SECOND DIVISION 1.

Gerry Sensing P 9,505.68

2. Belen Fernandez 14,258.52
[G.R. NO. 146572 : January 14, 2005]
3. Mirasol Diaz 12,458.52
CIRINEO BOWLING PLAZA, INC., Petitioner, v. GERRY SENSING, BELEN FERNANDEZ, MIRASOL 4. Margarita Abril 31,557.12
DIAZ, MARGARITA ABRIL, DARIO BENITEZ, MANUEL BENITEZ, RONILLO TANDOC, EDGAR
DIZON, JOVELYN QUINTO, KAREN REMORAN, JENIFFER RINGOR, DEPARTMENT OF LABOR 5. Lamberto Solano 53,151.12
AND EMPLOYMENT and COURT of APPEALS, Respondents.
6. Dario Benitez 53,151.12

DECISION 7. Manuel Benitez 53,151.12

8. Ronillo Tandoc 36,951.12
AUSTRIA-MARTINEZ, J.:
9. Edgar Dizon 14,637.78

Before us is a special civil action for certiorari filed by petitioner assailing the Resolution1 dated August 31, 2000 10. Jovelyn Quinto 22,769.88
of the Court of Appeals (CA) which dismissed petitioner's Petition for Certiorari; and the Resolution2 dated 11. Karen Remoran 21,387.78
November 10, 2000 which denied petitioner's motion for reconsideration.
12. Jennifer Ringor 37,304.82
The antecedent facts are as follows: 13. Eligio Paolo, Jr. 12,810.00

On November 27, 1995, Eligio Paolo, Jr., an employee of petitioner, filed a letter complaint with the Department
of Labor and Employment (DOLE for short), Dagupan District Office, Dagupan City, requesting for the TOTAL P 373,094.58
inspection/investigation of petitioner for various labor law violations like underpayment of wages, 13th month
pay, non-payment of rest day pay, overtime pay, holiday pay and service incentive leave pay.3 Pursuant to the and to submit the proof of payment to this Office within ten (10) days from receipt hereof. Otherwise, a Writ of
visitorial and enforcement powers of the Secretary of Labor and Employment, his duly authorized representative Execution will be issued to enforce this order.
under Article 128 of the Labor Code, as amended, conducted inspections on petitioner's establishment the
following day. In his inspection report,4 Labor and Employment Officer III, Crisanto Rey Dingle, found that
petitioner has thirteen5 employees and had committed the following violations: underpayment of minimum wage, Respondent is further ORDERED to adjust the salaries of its employees to the applicable daily minimum wages
13th month pay, holiday premiums, overtime premiums, and non-payment of rest day. The findings in the and to submit the proof thereof within the same period.
inspection report were explained to petitioner's officer-in-charge, Ma. Fe Boquiren, who signed the same.
SO ORDERED.7
The first hearing of the case was scheduled on December 27, 1995, but petitioner failed to appear, thus, the
hearing was reset to January 10, 1996. On the date set, Boquiren, as petitioner's representative, appeared with the copy of which was received by petitioner's counsel on May 17, 1996. No motion for reconsideration or appeal
information that petitioner's President/General Manager Luisito Cirineo was sick and confined in a hospital. memorandum was filed by petitioner.

On the January 19, 1996 hearing, Cirineo appeared and asked for more time to settle with his employees. The case On May 27, 1996, petitioner's representative, Carmen Zapata, appeared before the DOLE Regional Office and
was again set on January 26, 1996 but Cirineo failed to appear. submitted the quitclaims, waivers and releases of employees-awardees, Lamberto Solano, Jovelyn Quinto, Manuel
Benitez, Edgar Dizon, Ronillo Tandoc, Eligio Paolo, Jr., and Dario Benitez. Later, however, Benitez, Tandoc,
On April 22, 1996, an Order6 was issued by the DOLE Regional Office, the dispositive portion of which reads: Quinto and Dizon wrote DOLE a letter denying having received any amount from petitioner. Thus, DOLE's
inspector Dingle went to petitioner's establishment to confirm the authenticity of the quitclaims and releases and
talked to the employees concerned who stated that they signed the document without knowing its contents but they
WHEREFORE, premises considered and considering further that the amount computed constitutes part of the are willing to settle if they will be given the amount computed by DOLE.ςηαñrοblεš  Î½Î¹r†υαl  lαω
lawful remunerations of thirteen affected employees, respondent is hereby ordered to pay them the total amount of lιbrαrÿ
THREE HUNDRED SEVENTY SEVEN THOUSAND FIVE HUNDRED PESOS AND 58/100. (P377,500.58),
representing their unpaid/underpaid wages, 13th month pay, holiday premiums, rest day pay and overtime
premiums distributed as follows:

NAME AMOUNT
On June 19, 1996, Luisito Cirineo and a certain Fe Cirineo Octaviano, owner of Esperanza Seafoods Kitchenette However, on March 30, 1999, DOLE Undersecretary Jose Español dismissed the appeal and affirmed the order
stationed in petitioner's establishment, wrote DOLE a letter requesting that the case be endorsed to the National dated February 7, 1997 of the DOLE Regional Director with the following disquisitions:
Labor Relations Commission since the resolution of the case required evidentiary matters not disclosed or verified
in the normal course of inspection. They also submitted documents to show that petitioner and Esperanza Seafoods In support thereof, respondent alleges that it had only eight (8) employees as the "other claimants of labor
Kitchenette are separate and distinct business entities and that some of the employees-awardees are actually benefits . . . are employees of Fe Esperanza Octaviano doing business under the name and style "Esperanza
employees of the Esperanza Seafoods Kitchenette. Seafoods Kitchenette." Thus, it points out that:. . .

On September 12, 1996, DOLE issued its Order8 stating among others: Hence, under the Labor Code, Article 94 thereof the employees of the appellant are not entitled to holiday pay and
holiday premium pay.
Records show that respondent, Luisito Cirineo and his representative appeared before this Office during the
summary investigation of this instant case but they never once mentioned the issue of separate juridical Under Republic Act 6727 and its Implementing Rules, Chapter 1, Section 1 thereof, establishments employing less
personalities. Respondent had always been bent on settling the respective claims of all thirteen (13) than ten (10) employees are exempted from compliance with minimum wage rates. Hence, the wages given to
concerned employees. In the process, however, he acknowledged being their employer. He cannot at this respondents do not constitute under payments. As to their claims for overtime pay and rest day pay, there is no
juncture therefore say, that some of the awardees in our ORDER are employees of another business proof that respondents rendered overtime or restday work, hence they are not entitled to the same. (Cagampanan v.
entity. This being the case, we cannot grant his request for indorsement to the NLRC. NLRC, 195 SCRA 533)

WHEREFORE, premises considered, the case of employees Eligio Paolo, Jr. and Lamberto Solano whose We do not agree.
respective claims had been settled by respondent is hereby DISMISSED. The ORDER for the payment of the
monetary claims of the eleven (11) other cash awardees STANDS. Let execution follow immediately.9 (Emphasis
supplied)ςrαlαωlιbrαrÿ The records show that during the summary investigation respondent never refuted the findings of the labor
inspector particularly the identity of the thirteen (13) concerned employees nor raised the issue of separate
juridical personalities of respondent Cirineo and Esperanza Seafoods Kitchenette. Thus, in the Order dated 07
On October 21, 1996, DOLE Regional Director Maximo B. Lim issued a writ of execution.10 On November 13, February 1997, the Regional Director ruled:
1996, petitioner filed a motion to quash11 the writ of execution alleging the following grounds:
. . . Respondent's actuation during and after the summary investigation disclosed that it was bent on settling all the
I. The Writ of Execution seeks to satisfy the monetary awards given to employees who are not employees of claims of the claimant-awardees and never did it refute the identity of the concerned awardees. Otherwise,
Cirineo Bowling Plaza, Inc.. respondent could have easily raised the issue by admitting evidence such as payrolls, daily time records and any
similar document which could have pinpointed the real employer of the claimants.. . .
II. The Writ of Execution seeks to satisfy monetary awards given to employees of Fe Esperanza C. Octaviano who
was not impleaded. The documents submitted to this Office by respondent could be interpreted as a desperate attempt to mislead this
Office and to evade liability.
III. The Writ of Execution seeks to satisfy monetary awards wrongfully given to employees employed by
establishments employing less than ten (10) employees, who are not for this reason entitled to holiday and holiday On the issue of jurisdiction, we rule that the Regional Director has jurisdiction over the instant case.
premium pay, nor to underpayment of wages.
The old rule limiting the jurisdiction of the Secretary of Labor and Employment or his duly authorized
IV. The Writ of Execution seeks to satisfy the award of benefits in excess of the jurisdictional amount allowed by representatives to money claims not exceeding P5,000.00 has been repealed by the passage of R.A. No. 7730,
law. Section 1 of which reads:

V. The Writ of Execution seeks to enforce an Order issued beyond the quasi-judicial authority of the Regional Section 1. Paragraph (b) of Article 128 of the Labor Code. As amended, is hereby further amended to read as
Director12 . follows:

In an Order13 dated February 7, 1997, DOLE Regional Director Lim denied petitioner's motion to quash the writ of Art. 128. Visitorial and Enforcement Power.. . .
execution.
(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the
Petitioner filed its Memorandum of Appeal to the Secretary of Labor and Employment14 who dismissed the appeal relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized
on the ground that same was filed out of time.15 On motion for reconsideration, the appeal was granted and the representative shall have the power to issue compliance orders to give effect to the labor standards provisions of
appeal was given due course. this Code and other labor legislation based on the finding of the labor employment and enforcement officer or
industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives
shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where Section 3. Contents and filing of petition; effect of non-compliance with requirements. -
the employer contests the findings of the labor employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of inspection. ...

Pursuant to R.A. 7730, the jurisdictional limitations imposed by Article 129 on the visitorial and enforcement In actions filed under Rule 65, the petition shall further indicate the material dates showing when the notice of the
powers of this Office under Article 128 of the Labor Code, have been repealed. The phrase "notwithstanding the judgment or final order or resolution subject thereof was received, when a motion for new trial or reconsideration,
provision of Articles 129 and 217 of the Labor Code to the contrary," erases all doubts as to the amendatory nature if any, was filed and when notice of the denial thereof was received.. . .
of R.A. No. 7730. The amendment, in effect, overturned the rulings in the Aboitiz and Servandos cases insofar as
the restrictive effect of Article 129 on the use of the power under Article 128 is concerned.
The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the
dismissal of the petition.
Indeed, the Supreme Court in Nazareno Furniture v. Hon. Secretary of Labor and Employment and Tomas
Mendoza (G.R. No. 128546, April 30, 1997), already ruled that:
It bears stressing that the timely perfection of an appeal is a mandatory requirement, which cannot be trifled with
as a "mere technicality" to suit the interest of a party. The rules on periods for filing appeals are to be observed
Petitioner is incorrect in stating that R.A. 7730 did not specifically amend Art. 217 of the Labor Code. In fact, it is religiously, and parties who seek to avail themselves of the privilege must comply with the rules.18 The failure to
plainly stated that the amendment applies notwithstanding the provisions of Articles 129 and 217 to the contrary. perfect an appeal as required by law renders the judgment final and executory.19
Even if Article 217 confers original and exclusive jurisdiction over cases such as the one subject of this petition,
this has been modified by the later enactment of R.A. 7730. . . ."16
While there are exceptional cases where we set aside procedural defects to correct a patent injustice, there should
be an effort on the part of the party invoking liberality to at least explain its failure to comply with the rules.20 It
Petitioner's motion for reconsideration was denied in a Resolution dated April 18, 2000. 17
appears that petitioner's new counsel failed to state the material date twice, first in its petition filed with the CA
and, second, in its motion for reconsideration. Petitioner's explanation focused on the fact that its President,
Petitioner filed a Petition for Certiorari with prayer for the issuance of temporary restraining order with the CA. Luisito Cirineo, only learned of the DOLE's denial of its motion for reconsideration on August 1, 2000 when he
came back from a trip from Europe; that efforts to communicate with its former counsel remained futile. We find
On August 31, 2000, the CA dismissed the petition for failure of petitioner to (1) attach a copy of the letter such explanation unsatisfactory since the material dates can easily be verified from the files of the DOLE office.
complaint filed by petitioner's employees and the Order dated February 7, 1997 of the DOLE Regional Director
and (2) state the material date when the assailed Orders/Resolutions were received pursuant to Section 1 of Rule Even if we disregard technicality, we find the arguments raised by petitioner without merit. As correctly held by
65 and Section 3 of Rule 46 of the 1997 Rules of Civil Procedure. Petitioner filed a motion for reconsideration the DOLE Regional Director and sustained by the DOLE Undersecretary, records show that petitioner never
which was also denied by the CA on November 10, 2000, copy of which was received by petitioner on November refuted the findings of the labor inspector as to the identity of the thirteen employees nor raised the issue of
24, 2000.ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ separate juridical personalities of petitioner Cirineo and Esperanza Seafoods Kitchenette during the investigation
and on the hearings conducted.
Petitioner comes to us by way of a Petition for Certiorari under Rule 65 raising the sole issue:
Likewise, we sustain the jurisdiction of the DOLE Regional Director.ςηαñrοblεš  Î½Î¹r†υαl  lαω
PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR lιbrαrÿ
EXCESS OF JURISDICTION WHEN IT DISMISSED THE INSTANT PETITION AND OUTRIGHT
DISMISSAL OF PETITIONER'S MOTION FOR RECONSIDERATION DUE TO MERE TECHNICALITIES. The visitorial and enforcement powers of the DOLE Regional Director to order and enforce compliance with labor
standard laws can be exercised even where the individual claim exceeds P5,000.00.21 In Allied Investigation
Respondents did not file their comment on the petition. Bureau, Inc. v. Secretary of Labor and Employment, 22 we elucidated:

We dismiss the petition. Petitioner argues that the power to adjudicate money claims belongs to the Labor Arbiter who has exclusive
jurisdiction over employees' claims where the aggregate amount of the claims of each employee
exceeds P5,000.00; and, that the Labor Arbiter has jurisdiction over all other claims arising from employer-
We find no grave abuse of discretion committed by the CA in issuing the assailed resolutions. The CA dismissed employee relations, including those of persons in domestic or household service, involving an amount exceeding
the Petition for Certiorari for failure of petitioner to attach certain documents and to state the material date. While five thousand pesos (P5,000.00), whether or not accompanied with a claim for reinstatement.
petitioner filed its motion for reconsideration, attaching the required documents, the CA correctly found that it still
did not state the material date when it received the DOLE's Resolution dated April 18, 2000 denying its motion for
reconsideration. Thus, without the date of receipt of the denial of such motion, the CA could not determine Petitioner's arguments are untenable.
whether the petition was filed within the reglementary period of sixty days for filing the Petition
for Certiorari under Rule 65 of the Rules of Court. Under Section 3, Rule 46 of the 1997 Rules of Civil Procedure,
as amended by SC Circular No. 39-98, in original actions for certiorari filed with the CA, the petition must
include the following material dates, to wit:
While it is true that under Articles 129 and 217 of the Labor Code, the Labor Arbiter has jurisdiction to hear and In a recent case, the Supreme Court ruled in this wise:
decide cases where the aggregate money claims of each employee exceeds P5,000.00, said provisions of law do
not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized Assailed in this special civil action for certiorari is the Order dated August 1, 1995 issued by public respondent
representatives. Regional Director Romeo A. Young of the Department of Labor and Employment (DOLE) in Case No. NCROO-
9503-IS-035, ordering petitioner Lord and Lady Salon to pay private respondent Ateldo Barroga the sum
Rather, said powers are defined and set forth in Article 128 of the Labor Code (as amended by R.A. No. 7730) of P14,099.05 representing his underpaid wages and premium pay for work on holidays. This suit is an offshoot of
thus: the complaint for payment of salary differentials filed by private respondent against petitioner on March 20, 1995.
Upon investigation conducted by public respondent's office, petitioner was found to have committed the following
Art. 128. Visitorial and enforcement power. ' violations: (1) underpayment of wages, (2) non-implementation of premium pay for worked legal holidays, and (3)
non-availability of records at the time of inspection. Consequent to the parties' failure to reach an amicable
settlement, public respondent issued the assailed resolution. Petitioner asserts that public respondent exceeded his
(a) The Secretary of Labor or his duly authorized representatives, including labor regulation officers, shall have jurisdiction in taking cognizance of the complaint and ordering the payment of P14,099.05 to private respondent
access to employer's records and premises at any time of the day or night whenever work is being undertaken because the award of the latter amount goes over the jurisdictional amount of P5,000.00 for cases filed before the
therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter Regional Director, thus, is properly cognizable by the Labor Arbiter instead.
which may be necessary to determine violations or which may aid in the enforcement of this Code and of any
labor law, wage order or rules and regulations issued pursuant thereto.
We dismiss the petition. Pursuant to Section 1 of Republic Act 7730 [Approved on June 2, 1994] which amended
Article 128 (b) of the Labor Code, the Secretary of Labor and Employment or his duly authorized representative,
(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the in the exercise of their visitorial and enforcement powers, are now authorized to issue compliance orders to give
relationship of employer-employee exists, the Secretary of Labor and Employment or his duly authorized effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor
representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of employment and enforcement officers or industrial safety engineers made in the course of inspection, sans any
this Code and other labor legislation based on the findings of labor employment and enforcement officers or restriction with respect to the jurisdictional amount of P5,000.00 provided under Article 129 and Article 217 of the
industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives Code.
shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where
the employer contests the finding of the labor employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of inspection. The instant case therefore falls squarely within the coverage of the aforecited amendment as the assailed order was
issued to enforce compliance with the provisions of the Code with respect to the payment of proper wages. Hence,
petitioner's claim of lack of jurisdiction on the part of public respondent is bereft of merit.23
An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article
may be appealed to the latter. In case said order involved a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited WHEREFORE, the instant petition is DISMISSED for lack of merit.SO ORDERED.
by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed
from.. . . Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.Endnotes:

The aforequoted provision explicitly excludes from its coverage Articles 129 and 217 of the Labor Code by the 1
 Penned by Jstice Godardo A. Jacinto with the concurrence of Justices Rodrigo V. Cosico and Bienvenido L.
phrase "(N)otwithstanding the provisions of Articles 129 and 217 of this Code to the contrary . . ." thereby Reyes.
retaining and further strengthening the power of the Secretary of Labor or his duly authorized representative to 2
 Id., pp. 26-27.
issue compliance orders to give effect to the labor standards provisions of said Code and other labor legislation 3
 CA Records, p. 118.
based on the findings of labor employment and enforcement officers or industrial safety engineers made in the 4
 Rollo, p. 54.
course of inspection. 5
 See page 3 of herein decision.
6
 Rollo, pp. 54-56.
In the case at bar, the Office of respondent Regional Director conducted inspection visits at petitioner's
7
 Id., pp. 55-56.
8
establishment on February 9 and 14, 1995 in accordance with the above-mentioned provision of law. In the course  Rollo, pp. 57-59.
of said inspection, several violations of the labor standard provisions of the Labor Code were discovered and
9
 Id., p. 58.
reported by Senior Labor Enforcement Officer Eduvigis A. Acero in his Notice of Inspection Results. It was on
10
 Id., pp. 97-100.
the bases of the aforesaid findings (which petitioner did not contest), that respondent Regional Director issued the
11
 Id., pp. 101-109.
assailed Order for petitioner to pay private respondents the respective wage differentials due them.
12
 Id., p. 101.
13
 Id., pp. 142-152.
14
 Secretary Leonardo A. Quisumbing (now Supreme Court Associate Justice).
Clearly, as the duly authorized representative of respondent Secretary of Labor, and in the lawful exercise of the 15
 Id., p. 121.
Secretary's visitorial and enforcement powers under Article 128 of the Labor Code, respondent Regional Director 16
 Id., pp. 125-126.
had jurisdiction to issue his impugned Order. 17
 Id., p. 127.
18
 Cuevas vs. Bais Steel Corporation, 391 SCRA 192.
19
 Mabuhay vs. NLRC, 288 SCRA 1, 6. when the 1973 Constitution was still in effect. We ruled that the NLRC has jurisdiction over the employees of
20
 Lapid vs. Laurea, 391 SCRA 277, 285. NASECO on the ground that it is the 1987 Constitution that governs because it is the Constitution in place at the
21
 Guico vs. Quisumbing, 298 SCRA 667. time of the decision. Thus, NASECO which had been organized under the general incorporation statute and a
22
 319 SCRA 77. subsidiary of the National Investment Development Corporation, which in turn was a subsidiary of the Philippine
23
 Id., pp. 82-86 National Bank, is excluded from the purview of the Civil Service Commission.

FIRST DIVISION 5. ID.; ID.; ID.; EMPLOYEES OF NHA INCORPORATED UNDER THE FORMER CORPORATION LAW,
SUBJECT TO THE PROVISIONS OF THE LABOR CODE. — We see no cogent reason to depart from the
[G.R. No. 98107. August 18, 1997.] ruling in the aforesaid case. In the case at bench, the National Housing Corporation is a government owned
corporation organized in 1959 in accordance with Executive Order No. 399, otherwise known as the Uniform
BENJAMIN C. JUCO, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION and NATIONAL Charter of Government Corporation dated January 1, 1959. Its shares of stock are and have been one hundred
HOUSING CORPORATION, Respondents. percent (100%) owned by the Government from its incorporation under Act 1459, the former corporation law. The
government entities that own it shares of stock are the Government Service Insurance System, the Social Security
Ricardo C . Valmonte for Petitioner. System, the Development Bank of the Philippines, the National Investment and Development Corporation and the
People’s Homesite and Housing Corporations. Considering the fact that the NHA had been in incorporated under
The Government Corporate Counsel for Respondents. Act 1459, the former corporation law, it is but correct to say that it is a government-owned or controlled
corporation whose employee are subject to the provisions of the Labor Code. This observation is reiterated in the
recent case of Trade Union of the Philippines and Allied Services (TUPAS) v. National Housing Corporation,
where we held that the NHA is now within the jurisdiction of the Department of Labor and Employment, it being a
government-owned and/or controlled corporation without an original charter. Furthermore, we also held that the
SYLLABUS workers or employees of the NHC (now NHA) undoubtedly have the right to form unions or employee’s
organization and that there is no impediment to the holding of a certification election among them as they are
covered by the Labor Code. Thus, the NLRC erred in dismissing petitioner’s complaint for lack of jurisdiction
1. CONSTITUTIONAL LAW; 1973 CONSTITUTION; CONSTITUTIONAL COMMISSIONS; CIVIL because the rule now is that the Civil Service now covers only government-owned or controlled corporations with
SERVICE COMMISSION; EMPLOYER IN GOVERNMENT-OWNED AND/OR CONTROLLED original charters. Having been incorporated under the Corporation Law, its relations with its personnel are
CORPORATIONS EMBRACED WITHIN THE CIVIL SERVICE. — Under the laws then in force, employees of governed by the Labor Code and come under the jurisdiction of the National Labor Relations Commission.
government-owned and/or controlled corporations were governed by the Civil Service Law and not by the Labor
Code. Hence, Article 277 of the Labor Code (PD 442) then provided: "The terms and conditions of employment of
all government employees, including employees of government-owned and controlled corporations shall be
governed by the Civil Service Law rules and regulations. . . The 1973 Constitution, Article II-B, Section 1(1), on DECISION
the other hand provided: "The Civil Service embraces every branch, agency-subdivision and instrumentality of the
government, including government-owned or controlled corporations.
HERMOSISIMA, JR., J.:
2. ID.; 1987 CONSTITUTION; CONSTITUTIONAL COMMISSION; CIVIL SERVICE COMMISSION; ONLY
EMPLOYEES OF GOVERNMENT-OWNED AND/OR CONTROLLED CORPORATIONS WITH ORIGINAL
CHARTER, EMBRACED WITHIN THE CIVIL SERVICE. — Although we had earlier ruled in National
Housing Corporation v Juco, that employees of government-owned and/or controlled corporations, whether This is a petition for certiorari to set aside the Decision of the National Labor Relations Commission (NLRC)
created by special law or formed as subsidiaries under the general Corporation Law, are governed by the Civil dated March 14, 1991, which reversed the Decision dated May 21, 1990 of Labor Arbiter Manuel R Caday, on the
Service Law and not by the Labor Code, this ruling has been supplanted by the 1987 Constitution. Thus, the said ground of lack of jurisdiction.
Constitution now provides: "The civil service embraces all branches, subdivisions, instrumentalities and agencies
of the Government, including government-owned or controlled corporations with original charter." (Article IX-8, Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing Corporation (NHC)
Section 2[1]). from November 16, 1970 to May 14, 1975. On May 14, 1975, he was separated from the service for having been
implicated in a crime of theft and/or malversation of public funds.cralawnad
3. ID.; ID.; ID.; ID.; ID.; "WITH ORIGINAL CHARTER," CONSTRUED. — We ruled that the new phrase "with
original charter" means that government-owned and controlled corporations refer to corporations chartered by On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with the Department of
special law as distinguished from corporations organized under the Corporation Code. Labor.

4. REMEDIAL LAW; JURISDICTION; CONSTITUTION IN PLACE AT TIME OF DECISION DETERMINES On September 17, 1977, the Labor Arbiter rendered a decision dismissing the complaint on the ground that the
JURISDICTION OVER CASES INVOLVING EMPLOYEES IN GOVERNMENT-OWNED AND/OR NLRC had no jurisdiction over the case. 1
CONTROLLED CORPORATIONS. — In National Service Corporation (NASECO) v. National Labor Relations
Commission, we had the occasion to apply the present Constitution in deciding whether or not the employees of Petitioner then elevated the case to the NLRC which rendered a decision on December 28, 1982, reversing the
NASECO are covered by the Civil Service Law or Labor Code notwithstanding that the case arose at the time decision of the Labor Arbiter. 2
 Thereafter, the Labor Arbiter rendered a decision, the dispositive portion of which reads:jgc:chanrobles.com.ph
Dissatisfied with the decision of the NLRC, respondent NHC appealed before this Court and on January 17, 1985,
we rendered a decision, the dispositive portion thereof reads as follows:jgc:chanrobles.com.ph "Premises considered, judgment is hereby rendered declaring the dismissal of the complainant as illegal and
ordering the respondent to immediately reinstate him to his former position without loss of seniority rights with
"WHEREFORE, the petition is hereby GRANTED. The questioned decision of the respondent National Labor full back wages inclusive of allowance and to his other benefits or equivalent computed from the time it is
Relations Commission is SET ASIDE. The decision of the Labor Arbiter dismissing the case before it for lack of withheld from him when he was dismissed on March 27, 1977, until actually reinstated." 9
jurisdiction is REINSTATED." 3
On June 1, 1990, respondent NHC filed its appeal before the NLRC and on March 14, 1991, the NLRC
On January 6, 1989, petitioner filed with the Civil Service Commission a complaint for illegal dismissal, with promulgated a decision which reversed the decision of Labor Arbiter Manuel R. Caday on the ground of lack of
preliminary mandatory injunction. 4 jurisdiction. 10

On February 6, 1989, respondent NHC moved for the dismissal of the complaint on the ground that the Civil The primordial issue that confronts us is whether or not public respondent committed grave abuse of discretion in
Service Commission has no jurisdiction over the case. 5 holding that petitioner is not governed by the Labor Code.

On April 11, 1989, the Civil Service Commission issued an order dismissing the complaint for lack of jurisdiction. Under the laws then in force, employees of government-owned and/or controlled corporations were governed by
It ratiocinated that:jgc:chanrobles.com.ph the Civil Service Law and not by the Labor Code. Hence,

"The Board finds the comment and/or motion to dismiss meritorious. It was not disputed that NHC is a Article 277 of the Labor Code (PD 442) then provided:jgc:chanrobles.com.ph
government corporation without an original charter but organized/created under the Corporation Code.
"The terms and conditions of employment of all government employees, including employees of government-
Article IX, Section 2 (1) of the 1987 Constitution provides:chanrob1es virtual 1aw library owned and controlled corporations shall be governed by the Civil Service Law, rules and regulations . . ."cralaw
virtua1aw library
‘The civil service embraces all branches, subdivisions, instrumentalities and agencies of the Government,
including government owned and controlled corporations with original charters.’ (Emphasis supplied) The 1973 Constitution, Article II-B, Section 1(1), on the other hand provided:jgc:chanrobles.com.ph

From the aforequoted constitutional provision, it is clear that respondent NHC is not within the scope of the civil "The Civil Service embraces every branch, agency, subdivision and instrumentality of the government, including
service and is therefore beyond the jurisdiction of this Board. Moreover, it is pertinent to state that the 1987 government-owned or controlled corporations."cralaw virtua1aw library
Constitution was ratified and became effective on February 2, 1987.
Although we had earlier ruled in National Housing Corporation v. Juco, 11 that employees of government-owned
WHEREFORE, for lack of jurisdiction, the instant complaint is hereby dismissed." 6 and/or controlled corporations, whether created by special law or formed as subsidiaries under the general
Corporation Law, are governed by the Civil Service Law and not by the Labor Code, this ruling has been
On April 28, 1989, petitioner filed with respondent NLRC a complaint for illegal dismissal with preliminary supplanted by the 1987 Constitution. Thus, the said Constitution now provides:jgc:chanrobles.com.ph
mandatory injunction against respondent NHC. 7
"The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government,
On May 21, 1990, respondent NLRC thru Labor Arbiter Manuel R. Caday ruled that petitioner was illegally including government owned or controlled corporations with original charter." (Article IX-B, Section 2[1])
dismissed from his employment by respondent as there was evidence in the record that the criminal case against
him was purely fabricated, prompting the trial court to dismiss the charges against him. Hence, he concluded that In National Service Corporation (NASECO) v. National Labor Relations Commission, 12 we had the occasion to
the dismissal was illegal as it was devoid of basis, legal or factual. apply the present Constitution in deciding whether or not the employees of NASECO are covered by the Civil
Service Law or the Labor Code notwithstanding that the case arose at the time when the 1973 Constitution was
He further ruled that the complaint is not barred by prescription considering that the period from which to reckon still in effect. We ruled that the NLRC has jurisdiction over the employees of NASECO on the ground that it is the
the reglementary period of four years should be from the date of the receipt of the decision of the Civil Service 1987 Constitution that governs because it is the Constitution in place at the time of the decision. Furthermore, we
Commission promulgated on April 11, 1989. He also ratiocinated that:jgc:chanrobles.com.ph ruled that the new phrase "with original charter" means that government-owned and controlled corporations refer
to corporations chartered by special law as distinguished from corporations organized under the Corporation Code.
"It appears . . . complainant filed the complaint for illegal dismissal with the Civil Service Commission on January Thus, NASECO which had been organized under the general incorporation statute and a subsidiary of the National
6, 1989 and the same was dismissed on April 11, 1989 after which on April 28, 1989, this case was filed by the Investment Development Corporation, which in turn was a subsidiary of the Philippine National Bank, is excluded
complainant. Prior to that, this case was ruled upon by the Supreme Court on January 17, 1985 which enjoined the from the purview of the Civil Service Commission.chanrobles virtual lawlibrary
complainant to go to the Civil Service Commission which in fact, complainant did. Under the circumstances, there
is merit on the contention that the running of the reglementary period of four (4) years was suspended with the We see no cogent reason to depart from the ruling in the aforesaid case.
filing of the complaint with the said Commission. Verily, it was not the fault of the respondent for failing to file
the complaint as alleged by the respondent but due to, in the words of the complainant, a ‘legal knot’ that has to be In the case at bench, the National Housing Corporation is a government owned corporation organized in 1959 in
untangled." 8 accordance with Executive Order No. 399, otherwise known as the Uniform Charter of Government Corporation,
dated January 1, 1959. Its shares of stock are and have been one hundred percent (100%) owned by the
Government from its incorporation under Act 1459, the former corporation law. The government entities that own 12. 168 SCRA 122 (1988).
its shares of stock are the Government Service Insurance System, the Social Security System, the Development
Bank of the Philippines, the National Investment and Development Corporation and the People’s Homesite and 13. National Housing Corporation v. Juco, 134 SCRA 172 (1985).
Housing Corporation. 13 Considering the fact that the NHA had been incorporated under Act 1459, the former
corporation law, it is but correct to say that it is a government-owned or controlled corporation whose employees 14. 173 SCRA 33 (1989).
are subject to the provisions of the Labor Code. This observation is reiterated in the recent case of Trade Union of
the Philippines and Allied Services (TUPAS) v. National Housing Corporation, 14 where we held that the NHA is 15. PNOC-Energy Development Corporation v. NLRC, 201 SCRA 487 (1991) The NHC (now NHA).
now within the jurisdiction of the Department of Labor and Employment, it being a government-owned and/or
controlled corporation without an original charter. Furthermore, we also held that the workers or employees of the
NHC (now NHA) undoubtedly have the right to form unions or employee’s organization and that there is no
impediment to the holding of a certification election among them as they are covered by the Labor Code.

Thus, the NLRC erred in dismissing petitioner’s complaint for lack of jurisdiction because the rule now is that the
Civil Service now covers only government-owned or controlled corporations with original charters. 15 Having
been incorporated under the Corporation Law, its relations with its personnel are governed by the Labor Code and
come under the jurisdiction of the National Labor Relations Commission.

One final point. Petitioners have been tossed from one forum to another for a simple illegal dismissal case. It is but
apt that we put an end to his dilemma in the interest of justice.

WHEREFORE, the decision of the NLRC in NLRC NCR-04-02036089 dated March 14, 1991 is hereby
REVERSED and the Decision of the Labor Arbiter dated May 21, 1990 is REINSTATED.chanrobles
virtuallawlibrary

SO ORDERED.

Padilla, Bellosillo, Vitug and Kapunan, JJ., concur.

Endnotes:
1. Rollo, pp 20-2l

2. Id., pp. 22-26

3. Id., pp. 27-37

4. Id., pp. 38-42.

5. Id., pp. 43-47

6. Id., p. 52.

7. Id., pp. 53-58.

8. Id., p 68

9. Id., p 69.

10. Id., pp 78-86.

11. 134 SCRA 172 (1985).

 related statutes, particularly as regards the rule that an any employee "in government-owned or controlled
corporations, shall be considered ipso facto resigned from his office upon the filing of his certificate of
candidacy." What all this imports is that Section 66 of the Omnibus Election Code applies to officers and
employees in government-owned or controlled corporations, even those organized under the general laws on
incorporation and therefore not having an original or legislative charter, and even if they do not fall under the Civil
Service Law but under the Labor Code. In other words, Section 66 constitutes just cause for termination of
employment in addition to those set forth in the Labor Code, as amended.

SECOND DIVISION
DECISION
[G.R. No. 100947. May 31, 1993.]
NARVASA, C.J.:
PNOC ENERGY DEVELOPMENT CORPORATION AND MARCELINO TONGCO, Petitioners, v.
NATIONAL LABOR RELATIONS COMMISSION and MANUEL S. PINEDA, Respondents.
The applicability to private respondent Manuel S. Pineda of Section 66 of the Election Code is what is chiefly
Alikpala, Gomez & Associates Law Office, for Petitioners.
involved in the case at bar. Said section reads as follows:jgc:chanrobles.com.ph
Filomeno A. Zeta for Private Respondent. "SECTION 66. Candidates holding appointive office or position. — Any person holding a public appointive office
or position, including active members of the Armed Forces of the Philippines, and officers and employees in
government-owned or controlled corporations, shall be considered ipso facto resigned from his office upon the
filing of his certificate of candidacy."cralaw virtua1aw library
SYLLABUS
Manuel S. Pineda was employed with the Philippine National Oil Co. - Energy Development Corp. (PNOC-EDC),
a subsidiary of the Philippine National Oil Co., from September 17, 1981, when he was hired as clerk, to January
1. CONSTITUTIONAL LAW; CIVIL SERVICE; GOVERNMENT-OWNED OR CONTROLLED 26, 1989, when his employment was terminated. The events leading to his dismissal from his job are not
CORPORATIONS WITHOUT ORIGINAL CHARTERS, NOT EMBRACED THEREIN. — Section 2 (1), disputed.chanroblesvirtuallawlibrary
Article IX of the 1987 Constitution provides as follows: "The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including government-owned or controlled corporations with In November, 1987, while holding the position of Geothermal Construction Secretary, Engineering and
original charters." Implicit in the provision is that government-owned or controlled corporations without original Construction Department, at Tongonan Geothermal Project, Ormoc City, Pineda decided to run for councilor of
charters — i.e., organized under the general law, the Corporation Code — are not comprehended within the Civil the Municipality of Kananga, Leyte, in the local elections scheduled in January, 1988, and filed the corresponding
Service, and their employees are not subject to Civil Service Law. So has this Court construed the provision. certificate of candidacy for the position. Objection to Pineda’s being a candidate while retaining his job in the
(NASECO, et. al. v. NLRC, Et Al., 166 SCRA 122, Lumanta, et. al. v. NLRC, Et Al., 170 SCRA 79, PNOC-EDC PNOC-EDC was shortly thereafter registered by Mayor Arturo Cornejos of Kananga, Leyte. The mayor
v. Leogardo, et. al., 175 SCRA 29). communicated with the PNOC-EDC — thru Engr. Ernesto Patanao, Resident Manager, Tongonan Geothermal
Project — to express the view that Pineda could not actively participate in politics unless he officially resigned
2. ID.; OMNIBUS ELECTION CODE; CANDIDATES HOLDING APPOINTIVE OFFICE OR POSITION from PNOC-EDC. 1 Nothing seems to have resulted from this protest.
CONSIDERED IPSO FACTO RESIGNED UPON FILING OF CERTIFICATE OF CANDIDACY; APPLIES TO
OFFICERS AND EMPLOYEES IN GOVERNMENT-OWNED AND CONTROLLED CORPORATION WITH The local elections in Leyte, scheduled for January, 1988, were reset to and held on February 1, 1988. Pineda was
OR WITHOUT ORIGINAL CHARTERS. — When the Congress of the Philippines reviewed the Omnibus among the official candidates voted for, and eventually proclaimed elected to, the office of councilor. Some
Election Code of 1985, in connection with its deliberations on and subsequent enactment of related and repealing vacillation appears to have been evinced by Pineda at about this time. On February 8, 1988, he wrote to the
legislation — i.e., Republic Acts Numbered 7166: "An Act Providing for Synchronized National and Local COMELEC Chairman, expressing his desire to withdraw from the political contest on account of what he
Elections and for Electoral Reforms, Authorizing Appropriations Therefor, and for Other Purposes" (effective considered to be election irregularities; 2 and on March 19, 1988, he wrote to the Secretary of Justice seeking legal
November 26, 1991), 6646: "An Act Introducing Additional Reforms in the Electoral System and for Other opinion on the question, among others, of whether or not he was "considered automatically resigned upon . . .
Purposes" (effective January 5, 1988) and 6636: "An Act Resetting the Local Elections, etc." (effective November filing of . . . (his) certificate of candidacy," and whether or not, in case he was elected, he could "remain appointed
6, 1987), it was no doubt aware that in light of Section 2(1), Article IX of the 1987 Constitution: (a) government- to any corporate offspring of a government-owned or controlled corporation." 3 Nevertheless, Pineda took his oath
owned or controlled corporations were of two (2) categories — those with original charters, and those organized of office in June, 1988 as councilor-elect of the Municipality of Kananga, Leyte. 4 And despite so qualifying as
under the general law — and (b) employees of these corporations were of two (2) kinds — those covered by the councilor, and assuming his duties as such, he continued working for PNOC-EDC as the latter’s Geothermal
Civil Service Law, rules and regulations because employed in corporations having original charters, and those not Construction Secretary, Engineering and Construction Department, at Tongonan Geothermal Project, Ormoc City.
subject to Civil Service Law but to the Labor Code because employed in said corporations organized under the
general law, or the Corporation Code. Yet Congress made no effort to distinguish between these two classes of On June 7, 1988, Marcelino M. Tongco, Department Manager of the Engineering and Construction Department,
government-owned or controlled corporations or their employees in the Omnibus Election Code or subsequent
PNOC-EDC, addressed an inquiry to the latter’s Legal Department regarding the status of Manuel S. Pineda as abused its discretion:chanrob1es virtual 1aw library
employee in view of his candidacy for the office of municipal councilor. 5 In response, the Legal Department
rendered an opinion to the effect that Manuel S. Pineda should be considered ipso facto resigned upon the filing of 1) when it ruled that Manuel S. Pineda was not covered by the Civil Service Rules when he filed his candidacy for
his Certificate of Candidacy in November, 1987, in accordance with Section 66 of the Omnibus Election Code. 6 the 1988 local government elections in November 1987;

Pineda appealed the PNOC-EDC Legal Department’s ruling to N.C. Vasquez, the Vice President of PNOC-EDC, 2) when it ruled that Pineda was not covered by the Omnibus Election Code at the time he filed his certificate of
on July 14, 1988. In his letter of appeal, 7 he invoked a "court ruling in the case of Caagusan and Donato v. candidacy for the 1988 local elections;
PNOC-Exploration Corp. . . . (to the effect that) while the government-owned or controlled corporations are
covered by the Civil Service Law (as is taken to mean in Sec. 66 of the Omnibus Election Code of 1985) (sic), the 3) when it ruled that Pineda was illegally dismissed despite the fact that he was considered automatically resigned
subsidiaries or corporate offsprings are not." In the same letter he declared his wish to continue working with pursuant to Section 66 of the Omnibus Election Code; and
PNOC-EDC and his willingness to voluntarily resign from his position as councilor/member of the Sangguniang
Bayan. 4) when it ruled that Pineda could occupy a local government position and be simultaneously employed in a
government-owned or control corporation, a situation patently violative of the constitutional prohibition on
He also wrote a letter dated October 17, 1988 to the Department of Local Government inquiring about the status of additional compensation.
his employment with PNOC-EDC in relation to his election as member of the Sangguniang Bayan. He was
advised by DLG Undersecretary Jacinto T. Rubillo Jr., by letter dated March 31, 1989, that there was no legal Acting on the petition, this Court issued a temporary restraining order enjoining the respondent NLRC from
impediment to his continuing in his employment with PNOC-EDC while holding at the same time the elective implementing or enforcing its decision and resolution dated April 24, 1991 and June 21, 1991,
position of municipal councilor. Cited as basis by Undersecretary Rubillo was Section 2(1) Article IX-B of the respectively.chanroblesvirtualawlibrary
1987 Constitution and this Court’s ruling in NASECO VS. NLRC, 168 SCRA 122. Undersecretary Rubillo went
on to say that Pineda could receive his per diems as municipal councilor as well as the corresponding In the comment required of him by the Court, the Solicitor General expressed agreement with the respondent
representation and transportation allowance (RATA) "provided the PNOC-EDC charter does not provide Commission’s holding that Manuel Pineda had indeed been illegally separated from his employment in the PNOC-
otherwise and public service shall not be prejudiced." 8 EDC; in other words, that his running for public office and his election thereto had no effect on his employment
with the PNOC-EDC, a corporation not embraced within the Civil Service.
The PNOC-EDC did not, however, share the Undersecretary’s views. On January 26, 1989, the PNOC-EDC,
through Marcelino Tongco (Manager, Engineering and Construction Department), notified Manuel S. Pineda in Petitioner PNOC-EDC argues that at the time that Pineda filed his certificate of candidacy for municipal councilor
writing (1) that after having given him "ample time" to make some major adjustments before . . . separation from in November, 1987, the case law "applicable as far as coverage of government-owned or controlled corporations
the company," his employment was being terminated pursuant to Section 66 of the Omnibus Election Code, are concerned . . . (was to the following effect): 18
effective upon receipt of notice, and (2) that he was entitled to "proper compensation" for the services rendered by
him from the time he filed his certificate of candidacy until his actual separation from the service. 9 ‘As correctly pointed out by the Solicitor General, the issue of jurisdiction had been resolved in a string of cases
starting with the National Housing Authority v. Juco (134 SCRA 172) followed by Metropolitan Waterworks and
On October 16, 1989, Pineda lodged a complaint for illegal dismissal in the Regional Arbitration Branch No. VIII, Sewerage System v. Hernandez (143 SCRA 602) and the comparatively recent case of Quimpo v. Sandiganbayan
NLRC, Tacloban City. Impleaded as respondents were the PNOC-EDC and the Manager of its Engineering and (G.R. No. 72553, Dec. 2, 1986) in which this Court squarely ruled that PNOC subsidiaries, whether or not
Construction Department, Marcelino M. Tongco. 10 originally created as government-owned or controlled corporations are governed by the Civil Service Law.’"

After due proceedings, Labor Arbiter Araceli H. Maraya, to whom the case was assigned, rendered a decision on This doctrine, petitioner further argues, was not "automatically reversed" by the 1987 Constitution because not
December 28, 1990, 11 declaring Manuel S. Pineda’s dismissal from the service illegal, and ordering his "amended or repealed by the Supreme Court or the Congress;" 19 and this Court’s decision in November, 1988, in
reinstatement to his former position without loss of seniority rights and payment of full back wages corresponding National Service Corporation v. NLRC, supra 20 — abandoning the Juco ruling — "cannot be given retroactive
to the period from his illegal dismissal up to the time of actual reinstatement. The Arbiter pointed out that the effect . . . (in view of) the time-honored principle . . . that laws (judicial decisions included) shall have no
ruling relied upon by PNOC-EDC to justify Pineda’s dismissal from the service, i.e., NHA v. Juco, 12 had already retroactive effect, unless the contrary is provided (Articles 4 and 8 of the New Civil Code of the
been abandoned; and that "as early as November 29, 1988," the governing principle laid down by case law — in Philippines)."cralaw virtua1aw library
light of Section 2(1), Article IX-B of the 1987 Constitution 13 — has been that government-owned or controlled
corporations incorporated under the Corporation Code, the general law — as distinguished from those created by Section 2 (1), Article IX of the 1987 Constitution provides as follows:jgc:chanrobles.com.ph
special charter — are not deemed to be within the coverage of the Civil Service Law, and consequently their
employees, like those of the PNOC-EDC, are subject to the provisions of the Labor Code rather than the Civil "The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government,
Service Law. 14 including government-owned or controlled corporations with original charters."cralaw virtua1aw library

The PNOC-EDC filed an appeal with the National Labor Relations Commission. The latter dismissed the appeal Implicit in the provision is that government-owned or controlled corporations without original charters — i.e.,
for lack of merit in a decision dated April 24, 1991. 15 PNOC-EDC sought reconsideration; 16 its motion was organized under the general law, the Corporation Code — are not comprehended within the Civil Service, and
denied by the Commission in a Resolution dated June 21, 1991. 17 their employees are not subject to Civil Service Law. So has this Court construed the provision. 21

It is this Decision of April 24, 1991 and the Resolution of June 21, 1991 that the PNOC-EDC seeks to be annulled In National Service Corporation (NASECO), Et. Al. v. NLRC, Et Al., etc., 22 decided on November 29, 1988, it
and set aside in the special civil action for certiorari at bar. It contends that the respondent Commission gravely was ruled that the 1987 Constitution "starkly varies" from the 1973 charter — upon which the Juco doctrine rested
— in that unlike the latter, the present constitution qualifies the term, "government-owned or controlled Be this as it may, it seems obvious to the Court that a government-owned or controlled corporation does not lose
corporations," by the phrase, "with original charter;" hence, the clear implication is that the Civil Service no longer its character as such because not possessed of an original charter but organized under the general law. If a
includes government-owned or controlled corporations without original charters, i.e., those organized under the corporation’s capital stock is owned by the Government, or it is operated and managed by officers charged with
general corporation law. 23 NASECO further ruled that the Juco ruling should not apply retroactively, considering the mission of fulfilling the public objectives for which it has been organized, it is a government-owned or
that prior to its promulgation on January 17, 1985, this Court had expressly recognized the applicability of the controlled corporation even if organized under the Corporation Code and not under a special statute; and
Labor Code to government-owned or controlled corporations. 24 employees thereof, even if not covered by the Civil Service but by the Labor Code, are nonetheless "employees in
government-owned or controlled corporations," and come within the letter of Section 66 of the Omnibus Election
Lumanta, Et. Al. v. NLRC, Et Al., 25 decided on February 8, 1989, made the same pronouncement: that Juco had Code, declaring them "ipso facto resigned from . . . office upon the filing of . . . (their) certificate of
been superseded by the 1987 Constitution for implicit in the language of Section 2(1), Article IX thereof, is the candidacy."cralaw virtua1aw library
proposition that government-owned or controlled corporations without original charter do not fall under the Civil
Service Law but under the Labor Code. What all this imports is that Section 66 of the Omnibus Election Code applies to officers and employees in
government-owned or controlled corporations, even those organized under the general laws on incorporation and
And in PNOC-EDC v. Leogardo, etc. Et. Al., 26 promulgated on July 5, 1989, this Court ruled that conformably therefore not having an original or legislative charter, and even if they do not fall under the Civil Service Law but
with the apparent intendment of the NASECO case, supra, since the PNOC-EDC, a government-owned or under the Labor Code. In other words, Section 66 constitutes just cause for termination of employment in addition
controlled company had been incorporated under the general Corporation Law, its employees are subject to the to those set forth in the Labor Code, as amended.
provisions of the Labor Code.
The conclusions here reached make unnecessary discussion and resolution of the other issues raised in this
It is thus clear that the Juco doctrine prevailing at the time of the effectivity of the fundamental charter in 1987 — case.chanroblesvirtuallawlibrary
i.e., that government-owned or controlled corporations were part of the Civil Service and its employees subject to
Civil Service laws and regulations, 27 regardless of the manner of the mode of their organization or incorporation WHEREFORE, the petition is GRANTED; the decision of public respondent National Labor Relations
— is no longer good law, being at "stark variance," to paraphrase NASECO, with the 1987 Constitution. In other Commission dated April 24, 1991 and its Resolution dated June 21, 1991 are NULLIFIED AND SET ASIDE; and
words, and contrary to the petitioner’s view, as of the effectivity of the 1987 Constitution, government-owned or the complaint of Manuel S. Pineda is DISMISSED. No costs.
controlled corporations without original charters, or, as Mr. Justice Cruz insists in his concurring opinion in
NASECO v. NLRC, 28 a legislative, charter (i.e., those organized under the Corporation Code), ceased to pertain SO ORDERED.
to the Civil Service and its employees could no longer be considered as subject to Civil Service laws, rules or
regulations. Padilla, Regalado and Nocon, JJ., concur.

The basic question is whether an employee in a government-owned or controlled corporations without an original Endnotes:
charter (and therefore not covered by Civil Service Law) nevertheless falls within the scope of Section 66 of the
Omnibus Election Code, viz.:jgc:chanrobles.com.ph

"SECTION 66. Candidates holding appointive office or position. — Any person holding a public appointive office
or position, including active members of the Armed Forces of the Philippines, and officers and employees in
1. Rollo, p. 103 (Public respondents’ Comment, p. 2).
government-owned or controlled corporations, shall be considered ipso facto resigned from his office upon the
filing of his certificate of candidacy."cralaw virtua1aw library
2. Annex B, Petition; rollo, p. 104.
When the Congress of the Philippines reviewed the Omnibus Election Code of 1985, in connection with its
deliberations on and subsequent enactment of related and repealing legislation — i.e., Republic Acts Numbered 3. Annex C, Petition.
7166: "An Act Providing for Synchronized National and Local Elections and for Electoral Reforms, Authorizing
Appropriations Therefor, and for Other Purposes" (effective November 26, 1991), 6646: "An Act Introducing 4. Rollo, p. 104.
Additional Reforms in the Electoral System and for Other Purposes" (effective January 5, 1988) and 6636: "An
Act Resetting the Local Elections, etc." (effective November 6, 1987), it was no doubt aware that in light of 5. Annex D, Petition.
Section 2(1), Article IX of the 1987 Constitution: (a) government-owned or controlled corporations were of two
(2) categories — those with original charters, and those organized under the general law — and (b) employees of 6. Annex E, Petition.
these corporations were of two (2) kinds — those covered by the Civil Service Law, rules and regulations because
employed in corporations having original charters, and those not subject to Civil Service Law but to the Labor
7. Annex F, Petition.
Code because employed in said corporations organized under the general law, or the Corporation Code. Yet
Congress made no effort to distinguish between these two classes of government-owned or controlled corporations
or their employees in the Omnibus Election Code or subsequent related statutes, particularly as regards the rule 8. Rollo, pp. 105-106 (Public Respondent’s Comment, pp. 4-5).
that an any employee "in government-owned or controlled corporations, shall be considered ipso facto resigned
from his office upon the filing of his certificate of candidacy." 29 9. Annex G, Petition; rollo, p. 106.
10. Annex H, Petition.

11. Rollo, pp. 49-55.

12. G.R. No. 64313, January 17, 1985, 134 SCRA 172.

13. Said provision reads as follows: "The Civil Service embraces branches, subdivisions, instrumentalities and
agencies of the Government, including government-owned or controlled corporations with original charters." .

14. National Service Corporation (NASECO) v. NLRC, 168 SCRA 124 (1988); PNOC-EDC v. Deputy Minister
of Labor and Vicente Ellelina, G.R. No. 58494, July 5, 1989.

15. Cited, in addition to NASECO v. NLRC, supra, was Lumanta v. NLRC, 170 SCRA 79 (1989).

16. Rollo, pp. 75-81.

17. Id., pp. 83-84.

18. Rollo, p. 10, Emphasis supplied.

19. SEC. 10, ART. XIII of the Constitution (Transitory Provisions) pertinently providing that the "provisions of
the existing Rules of Court, judiciary acts, and procedural laws not inconsistent with this Constitution shall remain
operative unless amended or repealed by the Supreme Court or the Congress." The petitioner implies that the term
"judiciary acts" includes judicial decisions.

20. 168 SCRA 124, reiterated in Lumanta v. NLRC, 170 SCRA 79.

21. See cases cited in footnote 11, supra.

22. 168 SCRA 122.

23. At pp. 134-138.

24. At pp. 133-134.

25. 170 SCRA 79.

26. 175 SCRA 26.

27. See cases cited in footnote 15, supra.

28. 168 SCRA 124, 139-140.

29. Emphasis supplied
 international organizations, in accordance with international practice, from political pressure or control by the host
country to the prejudice of member States of the organization, and to ensure the unhampered performance of their
functions."cralaw virtua1aw library

3. ID.; ID.; ID.; DETERMINATION THEREOF, A POLITICAL QUESTION. — In the International Catholic
Migration Commission case, we held that there is no conflict between the constitutional duty of the State to protect
the rights of workers and to promote their welfare, and the grant of immunity to international organizations.
Clauses on jurisdictional immunity are now standard in the charters of international organizations to guarantee the
smooth discharge of their functions. The diplomatic immunity of private respondent was sufficiently established
FIRST DIVISION by the letter of the Department of Foreign Affairs, recognizing and confirming the immunity of UNRFNRE in
accordance with the 1946 Convention on Privileges and Immunities of the United Nations where the Philippine
[G.R. Nos. 109095-109107. February 23, 1995.] Government was a party. The issue whether an international organization is entitled to diplomatic immunity is a
"political question" and such determination by the executive branch is conclusive on the court and quasi-judicial
ELPEDIO LASCO, RODOLFO ELISAN, URBANO BERADOR, FLORENTINO ESTOBIO, agencies. Our courts can only assume jurisdiction over private respondent if it expressly waived its immunity,
MARCELINO MATURAN, FRAEN BALIBAG, CARMELITO GAJOL, DEMOSTHENES MANTO, which is not so in the case at bench.
SATURNINO BACOL, SATURNINO LASCO, RAMON LOYOLA, JOSENIANO B. ESPINA, all
represented by MARIANO R. ESPINA, and MARIANO R. ESPINA, Petitioners, v. UNITED NATIONS DECISION
REVOLVING FUND FOR NATURAL RESOURCES EXPLORATION (UNRFNRE) represented by its
operations manager, DR. KYRIACOS LOUCA, OSCAR N. ABELLA, LEON G. GONZAGA, JR., MUSIB
M. BUAT, Commissioners of National Labor Relations Commission (NLRC), Fifth Division, Cagayan de QUIASON, J.:
Oro City and IRVING PETILLA, Labor Arbiter of Butuan City, Respondents. This is a petition for certiorari under Rule 65 of the Revised Rules of Court to set aside the Resolution dated
January 25, 1993 of the National Labor Relations Commission (NLRC), Fifth Division, Cagayan de Oro
City.chanroblesvirtuallawlibrary
SYLLABUS
We dismiss the petition.

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; DOES NOT LIE UNLESS A MOTION FOR I
RECONSIDERATION IS FIRST FILED. — Certiorari as a special civil action will not lie unless a motion for
reconsideration is first filed before the respondent tribunal, to allow it an opportunity to correct its assigned errors.
Petitioners were dismissed from their employment with private respondent, the United Nations Revolving Fund
2. POLITICAL LAW; DOCTRINE OF DIPLOMATIC IMMUNITY; EXTENDS TO INTERNATIONAL for Natural Resources Exploration (UNRFNRE), which is a special fund and subsidiary organ of the United
ORGANIZATION, ITS OFFICIALS AND FUNCTIONARIES; PURPOSE THEREOF. — As a matter of state Nations. The UNRFNRE is involved in a joint project of the Philippine Government and the United Nations for
policy as expressed in the Constitution, the Philippine Government adopts the generally accepted principles of exploration work in Dinagat Island.
international law. Being a member of the United Nations and a party to the Convention on the Privileges and
Immunities of the Specialized Agencies of the United Nations, the Philippine Government adheres to the doctrine Petitioners are the complainants in NLRC Cases Nos. SRAB 10-03-00067-91 to 10-03-00078-91 and SRAB 10-
of immunity granted to the United Nations and its specialized agencies. Both treaties have the force and effect of 07-00159-91 for illegal dismissal and damages.
law. In World Health Organization v. Aquino, 48 SCRA 242 (1972), we had occasion to rule that: "It is a
recognized principle of international law and under our system of separation of powers that diplomatic immunity In its Motion to Dismiss, private respondent alleged that respondent Labor Arbiter had no jurisdiction over its
is essentially a political question and courts should refuse to look beyond a determination by the executive branch personality since it enjoyed diplomatic immunity pursuant to the 1946 Convention on the Privileges and
of the government, and where the plea of diplomatic immunity is recognized and affirmed by the executive branch Immunities of the United Nations. In support thereof, private respondent attached a letter from the Department of
of the government as in the case at bar, it is then the duty of the courts to accept the claim of immunity upon Foreign Affairs dated August 26, 1991, which acknowledged its immunity from suit. The letter confirmed that
appropriate suggestion by the principal law officer of the government, the Solicitor General or other officer acting private respondent, being a special fund administered by the United Nations, was covered by the 1946 Convention
under his direction. Hence, in adherence to the settled principle that courts may not so exercise their jurisdiction by on the Privileges and Immunities of the United Nations of which the Philippine Government was an original
seizure and detention of property, as to embarrass the executive arm of the government in conducting foreign signatory (Rollo, p. 21).
relations, it is accepted doctrine that "in such cases the judicial department of (this) government follows the action
of the political branch and will not embarrass the latter by assuming an antagonistic jurisdiction." We recognize On November 25, 1991, respondent Labor Arbiter issued an order dismissing the complaints on the ground that
the growth of international organizations dedicated to specific universal endeavors, such as health, agriculture, private respondent was protected by diplomatic immunity. The dismissal was based on the letter of the Foreign
science and technology and environment. It is not surprising that their existence has evolved into the concept of Office dated September 10, 1991.
international immunities. The reason behind the grant of privileges and immunities to international organizations,
its officials and functionaries is to secure them legal and practical independence in fulfilling their duties. Immunity Petitioner’s motion for reconsideration was denied. Thus, an appeal was filed with the NLRC, which affirmed the
is necessary to assure unimpeded performance of their functions. The purpose is "to shield to affairs of dismissal of the complaints in its Resolution dated January 25, 1993.chanroblesvirtuallawlibrary
Petitioners filed the instant petition for certiorari without first seeking a reconsideration of the NLRC resolution. "Sec. 5. The premises of the specialized agencies shall be inviolable. The property and assets of the specialized
agencies, wherever located and by whomsoever held, shall be immune from search, requisition, confiscation,
II expropriation and any other form of interference, whether by executive, administrative, judicial or legislative
action" (Emphasis supplied).

Article 223 of the Labor Code of the Philippines, as amended, provides that decisions of the NLRC are final and As a matter of state policy as expressed in the Constitution, the Philippine Government adopts the generally
executory. Thus, they may only be questioned through certiorari as a special civil action under Rule 65 of the accepted principles of international law (1987 Constitution, Art. II, Sec. 2). Being a member of the United Nations
Revised Rules of Court. and a party to the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations,
the Philippine Government adheres to the doctrine of immunity granted to the United Nations and its specialized
Ordinarily, certiorari as a special civil action will not lie unless a motion for reconsideration is first filed before agencies. Both treaties have the force and effect of law.chanroblesvirtuallawlibrary
the respondent tribunal, to allow it an opportunity to correct its assigned errors (Liberty Insurance Corporation v.
Court of Appeals, 222 SCRA 37 [1993]).chanroblesvirtualawlibrary In World Health Organization v. Aquino, 48 SCRA 242 (1972), we had occasion to rule
that:jgc:chanrobles.com.ph
In the case at bench, petitioner’s failure to file a motion for reconsideration is fatal to the instant petition.
Moreover, the petition lacks any explanation for such omission, which may merit its being considered as falling "It is a recognized principle of international law and under our system of separation of powers that diplomatic
under the recognized exceptions to the necessity of filing such motion. immunity is essentially a political question and courts should refuse to look beyond a determination by the
executive branch of the government, and where the plea of diplomatic immunity is recognized and affirmed by the
Notwithstanding, we deem it wise to give due course to the petition because of the implications of the issue in our executive branch of the government as in the case at bar, it is then the duty of the courts to accept the claim of
international relations. immunity upon appropriate suggestion by the principal law officer of the government, the Solicitor General or
other officer acting under his direction. Hence, in adherence to the settled principle that courts may not so exercise
Petitioners argued that the acts of mining exploration and exploitation are outside the official functions of an their jurisdiction by seizure and detention of property, as to embarrass the executive arm of the government in
international agency protected by diplomatic immunity. Even assuming that private respondent was entitled to conducting foreign relations, it is accepted doctrine that “in such cases the judicial department of (this)
diplomatic immunity, petitioners insisted that private respondent waived it when it engaged in exploration work government follows the action of the political branch and will not embarrass the latter by assuming as antagonistic
and entered into a contract of employment with petitioners. jurisdiction" (Emphasis supplied).

Petitioners, likewise, invoked the constitutional mandate that the State shall afford full protection to labor and international organizations to guarantee the smooth discharge of their functions.
promote full employment and equality of employment opportunities for all (1987 Constitution, Art. XIII, Sec. 3).
The diplomatic immunity of private respondent was sufficiently established by the letter of the Department of
The Office of the Solicitor General is of the view that private respondent is covered by the mantle of diplomatic Foreign Affairs, recognizing and confirming the immunity of UNRFNRE in accordance with the 1946 Convention
immunity. Private respondent is a specified agency of the United Nations. Under Article 105 of the Charter of the on Privileges and Immunities of the United Nations where the Philippine Government was a party. The issue
United Nations:chanroblesvirtuallawlibrary whether an international organization is entitled to diplomatic immunity is a "political question" and such
determination by the executive branch is conclusive on the courts and quasi-judicial agencies (The Holy See v.
"1. The Organization shall enjoy in the territory of its Members such privileges and immunities as are necessary Hon. Eriberto U. Rosario, Jr., G.R. No. 101949, Dec. 1, 1994; International Catholic Migration Commission v.
for the fulfillment of its purposes. Calleja, supra).chanroblesvirtuallawlibrary

"2. Representatives of the Members of the United Nations and officials of the Organization shall similarly enjoy Our courts can only assume jurisdiction over private respondent if it expressly waived its immunity, which is not
such privileges and immunities as are necessary for the independent exercise of their functions in connection with so in the case at bench (Convention on the Privileges and Immunities of the Specialized Agencies of the United
the Organization."cralaw virtua1aw library Nations, Art. III, Sec. 4).

Corollary to the cited article is the Convention on the Privileges and Immunities of the Specialized Agencies of the Private respondent is not engaged in a commercial venture in the Philippines. Its presence here is by virtue of a
United Nations, to which the Philippines was a signatory (Vol. 1, Philippine Treaty Series, p. 621.) We quote joint project entered into by the Philippine Government and United Nations for mineral exploration in Dinagat
Sections 4 and 5 of Article III thereof:jgc:chanrobles.com.ph Island. Its mission is not to exploit our natural resources and gain pecuniarily thereby but to help improve the
quality of life of the people, including that of petitioners.chanrobles.com : virtual law library
"Sec. 4. The specialized agencies, their property and assets, wherever located and by whomsoever held, shall enjoy
immunity from every form of legal process except insofar as in any particular case they have expressly waived This is not to say that petitioners have no recourse. Section 31 of the Convention on the Privileges and Immunities
their immunity. It is, however, understood that no waiver of immunity shall extend to any measure of execution of the Specialized Agencies of the United Nations states that "each specialized agency shall make a provision for
(Emphasis supplied). appropriate modes of settlement of: (a) disputes arising out of contracts or other disputes of private character to
which the specialized agency is a party."cralaw virtua1aw library

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

Padilla, Davide, Jr., Bellosillo and Kapunan, JJ., concur.