Tolentino vs. Social Security Commission

Before Republic Act No. 6040, the exclusive power to impose disciplinary sanctions on civil service employees, including employees of the Social Security System, was vested in the Commissioner of Civil Service; department heads and agencies such as the Social Security Commission had no original jurisdiction to decide or impose penalties, and their actions could be treated only as recommendations. Republic Act No. 6040 did not apply retroactively to this case, and its provisions insulating government-owned or controlled corporations with collective bargaining agreements from Civil Service Commission coverage were void as inconsistent with Section 1(1), Article XII(B) of the 1973 Constitution.

Amado Tolentino was an employee of the Social Security System, a government-owned or controlled corporation whose personnel were required to be selected from civil service eligibles and to remain subject to civil service rules and regulations. The Social Security System and its administrator operated under the Social Security Act of 1954, while disciplinary jurisdiction over civil service employees was governed by the Civil Service Act of 1959 and the Civil Service Rules. Republic Act No. 6040, enacted on August 4, 1969, later amended the Civil Service Act by expanding the exempt service and granting department heads original disciplinary jurisdiction. The dispute proceeded along two tracks: one seeking nullification of the administrative dismissal and another seeking reinstatement through an unfair labor practice charge.

Amado Tolentino was employed by the Social Security System as an Editorial Assistant before April 14, 1961, with an annual salary of P2,400.00, and his appointment was approved by the Civil Service Commission. On April 14, 1961, he received a salary promotion to P2,580.00 per annum effective March 1, 1961. His designation was changed from Editorial Assistant to Credit Analyst on March 16, 1962, and that appointment was also approved by the Civil Service Commission. After resigning to run for a municipal position in the 1961 elections, he was reinstated to the position of Credit Analyst on June 15, 1964, and he took his oath of office on June 16, 1964. On May 11, 1965, his designation was changed from Credit Analyst to Technical Assistant effective January 1, 1965, with an increase in salary from P2,580.00 per annum to P4,200.00 per annum. He was holding the position of Technical Assistant, referred to as Executive Assistant, when the Social Security Commission later passed Resolution No. 1003.

On May 23 and 24, 1966, the SSS Administrator filed administrative charges against Tolentino for dishonesty and electioneering. Tolentino answered and denied the charges in two separate letters dated July 2, 1966. On July 6, 1966, Acting Administrator Reynaldo Gregorio informed him that his answer was unsatisfactory and that the charges would be formally investigated by a committee composed of Attys. Ernesto D. Duran as Chairman, Fabiana J. Patag, and Florencio Ongkingko pursuant to Personnel Order 52-G. The same memorandum placed Tolentino under preventive suspension effective July 1966.

The investigating committee began its proceedings on July 12, 1966 and concluded them on September 7, 1966. On September 15, 1966, the Social Security Commission issued Resolution No. 1003, affirming the Administrator’s decision finding Tolentino guilty of dishonesty as charged and imposing dismissal from the service effective July 6, 1966, the first day of his preventive suspension, with prejudice to reinstatement. Tolentino received notice of the dismissal through a letter dated September 20, 1966, which he received on September 30, 1966.

On November 10, 1966, Tolentino filed a petition for mandamus with preliminary mandatory injunction in the Court of First Instance of Rizal, contending that Resolution No. 1003 and the Administrator’s affirmed decision were null and void for lack of jurisdiction because disciplinary jurisdiction over civil service employees rested exclusively with the Civil Service Commissioner. In the separate labor matter, the SSS Employees’ Labor Union-NLU and Tolentino moved the Prosecution Division of the Court of Industrial Relations to file an unfair labor practice complaint against the Social Security System and Gilberto Teodoro, which was docketed as Case No. 5042-ULP. The Social Security System denied the unfair labor practice charges and asserted that Tolentino had been dismissed after being charged with and found guilty of dishonesty on two counts following a formal investigation.

• G.R. No. L-28870 — Nullity for Lack of Jurisdiction: Tolentino argued that Resolution No. 1003 and the Administrator’s decision it affirmed were null and void for lack of jurisdiction because the Civil Service Act of 1959 and the Civil Service Rules vested the power to decide administrative cases against civil service employees exclusively in the Civil Service Commissioner.
• G.R. No. L-39149 — Denial of Unfair Labor Practice: The Social Security System and Gilberto Teodoro denied the unfair labor practice charge, asserting that Tolentino was dismissed only after being charged with and found guilty of dishonesty on two counts, preceded by a formal investigation; they sought annulment of the Court of Industrial Relations’ adverse ruling.

• G.R. No. L-28870 — Court of First Instance Lacked Jurisdiction: Respondents Social Security Commission, Gilberto Teodoro, and Angel Penano raised the affirmative defense that the lower court lacked jurisdiction over the Social Security Commission because the Commission was of the same rank as the Court of First Instance in the exercise of its quasi-judicial powers under the Social Security Act of 1954, as amended, following Poblete Construction Co. vs. Social Security Commission.
• G.R. No. L-28870 — Exempt Service Coverage: The Social Security Commission further contended that its officers and employees were not covered by the Civil Service Law and Rules, invoking the Civil Service Commissioner’s 1964 memorandum circulars. Under those circulars, employees of government-owned or controlled corporations performing proprietary functions who had entered collective bargaining contracts through their labor unions, as well as non-union employees who accepted benefits under such contracts, fell within the exempt service and were not governed or protected by the Civil Service Act.

• Disciplinary Jurisdiction of the Social Security Commission: Whether the Social Security Commission and its Administrator had jurisdiction to investigate and decide administrative disciplinary charges against Tolentino and to impose dismissal through Resolution No. 1003.
• Effect and Validity of Republic Act No. 6040: Whether Republic Act No. 6040 could retroactively supply disciplinary jurisdiction in this case, and whether its amendments exempting government-owned or controlled corporations with collective bargaining agreements from Civil Service Commission coverage were valid under the 1973 Constitution.
• Jurisdiction of the Court of Industrial Relations: Whether the Court of Industrial Relations had jurisdiction over the unfair labor practice complaint arising from the same dismissal.

• Disciplinary Jurisdiction of the Social Security Commission: No. The Social Security Commission and its Administrator lacked original disciplinary jurisdiction because the Civil Service Act of 1959 vested that power exclusively in the Commissioner of Civil Service. Resolution No. 1003, however, was not null and void; it could be treated as the recommendation of the department head for submission to the Civil Service Commission for decision or appropriate action.
• Effect and Validity of Republic Act No. 6040: Republic Act No. 6040 did not apply retroactively to the 1966 dismissal, and its provisions insulating government-owned or controlled corporations with collective bargaining agreements from Civil Service Commission coverage were void as inconsistent with Section 1(1), Article XII(B) of the 1973 Constitution.
• Jurisdiction of the Court of Industrial Relations: No. The Court of Industrial Relations lacked jurisdiction over Case No. 5042-ULP because the disciplinary power over the Social Security System’s erring employees was vested exclusively in the Civil Service Commissioner at the relevant time; its decision and en banc resolution were set aside as null and void.

• Disciplinary Jurisdiction of the Social Security Commission: Jurisdiction over the subject matter is vested by law and is determined by the statute in force at the commencement of the action. Under Section 33 of the Civil Service Act of 1959, as it stood before Republic Act No. 6040, the sole power to impose disciplinary sanctions on civil service employees was vested exclusively in the Commissioner of Civil Service. Section 27 of the Civil Service Rules reinforced this by requiring the department head to forward the complete record with his comment and recommendation to the Commissioner for decision, making the department head’s powers purely recommendatory. Tolentino was a civil service official under Article II, Section 3 of the Civil Service Act and Section 3 of the Social Security Act, as amended by Republic Act No. 2658, because Social Security System personnel were selected only from civil service eligibles certified by the Civil Service Commissioner and remained subject to civil service rules and regulations. The 1964 Subido memorandum circulars could not place Social Security System employees in the exempt service because Section 6 of the Civil Service Act limited the exempt service to elective officers, members of the armed forces, and persons employed on a contract basis. Section 2, paragraph (j) of the Civil Service Rules defined contract-based employment narrowly, excluding employees or laborers serving under the direction and supervision of a governmental agency. The circulars therefore improperly attempted to broaden the exempt service beyond what the law allowed. Accordingly, the Social Security Commission and its Administrator had no power to decide the disciplinary case or impose dismissal. Resolution No. 1003, however, could be treated as the recommendation of the department head to the Civil Service Commission.

• Effect and Validity of Republic Act No. 6040: Republic Act No. 6040, enacted on August 4, 1969, amended Section 33 of the Civil Service Act to grant heads of departments, agencies, and instrumentalities original jurisdiction to investigate and decide disciplinary matters, subject to appeal or review by the Commission, and expanded the exempt service. It could not govern the present case because the administrative action had already been litigated, decided, appealed, and submitted for decision before the enactment of Republic Act No. 6040. Moreover, Section 47 of that Act expressly provided that rights and privileges vested or acquired under the prior Civil Service Law, rules, and regulations should remain in force and effect. The Court further held that insofar as Republic Act No. 6040 insulated government-owned or controlled corporations with collective bargaining agreements from the embrace of the Civil Service Commission, it was inconsistent with Section 1(1), Article XII(B) of the 1973 Constitution, which placed every government-owned or controlled corporation within the Civil Service. That portion of the statute was therefore void.

• Jurisdiction of the Court of Industrial Relations: From the time Tolentino was charged with and convicted of dishonesty in 1966 until the filing of the unfair labor suit on May 7, 1968, the power to impose disciplinary sanctions on erring employees of the Social Security Commission was vested exclusively in the Commissioner of Civil Service, without prejudice to appeal to the Civil Service Board of Appeals under Sections 18 and 36 of Republic Act No. 2260. The Court of Industrial Relations, created under Commonwealth Act No. 103, a statute of earlier vintage, had no jurisdiction over Case No. 5042-ULP. Its decision dated March 5, 1974, and its subsequent en banc resolution dated August 13, 1974, were therefore issued without jurisdiction and were set aside as null and void. No scrutiny of the Court of Industrial Relations’ factual findings was necessary.

• Jurisdiction over subject matter — Jurisdiction over the subject matter is conferred only by law. It is not acquired by the consent or acquiescence of the parties, nor by the unilateral assumption thereof by any tribunal. Jurisdiction is determined by the statute in force at the time of the commencement of the action, and once acquired, it continues until the case is finally terminated. Applied here, the 1966 disciplinary proceedings and the 1968 unfair labor suit were governed by Republic Act No. 2260, not Republic Act No. 6040.

• Exclusive disciplinary jurisdiction under the Civil Service Act of 1959 — Before the amendments introduced by Republic Act No. 6040, Section 33 of Republic Act No. 2260 vested the sole power to impose disciplinary sanctions on civil service employees exclusively in the Commissioner of Civil Service. Heads of departments, agencies, and instrumentalities had recommendatory powers only; they could not decide, impose penalties, or implement the decision. Applied here, Resolution No. 1003 could only stand as a recommendation from the Social Security Commission to the Civil Service Commission.

• Coverage of civil service and limits of the exempt service — The Civil Service embraces every branch, agency, subdivision, and instrumentality of the Government, including government-owned or controlled corporations. Under Republic Act No. 2260, the exempt service was limited to elective officers, members of the commissioned and enlisted service of the Armed Forces, and persons employed on a contract basis. Administrative circulars could not broaden that enumeration to exclude employees of government-owned or controlled corporations merely because they had collective bargaining agreements or accepted benefits under them.

• Non-retroactivity and constitutional supremacy — Amendments to the Civil Service Act in Republic Act No. 6040 could not be applied retroactively where the case had been litigated and submitted for decision before enactment, especially because Section 47 preserved rights and privileges previously acquired. Moreover, a statute inconsistent with the Constitution is void. The 1973 Constitution’s Civil Service article nullified the attempt in Republic Act No. 6040 to place government-owned or controlled corporations with collective bargaining agreements outside the Civil Service Commission’s coverage.

• Jurisdiction of the Court of Industrial Relations over disciplinary dismissal cases — Where disciplinary jurisdiction over an employee is vested exclusively in the Civil Service Commissioner, the Court of Industrial Relations cannot exercise jurisdiction over an unfair labor practice complaint arising from the same dismissal. The Court of Industrial Relations, created under Commonwealth Act No. 103, could not acquire jurisdiction over a matter falling within the exclusive authority of the Civil Service Commission under Republic Act No. 2260.

• "The settled rule is that jurisdiction of a court or tribunal is determined by the statute in force at the time of the commencement of the action." — This states the controlling jurisdictional rule for both petitions: because the 1966 dismissal and 1968 labor complaint predated Republic Act No. 6040, the Civil Service Act of 1959 governed.

• "It is clear that under section 33 of the Civil Service Act (Republic Act 2260) heretofore quoted, before the amendments introduced therein by Republic Act No. 6040, the sole power to impose disciplinary sanctions on civil service employees was vested exclusively in the Commissioner of Civil Service." — This is the ratio decidendi on the Social Security Commission’s lack of original disciplinary jurisdiction.

• "Clearly, insofar as Republic Act No. 6040 insulates government-owned or controlled-corporations with collective bargaining agreements with their employees from the embrace of the Civil Service Commission, said statute is inconsistent with the fundamental law of the land. As such, it is void (Article 7, New Civil Code)." — This is the constitutional holding invalidating the part of Republic Act No. 6040 that conflicted with the 1973 Constitution’s Civil Service article.

• "At the time Amado Tolentino was charged with and convicted of dishonesty in 1966 up to the time the Prosecution Division of the Court of Industrial Relations filed with said court the unfair labor suit docketed as Case No. 5042-ULP on May 7, 1968, the power to impose disciplinary sanctions on erring employees of the Social Security Commission was vested exclusively in the Commissioner of Civil Service, without prejudice to appeal to the Civil Service Board of Appeals (sections 18 and 36, R.A. 2260)." — This explains why the Court of Industrial Relations’ unfair labor practice decision was void for lack of jurisdiction.

• Mendoza vs. Social Security Commission, G.R. No. L-29189, April 11, 1972, 44 SCRA 373 — Controlling precedent and “in point.” It held that before Republic Act No. 6040, the sole power to discipline civil service employees was vested exclusively in the Commissioner of Civil Service; the Social Security Commission had no authority to impose disciplinary penalties.

• Poblete Construction Co., et al. vs. Social Security Commission, et al., G.R. No. L-17605, January 22, 1964 — Followed by the Court of First Instance in dismissing the mandamus petition on the ground that the Social Security Commission ranks with the Court of First Instance in its quasi-judicial powers.

• Bacalso vs. Ramolete, G.R. No. L-22488, October 26, 1967 — Cited for the rule that jurisdiction over the subject matter is not acquired by consent or acquiescence of the parties, nor by unilateral assumption of the tribunal.

• De Jesus vs. Garcia, G.R. No. L-26816, February 28, 1967 — Cited for the same rule on jurisdiction over the subject matter.

• Aquisap vs. Basilio, G.R. No. L-21293, December 29, 1967 — Cited for the rule that jurisdiction is determined by the statute in force at the time of the commencement of the action.

• Section 33, Civil Service Act of 1959 (Republic Act No. 2260) — Before its amendment by Republic Act No. 6040, vested exclusive disciplinary jurisdiction in the Commissioner of Civil Service; used to hold that the Social Security Commission lacked original jurisdiction over Tolentino’s dismissal.

• Section 27, Civil Service Rules — Required the department head to forward the complete record of an administrative case to the Commissioner of Civil Service for decision, making the department head’s power purely recommendatory.

• Article II, Section 3, Civil Service Act of 1959 — Defined the scope of the Civil Service to include government-owned or controlled corporations; established that Tolentino was a civil service official.

• Section 3(c), Social Security Act of 1954 (Republic Act No. 1161), as amended by Republic Act No. 2658 — Required Social Security System personnel to be selected from civil service eligibles certified by the Commissioner of Civil Service and to remain subject to civil service rules and regulations.

• Section 6, Civil Service Act of 1959, and Section 2, paragraph (j), Civil Service Rules — Limited the exempt service to elective officers, armed forces personnel, and persons employed on a contract basis; used to invalidate the Subido circulars attempting to exclude CBA-covered corporate employees.

• Republic Act No. 6040, Section 33 amendments and Section 47 — Could not be applied retroactively to the 1966 dismissal; Section 47 preserved rights and privileges vested under the prior Civil Service Law. The amendments expanding the exempt service were partly declared void.

• Section 1(1), Article XII(B), 1973 Constitution — Provided that the Civil Service embraces every branch, agency, subdivision, and instrumentality of the Government, including government-owned or controlled corporations; rendered void the Republic Act No. 6040 provision insulating CBA-covered corporations from Civil Service Commission coverage.

• Sections 18 and 36, Republic Act No. 2260 — Provided for appeal to the Civil Service Board of Appeals and supported the exclusive jurisdiction of the Civil Service Commissioner.

• Commonwealth Act No. 103 — Created the Court of Industrial Relations; as a statute of earlier vintage, it could not confer jurisdiction over the unfair labor case involving a disciplinary matter exclusively vested in the Civil Service Commissioner.

Concepcion, Jr., Escolin, Cuevas, and Alampay, JJ., concurred. Aquino (Chairman) and Abad Santos, JJ., were on leave.