The position of General Manager of a local water district is primarily confidential in nature, and the amendment introduced by Republic Act No. 9286, requiring removal only for cause and after due process, does not convert it into a career service position; thus, an appointee may hold such a position on a coterminous basis even beyond the compulsory retirement age.

The case arose from the appointment and reappointment of Paulino J. Rafanan as General Manager (GM) of Pililla Water District (PWD). Issues emerged regarding the nature of his appointment (coterminous status), his continuation in service beyond the compulsory retirement age of 65, and the interpretation of relevant Civil Service Commission (CSC) circulars and Republic Act No. 9286, which amended the law governing water districts.

• Paulino J. Rafanan was first appointed General Manager (GM) of Pililla Water District (PWD) on a coterminous status on August 7, 1998.
• On October 4, 2001, the CSC issued Resolution No. 011624, clarifying that persons who reached the compulsory retirement age of 65 could still be appointed to coterminous/primarily confidential positions, and those already in such positions who reach 65 are considered automatically extended.
• On April 2, 2004, R.A. No. 9286 amended Section 23 of P.D. No. 198, stating that the General Manager "shall not be removed from office, except for cause and after due process."
• On June 16, 2004, PWD's Board of Directors (BOD) approved Resolution No. 19, extending Rafanan's services as GM up to December 31, 2008, as he was reaching 65 that month.
• The CSC, in Resolution No. 04-1271 (November 23, 2004), denied PWD's request for extension and considered Rafanan separated from service on his 65th birthday (June 25, 2004). CSC denied the motion for reconsideration.
• On April 8, 2005, PWD's BOD issued Resolution No. 09, reappointing Rafanan as GM on coterminous status.
• In a letter dated November 19, 2007, Pililla Mayor Leandro V. Masikip, Sr. questioned Rafanan's coterminous appointment as void ab initio because Rafanan had reached compulsory retirement age and was appointed to a career position. This was treated as an appeal by the CSC.
• On May 19, 2008, the CSC issued Resolution No. 080942 invalidating Rafanan's April 8, 2005 coterminous appointment, stating it violated Section 2 of R.A. No. 9286 and circumvented the denial of service extension. Rafanan's motion for reconsideration was denied by CSC Resolution No. 081846.
• PWD appealed to the Court of Appeals (CA), which reversed the CSC, ruling that the GM position in water districts remains primarily confidential, allowing appointment beyond compulsory retirement age.

• The Civil Service Commission (CSC) argued that the amendment to Section 23 of P.D. No. 198 by R.A. No. 9286 (providing that the GM "shall not be removed from office, except for cause and after due process") ipso facto reclassified the GM position from non-career to a career position.
• The CSC contended that its Memorandum Circular No. 13, Series of 2006, which prescribed guidelines and qualification standards for the GM position as a career service post, applied to Rafanan, requiring him to meet permanent status requirements.
• The CSC posited that Rafanan's April 8, 2005 reappointment on coterminous status was invalid because he had already reached the compulsory retirement age and the position was allegedly now a career position.
• The CSC believed the reappointment was an attempt to circumvent its earlier denial of Rafanan's service extension.

• Pililla Water District (PWD) argued that the position of General Manager of a water district remains primarily confidential in nature, even after the amendment by R.A. No. 9286.
• PWD contended that the amendment requiring removal "for cause" is not in conflict with a coterminous appointment, as "loss of confidence" constitutes "cause" for removal from a primarily confidential position.
• PWD maintained that CSC Memorandum Circular No. 13, Series of 2006, should only apply to appointments made after its issuance and not to Rafanan, who was an incumbent GM.
• PWD asserted that as a holder of a primarily confidential position, Rafanan could be appointed to or remain in said position even beyond the compulsory retirement age of 65 years, pursuant to CSC Resolution No. 011624.
• PWD argued that the CSC cannot usurp the power of appointment and removal of the appointing authority and that the CSC failed to observe due process.

• Whether the Court of Appeals erred in ruling that the position of General Manager of a local water district is primarily confidential in nature.
• Whether the Court of Appeals erred in ruling that the April 8, 2005 appointment of Rafanan in a co-terminous capacity was valid, despite his having reached the compulsory retirement age.

• The Supreme Court denied the petition for review on certiorari filed by the CSC and affirmed the Court of Appeals' decision.
• The Court held that the position of General Manager of a water district is primarily confidential in nature, characterized by the close proximity and high degree of trust and confidence between the GM and the Board of Directors (BOD). The GM's duties, determined by the BOD, involve supervision, control, policy implementation, and direct accountability to the BOD, indicating a relationship demanding trust.
• The amendment introduced by R.A. No. 9286, stating that the GM "shall not be removed from office, except for cause and after due process," merely tempered the BOD's discretion and did not convert the position into a career service position. "Loss of confidence" is a valid cause for removal from a primarily confidential position, consistent with due process requirements.
• A coterminous appointment falls under the non-career service classification, and its tenure is limited or co-existent with the appointing authority's trust and confidence. The GM's term is effectively coterminous with the BOD's tenure (maximum of six years), subject to reappointment or earlier removal for cause.
• Since the GM position is primarily confidential, Rafanan was validly reappointed on April 8, 2005, under coterminous status despite having reached the compulsory retirement age, as allowed by Section 12(b), Rule XIII of CSC Memorandum Circular No. 15, s. 1999, as amended by CSC Resolution No. 011624.

• Primarily Confidential Position — A position characterized by the highest degree of confidence, or close intimacy between the appointing authority and the appointee, ensuring freedom of discussion, delegation, and reporting without embarrassment or misgivings of betrayals of personal trust or confidential matters. The Court affirmed that the GM of a water district holds such a position due to the nature of duties involving direct appointment by, reporting to, and accountability to the Board of Directors, and involvement in policy and decision-making, necessitating a high degree of trust.
• Proximity Rule — A principle used to determine if a position is primarily confidential, based on the closeness of the relationship and the degree of trust between the appointer and appointee. This was applied to analyze the relationship between the GM and the BOD of the water district.
• Security of Tenure in Confidential Positions — While employees in the Civil Service shall not be removed except for cause, this rule has exceptions. For primarily confidential positions, tenure lasts only as long as confidence endures. The Court clarified that R.A. No. 9286's provision for removal "only for cause" for GMs includes "loss of confidence," and does not convert the position to career service with full security of tenure typical of such posts.
• Non-Career Service — A classification in the Civil Service characterized by entrance on bases other than usual merit and fitness tests, and tenure which is limited (e.g., coterminous with the appointing authority or subject to their pleasure). The Court classified the GM position as non-career, specifically coterminous with the BOD's trust or tenure.
• Coterminous Appointment — An appointment where entrance and continuity in service are based on the trust and confidence of the appointing authority, or co-existent with their tenure, or limited by project duration or funds. The Court found Rafanan's reappointment as GM to be a valid coterminous appointment.
• Prospective Application of Laws — The general rule that statutes are to be construed as having only a prospective operation unless legislative intent for retroactive effect is expressly declared or necessarily implied. While discussed in relation to Paloma v. Mora concerning R.A. 9286's application to prior terminations, the principle informed that R.A. 9286 governed Rafanan's 2005 reappointment.
• Judicial Review of Classification of Positions — The Court is not bound by the classification of positions in the civil service made by legislative or executive branches, or even by constitutional bodies like the CSC, and will make its own determination as to the nature of a particular position. This was asserted in determining the GM position as primarily confidential despite CSC's differing classification.

• "x x x we rule that the position of general manager remains primarily confidential in nature despite the amendment of Section 23 of P.D. No. 198 by R.A. No. 9286, which gave the occupant of said position security of tenure, in that said officer could only be removed from office for cause and after due process."
• "It is established that no officer or employee in the Civil Service shall be removed or suspended except for cause provided by law. However, this admits of exceptions for it is likewise settled that the right to security of tenure is not available to those employees whose appointments are contractual and coterminous in nature."
• "Indeed, no officer or employee in the Civil Service shall be removed or suspended except for cause provided by law. The phrase “cause provided by law," however, includes "loss of confidence." It is an established rule that the tenure of those holding primarily confidential positions ends upon loss of confidence, because their term of office lasts only as long as confidence in them endures."

• Paloma v. Mora — Referenced to show that R.A. No. 9286, which amended P.D. No. 198 regarding the removal of GMs of water districts, has prospective application and changed the grounds for termination from "at the pleasure of the Board" to "for cause and after due process." The current case distinguished that this change did not alter the primarily confidential nature of the GM position.
• De los Santos v. Mallare — Cited for the definition of a primarily confidential position, emphasizing close intimacy and trust, and the principle that such appointments are terminable at the will (or loss of confidence) of the appointing officer.
• Piñero v. Hechanova — Cited for the doctrine that the nature of the position itself determines whether it is primarily confidential, policy-determining, or highly technical, and that executive pronouncements or legislative fiat are initial determinations not foreclosing judicial review.
• Civil Service Commission v. Javier — Referenced to establish that the Court is not bound by the CSC's classification of confidential positions and will make its own determination. Also cited for the application of the "proximity rule."
• Tanjay Water District v. Quinit, Jr. — Cited for the principle that "cause provided by law" for removal of a civil service employee includes "loss of confidence" for those holding primarily confidential positions, and their termination on this ground is an expiration of their term, not a removal.
• Omnibus Rules Implementing Book V of Executive Order No. 292 (Administrative Code of 1987) — Referenced for definitions of permanent, temporary, and coterminous appointments, and the classification of career and non-career service.

• Presidential Decree No. 198 (Provincial Water Utilities Act of 1973), Section 23 (as originally worded and as amended by P.D. No. 768) — Original and amended versions stated that the General Manager "shall serve at the pleasure of the board." This was the governing law before R.A. 9286.
• Republic Act No. 9286, Section 2 (amending Section 23 of P.D. No. 198) — Amended P.D. No. 198 to state that the General Manager "shall not be removed from office, except for cause and after due process." The interpretation of this amendment was central to the case.
• CSC Memorandum Circular No. 15, s. 1999, Rule XIII, Section 12 (as amended by CSC Resolution No. 011624) — This CSC issuance allows a person who has reached the compulsory retirement age of 65 to be appointed to a coterminous/primarily confidential position, or if already in such a position, to be automatically extended in service. This was key to validating Rafanan's reappointment.
• Omnibus Rules Implementing Book V of Executive Order No. 292, Section 13 and 14 (Rule V) — Defines permanent, temporary, and coterminous appointments. Section 14, defining coterminous appointments, was applied to Rafanan's situation.
• Administrative Code of 1987 (Executive Order No. 292), Book V, Title I, Subtitle A, Chapter 2, Sections on Career Service and Non-Career Service (implicitly, Sec. 7 and Sec. 9) — These provisions classify positions in the civil service. The Court determined the GM position falls under non-career service due to its primarily confidential nature.
• Presidential Decree No. 198, Section 24 — Details the duties of the General Manager, which are determined by the Board, and grants the GM full supervision and control over water district facilities. This was used to show the close working relationship and trust required between the GM and the BOD.
• Presidential Decree No. 198, Section 11 — Specifies the term of office for BOD members of water districts (six years), which the Court linked to the maximum term a GM appointed on coterminous status might serve, subject to reappointment.
• Presidential Decree No. 198, Section 36 — Empowers LWUA to take over defaulting water districts, reinforcing the non-career nature of the GM position as it can be replaced by LWUA designees.