Good and bad faith

The essence of the President’s executive power is the control of all the executive departments, bureaus and offices (Sections 1 and 17, Article VII Constitution). Pursuant to this power, the President has the authority to reorganize any of said offices. What is involved in the term “reorganization”? This is answered in this case of some employees of the Department of Health (DOH) belonging to a union (MEWAP).

The case arose when the then President issued Executive Order (EO) 102 on May 24, 1999 providing for structural changes and redirecting the functions and operations of the DOH. This EO was pursuant to the Administrative Code of 1987 (EO 292) and sections 78 and 80 of Republic Act 8522 also known as the General Appropriations Act of 1998. To implement this EO, the Department of Budget and Management (DBM) issued the Notice of Organization Staffing and Compensation Action (NOSCA) on July 8, 2000 while the Presidential Committee on Executive Government (PCEG) created by another EO (165) and composed of the Executive Secretary as chair and the DBM Secretary as vice chair, issued Memorandum Circular 62 directing the rationalization and streamlining of the DOH.

Hence on August 29, 2000, the secretary of Health issued Department Memorandum 157 series of 2000 pertaining to the transfer or movement of personnel, properties records and documents as contained in a Placement List.

As a consequence, the union of affected employees in the Malarial Control Service of the DOH (MEWAP) sought to nullify EO 102 for being issued with grave abuse of discretion amounting to lack or excess of jurisdiction on the ground among others that the President has no authority to effect the reorganization of a department under the executive branch particularly that of redirecting the functions and operations of the DOH. Was the union correct?

No. The President has authority to carry out a reorganization of the DOH under the Constitution (Sections 1 and 17 Art. VII). This authority is an adjunct of his power of control. Reorganization involves reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions. It alters the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them.

While the power to abolish an office is generally lodged with the legislature under the legal precept that the power to create includes the power to destroy, the authority of the President to reorganize the bureaus, agencies or offices in the executive department, which may include such abolition or to inactivate the functions of a particular office, is permissible under our present laws.

In carrying out the reorganization of any branch or agency of the executive department however, the President must exercise good faith. Reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. Removal of civil service employees made as a result of reorganization may be considered in bad faith where: (1) there is significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (2) an office is abolished and another performing substantially the same functions is created; (3) incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; (4) there is a classification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; and (5) the removal violates the order of separation (RA 6656).

In this particular case, the reorganization taken by the DOH was not implemented in bad faith. In fact it was only alleged that the employees were directly affected by the reorganization ordered under EO 102 (Malaria Employees etc et. al. vs. Executive Secretary et. al. G.R. 160093, July 31, 2007).

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