BUKLOD NG KAWANING EIIB v.

ZAMORA

Buklod ng Kawaning EIIB, et al., Petitioners, vs. Hon. Executive Secretary Ronaldo B. Zamora, et al., Respondents.

G.R. No. 142801-802

July 10, 2001

En Banc

Sandoval-Gutierrez, J.:

This is a petition for certiorari, prohibition and mandamus filed by the petitioners seeking the nullification of Executive Order No. 191 and Executive Order No. 223 on the ground that they were issued by the Office of the President with grave abuse of discretion and in violation of their constitutional right to security of tenure.

FACTS: The Economic Intelligence and Investigation Bureau (EIIB) was created as part of the structural organization of the Ministry of Finance through the issuance of Executive Order No. 127 by former President Corazon Aquino. The EIIB was tasked to: evaluate intelligence reports, gather evidence on illegal activities affecting the national economy and aid in the prosecution of cases; coordinate with external agencies in monitoring financial and economic activities of persons or entities which may adversely affect national financial interest; provide for the guidelines in the conduct of intelligence and investigation operations; and perform such other appropriate functions. The EIIB was assigned to primarily conduct anti-smuggling operations in areas outside the jurisdiction of the Bureau of Customs by virtue of Memorandum Order No. 225 issued by former president Aquino. Subsequently, former President Joseph Estrada issued Executive Order No. 191 ordering the deactivation of the EIIB and the transfer of its functions to the Bureau of Customs and the National Bureau of Investigation on the ground that: the designated functions of the EIIB are also being performed by the other existing agencies of the government; and that there is a need to constantly monitor the overlapping of functions among these agencies. Executive Order No. 196 was issued creating the Presidential Anti-Smuggling Task Force Aduana. He also issued Executive Order No. 223 whereby all EIIB personnel occupying positions specified therein were separated from the service pursuant to a bona fide reorganization resulting to abolition, redundancy, merger, division, or consolidation of positions. Aggrieved, petitioners filed the present case invoking the courts power of judicial review of Executive Order Nos. 191 and 223. Petitioners contend that the issuance of the said executive orders is: (a) a violation of their right to security of tenure; (b) tainted with bad faith as they were not actually intended to make the bureaucracy more efficient but to give way to Task Force

Aduana the functions of which are essentially and substantially the same as that of EIIB; and (c) a usurpation of the power of Congress to decide whether or not to abolish the EIIB. On the other hand, the Solicitor General maintains that: (a) the President enjoys the totality of the executive power provided under Sections 1 and 7, Article VII of the Constitution, thus, he has the authority to issue Executive Order Nos. 191 and 223; (b) the said executive orders were issued in the interest of national economy, to avoid duplicity of work and to streamline the functions of the bureaucracy; and (c) the EIIB was only deactivated and not abolished.

ISSUES: 1. Whether or not the President has the authority to carry out reorganization in any branch or agency of the executive department. 2. Whether or not the reorganization in this case is valid.

RULING: 1. Yes. The President is empowered by the Administrative Code to validly reorganize his office even without congressional authority in order to achieve economy and efficiency. The general rule has always been that the power to abolish a public office is lodged with the legislature. This proceeds from the legal precept that the power to create includes the power to destroy. A public office is either created by the Constitution, by statute, or by authority of law. Thus, except where the office was created by the Constitution itself, it may be abolished by the same legislature that brought it into existence. The exception is that, as far as bureaus, agencies or offices in the executive department are concerned, the Presidents power of control may justify him to inactivate the functions of a particular office, or certain laws may grant him the broad authority to carry out reorganization measures. In the whereas clause of Executive Order No. 191, former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745, the General Appropriations Act for fiscal year 1999. It provides: Sec. 77. Organized Changes. Unless otherwise provided by law or directed by the President of the Philippines, no changes in key positions or organizational units in any department or agency shall be authorized in their respective organizational structures and funded from appropriations provided by this Act. The Supreme Court said that the above provision recognizes the authority of the President to effect organizational changes in the department or agency under the executive structure. Such a ruling further finds support in Section 78 of Republic Act No. 8760. Under this law, the heads of departments, bureaus, offices and agencies and other entities in the Executive Branch are mandated to conduct actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President.

Under Section 31, Book III of Executive Order No. 292, the Administrative Code of 1987, the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may transfer the functions of other Departments or Agencies to the Office of the President. The EIIB is a bureau attached to the Department of Finance. It falls under the Office of the President. Hence, it is subject to the Presidents continuing authority to reorganize.

2. Yes. The reorganization is valid. The Solicitor General invoked the distinction between deactivation and abolition. To deactivate means to render inactive or ineffective or to break up by discharging or reassigning personnel, while to abolish means to do away with, to annul, abrogate or destroy completely. Abolition denotes an intention to do away with the office wholly and permanently. While in abolition, the office ceases to exist, the same is not true in deactivation where the office continues to exist, albeit remaining dormant or inoperative. Deactivation and abolition are both reorganization measures. As far as bureaus, agencies or offices in the executive department is concerned, the Presidents power of control may justify him to inactivate the function of a particular office or certain law may grant him the broad authority to carry out reorganization measure. An examination of the pertinent Executive Orders shows that the deactivation of EIIB and the creation of Task Force Aduana were done in good faith. It was not for the purpose of removing the EIIB employees, but to achieve the ultimate purpose of E.O. No. 191, which is economy. While Task Force Aduana was created to take the place of EIIB, its creation does not entail expense to the government. Firstly, there is no employment of new personnel to man the Task Force. E.O. No. 196 provides that the technical, administrative and special staffs of EIIB are to be composed of people who are already in the public service, they being employees of other existing agencies. Secondly, the thrust of E.O. No. 196 is to have a small group of military men under the direct control and supervision of the President as base of the governments anti-smuggling campaign. The idea is to encourage the utilization of personnel, facilities and resources of the already existing departments instead of maintaining an independent office with a whole set of personnel and facilities. And thirdly, it is evident from the yearly budget appropriation of the government that the creation of the Task Force Aduana was especially intended to lessen EIIBs expenses. Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. As a general rule, a reorganization is carried out in good faith if it is for the purpose of economy or to make bureaucracy more efficient. In that event, no dismissal or separation actually occurs because the position itself ceases to exist. If the abolition, which is nothing else but a separation or removal, is done for political reasons or purposely to defeat security of tenure, otherwise not in good faith, no valid abolition takes and whatever abolitio is done, is void ab initio. There is an invalid abolition as where there is merely a change of nomenclature of positions, or where claims of economy are belied by the existence of ample funds.

In the present case, petitioners right to security of tenure is not violate because the abolition of EIIB within the competence of a legitimate body is done in good faith and suffers from no infirmity. Valid abolition of offices is neither removal nor separation of the incumbents. Hence, the petition was denied for lack of merit.