G.R. No. L-29189 April 11, 1972
VICTOR D. MENDOZA, petitioner-appellee, vs. SOCIAL SECURITY COMMISSION and FLORENCIO N. ONGKINGCO, respondents-appellants.

FACTS

Victor D. Mendoza, Manager of the Commercial and Industrial Loans Department of the Social Security System (SSS), was formally investigated for alleged irregularities. After hearings, a Committee of Commissioners found him guilty on several charges and initially recommended his separation from service. The Social Security Commission en banc, however, issued Resolution No. 198, dated February 9, 1967, imposing instead the penalty of demotion in rank and salary from Manager to Division Chief. Mendoza filed a petition for prohibition with preliminary injunction in the Court of First Instance of Rizal, contending the Commission lacked jurisdiction to discipline him, as he was a civil service employee covered by the Civil Service Act of 1959 ( Republic Act No. 2260 ).
The Social Security Commission argued it had disciplinary power under Section 5 of the Social Security Act ( R.A. No. 1161 ). It also asserted that Mendoza failed to exhaust administrative remedies and that the Court of First Instance had no jurisdiction to review the Commission’s resolutions. The trial court ruled in favor of Mendoza, declaring Resolution No. 198 void ab initio and making the injunction permanent. The Commission appealed directly to the Supreme Court.

ISSUE

Whether the Social Security Commission had jurisdiction to impose the disciplinary penalty of demotion upon petitioner Victor D. Mendoza.

RULING

The Supreme Court affirmed the trial court’s decision, ruling that the Social Security Commission lacked jurisdiction. The legal logic is anchored on the applicable civil service laws at the time of the disciplinary action. Section 33 of the Civil Service Act of 1959 ( R.A. No. 2260 ) vested the exclusive power to impose disciplinary sanctions on civil service employees in the Commissioner of Civil Service. Department or agency heads only had recommendatory powers.
Petitioner Mendoza was unequivocally a civil service employee. Section 3 of the Social Security Act, as amended, explicitly required that SSS personnel “shall be selected only from civil service eligibles… and shall be subject to civil service rules and regulations.” The Commission’s invocation of certain memorandum circulars regarding employees under collective bargaining agreements was inapplicable, as Mendoza held an executive, non-union position.
The Court further noted that Republic Act No. 6040 , enacted on August 4, 1969, later granted department heads original disciplinary jurisdiction, but this law could not be applied retroactively to a case already litigated and submitted for decision prior to its effectivity. The principle of exhaustion of administrative remedies was also deemed inapplicable, as the core issue involved a pure question of law regarding the Commission’s lack of jurisdiction. Consequently, the penalty imposed by the Social Security Commission was null and void.