G.R. No. 58494 July 5, 1989
PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORPORATION, petitioner, vs. HON. VICENTE T. LEOGARDO, DEPUTY MINISTER OF LABOR AND VICENTE D. ELLELINA, respondents.

FACTS

Petitioner PNOC-EDC, a subsidiary of the Philippine National Oil Company (PNOC), filed an application for clearance to dismiss private respondent Vicente D. Ellelina, a contractual employee, for allegedly committing a crime (Alarm or Public Scandal) during a company Christmas party. The incident involved Ellelina attempting to grab a firearm from a PC officer after a dispute over a raffle prize. The Ministry of Labor and Employment (MOLE) initially granted clearance but later revoked it, ordering Ellelina’s reinstatement with backwages. Petitioner appealed to the Minister of Labor, who affirmed the order through public respondent Deputy Minister Leogardo.

ISSUE

The primary issue is whether public respondent committed grave abuse of discretion in holding that petitioner PNOC-EDC is governed by the Labor Code, thereby sustaining jurisdiction over the dismissal case. The secondary issue is whether Ellelina’s dismissal was justified.

RULING

The Supreme Court dismissed the petition and affirmed the Deputy Minister’s order. On the jurisdictional issue, the Court held that PNOC-EDC, having been incorporated under the general Corporation Law and not created by a special charter, is a government-owned or controlled corporation whose employees are subject to the Labor Code, not the Civil Service Law. This ruling applies the doctrine established in NASECO vs. NLRC, which interpreted the present Constitution (1987). The Constitution now limits Civil Service coverage to government-owned or controlled corporations with original charters. Since PNOC-EDC lacks an original charter, the Labor Code governs, and the Labor Ministry correctly exercised jurisdiction. The Court rejected petitioner’s claim of estoppel, focusing instead on the substantive legal test of corporate creation.
Regarding the dismissal’s validity, the Court sustained the Labor Ministry’s finding that dismissal was too harsh a penalty for a first offense, considering the nature of the act committed. Reinstatement without loss of seniority rights was deemed proper. However, the Court modified the award of backwages, limiting it to three years from February 1, 1978, consistent with prevailing jurisprudence. The decision underscores that the governing legal framework for a government corporate employee’s dismissal depends on the corporation’s manner of creation, and that penalties must be commensurate to the infraction.