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FELIX UY v COA petitioners were ordered.

1 MSPB further
21 March 2000 | Puno, J. | Notice and explained that although the governor
Hearing when required may take measures to retrench or reduce
Petitioners: Felix Uy, Roman Cagatin, the work force, the 53 out of 106
James Enguito, and 57 others employees in the office were terminated
Respondents: COA, represented by Chair without showing that they were
Celso Gangan and Commissions Sofronio compared in terms of relative fitness,
Ursal and Raul Flores efficiency and length of service. There
was no other basis for terminating them
FACTS: except for lack of funds.
Petitioners were among the more than 60
permanent employees of the Provincial MSPB ordered the governor to reinstate
Engineering Office of Agusan del Sur who the dismissed employees which the
were dismissed from service by then Gov. governor refused to implement.
Ceferino Paredes, allegedly to scale down MSPB then directed the
the operations of said office. governor to show cause why he
should not be declared in
(July 11, 1988) A petition for contempt.
reinstatement was filed by petitioners
before the Merit Systems Protection The matter was brought before the Civil
Board (MSPB) Service Commission (CSC) which issued
They alleged that Gov. Paredes an Order (Dec. 14, 1993) directing the
was motivated by political governor to reinstate the employees with
vengeance when he dismissed the caveat that should he fail to do so,
them and hired new employees the CSC would be constrained to initiate
to replace them. contempt proceedings against him and
other responsible officials.
During the pendency of the petition, Gov.
Paredes issued Memorandum Order No. (March 21, 1994) CSC initiated indirect
3-A providing for the hiring of casual contempt proceedings against the
employees to replace the dismissed Provincial Governor who was by then,
employees, allegedly due to exigency of Democrito Plaza.

Hearings were conducted by the Civil

Service Regional Office No. X, Cagayan 1 Sec 29, EO 292. Reduction in Force. -
de Oro City, where both parties were Whenever it becomes necessary for lack of
work or funds or due to change in the scope
represented by their respective counsels
or nature of an agency's program or as a
(last hearing held on June 29, 1990).
result of reorganization, to reduce the staff of
any department or agency, those in the
(January 29, 1993) MSPB held that the same group or class of positions in one or
reduction in work force was not done in more agencies within the particular
accordance with civil service rules and department or agency wherein the reduction
regulations. The reinstatement of is to be effected, shall be reasonably
compared in terms of relative fitness,
efficiency and length of service, and those
found to be least qualified for the remaining
position shall be laid off.
Gov. Plaza complied and salaries and other monetary benefits. MR
petitioners were reinstated to filed by petitioners with COA was denied.
their former positions.
ISSUE: W/N COA, in the exercise of its
However, a few months later, the power to audit, can disallow the payment
Provincial Administrator, wrote a letter to of back wages of illegally dismissed
COA, inquiring whether or not: employees which has been decreed
a. The MSPB CSC decision directing the pursuant to a final decision of the CSC
payment of back salaries and other NO.
benefits of the reinstated 61 employees
is final and executory Later, COA held RATIO:
that it has become final and executory COA is bereft of power to disallow the
there being no appeal filed within the payment of the backwages.
reglementary period.
b. The COA is the only proper COA, in ruling that there is bad faith in
authority to determine disbursement of terminating the petitioners, relied solely
such is in order In DA v NLRC, the SC on the MSPB decision holding that the
held that pursuant to CA 327, as dismissal was illegal because it violated
amended by PD 1445, the money claim Sec 29 of EO 292 and Sec 14 of the Rules
should first be brought to the COA. on Personnel Action and Policies. MSPB
c. Former Provincial Governor never made a categorical finding that
Paredes would be personally liable for former Gov. Paredes acted in bad faith
payment of back salaries and other and should be personally liable for the
benefits Yes, illegal dismissal done in payment of backwages.
bad faith.
COAs exercise of its power in deciding
In the meantime, the Provincial Treasurer administrative cases involving
of Agusan del Sur made a partial expenditure of public funds involves the
payment to the reinstated employees quasi-judicial aspect of government
representing back salaries (Php2.3M out audit.2
of the total Php3.3M).
The fundamental requirements of
When the CSC ruled that there was illegal procedural due process cannot be
termination and subsequently ordered violated in proceedings before the
their reinstatement, the settled rule is COA. Gov. Paredes was never made a
that the government employee who was party to nor served a notice of the
illegally terminated such government proceedings before the COA. While
employee is considered as not having left admin agencies exercising quasi-
his office, so that he is entitled to all the judicial powers are not bound by
rights and privileges that accrue to him technical procedures, they are not
by virtue of the office he held. free to disregard the basic demands
of due process. Notice to a party is
Because of the CSC ruling that the
payment of back salaries became the 2 This pertains to the "examination, audit,
personal liability of former Gov. Paredes and settlement of all debts and claims of any
and not of the provincial government, the sort due from or owing to the Government or
Provincial Government of Agusan del Sur any of its subdivisions, agencies and
refused to release the remaining back instrumentalities.
an indispensable ingredient of due funds and properties. Payment of
process. It would be unfair for COA backwages can hardly be described as
to hold Gov. Paredes personally such.
liable without giving him an
opportunity to be heard and present Although estoppel will not lie against the
evidence in his defense. Public state, exceptions in the interest of justice
officials are personally liable for and fair play are admitted. Petitioners
damages arising from illegal acts sufferings started in 1988 when they
done in bad faith provided that they were illegally dismissed. Now, after more
have been sued both in their official than a decade, COA holds that petitioners
and personal capacities. should run after Gov. Paredes in his
personal capacity. Social justice
The action taken by COA in disallowing legislation, to be truly meaningful and
the further payment by the Provincial rewarding to the workers, must not be
Government of Agusan del Sur of hampered in its application by long-
backwages due the petitioners amended winded arbitration and litigation. To make
the final decision of the MSPB. The audit these workers suffer from the effect of a
authority of COA is intended to prevent judicial ruling, would be to disregard
irregular, unnecessary, excessive, what the social justice concept stands
extravagant or unconscionable for.
expenditures or uses of government