TEOFILO CABRERA, FAUSTO BACLIG AND ALFREDO AGULAN, PETITIONERS, VS. THIRD DIVISION, NATIONAL LABOR RELATIONS COMMISSION, NATIONAL SERVICE CORPORATION AND/OR BRIG. GEN. MIGUEL VI…

Cabrera versus National Labor Relations Commission

The Case

This is a petition brought by Teofilo Cabrera, Fausto Baclig, and Alfredo Agulan against the Third Division of the National Labor Relations Commission, the National Service Corporation, and its general manager. The petitioners were dismissed by the National Service Corporation and had won a favorable ruling from the Labor Arbiter, only to see the Commission later dismiss their complaint on the ground that it had no jurisdiction over a government-owned corporation. The case matters because it fixes the dividing line between the Civil Service and the Labor Code: only government-owned or controlled corporations with original charters fall under the Civil Service, and all others are governed by the Labor Code.

Procedural History

The petitioners filed their complaint for illegal dismissal with the Ministry of Labor and Employment in September 1980. After considering the position papers, the Labor Arbiter ordered their reinstatement without loss of seniority rights, with two years of back wages and other benefits. The National Service Corporation appealed, and the First Division of the National Labor Relations Commission affirmed the Labor Arbiter in December 1985. The petitioners then moved for a writ of execution. The corporation opposed the motion on the ground that it had not been furnished a copy of the decision, but the opposition was rejected and the writ was granted. Reconsideration was denied, and the corporation appealed to the Commission, which this time, through its Third Division, declared itself without jurisdiction and dismissed the case in August 1987, citing the National Housing Authority case. The petitioners came to the Supreme Court asking that the original decision of the Labor Arbiter be affirmed.

Facts

The petitioners were employees of the National Service Corporation. They were dismissed, and in September 1980 they complained to the Ministry of Labor and Employment for illegal dismissal.

The Labor Arbiter ruled in their favor, ordering reinstatement without loss of seniority rights and payment of two years of back wages and other benefits. The First Division of the National Labor Relations Commission affirmed this decision in December 1985. When the petitioners sought execution, the corporation resisted, claiming it had not received a copy of the decision, but its opposition was rejected and execution was ordered.

On appeal, the Third Division of the Commission reversed course. Relying on the National Housing Authority case, it held that the corporation was a government-owned or controlled corporation covered by Civil Service rules rather than the Labor Code, declared itself without jurisdiction, and dismissed the case in August 1987. Notably, when petitioner Fausto Baclig had earlier filed a complaint with the Merit System Board of the Civil Service for reinstatement, the corporation's general manager had answered that the case was cognizable not by the Board but by the labor authorities, because the corporation was a private corporation organized under the Corporation Law.

Issues

• Whether or not the National Labor Relations Commission has jurisdiction over a complaint for illegal dismissal filed against the National Service Corporation, a government-owned or controlled corporation organized under the Corporation Law and without an original charter.
• Whether or not the National Service Corporation is estopped from challenging the jurisdiction of the National Labor Relations Commission after having accepted it throughout the proceedings.

Applicable Provisions

Article Nine, Section Two, paragraph one of the 1987 Constitution provides:

The Civil Service embraces all branches, subdivisions, instrumentalities and agencies of the Government, including government-owned or controlled corporations with original charters.

This is the provision that governs the case and confines the Civil Service to corporations with original charters.

Article Twelve, Section One, paragraph one of the 1973 Constitution, applied in the earlier National Housing Authority case, provided:

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

The decision explains that this broader wording was the basis of the old rule, which the Court later overturned.

Ruling

On the first issue, the Court held that the Commission erred in dismissing the complaint for lack of jurisdiction. The rule now is that only government-owned or controlled corporations with original charters come under the Civil Service. The National Service Corporation was organized under the Corporation Law and not by virtue of a special legislative charter, so its relations with its personnel are governed by the Labor Code and fall under the jurisdiction of the National Labor Relations Commission. The Court applied the doctrine of the National Service Corporation case, which had overturned the earlier National Housing Authority ruling after finding that the corporation had no original charter from the legislature.

On the second issue, the Court added that the corporation is estopped from challenging the jurisdiction of the Commission, having accepted it all the while the case was in progress and until 1987, when it appealed the order for the issuance of the writ of execution. The Court also noted the corporation's own answer before the Merit System Board, where its general manager had insisted that the case belonged to the labor authorities because the corporation was private in character.

The Court acknowledged that the petitioners did not allege grave abuse of discretion as required in a petition for certiorari, but it disregarded that procedural flaw in view of the jurisdictional issue raised and in the interest of substantial justice.

Doctrine

Under the 1987 Constitution, the Civil Service embraces government-owned or controlled corporations with original charters only. A government-owned or controlled corporation organized under the Corporation Law, without a special legislative charter, is governed by the Labor Code, and labor disputes involving it fall within the jurisdiction of the National Labor Relations Commission. A party that invokes and accepts the jurisdiction of the labor tribunals throughout the proceedings is estopped from later challenging that jurisdiction.

Disposition

The Court reversed and set aside the order of the National Labor Relations Commission and reinstated the decision of the Labor Arbiter, as affirmed by the Commission, together with the order of execution, without costs.

Remember This

Memorize the line: only government-owned or controlled corporations with original charters fall under the Civil Service; those organized under the Corporation Law remain under the Labor Code. Examiners use this case to test the jurisdiction of the National Labor Relations Commission over government-owned corporations and the doctrine of estoppel by acceptance of jurisdiction.