Fernando vs. Sto. Tomas

A reassignment of a civil service employee from one organizational unit to another within the same agency, made in good faith and in the interest of the service, does not require the employee’s prior consent, does not violate security of tenure or due process, and is not a demotion absent the issuance of a new appointment or a proven reduction in rank, status, or salary. A disciplinary order imposing a suspension of more than thirty days must be appealed to the Civil Service Commission before resort to certiorari; failure to exhaust this administrative remedy is a jurisdictional defect warranting dismissal.

The Labor Secretary reassigned several Mediator Arbiters in the National Capital Region in response to a need to expedite the disposition of inter-union and intra-union disputes. While the other reassigned med-arbiters complied without objection, petitioners Fernando, Dizon, Falconitin, and Adap protested the movement as a constructive dismissal and refused to report to their new assignments, leading to administrative charges and eventual suspension.

• The Reassignment Order: Petitioners Napoleon V. Fernando, Andres Dizon, Tomas F. Falconitin, and Paterno Adap were appointed as Mediator Arbiters in the National Capital Region of the Department of Labor and Employment (DOLE-NCR). They functioned as hearing officers. On May 26, 1993, Secretary Confesor issued Memorandum Order No. 4 reassigning Fernando, Dizon, and Falconitin to the Appeals and Review Unit, Office of the Secretary, and Adap to the Bureau of Labor Relations. The order stated it was “in the interest of the service and in order to expedite the resolution of inter-union and intra-union cases.” Three other med-arbiters (Fadrigon, Tuyay, Bactin) who were similarly reassigned promptly complied.
• Petitioners’ Resistance: Petitioners, by letter of June 7, 1993, sought reconsideration and recall of the order, arguing the reassignment made without their consent was equivalent to removal without just cause. Secretary Confesor, on June 23, 1993, issued a memorandum clarifying that the order was a mere reassignment, not a transfer, and emphasized that employee consent was not required. She directed petitioners to report to their new assignments and turn over all case records. Petitioners still refused and, on June 28, 1993, filed a second letter seeking reconsideration, claiming the order violated their rights to security of tenure and due process of law.
• Administrative Proceedings: On July 7, 1993, the Secretary denied the request and directed them to show cause why they should not be charged with gross insubordination. Petitioners appealed the reassignment to the Merit Systems Protection Board (MSPB) / CSC on July 12, 1993 and filed a supplemental appeal on July 19, 1993. They simultaneously submitted their explanation to the show-cause order. On July 26, 1993, formal charges for gross insubordination were filed and a ninety-day preventive suspension pending investigation was imposed.
• CSC Resolution and Final Penalty: The CSC, on October 12, 1993, released Resolution No. 93-4480 finding the reassignment valid, declaring it was not a demotion but a legitimate personnel action, and dismissing petitioners’ appeal. On October 25, 1993, Secretary Confesor found petitioners guilty of two counts of gross insubordination and imposed a one-year suspension.
• Allegations of Malice: Petitioners alleged that the reassignment was attended by malice and bad faith. They asserted personal friendship between Secretary Confesor and CSC Chairman Sto. Tomas, resulting in partiality, and claimed the CSC prejudged the appeal by issuing legal opinions while the matter was pending. Petitioner Fernando specifically claimed the reassignment was retaliation for an independent ruling he issued in a case (APSOTEU vs. EEI) where he ordered cancellation of a union’s certificate of registration. No substantial evidence was offered to support these contentions.

• Lack of CSC Jurisdiction: Petitioners maintained that under Section 13, Book V of the Administrative Code of 1987, jurisdiction over appeals from personnel actions such as the reassignment order was vested exclusively in the Merit Systems Protection Board, not the Civil Service Commission, whose direct review was thus invalid.
• Malice, Bad Faith, and Partiality: Petitioners argued that the reassignment was tainted by improper motive and that the CSC acted with partiality. They claimed the Labor Secretary exerted undue influence due to a personal friendship with the CSC Chairman, and that the CSC’s Director for Legal Affairs issued advisory opinions on the very issues while the appeal was pending, effectively prejudging the case. Fernando specifically contended the action was retaliation for his independent handling of the APSOTEU case.
• Constructive Dismissal and Demotion: Petitioners contended the reassignment, made without their consent, was tantamount to constructive dismissal. They further argued it constituted a demotion in rank and status because their functions were reduced from hearing officers who render judgment to drafters of decisions on appeal, in violation of their rights to security of tenure and due process.

• Valid Reassignment without Consent: Respondents, through the Solicitor General, countered that the movement was a reassignment, not a transfer or demotion, and did not require the employees’ consent. It was a valid exercise of the Secretary’s administrative authority to deploy personnel in the interest of the service.
• No Demotion or Diminution: Respondents argued that petitioners retained their positions and salary as Mediator Arbiters, no new appointments were issued, and there was no reduction in rank, status, or salary. A change in specific tasks or functions within the same position does not amount to a demotion.
• Presumption of Regularity and Lack of Evidence: Respondents invoked the presumption of regularity in the performance of official duties, underscoring that petitioners offered no clear and convincing evidence of bad faith, malice, or partiality. Mere conjectures and unsubstantiated allegations are insufficient to overcome this presumption.

• Jurisdiction: Whether the Civil Service Commission had lawful jurisdiction to directly review the Labor Secretary’s reassignment order after the abolition of the Merit Systems Protection Board.
• Validity of Reassignment: Whether the reassignment of petitioners without their consent constituted an illegal demotion, constructive dismissal, or violation of their security of tenure and due process rights.
• Exhaustion of Administrative Remedies: Whether the preventive suspension order and the subsequent one-year punitive suspension order could be the subject of a petition for certiorari without prior appeal to the Civil Service Commission.

• Jurisdiction: The CSC properly exercised jurisdiction. CSC Resolution No. 93-2387, which took effect on July 1, 1993, abolished the MSPB to streamline operations; thereafter, appeals in personnel actions and administrative cases were filed directly with the CSC. Petitioners filed their appeal on July 12, 1993, after the abolition took effect, so it was correctly entertained by the CSC.
• Validity of Reassignment: The reassignment was valid. The uncontested fact that no new appointment was issued was fatal to the claim of demotion, because under Rule VII, Sections 10 and 11 of the Omnibus Rules Implementing Book V of Executive Order No. 292, a demotion requires issuance of an appointment with diminution in duties, responsibilities, status, or rank, while a reassignment does not. Petitioners also failed to prove a reduction in salary. They were appointed as Mediator Arbiters in the NCR, not to a fixed station or unit, and thus could claim no vested right to a particular assignment. A reassignment made in good faith and in the interest of the service is valid even without the employee’s consent, per Bentain vs. Court of Appeals. Any procedural defect in the issuance of the original order was cured when petitioners filed and the Secretary resolved two motions for reconsideration, affording them full opportunity to be heard.
• Exhaustion of Administrative Remedies: The suspension orders were not properly before the Court. The ninety-day preventive suspension lapsed without appeal, and the investigation that followed had already concluded with the punitive order, rendering the issue moot. The one-year suspension, being a penalty exceeding thirty days, was explicitly appealable to the Civil Service Commission under Section 37 of Presidential Decree No. 807 and Section 47 of Executive Order No. 292. Petitioners’ direct resort to certiorari without first appealing to the CSC constituted a failure to exhaust administrative remedies, which is a fatal procedural defect absent any recognized exception. No such exception was shown.

• Distinction Between Reassignment and Demotion — A reassignment is the movement of an employee from one organizational unit to another in the same department or agency that does not involve a reduction in rank, status, or salary and does not require the issuance of an appointment. A demotion is a movement from one position to another involving the issuance of an appointment with diminution in duties, responsibilities, status, or rank, which may or may not involve a reduction in salary. The absence of a new appointment is the critical distinguishing feature.
• Reassignment without Consent — A reassignment made in good faith and in the interest of the government service is permissible and valid even without the employee’s prior consent. An employee not appointed to a specific station or unit cannot claim a vested right to a particular assignment or to security of tenure thereat.
• Presumption of Regularity and Proof of Bad Faith — Public officials enjoy a presumption of regularity in the performance of official duties. Bad faith, malice, or improper motive can never be presumed; it must be proved by clear and convincing evidence. Mere speculations and conjectures are insufficient.
• Exhaustion of Administrative Remedies — Before a party may seek judicial intervention, all available administrative remedies must be fully exhausted. An order imposing a penalty of suspension for more than thirty days must be appealed to the Civil Service Commission; failure to exhaust this internal appeal renders a petition for certiorari premature and dismissible under Rule 65.

• “A demotion, under Section 11, Rule VII of the Omnibus Rules Implementing Book V of Executive Order No. 292, is defined as the movement from one position to another involving the issuance of an appointment with diminution in duties, responsibilities, status or rank which may or may not involve reduction in salary. On the other hand, Section 10 of the same rule defines a reassignment as the movement of an employee from one organizational unit to another in the same department or agency which does not involve a reduction in rank, status, or salary and does not require the issuance of an appointment. A demotion, therefore, involves the issuance of an appointment.” — The definitive statutory distinction applied to reject petitioners’ claim of demotion.
• “In the case of Bentain vs. Court of Appeals, we categorically held that a reassignment in good faith and in the interest of the government service is permissible and valid even without the employee's prior consent.” — Controlling precedent for the validity of consent-less reassignment.
• “Bad faith can never be presumed; it must be proved by clear and convincing evidence.” — Standard for overcoming the presumption of regularity in official acts.

• Bentain vs. Court of Appeals, G.R. No. 89452, June 5, 1992, 209 SCRA 644 — Followed as controlling authority for the rule that an employee may be reassigned in good faith and in the interest of public service without the employee’s consent.

• Executive Order No. 292 (Administrative Code of 1987), Book V, Section 13 — Initially provided for MSPB jurisdiction over appeals; rendered inapplicable by the CSC’s abolition of the MSPB under Section 17.
• Executive Order No. 292, Book V, Section 17 — Empowered the CSC as an independent constitutional body to effect changes in its organization as the need arises, the legal basis for Resolution No. 93-2387 abolishing the MSPB.
• Omnibus Rules Implementing Book V of E.O. No. 292, Rule VII, Sections 10 and 11 — Defined reassignment and demotion respectively; the Court relied on the requirement of an appointment for demotion to conclude the movement was a valid reassignment.
• Presidential Decree No. 807, Section 37; Executive Order No. 292, Section 47 — Both provisions mandate that decisions in administrative disciplinary cases imposing a penalty of suspension for more than thirty days are appealable to the CSC. Applied to dismiss the direct challenge to the one-year suspension for non-exhaustion.

Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Davide, Jr., Romero, Melo, Quiason, Puno, Vitug, Kapunan, and Mendoza, JJ., concur. Bellosillo, J., on leave.

N/A (the decision was unanimous among the justices who participated).