SUPREME COURT

EN BANC

[G.R. No. 103121. September 10, 1993.]

REMEDIOS T. BLAQUERA, HERMINIO GUTIERREZ, AUGUSTO R. ORAA,

VIRGINIA MALLILLIN, NENA T. AQUINO, RIZALYN DELA CRUZ, SATURNINO
Y. CANMANGONAN, ALICIA S. UMEREZ, PRESENTACION C. DIEZ, VICTORIO
M. VILLAGRACIA, FELISA C. GALARAGA, NELIA D. CANUELA, EDITHA P.
FRIGILLANA, GLORIA T. DACANAY, BERNARD M. DE LARA, NORMA G.
SORIANO, ADELAIDA CALOOY, VIRGINIA B. MILLANO, ADONIS S. JAVIER,
SYLVIA C. ABUNGAN, BENJAMIN S. CADAWAN, NOEL V. FERRER, JOSUE
PEREZ, RAMON QUEBRAL, ALFONSO DELA CRUZ, JOEL ALMOSARA, IMELDA
CLARION, ANTONIO P. GUANSING, JR., WILFREDO VILLANUEVA,
WENCESLAO MAGO, ANTONIO DEQUINA, ANGELO A. JAVIER, JOSE DE
GUZMAN, REYNALDO VECINO, JOSEFA CAABAY, EXPEDITO SORIA,
LAMBERTO MELAD, REBE LOZANO, DANILO C. ADINA, JOSE P. ARZADON,
EDWIN L. DE VERA, BERNARDO M. MENDOZA, TITA H. MACARAEG, FELIFE B.
SANTOS, LUCIO R. SUYAT, SANTIAGO R. FRAGANTE, FRANCISCA D. CANUEL,
EVELYN B. LORQUE, LUIS MENDOZA, JAIME GATAN, PROTACIO ARAGON, JR.,
ARTURO T. SANTOS, ROGELIO S. GALANG, JOSEFA B. PELIAS, EDWARD P.
FRANCO, DOMINADOR ABAD, MAXIMIANO ISADA, JR., MAMAO C.
MACAPODI, JUAN CANLAS, SALVADOR PATA, ROLANDO LACANDASO,
ALFONSO DE LEON, RODOLFO VELASCO, JR., DALMACIO H. NADAL, RENE
CILINDRO, ELENA C. CASIS, ISABEL AMISCARAY, ELIZABETH VIDAL,
MANUEL D. DE GUZMAN, ESTRELLA S. PABAIRA, VIOLETA S. TUVERA, LILIA
T. TABENA, EDNA L. DOLLAGA, RODOLFO E. SIBAYAN, ALEXANDER R.
PAYUMO, VIRGILIO R. ABAYA, TEMPOLOK G. AMIR, VICTOR B. BALDE, LULLA
V. BERNARDO, ANGEL CADIZ, LUZ F. CADIZ, GUADALUPE P. CORLONCITO,
FLORDELIZA P. FEDERIS, BERNARDO P. IBE, SALAMBAI A. KADATUAN,
ZENAIDA A. LEANDER, TEDDY B. MARASIGAN, PASTOLERO A. NOEMI,
ROBERTO C. DELA PAZ, AUGUSTO J. SANTOS, SAGUNDINA A. SARONA, IRISH
S. TINO, CRISENTE C. MANIO, PUREZA T. SAYON, PETRONIO TADIOSA,
HERMINIGILDO S. ALLASCO, ELVIRA C. SABANDO, SERGIO ABUAN,
MITCHELL A. LACHICA, CELEDONIO C. BERNABE, MA. THERESA G. AQUINO,
ALEJANDRO R. SIBUCAO, JR., EVELYN V. MENDEZ, DIGNICITA G. SERRANO,
LILIA J. RADA, NICASIO F. ROMERO, ANGELINA B. FERNANDEZ, INOCENCIA
M. SANTOS, WILFREDO H. ZAPANTA, SATURNINA V. VITE, GUADENCIA V.
FLORES, PEDRO VICTORIA, CATALINO ALCONIZ, MARIA REBECCA B.
BURGOS, MA. MAGDALENA ESPEJO-MORENO, ROLANDO I. ETEROSA, ROMEO
L. MANOSO, SATOR H. ALTAREJOS, NENITA N. AQUINO, FAUSTO S.
BERNARDO, ROSARION MERLINDA B. BELLEDO, MANUEL V. DELA CRUZ,
EMMIE L. IGNACIO, ANABELL C. LABORTE, ALBERT A. MAGALANG, JAIME P.
MALLARE, CONCEPCION C. OCAMPO, FLORENTINO C. PALO, REGULO S.
QUEJADA, LUIS FIDEL B. RONQUILLO, NELIA M. SANTOS, MALANE DELOS
SANTOS, REBECCA E. SARACHO, LIZ Y. VELARDE, ANITA R. ABIERA,
ARMANDO V. ACOSTA, ADVINCULA B. ADVINCULA, FELIMON J. ALANO,
ASUNCION T. AMIN, LORELIE N. ANDRES, RAUEL A. BALAJADIA, ROSARIO
B. BATOON, DOLORES B. BETRAN, PRIMA M. CABRAL, ROSARIO H. CAPILI,
BRIGIDA N. DE CASTRO, TEODORO A. DE CASTRO, DUNN HERMANN C.
DALIRE, JOCOBO G. FESALBON, FE G. GAMBA, MARIA JAY A. GENCIANA,
ROSARIO G. GUIRON, CONSTANTINO C. GODOY, FRANCISCO F. GODOY,
JOVITA C. GOMEZ, TEODORA R. KUIZON, JOSEPHINE G. L. LAUCHENGCO,
PUBLIO P. MALLILLIN, JULIE C. MANALO, ROSALINDA P. MEMPIN, HERNANI
G. DEL MUNDO, EDERLINA C. MUSNGI, FE V. NOCHE, PERCIDA G. NORTON,
EVA A. NUGUIM, EMELITA S. DEL PRADO, EMERICO B. PUMARADA,
BENJAMINA QUINACUAN, ISABEL C. RIVERA, RAQUEL P. DEL ROSARIO,
OLYMPIA M. DE SAGUN, JAIME F. SANTOS, MARIO L. SANTOS, VIRGILIO M.
SARMIENTO, LILIBETH M. SOAN, LOIDA S. VALENCIA, ANGELINA A.
VELASQUEZ, ADELINA B. VICTORIA, MA. ROSARIO MANZANO, ROSALINDA
C. BALANCIO, GLORIA KABIGTING, MARIO N. TOLENTINO, VICTORIA C.
TIONGSON, EMILIO S. MEDINA, SYLVIA H. CASTRO ABUNGAN, DEMCIA T.
BRAGANZA, MARINO K. SANTOS, TERESITA B. TOMAS, PEDRILLO B.
ALFAREJOS, JANETTE L. GARCIA, DON E. ABARRIENTOS, REYNALDO M.
CENTENO, CRISTETA A. CASTRO, WILFREDO B. BONILLA, DELIA C.
SERRANO, CONCESA IMPOS-ALDAY, RESTITUTO P. PARDIÑAS, EVANGELINE
T. CORCUERA, ANICETO D. ORDEN, ESTELITA S.I. FLORES, PATRIA
ABUNALES, SELFA C. FERNANDEZ, VIOLETA A. BUAGAS, LYDIA VILLARIN,
LULU CORALES, ZENAIDA MALLATE, RAQUEL FUENTES, EMELINA GAMBA,
JEAN MIN LADIA, CHONA ZAMORA, ALICIA CIMATU, REYNALDO P.
ALCANCES, MARINELA CECILIA T. PASCUA and DOLORES T.
TOLENTINO, Petitioners, CONRADO SALVADOR and MIGUEL CAISIP,
intervenors, v. THE CIVIL SERVICE COMMISSION, HON. FULGENCIO S.
FACTORAN, JR., as the Secretary of the Department of Environment and
Natural Resources, HON. GUILLERMO N. CARAGUE, as the Secretary of the
Department of Budget and Management, Respondents.

Padilla, Jimenez, Kintanar & Asuncion Law Office, for Petitioners.

The Solicitor General for Respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; CIVIL SERVICE COMMISSION; GOVERNMENT

REORGANIZATION; GOOD FAITH A BASIC INGREDIENT FOR ITS VALIDITY. — Good
faith, we ruled in Dario v. Mison is a basic ingredient for the validity of any
government reorganization. It is the golden thread that holds together the fabric of
the reorganization. Without it, the cloth would disintegrate. "Reorganization is a
recognized valid ground for separation of civil service employees, subject only to the
condition that it be done in good faith. No less than the Constitution itself in Section
16 of the Transitory Provisions, together with Sections 33 and 34 of Executive Order
No. 81 and Section 9 of Republic Act No. 6656, support this conclusion with the
declaration that all those not so appointed in the implementation of said
reorganization shall be deemed separated from the service with the concomitant
recognition of their entitlement to appropriate separation benefits and/or retirement
plans of the reorganized government agency." (Domingo v. Development Bank of the
Phils., 207 SCRA 766.)

2. ID.; ID.; ID.; WHEN CARRIED OUT IN GOOD FAITH; LEGAL EFFECTS THEREOF;
WHEN ABOLITION OF POSITIONS INVALID. — A reorganization in good faith is one
designed to trim the fat off the bureaucracy and institute economy and greater
efficiency in its operation. It is not a mere tool of the spoils system to change the
face of the bureaucracy and destroy the livelihood of hordes of career employees in
the civil service so that the new-powers-that-be may put their own people in control
of the machinery of government. "Reorganization in this jurisdiction have been
regarded as valid provided they are pursued in good faith. As a general rule, a
reorganization is carried out in ‘good faith’ if it is for the purpose of economy or to
make bureaucracy more efficient. In that event, no dismissal (in case of dismissal)
or separation actually occurs because the position itself ceases to exist. And in that
case, security of tenure would not be a Chinese wall. Be that as it may, if the
‘abolition,’ which is nothing else but a separation or removal, is done for political
reasons or purposely to defeat security of tenure, or otherwise not in good faith, no
valid ‘abolition’ takes place and whatever ‘abolition’ is done, is void ab initio. There
is an invalid ‘abolition’ as where there is merely a change of nomenclature of
positions, or where claims of economy are belied by the existence of ample funds."
(Dario v. Mison, 176 SCRA 84, 92-93.)

3. ID.; ID.; ID.; RIGHT OF STATE TO REORGANIZE GOVERNMENT BEYOND DISPUTE;

OBSERVANCE OF FUNDAMENTAL STANDARDS OF FAIRNESS AND AUTO-
LIMITATIONS AND RESTRICTIONS IMPOSED BY THE CONSTITUTION AND
APPLICABLE LAWS MANDATORY; REORGANIZATION, OUSTER, AND APPOINTMENTS
OF SUCCESSORS BE MADE IN GOOD FAITH. — There is no dispute over the power
to reorganize — whether traditional, progressive, or whatever adjective is appended
to it. However, the essence of constitutional government is adherence to basis rules.
The rule of law requires that no government official should feel free to do as he
pleases using only his avowedly sincere intentions and conscience to guide him. The
fundamental standards of fairness embodied in the bona fide rule cannot be
disregarded. More particularly, the auto-limitations imposed by the President when
she proclaimed the Provisional Constitution and issued executive orders as sole law
maker and the standards and restrictions prescribed by the present Constitution and
the Congress established under it, must be obeyed. Absent this compliance, we
cannot say that a reorganization is bona fide." (Mendoza v. Quisumbing, 186 SCRA
108.) "In fact, the right of the State to reorganize the Government resulting in the
separation of career civil service employees under the 1987 Constitution is beyond
dispute, but as emphasized in the Mison case (G.R. Nos. 81954, 81967 and 82023,
August 8, 1989) and in the cases of Bondoc v. Sec. of Science and Technology (G.R.
No. 83025), Quisumbing v. Tupas (G.R. No. 87401) and Hamed v. Civil Service
Commission (G.R. No. 89069), all of which having been promulgated on July 19,
1990, said reorganization, ouster, and appointments of successors must be made in
GOOD FAITH." (Siete v. Santos, 190 SCRA 50, 51-52.)

4. ID.; ID.; ID.; CHANGE IN EMPLOYMENT STATUS FROM PERMANENT TO "HOLD-

OVERS" VIOLATIVE OF EMPLOYEES’ RIGHT TO DUE PROCESS; CONVERSION OF
EMPLOYMENT FROM PERMANENT TO "COTERMINOUS" TANTAMOUNT TO REMOVAL
WITHOUT CAUSE AND WITHOUT DUE PROCESS; CASE AT BAR. — There appears to
be no sufficient justification for the reorganization of the DENR, as revised by the
DBM. The fact that Section 25 of E.O. No. 192 changed the status of all the officers
and employees of the DENR from permanent or regular to mere "hold-overs,"
flagrantly violating the employees’ right to due process, taints the reorganization
process. Section 25 provides: "SEC. 25. New Structure and Pattern. — Upon approval
of this Executive Order, the officers and employees of the Department shall in a hold-
over capacity, continue to perform their respective duties and responsibilities and
receive the corresponding salaries and benefits unless in the meantime they are
separated from government service.." . . Those incumbents whose positions are not
included therein, or, who are not reappointed, shall be deemed separated from the
service. . . .." . . In Mendoza v. Quisumbing, 186 SCRA 108, the Court noted the
pernicious effect of the "hold-over" provision (Sec. 24) in Executive Order No. 117
reorganizing the Department of Education and Culture which uprooted thousands of
school teachers and employees, thus: ". . . Pursuant to the above provision [Sec. 24,
E.O. No. 117], around 400,000 school teachers, janitors, clerks, principals,
supervisors, administrators, and higher officials were placed on ‘hold-over status.’
When a public officer is placed on hold-over status, it means that his term has expired
or his services terminated but he should continue holding his office until his successor
is appointed or chosen and has qualified. (See Topacio Nueno v. Angeles, 76 Phil. 12
[1946])." (Mendoza v. Quisumbing, 186 SCRA 108, 110-111.) That the
reorganization of the DENR was not intended to achieve economy and efficiency, is
revealed by the admission in page 16 of the public respondents’ Comment that the
new staffing pattern of the department contains "991 positions more than the total
number of permanent positions in the DENR before the reorganization." In fact, DENR
Secretary Fulgencio Factoran (who is presumed to know better than anyone else the
needs of his department) had urged the DBM to restore the positions of the
petitioners because they are "vital to the functions, mandates and objectives of the
DENR." Since the abolition of their positions will not conduce to either "efficiency" or
"economy" in the Service, which are the principal justifications for any government
overhaul, then, obviously, the reorganization of the DENR is not justified. The
conversion of the petitioners from permanent to "coterminous" employees is a
wholesale demotion of personnel which is tantamount to removal without cause and
without due process." (Floreza v. Ongpin, 182 SCRA 692, 693.)

5. ID.; ID.; ID.; DETRACTION FROM MANDATORY REQUIREMENT OF NOTICE AND

HEARING NOT JUSTIFIED BY REORGANIZATION. — In Domingo v. DBP, 207 SCRA
766, the Court emphasized that a reorganization "does not justify a detraction from
the mandatory requirement of notice and hearing" to the affected officials and
employees. "Section 2 of Republic Act No. 6656 provides that ‘no officer or employee
in the career service shall be removed except for a valid cause and after due notice
and hearing.’ Thus, there is no question that while dismissal due to a bona fide
reorganization is recognized as a valid cause, this does not justify a detraction from
the mandatory requirement of notice and hearing . . ." (Domingo v. Development
Bank of the Philippines, 207 SCRA 766.)

DECISION

GRIÑO-AQUINO, J.:

The petitioners and intervenors who are permanent employees in the Department of
Environment and Natural Resources (DENR) filed this petition for prohibition and
mandamus with a prayer for the issuance of a writ of preliminary injunction and/or
restraining order, to stop the respondents from removing them from their positions
in the DENR pursuant to the 1987 reorganization of that department under Executive
Order No. 192 dated June 10, 1987.

To carry out said reorganization, and pursuant to Executive Order No. 165 of May 5,
1987 which abolished the Commission on Government Reorganization and
transferred its remaining functions 1 to the Department of Budget and Management
(DBM for brevity), DENR Secretary Fulgencio S. Factoran, Jr. submitted to the DBM
a staffing pattern consisting of 28,106 positions. The DBM approved only 22,956
positions and the petitioners’ positions were among those trimmed off the new
plantilla. As the lean plantilla did not meet the manpower requirements of the DENR,
Secretary Factoran submitted a staffing pattern consisting of 24,614 positions.

On July 4, 1988, the DBM released a revised staffing pattern containing 23,612
positions only which was 1,002 positions less than what the DENR Secretary
requested and which still did not include the positions of the petitioners.

On July 29, 1988, the DENR requested the DBM to restore 839 positions which DBM
had disapproved earlier. The request was approved on September 14, 1988 after
long negotiations between the DENR and DBM, subject to the condition that these
positions shall be coterminous with the appointees but not to exceed three (3) years.
The implications of this are:
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"1. If the appointee desires to retire, resign, transfer to other office or leave his
employment for any reason whatsoever, the position is automatically abolished, even
if the three-year period has not lapsed.

"2. By the end of the 3rd year, the employee holding a coterminous position is
automatically separated." (p. 7, Rollo.).

Meanwhile, on June 10, 1988, Republic Act No. 6656 "An Act to Protect the Security
of Tenure of Civil Service Officers and Employees In the Implementation of
Government Reorganization," was passed. Section 11 thereof orders all departments
and agencies to complete the 1987 reorganization of the executive branch within
ninety (90) days from the approval of the law, or on or before September 8, 1988.

The directors of the affected bureaus (the Environmental Management Bureau,

Forestry Management Bureau, Parks and Wildlife Bureau, Mines and Geosciences
Bureau) requested the DENR and DBM Secretaries to convert the coterminous
positions to permanent. The DENR Secretary favorably endorsed their request citing
changes in the functions of the DENR as justification for the request (Annex B). The
request was reiterated by the DENR Assistant Secretary for Services Management
but it was denied on December 19, 1990 by DBM Secretary Guillermo Carague.

The DENR Secretary’s motion for reconsideration was not acted upon by Secretary
Carague.

Meanwhile, the General Appropriations Act of FY 1991 (R.A. No. 7078) provided for
the salaries of the coterminous employees in the DENR until December 31, 1991.

On August 6, 1991, DENR Secretary Factoran submitted a memorandum to President

Aquino, through Executive Secretary Franklin Drilon, requesting that the 597
coterminous positions of the DENR (which would expire on September 15, 1991) be
extended up to December 31, 1991, without prejudice to DBM’s action on his
(Secretary Factoran’s) motion for reconsideration. The Office of the President granted
the request.

But as Secretary Factoran’s request for reconsideration of Secretary Carague’s order

remained unacted upon, the petitioners filed in this Court on December 19, 1991, the
present petition for prohibition 2 and mandamus 3 with a prayer for the issuance of
a restraining order/preliminary injunction.

The grounds relied upon by the petitioners are:

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1. That the impending mass dismissal of petitioners from employment on December

31, 1991 would violate their right to security of tenure and the provisions of Republic
Act No. 6656;

2. That the appointment of the petitioners to the so-called coterminous positions

deprived them of the right to due process;

3. The creation of positions "coterminous with the incumbent but not exceeding three
years" is not in accordance with civil service laws, rules and regulations; and

4. Respondent DBM Secretary has no discretion but to grant respondent DENR

Secretary’s request for regularization of the coterminous positions.

Upon receipt of the petition, the Court issued a temporary restraining order directing
the DENR Secretary to "cease and desist from terminating the services of the
petitioners effective December 31, 1991 and from preventing them from performing
their duties and functions as officials and employees of the DENR corresponding to
their respective positions" (p. 51, Rollo).

On January 23, 1992, petitioners filed an "Urgent Motion to Cite Respondents for
Contempt" for failure to pay their salaries, allowances and such other benefits due
them while they continue to perform their respective duties and responsibilities in the
DENR. On March 2, 1992, petitioners filed a Supplemental Motion for Contempt on
the ground that besides not paying their salaries, respondents made them sign new
appointments making them "coterminous with the incumbent." These acts of the
respondents allegedly violate the Restraining Order issued by this Court on December
27, 1991.

In its Comment, the Office of the Solicitor General denied that public respondents
have violated the temporary restraining order. Respondent DENR Secretary complied
with the TRO by not terminating the services of the petitioners. Non-payment of the
petitioners’ salaries was due to the lack of an appropriation of funds for their salaries.
Besides, the TRO did not require the DBM to appropriate funds for their salaries. The
DBM did not violate the TRO when it required petitioners to sign new appointments
making their positions coterminous with the incumbent for it (DBM) was not directed
by the TRO to desist from committing any act. chanrob

On January 23, 1992, Reynaldo Alcances, Marinela Cecilia T. Pascua and Dolores T.
Tolentino, through the petitioners’ counsel, asked to be included as petitioners
because their names had been inadvertently omitted from the list of petitioners. Their
motion may be granted for they are similarly situated as the original petitioners who
have continued to work in the DENR beyond December 31, 1991.

On February 24, 1992, a Motion for Leave to Intervene was filed by Conrado Salvador
and Miguel Caisip which was not opposed by the petitioners. Before the Court could
grant them leave to intervene, they filed a complaint in Intervention on July 20, 1993.

On March 6, 1992, Alfredo S. Marchadesch, Jr. and Carolina S. Cavan withdrew as

petitioners because they had accepted new appointments in the DENR.

On April 13, 1992, the public respondents, through the Solicitor General, filed their
Comment on the petition.

The petitioners argue that their dismissal on December 31, 1991, would violate their
right to security of tenure safeguarded by paragraph (3), Section 2 of Article IX-B of
the Constitution, and the 2nd paragraph, Section 3 of Article XIII thereof. They also
invoke Sections 1 and 11 of Republic Act No. 6656, which provide that "departments
and agencies of the government have only ninety (90) days from the approval of the
Act to undertake the complete implementation of their respective reorganization plan,
hence, the DENR had only up to September 8, 1988, to reorganize. Their dismissal
on December 31, 1991, goes beyond the period allowed by law for the reorganization
of the DENR.

We find merit in the petition.

It may be recalled that upon her assumption of office as President of the Philippines
after the EDSA Revolution, President Corazon Aquino invested herself under Sections
1 and 2, Article III of the Freedom Constitution (Proclamation No. 3, March 25, 1986)
with power and authority to reorganize the Government "by proclamation or
executive order or by designation or appointment and qualification of the successor
of any elective and appointive officials under the 1973 Constitution." The
reorganization was to be completed within one year from February 25, 1986, or by
February 25, 1987.

"SEC. 1. In the reorganization of the government, priority shall be given to measures

to promote economy, efficiency, and the eradication of graft and corruption.

"SEC. 2. All elective and appointive officials and employees under the 1973
Constitution shall continue in office until otherwise provided by proclamation or
executive order or upon the designation or appointment and qualification of their
successors, if such is made within a period of one year from February 25, 1986."
(Emphasis ours.).

However, "in order to obviate unnecessary anxiety and demoralization among the
deserving officials and employees, particularly in the Career Civil Service" arising
from the reorganization of the government, the President issued E.O. No. 17 on May
28, 1986 providing guidelines for the implementation of the reorganization "to protect
career civil servants whose qualifications and performance meet the standards of
service demanded by the new Government, and to ensure that only those found
corrupt, inefficient and undeserving are separated from the government service." The
head of each Ministry (now Department) was tasked to "see to it that the separation
and replacement of officers and employees is made only for justifiable reasons" which
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"SEC. 3. The following shall be the grounds for separation/replacement of

personnel: jgc:[Link]

"1. Existence of a case for summary dismissal pursuant to Section 40 of the Civil
Service Law;

"2. Existence of a probable cause for violation of the Anti-Graft and Corrupt Practices
Act as determined by the Ministry Head concerned;

"3. Gross incompetence or inefficiency in the discharge of functions;

"4. Misuse of public office for partisan political purposes;

"5. Any other analogous ground showing that the incumbent is unfit to remain in the
service or his separation/replacement is in the interest of the service." (E.O. No. 17.).

Excluded from the protection of E.O. No. 17 are: jgc:[Link]

"Sec. 11. This Executive Order shall not apply to elective officials or those designated
to replace them, presidential appointees, casual and contractual employees, or
officials and employees removed pursuant to disciplinary proceedings under the Civil
Service Law and Rules, and to those laid off as a result of the reorganization
undertaken pursuant to Executive Order No. 5." (Emphasis supplied.). chanrobles virtual lawlibrary

As a result of the ratification of the 1987 Constitution by the nation, the

reorganization deadline in Proclamation No. 3 (February 25, 1987) was advanced to
February 2, 1987.

Although the security of tenure of government employees is protected by Section 2,

subpar. (3), Title B, Article IX of the 1987 Constitution, thus:
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"Sec. 2. (3) No officer or employee of the civil service shall be removed or suspended
except for cause provided by law."
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Section 16 of Article XVIII (Transitory Provisions) of the Constitution still allows the
separation of employees "not for cause but as a result of the reorganization pursuant
to Proclamation No. 3 . . . and the reorganization following the ratification of this
Constitution." Section 16 is quoted hereunder:
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"Sec. 16. Career civil service employees separated from the service not for cause but
as a result of the reorganization pursuant to Proclamation No. 3 dated March 25,
1986 and the reorganization following the ratification of this Constitution shall be
entitled to appropriate separation pay and to retirement and other benefits accruing
to them under the laws of general application in force at the time of their separation.
In lieu thereof, at the option of the employees, they may be considered for
employment in the Government or in any of its subdivisions, instrumentalities, or
agencies, including government-owned or controlled corporations and their
subsidiaries. This provision also applies to career officers whose resignation, tendered
in line with the existing policy, had been accepted." (Emphasis ours.).

E.O. No. 192 dated June 10, 1987 "PROVIDING FOR THE REORGANIZATION OF THE
DEPARTMENT OF ENVIRONMENT, ENERGY AND NATURAL RESOURCES, RENAMING
IT THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, AND FOR
OTHER PURPOSES" is a "reorganization following the ratification of this Constitution."
Although impliedly sanctioned under Section 16 of the Transitory Provisions of the
1987 Constitution, it must nevertheless pass the test of good faith to be valid. Good
faith, we ruled in Dario v. Mison 4 is a basic ingredient for the validity of any
government reorganization. It is the golden thread that holds together the fabric of
the reorganization. Without it, the cloth would disintegrate.

"Reorganization is a recognized valid ground for separation of civil service employees,

subject only to the condition that it be done in good faith. No less than the
Constitution itself in Section 16 of the Transitory Provisions, together with Sections
33 and 34 of Executive Order No. 81 and Section 9 of Republic Act No. 6656, support
this conclusion with the declaration that all those not so appointed in the
implementation of said reorganization shall be deemed separated from the service
with the concomitant recognition of their entitlement to appropriate separation
benefits and/or retirement plans of the reorganized government agency." (Domingo
v. Development Bank of the Phils., 207 SCRA 766.).

A reorganization in good faith is one designed to trim the fat off the bureaucracy and
institute economy and greater efficiency in its operation. It is not a mere tool of the
spoils system to change the face of the bureaucracy and destroy the livelihood of
hordes of career employees in the civil service so that the new-powers-that-be may
put their own people in control of the machinery of government.

"Reorganizations in this jurisdiction have been regarded as valid provided they are
pursued in good faith. As a general rule, a reorganization is carried out in ‘good faith’
if it is for the purpose of economy or to make bureaucracy more efficient. In that
event, no dismissal (in case of dismissal) or separation actually occurs because the
position itself ceases to exist. And in that case, security of tenure would not be a
Chinese wall. Be that as it may, if the ‘abolition,’ which is nothing else but a separation
or removal, is done for political reasons or purposely to defeat security of tenure, or
otherwise not in good faith, no valid ‘abolition’ takes place and whatever ‘abolition’ is
done, is void ab initio. There is an invalid ‘abolition’ as where there is merely a change
of nomenclature of positions, or where claims of economy are belied by the existence
of ample funds." (Dario v. Mison, 176 SCRA 84, 92-93.).

"There is no dispute over the power to reorganize - whether traditional, progressive,

or whatever adjective is appended to it. However, the essence of constitutional
government is adherence to basic rules. The rule of law requires that no government
official should feel free to do as he pleases using only his avowedly sincere intentions
and conscience to guide him. The fundamental standards of fairness embodied in the
bona fide rule cannot be disregarded. More particularly, the auto-limitations imposed
by the President when she proclaimed the Provisional Constitution and issued
executive orders as sole law maker and the standards and restrictions prescribed by
the present Constitution and the Congress established under it, must be obeyed.
Absent this compliance, we cannot say that a reorganization is bona fide." (Mendoza
v. Quisumbing, 186 SCRA 108.).
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lawlibrary

"In fact, the right of the State to reorganize the Government resulting in the
separation of career civil service employees under the 1987 Constitution is beyond
dispute, but as emphasized in the Mison case (G.R. Nos. 81954, 81967 and 82023,
August 8, 1989) and in the cases of Bondoc v. Sec. of Science and Technology (G.R.
No. 83025), Quisumbing v. Tupas (G.R. No. 87401) and Hamed v. Civil Service
Commission (G.R. No. 89069), all of which having been promulgated on July 19,
1990, said reorganization, ouster, and appointments of successors must be made in
GOOD FAITH." (Emphasis supplied; Siete v. Santos, 190 SCRA 50, 51-52.).

There appears to be no sufficient justification for the reorganization of the DENR, as

revised by the DBM. The fact that Section 25 of E.O. No. 192 changed that status of
all the officers and employees of the DENR from permanent or regular to mere "hold-
overs," flagrantly violating the employees’ right to due process, taints the
reorganization process. Section 25 provides: jgc:[Link]

"SEC. 25. New Structure and Pattern. — Upon approval of this Executive Order, the
officers and employees of the Department shall in a hold-over capacity, continue to
perform their respective duties and responsibilities and receive the corresponding
salaries and benefits unless in the meantime they are separated from government
service.

". . . Those incumbents whose positions are not included therein, or, who are not
reappointed, shall be deemed separated from the service. . . ."
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library

In Domingo v. DBP, 207 SCRA 766, the Court emphasized that a reorganization "does
not justify a detraction from the mandatory requirement of notice and hearing"
(italics ours) to the affected officials and employees.

"Section 2 of Republic Act No. 6656 provides that ‘no officer or employee in the career
service shall be removed except for a valid cause and after due notice and hearing.’
thus, there is no question that while dismissal due to a bona fide reorganization is
recognized as a valid cause, this does not justify a detraction from the mandatory
requirement of notice and hearing. . . ." (Emphasis supplied; Domingo v.
Development Bank of the Philippines, 207 SCRA 766.).

In Mendoza v. Quisumbing, 186 SCRA 108, the Court noted the pernicious effect of
the "hold-over" provision (Sec. 24) in Executive Order No. 117 reorganizing the
Department of Education and Culture which uprooted thousands of school teachers
and employees, thus:
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". . . Pursuant to the above provision [Sec. 24, E.O. No. 117], around 400,000 school
teachers, janitors, clerks, principals, supervisors, administrators, and higher officials
were placed on ‘hold-over status.’ When a public officer is placed on hold-over status,
it means that his term has expired or his services terminated but he should continue
holding his office until his successor is appointed or chosen and has qualified. (See
Topacio Nueno v. Angeles, 76 Phil. 12 [1946])." (Mendoza v. Quisumbing, 186 SCRA
108, 110-111.).

That the reorganization of the DENR was not intended to achieve economy and
efficiency, is revealed by the admission in page 16 of the public respondents’
Comment that the new staffing pattern of the department contains "991 positions
more than the total number of permanent positions in the DENR before the
reorganization." In fact, DENR Secretary Fulgencio Factoran (who is presumed to
know better than anyone else the needs of his department) had urged the DBM to
restore the positions of the petitioners because they are "vital to the functions,
mandates and objectives of the DENR" (p. 30, Comment). Since the abolition of their
positions will not conduce to either "efficiency" or "economy" in the Service, which
are the principal justifications for any government overhaul, then, obviously, the
reorganization of the DENR is not justified.
The conversion of the petitioners from permanent to "coterminous" employees is a
wholesale demotion of personnel which is tantamount to removal without cause and
without due process." (Floreza v. Ongpin, 182 SCRA 692, 693.) It is therefore null
and void.

WHEREFORE, the petition for certiorari is GRANTED. The removal of the petitioners
and intervenors from office is declared null and void. The respondent Secretary of
the Department of Environment and Natural Resources (DENR), or his successor in
office, is ordered to reinstate the petitioners to their former or equivalent positions
in the DENR without loss of seniority and other benefits, and to issue regular and
permanent appointments to them for the positions in the new organization and
staffing pattern corresponding to their positions in the 1986 plantilla. The respondent
Secretary of the Department of Budget and Management, or his successor in office,
is ordered to reinstate the appropriation for the salaries of the petitioners and
intervenors. The temporary restraining order which the Court issued in this case is
made permanent. cralawnad

The petitioners’ motion to cite the public respondents for contempt of court is DENIED
for having become moot after the latter’s resignation from office upon the change of
administration on June 30, 1929. No costs.

SO ORDERED.

Narvasa, C.J., Cruz, Bidin, Regalado, Davide, Jr., Romero, Nocon, Bellosillo, Melo,
Quiazon, Puno and Vitug, JJ., concur.

Feliciano, J., did not take part in the deliberations of this case.

Padilla, J., took no part, related to petitioners counsel.