G.R. No. 95450. March 19, 1993.
HOME INSURANCE AND GUARANTY CORPORATION (HIGC), petitioner, vs. CIVIL SERVICE COMMISSION and DANIEL R. CRUZ, respondents.

FACTS

Private respondent Daniel R. Cruz was the Vice President, Finance and Administrative Group of the Home Financing Corporation, now known as the Home Insurance and Guaranty Corporation (HIGC), from June 1, 1986 to July 8, 1988. His initial appointment was approved as temporary by the Civil Service Commission (CSC), subject to completion of an Executive Leadership and Management Program. Upon reconsideration, the CSC changed his appointment to permanent but still subject to completion of the program within three years, otherwise he would be reverted to temporary status. In 1987, Cruz was found responsible for simple neglect of duty for inefficient supervision leading to the loss of six Land Bank checks. In July 1988, HIGC underwent a reorganization, reducing Vice-President positions from six to three. Cruz was not reappointed as he was found to lack civil service eligibility. Cruz appealed to the HIGC Reorganization Appeals Board, invoking his permanent appointment. He sought but was not granted Early Separation Incentive Package (ESIP) benefits. The HIGC Board dismissed his appeal. However, the CSC issued Resolution No. 89-543, finding Cruz to be a holder of a permanent career position and directing HIGC to reappoint him to a position next lower in rank to Vice President without reduction in salary, or approve his ESIP application. The CSC, in Resolution No. 89-973, modified this, directing HIGC to reappoint Cruz to a position next lower to Vice President, such as Manager of the Comptrollership Department or Treasury, and to pay him back salaries from his termination based on his old Vice-President salary rate. HIGC filed this petition for certiorari, arguing the CSC committed grave abuse of discretion.

ISSUE

Whether the Civil Service Commission committed grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that respondent Daniel R. Cruz, a non-civil service eligible, was a permanent employee entitled to reappointment and back salaries.

RULING

Yes, the CSC committed grave abuse of discretion. The Supreme Court granted the petition and reversed the questioned CSC resolutions.
1. The position of Vice-President at HIGC belongs to the second level of the career service under Presidential Decree No. 807 (the Civil Service Decree), which includes professional, technical, or scientific positions up to Division Chief level requiring at least four years of college work. Entrance to the second level is through competitive examination, requiring civil service eligibility.
2. A permanent appointment is issued only to a person who meets all requirements, including the appropriate eligibility prescribed by law. It is undisputed that Cruz lacked any civil service eligibility. Therefore, his permanent appointment was a legal nullity. Not even the CSC can validate such an error.
3. Consequently, Cruz’s appointment was merely temporary and could be terminated at the pleasure of the appointing power. A non-eligible shall not be appointed whenever a civil service eligible is available and ready to accept appointment.
4. The reorganization of HIGC was carried out in good faith for the purpose of economy and efficiency, reducing the number of Vice-President positions. In a valid reorganization, no dismissal or separation actually occurs as the position itself ceases to exist.
Thus, the CSC gravely abused its discretion in insisting Cruz was eligible for reappointment to a permanent position requiring civil service eligibility. Cruz is declared ineligible for reappointment in HIGC for lack of the required civil service eligibility.