PEOPLE’S HOMESITE AND HOUSING CORPORATION, PETITIONER, VS. COURT OF INDUSTRIAL RELATIONS, FELICIDAD ALCE, BERGIDA APOSTLE, LUZ ALCORAN, SOLICIDAD ANDRADE, AUREA ABAS, GENEROSA A…

In this petition for certiorari,
the People’s Homesite and Housing Corporation (PHHC) seeks a reversal of the
Resolution of the Court of Industrial Relations (CIR) en banc
dated February 23, 1970 ordering the PHHC to pay private respondents* wage differentials for work rendered from July 25,
1967 to February, 1968.

In I967, the Philippine government and the World Food Program
(WFP) entered into an agreement which provided
that:

x x x

Until the efforts of the various Government Agencies concerned have
been successful in developing and executing the overall plan for the Sapang
Palay resettlement area, substantial employment must be found for the majority
of the squatter families at present living there. The People’s Homesite and Housing Corporation, hereafter referred
to as PHHC, is proposing a self-help project to be undertaken by the squatter
families for the construction of two earth dams (which will involve the moving
of 44,165 cu. meters of earth), roads of 850 meters long . . . and 17 kilometers of associate drainage and irrigation
channels; at the same time a number of existing roads in the area will be improved
by the construction of 42 kilometers of dams and ditches which will involve the
removal of 75,600 cu. meters of earth.

The undertaking will provide water for the irrigation of more than
100 hectares of land to be used for additional food production, the reservoir
will provide non-drinking water for domestic purposes and will be stocked with
fish.

WFP has been asked to supply the food for a basic ration for the 500 settlers participating in this
scheme, and for their 2,000 dependents for a period of 560 days. The food ration will supplement a cash
incentive of One Half Peso (P0.50) per participant per day. (Exh. “1”).

In recruiting
participants to the program, application forms entitled “WFP Self Help
Community Project Information Sheet,” (Exh. “2”) were issued,
mentioning the voluntary nature of the work to be rendered.

Although the participants
were assigned to work on canals and roads, the projects agreed upon between the
PHHC and the World Food Program were never fully implemented.

The PHHC ordered the participants to accomplish a time
sheet which formed the basis for the payment of P0.50 per day and the weekly
food ration. A division chief was also
assigned to administer and manage the Sapang Palay project. The agency provided the participants with
work tools and equipment such as spades, rakes, shovels, picks and axes. A PHHC employee acted as “work supervisor”: he designated the area to be worked on by
the participants pursuant to a pre­determined program made by the PHHC; and he also conducted ocular inspection in
the area.

Complaining about their work and compensation, the participants went to the Department of
Labor. After investigation, Secretary
Ople sent to the PHHC General
Manager the following message:

FINDINGS ON WORKERS SAPANG PALAY PROJECT
REVEAL VIOLATIONS OF LABOR LAWS STOP SUGGEST LABORERS BE PAID IN ACCORDANCE
WITH MINIMUM WAGE LAW

PHHC thereafter suspended
work. And the participants instituted
the present action in the Court of Industrial Relations against the PHHC,
praying for the payment of the
difference between the minimum wage (which was P6.00 at that time) and the
P0.50 paid to them, overtime compensation, and also for reinstatement.

In its answer, PHHC claimed,
among others, that it was exercising
governmental functions; that it did not employ private respondents herein; and
that the CIR had no jurisdiction over PHHC, and over the subject matter of the
action.

After trial, the Court a
quo ruled that since there was no evidence that private respondents
rendered overtime work, their claim was reduced to a mere money claim over
which the regular courts, not the CIR, had jurisdiction. It thus dismissed the action.

On motion for reconsideration, the Court of
Industrial Relations en banc reversed the order of dismissal and
ordered the PHHC to pay wage differentials to the claimants; but denied the
claims for reinstatement and overtime compensation. From that resolution, PHHC brought the case to Us on certiorari,
raising the following issues:

I

WHETHER OR NOT THE CIR HAS JURISDICTION
OVER PHHC, A GOVERNMENT OWNED AND/OR CONTROLLED CORPORATION PERFORMING
GOVERNMENTAL FUNCTIONS

II

WHETHER OR NOT (THE) CIR HAS JURISDICTION
OVER THOSE CASES WHERE THERE EXIST(S) NO EMPLOYER-EMPLOYEE RELATIONSHIP

III

WHETHER OR NOT (THE) CIR HAS JURISDICTION
OVER CASES FOR MERE MONEY CLAIMS WHERE NO REINSTATEMENT IS SOUGHT

IV

WHETHER OR NOT THERE EXISTS (AN)
EMPLOYER-EMPLOYEE (RELATIONSHIP) CONSIDERING THE FACTUAL CIRCUMSTANCES

We vote to grant the petition.

The jurisdiction of the
then Court of Industrial Relations is set forth in Section 1 of Commonwealth
Act No. 103, as amended. Construing
this provision of law, We have ruled that the CIR has jurisdiction over labor
disputes involving government-owned or controlled corporations performing
basically proprietary functions, (GSIS v. Castillo, 98 Phil. 876 [1956]; GSIS
v. GSIS Employees Assn., 119 Phil. 524 [1964]; SSS Employees Assn. v. Soriano,
117 Phil; 1038 [1963]) but not those performing governmental functions
(University of the Philippines and Anonas v. CIR, 107 Phil. 848 [1960]).

It has not always been
easy determining which functions are governmental in nature and which
are proprietary. The characterization of functions performed by
the government has evolved from the traditional
“constituent-ministrant” classification (as enunciated in the case of
Bacani v National Coconut Corporation,
(100 Phil. 468 [1956]) to its disavowal
in the case of ACCFA v CUGCO, et. al (No. L­-221484, November 29, 1969, 30 SCRA
649) where, considering the social justice provision of the 1935 Constitution,
We said that the “constituent-ministrant” classification had become
unrealistic, if not obsolete. There, We
gave our assent to a socio-political philosophy espousing a greater
socialization of economic forces. We
found nothing objectionable in government undertaking in its sovereign capacity
activities which, by the constituent-ministrant test would have been
considered as merely optional.

We, thus, ruled in said case that the Agricultural Credit
Administration, tasked as it was with the implementation of the land reform
program of the government, was an agency performing governmental functions.

Coming now to the case at bar. We note that since 1941 when the National Housing Commission
(predecessor of PHHC, which is now known as the National Housing Authority
[NHA]) was created, the Philippine
government has pursued a mass housing and resettlement program to meet the
needs of Filipinos for decent housing. The agency tasked with implementing such governmental program was the
PHHC. These can be gleaned from the
provisions of Commonwealth Act 648, the charter of said agency.

We rule that the PHHC is
a governmental institution performing governmental functions.

This is not the first time We are ruling on the proper
characterization of housing as an activity of government. In the 1985 case of National Housing
Corporation v. Juco and the NLRC
(No. L-64313, January 17, 1985, 134 SCRA 172), We ruled that housing is a
governmental function.

A perusal of the
functions of the PHHC and the NHC indicates that both perform, substantially
the same functions.

Commonwealth Act No. 648,
as amended, provides:

Section 2. The purposes for
which the (People’s Homesite and Housing Corporation) is created are:

a)     
The acquisition, development, improvement, construction,
leasing and selling of lands and buildings or any interest therein in the
cities and populous towns of the Philippines, with the object of providing
decent housing for those who may be found unable otherwise to provide
themselves therewith;

b)     
The promotion of the physical, social and economic betterment
of the inhabitants of the cities and populous towns of the Philippines, by
eliminating therefrom slums and dwelling places which are unhygienic or
unsanitary and by providing homes at low cost to replace those which may be so
eliminated; and,

c)     
The provision of community and institutional housing for
destitute individuals and families and for paupers.

On the other hand, the
articles of incorporation of the NHC provide:

SECOND: That the purpose
for which the corporation is organized is to assist and carry out the
coordinated massive housing program of the government, principally but not
limited to low-cost housing with the integration, cooperation and assistance of
all governmental agencies concerned, through the carrying on of any or all the
following activities:

1)   
The acquisition, development or reclamation of lands for the
purpose of construction and building therein preferably low-cost housing so as
to provide decent and durable dwelling for the greatest number of inhabitants
in the country;

2)   
The promotion and development of physical, social and economic
community growth through the establishment of general physical plans for urban,
suburban and metropolitan areas to be characterized by efficient land use
patterns;

3)    The
coordination and implementation of all projects of the government for the
establishment of nationwide and massive low-cost housing;

4)   
The undertaking and conducting of research and technical
studies of the development and promotion of construction of houses and
buildings of sound standards of design
liability, durability, safety, comfort and size for improvement of the
architectural and engineering designs and utility of houses and buildings with
the utilization of new and/or native materials economics (sic) in material and
construction, distribution, assembly and construction and of applying advanced
housing and building technology.

5)   
Construction and installation in these projects of low-cost
housing privately or cooperatively owned water and sewerage system or waste
disposal facilities, and the formulation of a unified or officially coordinated
urban transportation system as a part of a comprehensive development plan in
these areas.

In the Juco case, We ruled that the NHC, as it was
established as an “instrumentality of government to accomplish
governmental policies and objectives and extend essential services to the
people,” performs governmental and not proprietary functions. It thus comes under the jurisdiction of the Civil Service Commission and not the
Ministry of Labor and Employment (supra, 134 SCRA 172, 180, 181). We see no reason for departing from that
ruling now. The Court of Industrial
Relations had no jurisdiction over the dispute involving the PHHC and the
private respondents.

In view of the foregoing, We deem it unnecessary to pass upon the
other issues raised.

WHEREFORE, the petition is granted. The assailed resolution of the Court of
Industrial Relations is SET ASIDE.

Fernan, (Chairman), Gutierrez, Jr., Paras, Padilla, and Bidin, JJ., concur.

* Private respondents, who number
around 700, are settlers in the Sapang Palay resettlement area.