Question Security of Tenure

Hello CSC,

Good day!

Our Agency (a income generating GOCC) is entering a Joint Venture Agreement with a Private Proponent (Entity) and almost all of the functions of our agency will be covered by the Private Proponent (e.g. Management, Operations and Maintenance) including our primary mandate! There are some employees within our agency who are against this JVA because we believed that this practice is NOT for the best of the service and the consuming public in general.

The Board Chairman and Higher Management are now verbally communicating with us and Persuading us to either file for early retirement or transfer employment to the Private Partner (Proponent/Entity) in this Joint Venture.

Question:

How can we preserved our security of tenure? The aforesaid Board Chairman verbally claims that they will be abolishing our positions within our agency because our job description will be covered by the Private Partner.

The said Board Chairman is scarring or frightening these employees that they will be on "FLOATING STATUS" and will not be paid of thwir salaries if they wouldn't decide now whether to retire or transfer employment.

Seeking for your immediate respose regarding this matters.

Thank you.

Concerned Public Servant wrote: Hello CSC,

Good day!

Our Agency (a income generating GOCC) is entering a Joint Venture Agreement with a Private Proponent (Entity) and almost all of the functions of our agency will be covered by the Private Proponent (e.g. Management, Operations and Maintenance) including our primary mandate! There are some employees within our agency who are against this JVA because we believed that this practice is NOT for the best of the service and the consuming public in general.

The Board Chairman and Higher Management are now verbally communicating with us and Persuading us to either file for early retirement or transfer employment to the Private Partner (Proponent/Entity) in this Joint Venture.

Question:

How can we preserved our security of tenure? The aforesaid Board Chairman verbally claims that they will be abolishing our positions within our agency because our job description will be covered by the Private Partner.

The said Board Chairman is scarring or frightening these employees that they will be on "FLOATING STATUS" and will not be paid of thwir salaries if they wouldn't decide now whether to retire or transfer employment.

Seeking for your immediate respose regarding this matters.

Thank you.

we are all permanent government employees by the way...

To the concerned citizen:

You represented that positions within your agency, your position included, would be abolished because its job description will be covered by the Private Partner, under a joint venture. You now want to be advised on how your security of tenure could be preserve.

Please be informed that as a matter of policy, the Commission does not render an opinion or ruling on issues that may eventually be the subject of a complaint or appeal before it. This is so especially if the material facts necessary to the judicious adjudication of the issues are not fully represented or substantiated as in this case.

It is well settled under the Philippine Constitutional that "No officer or employee of the civil service shall be removed or suspended except for cause provided by law". Such mandate has the spirit of preserving one's security of tenure to the position he/she is holding in government service.

However, as regards your case, we invite your attention to the case of Prospero A. Pichay, Jr. vs. Office of the Deputy Executive Secretary for Legal Affairs Investigative and Adjudicatory Division, et al., G.R. No. 196425 dated July 24, 2012, the Supreme Court stated thus:

“The abolition of the PAGC did not require the creation of a new, additional and distinct office as the duties and functions that pertained to the defunct anti-graft body were simply transferred to the ODESLA, which is an existing office within the Office of the President Proper. The reorganization required no more than a mere alteration of the administrative structure of the ODESLA through the establishment of a third division – the Investigative and Adjudicatory Division – through which ODESLA could take on the additional functions it has been tasked to discharge under E.O. 13. In Canonizado v. Aguirre, We ruled that –

“Reorganization takes place when there is an alteration of the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them. It involves a reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions.

“The Reorganization was Pursued in Good Faith.

“A valid reorganization must not only be exercised through legitimate authority but must also be pursued in good faith. A reorganization is said to be carried out in good faith if it is done for purposes of economy and efficiency. It appears in this case that the streamlining of functions within the Office of the President Proper was pursued with such purposes in mind.”
Clearly, if the abolition of an agency is pursued in good faith, that is, for purposes of economy and efficiency, is valid. "

Thus, if abolition of an agency is carried out on legitimate grounds, there is no impairment of the security of tenure of the affected employees (Kapisanan ng Mga Kawani ng Energy Regulatory Board vs. Commissioner Fe B. Barin et al., G.R. No. 150974 dated June 29, 2007).

As regards the payment of separation pay, this is only allowed under Section 9 of Republic Act (RA) No. 6656 also known as An Act To Protect The Security of Tenure of Civil Service Officers And Employees In The Implementation Of Government Reorganization when an employee is separated due to a valid reorganization stating, to wit:

"Section 9. All officers and employees who are found by the Civil Service Commission to have been separated in violation of the provisions of this Act, shall be ordered reinstated or reappointed as the case may be without loss of seniority and shall be entitled to full pay for the period of separation. Unless also separated for cause, all officers and employees, who have been separated pursuant to reorganization shall, if entitled thereto, be paid the appropriate separation pay and retirement and other benefits under existing laws within ninety (90) days from the date of the effectivity of their separation or front the date of the receipt of the resolution of their appeals as the case may be: provided, that application for clearance has been filed and no action thereon has been made by the corresponding department or agency. Those who are not entitled to said benefits shall be paid a separation gratuity in the amount equivalent to one (l) month salary for every year of service. Such separation pay and retirement benefits shall have priority of payment out of the savings of the department or agency concerned."(Underscoring supplied).

We hope we have enlightened you on the matter.

Abolition of public office or position as consequence of joint venture arrangement is sui generis which does not fall squarely within the ambit of reorganization. No jurisprudence is yet available passing upon the issue on loss of security of tenure occasioned by or as a result of a joint venture agreement entered into by government agency, instrumentality or GOCCs.

Reorganization is defined by law and jurisprudence as: “A reorganization ‘involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions.’ It alters the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them to make the bureaucracy more responsive to the needs of the public clientele as authorized by law. It could result in the loss of one’s position through removal or abolition of an office.” (cited in Pan vs Peña, G.R. No. 174244 , February 13, 2009)

In reorganization on the one hand, there is no private party involved as it is still the government which performs its functions or activities. The loss of one’s position or abolition of the office is by reason of revamp of the existing bureaucratic structures, authorities and responsibilities. In a JV on the other hand, it is the GOCC which abdicates the performance of certain functions and activities in favor of a private entity.
From another viewpoint, in reorganization the positions or functions in reality became non-existent but in a JV some of the positions or functions remain but transferred to the private entity.

If we insist on using the Rules on Government Reorganization on JVs, then all JVs that will result to reorganization is void because Section 1, RA 6656 requires passage of a law expressly authorizing reorganization for a valid reorganization to take place, viz –

"Section 1. It is hereby declared the policy of the State to protect the security of tenure of civil service officers and employees in the reorganization of the various agencies of the National Government and of local governments, state colleges and universities expressly authorized by law, including government-owned or controlled corporations with original charters, without sacrificing the need to promote morale, efficiency in the civil service pursuant to Article IX, B, Section 3 of the Constitution." [EMPHASIS SUPPLIED].

PD 198 does not expressly vest in the Board of Directors or any of its officers the power to reorganize the structures and positions in the Water District. In CSC Resolution No. 992762 dated December 15, 1999 (BATTUNG, ELADIO C.), it was ruled that –

“Thus, any process with the end in view of restructuring the bureaucracy's organizational and functional set-up to make it more viable in terms of economy, efficiency, effectiveness and to make it more responsive to the needs of public clientele as authorized by law, whether partial or total, is reorganization (Rules on Government Reorganization) which can validly and lawfully be exercised only by virtue of an express grant of such power and to be implemented pursuant to RA No. 6656.

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In sum, the Commission agrees with the findings of the Civil Service Commission - Regional Office No. III that the Philippine Crop Insurance Corporation does not posses the power to reorganize the corporation. Thus, any reorganization undertaken without express authority is not in order.”

The Supreme Court in a plethora of cases ruled that power to reorganize public positions is inherently a legislative power. In UP Board of Regents vs Rasul (G.R. No. 91551, August 16, 1991) it was reiterated that –

“It is therefore clear that the authority of the UP is limited to what is expressly provided in Act No. 1870 as amended, that is, to combine or merge colleges, that is all the law speaks of in such instance.

On the other hand, the power to create and abolish offices carries with it the power to fix the number of positions, salaries, emoluments, and to provide funds for the operation of the office created. This power is inherently legislative in character. The UP Board of Regents does not have such power. Hence, the abolition of the position of respondent Dr. Estrella is not valid.”

The policy of according protection to security of tenure of government employees is not merely a statutory grant but a Constitutional Right (Article IX, B, Section 3) and therefore must pass the stringent requirements of the law and the constitution if the same will be disregarded even in case of reorganization.

Inevitably, a JV will result to abolition of public office or function since the same will be undertaken by the private partner. The question that must be answered is that whether the 2013 NEDA JV Guideline is constitutional when it will result to removal of civil servants from public office without due process of law and without a law authorizing this reorganization.

Hi Sir Leonardo,

Thank you for enlightening us...

You mentioned about PD 198, how did you guessed that our agency is a LWD? Which in fact, you are absolutely correct!