The commission said Luz’s reassignment was a "management prerogative exercised by the President" in the best interest of public service.
The decision was concurred in by Commissioners J. Waldemar Valmores and Cesar Buenaflor.
CSC Chairperson Karina Constantino-David dissented, pointing out that Luz holds a career executive service officer or CESO rank and enjoys security of tenure "such that he can be removed from his position only for cause and after observing his right to due process."
Malacanang fired Luz on Sept. 13, two days after the PCIJ reported the Department of Education’s (DepEd) refusal to accept three postdated checks (P15 million in all) the Palace had issued for the scholarship program of Zambales Rep. Antonio Diaz. DepEd said this violated auditing rules and accounting procedure.
The postdated checks were released at a time the House justice committee was conducting hearings on the impeachment complaint against President Arroyo, raising suspicions that DepEd was being used to launder money for legislators who supported the president.
Luz received his walking papers from Executive Secretary Eduardo Ermita, who later issued another order transferring him to DOLE.
Luz subsequently sued the Palace before the CSC, branding the transfer as an illegal and blatant disregard of his rights as a civil servant.
In his complaint, Luz said the order to transfer him was obviously done for political reasons and that he was being sacked for doing the right thing. His lawyers said there was an apparent intent of Malacanang to "float" the undersecretary as "punishment" because there was no vacant position of undersecretary at DOLE.
Luz further argued that the transfer was not done "in the interest of public service" because, he said, the public would be better served if he remained at DepEd.
In its 11-page ruling, however, the CSC said since Luz had accepted his appointment as DepEd undersecretary as being coterminous with Arroyo’s term, his "continuity in the service is based on the trust and confidence of President Arroyo and is subject to her pleasure." This means he has no tenurial security to his position, it said.
The CSC also ruled that it has no jurisdiction over the complaint filed by Luz. Under the law, an official with CESO rank like Luz can appeal his case to the president if he believes that his transfer is not justified, it said.
In her 15-page dissenting opinion, CSC Chairperson David said, however, the commission has the exclusive jurisdiction on the appeal, being the sole arbiter of controversies relating to civil service.
David agreed with Luz that his reassignment was done in bad faith. Luz, she said, holds a crucial position in the biggest department in government.
"If a career official can be taken out of the department (either by termination or by other means such as reassignment), for no apparent reason, then the ‘insecurity’ of the rest of the career bureaucracy is a reality," she said.
"No matter how the reassignment is justified and packaged, the career people would know why Luz was taken out," David said. "The message that is being sent is that career officials better tow the line that is set by the political leadership, no matter what, lest you be another Luz."
Commissioner Buenaflor issued an extended concurring opinion stating that the CSC, having no jurisdiction over the appeal, "will and must not intrude into the wisdom" of the appointing authority. He argued that the determination of what constitutes "in the interest of public service" lies in the prerogative of the President. "Bad faith and grave abuse of discretion are never presumed," he said.
Buenaflor, a former CSC regional director, is an Arroyo appointee. Prior to his appointment as CSC commissioner, he was named commissioner of the Presidential Anti-Graft Commission in 2001 by President Arroyo.
Commissioner Valmores, the first Mindanaoan to be appointed CSC commissioner, recently retired from the CSC.
Atty. Rowena Guanzon, Luz’s lead counsel, said they will appeal the decision before the Court of Appeals.