Cabrera vs. NLRC

A government-owned or controlled corporation organized under the Corporation Law, without an original charter from the legislature, is not part of the Civil Service; its employer-employee relations are governed by the Labor Code and fall within the jurisdiction of the National Labor Relations Commission.

Petitioners Teofilo Cabrera, Fausto Baclig, and Alfredo Agulan were employees of the National Service Corporation (NASECO), a government-owned or controlled corporation. NASECO is an admitted subsidiary of the National Investment and Development Corporation (NIDC), which in turn is a subsidiary of the Philippine National Bank (PNB). The dispute centered on whether NASECO's employees were covered by the Labor Code and thus within the jurisdiction of the NLRC, or by Civil Service rules and regulations, a question that turned on whether NASECO possessed an "original charter" from the legislature within the meaning of the 1987 Constitution. The legal landscape had shifted during the pendency of the case: the earlier doctrine in National Housing Authority vs. Juco, decided under the 1973 Constitution, placed all GOCCs under the Civil Service, but this was overturned in NASECO vs. NLRC under the 1987 Constitution, which limited Civil Service coverage to GOCCs with original charters.

Petitioners Teofilo Cabrera, Fausto Baclig, and Alfredo Agulan were employed by the National Service Corporation (NASECO), a government-owned or controlled corporation and an admitted subsidiary of the National Investment and Development Corporation (NIDC), itself a subsidiary of the Philippine National Bank (PNB). After their dismissal by NASECO, the petitioners filed a complaint for illegal dismissal with the Ministry of Labor and Employment on September 17, 1980. The Labor Arbiter, after considering the position papers submitted by the parties, rendered a decision on September 30, 1983, ordering the petitioners' reinstatement without loss of seniority rights and the payment of two years back wages and other benefits.

NASECO appealed to the NLRC, and the First Division affirmed the Labor Arbiter's decision on December 9, 1985. The petitioners thereafter moved for the issuance of a writ of execution. NASECO 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. NASECO's motion for reconsideration was denied, prompting it to appeal to the NLRC once more — this time before the Third Division.

On August 18, 1987, the NLRC Third Division declared itself without jurisdiction and dismissed the case. Relying on National Housing Authority vs. Juco, the public respondent held that NASECO was not covered by the Labor Code but by Civil Service rules and regulations, being a government-owned or controlled corporation. Notably, when petitioner Fausto Baclig had earlier filed a complaint with the Merit System Board of the Civil Service for his reinstatement, NASECO's general manager alleged in his answer dated February 9, 1981, that the case was cognizable not by the Board but by the labor authorities, on the ground that NASECO was a private corporation organized under the Corporation Law. The petitioners then elevated the matter to the Supreme Court, seeking affirmance of the original decision rendered by the Labor Arbiter.

• Jurisdiction of the NLRC: Petitioners sought affirmance of the Labor Arbiter's original decision, contending that the NLRC had jurisdiction over their illegal-dismissal complaint because NASECO, as a GOCC without an original legislative charter, was governed by the Labor Code rather than Civil Service rules.

• Civil Service Coverage: Respondent NASECO argued, through the NLRC Third Division, that as a government-owned or controlled corporation, it was covered by Civil Service rules and regulations and not by the Labor Code, relying on the doctrine in National Housing Authority vs. Juco.
• Procedural Defect: The Solicitor General observed that the petitioners did not allege grave abuse of discretion on the part of the respondents as required in a petition for certiorari under Rule 65 of the Rules of Court.

• Jurisdiction over GOCC Employees: Whether the NLRC has jurisdiction over an illegal-dismissal complaint filed by employees of a government-owned or controlled corporation organized under the Corporation Law and without an original legislative charter.
• Estoppel from Challenging Jurisdiction: Whether a GOCC that actively participated in labor proceedings and previously asserted the labor authorities' jurisdiction is estopped from later challenging the NLRC's jurisdiction.

• Jurisdiction over GOCC Employees: Yes. The NLRC has jurisdiction because NASECO, organized under the Corporation Law without an original charter from the legislature, is not part of the Civil Service under the 1987 Constitution; its employer-employee relations are governed by the Labor Code.
• Estoppel from Challenging Jurisdiction: Yes. NASECO was estopped from challenging the NLRC's jurisdiction, having accepted it throughout the proceedings until 1987, and having previously asserted before the Civil Service Merit System Board that the case was cognizable by labor authorities.

• Jurisdiction over GOCC Employees: Under the 1973 Constitution, Article XII-B, Section 1(1) provided that the Civil Service embraced every government-owned or controlled corporation, which led to the ruling in National Housing Authority vs. Juco that GOCC employees were covered by Civil Service rules and not the Labor Code. That doctrine was overturned in NASECO vs. NLRC, decided on November 24, 1988, under Article IX-B, Section 2(1) of the 1987 Constitution, which provides that the Civil Service embraces government-owned or controlled corporations with original charters. NASECO did not have an original charter from the legislature, having been organized under the Corporation Law. As a subsidiary of NIDC, in turn a subsidiary of PNB, NASECO was a GOCC without original charter, and accordingly its relations with its personnel were governed by the Labor Code and within the jurisdiction of the NLRC. The 1987 Constitution, being the Constitution in force at the time of decision, governed the case.

• Estoppel from Challenging Jurisdiction: NASECO accepted the jurisdiction of the labor authorities throughout the proceedings, from the filing of the complaint in 1980 until 1987, when it first challenged the NLRC's jurisdiction upon appealing the order for the issuance of the writ of execution. A long line of decisions, including Tijam vs. Sibonghanoy and subsequent cases, operates against NASECO on this point. Moreover, when petitioner Baclig filed a complaint with the Civil Service Merit System Board, NASECO's general manager himself asserted in his answer dated February 9, 1981, that the case was cognizable by labor authorities, not the Board, because NASECO was a private corporation organized under the Corporation Law. This prior position was directly inconsistent with NASECO's later invocation of Civil Service coverage.

• Civil Service Coverage of GOCCs Under the 1987 Constitution — Under Article IX-B, Section 2(1) of the 1987 Constitution, the Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters. A GOCC organized under the Corporation Law and without a special legislative charter is not part of the Civil Service; its employer-employee relations are governed by the Labor Code, and disputes arising therefrom fall within the jurisdiction of the NLRC. This doctrine overturned the earlier rule under the 1973 Constitution (National Housing Authority vs. Juco), which had placed all GOCCs under the Civil Service without the "original charter" qualification.

• Estoppel from Challenging Jurisdiction — A party who has actively participated in proceedings before a tribunal and accepted its jurisdiction throughout the case is estopped from later challenging that jurisdiction, particularly when it had previously asserted the tribunal's jurisdiction in other proceedings. This principle, drawn from a long line of decisions beginning with Tijam vs. Sibonghanoy, bars a party from belatedly invoking lack of jurisdiction to evade an adverse ruling.

• "Our finding is that the respondent NLRC erred in dismissing the petitioners' complaint for lack of jurisdiction because the rule now is that only government-owned or controlled corporations with original charters come under the Civil Service." — This passage states the ratio decidendi: the controlling test for determining whether a GOCC's employees fall under the Civil Service or the Labor Code under the 1987 Constitution.

• "The NASECO having been organized under the Corporation Law and not by virtue of a special legislative charter, its relations with its personnel are governed by the Labor Code and come under the jurisdiction of the National Labor Relations Commission." — This is the dispositive legal conclusion applying the "original charter" test to NASECO's specific circumstances.

• "Additionally, the NASECO is estopped from challenging the jurisdiction of the NLRC, having accepted it all the while this case was in progress and until 1987, when it appealed the order of the Labor Arbiter for the issuance of the writ of execution." — This passage articulates the estoppel doctrine as applied to NASECO, reinforcing that jurisdictional challenges cannot be raised opportunistically after years of active participation.

• National Housing Authority vs. Juco, 134 SCRA 172 — The prior controlling precedent under the 1973 Constitution holding that all GOCCs were part of the Civil Service. It was overturned by NASECO vs. NLRC and distinguished in this case as no longer applicable under the 1987 Constitution.
• National Service Corporation vs. NLRC, 168 SCRA 122 — The controlling precedent that overturned NHA vs. Juco, establishing that only GOCCs with original charters fall under the Civil Service under the 1987 Constitution. This case directly governed the disposition.
• Tijam vs. Sibonghanoy, 23 SCRA 29 — Leading case on estoppel from belatedly challenging jurisdiction, cited as the foundation for the line of decisions barring NASECO from contesting the NLRC's jurisdiction after years of active participation.
• Bliss Development Corporation vs. NLRC, G.R. No. 83100, February 5, 1990 — Cited as additional authority supporting the rule that GOCCs without original charters are governed by the Labor Code.

• Article IX-B, Section 2(1), 1987 Constitution — Provides that "the Civil Service embraces all branches, subdivisions, instrumentalities and agencies of the Government, including government-owned or controlled corporations with original charters." This provision was the constitutional basis for distinguishing NASECO from GOCCs with original charters and for placing it under the Labor Code.
• Article XII-B, Section 1(1), 1973 Constitution — Provided that "the Civil Service embraces every branch, agency, subdivision and instrumentality of the Government, including every government-owned or controlled corporation." This was the basis for the now-overturned NHA vs. Juco doctrine; the absence of the "original charter" qualifier distinguished it from the 1987 Constitution's provision.
• Rule 65, Rules of Court — Governs petitions for certiorari, requiring allegation of grave abuse of discretion. The Solicitor General noted the petitioners' failure to allege grave abuse of discretion, but the Court disregarded the procedural defect in view of the jurisdictional issue and the interest of substantial justice.

Narvasa, Griño-Aquino, and Medialdea, JJ., concurred. Gancayco, J., was on leave.