G.R. No. 170463 ; February 2, 2011
THE BOARD OF TRUSTEES OF THE GOVERNMENT SERVICE INSURANCE SYSTEM and WINSTON F. GARCIA, in his capacity as GSIS President and General Manager, Petitioners, vs. ALBERT M. VELASCO and MARIO I. MOLINA, Respondents.

FACTS

On May 23, 2002, petitioners administratively charged respondents, GSIS employees, with grave misconduct and placed them under preventive suspension for 90 days for their alleged participation in a demonstration denouncing alleged corruption and calling for the ouster of GSIS President Winston F. Garcia. Respondent Mario I. Molina requested a step increment, which was denied on April 22, 2003, citing GSIS Board Resolution No. 372, which provided that the step increment of an employee on preventive suspension shall be withheld until a decision on the case is rendered. Respondents’ request to avail of Christmas raffle benefits under GSIS Board Resolution No. 306 was also denied due to their pending administrative case. On August 27, 2003, the GSIS Board issued Resolution No. 197, adopting a policy disqualifying employees with pending administrative cases from promotion, step increment, performance-based bonus, and other benefits during the pendency of the case. On November 14, 2003, respondents filed a petition for prohibition with a prayer for a writ of preliminary injunction before the Regional Trial Court (RTC) of Manila, Branch 19, seeking to restrain the implementation of Resolutions Nos. 197 and 372. They argued that the denial of benefits violated their right to be presumed innocent, constituted punishment without hearing, and that the resolutions were ineffective for non-registration with the UP Law Center as required by the Revised Administrative Code. The RTC granted the petition, declared the resolutions null and void, and made the preliminary injunction permanent.

ISSUE

1. Whether the RTC had jurisdiction over the petition for prohibition or if jurisdiction lay with the Civil Service Commission (CSC).
2. Whether the petition for prohibition was filed in the correct territorial jurisdiction.
3. Whether the internal rules and regulations (GSIS Board Resolutions) required registration with the Office of the National Administrative Register (ONAR) for effectivity.
4. Whether the regulation disqualifying employees with pending administrative cases from step increments and Christmas raffle benefits is unconstitutional.
5. Whether the nullification of the GSIS Board Resolutions was beyond the scope of an action for prohibition.

RULING

The Supreme Court partly granted the petition.
1. On Jurisdiction: The RTC had jurisdiction over the petition for prohibition. The case was a special civil action for prohibition under Rule 65 of the Rules of Court, seeking to restrain the enforcement of the GSIS Board Resolutions. It did not involve a simple claim for employee benefits over which the CSC might have jurisdiction, but a challenge to the validity of the resolutions themselves. Therefore, the RTC properly took cognizance of the case.
2. On Territorial Jurisdiction: The petition was filed in the proper territorial jurisdiction. Under Section 4, Rule 65 of the Rules of Court, a petition for prohibition against a board or officer may be filed in the RTC exercising jurisdiction over the territorial area where the respondent resides or holds office. The GSIS principal office is in Pasay City, within the National Capital Judicial Region. The RTC of Manila is a court within that same judicial region. Furthermore, one of the respondents, Albert M. Velasco, was a resident of Manila. Therefore, the RTC of Manila had territorial jurisdiction.
3. On Registration with the ONAR: The internal rules and regulations (GSIS Board Resolutions) did not require registration with the ONAR for their effectivity. The Court clarified that the registration requirement under Book VII, Chapter 2 of the Revised Administrative Code applies only to “administrative rules of general applicability,” which are regulations that apply to all persons or entities under the agency’s jurisdiction. The assailed GSIS resolutions were internal rules governing employee benefits and conduct specific to GSIS personnel. They were not rules of general applicability that needed to be published or registered. The trial court erred in declaring the resolutions ineffective for non-registration.
4. On Constitutionality of the Disqualification: The regulation disqualifying employees with pending administrative cases from step increments and Christmas raffle benefits is not unconstitutional. The Court held that:
* Step Increment: A step increment is a reward for continuous, satisfactory service. Preventive suspension creates a gap in service. Under CSC rules, an employee is not entitled to a step increment if there is a gap in service, such as during a period of preventive suspension. Therefore, withholding the step increment during the pendency of an administrative case is justified and does not violate due process or the presumption of innocence, as it is based on the lack of continuous satisfactory service, not a presumption of guilt.
* Christmas Raffle Benefits: The Christmas raffle benefit is a form of financial assistance or bonus granted as an act of generosity by the employer, not a demandable right arising from law or contract. The GSIS has the discretion to set conditions for its grant. Disqualifying employees with pending administrative cases from such discretionary benefits is a valid exercise of management prerogative and does not constitute punishment without hearing.
5. On the Scope of Prohibition: The nullification of the GSIS Board Resolutions was within the scope of the action for prohibition. A writ of prohibition may be granted not only to restrain further proceedings but also to nullify acts done without or in excess of jurisdiction or with grave abuse of discretion. Since the trial court found the resolutions invalid, it could declare them null and void. However, the trial court’s basis for nullification (non-registration) was incorrect.
DISPOSITIVE:
The Supreme Court REVERSED and SET ASIDE the September 24, 2004 Decision and October 7, 2005 Order of the Regional Trial Court of Manila, Branch 19. GSIS Board Resolution No. 197 (Series of 2003) and the pertinent provision of Resolution No. 372 (Series of 2000) were declared VALID and EFFECTIVE. The permanent writ of injunction issued by the trial court was LIFTED and SET ASIDE.