G.R. No.

L-49677 May 4, 1989 Government from its incorporation under Act 459,
the former corporation law. The government
TRADE UNIONS OF THE PHILIPPINES AND ALLIED entities that own its shares of stock are the
SERVICES, petitioner, Government Service Insurance System, the Social
vs. Security System, the Development Bank of the
NATIONAL HOUSING CORPORATION and ATTY. Philippines, the National Investment and
VIRGILIO SY, as Officer-in-Charge of the Bureau of Development Corporation and the People's
Labor Relations, respondents. Homesite and Housing Corporation. 1 Petitioner
Trade Unions of the Philippines and Allied Services
(TUPAS, for brevity) is a legitimate labor
organization with a chapter in NHC.
The employees of the public sector comprise the
largest bloc of workers in our national work force. On July 13, 1977, TUPAS filed a petition for the
Governmental bureaucracy is continually being conduct of a certification election with Regional
reorganized to cope with the growing complexity of Office No. IV of the Department of Labor in order
the problems and needs of political and to determine the exclusive bargaining
administrative governance. As the increase in the representative of the workers in NHC. It was
number of government employees grows space, claimed that its members comprised the majority
the need to enhance their welfare correspondingly of the employees of the corporation. 2 The petition
becomes more imperative. While it may be was dismissed by med-arbiter Eusebio M. Jimenez
assumed that the Government is exerting efforts to in an order, dated November 7, 1977, holding that
advance the interests of its employees, it is quite NHC "being a government-owned and/or
understandable that the employees themselves controlled corporation its employees/workers are
should actively seek arrangements where by they prohibited to form, join or assist any labor
can participate more meaningfully in management organization for purposes of collective bargaining
and employment relationships. There is, thus, a pursuant to Section 1, Rule II, Book V of the Rules
proliferation of unions or employees' organizations, and Regulations Implementing the Labor Code." 3
each seeking concomitant representational
recognition. From this order of dismissal, TUPAS appealed to
the Bureau of Labor Relations 4 where, acting
The antecedent facts which led to the filing of this thereon in BLR Case No. A-984-77 (RO4-MED-1090-
special civil action for certiorari are clear and 77), Director Carmelo C. Noriel reversed the order
undisputed. The juridical status and relevant of dismissal and ordered the holding of a
circumstances of respondent corporation have certification election. 5 This order was, however, set
been established in a case of illegal dismissal filed aside by Officer-in-Charge Virgilio S.J. Sy in his
against it, as previously decided by the Court and resolution of November 21, 1978 6 upon a motion
hereinafter discussed. However, submitted this for reconsideration of respondent NHC.
time for Our resolution is a controversy on the
propriety of and requirements for certification In the instant petition for certiorari, TUPAS seeks
elections in government-owned or controlled the reversal of the said resolution and prays that a
corporations like the respondent. certification election be held among the rank and
file employees of NHC.
Respondent National Housing Corporation
(hereinafter referred to as NHC) is a corporation In retrospect, it will be recalled that in a former
organized in 1959 in accordance with Executive case of illegal dismissal involving the same
Order No. 399, otherwise known as the Uniform respondent corporation, 7 We had ruled that the
Charter of Government Corporations, dated employees of NHC and of other government owned
January 1, 1951. Its shares of stock are and have or controlled corporations were governed by civil
been one hundred percent (100%) owned by the service laws, rules and regulations pursuant to the
1973 Constitution which provided that "the civil corporations with original
service embraces every branch, agency, subdivision charters and therefore, by clear
and instrumentality of the government, including implication, the Civil Service does
government-owned or controlled corporations." 8 not include government-owned or
controlled corporations which are
It was therein stressed that to allow subsidiary organized as subsidiaries of
corporations to be excluded from the civil service government-owned or controlled
laws would be to permit the circumvention or corporations under the general
emasculation of the above-quoted constitutional corporation law. 10
provision. As perceptively analyzed therein, "(i)t
would be possible for a regular ministry of While the aforecited cases sought different reliefs,
government to create a host of subsidiary that is, reinstatement consequent to illegal
corporations under the Corporation Code funded dismissal, the same lis mota determinative of the
by a willing legislature. A government-owned present special civil action was involved therein.
corporation could create several subsidiary
corporations. These subsidiary corporation rations The workers or employees of NHC undoubtedly
would enjoy the best of two worlds. Their officials have the right to form unions or employees'
and employees would be privileged individuals, organizations. The right to unionize or to form
free from the strict accountability required by the organizations is now explicitly recognized and
Civil Service Decree and the regulations of the granted to employees in both the governmental
Commission on Audit. Their incomes would not be and the private sectors. The Bill of Rights provides
subject to the competitive restraints of the open that "(t)he right of the people, including those
market nor to the terms and conditions of civil employed in the public and private sectors, to form
service employment." unions, associations or societies for purposes not
contrary to law shall not be abridged" 11
The rule, however, was modified in the 1987
Constitution, the corresponding provision whereof This guarantee is reiterated in the second
declares that "(t)he civil service embraces all paragraph of Section 3, Article XIII, on Social Justice
branches, subdivisions, instrumentalities and and Human Rights, which mandates that the State
agencies of the government, including "shall guarantee the rights of all workers to self-
government-owned or controlled corporations with organization, collective bargaining and
original charters." 9 negotiations, and peaceful concerted activities,
including the right to strike in accordance with
Consequently, the civil service now covers only law ...."
government owned or controlled corporations with
original or legislative charters, that is those created Specifically with respect to government employees,
by an act of Congress or by special law, and not the right to unionize is recognized in Paragraph (5),
those incorporated under and pursuant to a Section 2, Article IX B 12 which provides that "(t)he
general legislation. As We recently held — right to self-organization shall not be denied to
government employees." The rationale of and
..., the situations sought to be justification for this innovation which found
avoided by the 1973 Constitution expression in the aforesaid provision was explained
and expressed by this Court in by its proponents as follows:
the National Housing
Corporation case ... appear ... The government is in a sense the
relegated to relative insignificance repository of the national
by the 1987 Constitutional provision sovereignty and, in that respect, it
that the Civil Service embraces must be held in reverence if not in
government-owned controlled awe. It symbolizes the unity of the
nation, but it does perform a public's own allies for detecting graft
mundane task as well. It is an and corruption and for exposing
employer in every sense of the word it.... 13
except that terms and conditions of
work are set forth through a Civil There is, therefore, no impediment to the holding
Service Commission. The of a certification election among the workers of
government is the biggest employer NHC for it is clear that they are covered by the
in the Philippines. There is an Labor Code, the NHC being a government-owned
employer-employee relationship and/or controlled corporation without an original
and we all know that the charter. Statutory implementation of the last cited
accumulated grievances of several section of the Constitution is found in Article 244 of
decades are now beginning to the Labor Code, as amended by Executive Order
explode in our faces among No. 111, thus:
government workers who feel that
the rights afforded by the Labor ... Right of employees in the public
Code, for example, to workers in the service — Employees of the
private sector have been effectively government corporations
denied to workers in government in established under the Corporation
what looks like a grotesque, (sic) a Code shall have the right to organize
caricature of the equal protection of and to bargain collectively with their
the laws. For example, ... there were respective employers. All other
many occasions under the old employees in the civil service shall
government when wages and cost of have the right to form associations
living allowances were granted to for purposes not contrary to law.
workers in the private sector but
denied to workers in the The records do not show that supervening factual
government for some reason or events have mooted the present action. It is meet,
another, and the government did however, to also call attention to the fact that,
not even state the reasons why. The insofar as certification elections are concerned,
government employees were being subsequent statutory developments have rendered
discriminated against. As a general academic even the distinction between the two
rule, the majority of the world's types of government-owned or controlled
countries now entertain public corporations and the laws governing employment
service unions. What they really add relations therein, as hereinbefore discussed. For,
up to is that the employees of the whether the employees of NHC are covered by the
government form their own Labor Code or by the civil service laws, a
association. Generally, they do not certification election may be conducted.
bargain for wages because these are
fixed in the budget but they do For employees in corporations and entities covered
acquire a forum where, among other by the Labor Code, the determination of the
things, professional and self- exclusive bargaining representative is particularly
development is (sic) promoted and governed by Articles 255 to 259 of said Code.
encouraged. They also act as Article 256 provides for the procedure when there
watchdogs of their own bosses so is a representation issue in organized
that when graft and corruption is establishments, while Article 257 covers
committed, generally, it is the unorganized establishments. These Labor Code
unions who are no longer afraid by provisions are fleshed out by Rules V to VII, Book V
virtue of the armor of self- of the Omnibus Implementing Rules.
organization that become the
With respect to other civil servants, that is,
employees of all branches, subdivisions,
instrumentalities and agencies of the government
including government-owned or controlled
corporations with original charters and who are,
therefore, covered by the civil service laws, the
guidelines for the exercise of their right to organize
is provided for under Executive Order No. 180.
Chapter IV thereof, consisting of Sections 9 to 12,
regulates the determination of the "sole and
exclusive employees representative"; Under
Section 12, "where there are two or more duly
registered employees' organizations in the
appropriate organization unit, the Bureau of Labor
Relations shall, upon petition order the conduct of
certification election and shall certify the winner as
the exclusive representative of the rank-and-file
employees in said organizational unit."

Parenthetically, note should be taken of the

specific qualification in the Constitution that the
State "shall guarantee the rights of all workers to
self-organization, collective bargaining, and
peaceful concerted activities, including the right to
strike in accordance with law" and that they shall
also participate in policy and decision-making
processes affecting their rights and benefits as may
be provided by law." 14 (Emphasis supplied.)

ON THE FOREGOING CONSIDERATIONS, the

assailed resolution of the Bureau of Labor
Relations, dated November 21, 1978, is ANNULLED
and SET ASIDE and the conduct of a certification
election among the affected employees of
respondent National Housing Corporation in
accordance with the rules therefor is hereby
GRANTED.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez,

Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Sarmiento,
Cortes Griño Aquino and Medialdea, JJ., concur.

Gancayco, J., on leave.

TUPAS v. NHA November 21, 1978 upon a motion for
reconsideration of respondent NHC.
TUPAS v. NHA
G.R. No. L-49677 May 4, 1989 Issue:
Regalado, J.
                whether or not the employees of NHA are
not covered by Civil Service law, rules and
Facts: regulations and have therefore the right to
unionize
                Respondent National Housing Corporation
(hereinafter referred to as NHC) is a corporation Held:
organized in 1959 in accordance with Executive
Order No. 399, otherwise known as the Uniform                 Yes. The civil service now covers only
Charter of Government Corporations, dated government owned or controlled corporations with
January 1, 1951. Its shares of stock are and have original or legislative charters, that is, those
been one hundred percent (100%) owned by the created by an act of Congress or by special law, and
Government from its incorporation under Act 459, not those incorporated under and pursuant to a
the former corporation law. The government general legislation. The Civil Service does not
entities that own its shares of stock are the GSIS, include government-owned or controlled
SSS, DBP, the NIDC and the People’s Homesite and corporations which are organized as subsidiaries of
Housing Corporation. Petitioner Trade Unions of government-owned or controlled corporations
the Philippines and Allied Services (TUPAS) is a under the general corporation law.
legitimate labor organization with a chapter in
NHC.                 The workers or employees of NHC
undoubtedly have the right to form unions or
On July 13, 1977, TUPAS filed a petition for employees’ organizations. The right to unionize or
the conduct of a certification election with Regional to form organizations is now explicitly recognized
Office No. IV of the Department of Labor in order and granted to employees in both the
to determine the exclusive bargaining governmental and the private sectors.
representative of the workers in NHC. It was
claimed that its members comprised the majority There is, therefore, no impediment to the
of the employees of the corporation. The petition holding of a certification election among the
was dismissed by med-arbiter Eusebio M. Jimenez workers of NHC for it is clear that they are covered
in an order, dated November 7, 1977, holding that by the Labor Code, the NHC being a government-
NHC “being a government-owned and/or owned and/or controlled corporation without an
controlled corporation its employees/workers are original charter. Statutory implementation of the
prohibited to form, join or assist any labor last cited section of the Constitution is found in
organization for purposes of collective bargaining Article 244 of the Labor Code, as amended by
pursuant to Section 1, Rule II, Book V of the Rules Executive Order No. 111, thus:
and Regulations Implementing the Labor Code.”
... Right of employees in the public service
Bureau of Labor Relations — Employees of the government corporations
established under the Corporation Code shall have
From this order of dismissal, TUPAS the right to organize and to bargain collectively
appealed to the Bureau of Labor Relations where with their respective employers. All other
Director Carmelo C. Noriel reversed the order of employees in the civil service shall have the right to
dismissal and ordered the holding of a certification form associations for purposes not contrary to law.
election. This order was, however, set aside by
Officer-in-Charge Virgilio S.J. Sy in his resolution of