021-Pnoc-Edc vs. NLRC 201 Scra 487
021-Pnoc-Edc vs. NLRC 201 Scra 487
021-Pnoc-Edc vs. NLRC 201 Scra 487
NLRC
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PNOC v. NLRC
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In addition, private respondent, Danilo Mercado violated company rules and regulations in the
following instances:
1. On June 5, 1985, Danilo Mercado was absent from work without leave, without proper turn-over
of his work, causing disruption and delay of company work activities;
2. On June 15, 1985, Danilo Mercado went on vacation leave without prior leave, against company
policy, rules and regulations. (Petitioner's Memorandum, Rollo, p. 195).
On September 23, 1985, private respondent Mercado filed a complaint for illegal dismissal, retirement benefits,
separation pay, unpaid wages, etc. against petitioner PNOC-EDC before the NLRC Regional Arbitration Branch
No. VII docketed as Case No. RAB-VII-0556-85.
After private respondent Mercado filed his position paper on December 16, 1985 (Annex "B" of the Petition, Rollo,
pp. 28-40), petitioner PNOC-EDC filed its Position Paper/Motion to Dismiss on January 15, 1986, praying for the
dismissal of the case on the ground that the Labor Arbiter and/or the NLRC had no jurisdiction over the case
(Annex "C" of the Petition, Rollo, pp. 41-45), which was assailed by private respondent Mercado in his Opposition
to the Position Paper/Motion to Dismiss dated March 12, 1986 (Annex "D" of the Petition, Rollo, pp. 46-50).
The Labor Arbiter ruled in favor of private respondent Mercado. The dispositive onion of said decision reads as
follows:
WHEREFORE, in view of the foregoing, respondents are hereby ordered:
1) To reinstate complainant to his former position with full back wages from the date of his
dismissal up to the time of his actual reinstatement without loss of seniority rights and other
privileges;
2) To pay complainant the amount of P10,000.00 representing his personal share of his savings
account with the respondents;
3) To pay complainants the amount of P30,000.00 moral damages; P20,000.00 exemplary damages
and P5,000.00 attorney's fees;
4) To pay complainant the amount of P792.50 as his proportionate 13th month pay for 1985.
Respondents are hereby further ordered to deposit the aforementioned amounts with this Office
within ten days from receipt of a copy of this decision for further disposition.
SO
(Labor Arbiter's Decision, Rollo, p. 56)
ORDERED.
The appeal to the NLRC was dismissed for lack of merit on July 3, 1987 and the assailed decision was affirmed.
Hence, this petition.
The issues raised by petitioner in this instant petition are:
1. Whether or not matters of employment affecting the PNOC-EDC, a government-owned and
controlled corporation, are within the jurisdiction of the Labor Arbiter and the NLRC.
2. Assuming the affirmative, whether or not the Labor Arbiter and the NLRC are justified in
PNOC v. NLRC
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ordering the reinstatement of private respondent, payment of his savings, and proportionate 13th
month pay and payment of damages as well as attorney's fee.
Petitioner PNOC-EDC alleges that it is a corporation wholly owned and controlled by the government; that the
Energy Development Corporation is a subsidiary of the Philippine National Oil Company which is a government
entity created under Presidential Decree No. 334, as amended; that being a government-owned and controlled
corporation, it is governed by the Civil Service Law as provided for in Section 1, Article XII-B of the 1973
Constitution, Section 56 of Presidential Decree No. 807 (Civil Service Decree) and Article 277 of Presidential
Decree No. 442, as amended (Labor Code).
The 1973 Constitution provides:
The Civil Service embraces every branch, agency, subdivision and instrumentality of the
government including government-owned or controlled corporations.
Petitioner PNOC-EDC argued that since Labor Arbiter Minoria rendered the decision at the time when the 1973
Constitution was in force, said decision is null and void because under the 1973 Constitution, government-owned
and controlled corporations were governed by the Civil Service Law. Even assuming that PNOC-EDC has no
original or special charter and Section 2(i), Article IX-B of the 1987 Constitution provides that:
The Civil Service embraces all branches, subdivision, instrumentalities and agencies of the
Government, including government-owned or controlled corporations with original charters.
such circumstances cannot give validity to the decision of the Labor Arbiter (Ibid., pp. 192-193).
This issue has already been laid to rest in the case of PNOC-EDC vs. Leogardo, 175 SCRA 26 (July 5, 1989),
involving the same petitioner and the same issue, where this Court ruled that the doctrine that employees of
government-owned and/or con 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, has been
supplanted by the present Constitution. "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 are 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."
Specifically, the PNOC-EDC having been incorporated under the General Corporation Law was held to be a
government owned or controlled corporation whose employees are subject to the provisions of the Labor Code
(Ibid.).
The fact that the case arose at the time when the 1973 Constitution was still in effect, does not deprive the NLRC
of jurisdiction on the premise that it is the 1987 Constitution that governs because it is the Constitution in place at
the time of the decision (NASECO v. NLRC, G.R. No. 69870, 168 SCRA 122 [1988]).
In the case at bar, the decision of the NLRC was promulgated on July 3, 1987. Accordingly, this case falls squarely
under the rulings of the aforementioned cases.
As regards the second issue, the record shows that PNOC-EDC's accusations of dishonesty and violations of
company rules are not supported by evidence. Nonetheless, while acknowledging the rule that administrative
bodies are not governed by the strict rules of evidence, petitioner PNOC-EDC alleges that the labor arbiter's
propensity to decide the case through the position papers submitted by the parties is violative of due process
PNOC v. NLRC
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