Lumanta vs. National Labor Relations Commission

The Court held that for purposes of labor jurisdiction, a government-owned or controlled corporation "with original charter" under Article IX-B, Section 2(1) of the 1987 Constitution refers only to those created by special legislative charter. Consequently, GOCCs incorporated under the general Corporation Code, like respondent FTI, are covered by the Labor Code, and claims against them fall within the jurisdiction of the DOLE and the labor arbiters.

Petitioners Luz Lumanta and fifty-four other retrenched employees filed a complaint against Food Terminal, Inc. (FTI) for unpaid separation pay, underpayment of wages, and non-payment of emergency cost of living allowances. FTI, a government-owned and controlled corporation, moved to dismiss the complaint, arguing that its employees were governed by the Civil Service Law and that the Civil Service Commission, not the DOLE, had jurisdiction over the dispute. The Labor Arbiter and the National Labor Relations Commission (NLRC) agreed, dismissing the complaint based on the precedent set in National Housing Authority v. Juco (1985), which held that all GOCC employees are under the civil service.

Petitioners Luz Lumanta and 54 others were retrenched employees of Food Terminal, Inc. (FTI). On 20 March 1987, they filed a complaint with the DOLE for unpaid separation pay, underpayment of wages, and non-payment of ECOLA. FTI moved to dismiss, claiming it was a government-owned and controlled corporation whose employees were under the Civil Service Law, thus placing jurisdiction with the Civil Service Commission. The Labor Arbiter and NLRC dismissed the complaint, relying on the NHA v. Juco doctrine under the 1973 Constitution. The 1987 Constitution, which took effect on 2 February 1987, amended the civil service provision to include only GOCCs "with original charter." FTI was originally a private entity ("Greater Manila Food Terminal Market, Inc.") incorporated under the general incorporation law. It was later acquired by the government and designated a GOCC, but it was not created by a special legislative charter.

Petitioners argued that FTI, although government-owned, retained characteristics of a private corporation: it hired employees directly without Civil Service Commission approval, and its personnel were covered by the Social Security System (SSS), not the Government Service Insurance System (GSIS). They contended that under the 1987 Constitution, FTI, as a GOCC without an original charter, fell outside the scope of the civil service, and thus the DOLE had jurisdiction over their labor claims.

Respondent FTI argued that as a government-owned and controlled corporation, its employment relations were governed by the Civil Service Law, not the Labor Code. It maintained that the Civil Service Commission, not the DOLE, had jurisdiction over the dispute. The public respondent NLRC adopted this position, relying on the NHA v. Juco precedent.

• Procedural Issues: Whether the NLRC and Labor Arbiter committed grave abuse of discretion in dismissing the complaint for lack of jurisdiction.
• Substantive Issues: Whether the DOLE has jurisdiction over labor claims against a government-owned and controlled corporation without an original charter under the 1987 Constitution.

• Procedural: The Court found that the NLRC acted without or in excess of its jurisdiction by applying the Juco doctrine, which had been superseded by the 1987 Constitution. Because jurisdiction is determined at the time of filing the complaint, and the complaint was filed after the 1987 Constitution took effect, the new constitutional provision applied.
• Substantive: The Court ruled that the 1987 Constitution, specifically Article IX-B, Section 2(1), narrowed the civil service coverage to include only GOCCs "with original charter." It interpreted this phrase, based on the Constitutional Commission's deliberations and the NASECO ruling, to mean corporations created by special law. Since FTI was incorporated under the general Corporation Code, it was not covered by the civil service. Therefore, its employees' terms and conditions of employment were governed by the Labor Code, and the DOLE had jurisdiction over the dispute.

• Civil Service Coverage under the 1987 Constitution — The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charter. The phrase "with original charter" means those created by special law, as distinguished from those incorporated under the general Corporation Code. This doctrine distinguishes the 1987 Constitution from the 1973 Constitution, which included all GOCCs without exception.
• Jurisdiction Determined at Time of Filing — Jurisdiction over the subject matter is determined by the law in force at the time the action is commenced. The 1987 Constitution, having taken effect before the filing of the complaint, governed the jurisdictional question.

• "The 1987 Constitution which took effect on 2 February 1987, has on this point a notably different provision which reads: 'The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charter.'" — This passage highlights the pivotal textual change that altered the jurisdictional landscape for GOCCs.
• "We conclude that because respondent FTI is government-owned and controlled corporation without original charter, it is the Department of Labor and Employment, and not the Civil Service Commission, which has jurisdiction over the dispute arising from employment of the petitioners with private respondent FTI." — This is the core holding applying the new constitutional provision to the facts.

• National Housing Authority v. Juco (134 SCRA 172 [1985]) — Cited by the lower tribunals as controlling precedent. The Supreme Court distinguished it, noting it was decided under the 1973 Constitution and that its holding was expressly limited to corporations claimed as government-owned, not those taken over in foreclosure.
• National Service Corporation (NASECO) v. National Labor Relations Commission (G.R. No. 69870, November 29, 1988) — Followed and applied. The Court quoted its ruling that "with original charter" refers to corporations chartered by special law, thereby excluding GOCCs incorporated under the general Corporation Code from the civil service.

• Article IX-B, Section 2(1) of the 1987 Constitution — Provides the definition of the civil service, limiting it to GOCCs "with original charter." This was the controlling provision for determining jurisdiction.
• Article II-B, Section 1(1) of the 1973 Constitution — Referenced to show the prior, broader scope of the civil service that included all GOCCs, which the Juco case interpreted.