GSIS FAMILY BANK EMPLOYEES UNION, REPRESENTED BY ITS PRESIDENT MS. JUDITH JOCELYN MARTINEZ, PETITIONER, V. SEC. CESAR L. VILLANUEVA (IN HIS CAPACITY AS THE CHAIRMAN OF THE GOVER…

GSIS Family Bank Employees Union versus Villanueva

The Case

This is a special civil action for certiorari, prohibition, and mandamus brought directly before the Supreme Court by the GSIS Family Bank Employees Union, represented by its president Judith Jocelyn Martinez, against Secretary Cesar Villanueva as chairman of the Governance Commission for Government-Owned or Controlled Corporations, together with the bank's president Emmanuel Benitez and its board chairperson Geraldine Marie Berberabe-Martinez. The Union asks the Court to declare that GSIS Family Bank lies outside the coverage of Republic Act Number 10149, the GOCC Governance Act of 2011, and to compel the bank to negotiate a new collective bargaining agreement. The case matters because it fixes the boundary between the Labor Code and the compensation law for a peculiar creature of Philippine law: the government-owned or controlled corporation that was never given an original charter.

Procedural History

The Union did not pass through the lower courts. After the Governance Commission advised the bank that it could not negotiate the economic terms of a collective bargaining agreement, the Union filed a complaint before the National Conciliation and Mediation Board and later a notice of strike, while some employees filed complaints before the National Labor Relations Commission and the Department of Labor and Employment. On January thirtieth, two thousand fourteen, the Union went straight to the Supreme Court by petition for certiorari, prohibition, and mandamus. The bank's officers, the Governance Commission chairman, and later the Union filed their comments and reply. While the petition was pending, the Monetary Board prohibited the bank from doing business and placed it under receivership, which raised the question of mootness. The Supreme Court resolved the petition on the merits.

Facts

Royal Savings Bank was organized in July 1969 as a private thrift bank under the general corporation law and began operating in 1971. In 1984 the Central Bank placed it under receivership. To settle its suits against the Central Bank, it was rehabilitated with capital from Commercial Bank of Manila, a subsidiary of the Government Service Insurance System, and renamed Comsavings Bank. When the System later took over control of Comsavings Bank and infused additional capital, it came to own ninety-nine and fifty-five hundredths percent of the outstanding shares. In July 2001 the bank changed its name to GSIS Family Bank.

In 2011 Republic Act Number 10149 created the Governance Commission as a central advisory, monitoring, and oversight body over government-owned or controlled corporations. When the bank asked whether it could still bargain collectively, the Commission replied in March 2013 that as a government financial institution it had no authority to enter into a collective bargaining agreement, because the compensation and position classification system is fixed by law and not subject to private bargaining, and that its employees, being government employees, had no right to strike.

The Union then demanded the Christmas bonus stipulated in the existing agreement, and on the bank's refusal to negotiate a new one, filed this petition. In May 2016 the Monetary Board prohibited the bank from doing business and designated the Philippine Deposit Insurance Corporation as receiver.

Issues

• Whether or not the petition for certiorari is the correct remedy against the Governance Commission.
• Whether or not the closure of GSIS Family Bank has rendered the petition moot.
• Whether or not GSIS Family Bank, a non-chartered government-owned or controlled corporation, can enter into a collective bargaining agreement with its employees.

Applicable Provisions

Section 1, Article VIII of the 1987 Constitution provides:

SECTION 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law. Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

This is the source of the Court's traditional and expanded powers of judicial review, which the Union invokes.

Section 1, Rule 65 of the Rules of Court provides:

SECTION 1. Petition for Certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

This defines the remedy the Union chose and limits it to tribunals, boards, or officers exercising judicial or quasi-judicial functions.

Ruling

On the first issue, the Court held that certiorari does not lie. A writ of certiorari may issue only when it is directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions, when that body has acted without or in excess of jurisdiction or with grave abuse of discretion, and when there is no appeal or other plain, speedy, and adequate remedy. The Governance Commission is merely an advisory, monitoring, and oversight body; it possesses neither judicial nor quasi-judicial power. Its letters to the bank were advisory opinions rendered in response to queries, not adjudications. The petition was therefore the wrong remedy.

On the second issue, the Court held that the bank's closure did not render the petition moot, because the question of whether a non-chartered government-owned or controlled corporation may bargain collectively is capable of repetition yet evading review and affects a live legal relationship.

On the third issue, the Court held that officers and employees of government-owned or controlled corporations without original charters are covered by the Labor Code, not the Civil Service Law. Nevertheless, such non-chartered corporations are limited by law in negotiating economic terms with their employees, because the law has established a Compensation and Position Classification System that applies to all government-owned or controlled corporations, chartered or non-chartered. Compensation matters cannot be voluntarily agreed upon in a collective bargaining agreement, since they must follow the policies, parameters, and guidelines prescribed and approved by the President. The Union's prayer to compel negotiation of a new agreement therefore fails.

Doctrine

First, the Governance Commission is not a quasi-judicial body; its issuances are advisory, so they cannot be the subject of a petition for certiorari under Rule 65. Second, employees of non-chartered government-owned or controlled corporations are governed by the Labor Code and not the Civil Service Law, yet their economic terms are not freely bargainable, because the Compensation and Position Classification System applies to all such corporations and compensation must conform to the President's prescribed parameters. Third, the closure of a corporation does not moot a petition where the legal question is capable of repetition yet evading review.

Disposition

The petition was dismissed; the Union did not obtain its prayer to be declared outside the coverage of Republic Act Number 10149 or to compel a new collective bargaining agreement.

Remember This

Memorize the line: non-chartered government-owned or controlled corporations are under the Labor Code, but their economic terms are fixed by the Compensation and Position Classification System, not by free bargaining. Examiners use this case to test the Rule 65 requirement of a quasi-judicial body and the distinction between chartered and non-chartered government corporations.