GR 181866; (March, 2010) (Digest)
G.R. No. 181866, March 18, 2010
EMMANUEL S. HUGO, et al., Petitioners, vs. LIGHT RAIL TRANSIT AUTHORITY, Respondent.
FACTS
Respondent Light Rail Transit Authority (LRTA), a government-owned and controlled corporation created by Executive Order No. 603, entered into a ten-year Agreement for the Management and Operation of the Metro Manila Light Rail Transit System with Metro Transit Organization, Inc. (METRO). The Agreement stipulated that METRO’s employees were its own and not of LRTA. Petitioners were employees of METRO and members of a union. LRTA later purchased METRO’s shares but both entities maintained separate juridical personalities. After a deadlock in collective bargaining negotiations, petitioners went on strike. The Secretary of Labor assumed jurisdiction and issued a return-to-work order. When the Agreement expired, LRTA did not renew it and took over the system’s operations, hiring new personnel. METRO considered its personnel terminated. Petitioners filed a complaint for illegal dismissal and unfair labor practice against both METRO and LRTA before the NLRC. The Labor Arbiter initially dismissed the complaint against LRTA for lack of jurisdiction, but the NLRC reversed, holding LRTA could be considered an “indirect employer” and a necessary party. On remand, the Labor Arbiter ruled for petitioners. LRTA appealed to the NLRC but failed to post the required cash or surety bond, offering a property bond instead. The NLRC dismissed LRTA’s appeal for failure to perfect it. The Court of Appeals reversed the NLRC, holding the property bond was substantial compliance and directed the NLRC to give due course to the appeal.
ISSUE
Whether the Labor Arbiter and the NLRC have jurisdiction over LRTA, a government-owned and controlled corporation with an original charter, in a complaint for illegal dismissal filed by employees of its private contractor, METRO.
RULING
No. The Labor Arbiter and the NLRC do not have jurisdiction over LRTA. Citing Light Rail Transit Authority v. Venus, Jr., the Supreme Court held that LRTA, as a government-owned and controlled corporation created by an original charter, is beyond the jurisdiction of the Department of Labor and Employment, which governs private sector workers. Employees of METRO are private sector employees covered by the Labor Code, while employees of LRTA are government employees covered by civil service rules. The corporate veil of METRO cannot be pierced to hold LRTA liable as there was no showing of fraud or wrongdoing; the two entities maintained separate juridical personalities despite LRTA’s ownership of METRO’s shares. Consequently, the Labor Arbiter’s decision against LRTA was rendered without jurisdiction and is void. The Supreme Court reversed the Court of Appeals’ decision and dismissed petitioners’ complaint against LRTA.