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PEZA Vs Mercado

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0% found this document useful (0 votes)
78 views13 pages

PEZA Vs Mercado

admelec

Uploaded by

Jess Raña
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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2/17/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 614

 
 
 
 
 

G.R. No. 172144. March 9, 2010.*

PEZA BOARD OF DIRECTORS and LILIA B. DE LIMA,


petitioners, vs. GLORIA J. MERCADO, respondent.

Civil Service Law; Security of Tenure; For an examinee or an


incumbent to be a member of the Career Executive Service (CES)
and be entitled to security of tenure, she/he must pass the CES
examinations, be conferred CES eligibility, comply with the other
requirements prescribed by the CES Board and be appointed to a
CES rank by the President.—For an examinee or an incumbent to
be a member of the CES and be entitled to security of tenure,
she/he must pass the CES examinations, be conferred CES
eligibility, comply with the

_______________

* FIRST DIVISION.

684

684 SUPREME COURT REPORTS ANNOTATED


Peza Board of Directors vs. Mercado

other requirements prescribed by the CES Boardbe appointed


to a CES rank by the President. Admittedly, before and up to the
time of the termination of her appointment, respondent did not go
through the four stages of CES eligibility examinations.

PETITION for review on certiorari of the amended decision


and resolution of the Court of Appeals.
   The facts are stated in the opinion of the Court.
  PEZA Legal Services Group for petitioners.
  Del Prado, Diaz and Associates Law Offices for
respondent.

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CARPIO-MORALES, J.:
 
Being assailed is the Court of Appeals 1) Decision1 of
December 14, 2005 which reversed2 that of the Regional
Trial Court (RTC) of Pasay City, Branch 108, 2) Amended
Decision3 dated March 31, 2006 by awarding back salaries
to Gloria J. Mercado (respondent) computed from the time
of her alleged dismissal until her reinstatement as
Philippine Economic Zone Authority (PEZA) Deputy
Director General for Policy and Planning, and 3)
Resolution4 of March 31, 2006 which denied petitioners’
motion for reconsideration of the December 14, 2005
Decision.

_______________

1  CA Rollo, pp. 69-124. Penned by Associate Justice Celia Librea-


Leagogo and concurred in by Associate Justices Lucas Bersamin (now
Associate Justice of this Court) and Renato Dacudao.
2 Annex “H” of Petition, Rollo, pp. 150-163. Penned by Judge Priscilla
Mijares.
3  CA Rollo, pp. 239-244. Penned by Associate Justice Celia Librea-
Leagogo and concurred in by Associate Justices Lucas Bersamin (now
Associate Justice of this Court) and Renato Dacudao.
4 Id., at pp. 246-247. Penned by Associate Justice Celia Librea-Leagogo
and concurred in by Associate Justices Lucas Bersamin (now Associate
Justice of this Court) and Renato Dacudao.

665

VOL. 614, March 9, 2010 665


Peza Board of Directors vs. Mercado

 
The antecedent facts of the present controversy are as
follows:
Respondent was appointed as Group Manager for Policy
and Planning of PEZA on September 16, 1998. Her
appointment was temporary in nature.
On May 16, 1999, respondent was promoted to the
position of Deputy Director General for Policy and
Planning. Her appointment indicated the same as on
permanent basis, but with the following annotation: NO
SECURITY OF TENURE UNLESS HE/SHE OBTAINS
CESO OR CSEE ELIGIBILITY. CESO is the acronym for
Career Executive Service Officer, while CSEE is the
acronym for Career Service Executive Eligibility.

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On June 1, 2000, petitioner Lilia B. de Lima, in her


capacity as PEZA Director General, by letter of even date,
advised respondent of the termination of her appointment
effective on the closing hours of the day. On even date,
petitioner PEZA Board convened in an executive session
and passed a Resolution appointing Wilhelm G. Ortaliz
(Ortaliz), a CESO eligible, as Deputy Director General for
Policy and Planning effective immediately.
Respondent thereupon filed on June 7, 2000 with the
RTC of Pasay City a petition for prohibition, quo warranto
and damages with preliminary prohibitory/mandatory
injunction and/or temporary restraining order against
herein petitioners and Ortaliz, docketed as Civil Case No.
00-0172, questioning the June 1, 2000 PEZA Board
Resolution appointing Ortaliz as Deputy Director General
for Policy and Planning.
In the main, respondent alleged in her complaint that
her degree in Master in National Security Administration
(MNSA) automatically conferred upon her Career
Executive Service (CES) eligibility; that Republic Act No.
(R.A.) 8748, which amended R.A. 7916 or the PEZA
Charter, did away with the CES eligibility requirement for
the position of Deputy Director General; and that the
termination of her ap-

686

686 SUPREME COURT REPORTS ANNOTATED


Peza Board of Directors vs. Mercado

pointment was actuated with bad faith to entitle her to


moral and exemplary damages.
Petitioners countered that respondent’s MNSA degree at
best merely granted her a CESO rank, not eligibility, and
since she had not acquired CES eligibility, she had no
security of tenure with respect to her position and could,
therefore, be replaced at any time by Ortaliz who is a CES
eligible.
Respecting respondent’s contention that R.A. 8748
removed the CES eligibility requirement, petitioners
asserted that based on the records of the deliberations on
Senate Bill No. 1136 which eventually became R.A. 8748,
the lawmakers never really intended to do away with the
CES eligibility requirement for the position of Deputy
Director General; and that assuming arguendo that that
was the intention, R.A. 8748 took effect only on June 20,
1999 after the appointment of respondent on May 16, 1999.

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By Decision of December 4, 2001, the trial court


dismissed respondent’s petition. It held that the passage of
R.A. 8748 notwithstanding, the CES eligibility requirement
for the position of Deputy Director General remains, in
light of 1) the certification from the CES Board that
respondent was not a CES eligible, 2) R.A. 7916 (An Act
Providing for the Legal Framework and Mechanisms for
the Creation, Operation, Administration, and Coordination
of Special Economic Zones in the Philippines, Creating for
this Purpose, the Philippine Economic Zone Authority
(Peza), and for Other Purposes) which provides that
appointment to the three PEZA Deputy Director General
positions requires CES eligibility, and 3) the Senate
deliberations on the bill which eventually became R.A.
8748.
The trial court further held that, contrary to
respondent’s contention, her MNSA degree did not
automatically confer on her CES eligibility for, under
Executive Order No. 771 (AMENDING EXECUTIVE
ORDER NO. 696 GRANTING CAREER EXECUTIVE
SERVICE OFFICER RANK TO GRADUATES OF THE
NATIONAL DEFENSE COLLEGE

687

VOL. 614, March 9, 2010 687


Peza Board of Directors vs. Mercado

OF THE PHILIPPINES AND OTHER RELATED


PURPOSES), the recommendation of the Ministry or
Agency concerned and the evaluation of the Career
Executive Service Board (CESB) were still needed; and
that absent these additional requirements, what was
granted to MNSA degree holders was merely the salary
corresponding to the CESO rank and not the rank itself.
The trial court went on to state that per CESB
Resolution No. 204 dated December 21, 1998, MNSA
graduates are deemed only to have passed the
Management Aptitude Test Battery which is merely the
first stage in the four-stage CES eligibility conferment
process.
The trial court, concluding that since respondent did not
have the required eligibility for the position, held that her
appointment was merely temporary and had no security of
tenure thereto, and that, therefore, it was deemed to have
expired upon the appointment of Ortaliz.
The trial court denied respondent’s claim for damages, it
finding that she failed to substantiate the same and, in any
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event, petitioners acted in accordance with law.


Respondent appealed to the Court of Appeals, raising
substantially the same arguments she raised before the
trial court.
As stated early on, the appellate court, by the assailed
Decision of December 14, 2005, reversed the trial court’s
decision. It held that since respondent was promoted to the
position of Deputy Director General for Policy and
Planning on a permanent status, she cannot be summarily
removed; and that respondent’s MNSA degree obtained on
July 12, 1993 automatically conferred on her a CES
eligibility pursuant to Executive Order No. 696, as
amended by Executive Order No. 771.
The appellate court went on to hold that even if
respondent was not a CES eligible, she is still qualified for
the position as the requirement under Sec. 11 of Republic
Act No. 7916 that

688

688 SUPREME COURT REPORTS ANNOTATED


Peza Board of Directors vs. Mercado

appointees to Deputy Director General positions must


“have career executive service eligibility” is no longer found
under Sec. 11 of Republic Act No. 8748. It ratiocinated that
the deletion of such requirement indicated that the
legislature intended to do away with the eligibility
requirement.
At all events, the appellate court held that respondent
subsequently qualified to the position as she was conferred
a CES eligibility by the Civil Service Commission in
December 2000.
Albeit the appellate court held that respondent was
illegally removed from and ordered her reinstatement to
her position, it did not find her entitled to damages as
there was no proof that the termination of her services was
tainted with bad faith on the part of petitioners. Thus, the
appellate court disposed:

“WHEREFORE, premises considered, the appeal is


GRANTED. The Decision dated 04 December 2001 of the
Regional Trial Court of Pasay City, Branch 108 in Civil Case No.
00-172 is REVERSED and SET ASIDE. PEZA Board Resolution
No. 00-187 is declared NULL and VOID; appellee WILHELM G.
ORTALIZ is OUSTED and altogether EXCLUDED from
exercising, holding or occupying the position of PEZA Deputy
Director General for Policy and Planning; and appellant GLORIA

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J. MERCADO is hereby REINSTATED to her position as PEZA


Deputy Director General for Policy and Planning. Costs against
appellees.
SO ORDERED.”5 (emphasis in the original)

 
Petitioners moved for reconsideration of the appellate
court’s decision. Respondent too moved for a partial motion
for reconsideration of the decision.
The appellate court, by the Amended Decision of March
31, 2006, acting on respondent’s motion for reconsideration,
denied her claim for damages and attorney’s fees but
granted her claim for back salaries, computed from the
time of her

_______________

5 Id., at p. 122.

689

VOL. 614, March 9, 2010 689


Peza Board of Directors vs. Mercado

removal until her reinstatement to the position as PEZA


Deputy Director General for Policy and Planning.
By Resolution also dated March 31, 2006, the appellate
court denied petitioners’ motion for reconsideration, hence,
their present recourse, they raising the same defenses and
arguments proffered during the proceedings before the trial
and appellate courts.
The petition is impressed with merit.
Section 27 (1), of the Civil Service Law provides:

“(1) Permanent status.—A permanent appointment shall be


issued to a person who meets all the requirements for the
position to which he is being appointed, including the
appropriate eligibility prescribed, in accordance with the
provisions of law, rules and standards promulgated in pursuance
thereof.” (emphasis and underscoring supplied)

 
In the CES under which the position of PEZA Deputy
Director General for Policy and Planning is classified, the
acquisition of security of tenure which presupposes a
permanent appointment is governed by the Rules and
Regulations promulgated by the CES Board. As the recent
case of Amores vs. Civil Service Commission explains:6

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“Security of tenure in the career executive service, which


presupposes a permanent appointment, takes place upon passing
the CES examinations administered by the CES Board. It is
that which entitles the examinee to conferment of CES eligibility
and the inclusion of his name in the roster of CES eligibles. Under
the rules and regulations promulgated by the CES Board,
conferment of the CES eligibility is done by the CES Board
through a formal board resolution after an evaluation has
been done of the examinee’s performance in the four
stages of the CES eligibility examinations. Upon
conferment of CES eligibility and compliance with the
other requirements prescribed by the Board, an
incumbent of a CES position may qualify for ap-

_______________

6 G.R. No. 170093, April 29, 2009, 587 SCRA 160.

690

690 SUPREME COURT REPORTS ANNOTATED


Peza Board of Directors vs. Mercado

pointment to a CES rank. Appointment to a CES rank is


made by the President upon the Board’s recommendation.
It is this process which completes the official’s
membership in the CES and confers on him security of
tenure in the CES. Petitioner does not seem to have gone
through this definitive process.” (emphasis, italics and
underscoring supplied)

 
Clearly, for an examinee or an incumbent to be a
member of the CES and be entitled to security of tenure,
she/he must pass the CES examinations, be conferred CES
eligibility, comply with the other requirements prescribed
by the CES Board, and be appointed to a CES rank by the
President.
Admittedly, before and up to the time of the termination
of her appointment, respondent did not go through the four
stages of CES eligibility examinations.
The appellate court’s ruling that respondent became
CES eligible upon earning the MNSA degree, purportedly
in accordance with Executive Order No. 696, as amended
by Executive Order No. 771, does not lie.
The pertinent portions of Executive Order No. 696
issued on May 27, 1981 which granted CESO rank to

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graduates of the National Defense College of the


Philippines read:

“x x x x
WHEREAS, Article IV, Chapter I, Part III of the Integrated
Reorganization Plan provides for a Career Executive Service to
constitute a continuing pool of well-selected and development-
oriented career administrators of the government;
WHEREAS, the pre-qualification requirements for
admission at NDCP as well as the training obtained there
fully satisfy the training and pre-qualification
requirements for appointment to the Career Executive
Service; and
xxxx
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
the Philippines, by virtue of the powers vested in me by law, do
hereby order that:

691

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Peza Board of Directors vs. Mercado

Sec. 1. holders of the degree of Master of National


Security Administration shall be given preference in
promotion to existing vacant positions, as well as
assignments to higher responsibility, particularly those
involving policy formulation in their respective units,
ministries, agencies, offices or entities.
Sec. 2. Initially, NDCP graduates belonging to the government
service shall be granted the rank of CESO III with
corresponding compensation and other privileges in the Career
Executive Service.
x x x x” (emphasis and underscoring supplied)

 
Upon the other hand, the pertinent portions of
Executive Order No. 771 issued more than eight months
later or on February 4, 1982, which amended Executive
Order No. 696, read:

WHEREAS, Section 2 of the Executive Order No. 696 dated May


27, 1981, provides that graduates of the National Defense College
of the Philippines belonging to the government service shall be
granted the rank of CESO III with corresponding compensation
and other privileges in the Career Executive Service;
WHEREAS, graduates of the Career Executive Service
Development Program who are equally deserving have not been
extended the same or similar benefits;
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WHEREAS, the automatic grant of CESO Rank III with


corresponding compensation and privileges to NDCP graduates
has caused salary inequities in some agencies; and
WHEREAS, there is a need to harmonize the conferment of ranks,
compensation and other benefits to graduates of both institutions
or programs in order to maintain a high level or morale in the
Career Executive Service.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
the Philippines, by virtue of the powers vested in me by law, do
hereby order that:
Sec. 1. Section 2 of Executive Order No. 696 is hereby amended,
to read as follows:

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692 SUPREME COURT REPORTS ANNOTATED


Peza Board of Directors vs. Mercado

Sec. 2. Graduates of the National Defense College of


the Philippines belonging to the civil service, and
graduates of the Career Executive Service
Development Program who have not yet been
appointed to a CESO rank shall be granted initially
CESO Rank, V, or higher, depending on the
recommendation of the Ministry or Agency head
concerned and the evaluation of the Career
Executive Service Board, with corresponding
compensation and other benefits. The Career
Executive Service Board, in consultation with the
National Defense College of the Philippines shall
promulgate rules and regulations to implement this
Order.
x x x x” (emphasis and underscoring supplied)

Pursuant to this amendatory Executive Order, the CESB


issued on December 21, 1998 Resolution No. 204,
“ACCREDITING THE MASTER OF NATIONAL
SECURITY ADMINISTRATION (MNSA) DEGREE
CONFERRED BY THE NATIONAL DEFENSE COLLEGE
OF THE PHILIPPINES AND MASTER OF PUBLIC
SAFETY ADMINISTRATION (MPSA) DEGREE
CONFERRED BY THE PHILIPPINE PUBLIC SAFETY
COLLEGE AS EQUIVALENT TO THE MANAGEMENT
APTITUDE TEST BATTERY FOR POSSIBLE
CONFERMENT OF CES ELIGIBILITY,” the pertinent
portions of which read:

“x x x x

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WHEREAS, the Board evaluated the curriculum and


screening requirements of the two masteral programs and found
these to approximate the rigid requirements and standards of the
Management Aptitude Test Battery;
NOW THEREFORE, be it RESOLVED as it is hereby
RESOLVED that the Master of National Security Administration
(MNSA) degree conferred by NDCP and the Master of Public
Safety Administration (MPSA) degree conferred by PPSC be
accredited as equivalent to passing the Management
Aptitude Test Battery (MATB) and that graduates of both
programs interested to acquire CES eligibility and CES rank be
allowed to proceed to the second stage of the CES eligibility
examination process which is the Assessment Center and the
other stages of the examination thereafter in accordance with
existing policies and regulations;

693

VOL. 614, March 9, 2010 693


Peza Board of Directors vs. Mercado

PROVIDED, however, that all expenses that will be incurred in


participating in the Assessment Center shall be shouldered by the
agency and/or the graduates.
RESOLVED FURTHER that MNSA and MPSA graduates
who pass the three other stages of the CES eligibility
examinations and are conferred CES eligibility and who
are incumbents of CES positions may qualify for appointment
to CES ranks; PROVIDED that they meet and comply with the
other requirements prescribed by the CES Board and the
Office of the President to qualify for rank appointment.”
(emphasis, italics and underscoring supplied)

 
By respondent’s attainment of an MNSA degree, she
was not conferred automatic CES eligibility. It was, as
above-quoted portions of CESB Resolution No. 204 state,
merely accredited as “equivalent to passing the
Management Aptitude Test Battery.” For respondent to
acquire CES eligibility and CES rank, she could “proceed to
the second stage of the eligibility examination process . . .
and the other stages of the examination . . . in accordance
with existing policies and regulations”; and that if
respondent as MNSA degree holder passed the three other
stages of the CES eligibility examinations and is conferred
CES eligibility, she could “qualify for appointment to CES
ranks,” PROVIDED that she meets and complies “with

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other requirements of the CES Board and the Office of the


President to qualify for rank appointment.”
Since, it is admitted that respondent, who acquired an
MNSA degree in 1993, had not undergone the second, third
and fourth stages of the CES eligibility examinations prior
to her appointment or during her incumbency as Deputy
Director General up to the time her appointment was
terminated, she was not a CES eligible, as indeed certified
to by the CES Board. Not being a CES eligible, she had no
security of tenure, hence, the termination by the PEZA
Board on June 1, 2000 of her appointment, as well as the
appointment in her stead of CES eligible by Ortaliz, were
not illegal.
694

694 SUPREME COURT REPORTS ANNOTATED


Peza Board of Directors vs. Mercado

 
Respecting the contention that the promulgation of R.A.
8748 on June 1, 1999 removed the CES eligibility
qualification for the position of Deputy Director General,
hence, respondent, albeit not a CES-eligible, could only be
terminated for cause, the same is untenable. The relevant
portion of said law reads:

“Section 1. Chapter II, Section 11 of Republic Act No. 7916 is


hereby amended to read as follows:
Section 11. The Philippine Economic Zone Authority
(PEZA) Board.—There is hereby created a body corporate to
be known as the Philippine Economic Zone Authority
(PEZA) attached to the Department of Trade and Industry.
The Board shall have a director general with the rank of
department undersecretary who shall be appointed by the
President. The director general shall be at least forty (40)
years of age, of proven probity and integrity, and a degree
holder in any of the following fields: economics, business,
public administration, law, management or their
equivalent, and with at least ten (10) years relevant
working experience preferably in the field of management
or public administration.
The director general, shall be assisted by three (3)
deputy directors general each for policy and
planning, administration and operations, who shall
be appointed by the PEZA Board, upon the
recommendation of the director general. The deputy
directors general shall be at least thirty-five (35)

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years old, with proven probity and integrity and a


degree holder in any of the following fields:
economics, business, public administration, law,
management or their equivalent.” (emphasis supplied)

 
As correctly held by the trial court, removing the CES
eligibility requirement for the Deputy Director General
position could not have been the intention of the framers of
the law. It bears noting that the position is a high-ranking
one which requires specialized knowledge and experience
in certain areas including law, economics, public
administration and similar fields, hence, to remove it from
the CES would be absurd.
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Peza Board of Directors vs. Mercado

 
The Civil Service Commission CESB in fact has certified
that the position requires the appropriate CES eligibility.
It is settled that the construction given to a statute by an
administrative agency charged with the interpretation and
application of that statute is entitled to great respect and
should be accorded great weight by the courts.7
Respondent’s subsequent passing in late 2000 of the CES
examinations did not retroact to consider her a CESO at
the time her appointment was terminated on June 1, 2000.
WHEREFORE, the petition is GRANTED. The Court of
Appeals Decision of December 14, 2005, Amended Decision
of March 31, 2006 and Resolution of March 31, 2006 are
REVERSED AND SET ASIDE. The December 4, 2001
Decision of the Regional Trial Court of Pasay City, Branch
108 is REINSTATED.
SO ORDERED.

Puno (C.J., Chairperson), Leonardo-De Castro, Brion**


and Villarama, Jr., JJ., concur.

Petition granted, judgment, amended decision and


resolution reversed and set aside.

Note.—Civil Service Commission (CSC) has been


granted by the Constitution and the Administrative Code
jurisdiction over all civil service positions in the
government service whether career or non-career. (Civil
Service Commission vs. Sojor, 554 SCRA 160 [2008])
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——o0o—— 

_______________

7 Bagatsing v. Committee on Privatization, G.R. No. 112399, July 14,


1995, 246 SCRA 334; Nestle Philippines, Inc. v. Court of Appeals, G.R. No.
86738, November 13, 1991, 203 SCRA 505, 510.
** Additional member per raffle dated March 1, 2010 in lieu of
Associate Justice Lucas P. Bersamin.

© Copyright 2021 Central Book Supply, Inc. All rights reserved.

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