---

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 185215              

VIRGINIA D. BAUTISTA, Petitioner,
vs.
CIVIL SERVICE COMMISSION and DEVELOPMENT BANK OF THE PHILIPPINES, Respondents.

D E C I S I O N

DEL CASTILLO, J.:

There is demotion when an employee is appointed to a position resulting to a diminution in duties, responsibilities, status or rank which may or may not involve a reduction in salary.¹ Where an employee is appointed to a position with the same duties and responsibilities but a rank and salary higher than those enjoyed in his previous position, there is no demotion and the appointment is valid. While this principle and its corollary are plain, it is through the use of misleading premises that a semblance of demotion was attempted to be passed off in this case. Thus, we take this opportunity to again remind litigants to use only fair and honest means to plead their cause in order not to waste the precious time and resources of our courts.

This Petition for Review on Certiorari assails the October 31, 2008 Decision² of the Court of Appeals (CA) in CA-G.R. SP No. 98934 which affirmed the Resolution No. 070765³ dated April 16, 2007 of the Civil Service Commission (CSC). The CSC dismissed petitioner’s complaint based on the finding that the latter was not demoted upon her appointment as Bank Executive Officer II (BEO II) in the Development Bank of the Philippines (DBP).

Factual Antecedents

Petitioner began her career in DBP on June 1, 1978 when she was appointed as Chief of Division. On December 1, 1982, she was promoted to the position of Technical Assistant. On December 3, 1986, then President Corazon C. Aquino issued Executive Order No. 81⁴ which authorized, among others, the reorganization of DBP pursuant to Sections 32⁵ and 33⁶ thereof. As part of DBP’s reorganization, petitioner was temporarily appointed in January 1987 as Account Officer with an annual salary of ₱62,640.00 which is equivalent to the 14th step of Salary Grade (SG)-20. In November 1988, this appointment was made permanent subject to the result of the ongoing reorganization of DBP and the approval of the CSC.⁷

Republic Act No. 6758 (RA 6758), or "The Compensation and Classification Act of 1989," took effect on July 1, 1989. To implement the aforesaid law, the Department of Budget and Management (DBM) promulgated the Government Financial Institutions’ (GFIs) Index of Occupational Services which mandated GFIs, like the DBP, to adopt a uniform set of position titles in their plantilla. On October 2, 1989, the DBM issued Corporate Compensation Circular No. 10 (DBM-CCC No. 10) which authorized the GFIs to match their current set of position titles to those prescribed by the GFIs Index of Occupational Services. As a consequence, on February 15, 1991, petitioner was appointed on a permanent status as BEO II with an annual salary of ₱131,250.00 or the 8th step of SG-24 which was made to retroact to July 1, 1989 (the date of effectivity of RA 6758). Prior to her appointment thereto, petitioner occupied the position of Account Officer with SG-20 (24th step) with an annual salary of ₱102,000.00.⁸

Proceedings before the Development Bank of the Philippines

In a letter⁹ dated March 23, 1993, petitioner protested her appointment as BEO II before the Head of the Personnel Administration Department of the DBP because it allegedly amounted to a demotion. According to petitioner, prior to the reorganization of DBP, she occupied the position of Account Officer which, under the GFIs Index of Occupational Services, was assigned a salary grade of 25 while that of BEO II has a salary grade of 24. She thus opined that her appointment to the position of BEO II constituted a demotion due to the attendant diminution of benefits and emoluments arising from said appointment.

On February 8, 1994, petitioner reiterated her protest in a letter¹⁰ addressed to the Vice-Chairman of DBP.

Proceedings before the Department of Budget and Management

Petitioner’s complaint was referred to the DBM, which found the same to be lacking in merit. It held that the position of Account Officer in DBP is "not in the rank of Assistant Department Manager II. Therefore, to allocate [the] subject positions to Account Officer, SG-25 [under the GFIs Index of Occupational Services] will be highly illogical and totally out of context of the accepted organizational set-up for GOCCs¹¹/GFIs."¹²

Proceedings before the Civil Service Commission

Undaunted, petitioner appealed to the CSC through several letters dated September 26 1996,¹³ October 24, 1997,¹⁴ and February 23, 1998¹⁵ but the latter failed to act on the same. On October 8, 2001, while applying for early retirement, she again wrote a letter-complaint to the CSC. This time the CSC required DBP to comment.

In its comment,¹⁶ DBP asserted that when the bank started to reorganize in 1987, petitioner was appointed to the position of Account Officer with SG-20 on a temporary status. Pursuant to DBM-CCC No. 10 implementing RA 6758, the position of Account Officer with SG-20 was matched with BEO II with SG-24 (8th step). Contrary to petitioner’s claim, there was, thus, no demotion because her salary grade was even increased from 20 to 24.

On April 16, 2007, the CSC rendered a decision dismissing petitioner’s complaint for lack of merit. The CSC ruled that the appointment of petitioner to the position of BEO II was done pursuant to a valid reorganization. Moreover, petitioner only raised her claim to the contested position on September 26, 1996 or more than seven years from the time of her appointment. She is, thus, deemed to have slept on her rights under the equitable doctrine of laches.

Proceedings before the Court of Appeals

Petitioner thereafter appealed to the CA. On the issue of laches, the CA disagreed with the CSC. It found that petitioner timely protested her alleged demotion through several letter-complaints and appeals; first with the DBP a month after her appointment as BEO II, and, later on, through several letter-appeals with the CSC. Thus, petitioner did not sleep on her rights. If at all, the delay was attributable to the CSC’s inaction on her protests which spanned several years.

On the issue of demotion, the CA upheld the findings of the CSC that the appointment of petitioner to BEO II did not constitute a demotion because this was done in good faith and pursuant to a valid reorganization. It ruled that the DBP undertook the matching of positions in order to conform to the GFIs Index of Occupational Services based on the employee’s nature of function, hierarchy of jobs, and existing salary range. Petitioner’s duties and responsibilities as Account Officer with SG-20 and as BEO II with SG-24 are practically the same as shown by her BC-CSC Form 1 (Position Description Form). Rather than lowering her rank and salary, petitioner’s appointment as BEO II had, in fact, resulted to an increase thereof from SG-20 to SG-24, thus, negating petitioner’s claim of demotion.

Issues

Before this Court, petitioner attributes the following errors to the CA:

1. The CA erred in holding that petitioner’s appointment from Account Officer to BEO II did not result in a demotion in rank and salary, and

2. The CA erred in holding that DBP’s reorganization was valid and done in good faith.¹⁷

Petitioner’s Arguments

Petitioner argues that her appointment as BEO II with SG-24 constitutes a demotion because prior to the reorganization of DBP, she was an incumbent Account Officer with SG-25. The position of Account Officer with SG-25 was not abolished after the reorganization. Thus, there was a decrease in her rank and salary from SG-25 to SG-24. Citing Department of Trade and Industry v. Chairman and Commissioners of Civil Service Commission,¹⁸ petitioner claims that she should have been appointed to a position comparable to her former position. She decries that the assailed reorganization did not promote economy and efficiency but led to the demoralization of the employees who were not appointed to their old position.

Respondents’ Arguments

DBP counters that the appointment of petitioner to BEO II was done in good faith and pursuant to a valid reorganization. It claims that petitioner failed to prove that she held the position of Account Officer with SG-25 under the GFIs Index of Occupational Services prior to the reorganization of the bank. Rather, the evidence duly established that petitioner occupied the position of Account Officer with SG-20. The position of Account Officer with SG-20 is not the same as Account Officer with SG-25 under the GFIs Index of Occupational Services. When RA 6758 was passed by Congress, the DBM approved the GFIs Index of Occupational Services which mandated the GFIs, including DBP, to adopt the position titles therein. As a result, DBP fixed the positions of its employees to appropriate positions to conform to the GFIs Index of Occupational Services based on the nature of their functions, hierarchy of jobs, and existing salary range. Thus, the position of Account Officer with SG-20 was matched to the position of BEO II with SG-24. Petitioner’s duties and responsibilities as Account Officer and as BEO II remained essentially the same. Taken together, there can be no demotion because petitioner’s salary grade was even increased from 20 to 24.

The CSC, represented by the Solicitor General, is fully in accord with the afore-stated position of the DBP. It emphasizes that petitioner failed to prove that there was a reduction in her duties, responsibilities, status or rank as a result of her appointment to the position of BEO II.

Our Ruling

We affirm the findings of the CA and DENY the petition. There was no demotion when petitioner was appointed as BEO II.

In this jurisdiction, a reorganization is valid provided that it is done in good faith. As a general rule, the test of good faith lies in whether the purpose of the reorganization is for economy or to make the bureaucracy more efficient.¹⁹ Removal from office as a result of reorganization must, thus, pass the test of good faith.²⁰ A demotion in office, i.e., the movement from one position to another involving the issuance of an appointment with diminution in duties, responsibilities, status or rank which may or may not involve a reduction in salary,²¹ is tantamount to removal, if no cause is shown for it.²² Consequently, before a demotion may be effected pursuant to a reorganization, the observance of the rules on bona fide abolition of public office is essential.²³

There was no demotion because petitioner was appointed to a position comparable to the one she previously occupied. There was even an increase in her rank and salary.

Petitioner claims that she was illegally demoted when she was appointed from Account Officer with SG-25 to BEO II with SG-24 after the reorganization of DBP in 1989.

Petitioner’s contention is untenable and misleading.

The records show that prior to her appointment as BEO II, petitioner occupied the position of Account Officer with SG-20 and not Account Officer with SG-25. This is stated in petitioner’s own evidence consisting of her service record²⁴ as well as the admissions in her letter-complaints before the DBP and CSC. Curiously, in her arguments before the CA and this Court, petitioner modified her position by claiming that she was an Account Officer with SG-25 prior to her appointment to the position of BEO II with SG-24. We must, therefore, express our disapproval over the manner by which petitioner pleaded her cause which, to our mind, is nothing but an attempt to mislead this Court.

As correctly found by the CA, petitioner failed to prove that the position of Account Officer with SG-20 in the plantilla of DBP prior to its reorganization and the position of Account Officer with SG-25 under the GFIs Index of Occupational Services are the same. Upon the passage of RA 6758, the DBM promulgated the GFIs Index of Occupational Services which mandated the adoption of a uniform system of position titles in GFIs, including DBP. The DBM then issued DBM-CCC No. 10 which authorized DBP to match its current set of position titles to those prescribed under the GFIs Index of Occupational Services based on the nature of duties and responsibilities, qualification requirements for the position, hierarchy of jobs, and existing salary range. Consequently, petitioner’s position of Account Officer with SG-20 was matched to the position of BEO II with SG-24 because she exercised supervisory functions over certain bank personnel.

It will also be recalled that the DBM had earlier denied petitioner’s request that her position as Account Officer with SG-20 be matched to Account Officer with SG-25 under the GFIs Index of Occupational Services because the Account Officer position in DBP is not commensurate with the position of Account Officer with SG-25 under the said index.²⁵ While there was a change in title from "Account Officer" to "Bank Executive Officer," petitioner’s duties and responsibilities before and after the reorganization remained practically the same. Thus, her new appointment merely stated as reason therefor: "Change in Item Number due to Reorganization."²⁶ What is more, said appointment resulted to an increase of her salary grade from 20 to 24 translating to an increase of her annual salary from ₱102,000.00 to ₱131,250.00. Under these circumstances, there is no room for us to rule that a demotion took place because petitioner even benefited from an increase in rank and salary.1avvphi1

Petitioner did not assail the alleged reduction in the scope of her duties and responsibilities.

In a last ditch effort to save her case, petitioner posits for the first time on appeal that the supervisory function of BEO II is less than her former position. However, as correctly observed by the DBP and CSC, petitioner never assailed the reduction in the scope of her duties and responsibilities arising from her appointment as BEO II in the proceedings below. Instead, she limited her claim of demotion on the alleged decrease of her salary grade from 25 to 24 which, as stated earlier, has no legal and factual bases to stand on. Well-settled is the rule that points of law, theories, issues and arguments not adequately brought to the attention of the lower tribunal will not be ordinarily considered by a reviewing court as they cannot be raised for the first time on appeal.²⁷ Besides, even if we were to relax this rule, petitioner proffered no evidence to establish the extent of the alleged reduction of her duties and responsibilities other than her self-serving allegations. Interestingly, petitioner even admitted before the CA that she continued to exercise supervisory functions over bank personnel after she was appointed as BEO II.²⁸ She further claimed that in 1993 she was assigned to head a unit where she exercised supervisory functions over more than 20 bank personnel.²⁹ Thus, we uphold the findings of the CA that petitioner’s duties and responsibilities after the reorganization remained substantially the same.

The reorganization of the DBP was made in good faith.

Finally, petitioner’s reliance on the case of Department of Trade and Industry v. Chairman and Commissioners of Civil Service Commission³⁰ is misplaced. In said case, we affirmed the ruling of the CSC which found that the reorganization of the Department of Trade and Industry (DTI) was done in bad faith. We noted that when the position of therein respondent Espejo was abolished, there was a corresponding increase in the new staffing pattern of the DTI after the reorganization. Further, the incumbents were replaced by those less qualified in terms of educational qualification, performance and merit. Within this context, there was a clear intent to ease out the incumbents in order to favor less qualified individuals in the guise of a reorganization plan. In contrast, herein petitioner has failed to prove that DBP acted in bad faith when it appointed her as BEO II. None of the circumstances under Section 2³¹ of RA 6656³² which would be indicia of bad faith in the process of reorganization is present here. Quite the contrary, the reorganization worked in petitioner’s favor as her salary grade was increased from 20 to 24.

All in all, we agree with the findings of the CA that there was no demotion because petitioner was appointed to a position comparable to her former position. In fact, her new position entailed an increase in her salary grade from 20 to 24. There is, thus, no evidence to suggest that DBP acted in bad faith. Given that these findings are supported by substantial evidence, we adhere to the settled principle that the findings of an administrative body, when supported by substantial evidence, are accorded not only respect but also finality by this Court.³³

WHEREFORE, the petition is DENIED. The October 31, 2008 Decision of the Court of Appeals in CA-G.R. SP No. 98934, affirming Resolution No. 070765 of the Civil Service Commission which found that petitioner’s appointment as Bank Executive Officer II in the Development Bank of the Philippines did not result to her demotion, is AFFIRMED.

Costs against petitioner.

SO ORDERED.

MARIANO C. DEL CASTILLO
Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice

ANTONIO T. CARPIO Associate Justice	CONCHITA CARPIO MORALES Associate Justice
PRESBITERO J. VELASCO, JR. Associate Justice	ANTONIO EDUARDO B. NACHURA Associate Justice
TERESITA J. LEONARDO-DE CASTRO Associate Justice	ARTURO D. BRION Associate Justice
(No part) DIOSDADO M. PERALTA Associate Justice	LUCAS P. BERSAMIN Associate Justice
ROBERTO A. ABAD Associate Justice	MARTIN S. VILLARAMA, JR. Associate Justice
JOSE PORTUGAL PEREZ Associate Justice	JOSE CATRAL MENDOZA Associate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

RENATO C. CORONA
Chief Justice

Footnotes

¹ Omnibus Civil Service Rules and Regulations, Rule VII (Other Personnel Actions), Section 11.

² Rollo, pp. 18-33; penned by Associate Justice Normandie B. Pizarro and concurred in by Associate Justices Edgardo P. Cruz and Fernanda Lampas Peralta.

³ Id. at 41-46; penned by Commissioner Cesar D. Buenaflor and concurred in by Chairwoman Karina Constantino-David and Commissioner Mary Ann Z. Fernandez-Mendoza.

⁴ The 1986 Revised Charter of the Development Bank of the Philippines.

⁵ Sec. 32. Authority to Reorganize. - In view of the new scope of operations of the Bank, a reorganization of the Bank and a reduction in force are hereby authorized to achieve simplicity and economy in operations, including adopting a new staffing pattern to suit the reduced operations envisioned. The formulation of the program of reorganization shall be completed within six months after the approval of this Charter, and the full implementation of the reorganization program within thirty months thereafter.

⁶ Sec. 33. Implementing Details; Organization and Staffing of the Bank. - Upon the effectivity of this Charter, the Board of Directors of the Bank shall be constituted and its Chairman appointed. The Chairman is hereby authorized, subject to the approval of the Board of Directors as appropriate, to issue such orders, rules and regulations as may be necessary to implement the provisions of this Charter including those relative to the financial aspects, if any, and to the reorganization of the Bank as hereinabove authorized which will involve the determination and adoption of (1) the new internal structure of the Bank as reorganized down to the divisional section or lowest organizational levels, including such appropriate units as may be needed to handle caretaking activities such as the disposition of certain assets and the collection of certain accounts; (2) a new staffing pattern including appropriate salary rates, and (3) the initial operating budget.

⁷ CA rollo, pp. 159-160.

⁸ Rollo, p. 52; Annex "A" (petitioner’s Service Record).

⁹ Id. at 34-36.

¹⁰ Id. at 37-39.

¹¹ Government Owned and Controlled Corporations.

¹² Rollo, p.51.

¹³ Id. at 49-51.

¹⁴ Id. at 53-55.

¹⁵ Id. at 56-58.

¹⁶ CA rollo, p. 147.

¹⁷ Rollo, pp. 7-8.

¹⁸ G.R. No. 96739, October 13, 1993, 227 SCRA 198.

¹⁹ Dario v. Mison, 257 Phil. 84, 130 (1989).

²⁰ Id.

²¹ Supra note 1.

²² Gayatao v. Civil Service Commission, G.R. No. 93064, June 22, 1992, 210 SCRA 183, 192.

²³ Id.

²⁴ Supra note 8.

²⁵ Supra note 12.

²⁶ CA rollo, p. 161.

²⁷ Natalia v. Court of Appeals, G.R. No. 116216, June 20, 1997, 274 SCRA 527, 538-539.

²⁸ CA rollo, pp. 173-174.

²⁹ Id.

³⁰ Supra note 18.

³¹ Sec. 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exists when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party:

(a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned;

(b) Where an office is abolished and other performing substantially the same functions is created;

(c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit;

(d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same function as the original offices;

(e) Where the removal violates the order of separation provided in Section 3 hereof.

³² "An Act to Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization." Effective: June 10, 1988.

³³ Tiatco v. Civil Service Commission, G.R. No. 100294, December 21, 1992, 216 SCRA 749, 754.

The Lawphil Project - Arellano Law Foundation

---