MUNICIPALITY OF LA LIBERTAD, NEGROS ORIENTAL, REPRESENTED BY THE MUNICIPAL MAYOR LAWRENCE D. LIMKAICHONG, JR., PETITIONER, VS. JUDITH C. PENAFLOR, RESPONDENT.

Municipality of La Libertad versus Penaflor

The Case

This is a petition for review on certiorari brought by the Municipality of La Libertad, Negros Oriental, against Judith Penaflor, a rural health midwife whom the municipality had dropped from the rolls and later reinstated. The real question is not whether the dismissal was wrongful — that was settled long before — but who pays: the municipality as employer, or the former mayor personally as the official who ordered the illegal termination. The case matters because it fixes the rule on the personal liability of local executives for backwages, and because it teaches that bad faith and malice must be proved, not merely alleged.

Procedural History

Penaflor appealed her termination to the Civil Service Commission, which set aside the mayor's order dropping her from the rolls and directed her reinstatement. The mayor's motion for reconsideration was denied. The municipality appealed to the Court of Appeals, which affirmed the Commission, and that decision became final and executory. Penaflor was then reinstated, but her back salaries went unpaid, so she asked the Commission to compel payment. The Commission granted her motion and directed the municipality to pay back salaries and other monetary benefits from her illegal dismissal up to her actual reinstatement; reconsideration was denied. The municipality then went up to the Court of Appeals, which affirmed the Commission in its decision of May 13, 2002, holding that malice and bad faith had not been proved. Reconsideration was denied, so the municipality filed the present petition for review before the Supreme Court.

Facts

Before November 13, 1995, Penaflor, who had served the municipality for about twenty years, filed an application for a fifteen-day leave of absence effective that date. She had accumulated unused leave credits of more than one year, and her superior recommended approval of the application. On November 13, 1995, not knowing whether her application had been approved, she began to avail of the leave.

By memorandum dated December 1, 1995, then Mayor Napoleon Camero notified her that she had been terminated effective November 13, 1995, on the ground that she had not been reporting for duty since that date without an approved leave of absence. She sought reconsideration; the mayor denied it, citing her alleged violation of the rules on vacation leave, her frequent absenteeism, and the exigency of the service.

The Civil Service Commission found that she had been absent for less than thirty calendar days, from November 13 to December 1, 1995, and that no prior Return-to-Work Order had been served on her — a precondition to a valid dropping from the rolls. It set aside the termination and ordered her reinstatement. She was reinstated on May 15, 2000, by the new mayor, Lawrence Limkaichong, Jr. When her back salaries remained unpaid despite repeated pleas, the Commission ordered the municipality to pay them, and the Court of Appeals affirmed.

Issues

• Whether or not the municipality, rather than the former mayor personally, is liable to pay the back salaries and other monetary benefits of the illegally dismissed employee.
• Whether or not the former mayor acted with malice or bad faith, or beyond the scope of his authority, so as to make him personally liable.
• Whether or not the mayor needed the concurrence of the Sangguniang Bayan to terminate the employee's services.

Applicable Provisions

Section 444 of the Local Government Code, on the chief executive's powers, provides in the relevant part:

Sec. 444. The Chief Executive: Powers, Duties, Functions and Compensations. - (a) The municipal mayor, as the chief executive of the municipal government, shall exercise such powers and perform such duties and functions, as provided by this Code and other laws.

The Court used this to locate the mayor's power to appoint, and therefore to remove, municipal officials and employees.

Section 78 of the Local Government Code provides:

Sec. 78. Civil Service Law, Rules, and Regulations, and other related issuances. All matters pertinent to human resources and development in local government units shall be governed by the civil service law and such rules and regulations and other issuances promulgated pursuant thereto, unless other wise specified by this code.

The municipality invoked this to argue that the mayor had violated the civil service rules and thus acted outside his authority.

Paragraph 2.1(b) of Civil Service Commission Memorandum Circular Number 12, series of 1994, as quoted in the decision, provides:

If the number of unauthorized absences incurred is less than thirty (30) calendar days, written Return-to-Work-Order shall be served on the official or employee at his last known address on record. Failure on his part to report for work within the period stated in the order shall be a valid ground to drop him from the rolls.

This is the provision the mayor failed to follow, and it is the reason the termination was invalid in the first place.

Ruling

On the first issue, the Court held the municipality liable. In the absence of evidence to the contrary, the presumption that public officials discharged their official duties in good faith remains. The municipality bore the burden of proving malice — which the Court defined as the doing of a wrongful act intentionally without just cause or excuse, or a state of mind prompting a conscious violation of the law to the prejudice of another — and it failed to discharge that burden by substantial evidence.

On the second issue, the Court found that the former mayor's own comment on the appeal negated malice rather than showing it. The Court also rejected the argument that the mayor acted arbitrarily simply because the Commission reversed him; a reversal does not by itself prove bad faith.

On the third issue, the Court held that the mayor did not need the Sangguniang Bayan's concurrence. Under the Local Government Code, a head of department or office is appointed by the mayor with the concurrence of the majority of all Sangguniang Bayan members, but Penaflor was not a head of department or office. Following Section 444, the mayor was empowered to appoint all officials whose salaries are paid out of municipal funds and whose appointments are not otherwise provided for, and the power to appoint generally includes the power to remove. Hence the mayor acted within his authority, and the municipality, as employer, answers for the backwages.

Doctrine

A public official is presumed to have acted in good faith, and a local government unit that illegally dismisses an employee is liable for back salaries; personal liability of the dismissing official arises only where malice, bad faith, or action beyond the scope of authority is proved by substantial evidence. The reversal of an official's action by the Civil Service Commission does not, by itself, establish malice. And under the Local Government Code, the mayor's power to appoint municipal employees carries with it the power to remove, without need of Sangguniang Bayan concurrence, except as to heads of departments or offices.

Disposition

The Supreme Court denied the petition and affirmed the ruling that the Municipality of La Libertad must pay Penaflor's back salaries and other monetary benefits from her illegal dismissal up to her actual reinstatement.

Remember This

Memorize this line: bad faith and malice must be proved by substantial evidence, and a mere reversal by the Civil Service Commission is not proof of malice. Examiners use this case to test the personal liability of local executives for illegal dismissals and the appointing power's built-in power to remove.