Department of Transportation and Communications vs. Rolando S. Cruz

A government employee who is dismissed from service in good faith and later reinstated is not entitled to back salaries; absent proof of bad faith or grave abuse of discretion, compensation is paid only for service actually or constructively rendered, and the ruling in Mamaril vs. Civil Service Commission is binding under stare decisis where the facts are substantially the same.

The DOTC is the government agency that employed Rolando S. Cruz as one of the incumbents of the Department Legislative Liaison Specialist (DLLS) positions. The DLLS positions were initially coterminous, but the Civil Service Commission later declared at least two of them permanent or career, raising the question whether the former coterminous incumbents were automatically appointed to the permanent positions and entitled to back salaries upon reinstatement. The same factual and legal controversy had been litigated in Mamaril vs. Civil Service Commission, G.R. No. 164929, April 10, 2006, involving Erneliza Z. Mamaril, another DLLS incumbent, where the Court denied back salaries.

Rolando S. Cruz was one of the incumbents of the Department Legislative Liaison Specialist (DLLS) positions in the Department of Transportation and Communications (DOTC). On December 19, 2000, then DOTC Secretary Vicente C. Rivera, Jr. requested the Civil Service Commission (CSC) to attest that at least two of the four DLLS positions in the DOTC be made permanent. The CSC granted the request by Resolution No. 01-0233 dated January 23, 2001. Upon verbal query by DOTC Director Carina S. Valera, then CSC Chairman Corazon Alma de Leon advised the DOTC that incumbents of the formerly coterminous DLLS positions had no vested right to occupy the already permanent DLLS positions and were not automatically appointed thereto; the permanent positions could only be filled by following existing CSC rules and regulations and DOTC policies and guidelines.

By letter of January 29, 2001, DOTC Assistant Secretary for Administrative and Legal Affairs Wilfredo Trinidad sought written confirmation of the Chairman's advice. Pending receipt of a reply, Trinidad sent separate letters dated February 22, 2001 to Erneliza Z. Mamaril and Rolando Cruz, advising each that the change of the nature of the DLLS position from coterminous to permanent pursuant to CSC Resolution No. 01-0233 did not automatically make the holder of the now permanent DLLS position; that the interpretation was confirmed by Director Valera with then CSC Chairman de Leon; and that because the appointment was coterminous, their services automatically terminated with the non-existence of the coterminous position and the advent of the new appointing authority. The letters also stated that when the new DLLS permanent positions were authorized to be filled up, they could apply therefor, and in the meantime could seek appointment to any other vacant position that suited their qualifications, subject to the usual selection process under DOTC guidelines and CSC rules and regulations.

Acting on Trinidad's query, the CSC, by Resolution No. 01-0502 dated February 22, 2001, received at Trinidad's office on March 9, 2001 and by the DOTC Personnel Division on March 12, 2001, ruled that the two occupants of the two DLLS positions were ipso facto appointed to such positions under permanent status if they met the minimum requirements of the said positions. In light of the contrary advice previously given by former CSC Chairman de Leon, the DOTC, by letter of April 27, 2001, sought clarification on CSC Resolution No. 01-0502. By Resolution No. 01-1409 issued on August 20, 2001, the CSC modified Resolution No. 01-0502 by declaring that the previous incumbents of the two DLLS positions were no longer existing employees as of the date the positions were declared by the Commission as career in CSC Resolution No. 01-0233 dated January 23, 2001, and that DOTC Secretary Pantaleon D. Alvarez may now appoint who will occupy these newly created DLLS positions.

Mamaril and Cruz filed a Motion for Reconsideration of CSC Resolution No. 01-1409. By Resolution of November 26, 2002, the CSC issued Resolution No. 02-1504 reconsidering and setting aside CSC Resolution No. 01-1409. Mamaril and Cruz were thus reinstated to their former positions on November 26, 2002. The DOTC filed a Motion for Reconsideration of CSC Resolution No. 02-1504, which was denied by Resolution No. 03-1019 dated September 26, 2003. In the same Resolution, the CSC declared that Mamaril and Cruz were not entitled to back salaries from the time they were separated from the service up to their date of reinstatement. Mamaril filed a Motion for Reconsideration of Resolution No. 03-1019 only insofar as the CSC held that she was not entitled to backwages; by Resolution No. 04-0279 issued on March 18, 2004, the CSC denied Mamaril's Motion for Reconsideration.

Cruz and Mamaril filed separate petitions for review with the Court of Appeals assailing Resolution No. 03-1019 only insofar as the CSC held that they were not entitled to backwages, docketed as CA-G.R. SP No. 80353 and CA-G.R. SP No. 83314, respectively. In a Resolution dated May 14, 2004, the CA dismissed CA-G.R. SP No. 83314 for lack of verification and certification against forum shopping. When Mamaril's Motion for Reconsideration was denied in the CA Resolution dated August 6, 2004, she filed a Petition for Review on Certiorari with the Supreme Court, docketed as G.R. No. 164929. On April 10, 2006, the Court en banc rendered a Decision denying Mamaril's petition, finding it procedurally and substantially without merit. The Decision became final and executory, and entry of judgment was made of record on May 25, 2006.

In CA-G.R. SP No. 80353, the CA rendered a Decision setting aside CSC Resolution No. 03-1019 dated September 26, 2003 and ordering the DOTC to pay Cruz his back salaries from the date of his dismissal up to his actual reinstatement. While the CA viewed the dismissal as having been attended with good faith, it nonetheless held that Cruz was entitled to backwages since prevailing jurisprudence supports the award of backwages to illegally dismissed civil servants, finding inapplicable the DOTC-cited case of Octot vs. Ybañez. The DOTC filed a Motion for Reconsideration, which the CA denied in its Resolution dated June 4, 2007. Hence, the DOTC filed the present Petition for Review on Certiorari under Rule 45.

• Good Faith Precludes Back Salaries: The DOTC contended that a government employee who was dismissed from service in good faith is not entitled to back salaries upon his reinstatement, relying on the Court's application of Octot vs. Ybañez in Mamaril vs. Civil Service Commission.
• Stare Decisis: The DOTC argued that the assailed CA Decision should be set aside under the doctrine of stare decisis because the facts in Mamaril and the present case are exactly the same.
• No Compensation for No Service: The DOTC maintained that a public official is not entitled to any compensation if he has not rendered any services.
• Absence of Bad Faith or Grave Abuse of Discretion: The DOTC argued that the CA erred in failing to apply Octot vs. Ybañez, which holds that in the absence of proof that a government agency acted in bad faith and with grave abuse of discretion, a dismissed government employee is not entitled to backwages and cannot claim damages.

• Bad Faith Termination: Cruz contended that his dismissal was effected in bad faith since he was terminated without awaiting the reply of the CSC to the query of the DOTC regarding his employment status.
• Octot Inapplicable / Prevailing Jurisprudence: Cruz argued that Octot vs. Ybañez is inapplicable because prevailing jurisprudence supports the award of backwages for a maximum period of five years to an illegally dismissed employee.

• Entitlement to Back Salaries Upon Reinstatement: Whether a government employee who was dismissed from service in good faith and later reinstated is entitled to back salaries.
• Applicability of Octot vs. Ybañez: Whether Octot vs. Ybañez applies to bar back salaries absent proof of bad faith and grave abuse of discretion in the dismissal.
• Stare Decisis and Mamaril: Whether Mamaril vs. Civil Service Commission is binding under the doctrine of stare decisis where the facts are substantially the same.
• Compensation for Services Not Rendered: Whether a public official is entitled to compensation for a period during which he rendered no service.

• Entitlement to Back Salaries Upon Reinstatement: No. A government employee dismissed in good faith and later reinstated is not entitled to back salaries; absent bad faith or grave abuse of discretion, back salaries cannot be awarded.
• Applicability of Octot vs. Ybañez: Yes. Octot controls; good faith or bad faith and grave abuse of discretion determine the award of back salaries upon reinstatement, and no bad faith was shown.
• Stare Decisis and Mamaril: Yes. Mamaril is binding under stare decisis because the facts are substantially the same; the Court must apply its prior ruling.
• Compensation for Services Not Rendered: No. A public official is not entitled to compensation if he has not rendered service; compensation is paid only for service actually or constructively rendered.

• Entitlement to Back Salaries Upon Reinstatement: The pivotal question of whether a government employee dismissed from service in good faith is entitled to back salaries upon reinstatement had already been resolved in the negative in Mamaril. The general proposition is that a public official is not entitled to any compensation if he has not rendered any service; as he works, so shall he earn. Compensation is paid only for service actually or constructively rendered. In Mamaril, services were actually terminated on September 1, 2001 after CSC Resolution No. 01-1409 dated August 20, 2001 declared the previous incumbents no longer existing employees, and reinstatement occurred on November 26, 2002 after CSC Resolution No. 02-1504 set aside Resolution No. 01-1409. Octot instructs that good faith or bad faith and grave abuse of discretion in the dismissal or termination of a government employee come into play in the determination of the award of back salaries upon reinstatement. The DOTC's termination of Cruz's services, in accordance with the August 20, 2001 CSC Resolution, was not attended with bad faith and/or grave abuse of discretion. Thus, no backwages can be awarded in Cruz's favor.

• Applicability of Octot vs. Ybañez: In Octot, the petitioner, a security guard in the Regional Health Office No. VII, Cebu City who had been convicted of libel by a trial court, was summarily dismissed pursuant to Presidential Decree No. 6 and LOI Nos. 14 and 14-A issued by then President Marcos directing heads of departments and agencies to weed out undesirable government officials and employees. He was eventually acquitted, and his request for reinstatement was granted but not his claim for back salaries from the date of his dismissal. The Court, through then Chief Justice Teehankee, held that in the absence of proof that the respondent Regional Director acted in bad faith and with grave abuse of discretion, the petitioner was not entitled to backwages and consequently could not claim damages; the record manifested that the respondents officials were not motivated by ill will or personal malice but only by their desire to comply with the mandates of Presidential Decree No. 6. The denial of the award of back salaries, absent a showing of bad faith and/or grave abuse of discretion in the termination of the services of a government employee who was reinstated, was reiterated in Clemente vs. Commission on Audit, Acting Director of Prisons vs. Villaluz, and Echeche vs. Court of Appeals. The cases invoked by Mamaril—Tañala vs. Legaspi, De Guzman vs. Civil Service Commission, Gabriel vs. Domingo, and Del Castillo vs. Civil Service Commission—are not on all fours because in those cases the suspensions or dismissals were held unjustified; the employees were either exonerated from the charges, victims of proscribed abolition of office, or issued appointments to different positions that soon resulted in dismissal. Mamaril cannot be considered to have been illegally dismissed, and no parity of circumstances obtains.

• Stare Decisis and Mamaril: Mamaril is binding and applicable to the present case following the doctrine of stare decisis et non quieta movere, which means to adhere to precedents and not to unsettle things which are established. Under the doctrine, when the Supreme Court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases where the facts are substantially the same, regardless of whether the parties and property are the same. The doctrine of stare decisis is based upon the legal principle or rule involved and not upon the judgment which results therefrom; in this sense it differs from res judicata, which is based upon the judgment. It is one of policy grounded on the necessity for securing certainty and stability of judicial decisions; absent powerful countervailing considerations, like cases ought to be decided alike. The facts of the present case and those of Mamaril are the same. In light of Mamaril, which the Court follows as a precedent, the DOTC did not effect Cruz's termination with bad faith and, consequently, no backwages can be awarded in his favor. Once a case has been decided one way, any other case involving exactly the same point at issue should be decided in the same manner.

• Compensation for Services Not Rendered: The general proposition is that a public official is not entitled to any compensation if he has not rendered any service. As he works, so shall he earn. Compensation is paid only for service actually or constructively rendered. Because Cruz's services were terminated and he did not render service during the period for which back salaries were sought, and because the termination was in good faith, the claim for back salaries fails.

• Back salaries upon reinstatement of a government employee; good faith — A government employee dismissed in good faith and later reinstated is not entitled to back salaries. Absent proof of bad faith and/or grave abuse of discretion in the dismissal or termination, backwages cannot be awarded, because compensation is paid only for service actually or constructively rendered. The Court applied this doctrine to Cruz: the DOTC terminated his services pursuant to CSC Resolution No. 01-1409, and no bad faith or grave abuse of discretion attended that termination, so no back salaries could be awarded.

• Stare decisis et non quieta movere — When the Supreme Court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases where the facts are substantially the same, regardless of whether the parties and property are the same. The doctrine is based upon the legal principle or rule involved and not upon the judgment which results therefrom, and it differs from res judicata, which is based upon the judgment. It is grounded on the necessity for securing certainty and stability of judicial decisions. The Court applied it because Mamaril involved the same facts and the same point at issue, requiring the same result denying back salaries.

• Public office compensation; no work, no pay — A public official is not entitled to any compensation if he has not rendered any service; as he works, so shall he earn. Compensation is paid only for service actually or constructively rendered. The Court applied this principle to deny Cruz's claim for back salaries for the period he did not render service.

• Octot doctrine on backwages — Good faith or bad faith and grave abuse of discretion in the dismissal or termination of a government employee come into play in the determination of the award of back salaries upon reinstatement. In the absence of proof that the government agency acted in bad faith and with grave abuse of discretion, a dismissed government employee who is reinstated is not entitled to backwages and cannot claim damages. The Court applied this doctrine to Cruz because the DOTC acted in good faith.

• "The general proposition is that a public official is not entitled to any compensation if he has not rendered any service. As he works, so shall he earn. Compensation is paid only for service actually or constructively rendered." — This passage states the no-work-no-pay principle that the Court used to deny back salaries to a reinstated government employee whose termination was in good faith.

• "In the absence of proof that respondent Regional Director acted in bad faith and with grave abuse of discretion, petitioner is not entitled to backwages and consequently cannot claim for damages." — This is the controlling formulation from Octot vs. Ybañez, quoted by the Court, which makes bad faith or grave abuse of discretion the determinant for awarding back salaries upon reinstatement.

• "Clearly, in the light of Mamaril, which the Court follows as a precedent, the DOTC did not effect Cruz's termination with bad faith and, consequently, no backwages can be awarded in his favor." — This is the ratio decidendi of the present case, applying Mamaril under stare decisis and denying Cruz's claim for backwages.

• "Under the doctrine, when the Supreme Court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle, and apply it to all future cases, where facts are substantially the same; regardless of whether the parties and property are the same." — This passage defines the doctrine of stare decisis as applied by the Court to make Mamaril binding on Cruz's case.

• Mamaril vs. Civil Service Commission, G.R. No. 164929, April 10, 2006, 487 SCRA 65 — Controlling precedent. The Court found that the facts of the present case and Mamaril are the same, and followed Mamaril under stare decisis to hold that the DOTC did not terminate Cruz in bad faith and that no backwages could be awarded.

• Octot vs. Ybañez, No. L-48643, January 18, 1982, 111 SCRA 79 — Controlling precedent. It established that good faith or bad faith and grave abuse of discretion in the dismissal or termination of a government employee determine the award of back salaries upon reinstatement; absent proof of bad faith and grave abuse of discretion, backwages and damages cannot be awarded.

• Confederation of Sugar Producers Association, Inc. vs. Department of Agrarian Reform (DAR), G.R. No. 169514, March 30, 2007, 519 SCRA 582 — Cited for the definition and policy of stare decisis, including the principle that the doctrine is based on the legal principle or rule involved and not on the judgment.

• Ty vs. Banco Filipino Savings & Mortgage Bank, G.R. No. 144705, November 15, 2005, 475 SCRA 65 — Cited for the stare decisis principle that like cases ought to be decided alike and that a prior ruling on the same point at issue should be applied to subsequent cases.

• Rule 45, Rules of Court — The petition was filed as a Petition for Review on Certiorari under Rule 45, which was the procedural vehicle by which the DOTC elevated the CA Decision and Resolution to the Supreme Court.

• Section 13, Article VIII, 1987 Constitution — Cited in the Chief Justice's certification that the conclusions in the Decision were reached in consultation before the case was assigned to the writer of the opinion.

Reynato S. Puno (Chief Justice), Leonardo A. Quisumbing, Consuelo Ynares-Santiago, Antonio T. Carpio, Renato C. Corona, Conchita Carpio Morales, Adolfo S. Azcuna, Dante O. Tinga, Minita V. Chico-Nazario, Presbitero J. Velasco, Jr., Antonio Eduardo B. Nachura, Ruben T. Reyes (No Part), Teresita J. Leonardo-De Castro, and Arturo D. Brion.