G.R. No. 178021

Republic of the Philippines

Supreme Court

Manila

EN BANC

REPUBLIC OF THE PHILIPPINES, represented by the CIVIL SERVICE COMMISSION,

Petitioner,

- versus -

MINERVA M.P. PACHEO,

Respondent.

G.R. No. 178021

Present:

CORONA, C.J.,

CARPIO,

VELASCO, JR.,

LEONARDO-DE CASTRO,

BRION,

PERALTA,

BERSAMIN,

DEL CASTILLO,

ABAD,

VILLARAMA, JR.,

PEREZ,

MENDOZA,

SERENO,

REYES, and

PERLAS-BERNABE, JJ.

Promulgated:

January 25, 2012

x -------------------------------------------------------------------------------------------------------x

D E C I S I O N

MENDOZA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner Republic of the Philippines, represented by the Office of the Solicitor General (OSG), which assails the February 22, 2007 Decision[1] and the May 15, 2007 Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 93781. The CA reversed the November 21, 2005 Resolution of the Civil Service Commission (CSC) declaring the re-assignment of respondent Minerva M.P. Pacheos (Pacheo) not valid and ordering her reinstatement to her original station but without backwages under the principle of no work, no pay.

The Facts

Pacheo was a Revenue Attorney IV, Assistant Chief of the Legal Division of the Bureau of Internal Revenue (BIR) in Revenue Region No. 7 (RR7), Quezon City.

On May 7, 2002, the BIR issued Revenue Travel Assignment Order (RTAO) No. 25-2002,[3] ordering the reassignment of Pacheo as Assistant Chief, Legal Division from RR7 in Quezon City to RR4 in San Fernando, Pampanga. The BIR cited exigencies of the revenue service as basis for the issuance of the said RTAO.

Pacheo questioned the reassignment through her Letter dated May 9, 2002[4] addressed to Rene G. Banez, then Commissioner of Internal Revenue (CIR). She complained that the transfer would mean economic dislocation since she would have to spend ₱200.00 on daily travel expenses or approximately ₱4,000.00 a month. It would also mean physical burden on her part as she would be compelled to wake up early in the morning for her daily travel from Quezon City to San Fernando, Pampanga, and to return home late at night from San Fernando, Pampanga to Quezon City. She was of the view that that her reassignment was merely intended to harass and force her out of the BIR in the guise of exigencies of the revenue service. In sum, she considered her transfer from Quezon City to Pampanga as amounting to a constructive dismissal.

Due to the then inaction of the BIR, Pacheo filed a complaint[5] dated May 30, 2002, before the CSC- National Capital Region (CSC-NCR), praying for the nullification of RTAO No. 25-2002. In its July 22, 2002 Order,[6] the CSC-NCR treated Pacheos Complaint as an appeal and dismissed the same, without prejudice, for failure to comply with Sections 73 and 74 of Rule V(b) of the Uniform Rules on Administrative Cases in the Civil Service.[7]

In its Letter-reply[8] dated September 13, 2002, the BIR, through its Deputy Commissioner for Legal and Inspection Group, Edmundo P. Guevara (Guevara), denied Pacheos protest for lack of merit. It contended that her reassignment could not be considered constructive dismissal as she maintained her position as Revenue Attorney IV and was designated as Assistant Chief of Legal Division. It emphasized that her appointment to the position of Revenue Attorney IV was without a specific station. Consequently, she could properly be reassigned from one organizational unit to another within the BIR. Lastly, she could not validly claim a vested right to any specific station, or a violation of her right to security of tenure.

Not in conformity with the ruling of the BIR, Pacheo appealed her case before the CSC.

On November 21, 2005, the CSC issued Resolution No. 051697[9] granting Pacheos appeal, the dispositive portion of which reads:

WHEREFORE, the instant appeal of Minerva M.P. Pacheo is hereby GRANTED. The Bureau of Internal Revenue Revenue Travel Assignment Order No. 25-2002 dated May 7, 2002, on the reassignment of Pacheo to the Legal Division Revenue Region No. 4 San Fernanado, Pampanga, is hereby declared NOT VALID. ACCORDINGLY, Pacheo should now be recalled to her original station. This Commission, however rules and so holds that the withholding by the BIR of Pacheos salary for the period she did not report to work is justified.

The CSCRO No. III is directed to monitor the implementation of this Resolution.

In granting Pacheos appeal, the CSC explained:

On the second issue, this Commission finds merit in appellants contention that her reassignment in not valid.

Of pertinent application thereto is Rule III, Section 6 of CSC Memorandum Circular No. 40, series of 1998, dated December 14, 1998, which provides:

Section 6. Other Personnel Movements. The following personnel movements which will not require issuance of an appointment shall nevertheless require an office order by duly authorized official.

a. Reassignment Movement of an employee from one organizational unit to another in the same department or agency which does not involve reduction in rank, status or salary. If reassignment is done without consent of the employee being reassigned it shall be allowed for a maximum period of one year. Reassignment is presumed to be regular and made in the interest of public service unless proven otherwise or it constitutes constructive dismissal.

No assignment shall be undertaken if done indiscriminately or whimsically because the law is not intended as a convenient shield for the appointing/ disciplining authority to harass or oppress a subordinate on the pretext of advancing and promoting public interest.

Reassignment of small salaried employee is not permissible if it causes significant financial dislocation.

Although reassignment is a management prerogative, the same must be done in the exigency of the service without diminution in rank, status and salary on the part of the officer or employee being temporarily reassigned. Reassignment of small salaried employees, however is not allowed if it will cause significant financial dislocation to the employee reassigned. Otherwise the Commission will have to intervene.

The primary purpose of emphasizing small salaried employees in the foregoing rule is to protect the rank and file employees from possible abuse by the management in the guise of transfer/reassignment. The Supreme Court in Alzate v. Mabutas, (51 O.G. 2452) ruled:

x x x [T]he protection against invalid transfer is especially needed by lower ranking employees. The Court emphasized this need when it ruled that officials in the unclassified service, presidential appointees, men in the government set up occupy positions in the higher echelon should be entitled to security of tenure, unquestionable a lesser sol[ci]itude cannot be meant for the little men, that great mass of Common underprivileged employees-thousand there are of them in the lower bracket, who generally are without connections and who pin their hopes of advancement on the merit system instituted by our civil service law.

In other words, in order to be embraced in the term small-salaried employees, the latter must belong to the rank and file; and, his/her salary would be significantly reduced by virtue of the transfer/reassignment. Rank and file was categorized as those occupying the position of Division Chief and below, pursuant to CSC Resolution No. 1, series of 1991, dated January 28, 1991.

The facts established on record show that Pacheo belongs to the rank and file receiving an average monthly salary of Twenty Thousand Pesos (₱20,000.00) under the salary standardization law and a monthly take home pay of Fourteen Thousand Pesos (₱14,000.00). She has to spend around Four Thousand Pesos (₱4,000.00) a month for her transportation expenses as a consequence of her reassignment, roughly twenty eight percent (28%) of her monthly take home pay. Clearly, Pacheos salary shall be significantly reduced as a result of her reassignment.

In ANORE, Ma. Theresa F., this Commission ruled:

Anore, a lowly salaried employee, was reassigned to an isolated island 15 kilometers away from her original place of assignment. She has to travel by boat with only one trip a day to report to her new place of assignment in an office without any facilities, except its bare structure. Worst, the municipality did not provide her with transportation allowance. She was forced to be separated from her family, look for a boarding house where she can stay while in the island and spend for her board and lodging. The circumstances surrounding Anores reassignment is exactly the kind of reassignment that is being frowned upon by law.

This Commission, however, rules and so holds that the withholding by the BIR of her salaries is justified as she is not entitled thereto since she is deemed not to have performed any actual work in the government on the principle of no work no pay.

Accordingly, Pacheo should now be reinstated to her original station without any right to claim back salary as she did not report to work either at her new place of assignment or at her original station.[10] [Emphases in the original]

Still not satisfied, Pacheo moved for reconsideration. She argued that the CSC erred in not finding that she was constructively dismissed and, therefore, entitled to back salary.

On March 7, 2006, the CSC issued Resolution No. 060397[11] denying Pacheos motion for reconsideration.

Undaunted, Pacheo sought recourse before the CA via a petition for review.

In its February 22, 2007 Decision, the CA reversed the CSC Resolution and ruled in favor of Pacheo, the fallo of which states:

WHEREFORE, the petition is GRANTED. Resolution nos. 051697 and 060397 dated November 21, 2005 and March 7, 2006, respectively, of the Civil Service Commission are REVERSED and SET ASIDE. A new judgment is hereby entered finding petitioner to have been constructively dismissed and ordering her immediate reinstatement with full backwages and benefits.

SO ORDERED.[12]

In setting aside CSC Resolution Nos. 051697 and 060397, the CA held that:

While this Court agrees that petitioners reassignment was not valid considering that a diminution in salary is enough to invalidate such reassignment, We cannot agree that the latter has not been constructively dismissed as a result thereof.

It is well to remember that constructive dismissal does not always involve forthright dismissal or diminution in rank, compensation, benefits and privileges. For an act of clear discrimination, insensibility, or disdain by an employer may become so unbearable on the part of the employee that it could foreclose any choice by him except to forgo his continued employment.

The management prerogative to transfer personnel must be exercised without grave abuse of discretion and putting to mind the basic elements of justice and fair play. The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee.

In this case, petitioners reassignment will result in the reduction of her salary, not to mention the physical burden that she would suffer in waking up early in the morning to travel daily from Quezon City to San Fernando, Pampanga and in coming home late at night.

Clearly, the insensibility of the employer is deducible from the foregoing circumstances and petitioner may have no other choice but to forego her continued employment.

Moreover, it would be inconsistent to hold that the reassignment was not valid due to the significant reduction in petitioners salary and then rule that there is no constructive dismissal just because said reduction in salary will not render petitioner penniless if she will report to her new place of assignment. It must be noted that there is constructive dismissal when the reassignment of an employee involves a diminution in pay.

Having determined that petitioner has been constructively dismissed as a result of her reassignment, We shall resolve whether or not she is entitled to backwages.

In denying petitioners claim for backwages, the CSC held:

Accordingly, Pacheo should now be reinstated to her original station without any right to claim back salary as she did not report for work either at her new place of assignment or at her original station.

Pacheo, while belonging to the rank-and-file employees, is holding a responsible position as an Assistant Division Chief, who could not just abandon her duties merely because she protested her re-assignment and filed an appeal afterwards.

We do not agree.

If there is no work performed by the employee there can be no wage or pay, unless of course the laborer was able, willing and ready to work but was illegally locked out, dismissed or suspended. The No work, no pay principle contemplates a no work situation where the employees voluntarily absent themselves.

In this case, petitioner was forced to forego her continued employment and did not just abandon her duties. In fact, she lost no time in protesting her reassignment as a form of constructive dismissal. It is settled that the filing of a complaint for illegal dismissal is inconsistent with a charge of abandonment. The filing of the complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment.

Neither do we agree with the OSG when it opined that:

No one in the Civil Service should be allowed to decide on whether she is going to accept or not any work dictated upon by the exigency of the service. One should consider that public office is a public trust and that the act of respondent CIR enjoys the presumption of regularity. To uphold the failure of respondent to heed the RTAO would result in chaos. Every employee would put his or her vested interest or personal opinion over and above the smooth functioning of the bureaucracy.

Security of tenure is a right of paramount value as recognized and guaranteed under Sec. 3, Art. XIII of the 1987 Constitution.

The State shall afford full protection to labor, xxx and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to xxx security of tenure xxx

Such constitutional right should not be denied on mere speculation of any similar unclear and nebulous basis.

In Garcia, et al. v. Lejano, et al., the Supreme Court rejected the OSGs opinion that when the transfer is motivated solely by the interest of the service of such act cannot be considered violative of the Constitution, thus:

We do not agree to this view. While temporary transfers or assignments may be made of the personnel of a bureau or department without first obtaining the consent of the employee concerned within the scope of Section 79 (D) of the Administrative Code which party provides that The Department Head also may, from time to time, in the interest of the service, change the distribution among the several Bureaus and offices of his Department of the employees or subordinates authorized by law, such cannot be undertaken when the transfer of the employee is with a view to his removal. Such cannot be done without the consent of the employee. And if the transfer is resorted to as a scheme to lure the employee away from his permanent position, such attitude is improper as it would in effect result in a circumvention of the prohibition which safeguards the tenure of office of those who are in the civil service. It is not without reason that this Court made the following observation:

To permit circumvention of the constitutional prohibition in question by allowing removal from office without lawful cause, in the form or guise of transfers from one office to another, or from one province to another, without the consent of the transferee, would blast the hopes of these young civil service officials and career men and women, destroy their security and tenure of office and make for a subservient, discontented and inefficient civil service force that sways with every political wind that blows and plays up to whatever political party is in the saddle. That would be far from what the framers of our Constitution contemplated and desired. Neither would that be our concept of a free and efficient Government force, possessed of self-respect and reasonable ambition.

Clearly, the principle of no work, no pay does not apply in this case. As held in Neeland v. Villanueva, Jr:

We also cannot deny back salaries and other economic benefits on the ground that respondent Clerk of Court did not work. For the principle of no work, no pay does not apply when the employee himself was forced out of job. Xxx Indeed, it is not always true that back salaries are paid only when work is done. Xxx For another, the poor employee could offer no work since he was forced out of work. Thus, to always require complete exoneration or performance of work would ultimately leave the dismissal uncompensated no matter how grossly disproportionate the penalty was. Clearly, it does not serve justice to simply restore the dismissed employee to his position and deny him his claim for back salaries and other economic benefits on these grounds. We would otherwise be serving justice in halves.

An illegally dismissed government employee who is later ordered reinstated is entitled to back wages and other monetary benefits from the time of his illegal dismissal up to his reinstatement. This is only fair and sensible because an employee who is reinstated after having been illegally dismissed is considered as not having left his office and should be given a comparable compensation at the time of his reinstatement.

When a government official or employee in the classified civil service had been illegally dismissed, and his reinstatement had later been ordered, for all legal purposes he is considered as not having left his office, so that he is entitled to all the rights and privileges that accrue to him by virtue of the office that he held.[13]

The CSC moved for reconsideration but its motion was denied by the CA in its May 15, 2007 Resolution.

Hence, this petition.

THE ISSUES

WHETHER OR NOT THE ASSAILED DECISION IS LEGALLY CORRECT IN DECLARING THAT RESPONDENT WAS CONSTRUCTIVELY DISMISED AND ENTITLED TO BACK WAGES, NOTWITHSTANDING RESPONDENTS REFUSAL TO COMPLY WITH BIR RTAO No. 25-2002 WHICH IS IMMEDIATELY EXECUTORY PURSUANT TO SECTION 24 (F) OF P.D. 807.

WHETHER OR NOT RESPONDENT SUFFERED A DIMINUTION IN HER SALARY IN RELATION TO SECTION 6, RULE III OF CSC MEMORANDUM CIRCULAR No. 40, SERIES OF 1998, DATED DECEMBER 14, 1998, AS A RESULT OF THE ISSUANCE [OF] BIR RTAO No. 25-2002 ORDERING HER REASSIGNMENT FROM BIR RR No. 7 IN QUEZON CITY TO BIR RR No. 4 IN SAN FERNANDO, PAMPANGA.[14]

In her Memorandum,[15] Pacheo asserts that RTAO No. 25-2002, on the pretense of the exigencies of the revenue service, was solely meant to harass her and force her to resign. As a result of her invalid reassignment, she was constructively dismissed and, therefore, entitled to her back salaries and monetary benefits from the time of her illegal dismissal up to her reinstatement.

In its own Memorandum,[16] the CSC, through the OSG, argues that constructive dismissal is not applicable in this case because it was Pacheo herself who adamantly refused to report for work either in her original station or new place of assignment in clear violation of Section 24 (f) of Presidential Decree (PD) No. 807.[17] Citing jurisprudence,[18] the CSC avers that the RTAO is immediately executory, unless otherwise ordered by the CSC. Therefore, Pacheo should have first reported to her new place of assignment and then appealed her case to the CSC if she indeed believed that there was no justification for her reassignment. Since Pacheo did not report for work at all, she is not entitled to backwages following the principle of no work, no pay.

THE COURTS RULING

The petition fails to persuade.

It appears undisputed that the reassignment of Pacheo was not valid. In its memorandum, the OSG initially argues for the validity of RTAO No. 25-2002 authorizing Pacheos reassignment from Quezon City to San Fernando, Pampanga. Later, however, it specifically prays for the reinstatement of CSC Resolution Nos. 051697 and 060397, which categorically declared RTAO No. 25-2002 as not valid. In seeking such relief, the OSG has effectively accepted the finding of the CSC, as affirmed by the CA, that Pacheos reassignment was indeed invalid. Since the issue of Pacheos reassignment is already settled, the Court finds it futile to pass upon the same at this point.

The question that remains to be resolved is whether or not Pacheos assignment constitutes constructive dismissal and, thus, entitling her to reinstatement and backwages. Was Pacheo constructively dismissed by reason of her reassignment?

The Court agrees with the CA on this point.

While a temporary transfer or assignment of personnel is permissible even without the employee's prior consent, it cannot be done when the transfer is a preliminary step toward his removal, or a scheme to lure him away from his permanent position, or when it is designed to indirectly terminate his service, or force his resignation. Such a transfer would in effect circumvent the provision which safeguards the tenure of office of those who are in the Civil Service.[19]

Significantly, Section 6, Rule III of CSC Memorandum Circular No. 40, series of 1998, defines constructive dismissal as a situation when an employee quits his work because of the agency heads unreasonable, humiliating, or demeaning actuations which render continued work impossible. Hence, the employee is deemed to have been illegally dismissed. This may occur although there is no diminution or reduction of salary of the employee. It may be a transfer from one position of dignity to a more servile or menial job.

The CSC, through the OSG, contends that the deliberate refusal of Pacheo to report for work either in her original station in Quezon City or her new place of assignment in San Fernando, Pampanga negates her claim of constructive dismissal in the present case being in violation of Section 24 (f) of P.D. 807 [now Executive Order (EO) 292, Book V, Title 1, Subtitle A, Chapter 5, Section 26 (6)].[20] It further argues that the subject RTAO was immediately executory, unless otherwise ordered by the CSC. It was, therefore, incumbent on Pacheo to have reported to her new place of assignment and then appealed her case to the CSC if she indeed believed that there was no justification for her reassignment.

Anent the first argument of CSC, the Court cannot sustain the proposition. It was legally impossible for Pacheo to report to her original place of assignment in Quezon City considering that the subject RTAO No. 25-2002 also reassigned Amado Rey B. Pagarigan (Pagarigan) as Assistant Chief, Legal Division, from RR4, San Fernando, Pampanga to RR7, Quezon City, the very same position Pacheo formerly held. The reassignment of Pagarigan to the same position palpably created an impediment to Pacheos return to her original station.

The Court finds Itself unable to agree to CSCs argument that the subject RTAO was immediately executory. The Court deems it necessary to distinguish between a detail and reassignment, as they are governed by different rules.

A detail is defined and governed by Executive Order 292, Book V, Title 1, Subtitle A, Chapter 5, Section 26 (6), thus:

(6) Detail. A detail is the movement of an employee from one agency to another without the issuance of an appointment and shall be allowed, only for a limited period in the case of employees occupying professional, technical and scientific positions. 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. [Underscoring supplied]

On the other hand, a reassignment is defined and governed by E.O. 292, Book V, Title 1, Subtitle A, Chapter 5, Section 26 (7), thus:

(7) Reassignment.An employee may be reassigned from one organizational unit to another in the same agency; Provided, That such reassignment shall not involve a reduction in rank, status or salaries. [Underscoring supplied]

The principal distinctions between a detail and reassignment lie in the place where the employee is to be moved and in its effectivity pending appeal with the CSC. Based on the definition, a detail requires a movement from one agency to another while a reassignment requires a movement within the same agency. Moreover, pending appeal with the CSC, an order to detail is immediately executory, whereas a reassignment order does not become immediately effective.

In the case at bench, the lateral movement of Pacheo as Assistant Chief, Legal Division from Quezon City to San Fernando, Pampanga within the same agency is undeniably a reassignment. The OSG posits that she should have first reported to her new place of assignment and then subsequently question her reassignment. It is clear, however, from E.O. 292, Book V, Title 1, Subtitle A, Chapter 5, Section 26 (7) that there is no such duty to first report to the new place of assignment prior to questioning an alleged invalid reassignment imposed upon an employee. Pacheo was well within her right not to report immediately to RR4, San Fernando, Pampanga, and to question her reassignment.

Reassignments involving a reduction in rank, status or salary violate an employees security of tenure, which is assured by the Constitution, the Administrative Code of 1987, and the Omnibus Civil Service Rules and Regulations. Security of tenure covers not only employees removed without cause, but also cases of unconsented transfers and reassignments, which are tantamount to illegal/constructive removal.[21]

The Court is not unaware that the BIR is authorized to assign or reassign internal revenue officers and employees as the exigencies of service may require. This authority of the BIR, however, should be prudently exercised in accordance with existing civil service rules.

Having ruled that Pacheo was constructively dismissed, is she entitled to reinstatement and back wages? The Court agrees with the CA that she is entitled to reinstatement, but finds Itself unable to sustain the ruling that she is entitled to full back wages and benefits. It is a settled jurisprudence[22] that an illegally dismissed civil service employee is entitled to back salaries but limited only to a maximum period of five (5) years, and not full back salaries from his illegal dismissal up to his reinstatement.

WHEREFORE, the petition is DENIED. The assailed February 22, 2007 Decision and May 15, 2007 Resolution of the Court of Appeals, in CA-G.R. SP No. 93781, are hereby AFFIRMED with MODIFICATION that respondent Minerva M.P. Pacheo is hereby ordered reinstated without loss of seniority rights but is only entitled to the payment of back salaries corresponding to five (5) years from the date of her invalid reassignment on May 7, 2002.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.