Agyao, Jr. vs. Civil Service Commission

Third-level positions in the Civil Service are confined to the Career Executive Service, which covers only those positions expressly enumerated in the Administrative Code or identified by the Career Executive Service Board as equivalent, all of whom are appointed by the President. A non-presidential appointee holding a managerial position is not embraced in the CES and need not possess CES or CSEE eligibility to acquire security of tenure.

Modesto Agyao, Jr. was holding the position of Department Manager II at the Philippine Economic Zone Authority under a temporary appointment that had been renewed several times. On June 16, 2004, PEZA submitted his re-appointment to the Civil Service Commission for approval. The CSC Field Office-Bangko Sentral ng Pilipinas invalidated the appointment on the ground that Agyao lacked the required Career Executive Service Officer or Career Service Executive Examination eligibility and because qualified eligibles were actually available for the position. PEZA appealed the invalidation to the CSC, which affirmed the Field Office’s action. While the appeal was pending, Agyao was appointed to a lower permanent position. The Court of Appeals sustained the CSC’s ruling, prompting Agyao to elevate the matter to the Supreme Court.

• The Re-Appointment and Invalidation: Modesto Agyao, Jr. had been serving as Department Manager II at the Philippine Economic Zone Authority under a temporary appointment that had been renewed four times. On June 16, 2004, PEZA submitted his latest re-appointment to the Civil Service Commission. On July 16, 2004, CSC Field Office-BSP Director Mercedes P. Tabao invalidated the appointment, citing Agyao’s lack of Career Executive Service Office (CESO) or Career Service Executive Examination (CSEE) eligibility and the availability of qualified eligibles actually willing to assume the position, pursuant to Section 2(b), Rule III of CSC Memorandum Circular No. 40, s. 1998.

• Appeal to the CSC: PEZA Director-General Lilia B. De Lima appealed the invalidation. The CSC, in Resolution No. 05-0821 dated June 16, 2005, denied the appeal. The CSC noted that Agyao’s temporary third-level appointment had been renewed four times, that he had failed to acquire the appropriate third-level eligibility despite taking (and failing) the November 2004 CSEE, and that the CSCFO-BSP Director had certified that qualified eligibles were available.

• Subsequent Events and Motion for Reconsideration: On July 18, 2005, Agyao was informed of his appointment to the permanent position of Division Chief III. He nonetheless filed a Letter-Motion for Reconsideration of the CSC Resolution on August 21, 2005. The CSC denied the motion in Resolution No. 05-1486 dated October 17, 2005.

• Court of Appeals Decision: The CA affirmed the CSC, ruling that Agyao was not a Career Civil Service Eligible and could not invoke CSC Memorandum Circular No. 9, s. 2005 (which allowed one renewal of temporary third-level appointments) because the invalidation occurred before its issuance and the later clarificatory Office Memorandum No. 05, s. 2005, prohibited renewals after July 24, 2005.

• Non-Coverage by CES: Agyao contended that the position of Department Manager II at PEZA was not among those covered by the Career Executive Service, as he was appointed by the PEZA Director-General and not by the President. Accordingly, he was not required to possess CESO or CSEE eligibility.

• Retroactive Application of Favorable Circulars: Agyao argued that CSC Memorandum Circular No. 9, s. 2005, and its clarificatory Office Memorandum No. 05, s. 2005, were applicable to him because they allowed one renewal of temporary third-level appointments issued before July 24, 2005, and his re-appointment was made on June 16, 2004.

• Absence of Qualified and Willing Applicants: Agyao insisted that no qualified eligibles had actually applied for or were willing to assume his position; the list of eligibles provided by Director Tabao consisted of individuals from other government agencies, none of whom had applied, leaving the position vacant.

• Lack of Third-Level Eligibility: The CSC maintained that Agyao’s temporary appointment was properly invalidated because he lacked CESO/CSEE eligibility, having failed the November 2004 CSEE despite multiple renewals of his appointment.

• Non-Retroactivity of Circulars: The CSC argued that Memorandum Circular No. 9, s. 2005, and Office Memorandum No. 05, s. 2005, could not apply to Agyao because they were issued after the invalidation of his fifth temporary appointment and did not provide for retroactive application.

• Availability of Qualified Eligibles: The CSC countered that Director Tabao had certified and furnished PEZA a list of qualified eligibles for possible appointment, making Agyao’s contrary claim speculative and hearsay.

• Position is Third-Level Managerial: The CSC argued that, even though the Department Manager II position did not require presidential appointment, it was a third-level position of a managerial character involving planning, organizing, directing, coordinating, and controlling functions. Under its issuances and the merit-and-fitness principle, non-presidential appointees to such positions must possess third-level eligibility.

• Coverage of the Career Executive Service: Whether the position of Department Manager II at PEZA is covered by the Career Executive Service and therefore requires the appointee to possess CESO or CSEE eligibility, notwithstanding that the appointment is made by the PEZA Director-General rather than the President.

• Coverage of the Career Executive Service: The Department Manager II position does not fall under the Career Executive Service and requires no CESO or CSEE eligibility. Section 7(3), Chapter 2, Title I-A, Book V of the Administrative Code of 1987 enumerates the positions belonging to the CES — Undersecretary, Assistant Secretary, Bureau Director, Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of Department Service, and other officers of equivalent rank identified by the Career Executive Service Board — all of whom are appointed by the President. The Court consistently ruled in Office of the Ombudsman v. Civil Service Commission, Home Insurance and Guaranty Corporation v. Civil Service Commission, and National Transmission Corporation v. Hamoy that the CES covers presidential appointees only. Because the Department Manager II of PEZA is appointed by the PEZA Director-General, not by the President, it is not a CES position. Classifying it as such and requiring CES eligibility would unconstitutionally vest appointing power in the President or unlawfully include a non-presidential appointee in the CES. The CSC itself subsequently issued Office Memorandum No. 27, s. 2008, adopting this doctrine and repealing inconsistent issuances. The invalidation of Agyao’s appointment therefore lacked legal basis.

• CES Coverage Limited to Presidential Appointees — Third-level positions in the Career Service refer exclusively to positions in the Career Executive Service as enumerated in Section 7(3), Chapter 2, Title I-A, Book V of the Administrative Code of 1987 and other positions of equivalent rank identified by the Career Executive Service Board, all of whom must be appointed by the President. A non-presidential appointee to a managerial position is not part of the CES and does not need to acquire CES or CSEE eligibility to obtain security of tenure. The Court applied this doctrine to nullify the CSC’s long-standing practice of requiring third-level eligibility for non-presidential managerial appointees.

• "Simply put, third-level positions in the Civil Service are only those belonging to the Career Executive Service, or those appointed by the President of the Philippines."

• "To classify other positions not included in the above enumeration as covered by the CES and require appointees thereto to acquire CES or CSE eligibility before acquiring security of tenure will lead to unconstitutional and unlawful consequences. It will result either in (1) vesting the appointing power for non-CES positions in the President, in violation of the Constitution; or (2) including in the CES a position not held by presidential appointee, contrary to the Administrative Code."

• Office of the Ombudsman v. Civil Service Commission, G.R. No. 162215, July 30, 2007 — Followed; held that Director II positions in the Office of the Ombudsman, which are appointed by the Ombudsman, are not covered by the CES and do not require CES eligibility.
• Home Insurance and Guaranty Corporation v. Civil Service Commission, G.R. No. 95450, March 19, 1993 — Followed; ruled that a Vice-President position at HIGC, not being a presidential appointee position, did not belong to the third level.
• National Transmission Corporation v. Hamoy, G.R. No. 179255, April 2, 2009 — Followed; reiterated that CES covers presidential appointees only, and a Transco Vice-President appointed by the Transco President was not part of the CES.
• Civil Service Commission v. Court of Appeals and Philippine Charity Sweepstakes Office, G.R. No. 185766, November 23, 2010 — Cited as a recent reaffirmation of the same doctrine.

• Section 7(3), Chapter 2, Title I-A, Book V of Executive Order No. 292 (Administrative Code of 1987) — This provision enumerates the positions in the Career Executive Service (Undersecretary, Assistant Secretary, Bureau Director, etc.) and states that all are appointed by the President. The Court construed it as an exclusive list, confining the CES to presidential appointees, and held that the Department Manager II position fell outside its scope because the appointing authority was the PEZA Director-General.

Chief Justice Renato C. Corona, and Associate Justices Antonio T. Carpio, Conchita Carpio Morales, Presbitero J. Velasco, Jr., Antonio Eduardo B. Nachura, Teresita J. Leonardo-De Castro, Arturo D. Brion, Diosdado M. Peralta, Lucas P. Bersamin, Roberto A. Abad, Martin S. Villarama, Jr., Jose Portugal Perez, and Maria Lourdes P.A. Sereno. Associate Justice Mariano C. Del Castillo took no part.