G.R. No. L-64313 January 17, 1985NATIONAL HOUSING CORPORATION, petitioner, vs.BENJAMIN JUCO AND THE NATIONAL LABOR RELATIONS COMMISSION, respondents. Government Corporate Counsel for petitioner. Amante A. Pimentel for respondents.  GUTIERREZ, JR., J.:Are employees of the National Housing Corporation (NHC) covered by the Labor Code or by laws and regulations governing the civil service?

134 SCRA 172 (1985)

F: Juco was an employee of the NHA. He filed a complaint for illegal dismissal w/ MOLE but his case was dismissed by the labor arbiter on the ground that the NHA is a govt-owned corp. and jurisdiction over its employees is vested in the CSC. On appeal, the NLRC reversed the decision and remanded the case to the labor arbiter for further proceedings. NHA in turn appealed to the SC

ISSUE: Are employees of the National Housing Corporation, a GOCC without original charter, covered by the Labor Code or by laws and regulations governing the civil service?

HELD: Sec. 11, Art XII-B of the Constitution specifically provides: "The Civil Service embraces every branch, agency, subdivision and instrumentality of the Government, including every government owned and controlled corporation.The inclusion of GOCC within the embrace of the civil serv¬ice shows a deliberate effort at the framers to plug an earlier loophole which allowed GOCC to avoid the full consequences of the civil service system. All offices and firms of the government are covered.This consti provision has been implemented by statute PD 807 is unequivocal that personnel of GOCC belong to the civil service and subject to civil service requirements."Every" means each one of a group, without exception. This case refers to a GOCC. It does not cover cases involving private firms taken over by the government in foreclosure or similar proceedings. xxxFor purposes of coverage in the Civil Service, employees of govt- owned or controlled corps. whether created by special law or formed as subsidiaries are covered by the Civil Service Law, not the Labor Code, and the fact that pvt. corps. owned or controlled by the govt may be created by special charter does not mean that such corps. not created by special law are not covered by the Civil Service.xxxThe infirmity of the resp's position lies in its permitting the circumvention or emasculation of Sec. 1, Art. XII-B [now Art IX, B, Sec. 2 (1)] of the Consti. It would be possible for a regular ministry of govt to create a host of subsidiary corps. under the Corp. Code funded by a willing legislature. A govt-owned corp. could create several subsidiary corps. These subsidiary corps.

would enjoy the best of two worlds. Their officials and employees would be privileged individuals, free from the strict accountability required by the Civil Service Dec. and the regulations of the COA. Their incomes would not be subject to the competitive restraint in the open market nor to the terms and conditions of civil service employment. Conceivably, all govt-owned or controlled corps. could be created, no longer by special charters, but through incorp. under the general law. The Constitutional amendment including such corps. in the embrace of the civil service would cease to have application. Certainly, such a situation cannot be allowed.

National Service Corp. v. NLRC, 168 SCRA 125 (1988) --

The civil service does not include Government owned or controlled corporations (GOCC) which are organized as subsidiaries of GOCC under the general corporation law.

F: Eugenio Credo was an employee of the National Service Corporation. She claims she was illegally dismissed. NLRC ruled ordering her reinstatement. NASECO argues that NLRC has no jurisdiction to order her reinstatement. NASECO as a government corporation by virtue of its being a subsidiary of the NIDC, which is wholly owned by the Phil. National Bank which is in turn a GOCC, the terms and conditions of employment of its employees are governed by the Civil Service Law citing National Housing v Juco.

ISSUE: W/N employees of NASECO, a GOCC without original charter, are governed by the Civil Service Law.

HELD: NO. It would appear that, in the interest of justice, the holding in said case should not be given retroactive effect, that is, to cases that arose before its promulgation on 17 January 1985. To do otherwise would be oppressive to Credo and other employees similarly situated, because under the same 1973 Constitution ,but prior to the ruling in National Housing Corporation vs. Juco, this Court had recognized the applicability of the Labor Code to, and the authority of the NLRC to exercise jurisdiction over, disputes involving terms and conditions of employment in government owned or controlled corporations, among them, the National Service Corporation (NASECO). Furthermore, in the matter of coverage by the civil service of government-owned or controlled corporations, the 1987 Constitution starkly varies from the 1973 Constitution, upon which National Housing Corporation vs. Juco is based. Under the 1973 Constitution, it was provided that:

The civil service embraces every branch, agency, subdivision, and instrumentality of the Government, including every government-owned or controlled corporation. ... 35 On the other hand, the 1987 Constitution provides that:

The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charter. 36 (Emphasis supplied) Thus, the situations sought to be avoided by the 1973 Constitution and expressed by the Court in the National Housing . Corporation case in the following manner —

The infirmity of the respondents' position lies in its permitting a circumvention or emasculation of Section 1, Article XII-B of the constitution. It would be possible for a regular ministry of government to create a host of subsidiary corporations under the Corporation Code funded by a willing legislature. A government-owned corporation could create several subsidiary corporations. These subsidiary corporations would enjoy the best of two worlds. Their officials and employees would be privileged individuals, free from the strict accountability required by the Civil Service Decree and the regulations of the Commission on Audit. Their incomes would not be subject to the competitive restrains of the open market nor to the terms and conditions of civil service employment. Conceivably, all government-owned or controlled corporations could be created, no longer by special charters, but through incorporations under the general law. The Constitutional amendment including such corporations in the embrace of the civil service would cease to have application. Certainly, such a situation cannot be allowed to exist. 37 appear relegated to relative insignificance by the 1987 Constitutional provision that the Civil Service embraces government-owned or controlled corporations with original charter; and, therefore, by clear implication, the Civil Service does not include government-owned or controlled corporations which are organized as subsidiaries of government-owned or controlled corporations under the general corporation law. On the premise that it is the 1987 Constitution that governs the instant case because it is the Constitution in place at the time of decision thereof, the NLRC has jurisdiction to accord relief to the parties. As an admitted subsidiary of the NIDC, in turn a subsidiary of the PNB, the NASECO is a government-owned or controlled corporation without original charter.

G.R. No. L-58494            July 5, 1989PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORPORATION, petitioner,vs.HON. VICENTE T. LEOGARDO, DEPUTY MINISTER OF LABOR AND VICENTE D. ELLELINA, respondents.Jurisdiction over GOCCs and their subsidiaries in labor cases 

In December 1977, a Christmas party was held for the employees of PNOC-Energy Development Corporation (PNOC-EDC). In said event, one Vicente Ellelina, employee of PNOC-EDC, tried to grab an armalite rifle from a constabulary officer after he was denied to receive a raffle prize because he lost his winning ticket. For the commission of said crime, PNOC-EDC sought the dismissal of Ellelina. The Ministry of Labor and Employment (MOLE) did not give clearance to Ellelina’s dismissal. This was affirmed by then Minister of Labor, Vicente Leogardo.PNOC-EDC later assailed the jurisdiction of MOLE as it alleged that PNOC-EDC as a subsidiary of the Philippine National Oil Company (PNOC), a government owned or controlled corporation, is likewise a GOCC hence it should be the Civil Service Commission (CSC) that should have jurisdiction.

ISSUE: Whether or not the PNOC-EDC is correct.

HELD: No. It is true that PNOC is a GOCC and that PNOC-EDC, being a subsidiary of PNOC, is likewise a GOCC. It is also true that under the 1973 Constitution, all GOCCs are under the jurisdiction of the CSC. However, the 1987 Constitution change all this as it now provides:The Civil Service embraces all branches, subdivisions, instrumentalities and agencies of the Government, including government-owned or controlled corporations with original charters. (Article IX-B, Section 2 [1]) [emphasis supplied]Hence, the above provision sets the rule that the mere fact that a corporation is a GOCC does not automatically place it under the CSC. Under this provision, the test in determining whether a GOCC is subject to the Civil Service Law is the manner of its creation such that government corporations created by special charter are subject to its provisions while those incorporated under the general Corporation Law are not within its coverage.In the case at bar, PNOC-EDC, even though it is a GOCC, was incorporated under the general Corporation Law – it does not have its own charter, hence, it is under the jurisdiction of the MOLE.

G.R. No. 87676 December 20, 1989REPUBLIC OF THE PHILIPPINES, represented by the NATIONAL PARKS DEVELOPMENT COMMITTEE, petitioner, vs.THE HON. COURT OF APPEALS and THE NATIONAL PARKS DEVELOPMENT SUPERVISORY ASSOCIATION & THEIR MEMBERS, respondents.Bienvenido D. Comia for respondents. GRIÑO-AQUINO, J.:The Regional Trial Court of Manila, Branch III, dismissed for lack of jurisdiction, the petitioner's complaint in Civil Case No. 88- 44048 praying for a declaration of illegality of the strike of the private respondents and to restrain the same. The Court of Appeals denied the petitioner's petition for certiorari, hence, this petition for review. The key issue in this case is whether the petitioner, National Parks Development Committee (NPDC), is a government agency, or a private corporation, for on this issue depends the right of its employees to strike. This issue came about because although the NPDC was originally created in 1963 under Executive Order No. 30, as the Executive Committee for the development of the Quezon Memorial, Luneta and other national parks, and later renamed as the National Parks Development Committee under Executive Order No. 68, on September 21, 1967, it was registered in the Securities and Exchange Commission (SEC) as a non-stock and non-profit corporation, known as "The National Parks Development Committee, Inc." However, in August, 1987, the NPDC was ordered by the SEC to show cause why its Certificate of Registration should not be suspended for: (a) failure to submit the General Information Sheet from 1981 to 1987; (b) failure to submit its Financial Statements from 1981 to 1986; (c) failure to register its

Corporate Books; and (d) failure to operate for a continuous period of at least five (5) years since September 27, 1967. On August 18, 1987, the NPDC Chairman, Amado Lansang, Jr., informed SEC that his Office had no objection to the suspension, cancellation, or revocation of the Certificate of Registration of NPDC.By virtue of Executive Order No. 120 dated January 30, 1989, the NPDC was attached to the Ministry (later Department) of Tourism and provided with a separate budget subject to audit by the Commission on Audit. On September 10, 1987, the Civil Service Commission notified NPDC that pursuant to Executive Order No. 120, all appointments and other personnel actions shall be submitted through the Commission.Meanwhile, the Rizal Park Supervisory Employees Association, consisting of employees holding supervisory positions in the different areas of the parks, was organized and it affiliated with the Trade Union of the Philippines and Allied Services (TUPAS) under Certificate No. 1206. On June 15, 1987, two collective bargaining agreements were entered into between NPDC and NPDCEA (TUPAS local Chapter No. 967) and NPDC and NPDCSA (TUPAS Chapter No. 1206), for a period of two years or until June 30, 1989. On March 20, 1988, these unions staged a stake at the Rizal Park, Fort Santiago, Paco Park, and Pook ni Mariang Makiling at Los Banos, Laguna, alleging unfair labor practices by NPDC.On March 21, 1988, NPDC filed in the Regional Trial Court in Manila, Branch III, a complaint against the union to declare the strike illegal and to restrain it on the ground that the strikers, being government employees, have no right to strike although they may form a union. On March 24, 1988, the lower court dismissed the complaint and lifted the restraining order for lack of jurisdiction. It held that the case "properly falls under the jurisdiction of the Department of Labor," because "there exists an employer-employee relationship" between NPDC and the strikers, and "that the acts complained of in the complaint, and which plaintiff seeks to enjoin in this action, fall under paragraph 5 of Article 217 of the Labor Code, ..., in relation to Art. 265 of the same Code, hence, jurisdiction over said acts does not belong to this Court but to the Labor Arbiters of the Department of Labor." (p. 142, Rollo.).Petitioner went to the Court of Appeals on certiorari (CA-G.R. SP No. 14204). On March 31, 1989, the Court of appeals affirmed the order of the trial court, hence, this petition for review. The petitioner alleges that the Court of Appeals erred:

1) in not holding that the NPDC employees are covered by the Civil Service Law; and2) in ruling that petitioner's labor dispute with its employees is cognizable by the Department of Labor.

We have considered the petition filed by the Solicitor General on behalf of NPDC and the comments thereto and are persuaded that it is meritorious.In Jesus P. Perlas, Jr. vs. People of the Philippines, G.R. Nos. 84637-39, August 2, 1989, we ruled that the NPDC is an agency of the government, not a government-owned or controlled corporation, hence, the Sandiganbayan had jurisdiction over its acting director who committed estafa. We held thus:

The National Parks Development Committee was created originally as an Executive Committee on January 14,1963, for the development of the Quezon Memorial, Luneta and other national parks (Executive Order No. 30). It was later designated as the National Parks Development Committee (NPDC) on February 7, 1974 (E.O. No. 69). On January 9, 1966, Mrs. Imelda R. Marcos and Teodoro F. Valencia were designated Chairman and Vice- Chairman respectively (E.O. No. 3). Despite an attempt to transfer it to the Bureau of Forest Development, Department of Natural Resources, on December 1, 1975 (Letter of Implementation No. 39, issued pursuant to PD No. 830, dated November 27, 1975), the NPDC has remained under the Office of the President (E.O. No. 709, dated July 27, 1981). Since 1977 to 1981, the annual appropriations decrees listed NPDC as a regular government agency under the Office of the President and allotments for its maintenance and operating expenses were issued direct to NPDC (Exh. 10-A Perlas, Item No. 2, 3). (Italics ours.)

Since NPDC is a government agency, its employees are covered by civil service rules and regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees (Sec. 14, Executive Order No. 180). While NPDC employees are allowed under the 1987 Constitution to organize and join unions of their choice, there is as yet no law permitting them to strike. In case of a labor dispute between the employees and the government, Section 15 of Executive Order No. 180 dated June 1, 1987 provides that the Public Sector Labor- Management Council, not the Department of Labor and Employment, shall hear the dispute. Clearly, the Court of Appeals and the lower court erred in holding that the labor dispute between the NPDC and the members of the NPDSA is cognizable by the Department of Labor and Employment. WHEREFORE, the petition for review is granted. The decision of the Court of Appeals in CA-G.R. SP No. 14204 is hereby set aside. The private respondents' complaint should be filed in the Public Sector Labor-Management Council as provided in Section 15 of Executive Order No. 180. Costs against the private respondents.SO ORDERED.Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.