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ATTY. MA. ROSARIO MANALANG-DEMIGILLO v. TRADE

FACTS:

The case involves the restructuring of the Trade and Investment Development Corporation of the Philippines (TIDCORP), a government-owned corporation. In 2002, TIDCORP underwent a reorganization, resulting in the abolition of the Legal and Corporate Services Department (LCSD) and the demotion of Rosario Manalang-Demigillo (Demigillo), who was the Senior Vice President in charge of the LCSD. Following the reorganization, Demigillo filed an appeal with the Civil Service Commission (CSC) challenging the validity of the reorganization and her demotion. TIDCORP objected to her appeal, claiming it was improper. The Board of Directors eventually dismissed Demigillo's challenge, leading her to appeal to the Supreme Court.

Separately, Demigillo also raised issues regarding her performance ratings and subsequent removal from the rolls of TIDCORP. She appealed these actions to the CSC, which ruled that the reorganization was not validly implemented and that Demigillo's dismissal did not follow proper procedures.

The Supreme Court consolidated the appeals from both parties. The Court of Appeals (CA) issued two separate decisions on the appeals. In one decision, the CA affirmed the validity of the reorganization and denied Demigillo's reinstatement to her former position. In the other decision, the CA ruled that Demigillo had been demoted and unjustly dropped from the rolls, as TIDCORP failed to prove that due process was followed.

Both Demigillo and TIDCORP separately appealed the CA decisions to the Supreme Court, with Demigillo seeking reinstatement to a comparable position, and TIDCORP seeking the reversal of the ruling on demotion and dropping from the rolls.

ISSUES:

  1. Whether the Board of Directors of TIDCORP was an alter ego of the President with the authority to reorganize TIDCORP.

  2. Whether the reorganization of TIDCORP in 2002 was valid.

  3. Whether the doctrine of qualified political agency applies to the members of the Board of Directors of TIDCORP.

  4. Whether the 2002 reorganization of TIDCORP is valid.

  5. Whether the reappointment of Demigillo to the position of Senior Vice President in the Regional Centers and Management Support Services (RCMSS) is a diminution of her rank and status.

  6. Whether Demigillo's reassignment to the RCMSS violated her security of tenure.

  7. Whether or not the petitioner was given due process before being dropped from the rolls.

RULING:

  1. The Court held that the Board of Directors of TIDCORP was not an alter ego of the President with the authority to reorganize TIDCORP. The doctrine of qualified political agency does not apply in this case.

  2. The Court granted the petition for review of TIDCORP and ruled that the reorganization of TIDCORP in 2002 was valid.

  3. The doctrine of qualified political agency does not apply to the members of the Board of Directors of TIDCORP. The doctrine recognizes that the heads of executive departments are the alter egos of the President and their actions are deemed the acts of the President, unless disapproved. However, the members of the Board of Directors of TIDCORP were not appointed directly by the President but rather sat on the board ex officio by virtue of their position or function. They were not acting as alter egos of the President, but as responsible members of the Board constituted pursuant to the law.

  4. The 2002 reorganization of TIDCORP is valid because it was done in accordance with the exclusive and final authority granted under Republic Act No. 8494, which amended Presidential Decree No. 1080. The law gives the Board of Directors the power to provide for an organizational structure, appoint personnel, and reassign personnel of TIDCORP. The reorganization was not arbitrary and whimsical, as it was formulated following consultations and coordination with the affected offices within TIDCORP.

  5. The reappointment of Demigillo to the position of Senior Vice President in the RCMSS is not a diminution of her rank and status. Her reassignment was a result of a valid reorganization, and she maintained the same rank of Senior Vice President with an increase in pay grade.

  6. Demigillo's reassignment to the RCMSS did not violate her security of tenure. The prerogative to change work assignments or transfer employees lies with the employer, whether public or private. The reassignment was a consequence of a valid reorganization and did not diminish her rank, status, or salary.

  7. The Court held that the petitioner was given due process before being dropped from the rolls. The Court found that all the requisites for due process were duly established in this case. The first requisite was met as the petitioner received a poor performance rating for the annual rating period. The second requisite, which pertains to the timing of the notice, was also satisfied, considering that the petitioner was given almost four months to improve her performance before being dropped from the rolls. Although the letter informing the petitioner of her poor performance rating did not expressly contain a warning of possible separation from the service, the Court found that she was given sufficient warning through the letter, the Performance Evaluation Report Form, and the denial of her appeal. Lastly, the petitioner was provided with adequate information on the bases for her poor performance rating, enabling her to appeal properly.

PRINCIPLES:

  • The doctrine of qualified political agency, also known as the alter ego doctrine, applies when the acts of an executive agency or department head are presumed to be the acts of the President, unless disapproved or reprobated by the President.

  • In order for a reorganization to be valid, it must bear the earmarks of economy and efficiency.

  • The doctrine of qualified political agency recognizes that the heads of executive departments are the alter egos of the President and their actions are deemed the acts of the President, unless disapproved.

  • The doctrine of qualified political agency does not apply to members of the Board of Directors unless they are appointed directly by the President.

  • The President cannot personally perform all executive functions, so executive organizations are adjuncts of the Chief Executive and perform executive functions through the executive departments.

  • The delegation of power is not to be lightly inferred.

  • The Civil Service Commission has expertise and authority in matters relating to the career service and its rulings should be respected unless there is a clear showing of grave abuse of discretion.

  • Reorganization of government agencies must be done within legal bounds and in response to the changing needs of the agency to promote efficiency and effectiveness.

  • Reassignment resulting from a valid reorganization does not necessarily constitute a diminution in rank, status, or salary.

  • The prerogative to change work assignments or transfer employees lies with the employer, whether public or private, as long as it does not violate the employee's security of tenure.

  • The written notice of poor performance rating should be given to the employee not later than the 4th month of the rating period to provide sufficient time for improvement and uphold due process.

  • The purpose of the written notice is to give the employee an opportunity to enhance their performance and avoid separation from the service.

  • The notice must contain sufficient warning that failure to improve within the remaining period of the semester may result in separation from the service.

  • The notice should provide the employee with adequate information on the bases for the poor performance rating, enabling them to appeal properly.