Government reorganization after the effectivity of the 1987 Constitution, while permissible under its transitory provisions (Article XVIII, Section 16), must be carried out in good faith; separations of career civil service employees resulting therefrom are valid only if they are due to bona fide reasons such as the abolition of an office, redundancy of functions, or the need to merge, divide, or consolidate positions to meet service exigencies, and not as a means to arbitrarily remove employees whose security of tenure is protected by the Constitution.

• Following the 1986 People Power Revolution, President Corazon Aquino promulgated Proclamation No. 3, "DECLARING A NATIONAL POLICY TO IMPLEMENT THE REFORMS MANDATED BY THE PEOPLE," which also served as a provisional "Freedom Constitution."
• Proclamation No. 3 mandated, among other things, the complete reorganization of the government to eradicate unjust and oppressive structures, vestiges of the previous regime, and to promote economy, efficiency, and the eradication of graft and corruption.
• This proclamation empowered the President to undertake this reorganization, during which appointive officials could be separated from service under specified conditions.

• On March 25, 1986, President Corazon Aquino promulgated Proclamation No. 3 (the "Freedom Constitution"), which mandated a government reorganization and allowed officials under the 1973 Constitution to continue in office until otherwise provided or upon appointment of successors within one year from February 25, 1986.
• Executive Order No. 17, issued May 28, 1986, prescribed grounds for separation/replacement of personnel during this reorganization, such as summary dismissal, probable cause for anti-graft violations, gross incompetence, or misuse of office.
• On January 30, 1987, Executive Order No. 127 was promulgated, reorganizing the Ministry of Finance, including the Bureau of Customs (BOC), and providing in Section 59 that incumbents not included in the new structure or not reappointed would be deemed separated, after continuing in a hold-over capacity.
• The 1987 Philippine Constitution was ratified on February 2, 1987.
• On January 6, 1988, BOC Commissioner Salvador Mison issued a memorandum with "Guidelines on the Implementation of Reorganization Executive Orders," stating that by February 28, 1988, all covered employees would be informed of reappointment, offered another position, or informed of termination.
• On January 26, 1988, Commissioner Mison sent termination notices to approximately 394 Customs officials and employees (including petitioners Cesar Dario, Vicente Feria, Jr., and others), effective February 28, 1988, citing E.O. No. 127.
• Subsequently, Commissioner Mison appointed 522 individuals as replacements for the separated personnel by August 18, 1988.
• Affected employees pursued different remedies: some filed petitions directly with the Supreme Court (G.R. Nos. 81954, 81967, 82023), while others appealed to the Civil Service Commission (CSC).
• The CSC, in resolutions dated June 30, 1988, and November 16, 1988, ordered the reinstatement of many of these employees, finding their separations illegal.
• Republic Act No. 6656, "An Act to Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization," was signed into law on June 10, 1988, effective June 29, 1988, with retroactive effect to June 30, 1987.
• Commissioner Mison challenged the CSC's reinstatement orders in the Supreme Court (G.R. Nos. 85310 and 86241).
• Newly appointed customs examiners Benedicto Amasa and William Dionisio filed a petition (G.R. No. 83737) questioning the constitutionality of R.A. No. 6656.
• Thirty-five more Customs officials ordered reinstated by the CSC filed a petition (G.R. No. 85335) to compel Commissioner Mison to comply with the CSC's reinstatement order.
• All seven petitions were consolidated by the Supreme Court.

• (Dario, Feria, Casareno, et al. - the dismissed employees) Their dismissal violated their constitutional right to security of tenure under the 1987 Constitution, as the power to dismiss without cause under Proclamation No. 3 ended upon the 1987 Constitution's ratification.
• (Dario, Feria, Casareno, et al.) Section 59 of Executive Order No. 127, allowing separation by non-reappointment, was no longer a valid basis for termination after the 1987 Constitution took effect.
• (Dario, Feria, Casareno, et al.) As presidential appointees (in the case of Deputy Commissioners Dario and Feria), they were beyond Commissioner Mison's authority to remove under E.O. No. 39.
• (Dario, Feria, Casareno, et al.) The reorganization was conducted in bad faith, evidenced by mass dismissals followed by the hiring of a larger number of replacements, and lacked any finding of corruption or valid cause for their removal as per E.O. No. 17.
• (Dario, Feria, Casareno, et al.) Republic Act No. 6656 mandates their reinstatement because their separation violated its provisions protecting security of tenure during reorganization.
• (Amasa & Dionisio - new appointees in G.R. No. 83737) Republic Act No. 6656 is unconstitutional because its provisions strengthening security of tenure and its retroactive effect conflict with the transitory provisions of the 1987 Constitution that allow for removals "not for cause" during reorganization.

• (Commissioner Mison, Secretary of Finance, Executive Secretary) The government reorganization was validly implemented under Proclamation No. 3 and Executive Order No. 127.
• (Commissioner Mison, et al.) Article XVIII, Section 16 (Transitory Provisions) of the 1987 Constitution permits reorganization and the separation of employees "not for cause" even after its ratification, continuing the process initiated under the Freedom Constitution.
• (Commissioner Mison, et al.) Under Section 59 of E.O. No. 127, incumbents were merely in a holdover capacity, and non-reappointment legally constituted separation from service.
• (Commissioner Mison, et al.) The Supreme Court's decision in Jose v. Arroyo upheld the validity of E.O. No. 127 and the reorganization process thereunder, even post-1987 Constitution.
• (Commissioner Mison, et al.) Executive Order No. 17 ceased to be effective upon the ratification of the 1987 Constitution, and dismissals under E.O. No. 39 were "for cause," distinct from the "not for cause" separations under E.O. No. 127.
• (Commissioner Mison, et al.) Republic Act No. 6656 is of doubtful constitutionality, especially its retroactive application, as the 1987 Constitution itself allows for post-ratification reorganization.
• (Commissioner Mison, et al.) The reorganization was a "progressive" one, essential for overhauling the bureaucracy, and was conducted in faithful compliance with presidential guidelines.

• Whether the mass separation of the petitioner-employees from the Bureau of Customs, as part of the government reorganization implemented by Commissioner Mison, was valid.
• Whether Section 59 of Executive Order No. 127 remained a valid legal basis for terminating employees by non-reappointment after the ratification of the 1987 Constitution.
• Whether government reorganization conducted after the effectivity of the 1987 Constitution can result in the separation of career civil service employees "not for cause" without violating their security of tenure.
• Whether the reorganization of the Bureau of Customs under Commissioner Mison was carried out in good faith.
• Whether Republic Act No. 6656, particularly its provisions on reinstatement and retroactivity, is constitutional.
• Whether the Civil Service Commission committed grave abuse of discretion in ordering the reinstatement of the separated employees.

• The Supreme Court GRANTED the petitions of the dismissed employees (G.R. Nos. 81954, 81967, 82023, and 85335) and DISMISSED the petitions of Commissioner Mison (G.R. Nos. 85310 and 86241) and Amasa/Dionisio (G.R. No. 83737), ordering the reinstatement of the employees separated by Commissioner Mison's notices of January 26, 1988.
• The Court ruled that the authority to remove government employees without cause, which existed under the Freedom Constitution (Proclamation No. 3), ended upon the effectivity of the 1987 Constitution on February 2, 1987, after which the right to security of tenure became fully operational.
• Section 59 of Executive Order No. 127, which deemed unreappointed incumbents as separated, was rendered inoperative after February 2, 1987, as employees then acquired security of tenure; the "holdover" status was merely to facilitate reorganization and lapsed with the new Constitution.
• Reorganization after the 1987 Constitution, as contemplated by Article XVIII, Section 16, is permissible but must be conducted in good faith; separations "not for cause" must be a result of bona fide reorganization (e.g., abolition of office, redundancy) and not arbitrary dismissals.
• The reorganization of the Bureau of Customs under Commissioner Mison was found to lack good faith, as evidenced by the separation of 394 personnel and the hiring of 522 replacements, indicating an intent to "pack" the Bureau rather than a genuine restructuring for economy or efficiency, and was done in defiance of a presidential directive to halt further lay-offs.
• Republic Act No. 6656 is constitutional; its provisions for reinstatement of employees separated without valid cause during reorganization and its safeguards against bad faith are consistent with the constitutional protection of security of tenure and the requirement of good faith in reorganization.
• The Civil Service Commission did not commit grave abuse of discretion in ordering the reinstatement of the illegally separated employees; its resolutions were affirmed.
• Deputy Commissioners Dario and Feria, being presidential appointees, could not have been validly terminated by Commissioner Mison, whose appointing power under E.O. No. 39 excluded presidential appointees.

• Security of Tenure — A constitutional right enshrined in Article IX-B, Section 2(3) of the 1987 Constitution, stating that no officer or employee of the civil service shall be removed or suspended except for cause provided by law. This right became fully effective for all government employees on February 2, 1987, limiting removals even during reorganization to those based on good faith and valid grounds.
• Reorganization in Good Faith — While the government possesses the power to reorganize its offices to promote efficiency and economy, such reorganization, particularly after the 1987 Constitution, must be exercised in good faith. Good faith means the reorganization is genuinely for purposes like abolition of offices, redundancy, or merger, and not a guise for arbitrary dismissals or to circumvent security of tenure. The Court found Mison's actions lacked good faith.
• Separation "Not for Cause" (Article XVIII, Section 16, 1987 Constitution) — This transitory provision acknowledges that career civil service employees may be separated from service "not for cause" as a result of reorganization pursuant to Proclamation No. 3 and the reorganization following the ratification of the 1987 Constitution. The Court interpreted this to mean that while the separation isn't for a disciplinary cause, it must still be a consequence of a bona fide reorganization conducted in good faith.
• Cessation of Revolutionary Powers — The extraordinary power of the President under the Freedom Constitution (Proclamation No. 3) to remove government employees without cause ended upon the ratification of the 1987 Constitution on February 2, 1987.
• Operativeness of Executive Orders — Section 59 of Executive Order No. 127, which provided for the separation of unreappointed incumbents, became inoperative upon the effectivity of the 1987 Constitution, as the security of tenure guarantee then took precedence.
• Obiter Dictum — A remark made or opinion expressed by a judge in a decision upon a cause "by the way," that is, incidentally or collaterally, and not directly upon the question before the court. The Court characterized a statement in Jose v. Arroyo regarding continued separation "without cause" post-1987 Constitution as such, and clarified it did not negate the good faith requirement.
• Certiorari (Rule 65) — The proper remedy to assail resolutions of the Civil Service Commission before the Supreme Court is a special civil action for certiorari under Rule 65, limited to issues of lack or excess of jurisdiction or grave abuse of discretion.
• Retroactivity of Statutes (R.A. 6656) — Republic Act No. 6656, which protects civil servants' security of tenure during reorganization, was declared constitutional, including its provision for retroactive application (Section 13), as it aligns with constitutional principles of good faith and security of tenure.

• "Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. As a general rule, a reorganization is carried out in 'good faith' if it is for the purpose of economy or to make bureaucracy more efficient."
• "The Court finds that after February 2, 1987 no perceptible restructuring of the Customs hierarchy — except for the change of personnel — has occurred, which would have justified (all things being equal) the contested dismissals."
• "The records indeed show that Commissioner Mison separated about 394 Customs personnel but replaced them with 522 as of August 18, 1988. This betrays a clear intent to 'pack' the Bureau of Customs."
• "From February 2, 1987, the State does not lose the right to reorganize the Government resulting in the separation of career civil service employees [CONST. (1987), Supra] provided, that such a reorganization is made in good faith."
• "While [Executive Order No. 127] is valid, still and all the means with which it, was implemented is not."

• Jose v. Arroyo (G.R. No. 78435, August 11, 1987) — Cited by respondents to support the continuation of reorganization under E.O. 127 after the 1987 Constitution. The Court clarified that its pronouncements on separation "without cause" were obiter dictum and did not dispense with the good faith requirement.
• Palma-Fernandez v. De la Paz (No. 78496, August 15, 1988, 160 SCRA 751) — Supported the principle that security of tenure attached after February 2, 1987, rendering the "holdover" capacity under E.O. 127 ineffective as a basis for automatic vacancy or summary dismissal.
• De Leon v. Esguerra (No. 78059, August 31, 1987, 153 SCRA 602) — Established February 2, 1987, as the effectivity date of the 1987 Constitution, marking the end of the period for removals without cause under the Freedom Constitution.
• Aratuc v. Commission on Elections (Nos. L-49705-09, February 8, 1979, 88 SCRA 251) — Referenced to affirm that judgments of Constitutional Commissions like the CSC are reviewable by the Supreme Court via certiorari under Rule 65, focusing on grave abuse of discretion.
• Ginson v. Municipality of Murcia (No. L-46585, February 8, 1988, 157 SCRA 1) — Illustrative of the principle that reorganizations resulting in abolition of office must be done in good faith.
• Cruz v. Primicias Jr. (No. L-28573, June 13, 1968, 23 SCRA 998) — Cited for the rule that abolition of an office must be bona fide and not for political or personal reasons designed to circumvent security of tenure.
• Sarmiento III v. Mison (No. L-79974, December 17, 1987, 153 SCRA 549) — Invoked to justify disregarding procedural objections like failure to exhaust administrative remedies due to overriding public interest.

• 1987 Constitution, Article XVIII, Section 16 (Transitory Provisions) — Central to the case, this provision allows for separation "not for cause" of career civil service employees due to reorganization pursuant to Proclamation No. 3 and reorganization following the Constitution's ratification. The Court interpreted this to mandate good faith for any reorganization after February 2, 1987.
• 1987 Constitution, Article IX-B, Section 2(3) (The Civil Service Commission) — This section guarantees security of tenure: "No officer or employee of the civil service shall be removed or suspended except for cause provided by law." Its full effectivity from February 2, 1987, was a key factor in the ruling.
• Proclamation No. 3 (Freedom Constitution), Article II, Section 1(a) and Article III — Provided the initial legal basis for the government reorganization, including the power to separate employees within a one-year timeframe.
• Executive Order No. 17 (May 28, 1986) — Prescribed rules and grounds for separation/replacement of personnel during the reorganization under the Freedom Constitution, requiring justifiable reasons. The Court noted Mison's failure to adhere to its spirit.
• Executive Order No. 127 (January 30, 1987) — Specifically reorganized the Ministry of Finance, including the Bureau of Customs. Its Section 59, concerning holdover capacity and separation by non-reappointment, was held to be inoperative after the 1987 Constitution's ratification.
• Executive Order No. 39 (August 8, 1986) — Granted the Commissioner of Customs power to appoint Bureau personnel, except presidential appointees. This was relevant to the status of Deputy Commissioners Dario and Feria.
• Republic Act No. 6656 ("An Act to Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization") — Its constitutionality was upheld. Key sections included Section 2 (defining valid cause for removal during reorganization and indicators of bad faith), Section 9 (mandating reinstatement for illegal separation), and Section 13 (providing for retroactive effect).
• Presidential Decree No. 807, Section 39 — Pertains to appeals in administrative disciplinary cases, referenced in discussions about the procedural aspects of appealing CSC decisions.
• Rules of Court, Rule 65 — The procedural basis for bringing petitions for certiorari to the Supreme Court to review actions of quasi-judicial bodies like the CSC for grave abuse of discretion.

• Justice Isagani A. Cruz — Emphasized that Article XVIII, Section 16 of the 1987 Constitution primarily confers benefits on separated employees and is not an open-ended authorization for government reorganization post-ratification without legislative action. He argued that any reorganization after the Freedom Constitution must be authorized by law and adhere strictly to the principle of good faith, as the "absoluteness" of the revolutionary period's reorganization powers had ceased. He warned against the danger of a "progressive" reorganization with no time limit, as it threatens civil service stability.

• Justice Ameurfina A. Melencio-Herrera — Argued that Article XVIII, Section 16 of the 1987 Constitution explicitly allows for the continuation of reorganization initiated under Proclamation No. 3, including separations "not for cause," even after the Constitution's ratification. She contended that Commissioner Mison acted in good faith, following then-existing presidential directives and legal interpretations. She viewed Republic Act No. 6656, particularly its retroactive application requiring "for cause" separation, as unconstitutional for conflicting with Section 16. She believed the majority imposed "traditional" reorganization criteria (requiring specific cause like in disciplinary cases) onto a "progressive" reorganization mandated by unique historical circumstances.