Civil Service Commission vs. Cruz

A government employee who is dismissed and subsequently reinstated is entitled to back salaries for the period of suspension pending appeal when the employee is exonerated of the charges that caused the dismissal, and the lesser offense actually committed stems from an act different from the offense charged and carries a penalty that does not merit dismissal or suspension. The two conditions for entitlement to back salaries are: (a) the employee must be found innocent of the charges, and (b) the suspension must be unjustified; where the employee is completely exonerated, the second requirement is automatically subsumed in the first.

The respondent, Richard G. Cruz, was a Storekeeper A of the City of Malolos Water District (CMWD), a government-owned water utility. He was charged administratively by CMWD General Manager Nicasio Reyes with grave misconduct and dishonesty. The legal framework governing the dispute includes Section 47, Book V of the Administrative Code of 1987, which provides that an appeal shall not stop a decision from being executory and that a respondent shall be considered as having been under preventive suspension during the pendency of the appeal in the event he wins an appeal. The constitutional provision that "no officer or employee in the civil service shall be removed or suspended except for cause provided by law" serves as the basis for awarding back salaries to illegally dismissed or unjustly suspended employees.

Richard G. Cruz was a Storekeeper A of the City of Malolos Water District (CMWD). CMWD General Manager Nicasio Reyes charged him with grave misconduct and dishonesty. The grave misconduct charge arose from Cruz's alleged utterance of a false, malicious, and damaging statement — "Masasamang tao ang mga BOD at General Manager" — against GM Reyes and the CMWD Board of Directors, allegedly witnessed by four of Cruz's subordinates. The dishonesty charge stemmed from Cruz's act of claiming overtime pay despite his failure to log in and out in the computerized daily time record for three working days.

Cruz denied the charges. On the grave misconduct charge, he stressed that three of the four witnesses had already retracted their statements. On the dishonesty charge, he asserted that he never failed to log in and log out, reasoning that the lack of record was caused by technical computer problems, and he submitted documents showing that he rendered overtime work on the three days in question. GM Reyes preventively suspended Cruz for 15 days. Before the expiration of his preventive suspension, however, GM Reyes, with the approval of the CMWD Board, found Cruz guilty of grave misconduct and dishonesty and dismissed him from the service.

Cruz elevated the findings to the CSC, which absolved him of both charges and ordered his reinstatement. The CSC found no factual basis for the grave misconduct charge, holding that the utterance, even if true, was a mere expression of disgust over the management style of the GM and the Board, especially since those officials were charged with the Ombudsman for various anomalous transactions. On the dishonesty charge, the CSC declared that Cruz's failure to record his attendance while claiming overtime pay did not amount to dishonesty, as he submitted evidence showing his actual rendition of work on those days, and residents of the place where he worked attested to his presence. The CSC, however, found Cruz liable for violation of reasonable office rules for his failure to log in and log out, imposed a reprimand, but did not order the payment of back salaries.

Both the CMWD and Cruz filed motions for reconsideration, which the CSC denied. Both parties elevated the CSC ruling to the CA via separate petitions for review under Rule 43. The CA dismissed the CMWD's petition, and this ruling lapsed to finality, settling the issue of reinstatement. In the separate petition filed by Cruz, the CA applied the ruling in Bangalisan vs. CA and awarded him back salaries from the time he was dismissed up to his actual reinstatement, reasoning that CSC Resolution No. 080305 totally exonerated Cruz from the charges laid against him. The CA rejected the CSC's contention that the dishonesty charge had been merely downgraded to a lesser offense, seeing the finding for an offense (failing to properly record attendance) entirely different from the dishonesty charge because their factual bases are different.

• Misapplication of Bangalisan: The CSC argued that the CA erred in applying Bangalisan, which requires as a condition for entitlement to back salaries that the government employee be found innocent of the charge and that the suspension be unjustified. CSC Resolution No. 080305 did not fully exculpate Cruz but found him liable for a lesser offense, and his preventive suspension pending appeal was justified because he was not exonerated.

• Distinguishing Facts: The CSC argued that the factual considerations in Bangalisan are entirely different from the present case. In Bangalisan, the employee was considered totally exonerated because his infraction stemmed from an act entirely different from the act that was the basis of the grave misconduct charge. In the present case, the charge of dishonesty and the infraction committed by Cruz stemmed from a single act — his failure to properly record his attendance — so the charge of dishonesty was merely downgraded to a violation of reasonable office rules and regulations.

• Controlling Precedents: The CSC posited that the case should have been decided according to Jacinto vs. CA and De la Cruz vs. CA, where the award of back salaries was held inappropriate because the teachers involved were not fully exonerated from the charges laid against them.

• Entitlement to Back Salaries: Cruz maintained that he is entitled to reinstatement and back salaries because CSC Resolution No. 080305 exonerated him from the charges laid against him; for the purpose of entitlement to back salaries, what should control is his exoneration from the charges leveled against him by the CMWD. That he was found liable for a violation different from that originally charged is immaterial for purposes of the back salary issue.

• Applicability of Bangalisan: Cruz asserted that the Bangalisan ruling squarely applies since the CSC formally admitted in its Comment to CMWD's petition for review before the CA that the penalty of reprimand is not a reduced penalty for the penalty of dismissal imposable for grave misconduct and dishonesty.

• Entitlement to Back Salaries: Whether respondent Richard G. Cruz is entitled to back salaries after the CSC ordered his reinstatement to his former position, consonant with the CSC ruling that he was guilty only of violation of reasonable office rules and regulations.

• Entitlement to Back Salaries: Yes. The respondent is entitled to back salaries from the time he was dismissed by the CMWD until his reinstatement to his former position — i.e., for the period of his preventive suspension pending appeal. The two conditions for the award of back salaries were met: the offense Cruz was found guilty of (violation of reasonable office rules) stemmed from an act (failure to log in and log out) different from the act of dishonesty (claiming overtime pay despite failure to render overtime work) that he was charged with, and the committed offense merits neither dismissal nor suspension for more than one month, but only reprimand.

• Entitlement to Back Salaries: The Court began with the "no work-no pay" principle, from which it has excepted illegally dismissed or unjustly suspended employees based on the constitutional provision that "no officer or employee in the civil service shall be removed or suspended except for cause provided by law." The present legal basis for an award of back salaries is Section 47, Book V of the Administrative Code of 1987, which provides that a respondent shall be considered as having been under preventive suspension during the pendency of the appeal in the event he wins an appeal. The Court crafted two conditions before an employee may be entitled to back salaries: (a) the employee must be found innocent of the charges, and (b) his suspension must be unjustified. The reasoning is that although an employee is considered under preventive suspension during the pendency of a successful appeal, the law only authorizes preventive suspension for a fixed period; hence, his suspension beyond this fixed period is unjustified and must be compensated.

The Court traced the jurisprudential development of the rule. In Gonzales vs. Hernandez, the Court laid down the requisites for entitlement to back salaries: the employee must be exonerated of the charge against him and his suspension or dismissal must be found and declared to be illegal. However, subsequent rulings did not strictly observe these requirements, as the innocence of the employee alone served as basis for the award of back salaries in cases such as Tan vs. Gimenez, Tañala vs. Legaspi, Cristobal vs. Melchor, Tan, Jr. vs. Office of the President, De Guzman vs. CSC, and Del Castillo vs. CSC. The common thread in these cases is either the employee's complete exoneration of the administrative charge against him, or the employee's acquittal of the criminal charge based on his innocence. If the case falls on either of these instances, the conditions laid down in Gonzales become the two sides of the same coin; the requirement that the suspension must be unjustified is automatically subsumed in the other requirement of exoneration.

The Court also discussed Abellera vs. City of Baguio, which illustrated the independent character of the two conditions, so that the mere illegality of an employee's suspension could serve as basis for an award of back salaries. The unjustified "second suspension" in Abellera refers to the period when the employee was dismissed from the service up to the time of his actual reinstatement, which under the present legal landscape refers to "suspension pending appeal." In Miranda vs. Commission on Audit, the Court again considered the illegality of the suspension as a separate ground to award back salaries.

The Court then discussed Bangalisan vs. CA, which laid down the principle that if the exoneration of the employee is relative (as distinguished from complete exoneration), an inquiry into the factual premise of the offense charged and of the offense committed must be made. If the administrative offense found to have been actually committed is of lesser gravity than the offense charged, the employee cannot be considered exonerated if the factual premise for the imposition of the lesser penalty remains the same. The employee found guilty of a lesser offense may only be entitled to back salaries when the offense actually committed does not carry the penalty of more than one month suspension or dismissal.

Applying these principles, the Court found that the CA was correct in awarding Cruz his back salaries. The charges of grave misconduct and dishonesty against him were not substantiated. The first condition was met since the offense Cruz was found guilty of (violation of reasonable office rules) stemmed from an act (failure to log in and log out) different from the act of dishonesty (claiming overtime pay despite his failure to render overtime work) that he was charged with. The second condition was met as the committed offense merits neither dismissal from the service nor suspension (for more than one month), but only reprimand. For the period of his preventive suspension pending investigation, Cruz is not entitled to any back salaries per the ruling in Hon. Gloria vs. CA.

• Two Conditions for Award of Back Salaries — Before a government employee may be entitled to back salaries, two conditions must concur: (a) the employee must be found innocent of the charges, and (b) his suspension must be unjustified. Where the employee is completely exonerated of the administrative charge or acquitted in the criminal case arising from the same facts based on a finding of innocence, the second requirement becomes subsumed in the first. Otherwise, a determination of the act/s and offense/s actually committed and of the corresponding penalty imposed has to be made.

• Relative Exoneration — If the exoneration of the employee is relative (as distinguished from complete exoneration), an inquiry into the factual premise of the offense charged and of the offense committed must be made. If the administrative offense found to have been actually committed is of lesser gravity than the offense charged, the employee cannot be considered exonerated if the factual premise for the imposition of the lesser penalty remains the same. The employee found guilty of a lesser offense may only be entitled to back salaries when the offense actually committed does not carry the penalty of more than one month suspension or dismissal.

• Preventive Suspension Pending Investigation vs. Pending Appeal — Under Executive Order No. 292, there are two kinds of preventive suspension of civil service employees who are charged with offenses punishable by removal or suspension: (i) preventive suspension pending investigation and (ii) preventive suspension pending appeal. Compensation is due only for the period of preventive suspension pending appeal should the employee be ultimately exonerated. The preventive suspension pending investigation is not imposed as a penalty but only to enable the disciplining authority to conduct an unhampered investigation; it is a necessary sacrifice which holding a public office requires.

• "The Court's starting point for this outcome is the 'no work-no pay' principle – public officials are only entitled to compensation if they render service. We have excepted from this general principle and awarded back salaries even for unworked days to illegally dismissed or unjustly suspended employees based on the constitutional provision that 'no officer or employee in the civil service shall be removed or suspended except for cause provided by law'; to deny these employees their back salaries amounts to unwarranted punishment after they have been exonerated from the charge that led to their dismissal or suspension." — This passage establishes the foundational principle and constitutional basis for awarding back salaries to exonerated government employees.

• "To resolve the seeming conflict, the Court crafted two conditions before an employee may be entitled to back salaries: a) the employee must be found innocent of the charges and b) his suspension must be unjustified." — This is the canonical formulation of the two-condition test for entitlement to back salaries, frequently cited in subsequent jurisprudence.

• "Bangalisan clearly laid down the principle that if the exoneration of the employee is relative (as distinguished from complete exoneration), an inquiry into the factual premise of the offense charged and of the offense committed must be made. If the administrative offense found to have been actually committed is of lesser gravity than the offense charged, the employee cannot be considered exonerated if the factual premise for the imposition of the lesser penalty remains the same. The employee found guilty of a lesser offense may only be entitled to back salaries when the offense actually committed does not carry the penalty of more than one month suspension or dismissal." — This passage defines the doctrine of relative exoneration and its application to the award of back salaries.

• "A careful reading of these cases would reveal that a strict observance of the second condition for an award of back salaries becomes important only if the employee is not totally innocent of any administrative infraction. As previously discussed, where the employee is completely exonerated of the administrative charge or acquitted in the criminal case arising from the same facts based on a finding of innocence, the second requirement becomes subsumed in the first." — This passage clarifies the relationship between the two conditions and when the second condition is automatically satisfied.

• Bangalisan vs. CA, 342 Phil. 586 (1997) — Controlling precedent. The Court applied its principle that an employee found guilty of a lesser offense may be entitled to back salaries when the offense actually committed does not carry the penalty of more than one month suspension or dismissal, and when the factual premise of the lesser offense is different from that of the offense charged.

• Gonzales vs. Hernandez, 112 Phil. 160 (1961) — Followed. First laid down the requisites for entitlement to back salaries: the employee must be exonerated of the charge and his suspension or dismissal must be found and declared to be illegal.

• Tan vs. Gimenez, 107 Phil. 17 (1960) — Followed. Ruled that the payment of back salary to a government employee who was illegally removed from office because of his eventual exoneration on appeal is merely incidental to the ordered reinstatement.

• Tañala vs. Legaspi, 121 Phil. 541 (1965) — Followed. Held that an employee acquitted of criminal charges and ordered reinstated is entitled to back salaries, as his suspension and separation were thereby considered illegal.

• Abellera vs. City of Baguio, 19 SCRA 600 (1967) — Followed. Illustrated the independent character of the two conditions for back salaries, so that the mere illegality of an employee's suspension could serve as basis for an award.

• Miranda vs. Commission on Audit, 200 SCRA 657 (1991) — Followed. Held that a government official or employee is entitled to backwages not only if he is exonerated in the administrative case but also when the suspension is unjustified.

• City Mayor of Zamboanga vs. CA, 182 SCRA 785 (1990) — Distinguished. Held that the mere reduction of the penalty on appeal does not entitle a government employee to back salaries if he was not exonerated of the charge against him.

• Jacinto vs. CA, 346 Phil. 656 (1997) — Followed. Re-echoed the Bangalisan pronouncement that back salaries may be decreed only if the employee is found innocent of the charges and the suspension is unjustified.

• De la Cruz vs. CA, 364 Phil. 786 (1999) — Followed. Categorically stated that back wages may not be awarded to teachers ordered reinstated where they were neither exonerated nor unjustifiably suspended.

• Hon. Gloria vs. CA, 365 Phil. 744 (1999) — Followed. Distinguished preventive suspension from suspension pending appeal for the purpose of determining the extent of an employee's entitlement to back salaries.

• Section 47, Book V, Administrative Code of 1987 — Provides that an appeal shall not stop the decision from being executory, and in case the penalty is suspension or removal, the respondent shall be considered as having been under preventive suspension during the pendency of the appeal in the event he wins an appeal. This is the present legal basis for an award of back salaries.

• Section 51, Book V, Title I, Subtitle A, Executive Order No. 292 — Defines preventive suspension pending investigation, one of the two kinds of preventive suspension of civil service employees.

• Section 47(4), Book V, Title I, Subtitle A, Executive Order No. 292 — Defines preventive suspension pending appeal, the period for which compensation is due should the employee be ultimately exonerated.

• Section 13, Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — Provides that if a public official or employee is acquitted of the criminal charges specified in the law, he is entitled to reinstatement and the back salaries withheld during his suspension, unless in the meantime administrative proceedings have been filed against him.

• Section 42, Presidential Decree No. 807 (Civil Service Decree) — Addresses the lifting of preventive suspension pending administrative investigation; the Court clarified that its silence on the payment of back salaries is no reason to deny back salaries to a dismissed civil servant who was ultimately exonerated.

• Section 35, Republic Act No. 2260 (Civil Service Act of 1959) — Provided that if a respondent officer or employee is exonerated, he shall be restored to his position with full pay for the period of suspension; cited as the predecessor provision that expressly allowed back salaries.

• Section 260, Revised Administrative Code of 1917 — Provided for the payment of salary accruing pending suspension upon subsequent reinstatement of the suspended person or upon his exoneration; the earliest statutory basis discussed.

Corona, C.J., Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Villarama, Jr., Perez, and Sereno, JJ., concurred. Del Castillo, J., took no part; Abad, J., and Mendoza, J., were on official leave.