CIVIL SERVICE COMMISSION AND PHILIPPINE AMUSEMENT AND GAMING CORPORATION, PETITIONERS, VS. RAFAEL M. SALAS, RESPONDENT.

Civil Service Commission versus Salas

The Case

This is a petition for review on certiorari brought by the Civil Service Commission and the Philippine Amusement and Gaming Corporation against Rafael M. Salas, a former member of the corporation's Internal Security Staff. The petitioners ask the Supreme Court to reverse the Court of Appeals, which had set aside the Commission's resolution and ordered Salas reinstated with full back wages after finding that he had been illegally dismissed. The case matters because it settles a question every civil service examinee must answer: may the legislature or the Chief Executive, by mere declaration, convert a position into a confidential one, or does the nature of the position itself control? The Court answers that the nature of the position finally determines the matter, and that a statutory label is only an initial determination.

Procedural History

Salas was appointed in October 1989 as an Internal Security Staff member and assigned to the casino at the Manila Pavilion Hotel. In December 1991 the Board of Directors of the Philippine Amusement and Gaming Corporation terminated his services for loss of confidence. His letter of appeal for reinvestigation was denied. He then appealed to the Merit Systems Protection Board, which denied the appeal on the ground that, as a confidential employee, he was not dismissed but his term had merely expired. On further appeal, the Civil Service Commission issued its resolution affirming the Board.

Salas initially came to the Supreme Court on a petition for certiorari. By resolution, the case was referred to the Court of Appeals under the circular that took effect in June 1995. The Court of Appeals rendered its decision in September 1995, holding that Salas was not a confidential employee, that he could not be dismissed on the ground of loss of confidence, and that the provision of the presidential decree creating the corporation had been superseded by the 1987 Constitution. It ordered his reinstatement with full back wages, without prejudice to the filing of administrative charges against him if warranted. The Commission and the corporation then brought this petition for review to the Supreme Court.

Facts

Rafael M. Salas was appointed by the Chairman of the Philippine Amusement and Gaming Corporation as a member of the Internal Security Staff and assigned to the casino at the Manila Pavilion Hotel. His duties were routine: he performed duty assignments at the gaming and non-gaming areas to prevent irregularities, reported unusual incidents, coordinated with closed-circuit television and external security, acted as witness during chips inventory and card shuffling, and performed escort functions during the delivery of capital boxes and refills.

In December 1991 the Board of Directors terminated his employment for loss of confidence, after a covert investigation by the corporation's Intelligence Division. The intelligence summary claimed that Salas was engaged in proxy betting, supported by affidavits of two customers who said they were used as gunners, and by two polygraph tests that yielded unfavorable results. Salas asked for reinvestigation because he had not been heard, but his request was denied.

On appeal, the Merit Systems Protection Board and then the Civil Service Commission both ruled against him, reasoning that as a confidential employee by operation of law his term had merely expired, so there was no dismissal to speak of. The Court of Appeals reversed, and the matter reached the Supreme Court.

Issues

• Whether or not Rafael M. Salas, as a member of the Internal Security Staff of the Philippine Amusement and Gaming Corporation, is a confidential employee.
• Whether or not the statutory declaration in Section 16 of Presidential Decree No. 1869, classifying all employees of the casinos and related services as confidential appointees, conclusively makes his position primarily confidential.
• Whether or not the Court of Appeals correctly applied the proximity rule in determining the nature of his position.

Applicable Provisions

Section 16 of Presidential Decree No. 1869, creating the Philippine Amusement and Gaming Corporation, provides:

All positions in the corporation, whether technical, administrative, professional or managerial are exempt from the provisions of the Civil Service Law, rules and regulations, and shall be governed only by the personnel management policies set by the Board of Directors. All employees of the casinos and related services shall be classified as confidential appointees.

This is the provision the corporation relied on to terminate Salas for loss of confidence and to claim that his term merely expired.

Section 5 of Republic Act No. 2260, the Civil Service Act of 1959, provides:

The non-competitive or unclassified service shall be composed of positions expressly declared by law to be in the non-competitive or unclassified service or those which are policy-determining, primarily confidential, or highly technical in nature.

The phrase in nature is the textual hook of the Court's ruling, because it shows that the character of the position, not the label, is what the law regards.

Section 2, Rule XX of the Revised Civil Service Rules, promulgated under the Civil Service Act of 1959, provides:

Upon recommendation of the Commissioner, the President may declare a position as policy-determining, primarily confidential, or highly technical in nature.

This shows that the power to declare a position confidential was itself only an implementing power, which the Court treats as an initial determination.

Section 2, Article IX-B of the 1987 Constitution, as quoted in the decision, provides:

Appointments in the Civil Service, except as to those which are policy-determining, primarily confidential, or highly technical in nature, shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination.

This is the constitutional guarantee of security of tenure that the Court says cannot be defeated by executive fiat.

Ruling

On the first issue, the Court held that Salas is not a confidential employee. It examined the nature of his functions, his organizational ranking, and his compensation level. His duties were ordinary, routinary and quotidian. Although appointed by the Chairman, he did not report directly to the Office of the Chairman; he was under an Area Supervisor, who implemented the directives of the Branch Chief Security Officer, who in turn answered to the Chairman and the Board. His position belonged to the bottom level of the salary scale, Pay Class 2, against a highest level of Pay Class 12, and carried a modest salary. The Court held that the occupant of a position is a confidential employee only if the predominant reason for his selection was the appointing authority's belief that he can share a close intimate relationship ensuring freedom of discussion without fear of embarrassment or betrayal of personal trust. Where the position is remote from the appointing authority, the element of trust is no longer predominant.

On the second issue, the Court held that the statutory declaration is not conclusive. It approved the Commission's view that Section 16 of the decree, insofar as it exempts positions from the Civil Service Law, has been amended or deemed repealed by the 1987 Constitution and the Administrative Code of 1987, but that the last portion classifying casino employees as confidential appointees retains validity as a categorization. Nevertheless, the Court held that such classification is not absolute and all-encompassing. Relying on the Piñero doctrine, the Court ruled that it is the nature of the position which finally determines whether it is primarily confidential, and that executive pronouncements are no more than initial determinations that are not conclusive in case of conflict. Otherwise it would lie within the discretion of the Chief Executive to deny to any officer, by executive fiat, the protection of the constitutional guarantee. The Court quoted the constitutional deliberations, where it was said that it is not enough that the law calls a position primarily confidential to make it such, and that it is the nature of the duties which makes a position primarily confidential.

On the third issue, the Court held that the Court of Appeals correctly applied the proximity rule from De los Santos versus Mallare, which states:

Every appointment implies confidence, but much more than ordinary confidence is reposed in the occupant of a position that is primarily confidential. The latter phrase denotes not only confidence in the aptitude of the appointee for the duties of the office but primarily close intimacy which ensures freedom of intercourse without embarrassment or freedom from misgivings of betrayals of personal trust or confidential matters of state.

The Court also held that the earlier PAGCOR case invoked by the petitioners is not controlling, because there the confidential character of the position was never contested.

Doctrine

A position is primarily confidential not by title or legislative label but by the nature of its functions. The test is the proximity rule: there must be a close intimacy between the appointee and the appointing authority that ensures freedom of intercourse without embarrassment and freedom from misgivings of betrayal of personal trust. A statutory declaration that a position is confidential is only an initial determination, which the courts may review and reject in case of conflict, because otherwise the Chief Executive could by executive fiat deny an employee the security of tenure guaranteed by Section 2, Article IX-B of the 1987 Constitution. The exemption of policy-determining, primarily confidential, and highly technical positions from competitive examination does not remove them from the protection of security of tenure.

Disposition

The petition was denied and the judgment of the Court of Appeals was affirmed in its entirety, so Salas won and his reinstatement with full back wages stood.

Remember This

Memorize the line that it is the nature of the position, not the law's label, that finally determines whether a position is primarily confidential. Examiners use this case to test the proximity rule and the limits of executive power to classify positions outside the civil service.