachers, janitors, clerks, principals, supervisors,
administrators, and higher officials were placed on ‘hold-over status.’ When a
public officer is placed on hold-over status, it means that his term has
expired or his services terminated but he should continue holding his office
until his successor is appointed or chosen and has qualified. (See Topacio Nueno vs. Angeles, 76 Phil. 12
[1946]).” (Mendoza vs. Quisumbing, 186 SCRA 108, 110-111.)

That the reorganization of the DENR was not intended to achieve
economy and efficiency, is revealed by the admission in page 16 of the public
respondents’ Comment that the new staffing pattern of the department contains “991
positions more than the total number of permanent positions in
the DENR before the reorganization.” In fact, DENR Secretary Fulgencio
Factoran (who is presumed to know better than anyone else the needs of his
department) had urged the DBM to restore the positions
of the petitioners because they are “vital
to the functions, mandates and objectives of the DENR” (p. 30, Comment). Since the abolition of their positions will
not conduce to either “efficiency” or “economy” in the Service, which are the
principal justifications for any government overhaul, then, obviously, the
reorganization of the DENR is not justified.

The conversion of the petitioners from permanent to “coterminous”
employees is a wholesale demotion of personnel which is tantamount to
removal without cause and without due process.” (Floreza vs. Ongpin, 182 SCRA
692, 693.) It is therefore null and void.

WHEREFORE, the petition for certiorari is
GRANTED. The removal of the petitioners
and intervenors from office is declared null and void. The respondent Secre­tary of the Department
of Environment and Natural Resources (DENR), or his successor in office, is
ordered to reinstate the petitioners to their former or equiva­lent positions
in the DENR without loss of seniority
and other benefits, and to issue regular and permanent appointments to them for
the positions in the new organization and staffing pattern corresponding to
their positions in the 1986 plantilla. The respondent Secre­tary of the Department of Budget and Management, or
his successor in office, is ordered to reinstate the appro­priation for the
salaries of the petitioners and inter­venors. The temporary restraining order which the Court issued in this case is
made permanent.

The petitioners’ motion to cite the public respondents for
contempt of court is DENIED for having become moot after the latter’s
resignation from office upon the change of administration on June 30,
1992. No costs.

SO ORDERED.

Narvasa, C.J., (Chairman), Cruz, Bidin, Regalado, Davide, Jr.,
Romero, Nocon, Bellosillo, Melo, Quiason, Puno, and Vitug, JJ., concur.

Feliciano, J., I did not take
part in the deliberations on this case.

Padilla, J., No part, related
to petitioners counsel.

^[1]
“WHEREAS, the Department of Budget and Management is mandated to promote
economy and efficiency in govern­ment operations, including the development of
agency organizational structure and staffing pattern, and the design and review
of systems and procedures for methods improvement and optimum resource
utilization.”

^[2]
To stop the DENR Secretary from terminating the services of the petitioners
effective on December 31, 1991.

^[3]
Ordering the DENR Secretary to issue regular appointments to the petitioners
for the positions in the new position structure and staffing pattern of the
DENR.

^[4]
176 SCRA 84, 92-93