G.R. No. L-63742 and G.R. No. 84300 , April 17, 1989
Tanjay Water District, et al. vs. Hon. Pedro Gabaton, et al. / Josefino Datuin vs. Tarlac Water District

FACTS

In G.R. No. 63742 , Tanjay Water District filed an injunction suit in the Regional Trial Court against the Municipality of Pamplona and its officials to prevent interference with its waterworks system management. The respondent judge dismissed the case for lack of jurisdiction. He ruled that the dispute, involving water appropriation and control, fell under the primary jurisdiction of the National Water Resources Council per Presidential Decree (P.D.) No. 1067 (The Water Code). He further held that as both parties were government instrumentalities, the controversy should be administratively settled under P.D. No. 242.
In G.R. No. 84300 , Josefino Datuin filed an illegal dismissal case against Tarlac Water District with the Department of Labor. The Labor Arbiter ruled in his favor, but the National Labor Relations Commission (NLRC) reversed the decision, dismissing the complaint for lack of jurisdiction. The NLRC held that as a corporation created by special law (P.D. No. 198), the water district’s employees belonged to the civil service, making their separation subject to civil service rules, not labor laws.

ISSUE

The consolidated cases presented two primary issues: (1) Whether water districts created under P.D. No. 198 are government instrumentalities, and (2) Whether the RTC correctly dismissed Tanjay’s case for lack of jurisdiction.

RULING

The Supreme Court dismissed both petitions. On the nature of water districts, the Court affirmed they are government-owned or controlled corporations and instrumentalities of the state. It cited its recent ruling in Hagonoy Water District vs. NLRC, which clarified that while the original P.D. No. 198 exempted water district employees from civil service, this exemption was repealed by P.D. No. 1479 in 1978. Consequently, employees of water districts are part of the civil service.
Regarding jurisdiction over Tanjay’s case, the Court upheld the RTC’s dismissal. The dispute concerned the appropriation, utilization, and control of water, a matter expressly placed under the primary jurisdiction of the National Water Resources Council by Articles 88 and 89 of P.D. No. 1067. The RTC only possessed appellate jurisdiction over such matters. The Court also found P.D. No. 242 on administrative settlement inapplicable, as the dispute did not arise from the interpretation of statutes or agreements between government entities but from water rights. Therefore, Tanjay’s recourse was to file its complaint with the Water Resources Council first. Correspondingly, for Datuin, the proper venue for his dismissal case was the Civil Service Commission, not the NLRC.