G.R. No. 170463 - Board of Trustees of the Government Service Insurance System vs. Velasco

This is a petition for review of the 24 September 2004 Decision and the 7 October 2005 Order of the Regional Trial Court (RTC) of Manila, Branch 19, in Civil Case No. 03-108389. The trial court granted respondents Albert M. Velasco and Mario I. Molina's petition for prohibition and denied petitioners' motion for reconsideration.

On 23 May 2002, petitioners (Board of Trustees of the Government Service Insurance System (GSIS) and Winston F. Garcia, GSIS President and General Manager) charged respondents with grave misconduct and placed them under preventive suspension for 90 days. The charges stemmed from respondents' alleged participation in a demonstration by GSIS employees denouncing corruption and calling for Garcia's ouster.

On 4 April 2003, respondent Molina requested the implementation of his step increment, which was denied on 22 April 2003, citing GSIS Board Resolution No. 372. This resolution stated that step increments for employees under preventive suspension would be withheld until the resolution of their administrative case.
Respondents also requested Christmas raffle benefits under GSIS Board Resolution No. 306, which was denied due to their pending administrative case.

On 27 August 2003, GSIS Board issued Resolution No. 197, which disqualified employees with pending administrative cases from promotion, step increments, performance-based bonuses, and other benefits during the pendency of their cases.

On 14 November 2003, respondents filed a petition for prohibition with a prayer for a writ of preliminary injunction before the RTC of Manila. They sought to restrain the implementation of Resolutions Nos. 197 and 372, arguing that the denial of benefits violated their right to be presumed innocent and constituted punishment without due process. They also claimed the resolutions were ineffective as they were not registered with the UP Law Center.

On 24 September 2004, the trial court granted respondents' petition, declaring Resolutions Nos. 197 and 372 null and void. The court also made the preliminary injunction permanent. Petitioners' motion for reconsideration was denied on 7 October 2005.

Whether the jurisdiction over the subject matter of Civil Case No. 03-108389 lies with the Civil Service Commission (CSC) and not with the RTC of Manila, Branch 19.
Whether a Special Civil Action for Prohibition against the GSIS Board or its President and General Manager exercising quasi-legislative and administrative functions in Pasay City is outside the territorial jurisdiction of RTC-Manila, Branch 19.
Whether internal rules and regulations need not require publication with the Office of the National Administrative Register for their effectivity.
Whether a regulation disqualifying government employees with pending administrative cases from step increments and Christmas raffle benefits is unconstitutional.
Whether the nullification of GSIS Board Resolutions is beyond an action for prohibition, and whether a writ of preliminary injunction can be made permanent without a decision ordering the issuance of a writ of prohibition.

The Supreme Court denied the petition but modified the trial court's decision. The Court ruled as follows:

Jurisdiction: The RTC of Manila had jurisdiction over the petition for prohibition. The action was properly filed in Manila, where one of the respondents resided, and the writ of prohibition issued by the RTC was enforceable in Pasay City.
Effectivity of Resolutions: The Court held that Resolutions Nos. 197, 306, and 372 were internal rules regulating GSIS personnel and did not require publication or filing with the UP Law Center. Thus, they were effective without such registration.
Constitutionality of Disqualification from Benefits: The Court declared the provisions on step increments in Resolutions Nos. 197 and 372 void. It ruled that preventive suspension, being non-penal in nature, should not disqualify employees from step increments. Employees under preventive suspension should be entitled to step increments after serving the suspension period, even if the administrative case remains unresolved.
Presumption of Innocence: The Court affirmed that respondents had the right to be presumed innocent until proven guilty. Denying them benefits based on pending administrative charges violated this presumption.
Modification of Trial Court's Decision: The Court modified the trial court's decision, ruling that Resolutions Nos. 197, 306, and 372 need not be filed with the UP Law Center. However, the provisions on step increments in Resolutions Nos. 197 and 372 were declared void.

Jurisdiction and Venue: A petition for prohibition is a special civil action that may be filed in the RTC where the plaintiff resides. The RTC of Manila had jurisdiction over the case, and the writ of prohibition issued was enforceable in Pasay City.
Internal Rules and Regulations: Internal rules regulating only the personnel of an agency, such as GSIS Resolutions Nos. 197, 306, and 372, do not require publication or filing with the UP Law Center to be effective.
Preventive Suspension and Step Increments: Preventive suspension is not a penalty but a measure to facilitate investigation. Employees under preventive suspension should not be disqualified from step increments. The grant of step increments should only be delayed by the number of days of the suspension, not exceeding 90 days.
Presumption of Innocence: Employees with pending administrative cases are presumed innocent until proven guilty. Denying them benefits based on pending charges violates this presumption and constitutes punishment without due process.
Liberal Construction of Social Legislation: Laws and regulations granting employee benefits, such as step increments, should be liberally construed in favor of the employees to achieve their humanitarian purposes.