This case clarifies that a city treasurer in the Philippines has the authority to institute disciplinary actions against subordinate officers or employees within their office. The Supreme Court emphasizes that due process in administrative proceedings requires only that the employee be given an opportunity to explain their side, whether in writing or verbally. Furthermore, the Court reiterates that due process is satisfied when an employee has the opportunity to seek reconsideration of an adverse action or ruling. This decision reinforces the administrative powers of local government unit heads and underscores the importance of providing employees with a fair opportunity to be heard.

Treasurer’s Authority vs. Employee Rights: A Dagupan City Dispute

The case of Sebastian Garcia v. Juanito A. Pajaro and the City of Dagupan (G.R. No. 141149, July 5, 2002) centers on the disciplinary powers of a city treasurer over a subordinate employee. Sebastian Garcia, an employee of the City Treasurer’s Office in Dagupan City, was suspended and faced administrative charges initiated by City Treasurer Juanito Pajaro. Garcia contested Pajaro’s authority to discipline him, arguing that only the city mayor possessed such power. He further claimed a violation of his right to due process during the administrative proceedings. The Supreme Court was tasked with determining whether the city treasurer had the authority to discipline Garcia and whether the administrative proceedings adhered to the requirements of due process.

The Supreme Court affirmed the Court of Appeals’ decision, upholding the city treasurer’s authority to institute disciplinary actions and finding that Garcia’s right to due process was not violated. The Court emphasized that local government employees are covered by Civil Service Law, rules, and regulations. In this context, the Administrative Code of 1987 grants disciplinary powers to heads of departments, agencies, and instrumentalities, including provinces and cities. The Court cited Section 47 of the Administrative Code of 1987 which states:

“SEC. 47. Disciplinary Jurisdiction. – x x x (2) The Secretaries and heads of agencies and instrumentalities, provinces, cities and municipalities shall have jurisdiction to investigate and decide matters involving disciplinary action against officers and employees under their jurisdiction. Their decisions shall be final in case the penalty imposed is suspension for not more than thirty days or fine in an amount not exceeding thirty days’ salary. In case the decision rendered by a bureau or office head is appealable to the Commission, the same may be initially appealed to the department and finally to the Commission and pending appeal, the same shall be executory except when the penalty is removal, in which case the same shall be executory only after confirmation by the Secretary concerned.”

Building on this principle, the Court also cited Local Administrative Regulations (LAR) No. 2-85, issued by the Ministry of Finance on March 27, 1985. This regulation authorized heads of local treasuries to initiate administrative actions against subordinate officers or employees. The pertinent portions of LAR 2-85 are reproduced hereunder:

“RULE I – INSTITUTION OF ADMINISTRATIVE DISCIPLINARY ACTIONS

Sec. 1. How commenced. – Administrative disciplinary action may be commenced against a subordinate officer or employee by the Minister of Finance, Regional Directors or heads of the local treasury or assessment offices at their own instance (motu proprio) or upon sworn written complaint by any other person.

In the case of a complaint filed by any other person, the complainant shall submit sworn statements covering his testimony and those of his witnesses together with his documentary evidence.

RULE IV – HEARING

Sec. 1. Officer authorized to conduct hearings. — The investigation shall be conducted by the Minister of Finance or the Director for Local Government Finance or his/her assistants or regional director or head of office concerned or the duly designated representatives of said officials. The duly designated representatives shall make the necessary report and recommendation to the chief of office, regional director or this Ministry, as the case may be. The investigation shall be held not earlier than five (5) days not later than ten (10) days from date of receipt of respondent’s answer by the disciplining authority and shall be finished within thirty (30) days from commencement of the hearing, unless the period is extended or continuance allowed in meritorious cases.”

The Court reasoned that as city treasurer, Pajaro was the head of the Office of the Treasurer, making him the proper disciplining authority with the power to investigate Garcia and issue a preventive suspension order. The Court dismissed Garcia’s argument that only the city mayor could discipline him, clarifying that the mayor’s power to institute administrative proceedings does not negate the disciplinary authority granted to agency heads under the Administrative Code of 1987.

Addressing the due process claim, the Supreme Court reiterated the essence of due process in administrative proceedings. The Court clarified that due process simply requires that the individual have an opportunity to explain their side and that this opportunity can be provided through written pleadings, not solely through oral arguments. Further, the Court emphasized that the requirements of due process are also satisfied if a person is granted an opportunity to seek reconsideration of an action or ruling. In Garcia’s case, he was informed of the charges against him and given the opportunity to respond, but he chose not to participate in the investigation. Therefore, the Court found no violation of his right to due process.

The Court highlighted that Garcia was provided with a copy of the formal charge, the Regional Director approved the order of preventive suspension, and a subpoena was issued ordering him to testify during an investigation. His refusal to attend the investigation, despite due notice, was at his own peril, and he could not later claim a denial of due process.

Concerning Garcia’s claim for damages, the Court cited the established rule that a public officer is not liable for damages for acts done in the performance of official duties unless there is a clear showing of bad faith, malice, or gross negligence. Since Garcia failed to demonstrate any of these elements, his claim for damages was denied. This ruling underscores the protections afforded to public officials acting within the scope of their authority, absent demonstrable malice or bad faith.

FAQs

What was the key issue in this case?	The key issue was whether the city treasurer had the authority to institute disciplinary actions against a subordinate employee and whether the employee’s right to due process was violated during the administrative proceedings.
Who has the power to discipline local government employees?	The power to discipline local government employees is vested in the head of the local government unit or the head of the office or agency where the employee works, as provided by the Administrative Code of 1987 and Local Administrative Regulations.
What constitutes due process in administrative proceedings?	Due process in administrative proceedings requires that the individual be given notice of the charges against them and an opportunity to be heard, either in writing or verbally, before a judgment is rendered.
Is a city treasurer authorized to investigate subordinate employees?	Yes, a city treasurer, as the head of the Office of the Treasurer, is authorized to investigate and issue preventive suspension orders against subordinate employees charged with offenses that warrant such action.
What happens if an employee refuses to participate in an administrative investigation?	If an employee refuses to participate in an administrative investigation despite due notice, the investigation may proceed ex parte, and the employee cannot later claim a denial of due process.
When can a public officer be held liable for damages?	A public officer can be held liable for damages for acts done in the performance of official duties only if there is a clear showing of bad faith, malice, or gross negligence.
Does the power of the city mayor to institute administrative proceedings negate the authority of other agency heads?	No, the city mayor’s power to institute administrative proceedings does not negate the disciplinary authority granted to agency heads under the Administrative Code of 1987.
What is the effect of Local Administrative Regulations (LAR) No. 2-85?	Local Administrative Regulations (LAR) No. 2-85 authorizes heads of local treasuries to initiate administrative actions against subordinate officers or employees.

The Supreme Court’s decision in Garcia v. Pajaro provides crucial guidance on the scope of disciplinary authority within local government units and reinforces the principles of due process in administrative actions. Local government employees should be aware of their rights during administrative proceedings, and government officials must ensure that they act within the bounds of their authority and in accordance with due process requirements.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Sebastian Garcia vs. Juanito A. Pajaro and the City of Dagupan, G.R. No. 141149, July 05, 2002