Larin vs. Executive Secretary subject to certain revisions.

On even date, the NTA created a placement committee to

assist the appointing authority in the selection and placement of permanent personnel
280 SCRA 713; GR. No. L- 112745; October 16, 1997 in the revised OSSP. The results of the evaluation by the committee on the individual
qualifications of applicants to the positions in the new OSSP were then disseminated
Ponente: Torres, Jr., J.
and posted at the central and provincial offices of the NTA.
FACTS:The President issued E.O. No. 132 which mandates for the streamlining of On 10 June 1996, petitioners, all occupying different positions at the NTA office
the Bureau of Internal Revenue. Under said order, some positions and functions are in Batac, Ilocos Norte, received individual notices of termination of their employment
either abolished, renamed, decentralized or transferred to other offices, while other with the NTA effective thirty (30) days from receipt thereof. Finding themselves
offices are also created. The Excise Tax Service, of which the petitioner was the without any immediate relief from their dismissal from the service, petitioners filed a
Assistant Commissioner, was one of those offices that was abolished. Petitioner petition for certiorari, prohibition and mandamus, with prayer for preliminary
assailed the legality of EO No. 132 claiming that he was removed as a result of the mandatory injunction and/or temporary restraining order, with the Regional Trial Court
reorganization made in the BIRpursuant to E.O. No. 132. He claimed that there is yet (RTC) of Batac, Ilocos Norte, and prayed -
no law enacted by Congress which authorizes the reorganization by the Executive
Department of executive agencies, particularly the BIR.
1) that a restraining order be immediately issued enjoining the respondents from
ISSUE: Whether or not the President has the power to reorganize the BIR or to issue enforcing the notice of termination addressed individually to the petitioners and/or
the questioned EO No.132. from committing further acts of dispossession and/or ousting the petitioners from their
respective offices;
HELD: YES. Section 48 of R.A. 7645 clearly mentions the acts of "scaling down,
phasing out and abolition" of offices only and does not cover the creation of offices or
2) that a writ of preliminary injunction be issued against the respondents,
transfer of functions. Nevertheless, the act of creating and decentralizing is included
commanding them to maintain the status quo to protect the rights of the petitioners
in the subsequent provision of Section 62 which shows that the President is
pending the determination of the validity of the implementation of their dismissal from
authorized to effect organizational charges including the creation of offices in the
the service; and
department or agencyconcerned. Presidential Decree No. 1772 which amended
Presidential Decree No. 1416 expressly grants the President of the Philippines the
continuing authority to reorganize the national government, which includes the power 3) that, after trial on the merits, judgment be rendered declaring the notice of
to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, termination of the petitioners illegal and the reorganization null and void and ordering
to create and classify functions, services and activities and to standardize salaries their reinstatement with back wages, if applicable, commanding the respondents to
and materials. desist from further terminating their services, and making the injunction permanent. [1]

The RTC, on 09 September 2000, ordered the NTA to appoint petitioners in the
[G.R. No. 152845. August 5, 2003] new OSSP to positions similar or comparable to their respective former
assignments. A motion for reconsideration filed by the NTA was denied by the trial
DRIANITA BAGAOISAN vs. NATIONAL TOBACCO ADMINISTRATION court in its order of 28 February 2001. Thereupon, the NTA filed an appeal with the
Court of Appeals, raising the following issues:
VITUG, J.:
I. Whether or not respondents submitted evidence as proof that petitioners,
President Joseph Estrada issued on 30 September 1998 Executive Order No. individually, were not the best qualified and most deserving among
29, entitled Mandating the Streamlining of the National Tobacco Administration (NTA), the incumbent applicant-employees.
a government agency under the Department of Agriculture. The order was followed by
another issuance, on 27 October 1998, by President Estrada of Executive Order No.
36, amending Executive Order No. 29, insofar as the new staffing pattern was II. Whether or not incumbent permanent employees, including herein
concerned, by increasing from four hundred (400) to not exceeding seven hundred petitioners, automatically enjoy a preferential right and the right of
fifty (750) the positions affected thereby. In compliance therewith, the NTA prepared first refusal to appointments/reappointments in the new
and adopted a new Organization Structure and Staffing Pattern (OSSP) which, on 29 Organization Structure And Staffing Pattern (OSSP) of respondent
October 1998, was submitted to the Office of the President. NTA.

On 11 November 1998, the rank and file employees of NTA Batac, among III. Whether or not respondent NTA in implementing the mandated
whom included herein petitioners, filed a letter-appeal with the Civil Service reorganization pursuant to E.O. No. 29, as amended by E.O. No.
Commission and sought its assistance in recalling the OSSP. On 04 December 1998, 36, strictly adhere to the implementing rules on reorganization,
the OSSP was approved by the Department of Budget and Management (DBM)
1
 particularly RA 6656 and of the Civil Service Commission Rules on 1. The Court of Appeals decision upholding the reorganization of the National
Government Reorganization. Tobacco Administration sets a dangerous precedent in that:

IV. Whether or not the validity of E.O. Nos. 29 and 36 can be put in issue a) A mere Executive Order issued by the Office of the President and procured by a
in the instant case/appeal.[2] government functionary would have the effect of a blanket authority to reorganize a
bureau, office or agency attached to the various executive departments;
On 20 February 2002, the appellate court rendered a decision reversing and setting
aside the assailed orders of the trial court. b) The President of the Philippines would have the plenary power to reorganize the
entire government Bureaucracy through the issuance of an Executive Order, an
Petitioners went to this Court to assail the decision of the Court of Appeals, administrative issuance without the benefit of due deliberation, debate and discussion
contending that - of members of both chambers of the Congress of the Philippines;

I. The Court of Appeals erred in making a finding that went beyond the c) The right to security of tenure to a career position created by law or statute would
issues of the case and which are contrary to those of the trial court be defeated by the mere adoption of an Organizational Structure and Staffing Pattern
and that it overlooked certain relevant facts not disputed by the issued pursuant to an Executive Order which is not a law and could thus not abolish
parties and which, if properly considered, would justify a different an office created by law;
conclusion;
2. The case law on abolition of an office would be disregarded, ignored and
II. The Court of Appeals erred in upholding Executive Order Nos. 29 and abandoned if the Court of Appeals decision subject matter of this Petition would
36 of the Office of the President which are mere administrative remain undisturbed and untouched. In other words, previous doctrines and
issuances which do not have the force and effect of a law to precedents of this Highest Court would in effect be reversed and/or modified with the
warrant abolition of positions and/or effecting total reorganization; Court of Appeals judgment, should it remain unchallenged.

III. The Court of Appeals erred in holding that petitioners removal from the 3. Section 4 of Executive Order No. 245 dated July 24, 1987 (Annex D, Petition),
service is in accordance with law; issued by the Revolutionary government of former President Corazon Aquino, and the
law creating NTA, which provides that the governing body of NTA is the Board of
IV. The Court of Appeals erred in holding that respondent NTA was not Directors, would be rendered meaningless, ineffective and a dead letter law because
guilty of bad faith in the termination of the services of petitioners; the challenged NTA reorganization which was erroneously upheld by the Court of
(and) Appeals was adopted and implemented by then NTA Administrator Antonio de
Guzman without the corresponding authority from the Board of Directors as mandated
V. The Court of Appeals erred in ignoring case law/jurisprudence in the therein. In brief, the reorganization is an ultra vires act of the NTA Administrator.
abolition of an office.[3]
4. The challenged Executive Order No. 29 issued by former President Joseph Estrada
In its resolution of 10 July 2002, the Court required the NTA to file its comment on the but unsigned by then Executive Secretary Ronaldo Zamora would in effect be
petition. On 18 November 2002, after the NTA had filed its comment of 23 September erroneously upheld and given legal effect as to supersede, amend and/or modify
2002, the Court issued its resolution denying the petition for failure of petitioners to Executive Order No. 245, a law issued during the Freedom Constitution of President
sufficiently show any reversible error on the part of the appellate court in its Corazon Aquino. In brief, a mere executive order would amend, supersede and/or
challenged decision so as to warrant the exercise by this Court of its discretionary render ineffective a law or statute.[5]
appellate jurisdiction. A motion for reconsideration filed by petitioners was denied in
the Courts resolution of 20 January 2002. In order to allow the parties a full opportunity to ventilate their views on the
matter, the Court ultimately resolved to hear the parties in oral argument. Essentially,
On 21 February 2003, petitioners submitted a Motion to Admit Petition For En the core question raised by them is whether or not the President, through the
Banc Resolution of the case allegedly to address a basic question, i.e., the legal and issuance of an executive order, can validly carry out the reorganization of the NTA.
constitutional issue on whether the NTA may be reorganized by an executive fiat, not
by legislative action.[4] In their Petition for an En Banc Resolution petitioners would Notwithstanding the apparent procedural lapse on the part of petitioner to
have it that - implead the Office of the President as party respondent pursuant to Section 7, Rule 3,
of the 1997 Revised Rules of Civil Procedure, [6] this Court resolved to rule on the
merits of the petition.

2
 Buklod ng Kawaning EIIB vs. Zamora[7] ruled that the President, based on ``Sec. 62. Unauthorized organizational changes. Unless otherwise created by law or
existing laws, had the authority to carry out a reorganization in any branch or agency directed by the President of the Philippines, no organizational unit or changes in key
of the executive department. In said case, Buklod ng Kawaning EIIB challenged the positions in any department or agency shall be authorized in their respective
issuance, and sought the nullification, of Executive Order No. 191 (Deactivation of the organization structures and be funded from appropriations by this Act.
Economic Intelligence and Investigation Bureau) and Executive Order No. 223
(Supplementary Executive Order No. 191 on the Deactivation of the Economic `The foregoing provision evidently shows that the President is authorized to effect
Intelligence and Investigation Bureau and for Other Matters) on the ground that they organizational changes including the creation of offices in the department or agency
were issued by the President with grave abuse of discretion and in violation of their concerned.
constitutional right to security of tenure. The Court explained:
`x xx xxx
The general rule has always been that the power to abolish a public office is lodged
with the legislature. This proceeds from the legal precept that the power to create
includes the power to destroy. A public office is either created by the Constitution, by `Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which
statute, or by authority of law. Thus, except where the office was created by the states:
Constitution itself, it may be abolished by the same legislature that brought it into
existence. ``Sec. 20. Residual Powers. Unless Congress provides otherwise, the President shall
exercise such other powers and functions vested in the President which are provided
The exception, however, is that as far as bureaus, agencies or offices in the executive for under the laws and which are not specifically enumerated above or which are not
department are concerned, the Presidents power of control may justify him to delegated by the President in accordance with law.
inactivate the functions of a particular office, or certain laws may grant him the broad
authority to carry out reorganization measures. The case in point is Larin v. Executive `This provision speaks of such other powers vested in the President under the
Secretary [280 SCRA 713]. In this case, it was argued that there is no law which law. What law then gives him the power to reorganize? It is Presidential Decree No.
empowers the President to reorganize the BIR. In decreeing otherwise, this Court 1772 which amended Presidential Decree No. 1416. These decrees expressly grant
sustained the following legal basis, thus: the President of the Philippines the continuing authority to reorganize the national
government, which includes the power to group, consolidate bureaus and agencies,
`Initially, it is argued that there is no law yet which empowers the President to issue to abolish offices, to transfer functions, to create and classify functions, services and
E.O. No. 132 or to reorganize the BIR. activities and to standardize salaries and materials. The validity of these two decrees
are unquestionable. The 1987 Constitution clearly provides that `all laws, decrees,
executive orders, proclamations, letter of instructions and other executive issuances
`We do not agree. not inconsistent with this Constitution shall remain operative until amended, repealed
or revoked. So far, there is yet no law amending or repealing said decrees.
`x xx xxx
Now, let us take a look at the assailed executive order.
`Section 48 of R.A. 7645 provides that:
In the whereas clause of E.O. No. 191, former President Estrada anchored his
``Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the Executive authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General
Branch. The heads of departments, bureaus and offices and agencies are hereby Appropriations Act), a provision similar to Section 62 of R.A. 7645 quoted in Larin,
directed to identify their respective activities which are no longer essential in the thus:
delivery of public services and which may be scaled down, phased out or
abolished, subject to civil service rules and regulations. x xx. Actual scaling down, `Sec. 77. Organized Changes. Unless otherwise provided by law or directed by the
phasing out or abolition of the activities shall be effected pursuant to Circulars or President of the Philippines, no changes in key positions or organizational units in any
Orders issued for the purpose by the Office of the President. department or agency shall be authorized in their respective organizational structures
and funded from appropriations provided by this Act.
`Said provision clearly mentions the acts of `scaling down, phasing out and
abolition of offices only and does not cover the creation of offices or transfer of We adhere to the x xx ruling in Larin that this provision recognizes the authority of the
functions. Nevertheless, the act of creating and decentralizing is included in the President to effect organizational changes in the department or agency under the
subsequent provision of Section 62 which provides that: executive structure. Such a ruling further finds support in Section 78 of Republic Act
No. 8760. Under this law, the heads of departments, bureaus, offices and agencies

3
and other entities in the Executive Branch are directed (a) to conduct a Firstly, the number of positions in the new staffing pattern did not increase. Rather, it
comprehensive review of this respective mandates, missions, objectives, functions, decreased from 1,125 positions to 750. It is thus natural that ones position may be
programs, projects, activities and systems and procedures; (b) identify activities which lost through the removal or abolition of an office.
are no longer essential in the delivery of public services and which may be scaled
down, phased-out or abolished; and (c) adopt measures that will result in the Secondly, the petitioners failed to specifically show which offices were abolished and
streamlined organization and improved overall performance of their respective the new ones that were created performing substantially the same functions.
agencies. Section 78 ends up with the mandate that the actual streamlining and
productivity improvement in agency organization and operation shall be effected
pursuant to Circulars or Orders issued for the purpose by the Office of the Thirdly, the petitioners likewise failed to prove that less qualified employees were
President. The law has spoken clearly. We are left only with the duty to sustain. appointed to the positions to which they applied.

But of course, the list of legal basis authorizing the President to reorganize any x xx xxx xxx.
department or agency in the executive branch does not have to end here. We must
not lose sight of the very source of the power that which constitutes an express grant Fourthly, the preference stated in Section 4 of R.A. 6656, only means that old
of power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as employees should be considered first, but it does not necessarily follow that they
the Administrative Code of 1987), the President, subject to the policy in the Executive should then automatically be appointed. This is because the law does not preclude
Office and in order to achieve simplicity, economy and efficiency, shall have the the infusion of new blood, younger dynamism, or necessary talents into the
continuing authority to reorganize the administrative structure of the Office of the government service, provided that the acts of the appointing power are bonafide for
President. For this purpose, he may transfer the functions of other Departments or the best interest of the public service and the person chosen has the needed
Agencies to the Office of the President. In Canonizado vs. Aguirre [323 SCRA 312], qualifications.[9]
we ruled that reorganization involves the reduction of personnel, consolidation of
offices, or abolition thereof by reason of economy or redundancy of functions. It takes These findings of the appellate court are basically factual which this Court must
place when there is an alteration of the existing structure of government offices or respect and be held bound.
units therein, including the lines of control, authority and responsibility between
them. The EIIB is a bureau attached to the Department of Finance. It falls under the It is important to emphasize that the questioned Executive Orders No. 29
Office of the President. Hence, it is subject to the Presidents continuing authority to and No. 36 have not abolished the National Tobacco Administration but merely
reorganize. mandated its reorganization through the streamlining or reduction of its
personnel. Article VII, Section 17,[10] of the Constitution, expressly grants the
It having been duly established that the President has the authority to carry out President control of all executive departments, bureaus, agencies and offices which
reorganization in any branch or agency of the executive department, what is then left may justify an executive action to inactivate the functions of a particular office or to
for us to resolve is whether or not the reorganization is valid. In this jurisdiction, carry out reorganization measures under a broad authority of law. [11] Section 78 of the
reorganizations have been regarded as valid provided they are pursued in good General Provisions of Republic Act No. 8522 (General Appropriations Act of FY 1998)
faith. Reorganization is carried out in `good faith if it is for the purpose of economy or has decreed that the President may direct changes in the organization and key
to make bureaucracy more efficient. Pertinently, Republic Act No. 6656 provides for positions in any department, bureau or agency pursuant to Article VI, Section 25, [12] of
the circumstances which may be considered as evidence of bad faith in the removal the Constitution, which grants to the Executive Department the authority to
of civil service employees made as a result of reorganization, to wit: (a) where there is recommend the budget necessary for its operation. Evidently, this grant of power
a significant increase in the number of positions in the new staffing pattern of the includes the authority to evaluate each and every government agency, including the
department or agency concerned; (b) where an office is abolished and another determination of the most economical and efficient staffing pattern, under the
performing substantially the same functions is created; (c) where incumbents are Executive Department.
replaced by those less qualified in terms of status of appointment, performance and
In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon. Ronaldo D.
merit; (d) where there is a classification of offices in the department or agency
Zamora, in his capacity as the Executive Secretary, et al.,[13] this Court has had
concerned and the reclassified offices perform substantially the same functions as the
occasion to also delve on the Presidents power to reorganize the Office of the
original offices, and (e) where the removal violates the order of separation.[8]
President under Section 31(2) and (3) of Executive Order No. 292 and the power to
reorganize the Office of the President Proper. The Court has there observed:
The Court of Appeals, in its now assailed decision, has found no evidence of
bad faith on the part of the NTA; thus -
x xx. Under Section 31(1) of EO 292, the President can reorganize the Office of the
President Proper by abolishing, consolidating or merging units, or by transferring
In the case at bar, we find no evidence that the respondents committed bad faith in functions from one unit to another. In contrast, under Section 31(2) and (3) of EO 292,
issuing the notices of non-appointment to the petitioners. the Presidents power to reorganize offices outside the Office of the

4
President Proper but still within the Office of the President is limited to merely which appeals from a Division of the Court may be taken. A Division of the Court is
transferring functions or agencies from the Office of the President to Departments or the Supreme Court as fully and veritably as the Court En Banc itself and a decision of
Agencies, and vice versa. its Division is as authoritative and final as a decision of the Court En Banc. Referrals
of cases from a Division to the Court En Banc do not take place as just a matter of
The provisions of Section 31, Book III, Chapter 10, of Executive Order No. 292 routine but only on such specified grounds as the Court in its discretion may allow. [16]
(Administrative Code of 1987), above-referred to, reads thusly: WHEREFORE, the Motion to Admit Petition for En Banc resolution and the
Petition for an En Banc Resolution are DENIED for lack of merit. Let entry of
SEC. 31. Continuing Authority of the President to Reorganize his Office. The judgment be made in due course. No costs.
President, subject to the policy in the Executive Office and in order to achieve
simplicity, economy and efficiency, shall have continuing authority to reorganize the SO ORDERED.
administrative structure of the Office of the President. For this purpose, he may take
any of the following actions:
CRISOSTOMO vs COURT OF APPEALS
(1) Restructure the internal organization of the Office of the President Proper, 258 SCRA 134
including the immediate Offices, the Presidential Special Assistants/Advisers System Status and Characteristics
and the Common Staff Support System, by abolishing, consolidating or merging units Creation, Reorganization, and Abolition of Administrative Agencies
thereof or transferring functions from one unit to another; FACTS:
Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce
(PCC), havingbeen appointed to that position by the President of the Philippines on
(2) Transfer any function under the Office of the President to any other Department or
July 17, 1974. During his incumbencyas president of the PCC, two administrative
Agency as well as transfer functions to the Office of the President from other
cases were filed against petitioner, which were filed with the
Departments and Agencies; and
Office of the President, and were subsequently referred to the Office of
the Solicitor General forinvestigation.
(3) Transfer any agency under the Office of the President to any other department or On October 22, 1976, petitioner was preventively suspended from office pursuant to
agency as well as transfer agencies to the Office of the President from other R.A. No. 3019, asamended. In his place Dr. Pablo T. Mateo, Jr. was designated as
departments and agencies. officer-in-charge on November 10, 1976,and then as Acting President on May 13,
1977.
The first sentence of the law is an express grant to the President of a continuing On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E. Marcos,
authority to reorganize the administrative structure of the Office of the CONVERTING THE
President. The succeeding numbered paragraphs are not in the nature PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC
of provisos that unduly limit the aim and scope of the grant to the President of the UNIVERSITY, DEFINING ITS OBJECTIVES,
power to reorganize but are to be viewed in consonance therewith. Section 31(1) of ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS
Executive Order No. 292 specifically refers to the Presidents power to restructure the CURRICULAR OFFERINGS.
internal organization of the Office of the President Proper, by abolishing, consolidating Mateo continued as the head of the new University. On April 3, 1979, he was
or merging units hereof or transferring functions from one unit to another, while appointed Acting Presidentand on March 28, 1980, as President for a term of six
Section 31(2) and (3) concern executive offices outside the Office of the (6)years.
President Proper allowing the President to transfer any function under the Office of On July 11, 1980, the Circuit Criminal Court of Manila rendered judgment acquitting
the President to any other Department or Agency and vice-versa, and the transfer of petitioner of thecharges against him. Pursuant to the provisions of Section 13, R.A.
any agency under the Office of the President to any other department or agency No. 3019, as amended, otherwise
and vice-versa.[14] known as The Anti-Graft and Corrupt Practices Act, and under which the accused has
been suspended bythis Court in an Order dated October 22, 1976, said accused was
In the present instance, involving neither an abolition nor transfer of offices, the ordered reinstated to the position of
assailed action is a mere reorganization under the general provisions of the law President of the Philippine College of Commerce, now known as the
consisting mainly of streamlining the NTA in the interest of simplicity, economy and Polytechnic University of the Philippines, from which he has been suspended. By
efficiency. It is an act well within the authority of President motivated and carried out, virtue of said reinstatement, he is entitled to receivethe salaries and other benefits
according to the findings of the appellate court, in good faith, a factual assessment which he failed to receive during suspension, unless in the meantimeadministrative
that this Court could only but accept.[15] proceedings have been filed against him. The bail bonds filed by the accused for
hisprovisional liberty in these cases are hereby cancelled and released.
In passing, relative to petitioners Motion for an En Banc Resolution of the Case, On February 12, 1992, petitioner filed with the Regional Trial Court a motion for
it may be well to remind counsel, that the Court En Banc is not an appellate tribunal to execution of the judgment,particularly the part ordering his reinstatement to the
5
position of president of the PUP and the payment ofhis salaries and other benefits As petitioner correctly points out, when the purpose is to abolish a department or an
during the period of suspension. office or anorganization and to replace it with another one, the lawmaking authority
The motion was granted and a partial writ of execution was issued by the trial court on says so.
March 6, 1992. On But the reinstatement of petitioner to the position of president of the PUP could not be
March 26, 1992, however, President Corazon C. Aquino appointed Dr. Jaime Gellor ordered by the trialcourt because on June 10, 1978, P.D. No. 1437 had been
as acting president ofthe PUP, following the expiration of the term of office of Dr. promulgated fixing the term of office of presidents
NemesioPrudente, who had succeeded Dr. of state universities and colleges at six (6) years, renewable for another term of six (6)
Mateo. Petitioner was one of the five nominees considered by the President of the years, andauthorizing the President of the Philippines to terminate the
Philippines for theposition. terms of incumbents who were notreappointed.
The sheriff stated that he had executed the writ by installing petitioner as President of RATIO:
the PUP, although When the purpose is to abolish a department or an office or an organization and to
Dr. Gellor did not vacate the office as he wanted to consult with the President of the replace it withanother one, the lawmaking authority says so. What took place was a
Philippines first. Thisled to a contempt citation against Dr. Gellor. Petitioner assumed change in academic status of theeducational institution, not in its corporate life. Hence
the office of president of the PUP. the change in its name, the expansion of itscurricular offerings, and the changes in its
On May 18, 1992, therefore, the People of the Philippines filed a petition for certiorari structure and organization.
and prohibition,assailing the orders and the writs of execution issued by the trial court. ---
It also asked for a temporaryrestraining order. On June 25, 1992, the Court of
Appeals issued a temporary restraining order, enjoiningpetitioner to cease and desist [G.R. No. 142283. February 6, 2003]
from acting as president of the PUP pursuant to the reinstatement orders ofthe trial ROSA LIGAYA C. DOMINGO vs. HON. RONALDO D. ZAMORA, in his capacity as
court. the Executive Secretary
On July 15, 1992, the Seventh Division of the Court of Appeals rendered a decision to
set aside the ordersand writ of reinstatement issued by the trial court. The payment of This is a petition for certiorari and prohibition[1] with prayer for temporary
salaries and benefits to petitioneraccruing after the conversion of the PCC to the PUP restraining order seeking to nullify Executive Order No. 81 and Memoranda Nos.
was disallowed. Recovery of salaries and benefits waslimited to those accruing from 01592 and 01594.[2] The assailed executive order transferred the sports development
the time of petitioner’s suspension until the conversion of the PCC to the programs and activities of the Department of Education, Culture and Sports (DECS
PUP. The case was remanded to the trial court for a determination of the amounts for brevity) to the Philippine Sports Commission (PSC for brevity). The questioned
due and payable topetitioner. memoranda (DECS Memoranda for brevity), on the other hand, reassigned all Bureau
Hence this petition. Petitioner argues that P.D. No. 1341, which converted the PCC of Physical Education and School Sports (BPESS for brevity) personnel named in the
into the PUP, did notabolish the PCC. He contends that if the law had intended the DECS Memoranda to various offices within the DECS.
PCC to lose its existence, it would havespecified that the PCC was being "abolished"
rather than "converted" and that if the PUP was intended tobe a new institution, the
law would have said it was being "created." Petitioner claims that the PUP ismerely a
continuation of the existence of the PCC, and, hence, he could be reinstated to his The Facts
former positionas president.
ISSUE:
Whether or not the conversion of the PCC into PUP abolished the PCC On March 5, 1999, former President Joseph E. Estrada issued Executive Order
RULING: No. 81[3] (EO 81 for brevity) entitled Transferring the Sports Programs and Activities
No. In part the contention is well taken, but, as will presently be explained, of the Department of Education, Culture and Sports to the Philippine Sports
reinstatement is nolonger possible because of the promulgation of P.D. No. 1437 by Commission and Defining the Role of DECS in School-Based Sports.
the President of the Philippines on June
10, 1978. EO 81 provided thus:
P.D. No. 1341 did not abolish, but only changed, the former Philippine College of
Commerce into what isnow the Polytechnic University of the Philippines, in the same Section 1. Transferring the Sports Program and Activities to the PSC. All the
way that earlier in 1952, R.A. No. 778 had converted what was then the Philippine functions, programs and activities of DECS related to sports development as provided
School of Commerce into the Philippine College of Commerce. for in Sec. 16 of EO 117 (s. 1987) are hereby transferred to PSC.
What took place was a change in academic status of the educational institution, not in
its corporate life. Section 2. Defining the Role of DECS in School-Based Sports. The DECS shall have
Hence the change in its name, the expansion of its curricular offerings, and the jurisdiction and function over the enhancement of Physical Education (P.E.)
changes in its structureand organization. curriculum and its application in whatever form inside schools.

6
Section 3. The Role of PSC. As the primary agency tasked to formulate policies and The Courts Ruling
oversee the national sports development program, the management and
implementation of all school-based sports competitions among schools at the district,
provincial, regional, national and international levels, in coordination with concerned We dismiss this petition for being moot and academic.
public and private entities shall be transferred to the PSC.
As manifested by both petitioners[4] and respondents,[5] the subsequent
enactment of RA 9155 has rendered the issues in the present case moot and
Pursuant to EO 81, former DECS Secretary Andrew B. Gonzales (Secretary academic. Since RA 9155 abolished the BPESS and transferred the DECS functions
Gonzales for brevity) issued Memorandum No. 01592 on January 10, relating to sports competition to the PSC, petitioners now admit that it is no longer
2000. Memorandum No. 01592 temporarily reassigned, in the exigency of the service, plausible to raise any ultra vires assumption by the PSC of the functions of the
all remaining BPESS Staff to other divisions or bureaus of the DECS effective March BPESS.[6] Moreover, since RA 9155 provides that BPESS personnel not transferred
15, 2000. to the PSC shall be retained by the DECS, petitioners now accept that the law
On January 21, 2000, Secretary Gonzales issued Memorandum No. 01594 explicitly protects and preserves[7] their right to security of tenure.
reassigning the BPESS staff named in the Memorandum to various offices within the Although the issue is already academic, its significance constrains the Court to
DECS effective March 15, 2000. Petitioners were among the BPESS personnel point out that Executive Order No. 292 (EO 292 for brevity), otherwise known as the
affected by Memorandum No. 01594. Dissatisfied with their reassignment, petitioners Administrative Code of 1987, expressly grants the President continuing authority to
filed the instant petition. reorganize the Office of the President. Section 31 of EO 292 provides:
In their Petition, petitioners argue that EO 81 is void and unconstitutional for
being an undue legislation by President Estrada. Petitioners maintain that the SEC. 31. Continuing Authority of the President to Reorganize his Office. The
Presidents issuance of EO 81 violated the principle of separation of President, subject to the policy in the Executive Office and in order to achieve
powers. Petitioners also challenge the DECS Memoranda for violating their right to simplicity, economy and efficiency, shall have continuing authority to reorganize
security of tenure. the administrative structure of the Office of the President. For this purpose, he
may take any of the following actions:
Petitioners seek to nullify EO 81 and the DECS Memoranda. Petitioners pray
that this Court prohibit the PSC from performing functions related to school sports
development. Petitioners further pray that, upon filing of the petition, this Court issue a (1) Restructure the internal organization of the Office of the President Proper,
temporary restraining order against respondents to desist from implementing EO 81. including the immediate Offices, the Presidential Special Assistants/Advisers System
and the Common Support System, by abolishing, consolidating or merging units
During the pendency of the case, Republic Act No. 9155 (RA 9155 for brevity), thereof or transferring functions from one unit to another;
otherwise known as the Governance of Basic Education Act of 2001, was enacted on
August 11, 2001. RA 9155 expressly abolished the BPESS and transferred the (2) Transfer any function under the Office of the President to any other Department or
functions, programs and activities of the DECS relating to sports competition to the Agency as well as transfer functions to the Office of the President from other
PSC. The pertinent provision thereof reads: Departments and Agencies; and

SEC. 9. Abolition of BPESS. All functions, programs and activities of the Department (3) Transfer any agency under the Office of the President to any other department or
of Education related to sports competition shall be transferred to the Philippine Sports agency as well as transfer agencies to the Office of the President from other
Commission (PSC). The Program for school sports and physical fitness shall remain Departments or Agencies. (Emphasis supplied.)
part of the basic education curriculum.

Since EO 81 is based on the Presidents continuing authority under Section 31

The Bureau of Physical Education and School Sports (BPESS) is hereby (2) and (3) of EO 292,[8] EO 81 is a valid exercise of the Presidents delegated power
abolished. The personnel of the BPESS, presently detailed with the PSC, are hereby to reorganize the Office of the President. The law grants the President this power in
transferred to the PSC without loss of rank, including the plantilla positions they recognition of the recurring need of every President to reorganize his office to achieve
occupy. All other BPESS personnel shall be retained by the Department. simplicity, economy and efficiency. The Office of the President is the nerve center of
the Executive Branch. To remain effective and efficient, the Office of the President
must be capable of being shaped and reshaped by the President in the manner he
The Issue deems fit to carry out his directives and policies. After all, the Office of the President is
the command post of the President. This is the rationale behind the Presidents
continuing authority to reorganize the administrative structure of the Office of the
President.
The issue to resolve is whether EO 81 and the DECS Memoranda are valid.
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 Petitioners contention that the DECS is not part of the Office of the President is CONSTITUTION." Executive Order No. 17 recognized the "unnecessary anxiety and
immaterial. Under EO 292, the DECS is indisputably a Department of the Executive demoralization among the deserving officials and employees" the ongoing
Branch. Even if the DECS is not part of the Office of the President, Section 31 (2) and government reorganization had generated, and prescribed several grounds for the
(3) of EO 292 clearly authorizes the President to transfer any function or agency of separation/replacement of personnel. Specifically, she said on May 28, 1986:
the DECS to the Office of the President. Under its charter, the PSC is attached to the WHEREAS, in order to obviate unnecessary anxiety and demoralization among the
Office of the President.[9] Therefore, the President has the authority to transfer the deserving officials and employees, particularly in the career civil service, it is
functions, programs and activities of DECS related to sports development [10] to the necessary to prescribe the rules and regulations for implementing the said
PSC, making EO 81 a valid presidential issuance. constitutional provision to protect career civil servants whose qualifications and
performance meet the standards of service demanded by the New Government, and
However, the Presidents power to reorganize the Office of the President under to ensure that only those found corrupt, inefficient and undeserving are separated
Section 31 (2) and (3) of EO 292 should be distinguished from his power to from the government service. Noteworthy is the injunction embodied in the Executive
reorganize the Office of the President Proper. Under Section 31 (1) of EO 292, the Order that dismissals should be made on the basis of findings of inefficiency, graft,
President can reorganize the Office of the President Proper by abolishing, and unfitness to render public service. The President’s Memorandum of October 14,
consolidating or merging units, or by transferring functions from one unit to 1987 should furthermore be considered. We quote, in part: Further to the
another. In contrast, under Section 31 (2) and (3) of EO 292, the Presidents power to Memorandum dated October 2, 1987 on the same subject, I have ordered that there
reorganize offices outside the Office of the President Proper but still within the Office will be no further lay-offs this year of personnel as a result of the government
of the President is limited to merely transferring functions or agencies from the Office reorganization. On January 30, 1987, the President promulgated Executive Order No.
of the President to Departments or Agencies, and vice versa. 127, "REORGANIZING THE MINISTRY OF FINANCE." Among other offices,
This distinction is crucial as it affects the security of tenure of employees. The Executive Order No. 127 provided for the reorganization of the Bureau of Customs
abolition of an office in good faith necessarily results in the employees cessation in and prescribed a new staffing pattern therefor. Three days later, on February 2, 1987,
office, but in such event there is no dismissal or separation because the office itself the Filipino people adopted the new Constitution. On January 6, 1988, incumbent
ceases to exist.[11] On the other hand, the transfer of functions or agencies does not Commissioner of Customs Salvador Mison issued a Memorandum, in the nature of
result in the employees cessation in office because his office continues to exist "Guidelines on the Implementation of Reorganization Executive Orders," prescribing
although in another department, agency or office. In the instant case, the BPESS the procedure in personnel placement. On the same date, Commissioner Mison
employees who were not transferred to PSC were at first temporarily, then later constituted a Reorganization Appeals Board charged with adjudicating appeals from
permanently reassigned to other offices of the DECS, ensuring their continued removals under the above Memorandum. On January 26, 1988, Commissioner Mison
employment. At any rate, RA 9155 now mandates that these employees shall be addressed several notices to various Customs officials. As far as the records will
retained by the Department. likewise reveal, a total of 394 officials and employees of the Bureau of Customs were
given individual notices of separation. A number supposedly sought reinstatement
WHEREFORE, the instant petition is DISMISSED. No pronouncement as to with the Reorganization Appeals Board while others went to the Civil Service
costs. Commission. The first thirty one mentioned above came directly to this Court. The
records indeed show that Commissioner Mison separated about 394 Customs
SO ORDERED. personnel but replaced them with 522 as of August 18, 1988. On June 30, 1988, the
Civil Service Commission promulgated its ruling ordering the reinstatement of the 279
DARIO vs MISON 176 SCRA 84 Status and Characteristics Creation, Reorganization,
employees. On July 15, 1988, Commissioner Mison, represented by the Solicitor
and Abolition of Administrative Agencies FACTS: On March 25, 1986, President
General, filed a motion for reconsideration. Acting on the motion, the Civil Service
Corazon Aquino promulgated Proclamation No. 3, "DECLARING A NATIONAL
Commission, on September 20, 1988, denied reconsideration. On October 20, 1988,
POLICY TO IMPLEMENT THE REFORMS MANDATED BY THE PEOPLE,
Commissioner Mison instituted certiorari proceedings with this Court. On November
PROTECTING THEIR BASIC RIGHTS, ADOPTING A PROVISIONAL
16, 1988, the Civil Service Commission further disposed the appeal (from the
CONSTITUTION, AND PROVIDING FOR AN ORDERLY TRANSITION TO A
resolution of the Reorganization Appeals Board) of five more employees. On January
GOVERNMENT UNDER A NEW CONSTITUTION. Among other things, Proclamation
6, 1989, Commissioner Mison challenged the Civil Service Commission’s Resolution
No. 3 provided: SECTION 1. The President shall give priority to measures to achieve
in this Court. ISSUE: Whether or not Executive Order No. 127, which provided for the
the mandate of the people to: (a) Completely reorganize the government, eradicate
reorganization of the Bureau of Customs is valid RULING: Yes. There is no question
unjust and oppressive structures, and all iniquitous vestiges of the previous regime.
that the administration may validly carry out a government reorganization — insofar
Actually, the reorganization process started as early as February 25, 1986, when the
as these cases are concerned, the reorganization of the Bureau of Customs — by
President, in her first act in office, called upon "all appointive public officials to submit
mandate not only of the Provisional Constitution, supra, but also of the various
their courtesy resignations beginning with the members of the Supreme Court." Later
Executive Orders decreed by the Chief Executive in her capacity as sole lawmaking
on, she abolished the BatasangPambansa and the positions of Prime Minister and
authority under the 1986-1987 revolutionary government. It should also be noted that
Cabinet under the 1973 Constitution. On May 28, 1986, the President enacted
under the present Constitution, there is a recognition, albeit implied, that a
Executive Order No. 17, "PRESCRIBING RULES AND REGULATIONS FOR THE
government reorganization may be legitimately undertaken, subject to certain
IMPLEMENTATION OF SECTION 2, ARTICLE III OF THE FREEDOM
conditions. The core provision of law involved is Section 16 Article XVIII, of the 1987
8
Constitution. Sec. 16. Career civil service employees separated from the service not not come about automatically. Otherwise, security of tenure may be invoked.
for cause but as a result of the reorganization pursuant to Proclamation No. 3 dated Moreover, it can be seen that the statute itself recognizes removals without cause.
March 25, 1986 and the reorganization following the ratification of this Constitution However, it also acknowledges the possibility of the leadership using the artifice of
shall be entitled to appropriate separation pay and to retirement and other benefits reorganization to frustrate security of tenure. For this reason, it has installed
accruing to them under the laws of general application in force at the time of their safeguards. There is nothing unconstitutional about the Act. RATIO: Reorganizations
separation. In lieu thereof, at the option of the employees, they may be considered for have been regarded as valid provided they are pursued in good faith.
employment in the Government or in any of its subdivisions, instrumentalities, or
agencies, including government-owned or controlled corporations and their DOCTRINE: the president can reorganize the executive department (when done
subsidiaries. This provision also applies to career officers whose resignation, in good faith)
tendered in line with the existing policy, had been accepted. It is also to be observed CASE Number (including date): 142801-802. July 10, 2001
that unlike the grants of power to effect reorganizations under the past Constitutions, CASE Name: EIIB v Zamora
the above provision comes as a mere recognition of the right of the Government to Ponentesandoval-guttierrez
reorganize its offices, bureaus, and instrumentalities. Other than references to
"reorganization following the ratification of this Constitution," there is no provision for FACTS
"automatic" vacancies under the 1987 Constitution. Invariably, transition periods are  Petitioners seek that EO 191 (deactivation of EIIB) and EO 223 (all EIIB
characterized by provisions for "automatic" vacancies. They are dictated by the need personnel are separated from office) unconstitutional.
to hasten the passage from the old to the new Constitution free from the "fetters" of  1987 - Cory issued EO 127 creating the EIIB which gives it the following
due process and security of tenure. At this point, we must distinguish removals from tasks:
separations arising from abolition of office (not by virtue of the Constitution) as a
result of reorganization carried out by reason of economy or to remove redundancy of o Receive, gather and evaluate intelligence reports and information and
functions. In the latter case, the Government is obliged to prove good faith. In case of evidence on the nature, modes and extent of illegal activities affecting
removals undertaken to comply with clear and explicit constitutional mandates, the the national economy, such as, but not limited to, economic sabotage,
Government is not hard put to prove anything, plainly and simply because the smuggling, tax evasion, and dollar-salting, investigate the same and aid
Constitution allows it. Reorganizations in this jurisdiction have been regarded as valid in the prosecution of cases;
provided they are pursued in good faith. As a general rule, a reorganization is carried o Coordinate with external agencies in monitoring the financial and
out in "good faith" if it is for the purpose of economy or to make bureaucracy more economic activities of persons or entities, whether domestic or foreign,
efficient. In that event, no dismissal (in case of a dismissal) or separation actually which may adversely affect national financial interest with the goal of
occurs because the position itself ceases to exist. And in that case, security of tenure regulating, controlling or preventing said activities;
would not be a Chinese wall. Be that as it may, if the "abolition," which is nothing else o Provide all intelligence units of operating Bureaus or Offices under the
but a separation or removal, is done for political reasons or purposely to defeat Ministry with the general framework and guidelines in the conduct of
security of tenure, or otherwise not in good faith, no valid "abolition" takes place and intelligence and investigating works;
whatever "abolition" is done, is void ab initio. There is an invalid "abolition" as where o Supervise, monitor and coordinate all the intelligence and investigation
there is merely a change of nomenclature of positions, or where claims of economy operations of the operating Bureaus and Offices under the Ministry;
are belied by the existence of ample funds. It is to be stressed that by predisposing a o Investigate, hear and file, upon clearance by the Minister, anti-graft and
reorganization to the yardstick of good faith, we are not, as a consequence, imposing corruption cases against personnel of the Ministry and its constituents
a "cause" for restructuring. Retrenchment in the course of a reorganization in good units;
faith is still removal "not for cause," if by "cause" we refer to "grounds" or conditions o Perform such other appropriate functions as may be assigned by the
that call for disciplinary action. Good faith, as a component of a reorganization under Minister or his deputies.
a constitutional regime, is judged from the facts of each case. The records indeed  1989 – cory issued Memorandum order 225 declaring that all smuggling
show that Commissioner Mison separated about 394 Customs personnel but replaced cases outside the sol jurisdiction of the BOC fall within EIIB
them with 522 as of August 18, 1988. This betrays a clear intent to "pack" the Bureau  2000 – Erap issued EO191 with the reason that most of the EIIB’s functions
of Customs. He did so, furthermore, in defiance of the President’s directive to halt are done by other bureaus and agencies. He transferred the functions of
further lay-offs as a consequence of reorganization. Finally, he was aware that lay- EIIB to BOC and NBI
offs should observe the procedure laid down by Executive Order No. 17. We are not,  Erap also issued EO196 which is the presidential anti-smuggling task force
of course, striking down Executive Order No. 127 for repugnancy to the Constitution. ADUANA
While the act is valid, still and all, the means with which it was implemented is not. It  EO223 was issued
can be seen that the Act, insofar as it provides for reinstatement of employees ISSUES
separated without "a valid cause and after due notice and hearing" is not contrary to 1. Whether or not the president can reorganize the executive department
the transitory provisions of the new Constitution. The Court reiterates that although 2. Whether or not the reorganization was valid
the Charter’s transitory provisions mention separations "not for cause," separations
thereunder must nevertheless be on account of a valid reorganization and which do HELD (including the Ratio Decidendi)
9
 (1) Yes. It is argued that the power to create and abolish government offices
lies in the constitution, the legislature and the authority of law. However,
multiple laws allow the president to reorganize the executive department.
o Firstly, reorganization was defined by EO 292 sec 31 (admin code
of 1987) which is the power of the president to reduce, consolidate
and abolish offices in the executive department
o RA 7695 sec 48 (GAA 1993) – heads of bureaus can identify offices
that can be scaled down, phased out or abolished
o Same, sec 62 – Offices can be abolished only by law or by the
president
o PD 1772 [order by marcos that was not repealed(considered
active)] – allows the president to reorganize national government
o RA 8745sec 77 (GAA 1999) (this is the most important)– used by
respondent states that Unless otherwise provided by law or
directed by the President of the Philippines, no changes in key
positions or organizational units in any department or agency shall
be authorized in their respective organizational structures and
funded from appropriations provided by this Act.
 (2)Yes: petitioners say the reorganization was done in bad faith because it
was only done to make way for task force aduana. This is not the accurate.
o RA 6656 gives the evidences for bad faith in removal from civil
service
 there was increase in positions in an office
 a similar office was created
 replacements by less qualified candidates were made
 same functions as the abolished office was given to a new
office
 violated orders of suspension
o Task force Aduana was created for effieciency
 It hired no new employees since it employs only
intelligence member s of the AFP and intelligence officers
of other bureaus.
 Budget for Aduana is significantly lower (50M) as opposed
to EIIB (200M)
 It has more powers specifically that of search, seizure and
arrest as well as investigation of ill-gotten wealth
RULING:
Wherefore the petition is denied EO 191 and 223 are VALID

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