EXPLAINER: Does court's TRO on MCWD board affect water consumers? No, says Daluz, but why only now? Issue reduced to legality of firing directors.

Pachico A. Seares
·5 min read

A TEMPORARY restraining order issued March 15, 2021 by Regional Trial Court Judge James Steward Himalaloan orders that in the next 20 days:

[1] The three dismissed members of the board of Metropolitan Cebu Water District (MCWD) -- Ralph Sevilla, Jun Pe, and Cecilia Adlawan -- be reinstated; and

[2] Members of the present board of directors "cease and desist" from their duties.

What may surprise the public is that the issuance of the TRO took about one year and four months after the complaint was filed by three sacked directors on November 8, 2019. A month earlier, on October 15, the five-person board was notified that all its members were dismissed by Cebu City Mayor Edgardo Labella.

A TRO is generally issued to protect the rights of complainants pending litigation. In the MCWD case, since essential public service is involved, the question of disruption of service must have also been considered.

The court was to resolve the city's motion to reconsider the TRO in a hearing set for Thursday, March 18, as well as hear on the same day arguments for legality of the directors' dismissal and on March 25, arguments that their termination was illegal.

NO DISRUPTION, SAYS DALUZ. The new directors appointed by Mayor Labella started their work on February 17, 2020 when Jose Daluz III was elected chairman, with Frank Malilong as vice chairman and Miguelito Pato as secretary.

Daluz replaced Cecilia Adlawan for the professional sector. Malilong took over Joel Mari Yu's seat for the education sector, and Pato, the business sector represented before by Augustus Pe Jr. Manolette Dinsay, Governor Gwen Garcia's former chief lawyer, replaced Ralph Sevilla for the civic sector.

Alvin Garcia, the former mayor, was named to fill the women's sector slot formerly occupied by Procopio Fernandez, but the Local Water Utilities Administration (LWUA) last January 27, 2020 said the post should be filled by a "respectable citizen of the female gender." Garcia's slot was eventually given to Jodelyn May Seno, a human resources and corporate marketing consultant and a BA graduate in industrial and organizational psychology from University of the Philippines.

Daluz, reacting to the TRO, asked, Why only now? At the same time though, he said MCWD operations and service to consumers continue despite the litigation since the board handles only policies and not the day-to-day management. That also means MCWD cannot use the legal battle tussle as reason for any deficiency of water in the oncoming summer.

AUTHORITY TO FIRE. Under the Local Water Utilities Act of 1973 (Presidential Decree #198, as revised in 2010), the city mayor has the authority to appoint the directors since the residents of Cebu City comprise the greater number of MCWD's clients. Authority to dismiss a director or directors presumably also resides in the city mayor but LWUA shall review and, in effect, approve the dismissal. Or so the rules seem to be, as events in the MCWD directors controversy have played out.

Mayor Labella believes he followed the requirements, including the seeking of LWUA approval of the appointment of new directors. The new directors didn't assume office until LWUA gave the go-signal.

The lack of clear rules or mis-interpretation by the authorities concerned led to the brief snafu when LWUA Manila sent a three-person panel to serve as interim board, which it turned out they could not legally do. The three directors who sued -- Sevilla, Pe and Adlawan -- held out, declaring they would continue functioning as a board. Eventually though, they left their posts and went to court (minus Yu and Fernandez) last November 8, 2019 until the RTC's TRO March 15 this year ordered the return of the complainants to their posts.

The complainants question the authority of the mayor to dismiss them, partly on the basis of a December 5, 2019 letter of LWUA Acting Administrator Jeci Lapus to Mayor Labella that the power to appoint the directors didn't give the mayor the power to remove them. Lapus said the Local Water Utilities Act expressly states the exception to the rule of power-to-hire-carries-power-to-fire.

Earlier though, in a September 2019 letter, Lapus told Labella he can terminate the directors "within the bounds of law, consistent with the requirement that the dismissal must be for just cause."

FOR CAUSE AND DUE PROCESS. Even if Labella had no authority to fire the directors, that defect must have been cured by LWUA's subsequent approval of his appointees. The dispute thus may be reduced to the question whether they were removed "for cause," whether their security of tenure, as shown by their fixed terms, was not violated.

That could be the core issue in resolving the lawsuit. The fired directors must rely on the provision of the water utilities law that says "Directors may be removed for cause only."

"For cause" universally means the employee cannot be dismissed except for a just or authorized cause and only after due process. Were the directors confronted with their failure to solve the water crisis and given the chance to explain as due process demands?

MCWD officials and some directors appeared before the City Council and were asked what they had done to solve the problem. But it was not the kind of forum in which allegation of incompetence or neglect was formally made and the officials were formally asked to explain. Appearances before LGUs by MCWD officials were for consultation on legislation. Would resolutions of some local governments expressing disgust over MCWD service enough to comply with due process?

RESPONSIBILITY, MASS FIRING. Then there's also the matter of responsibility: the directors are responsible for which functions? If under the law the board of directors' job description is limited to policy-making, could they be held liable for water shortage, which involves not just policies but a lot more, including decision and action by managers and local government officials?

Board after board had served MCWD through the years and yet not one, including the board that was sacked wholesale, was confronted on the matter of inefficiency or reckless negligence for failure to end the water crisis, which has plagued the Metro Cebu for decades. Even one or two directors who just warmed their seat were included in Labella's wholesale firing.