Board of Trustees of GSIS vs. Velasco

A preventively suspended employee remains entitled to a step increment, which is merely delayed by the exact number of days of the preventive suspension, because preventive suspension is not a penalty but a measure that only interrupts the continuity of service.

Respondents Albert M. Velasco and Mario I. Molina, both Attorney V officers at the Government Service Insurance System (GSIS), were administratively charged with grave misconduct and placed under preventive suspension for 90 days on May 23, 2002, for participating in a demonstration denouncing GSIS corruption. Following the suspension, respondent Molina requested the implementation of his step increment, which was denied pursuant to GSIS Board Resolution No. 372, series of 2000, withholding step increments for employees under preventive suspension. Their request for Christmas raffle benefits under Resolution No. 306 was similarly denied due to the pending administrative case. Subsequently, the GSIS Board issued Resolution No. 197, series of 2003, disqualifying employees with pending administrative cases from promotion, step increments, performance-based bonuses, and other benefits.

• Administrative Charges: On May 23, 2002, respondents Velasco and Molina were formally charged with grave misconduct and preventively suspended for 90 days for participating in an anti-corruption demonstration.
• Denial of Benefits: On April 22, 2003, respondent Molina's request for a step increment was denied based on Resolution No. 372, which withheld step increments for employees under preventive suspension. Their request for Christmas raffle benefits under Resolution No. 306 was likewise denied due to their pending administrative case.
• Issuance of Resolution No. 197: On August 27, 2003, the GSIS Board issued Resolution No. 197, expanding the disqualification to include promotions, step increments, performance-based bonuses, and other benefits for employees with pending administrative cases.
• Prohibition Suit: On November 14, 2003, respondents filed a petition for prohibition, arguing that the denial of benefits violated their right to presumption of innocence and due process, and that the resolutions were ineffective for lack of registration with the UP Law Center.

• Jurisdiction: Petitioner argued that the Civil Service Commission, not the RTC, has jurisdiction over claims involving employee benefits.
• Territorial Jurisdiction: Petitioner maintained that the RTC of Manila lacked territorial jurisdiction over the GSIS Board, which holds office in Pasay City.
• Publication of Internal Rules: Petitioner argued that Resolution Nos. 372, 197, and 306 are internal regulations governing only GSIS personnel and thus need not be filed with the UP Law Center ONAR.
• Validity of Disqualification: Petitioner maintained that the GSIS Board possessed the power to disqualify respondents from step increments and benefits during the pendency of their administrative cases.
• Propriety of Prohibition: Petitioner argued that nullification of board resolutions is beyond the scope of an action for prohibition, and a writ of preliminary injunction cannot be made permanent without a corresponding writ of prohibition.

• Due Process and Presumption of Innocence: Respondent countered that denying employee benefits on the sole ground of a pending administrative case inflicts punishment without hearing and violates the presumption of innocence.
• Vested Right: Respondent argued that Molina had already earned his right to a step increment prior to the enactment of Resolution No. 372.
• Effectivity of Resolutions: Respondent maintained that the assailed resolutions were ineffective for lack of filing and publication with the UP Law Center as required by the Revised Administrative Code of 1987.

• Jurisdiction: Whether the Regional Trial Court, rather than the Civil Service Commission, has jurisdiction over the petition for prohibition.
• Territorial Jurisdiction: Whether the RTC of Manila has territorial jurisdiction over a prohibition suit against the GSIS Board situated in Pasay City.
• Publication: Whether internal rules and regulations regulating only agency personnel must be filed with the UP Law Center ONAR to be effective.
• Validity of Disqualification: Whether regulations disqualifying preventively suspended employees from step increments and benefits are valid.

• Jurisdiction: Jurisdiction over the prohibition suit properly lies with the RTC, not the CSC, because the action seeks to restrain the GSIS Board from exercising quasi-legislative and administrative functions, which falls under the RTC's original jurisdiction.
• Territorial Jurisdiction: Venue was properly laid in Manila because prohibition is a personal action that may be commenced where the plaintiff resides; furthermore, writs issued by the RTC are enforceable throughout the National Capital Judicial Region.
• Publication: Internal rules and regulations that regulate only the personnel of the agency, and not the public, need not be filed with the UP Law Center ONAR to be effective.
• Validity of Disqualification: The disqualification provisions in Resolution Nos. 197 and 372 were declared void. Preventive suspension is not a penalty but a preventive measure; thus, it merely interrupts the continuity of service and delays the grant of a step increment by the exact number of days of suspension, rather than disqualifying the employee entirely.

• Preventive suspension as a non-penalty — Preventive suspension pending investigation is not a penalty but a measure to prevent the respondent from influencing witnesses. Consequently, it cannot serve as a basis to forfeit benefits or impose disqualifications applicable to penalized employees.
• Effect of preventive suspension on step increment — Preventive suspension interrupts the continuity of service for purposes of computing the three-year requirement for a length-of-service step increment. However, it merely delays the grant of the increment by the exact number of days of suspension, not requiring the employee to serve another full three years.
• Publication of internal agency rules — Interpretative regulations and rules merely internal in nature—those regulating only the personnel of the administrative agency and not the public—need not be filed with the UP Law Center ONAR to be effective.

• "Preventive suspension pending investigation is not a penalty. It is a measure intended to enable the disciplining authority to investigate charges against respondent by preventing the latter from intimidating or in any way influencing witnesses against him."
• "Therefore, on the matter of step increment, if an employee who was suspended as a penalty will be treated like an employee on approved vacation leave without pay, then it is only fair and reasonable to apply the same rules to an employee who was preventively suspended, more so considering that preventive suspension is not a penalty."

• Notre Dame de Lourdes Hospital v. Mallare-Phillips, 274 Phil. 467 (1991) — Cited as controlling precedent for the rule that a personal action may be commenced where the plaintiff resides, validating the venue in Manila.
• Juan v. People of the Philippines, 379 Phil. 125 (2000) — Cited for the principle that preventive suspension is not a punishment but a preventive measure.
• Gloria v. Court of Appeals, 365 Phil. 744 (1999) — Cited alongside Juan to reinforce that preventive suspension is not a penalty.

• Sections 2 and 4, Rule 65 of the Rules of Court — Define the remedy of prohibition and the proper court for filing, establishing that the RTC has jurisdiction over prohibition against quasi-legislative or administrative bodies.
• Section 18, Batas Pambansa Blg. 129 — Defines the territorial jurisdiction of RTC branches, which the Supreme Court delineates via administrative orders.
• Section 21(1), BP 129 — Provides that writs of certiorari, prohibition, and mandamus issued by RTCs may be enforced in any part of their respective regions, justifying the enforcement of the Manila RTC's writ in Pasay City.
• Sections 51 and 52, Chapter 7, Subtitle A, Title I, Book V of the Revised Administrative Code of 1987 — Govern preventive suspension, establishing the 90-day limit and automatic reinstatement if not resolved, reinforcing its character as a non-penalty.
• Sections 3 and 4, Chapter 2, Book 7 of the Revised Administrative Code of 1987 — Require filing of rules with the UP Law Center for effectivity, which the Court held inapplicable to purely internal personnel rules.
• Joint Circular No. 1, series of 1990; CSC Memorandum Circular No. 41, series of 1998 — Govern the grant of step increments based on length of service and the effect of leaves without pay, which the Court applied by analogy to preventive suspension.

Antonio Eduardo B. Nachura, Diosdado M. Peralta, Roberto A. Abad, Jose C. Mendoza