DEPARTMENT OF FINANCE, REPRESENTED BY HON. CESAR V. PURISIMA IN HIS OFFICIAL CAPACITY AS SECRETARY, AND THE BUREAU OF CUSTOMS, REPRESENTED BY HON. ROZZANO RUFINO B. BIAZON, IN H…

Department of Finance versus Silvestre

The Case

This is a special civil action of certiorari and prohibition brought before the Supreme Court by the Department of Finance and the Bureau of Customs against a group of customs collectors who had obtained injunctive relief from the Regional Trial Court of Manila. The government assails the trial court's order extending a temporary restraining order against a personnel order that detailed twenty-seven customs officials to a newly created policy office, and asks the Court to dismiss the declaratory relief action below. The case matters because it draws the boundary between the exclusive jurisdiction of the Civil Service Commission over personnel actions and the jurisdiction of the regular courts over questions of validity and constitutionality, and because it measures a reform measure against the ordinary rules on publication and detail.

Procedural History

The respondents filed an action for declaratory relief with an application for a temporary restraining order and a writ of preliminary injunction before the Regional Trial Court of Manila. The executive judge issued a seventy-two hour temporary restraining order enjoining the implementation of the personnel order. The case was then raffled to the presiding judge of the branch, who extended that temporary restraining order to twenty days, or until 21 October 2013, without requiring the posting of a bond, and set the hearing on the preliminary injunction. The trial court later denied the application for a writ of preliminary injunction, and the presiding judge inhibited herself from further hearing the case. The Department of Finance and the Bureau of Customs then came to the Supreme Court by petition for certiorari and prohibition, with a prayer for a temporary restraining order or a writ of preliminary mandatory injunction.

Facts

On 2 September 2013, Executive Order No. 140 created the Customs Policy Research Office within the Department of Finance, to review customs administration policies, rules, and procedures and to recommend improvements. Section 3 of that order provided that the office shall be composed of its organic personnel, as approved by the Department of Budget and Management upon the recommendation of the Secretary of Finance, augmented and reinforced by personnel of the Department of Finance and the Bureau of Customs, as well as those detailed or seconded from other agencies. Section 9 provided that the order shall take effect immediately upon publication in two newspapers of general circulation. The order was published in the Manila Bulletin and the Philippine Star on 17 September 2013.

On that same day of publication, the Commissioner of Customs issued Customs Personnel Order No. B-189-2013, approved by the Secretary of Finance, detailing twenty-seven Bureau of Customs personnel holding the positions of Collector of Customs Fifth Level and Sixth Level to the new office, effective immediately and valid until sooner revoked. The order stated no period for the detail.

On 30 September 2013, fifteen of the affected officials filed the action for declaratory relief, questioning their mass detail and reassignment. They alleged that the detail was carried out in bad faith to remove them from their permanent positions, that the personnel order was issued before Executive Order No. 140 became effective, and that it was issued to beat the election ban on personnel movement. The trial court restrained implementation, and the government brought the matter to the Supreme Court.

Issues

• Whether or not the Regional Trial Court has jurisdiction over the action for declaratory relief filed by the respondents.
• Whether or not the respondents failed to exhaust administrative remedies before filing the action.
• Whether or not Executive Order No. 140 violated Article 2 of the Civil Code when it became effective immediately after its publication.
• Whether or not Customs Personnel Order No. B-189-2013 was validly issued.

Applicable Provisions

Section 1 of Rule V of the Omnibus Rules Implementing Book V of Executive Order No. 292 defines personnel action:

As used in these Rules, any action denoting movement or progress of personnel in the civil service shall be known as personnel action. Such action shall include promotion, transfer, reinstatement, reemployment, detail, secondment, reassignment, demotion and separation.

This defines the class of controversies committed to the Civil Service Commission, and the respondents' detail falls within it.

Section 8 of Rule VII of the same Omnibus Rules defines and limits a detail:

A detail is the movement of an employee from one department or agency to another which is temporary in nature, which does not involve a reduction in rank, status or salary and does not require the issuance of another appointment. The employee detailed receives his salary only from his mother unit or agency. Detail shall be allowed only for a maximum period in the case of employees occupying professional, technical and scientific position. If the employee believes that there is no justification for the detail, he may appeal his case to the Commission. Pending appeal, the decision to detail the employee shall be executory unless otherwise ordered by the Commission.

This supplies the standard against which the personnel order is measured, since a detail must be temporary and bounded in time.

Section 2 of Civil Service Commission Resolution No. 021181 fixes the duration:

Section 2. Duration of the detail. The detail shall be allowed only for a maximum period of one year. Details beyond one year may be allowed provided it is with the consent of the detailed employee. The extension or renewal of the period of the detail shall be within the authority of the mother agency.

This clarifies that no detail may run indefinitely, and it applies to ordinary employees as well as to those in professional, technical, and scientific positions.

Article 2 of the Civil Code, as amended, governs effectivity of laws:

Art. 2. Laws shall take effect after fifteen days following the completion of their publication either in the Official Gazette, or in a newspaper of general circulation in the Philippines, unless it is otherwise provided.

This is the provision the respondents invoke to argue that Executive Order No. 140 was not yet effective when the personnel order issued.

Section 3 of Executive Order No. 140 provides:

SECTION 3. Personnel and Staffing Complement. The CPRO shall be composed of its organic personnel, as approved by the Department of Budget and Management (DBM) upon recommendation of the DOF Secretary, augmented and reinforced by DOF and BOC personnel as well as those detailed or seconded from other agencies, whether attached to the DOF or not. In addition, the CPRO, upon approval of the DOF Secretary, may hire or engage technical consultants to provide necessary support in the performance of its mandate.

This is the source of the authority to detail, and it presupposes an organic personnel that the detailed employees were meant to augment.

Ruling

On the first issue, the Court held that the Civil Service Commission is the sole arbiter of controversies relating to the civil service, and that disciplinary cases and cases involving personnel actions, including detail and reassignment, fall within its exclusive jurisdiction. The respondents' mass detail was, on its face, a personnel action. But the petition went beyond questioning the detail: the respondents assailed the validity and constitutionality of the personnel order itself, alleging it was issued before the order it implemented took effect and to beat the election ban. Once that question was raised, the matter was no longer limited to a personnel action, and the trial court did not abuse its discretion in taking cognizance of the action.

On the second issue, the Court held that the doctrine of exhaustion of administrative remedies admits of exceptions, among them where the challenged administrative act is patently illegal, amounting to lack of jurisdiction, and where the question involved is purely legal. Since the respondents assailed the personnel order as patently illegal, arbitrary, and oppressive, the case fell within the exceptions, and prior resort to the administrative agency was not required.

On the third issue, the Court held that Executive Order No. 140 took effect on 17 September 2013, the day of its publication. The proviso in Article 2, "unless it is otherwise provided," refers to an effectivity date other than after fifteen days following completion of publication, and it lies within the discretion of the legislature, or here the Executive Department, to shorten or extend the period so long as publication is complied with. Section 9 of the order fixed immediate effectivity upon publication in two newspapers of general circulation, and publication was made. The Court added that interpretative regulations and those merely internal in nature, regulating only the personnel of the administrative agency and not the public, need not be published at all, and that the order is an internal regulation affecting primarily the personnel of the Department of Finance and the Bureau of Customs, valid even without publication.

On the fourth issue, the Court ruled for the respondents. Under Section 3 of Executive Order No. 140, the detailed employees were supposed to augment and reinforce the existing organic personnel of the office. Yet at the time of the detail the office had not been formally organized, had no organic personnel approved by the Department of Budget and Management, and the Secretary of Finance had yet to promulgate the rules and procedures required to enable it to exercise its powers. The Court also held that the personnel order did not provide for the period of the detail, making it indefinite, and that nothing showed the respondents occupied professional, technical, and scientific positions that would have allowed a longer detail. Since the resolution fixing a one-year maximum does not distinguish between ordinary employees and those in such positions, the order should have specified that the detail should not exceed one year. The Court acknowledged the government's campaign against corruption but held that department heads cannot take shortcuts that undermine and disregard the basic procedures of the law.

Doctrine

The Civil Service Commission has exclusive jurisdiction over personnel actions, which include detail, secondment, reassignment, promotion, transfer, reinstatement, reemployment, demotion, and separation. But when the action assails the validity or constitutionality of the very order effecting the personnel action, the question ceases to be a mere personnel action and falls within the jurisdiction of the regular courts.

Exhaustion of administrative remedies is not an absolute rule; it yields where the challenged act is patently illegal, where the question is purely legal, and where strong public interest is involved.

Under Article 2 of the Civil Code, the fifteen-day period yields to a contrary effectivity clause, and the Executive Department may shorten it provided publication is made. Internal regulations affecting only the personnel of an agency need not be published to be valid.

A detail is temporary in nature and must be for a definite period; under the Civil Service rules and the Commission's resolution, it may not exceed one year absent the employee's consent, and an order detailing employees indefinitely, before the organic personnel of the receiving office has been constituted, is invalid.

Disposition

The petition was partially granted: the Court sustained the validity of Executive Order No. 140, upheld the jurisdiction of the Regional Trial Court over the declaratory relief action, and ruled that Customs Personnel Order No. B-189-2013 was not validly issued.

Remember This

Memorize the line that a detail is temporary and must have a period, and that an indefinite detail issued before the receiving office has organic personnel is invalid. Examiners use this case to test the boundary between Civil Service Commission jurisdiction over personnel actions and court jurisdiction over constitutional questions, and the exception to the fifteen-day rule in Article 2 of the Civil Code.