G.R. No. L-6259; August 31, 1954
VALENTIN C. GARCIA, petitioner, vs. LAND SETTLEMENT AND DEVELOPMENT CORPORATION, respondent.

FACTS

Petitioner Valentin C. Garcia was an Acting Officer-in-Charge and Accountant of the Koronadal Valley Project of the National Land Settlement Administration (NLSA). He was suspended by the NLSA Manager pending an administrative investigation for illegal disposition of cattle, and a criminal complaint for malversation was also filed against him. Both the criminal complaint and the administrative investigation recommended his exoneration. The NLSA Manager reinstated Garcia to duty. Garcia then submitted a voucher for his salary during the suspension period to the NLSA Board of Directors for approval. The Board referred the voucher to the NLSA Auditor, who opined that Garcia’s reinstatement required prior Board approval under Commonwealth Act No. 441 . Before the Board could act, Executive Order No. 355 abolished the NLSA and created the Land Settlement and Development Corporation (LASEDECO), which took over NLSA’s assets and liabilities. Garcia submitted his claim to LASEDECO. Subsequently, the LASEDECO Board, ignoring the NLSA investigating committee’s exoneration, passed Resolution No. 256 declaring Garcia dismissed effective his suspension date, but considering his salary after recall as earned. Meanwhile, on April 17, 1950, the NLSA Board had passed Resolution No. 570 laying off several employees effective May 16, 1950, due to lack of funds, granting them benefits. Garcia and other laid-off personnel filed a case in the Court of Industrial Relations (CIR) to secure gratuity and back pay. The CIR awarded benefits to the other petitioners but denied Garcia’s claim, ruling that because the NLSA Board did not approve his reinstatement, he lost his status as an NLSA employee and thus was not entitled to the benefits under Resolution No. 570. Garcia appealed this decision.

ISSUE

Whether the Court of Industrial Relations erred in denying Valentin C. Garcia’s claim for gratuity and back pay on the ground that he lost his status as an NLSA employee due to the lack of Board approval for his reinstatement.

RULING

Yes, the Court of Industrial Relations erred. The Supreme Court reversed the CIR decision regarding Garcia. The Court held that Garcia’s suspension did not terminate his employment with NLSA; he remained an employee subject to administrative investigation. His recall to duty by the Manager was a reinstatement that did not change his pre-existing status as an employee; it was neither a new appointment nor a dismissal requiring Board approval under Commonwealth Act No. 441 , which only refers to original appointments. The subsequent Executive Orders invoked by LASEDECO (Nos. 355 and 399), which require Board approval for disciplinary actions, could not retroactively apply to Garcia’s May 1950 layoff and, in any case, do not govern reinstatements. Therefore, Garcia remained an NLSA employee until laid off in May 1950 under Resolution No. 570 and was entitled to the same benefits as other laid-off employees. The LASEDECO Board’s Resolution No. 256, passed a year after Garcia’s layoff, declaring him dismissed, was ineffective as Garcia was never a LASEDECO employee. The records were remanded to the CIR to ascertain Garcia’s entitled benefits. Costs were awarded against LASEDECO.