G.R. No. 58494, July 5, 1989
Philippine National Oil Company-Energy Development Corporation vs. Hon. Vicente T. Leogardo, Deputy Minister of Labor and Vicente D. Ellelina

FACTS

Petitioner Philippine National Oil Company-Energy Development Corporation (PNOC-EDC), a subsidiary of the government-owned Philippine National Oil Company, sought clearance from the Ministry of Labor and Employment (MOLE) to dismiss private respondent Vicente D. Ellelina, a contractual employee. The application was based on Ellelina’s alleged commission of a crime (Alarm or Public Scandal) during a company Christmas party, where he attempted to grab a firearm from a PC officer after a dispute over a raffle prize. MOLE initially granted clearance but later revoked it, ordering Ellelina’s reinstatement with backwages.
Petitioner appealed to the Minister of Labor, who affirmed the reinstatement order. PNOC-EDC then filed this Petition for Certiorari, arguing that the Labor Ministry lacked jurisdiction over it as a government-owned or controlled corporation, whose employees should be governed by the Civil Service Law under Article 277 of the Labor Code then in force. It also contended that the dismissal was valid due to the commission of a crime.

ISSUE

The issues are: (1) whether public respondent committed grave abuse of discretion in holding that petitioner is governed by the Labor Code, and (2) whether Ellelina’s dismissal was justified.

RULING

The Supreme Court dismissed the petition and affirmed the Deputy Minister’s decision. On the jurisdictional issue, the Court clarified the applicable constitutional provision. While the 1973 Constitution and prior jurisprudence held that employees of all government-owned or controlled corporations were under the Civil Service, the 1987 Constitution now provides that the Civil Service embraces such corporations “with original charters.” Following the precedent in NASECO vs. NLRC, the Court applied the 1987 Constitution as the law in place at the time of decision.
The legal logic is that the test for Civil Service coverage is the manner of the corporation’s creation. PNOC-EDC, having been incorporated under the general Corporation Law and not by a special legislative charter, is a government-owned or controlled corporation without an original charter. Consequently, its employees, including Ellelina, are subject to the Labor Code, and the Labor Ministry correctly exercised jurisdiction.
On the merits, the Court found the penalty of dismissal too harsh for Ellelina’s first offense, considering the nature of the act. Reinstatement without loss of seniority rights was proper. However, backwages were limited to three years from February 1, 1978, consistent with prevailing rulings. Thus, no grave abuse of discretion was committed by the public respondent.