G.R. No. 79182 – 278 Phil. 493 – 201 SCRA 487 – Mercantile Law – Corporation Law – Jurisdiction over GOCCs and their subsidiaries in labor cases
In June 1985, Danilo Mercado was dismissed by PNOC-Energy Development Corporation (PNOC-EDC) due to serious acts of dishonesty allegedly committed by Mercado. Mercado then filed a complaint for illegal dismissal against PNOC-EDC. PNOC-EDC filed a motion to dismiss on the ground that the Labor Arbiter and/or the National Labor Relations Commission (NLRC) has no jurisdiction over PNOC-EDC because it is a subsidiary of the Philippine National Oil Company (PNOC), a government owned or controlled corporation, and as a subsidiary, it is also a GOCC and as such, the proper forum for Mercado’s suit is the Civil Service Commission.
ISSUE: Whether or not PBOC-EDC is correct.
HELD: No. The issue in this case has been decided already in the case of PNOC-EDC vs Leogardo. It is true that PNOC is a GOCC and that PNOC-EDC, being a subsidiary of PNOC, is likewise a GOCC. It is also true that under the 1973 Constitution, all GOCCs are under the jurisdiction of the CSC. However, the 1987 Constitution change all this as it now 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]) [emphasis supplied]
Hence, the above provision sets the rule that the mere fact that a corporation is a GOCC does not automatically place it under the CSC. Under this provision, the test in determining whether a GOCC 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 the case at bar, PNOC-EDC, even though it is a GOCC, was incorporated under the general Corporation Law - it does not have its own charter, hence, it is under the jurisdiction of the MOLE.
Even though the facts of this case occurred while the 1973 Constitution was still in force, the provisions of the 1987 Constitution regarding the legal matters [procedural aspect] are applicable because it is the law in force at the time of the decision.
