Checking up on the corporations

Title

Language

English

Source

The Republic I (6) 1-31 December 1975

Year

1975

Subject

Corporations, Government -- Philippines

Rights

In Copyright - Educational Use Permitted

Fulltext

1-31 December 1975 7 Checking up on the corporations THE 100 or so government corpora tions—which up to now have been on various fringes of government con trol—are starting to feel the effects of the overall effort to improve manage ment of public resources and public servants. As a first step, the Civil Service Commission acted to bring the estima ted 165,000 employees of these corporaA reminder from the CSC THE Civil Service Commission sent this letter to the heads of those government corporations which are not yet complying with the Civil Service Rules: We wish to call your attention to the provision of the Constitution which places every government-owned and con trolled corporation within the ambit of the Civil Service. This provision is re iterated in Presidential Decree No. 807, the Civil Service Decree of the Philip pines, specifically, under Section 4 which states as follows: "The Civil Service embraces ev ery branch, agency, subdivision, and instrumentality of the government, including every government-owned or controlled corporation whether per forming governmental or proprietary function. ’’ We realize, however, that most cor porations were not governed by Civil Service Law and rules in the past so that it is possible that not all their res pective personnel can meet squarely the merit requirements of the Civil Ser vice. We wish to allay any apprehen sion, however, that Civil Service cover age of corporations would result in a sweeping change in the personnel struc ture of these corporations. On the con trary, Presidential Decree No. 807 in its Section 56, provides for a transition that would allow personnel of govern ment-owned or controlled corporations whose positions are not embraced in the Civil Service to continue in the ser vice until they have been given a chance to qualify in an appropriate civil service examination. In this connection, it is our wish that we could reach a working arrange ment to facilitate the conduct of such examinations, or any other selection de vice to achieve our collective goals. Meanwhile we expect that you would now submit to us all new appoint ments of that corporation,original and promotional, for appropriate action, and that these shall be made in accordance with Civil Service Law and rules. We also wish to call your attention to Section 9 of Presidential Decree No. 807 which provides that an appoint ment shall take effect immediately upon issuance by the appointing authority if the appointee assumes his duties imme diately and shall remain effective until disapproved by the Commission; with the appointee being paid at once. As you will note, this provision seeks to facilitate immediate payment of em ployees and, consequently, lead to a greater motivation for work. However, all appointing officials are required to submit all appointments to the Commission within thirty (30) days from issuance, otherwise, these appointments become ineffective. It is also requested that you furnish us a copy of the plantilia of personnel for our records. □ Very truly yours, JACOBO C. CLAVE Acting Chairman tions into the orbit of the civil service rules. In a separate directive, President Marcos ordered the Budget Commission and the Reorganization Commission to review the corporations and make rec ommendations including reorganization and abolition if necessary. Ever since this category of govern ment-owned or controlled corporations started cropping up early in this cen tury, many have had ambiguous rela tions with the Civil Service. Addition ally, some have created an image of im provising their functions as they go along. It is generally assumed that, unlike a government bureau, a corporation should operate in a commercial way. However, President Marcos noted that only a miniscule number are viable and profitable. Differences over terminology and categorization make it hard to get the exact number of government-owned or controlled corporations. The ■Civil Ser vice Commission puts the count at 75. Some other government sources put it at nearer 125. The Audit Commission, in its reckonings, divides them into Gov-, emment financing corporations; govern ment utility corporations; government utility corporations; government devel opmental and other corporations; and self-governing boards, commissions and agencies. During November, the Civil Service Commission sent letters to the corpora tions pointing out that they were now part of the Civil Service proper. It re quired that future staff appointments be submitted to the Commission (see letter in Column One). According to the Civil Service Com mission’s statistics, 28 of these corpora tions were already submitting their ap pointments and other personnel actions while 47 were not. One obvious question that crops up is pay differentials, since it is known that many people in government cor porations get higher. salaries and more fringe benefits than their counterparts in the government proper. Such matters are likely to be con sidered during a transition period which is provided for. Government staff plan ners consider that, in principle, it would clearly be more positive to bring the pay of those in the government proper into line with scales existing in the cor porations rather than the other way around. However, they concede this cannot be done overnight. The review of government corpora tions, which the President ordered, ob viously cannot be done overnight either. According to Director R. de Castro of the Budget Commission’s Manage ment Bureau: “This is a tremendous task if we are going into a real in-depth management audit.” He said that at present guidelines were being drawn up for the review, and probably some corporations would be singled out for immediate attention. □ Everyone stands to benefit THE public corporations, the govern ment and the nation as a whole gains a number of benefits from the Ci vil Service coverage of the government corporations. Firstly, it means uniform applica tion of the merit system and the elimi nation of the “padrino” or “palakasan” system in the appointment process. This will spare the corporations the discom fort they have had to suffer in trying to please and accommodate the proteges of the powers that be. The participation of the Civil Ser vice Commission in the appointment, HERE is the background to the status of government corporations. The 1935 Constitution said: "A Civil Service embracing all bran ches and subdivisions of the government shall be provided by law." It was silent on government corpo rations. Perhaps this was intentional by the 1934 Constitutional Convention, considering that most government-own ed at controlled corporations were then organized and operated, like any other private corporation, by a group or groups of persons, the government being then just a majority shareholder in them. The Convention’s obsession at that time was to include in the Constitution provisions regarding the merit system as a necessity in modem times. This was to check the proclivity of political leaders, department heads and bureau directors to extend temporary appoint ments and to make numerous exemp tions from the examination require ments. On January 6, 1950, Republic Act 422 authorized the President to reor ganize executive departments, bureaus, offices, agencies and other instrumental ities, including the corporations owned and controlled by it. , Executive Order 319 on May 25, 1950, said: "The officers and employees of the Department of Economic Coordi nation and of the different corpora tions and agencies under it that may hereafter be employed shall be sub ject to the application of the Civil Service rules and regulations as in the case of other officers and em ployees of the government. ” On January 5, 1951, Executive Or: der 399, known as the Uniform Charter for Government Corporations, said in Section 14: "All officers and employees of the corporations shall be subject to the Civil Service Law, Rules and Re gulations, except those whose posi tion may, upon recommendation of the Board of Directors and the Administrator of Economic Coordi nation, be declared by the President of the Philippines as policy determin ing, primarily confidential or tech nical in nature." To implement this, appointments of officers and employees who were taken on thereafter were submitted to the CSC for approval. Those who had been earlier appointed but were non-eligibles could not be promoted or receive salary in creases without losing their permanent status unless they qualified in an appro priate examination. DESPITE these executive orders, of ficers and employees of some gov ernment corporations maintained their exemption from CSC coverage- namely corporations with primarily proprietary functions and whose personnel were cov ered by collective bargaining agreements. Some others who were under Civil examination, promotion, discipline and other personnel processes will insure adherence to, and uniform application of, the Civil Service law and rules. But this benefit has its attendant cost. It means the public corporations must give up part of their autonomy in personnel policies and programs. The cor poration heads no longer have absolute say in recruitment, examination, pro motion, administrative discipline and the like. However, the Civil Service Commis sion does not, and will not, stand in the way of the efficient, economical and Service coverage—operating in corpora tions but performing purely government functions-tried to be excluded. Exam ples were personnel of the General Au diting Office (now Commission on Audit) assigned to government corporations. The Civil Service Act of 1959 (Rep ublic Act 2260 of June 19) said in Section 3: "The Philippine Civil Service shall embrace all branches, subdivisions, and instrumentalities of the govern ment, including government-owned or controlled corporations." Interpreting this, the Secretary of Justice said in Opinion 238 of 1959: ‘The law does not make a dis tinction between those corporations performing governmental functions and those performing proprietary functions. Where the statute .» ex pressed in general language, it should be applied in all cases witMn its terms, and its meaning may not, by construction, be restricted or qual ified. Consequently, governmentowned or controlled corporations per forming proprietary functions and their employees are within the scope of the new Civil Service Law." REACTING to the Civjl Service Act . of 1959, government corporations with collective bargaining agreements demanded recognition of the agreements. A court action was filed to compel the Ci vil Service Commission to recognize col lective bargaining agreement with man agement. Pending resolution, the CSC issued Memorandum Circulars Nos. 1 and 3 of 1964 declaring that officers and em ployees of government-owned or eon trolled corporations performing proprie tary functions were exempted from the Civil Service Law and Rules; and that the status of their employment shall be governed by the terms and conditions of their collective bargaining agreements. In other words, they were considered contractual employees in the exempt service under Sec. 6 (c) of Republic Act 2260. * This status was recognized in Rep ublic Act 6040, which amended Rep. Act 2260. Sec. 6 (c): The Exempt Service —The exempt service shall consist of the following: xxx xxx xxx "(c) Persons employed on con tract basis xxx and those in govern ment-owned or controlled corpora tions performing primarily proprie tary functions with collective bargain ing agreements." However, the promulgation of the New Constitution cut short this exemp tion from the coverage of the Civil Ser vice. To quote: i "The Civil Service embraces every branch, agency, subdivision, and ins trumentality of the government, in cluding every government-owned or controlled corporation." □ profitable operation of these corpora tions. The new leadership of the Com mission has inaugurated the so-called “facilitative service” rather than bu reaucratic control. Hence there can be a more meaningful and fruitful relation ship between the Commission and the various agencies of government, includ ing public corporations, to realize the government’s development goals. The standardization of salaries in all government offices will minimize fre quent turnover of employees which has resulted in overstaffing some offices while paralyzing others. □

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