GR L 64313; (January, 1985) (Digest)
G.R. No. L-64313 January 17, 1985
NATIONAL HOUSING CORPORATION, petitioner, vs. BENJAMIN JUCO AND THE NATIONAL LABOR RELATIONS COMMISSION, respondents.
FACTS
Benjamin Juco was a project engineer of the National Housing Corporation (NHC) from 1970 to 1975. His services were terminated on May 14, 1975, after being implicated in the theft and malversation of public funds involving scrap G.I. pipes owned by the corporation. On March 25, 1977, Juco filed a complaint for illegal dismissal with the then Ministry of Labor and Employment. The NHC, in its position paper, contested the jurisdiction of the Labor Arbiter, asserting that as a government-owned and controlled corporation, its employees fall under civil service laws and regulations, not the Labor Code.
The Labor Arbiter initially dismissed Juco’s complaint for lack of jurisdiction. On appeal, the National Labor Relations Commission (NLRC) set aside this dismissal. The NLRC acknowledged a prior ruling that the NHC was a government corporation but opted to depart from that precedent, stating that adherence to stare decisis should not retard progress, and remanded the case to the Labor Arbiter for resolution on the merits of the illegal dismissal claim.
ISSUE
Whether employees of the National Housing Corporation are covered by the Labor Code or by the civil service laws and regulations.
RULING
The Supreme Court GRANTED the petition, SET ASIDE the NLRC decision, and REINSTATED the Labor Arbiter’s dismissal for lack of jurisdiction. The Court held that employees of government-owned or controlled corporations are governed by the civil service.
The legal logic is anchored on the explicit constitutional mandate. Section 1, Article XII-B of the 1973 Constitution provided that “[t]he Civil Service embraces every branch, agency, subdivision, and instrumentality of the Government, including every government-owned or controlled corporation.” This language was a deliberate expansion from the 1935 Constitution to ensure comprehensive coverage and eliminate any loophole. The NHC is a 100% government-owned corporation, with its capital stock wholly subscribed by government financial institutions. As such, it is unequivocally an instrumentality of the government included within the civil service embrace.
This constitutional provision was implemented by Presidential Decree No. 807 (The Civil Service Decree), which explicitly covers personnel of government-owned or controlled corporations. Consequently, the Labor Code, which governs private employment, does not apply. The NLRC, therefore, had no jurisdiction over Juco’s complaint. His remedy, if any, lies within the civil service system. The Court emphasized that the constitutional and statutory intent is clear and all-encompassing, leaving no room for the NLRC to assume jurisdiction based on a discretionary departure from precedent.