Abadilla vs. Philippine Amusement & Gaming Corporation

Workers hired by a government-owned or -controlled corporation under contracts that comply with Civil Service Commission guidelines for job orders or contracts of service—characterized by the absence of an employer-employee relationship, non-enjoyment of standard government benefits, and work of a specific, limited duration—are not government employees and are not covered by civil service laws, rules, and regulations.

PAGCOR, a government-owned or -controlled corporation created under Presidential Decree No. 1869, operated a hotel and restaurant business at the Goldenfield Complex in Bacolod City. It hired the petitioners, Abadilla et al., to perform various service and kitchen functions (e.g., cook, waiter, dishwasher, steward) under individual, renewable contracts of employment. The petitioners worked on a "no work, no pay" basis for periods ranging from one to seventeen years. PAGCOR subsequently decided to close its hotel business at that location and transfer operations, announcing it would not renew the petitioners' contracts. This prompted the filing of an illegal dismissal complaint.

• Nature of Work and Employment: The petitioners were engaged by PAGCOR to work in its hotel and restaurant business in Bacolod City. Their positions included cook, assistant cook, waiter, purchaser, pantry aide, food processor, food attendant, steward, assistant food checker, dishwasher, kitchen supervisor, and busboy. Their employment was governed by individual contracts with fixed terms that were occasionally renewed.
• Terms of Employment Contracts: The contracts stipulated a "no work, no pay" arrangement. The petitioners alleged they were denied benefits accorded to regular PAGCOR employees, such as overtime pay, service incentive leave, and vacation leave. The CSC found the contracts contained provisions prohibited under applicable guidelines for job orders, such as requiring work during prescribed office hours and under the agency's direct supervision.
• Termination and Complaint: PAGCOR announced the closure of its hotel at the Goldenfield Complex and its transfer to another location. It also announced its decision not to renew the petitioners' contracts. This led to the filing of an illegal dismissal complaint.
• Prior Jurisdictional Finding: The CSCRO-VI, in its initial decision, scrutinized the contracts and concluded the petitioners were job order workers, not government employees, and thus outside the CSC's jurisdiction.

• Regular Employee Status: Petitioners argued they are regular employees of PAGCOR entitled to security of tenure and the benefits provided to regular government employees, as their work was necessary and desirable to PAGCOR's business.
• Not Confidential Employees: Petitioners contended they are not confidential employees of PAGCOR, disputing any characterization that would exempt them from standard employment protections.
• Jurisdiction of the CSC: Implicitly, petitioners argued that the CSC had jurisdiction over their complaint as they were government employees covered by civil service laws.

• Job Order Worker Status: PAGCOR countered that the petitioners were contract of service or job order workers. Their employment contracts were for a specific duration and did not create an employer-employee relationship with the government.
• Exemption from Civil Service Law: PAGCOR asserted that under its charter and applicable CSC issuances (like CSC Memorandum Circular No. 40-98 and CSC-COA-DBM Joint Circular No. 1, s. 2017), such workers are not covered by civil service laws, rules, and regulations.
• Lack of CSC Jurisdiction: Consequently, PAGCOR maintained the CSC lacked jurisdiction over the dispute.

• Employment Status: Whether the petitioners are regular employees of PAGCOR covered by civil service laws or contract of service/job order workers.
• Jurisdiction: Whether the Civil Service Commission has jurisdiction over the petitioners' complaint.

• Employment Status: The petitioners are contract of service or job order workers, not regular government employees. Their employment contracts, the nature of their functions (service and maintenance work), their organizational rank, and compensation level align with the characteristics of job order workers as defined in CSC Memorandum Circular No. 40-98, CSC Resolution No. 020790, and CSC-COA-DBM Joint Circular No. 1. These guidelines specify that such workers are not considered government service, do not enjoy benefits like PERA or RATA, and their contracts cover lump-sum or short-duration work where no employer-employee relationship exists.
• Jurisdiction: The CSC correctly dismissed the complaint for lack of jurisdiction. Since the petitioners are not government employees under the civil service, their employment dispute is not within the CSC's adjudicatory authority.

• Test for Confidential Employees in PAGCOR: The classification of a position as "primarily confidential" under the PAGCOR Charter (Sec. 16) is not absolute. The determination depends on the nature of the position, considering the functions, organizational ranking, and compensation level. Positions of low rank and non-sensitive duties (e.g., kitchen and service staff) do not qualify as confidential.
• Contract of Service/Job Order Workers vs. Government Employees: Workers hired under contracts of service or job orders, as defined by CSC issuances, are not government employees. Their services are not considered government service, they are not covered by civil service laws, and they do not enjoy the benefits of regular government employees. No employer-employee relationship exists between them and the hiring government agency.

• "The confluence of the above-mentioned circumstances creates a reasonable conclusion that complainants rendered work at PAGCOR under contract of services. As such, complainants are not considered government employees; hence, outside the mantle of Civil Service laws, rules and regulations. Consequently, this Office is stripped of jurisdiction in matters involving job orders and workers covered by contracts of services." — This passage from the CSC decision, quoted with approval by the Supreme Court, succinctly captures the jurisdictional consequence of the workers' status.
• "This Court seeks to uphold the constitutional protection afforded to labor. We sternly remind PAGCOR and all similar agencies that while their authority to contract services is recognized under applicable civil service rules, such hiring authority should not be used to mistreat or otherwise mismanage contract of service or job order workers." — This concluding note from the Supreme Court underscores the policy consideration for labor protection despite the jurisdictional finding.

• Civil Service Commission and Philippine Amusement and Gaming Corporation v. Salas, 340 Phil. 526 (1997) — Established that the portion of the PAGCOR Charter exempting all positions from the Civil Service Law had been modified by the 1987 Constitution and Administrative Code, but the classification of employees as "confidential" remains valid, though not conclusive on the courts.
• Philippine Amusement and Gaming Corporation v. Rilloraza, 412 Phil. 114 (2001) — Reiterated that the classification of a position as primarily confidential is not absolutely binding on the courts; the true test is the nature of the position.
• Philippine Amusement and Gaming Corporation v. Angara, 511 Phil. 486 (2005) — Applied the nature-of-functions test to hold that slot machine roving token attendants were not confidential employees.

• Presidential Decree No. 1869, Sec. 16 (PAGCOR Charter) — Provides that all positions in PAGCOR are exempt from the Civil Service Law and shall be governed by the Board of Directors' personnel policies, and that all casino and related service employees are classified as "confidential." The Court interpreted this in light of subsequent laws and jurisprudence.
• CSC Memorandum Circular No. 40, s. 1998, Rule XI, Secs. 1 & 2 — Defines contracts of services/job orders and states that services rendered thereunder are not considered government service and are not covered by civil service laws.
• CSC Resolution No. 020790 (2002), Sec. 3 — Lists prohibited provisions in contracts of service/job orders, such as requiring work during regular office hours or under the agency's direct control.
• CSC-COA-DBM Joint Circular No. 1, s. 2017, Sec. 7.4 — Clarifies that contract of service and job order workers are not covered by civil service law and rules, and their services are not creditable as government service.

Hon. Alfredo Benjamin S. Caguioa, Hon. Henri Jean Paul B. Inting, Hon. Ramon Paul L. Hernando, Hon. Samuel H. Gaerlan.