Gloria vs. Court of Appeals

A public employee exonerated of the charges leading to preventive suspension pending investigation is not entitled to back salaries because the suspension is authorized by law and thus justified, but an employee exonerated on appeal is entitled to back salaries for the period of suspension pending appeal because the immediate execution of the penalty becomes unjustified upon reversal. The Court ruled that to be entitled to back salaries, the employee must not only be found innocent of the charges, but the suspension must likewise be unjustified.

Private respondents are public school teachers who failed to report for work on various dates in September and October 1990 during the teachers' strikes. The Department of Education, Culture, and Sports (DECS) administratively charged them with grave misconduct, gross neglect of duty, gross violation of Civil Service rules, refusal to perform official duty, gross insubordination, conduct prejudicial to the best interest of the service, and absence without leave (AWOL). The disciplining authority placed them under preventive suspension and subsequently found them guilty as charged. Respondent Margallo was dismissed, while respondents Abad, Bandigas, and Somebang were suspended for six months.

• The Strikes and Absences: Private respondents, who are public school teachers, did not report for work on various dates in September and October 1990 during the teachers' strikes.
• Administrative Charges: DECS charged the respondents with grave misconduct, gross neglect of duty, gross violation of Civil Service Law and office regulations, refusal to perform official duty, gross insubordination, conduct prejudicial to the best interest of the service, and AWOL. They were placed under preventive suspension.
• DECS Ruling: The DECS investigation concluded before the lapse of the 90-day preventive suspension period. Respondents were found guilty as charged. Margallo was dismissed from service effective October 29, 1990. Abad, Bandigas, and Somebang were suspended for six months effective December 4, 1990.
• MSPB Appeal: Margallo appealed to the MSPB, which found him guilty only of conduct prejudicial to the best interest of the service and reduced his penalty to a six-month suspension. The appeals of the other three respondents were dismissed for procedural default.
• CSC Review: On further appeal, the CSC affirmed the MSPB regarding Margallo. Regarding Abad, Bandigas, and Somebang, the CSC found them guilty only of violation of reasonable office rules and regulations for failing to file applications for leave of absence. The CSC reduced their penalty to a reprimand and ordered their reinstatement.
• Court of Appeals Review: Respondents filed a petition for certiorari in the Supreme Court, which was referred to the Court of Appeals. The appellate court found all respondents guilty only of violation of reasonable office rules and regulations, imposing the penalty of reprimand. Upon motion for reconsideration, the Court of Appeals granted respondents back salaries for the period of their suspension beyond the 90-day preventive suspension.

• Petitioner maintained that the administrative investigation was concluded within the 90-day period of preventive suspension, implying that any continued suspension was due to the respondents' own appeals.
• Petitioner argued that, under the law, respondents are considered under preventive suspension during the pendency of their appeal and are therefore not entitled to the payment of their salaries during such period.

• Respondents contended that they should be exonerated of all charges against them.
• Respondents argued that they should be paid their salaries during the period of their suspension, asserting that their suspension beyond the initial period was unjustified.

• Substantive Issues:
  • Whether a public employee who is exonerated of the charges is entitled to the payment of back salaries during the period of preventive suspension pending investigation.
  • Whether a public employee who is exonerated on appeal is entitled to the payment of back salaries during the period of preventive suspension pending appeal.
  • Whether respondents, having been found guilty of violation of reasonable office rules and regulations and meted the penalty of reprimand, are entitled to back salaries.

• Substantive:
  • On the first issue, the Court ruled that an employee exonerated of the charges is not entitled to back salaries during the period of preventive suspension pending investigation. Preventive suspension pending investigation is not a penalty but a measure to enable the disciplining authority to conduct an unhampered investigation. Because the suspension is authorized by law, it cannot be considered unjustified even if the employee is later exonerated. The deletion of the provision for payment of salaries upon exoneration from the Civil Service Act of 1959 (R.A. No. 2260) in subsequent laws (P.D. No. 807 and E.O. 292) further indicates legislative intent to disallow such payment.
  • On the second issue, the Court held that an employee who is exonerated on appeal is entitled to back salaries during the period of preventive suspension pending appeal. Unlike suspension pending investigation, suspension pending appeal is actually punitive because it results from the immediate execution of the penalty of suspension or dismissal. If the employee wins the appeal, the suspension becomes unjustified because the law only authorizes preventive suspension for a maximum of 90 days. The employee is entitled to restitution, akin to the reparation of damages when an executed judgment is reversed under Rule 39, §5 of the Rules of Court.
  • On the third issue, the Court held that respondents are entitled to back salaries. Although respondents were found guilty of violation of reasonable office rules and meted the penalty of reprimand for being AWOL, they were exonerated of the grave charges that formed the basis for their preventive suspension and dismissal. To deny them back wages during their suspension would be tantamount to punishing them after their exoneration from the charges that caused their dismissal.

• Preventive Suspension Pending Investigation — A measure intended to enable the disciplining authority to investigate charges against a respondent by preventing the latter from intimidating or influencing witnesses. It is not a penalty. An employee exonerated during the investigation is not entitled to back salaries because the suspension, being authorized by law, is justified. The rule that an officer lawfully suspended is not entitled to compensation, even if the cause for suspension is later found insufficient, applies.
• Preventive Suspension Pending Appeal — Occurs when a decision imposing suspension or dismissal is immediately executory pending appeal. It is punitive in effect. If the respondent wins the appeal and is exonerated, the suspension is considered unjustified because the law only authorizes preventive suspension pending investigation for up to 90 days. Consequently, the respondent is entitled to reinstatement with full pay for the period of suspension pending appeal.
• Entitlement to Back Salaries — Payment of salaries corresponding to the period when an employee is not allowed to work may be decreed if two conditions are met: (1) the employee is found innocent of the charges which caused the suspension, and (2) the suspension is unjustified. Mere exoneration is insufficient if the suspension was lawful. Under existing jurisprudence, the award of back salaries shall not exceed the equivalent of five years' pay at the rate last received before the suspension was imposed.

• "An officer who has been lawfully suspended from his office is not entitled to compensation for the period during which he was so suspended, even though it be subsequently determined that the cause for which he was suspended was insufficient." — Citing Floyd R. Mechem's treatise to support the rule that lawful preventive suspension pending investigation does not require payment of back salaries upon exoneration.
• "It is precisely because respondent is penalized before his sentence is confirmed that he should be paid his salaries in the event he is exonerated. It would be unjust to deprive him of his pay as a result of the immediate execution of the decision against him and continue to do so even after it is shown that he is innocent of the charges for which he was suspended." — Explaining the rationale for granting back salaries during the period of preventive suspension pending appeal if the employee is exonerated.
• "To deny petitioner Mariano his back wages during his suspension would be tantamount to punishing him after his exoneration from the charges which caused his dismissal from the service." — Quoting Bangalisan v. Court of Appeals to justify awarding back salaries to respondents who, though reprimanded for AWOL, were cleared of the strike-related charges that caused their dismissal.

• Manila Public School Teachers Association v. Laguio, Jr., 200 SCRA 323 (1991) — Cited as the decision that declared the illegality of the 1990 teachers' strikes from which the present case arose.
• Bangalisan v. Court of Appeals, 276 SCRA 619 (1997) — Followed. The Court applied its ruling that back wages may be decreed if the employee is innocent of the charges causing the suspension and the suspension is unjustified. The Court clarified that Bangalisan did not actually allow compensation for the period of preventive suspension pending investigation, only for the period pending appeal.
• Jacinto v. Court of Appeals, 281 SCRA 567 (1997) — Followed. Applied the Bangalisan ruling to grant back salaries to a teacher reprimanded for AWOL but exonerated of strike participation.
• Abellera v. City of Baguio, 125 Phil. 1035 (1967) — Distinguished. The Court clarified that Abellera allowed recovery of salaries only for the time the employee was suspended pending appeal, not for the period of preventive suspension pending investigation.
• Miranda v. Commission on Audit, 200 SCRA 657 (1991) — Cited for the rule limiting the award of back salaries to a period not exceeding five years.

• Section 47(2) and (4), Book V, Title I, Subtitle A, Administrative Code of 1987 (E.O. 292) — Governs disciplinary jurisdiction and provides that an appeal shall not stop a decision from being executory; a respondent penalized with suspension or removal is considered under preventive suspension during the pendency of the appeal in the event he wins. The Court used this to distinguish suspension pending appeal as a punitive measure that warrants compensation if reversed.
• Section 51, Administrative Code of 1987 — Authorizes the disciplining authority to place a subordinate under preventive suspension pending investigation if the charge involves dishonesty, oppression, grave misconduct, or neglect of duty. The Court noted this authorization renders the suspension justified by law.
• Section 52, Administrative Code of 1987 — Provides that if the administrative case is not decided within 90 days, the respondent shall be automatically reinstated. The Court interpreted this to mean the law only authorizes preventive suspension pending investigation for 90 days; beyond that, the suspension is illegal.
• Section 35, Civil Service Act of 1959 (R.A. No. 2260) — Formerly provided that an exonerated employee shall be restored to his position with pay for the period of suspension. The Court noted the deletion of this provision in subsequent laws as indicative of legislative intent to deny payment of salaries during preventive suspension pending investigation.
• Section 42, Civil Service Decree of 1975 (P.D. No. 807) — Reproduced Section 52 of the present law but omitted the provision for payment of salaries upon exoneration found in R.A. No. 2260.
• Section 24, Ombudsman Act of 1989 (R.A. No. 6770) — Categorically provides that preventive suspension shall be "without pay." The Court used this to reinforce the legislative intent to disallow compensation during preventive suspension pending investigation.
• Rule 39, §5 of the Rules of Court — Provides for restitution or reparation of damages when an executed judgment is reversed. The Court analogized the immediate execution of an administrative penalty pending appeal to execution pending judgment, entitling an exonerated employee to restitution (back salaries).

Romero, Bellosillo, Vitug, Kapunan, Quisumbing, Purisima, and Gonzaga-Reyes, JJ.

• Panganiban, J. — Argued in a separate opinion that an employee exonerated of charges should be paid salaries even during the period of preventive suspension pending investigation. The separate opinion contended that exoneration proves there was no reason to suspend the employee, rendering the suspension unjustified and effectively a penalty. It argued that denying compensation provides a tool for the oppression of civil servants who, though innocent, may be falsely charged with grave offenses, and that the rule should align with the private sector's policy of granting full backwages upon illegal dismissal.