THIRD DIVISION
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ERNESTO C. DESEAR, TERESITA G. GONZAGA, TERESITA E.
EUSTAQUIO, VIRGINIA S. MONTEMAYOR, CRISTINA ABANTO, HENRY C. AMORTIZADO, FRANKIE
VALERA, NELIA G. CAMORO, JOYSIE Petitioners, - versus - |
G.R.
No. 179793 Present: CARPIO MORALES, J., Chairperson, BRION, BERSAMIN,
ABAD,* and VILLARAMA,
JR., JJ. Promulgated: July
5, 2010 |
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REPUBLIC OF THE Respondent. |
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DECISION
VILLARAMA,
JR., J.:
Which
quasi-judicial agency has jurisdiction to hear and decide complaints for
illegal dismissal against an adjunct government agency engaged in proprietary
function? Should the complaint be lodged before the National Labor Relations
Commission (NLRC) or to the Civil Service Commission (CSC)? This is the focal
issue that needs to be resolved in this petition for review on certiorari assailing the Decision[1]
and Resolution[2]
of the Court of Appeals in CA-G.R. SP
No. 84801 nullifying the Labor Arbiter’s and the NLRC’s rulings.
Republic of the P5 million was set aside from the Philippine Veterans’ Claims
Settlement Fund as seed capital for the AFPCES to be utilized and administered
for the operations and management of all commissary facilities in the military
establishments all over the country. AFPCES was intended to benefit the
veterans, their widows and orphans, and the members of the AFP and their
dependents. In December 1972, the AFP General Headquarters (AFP GHQ) issued
Staff Memorandum No. 5 formally organizing the AFPCES.[3]
In
order to socialize the services of AFPCES, General Order No. 920 was issued by
the AFP GHQ on
Petitioners,
on the other hand, numbering 65 in all,[6] were
hired as regular employees of AFPCES. Some worked as food handlers in AFPCES’
catering business and served during social functions held within its premises. Others
occupied positions as computer technicians, auditors, record clerks, cashiers,
canvassers, bookkeepers, and warehousemen.[7] Several
of them had worked with AFPCES for a number of years, ranging from
Between
1999 and 2001, however, AFPCES advised petitioners to undergo an indefinite
leave of absence without pay, allegedly upon a conditional promise that they
would be allowed to return to work as soon as AFPCES’ tax subsidy is released and
upon resumption of its store operations.[9]
When
AFPCES failed to recall petitioners to their work as allegedly promised,
petitioners filed a complaint for illegal (constructive) dismissal with damages
against AFPCES before the NLRC.[10]
On P16,007,996.00
as back wages, 13th month pay and separation pay to petitioners.
AFPCES
filed an appeal[12]
praying, among others, that it be exempted from posting the required appeal
bond. The NLRC, however, denied the plea and gave AFPCES ten (10) days to post
an appeal bond. The NLRC likewise denied AFPCES’ motion for reconsideration.
Meanwhile, petitioners sought the immediate execution of the Labor Arbiter’s
decision.
AFPCES filed
a petition before the appellate court docketed as CA-G.R. SP. No. 84801, and
prayed among others, for the issuance of a temporary restraining order to
enjoin the NLRC from dismissing the appeal and granting execution of the Labor
Arbiter’s decision.
On
Subsequently,
on
On
On
On
Aggrieved,
petitioners moved for a reconsideration of the said decision, but the appellate
court denied the same for lack of merit.[19]
Hence,
this petition.
Pivotal
to the resolution of this petition is a determination of the classification of
petitioners’ employment status with respondent AFPCES. AFPCES asserts that
since petitioners are government employees, jurisdiction over their complaints lies
not with the NLRC, but with the CSC. Petitioners, on the other hand, contend
that since they do not belong to the approved plantilla of government personnel,
their complaints for illegal dismissal was properly made before the NLRC.
Let
us clarify the matter.
Presidential
Decree (PD) No. 807 or the Civil Service Decree of the Philippines[20]
declares that the Civil Service Commission shall be the central personnel
agency to set standards and to enforce the laws governing the discipline of
civil servants.[21]
PD No. 807 categorically described the scope of the civil service as embracing
every branch, agency, subdivision, and instrumentality of the government,
including every government-owned or controlled corporations whether performing
governmental or proprietary function;[22]
and construed an agency to mean any bureau, office, commission, administration,
board, committee, institute, corporation, whether performing governmental or
proprietary function, or any other unit of the National Government, as well as
provincial, city or municipal government, except as otherwise provided.[23]
Subsequently,
Executive Order (EO) No. 180[24]
defined government employees as all employees of all branches, subdivisions,
instrumentalities, and agencies of the Government, including government-owned
or controlled corporations with original charters.[25]
It provided that the Civil Service and labor laws shall be followed in the
resolution of complaints, grievances and cases involving government employees.[26]
In
Philippine Refining Company v. Court of
Appeals,[27]
we declared that AFPCES is a government agency that is not immune from suit
since it is engaged in proprietary activities. We find no compelling reason to
deviate from such pronouncement. The historical background of its creation and
establishment indicates that AFPCES is an agency under the direct control and
supervision of the AFP as it was established to take charge of the operations
and management of all commissary facilities in military establishments all over
the country. By clear implication of law, all AFPCES personnel should therefore
be classified as government employees and any appointment, promotion, discipline
and termination of its civilian staff should be governed by appropriate civil
service laws and procedures.
Interestingly,
in the course of the proceedings, petitioners did not question or refute such
classification of the AFPCES. They, in fact, averred that AFPCES is not created
by a special law to classify it as a government-owned or controlled corporation
with original charter, but a mere entity of the AFP. They also admit that
AFPCES is without any corporate features as it is merely an agency performing
proprietary functions not only for the benefit of veterans, their widows and orphans,
and the members of the AFP, but for the public in general.[28]
Petitioners,
however, assert that the pronouncement in Duty
Free Philippines should not be applied in the instant case since the
factual milieu of the said case is different from the case at bar.
We
partly agree with petitioners.
Like
AFPCES, Duty Free Philippines is also a government agency engaged in
proprietary activities without separate corporate existence. Unlike Duty Free
Philippines, however, AFPCES committed acts which created an impression upon
petitioners that they fall within the coverage of pertinent labor laws and not
the civil service law. First, since the start of their employment and until
their unceremonious indefinite suspension from work, AFPCES have enrolled
petitioners to the SSS, the primary governmental agency engaged in providing
social security benefits to employees of the private sector, instead of the
Government Service Insurance System (GSIS) as mandated by Commonwealth Act No.
186.[29]
AFPCES even remitted its corresponding employer’s share to petitioners’ SSS
contributions. Such practice has been continuously observed by the AFPCES in
the span of more than three (3) decades.
Second,
the hiring, appointment and discipline of AFPCES employees never went through
the proper procedure as required by pertinent civil service laws and regulations.
In a formal request made by Feliciano M. Gacis, Jr., Officer-in-Charge of the
Office of the Assistant Secretary for Personnel of the Department of National
Defense, inquiring from the CSC whether petitioners are indeed government
employees covered by the Civil Service Law and CSC regulations, the said
Commission issued a Resolution containing the following findings:
It
is explicit that the aforequoted LOI merely set aside a fund in the amount of
five (5) [m]illion [p]esos for the operation of a commissary in all military
establishments in the country for the benefit of veterans, their widows and
orphans, and the members of the Armed Forces of the
Section 2 (1), Article IX B of the 1987 Constitution defines the scope of the civil service, as follows:
“Sec. 2. (1) The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters.”
From the aforequoted constitutional provision, it is clear that only government-owned or controlled corporations with original charters are embraced by the civil service. Hence, the question now that needs to be answered is: Can LOI 31-A be considered as the charter of the AFPCES such that it can be considered a government-owned or controlled corporation embraced by the Civil Service Law and rules?
After a careful evaluation and scrutiny of LOI 31-A, the Commission is of the opinion and so holds that the said LOI could hardly be considered as the charter of AFPCES. It should be noted that the said LOI does not specify the composition of AFPCES, its specific functions, its governing board, its powers and the limitation of the exercise thereof. In short, the said LOI does not provide the AFPCES corporate features. This being the case, the AFPCES cannot be considered a government-owned or controlled corporation with original charter. In fact, the AFPCES does not exercise corporate powers. Accordingly, its civilian employees cannot be considered as government employees covered by the Civil Service Law and rules.
x x x x
Further, there is neither a showing that the positions of civilian employees of the AFPCES are included in the plantilla of personnel duly approved by the Department of Budget and Management (DBM) nor said employees were issued appointments attested by the Commission.
WHEREFORE, the Commission hereby rules that all civilian employees of the Armed Forces of the Philippines Commissary and Exchange Service are not government employees covered and embraced by the Civil Service Law and rules.[30]
Indeed,
petitioners’ employment to the AFPCES should have been made in conformity with
pertinent civil service regulations since AFPCES is a government agency under
the direct control and supervision of the AFP. However, since this did not
happen, petitioners were placed under an anomalous situation with AFPCES
insisting that they are government employees under the jurisdiction of the CSC,
but with the CSC itself disavowing any jurisdiction over them.
This
notwithstanding, since
it cannot be denied that petitioners are government employees, the proper body
that has jurisdiction to hear the case is the CSC. Such fact cannot be negated
by the failure of respondents to follow appropriate civil service rules in the
hiring, appointment, discipline and dismissal of petitioners. Neither can it be
denied by the fact that respondents chose to enroll petitioners in the SSS
instead of the GSIS. Such considerations cannot be used against the CSC to
deprive it of its jurisdiction. It is not the absence or presence of the
required appointment from the CSC, or the membership of an employee in the SSS
or in the GSIS that determine the status of the position of an employee. We
agree with the opinion of the AFP Judge Advocate General that it is the
regulation or the law creating the Service that determines the position of the
employee.[31]
Petitioners
are government personnel since they are employed by an agency attached to the
AFP. Consequently, as correctly observed by the Court of Appeals, the Labor
Arbiter’s decision on their complaint for illegal dismissal cannot be made to
stand since the same was issued without jurisdiction. Any decision issued
without jurisdiction is a total nullity, and may be struck down at any time.[32]
However,
given petitioners’ peculiar situation, the Court is constrained not to deny the
petition entirely, but instead to refer it to the CSC pro hac vice. The Court notes that this case has been
pending for nearly a decade, but deciding it on the merits at this juncture,
while ideal and more expeditious, is not possible. The records of the case fail
to adequately spell out the validity of the complaint for illegal dismissal as
well as the actual amount of the claim. In fact, the records even fail to
disclose the amount of salary received by petitioners while they were engaged
to work in AFPCES’ facilities. But rather than directing petitioners to re-file
and relitigate their claim before the CSC – a step which will only duplicate
much of the proceedings already accomplished – the Court deems it best, pro
hac vice, to order the NLRC to forward the entire records of the
case directly to the CSC which is directed to take cognizance of the case. The
CSC is directed to promptly resolve whether petitioners were illegally
dismissed from the service, and whether they are entitled to their monetary
claims. Further, taking into
consideration AFPCES’ failure to observe the proper procedure required by
pertinent civil service rules and regulations regarding the hiring, appointment
and placement of petitioners, we likewise caution the CSC not to use the
AFPCES’ inefficiency to prejudice the status of petitioners’ employment or to
deny whatever right they may have under pertinent civil service laws. To hold otherwise would only be giving premium
to AFPCES’ delinquent attitude towards petitioners in particular, and to the
civil service in general. The AFPCES
cannot be made to have its cake and eat it, too.
WHEREFORE, the petition is PARTLY GRANTED. The Court of Appeals
Decision dated
The
National Labor Relations Commission (NLRC) is DIRECTED to forward the
records of the case (NLRC-NCR Case No. 03-01533-2001-NLRC NCR Case No.
032920-02) to the Civil Service Commission (CSC), which is ordered to promptly
proceed with the resolution of the case on the merits with deliberate dispatch.
SO
ORDERED.
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MARTIN S. VILLARAMA, JR. Associate Justice |
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WE CONCUR: CONCHITA CARPIO MORALES Associate Justice Chairperson |
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ARTURO D.
BRION Associate Justice |
LUCAS P. BERSAMIN Associate Justice |
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ROBERTO A. ABAD Associate Justice |
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A T T E S T A T I O N
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
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CONCHITA CARPIO MORALES Associate Justice Chairperson, Third
Division |
C E R T I F I C A T I O N
Pursuant
to Section 13, Article VIII of the 1987 Constitution and the Division
Chairperson’s Attestation, I certify that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
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RENATO C. CORONA Chief Justice |
*
Additional member per Special Order
No. 843.
[1] Rollo, pp. 11-23. Penned by Associate Justice Amelita G. Tolentino, with Associate Justices Portia Aliño-Hormachuelos and Arcangelita Romilla-Lontok concurring.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10] Docketed as NLRC-NCR Case No. 00-03-01533-2001
(
[11] CA rollo, pp. 35-41.
[12]
[13]
[14]
[15]
[16]
[17] G.R. No. 166365,
[18] Rollo, p. 19.
[19]
[20] Took effect on
[21] Section 2, Art. II, PD No. 807.
[22] Section 4, Art. IV,
[23] Section 3, Art. III,
[24] PROVIDING GUIDELINES FOR THE EXERCISE OF THE
RIGHT TO ORGANIZE OF GOVERNMENT EMPLOYEES, CREATING A PUBLIC SECTOR
LABOR-MANAGEMENT COUNCIL, AND FOR OTHER PURPOSES. It took effect on
[25] Section 1, EO No. 180.
[26] Section 16,
[27] G.R. No. 118794,
[28] Rollo, p. 40.
[29] AN ACT TO CREATE AND ESTABLISH A “GOVERNMENT
SERVICE INSURANCE SYSTEM,” TO PROVIDE FOR ITS ADMINISTRATION, AND TO
APPROPRIATE THE NECESSARY FUNDS THEREFOR, otherwise known as the “Government
Service Insurance Act.” The Act took effect on
[30] Rollo,
pp. 104-106. Civil Service Commission Resolution No. 010051 dated
[31] CA rollo, p. 46.
[32] Solid Homes, Inc. v. Payawal, G.R.
No. 84811,