EXPLAINER: Where Jun Pe, 2 other MCWD ex-directors got it right: LWUA must OK mayor’s action. And got it wrong: Mayor had no right to fire them. Will they appeal RTC ruling?

Contributed photos
Contributed photos

WHAT JUST HAPPENED. In a decision promulgated June 30, 2023 and released Tuesday, July 11, Cebu Regional Trial Court (RTC) Judge Anacleto G. Debalucos dismissed a complaint of three former Metropolitan Cebu Water District (MCWD) directors against then mayor Edgardo Labella who removed them before the end of their fixed term.

For “lack of merit,” said the ruling on the civil case filed on November 11, 2019 by Augustus Pe Jr., Ralph Sevilla, and Cecilia Adlawan. The respondents were Labella and Jeci Lapus, acting administrator of Local Water Utilities Administration (LWUA), the then interim MCWD directors, and the water district. The complainants wanted to nullify their termination and the designation of their replacements.

The complaint had no merit, the RTC)ruled. Then mayor Labella had the power to dismiss the directors. The power to appoint “carries with it the power to remove or discipline," said Judge Debalucos, citing the Supreme Court case of Napay vs. Daraga, Albay vice mayor (2019) and Aguirre Jr. vs. de Castro (1999).

Will the complainants appeal the ruling? Jun Pe told me Saturday, July 15, that was “for the lawyers (Sevilla and Adlawan) to decide.”

BOOST TO RAMA CLAIM. The ruling matters. It has come, relevant and interesting, amid the controversy rocking MCWD, which was set off by Mayor Michael Rama’s initial order to evict current chairman, Jose Daluz III, and two other directors -- Jodelyn May Seno and Miguel Pato -- and their defiance of the mayor’s order.

If the RTC ruling against Jun Pe and company was used to guide Mayor Rama in his recent action -- which was to recommend their termination to the Ombudsman and LWUA -- Rama could’ve dismissed outright Daluz and company, without going through the “recommendation” route. As Labella did in the Jun Pe case, Rama could’ve just sent the dismissal to LWUA for review.

The Jun Pe et al case is also a boost, at least until struck down by a superior court, to Mayor Rama’s contention that he has the right not just to appoint MCWD directors but also to discipline them, along with the Ombudsman and the Civil Service.

PE ET AL DIDN’T GET THESE RIGHT. Complainants in RTC lawsuit got it wrong on these major legal points:

[1] POWER TO FIRE. Whether the city mayor has the right to dismiss Jun Pe and the two other directors:

No, Pe et al said, mayor Labella had only the power to appoint. Yes, the court said, the mayor has both the power to appoint and the power to dismiss. Not by express provision of law -- because the law “does not expressly provide as to who has the power or authority to remove or discipline them” -- but by the “doctrine of implication,” the RTC ruling said, “absent any contrary statutory provision, the power to appoint carries with it the power to remove or discipline.”

Does the power to remove or discipline a director belong to the MCWD board of directors (BOD)? Yes, said the complainants. No, said the RTC. No provision under Presidential Decree (PD) 198 or the Local Water Utilities Act gives that power. Besides, that power in the board’s hands “may dangerously result in mutual protection among the BOD members themselves.”

[2] MCWD’S AUTONOMY. Whether mayor Labella violated “independence and autonomy” of MCWD under a presidential decree (#198) and DILG’s memo-circular (#2019-03 of January 10, 2019). which in effect say that water districts, including MCWD, “are not under the jurisdiction or control of any political subdivision in order to maintain their autonomy”:

Labella violated it, said Pe et al. No, ruled the court, the mayor’s disciplining the directors doesn’t affect the intent of autonomy; the provision merely aims “to prevent the LGU from meddling in purely internal affairs, management or operation of the district.” Otherwise, the mayor wouldn’t have given the right to appoint directors, or the law would’ve “expressly provided that the power to discipline a BOD member is vested in a particular office or agency.”

Besides, the complainants mainly relied on this part of Section 1 of PD 198, namely: “once formed, a district is subject to the provisions of (PD 198) and not under the jurisdiction of any political subdivision.” That was already amended, the RTC said, by PD 1479 that deleted it.

[3] DUE PROCESS: LABELLA DIDN’T GIVE; LWUA DID. The RTC ruling said mayor Labella didn’t bother to give due process when he removed the three directors in his October 15, 2019 notice. They weren’t given the opportunity to present their side.

The court didn’t agree with Labella’s argument that they weren’t entitled to notice and hearing prior to removal because “they could seek reconsideration or appeal their removal to LWUA.” Labella was “mistaken,” said the court, and the termination was illegal because of lack of due process.

But the initially illegal removal by Labella was “legitimized” by LWUA, the court said, when LWUA gave the directors “opportunity to explain their side” and “refute the accusations against them.”

“No basis to award damages,” the court said.

The complainants were accurate in their claim of absence of due process but that ended up a dud, they were proven wrong. when the RTC considered the due process at the LWUA level as sufficient.

CLEAR: LWUA REVIEWS, OK’S REMOVAL. What both sides of the controversy appear to get right is that the MCWD directors have fixed terms and “can be removed or disciplined only for cause and subject to review and approval of the LWUA.”

No shot fired at that claim. Both mayor Labella then and mayor Rama now would accept that law process. Except that Labella believed the mayor himself could remove the directors, subject only to review and approval by LWUA. While Rama merely recommended their dismissal to LWUA after his initial, “un-legalistic” attempt to evict was defied by Daluz.

HOW CONFUSION MAY END. The confusion is apparently caused by, as the court noted, the absence of a provision in the law that expressly designates the office or agency that is vested the power to remove or discipline directors of water districts. . The provision on who appoints is clear enough, particularly made so by the Supreme Court ruling that it’s the Cebu City mayor who does. The same law though is silent as to who can dismiss a BOD member.

The court in the June Pe case has embraced the rule that the appointing power is also the terminating power but that’s good only until (a) the SC will reject the ruling or (b) Congress -- seeing the mess the PDs, a martial law creation, has caused -- will make the law specific.


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