G.R. No. 93355 April 7, 1992
LUIS B. DOMINGO, petitioner, vs. DEVELOPMENT BANK OF THE PHILIPPINES and CIVIL SERVICE COMMISSION, respondents.

FACTS

Petitioner Luis B. Domingo was employed by the Development Bank of the Philippines (DBP) as Senior Training and Career Development Officer on permanent status from February 1979 to December 1986. Executive Order No. 81 (The Revised DBP Charter) was passed on December 3, 1986, authorizing the reorganization of DBP, including a reduction in force and the adoption of a new staffing pattern. Sections 33 and 34 of EO No. 81 provided that qualified personnel may be appointed to the new staffing pattern, and those not appointed are deemed separated, with no preferential rights for appointment or retention. Pursuant to this, DBP issued Board Resolution No. 304-87, allowing the issuance of temporary appointments to all DBP personnel as an interim measure to implement the reorganization. Petitioner was issued a temporary appointment on January 2, 1987, for one year, renewed up to November 30, 1988. DBP undertook an evaluation using a CSC-approved New Performance Appraisal System. Petitioner received a “below average” performance rating from the Final Review Committee, and his appointment was allowed to lapse. Petitioner filed a complaint with the Civil Service Commission (CSC) for illegal dismissal. The CSC initially ruled in his favor on November 27, 1989, directing his reappointment, finding the issuance of temporary appointments to permanent employees contrary to civil service rules. Upon DBP’s motion for reconsideration, submitting records showing petitioner’s below-average rating, the CSC issued a resolution on April 10, 1990, setting aside its earlier decision and affirming petitioner’s separation.

ISSUE

The primary issues raised were: (1) whether the reorganization violated petitioner’s security of tenure; (2) whether petitioner was denied procedural due process in the evaluation; (3) whether average or below-average efficiency ratings are valid grounds for termination; (4) whether Section 5 of the rules implementing Republic Act No. 6656 is repugnant to the constitutional mandate on removal only for cause; and (5) whether Section 16, Article XVIII of the Constitution was violated.

RULING

The Supreme Court affirmed the CSC resolution, finding no grave abuse of discretion. On security of tenure, the Court held that reorganization is a valid ground for separation if done in good faith for economy or efficiency, as supported by the Constitution, EO No. 81, and Republic Act No. 6656 . The DBP reorganization was undertaken in good faith pursuant to its new charter. On the issuance of temporary appointments, the Court ruled that while generally irregular for permanent employees, the unique context of a valid reorganization authorized by law, where the temporary status was an interim measure for evaluation, made it permissible. Petitioner’s below-average rating was a valid ground for non-retention in the new staffing pattern. On due process, the Court found petitioner was not denied procedural due process as he had the opportunity to appeal his rating to the Final Review Committee but failed to do so, despite being advised by his supervisor. His inaction precluded a claim of denial of due process. The Court also held that petitioner is entitled to separation and retirement benefits as provided by law.