PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORPORATION, PETITIONER, VS. HON. VICENTE T. LEOGARDO, DEPUTY MINISTER OF LABOR AND VICENTE D. ELLELINA, RESPONDENTS.

Through this Petition for Certiorari, Philippine National
Oil Company-Energy Development Corporation (PNOC-EDC) seeks to declare null and
void, for lack of jurisdiction, the Order of public respondent, the Deputy
Minister of Labor, sustaining his jurisdiction
over the instant controversy.

Petitioner PNOC-EDC is a subsidiary
of the Philippine National Oil Company (PNOC). 
On 20 January 1978,
it filed with the Ministry of Labor and Employment, Regional Office No. VII, Cebu City (MOLE), a clearance application to dismiss/terminate the services of private
respondent, Vicente D. Ellelina, a contractual
employee.

The application for
clearance was premised on Ellelina’s
alleged commission of a crime (Alarm or Public Scandal) during a Christmas
party on 19 December 1977 at petitioner’s camp in Uling, Cebu, when, because of the
refusal of the raffle committee to give him the prize corresponding to his lost
winning ticket, he tried to grab the armalite rifle
of the PC Officer outside the building despite the warning shots fired by the
latter.

Clearance to dismiss was
initially granted by MOLE but was subsequently revoked and petitioner was
ordered to reinstate Ellelina to his former position,
without loss of seniority rights, and with backwages
from 1 February 1978
up to his actual reinstatement.

Petitioner appealed to
the Minister of Labor who, acting through public respondent, affirmed, on 14
August 1981, the
appealed Order.  Hence, this Petition
predicated substantially on the following
grounds:

1.  Under Article 277 of the
Labor Code, the Ministry of Labor and Employment has no jurisdiction over
petitioner because it is a government-owned or controlled corporation;

2.  Ellelina’s
dismissal is valid and just because it is based upon the commission of a crime.

On the other hand, public respondent contends:

(a)  While the petitioner is
a subsidiary of the PNOC, it is still covered by the Labor Code and, therefore,
within the jurisdiction of the Ministry of Labor inasmuch as petitioner was
organized as a private corporation under the Corporation Law and registered
with the Securities and Exchange Commission;

(b)  Petitioner is estopped from assailing the Labor Department’s
jurisdiction, having subjected itself to the latter when it filed the
application for clearance to terminate Ellelina’s
services; and

(c)  Dismissal is too harsh a
penalty.

The issues that confront
us, therefore, are (1) whether or not public respondent committed grave abuse
of discretion in holding that petitioner is governed by the Labor Code; and (2)
whether or not Ellelina’s dismissal was justified.

Under the laws then in
force, employees of government-owned and/or controlled corporations were
governed by the Civil Service Law and not by the Labor Code.  Thus,

Article 277 of the Labor
Code (PD 442) then provided:

“The terms and conditions of employment of all government
employees, including employees of government-owned and controlled corporations
shall be governed by the Civil Service Law, rules and regulations x x x.”

In turn, the 1973
Constitution provided:

“The Civil Service embraces every branch, agency, subdivision
and instrumentality of the government, including government-owned or controlled
corporations.”

In National Housing
Corporation vs. Juco (L-64313, January 17, 1985, 134
SCRA 172), we laid down the doctrine that employees of government-owned and/or
controlled corporations, whether created by special law or formed as subsidiaries under the general
Corporation Law, are governed by the Civil Service Law and not by the Labor
Code.

However, the above
doctrine has been supplanted by the present Constitution, which provides:

“The Civil Service embraces all branches, subdivisions,
instrumentalities and agencies of the Government, including government–owned or
controlled corporations with original charters.” (Article IX–B, Section 2 (1))

Thus, under the present
state of the law, the test in determining whether a government–owned or controlled corporation is subject to the Civil
Service Law is the manner of its creation such that government corporations created
by special charter are subject to its provisions while those incorporated under
the general Corporation Law are not within its coverage.

In NASECO vs. NLRC (G.R.
No. 69870, November 29, 1988), we had occasion to apply the present Constitution
in deciding whether or not the employees of NASECO (a subsidiary of the NIDC,
which is in turn a subsidiary wholly–owned by the PNB, a government–owned corporation) are covered by the Civil Service Law or
the Labor Code notwithstanding that the case arose at the time when the 1973 Constitution was still in effect. 
We held that the NLRC has jurisdiction over the employees of NASECO
“on the premise that it is the 1987 Constitution that governs because it
is the Constitution in place at the time of decision;” and that being a
corporation without an original charter, the employees of NASECO are subject to
the provisions of the Labor Code.

We see no reason to
depart from the ruling in the aforesaid case.

We hold, therefore, that
the PNOC-EDC, having been incorporated under the general Corporation Law, is a
government-owned or controlled corporation whose employees are subject to the
provisions of the Labor Code.  This is
apparently the intendment in the NASECO case notwithstanding the fact that the
NASECO therein was a subsidiary of the PNB, a government-owned corporation.

In so far as Ellelina is concerned, we hold that the reinstatement
ordered by public respondent, without loss of seniority rights, is
proper.  However, consistent with the
rulings of this Court, backwages should be limited to
three years from 1 February 1978.  The
dismissal ordered by petitioner was a bit too harsh considering the nature of
the act which he had committed and that it was his first offense.

WHEREFORE, the Petition is DISMISSED, and the judgment
of respondent public official is hereby AFFIRMED.  No costs.

SO ORDERED.

Paras, Padilla, Sarmiento,
and Regalado, JJ., concur.