Republic of the Philippines vs. Court of Appeals

The National Parks Development Committee is a government agency, not a government-owned or controlled corporation; its employees are civil service employees covered by civil service rules and regulations and, although allowed to organize and join unions, have no right to strike absent a law permitting it. A labor dispute between government employees and the government is cognizable by the Public Sector Labor-Management Council under Section 15 of Executive Order No. 180, not by the Department of Labor and Employment.

The National Parks Development Committee (NPDC) was originally created in 1963 under Executive Order No. 30 as the Executive Committee for the development of the Quezon Memorial, Luneta and other national parks, and was later registered with the Securities and Exchange Commission as a non-stock, non-profit corporation known as “The National Parks Development Committee, Inc.” By Executive Order No. 120 dated January 30, 1989, NPDC was attached to the Ministry (later Department) of Tourism and provided with a separate budget subject to audit by the Commission on Audit, and the Civil Service Commission notified NPDC that all appointments and personnel actions shall be submitted through the Commission. Its employees organized into unions affiliated with the Trade Union of the Philippines and Allied Services and entered into collective bargaining agreements with NPDC.

The National Parks Development Committee (NPDC) was originally created in 1963 under Executive Order No. 30 as the Executive Committee for the development of the Quezon Memorial, Luneta and other national parks. It was later renamed the National Parks Development Committee under Executive Order No. 68 on September 21, 1967, and was registered with the Securities and Exchange Commission as a non-stock, non-profit corporation known as “The National Parks Development Committee, Inc.”

In August 1987, the Securities and Exchange Commission ordered NPDC to show cause why its Certificate of Registration should not be suspended for (a) failure to submit the General Information Sheet from 1981 to 1987; (b) failure to submit its Financial Statements from 1981 to 1986; (c) failure to register its Corporate Books; and (d) failure to operate for a continuous period of at least five years since September 27, 1967. On August 18, 1987, NPDC Chairman Amado Lansang, Jr. informed the SEC that his Office had no objection to the suspension, cancellation, or revocation of NPDC’s Certificate of Registration.

By virtue of Executive Order No. 120 dated January 30, 1989, NPDC was attached to the Ministry (later Department) of Tourism and provided with a separate budget subject to audit by the Commission on Audit. On September 10, 1987, the Civil Service Commission notified NPDC that pursuant to Executive Order No. 120, all appointments and other personnel actions shall be submitted through the Commission.

Meanwhile, the Rizal Park Supervisory Employees Association, consisting of employees holding supervisory positions in the different areas of the parks, was organized and affiliated with the Trade Union of the Philippines and Allied Services (TUPAS) under Certificate No. 1206. On June 15, 1987, two collective bargaining agreements were entered into between NPDC and NPDCEA (TUPAS local Chapter No. 967) and NPDC and NPDCSA (TUPAS Chapter No. 1206), for a period of two years or until June 30, 1989.

On March 20, 1988, these unions staged a strike at the Rizal Park, Fort Santiago, Paco Park, and Pook ni Mariang Makiling at Los Banos, Laguna, alleging unfair labor practices by NPDC. On March 21, 1988, NPDC filed in the Regional Trial Court in Manila, Branch III, a complaint against the union to declare the strike illegal and to restrain it on the ground that the strikers, being government employees, have no right to strike although they may form a union. On March 24, 1988, the lower court dismissed the complaint and lifted the restraining order for lack of jurisdiction. It found that an employer-employee relationship existed between NPDC and the strikers and that the acts complained of fell under the Labor Code provisions on strikes.

• Civil Service Coverage: Petitioner argued that the Court of Appeals erred in not holding that NPDC employees are covered by the Civil Service Law, because NPDC is a government agency and not a private corporation.
• No Right to Strike: Petitioner maintained that the strikers, being government employees, have no right to strike although they may form a union.
• Jurisdiction Over Labor Dispute: Petitioner argued that the Court of Appeals erred in ruling that its labor dispute with its employees is cognizable by the Department of Labor.

• Nature of NPDC: Whether the National Parks Development Committee is a government agency or a private corporation, on which depends the right of its employees to strike.
• Civil Service Coverage: Whether NPDC employees are covered by the Civil Service Law.
• Right to Strike: Whether NPDC employees, as government employees, have the right to strike.
• Jurisdiction Over Labor Dispute: Whether the labor dispute between NPDC and its employees is cognizable by the Department of Labor and Employment or by the Public Sector Labor-Management Council.

• Nature of NPDC: Government agency, not a government-owned or controlled corporation. It was created by executive order and remained under the Office of the President, with appropriations listing it as a regular government agency.
• Civil Service Coverage: Yes. Since NPDC is a government agency, its employees are covered by civil service rules and regulations under Section 2, Article IX of the 1987 Constitution and are civil service employees under Section 14 of Executive Order No. 180.
• Right to Strike: No. NPDC employees may organize and join unions of their choice under the 1987 Constitution, but no law permits them to strike.
• Jurisdiction Over Labor Dispute: Public Sector Labor-Management Council. Under Section 15 of Executive Order No. 180, the PSLC, not the Department of Labor and Employment, shall hear a labor dispute between employees and the government.

• Nature of NPDC: The Court relied on its ruling in Jesus P. Perlas, Jr. vs. People of the Philippines, G.R. Nos. 84637-39, August 2, 1989, where NPDC was held to be an agency of the government, not a government-owned or controlled corporation, and the Sandiganbayan was held to have jurisdiction over its acting director who committed estafa. In that ruling, NPDC was originally created as an Executive Committee on January 14, 1963, for the development of the Quezon Memorial, Luneta and other national parks under Executive Order No. 30; it was later designated as the National Parks Development Committee on February 7, 1974, under Executive Order No. 69. Despite an attempt to transfer it to the Bureau of Forest Development, Department of Natural Resources, on December 1, 1975, under Letter of Implementation No. 39 issued pursuant to Presidential Decree No. 830 dated November 27, 1975, NPDC remained under the Office of the President under Executive Order No. 709 dated July 27, 1981. From 1977 to 1981, the annual appropriations decrees listed NPDC as a regular government agency under the Office of the President, and allotments for its maintenance and operating expenses were issued directly to NPDC. Thus, NPDC is a government agency.
• Civil Service Coverage: Because NPDC is a government agency, its employees are covered by civil service rules and regulations under Section 2, Article IX of the 1987 Constitution. Its employees are civil service employees under Section 14 of Executive Order No. 180.
• Right to Strike: While NPDC employees are allowed under the 1987 Constitution to organize and join unions of their choice, there is as yet no law permitting them to strike. Accordingly, they have no right to strike.
• Jurisdiction Over Labor Dispute: In case of a labor dispute between the employees and the government, Section 15 of Executive Order No. 180 dated June 1, 1987 provides that the Public Sector Labor-Management Council, not the Department of Labor and Employment, shall hear the dispute. The Court of Appeals and the lower court therefore erred in holding that the labor dispute between NPDC and the members of the NPDSA is cognizable by the Department of Labor and Employment. The complaint should be filed in the Public Sector Labor-Management Council.

• Government Agency vs. Government-Owned or Controlled Corporation — An entity created by executive order, attached to the Office of the President, and funded as a regular government agency may be classified as a government agency rather than a government-owned or controlled corporation. The Court applied this to NPDC, relying on Perlas, and held that NPDC is an agency of the government, not a government-owned or controlled corporation.
• Civil Service Coverage of Employees of Government Agencies — Employees of a government agency are covered by civil service rules and regulations and are civil service employees. Because NPDC is a government agency, its employees fall under the civil service under Section 2, Article IX of the 1987 Constitution and Section 14 of Executive Order No. 180.
• No Right to Strike in the Public Sector — Government employees may organize and join unions of their choice, but they have no right to strike absent a law permitting it. The Court applied this to NPDC employees, holding that no law permits them to strike.
• Jurisdiction Over Public Sector Labor Disputes — Under Section 15 of Executive Order No. 180, labor disputes between government employees and the government are heard by the Public Sector Labor-Management Council, not the Department of Labor and Employment. The Court applied this to the NPDC labor dispute.

• “Since NPDC is a government agency, its employees are covered by civil service rules and regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees (Sec. 14, Executive Order No. 180).” — This passage states the ratio for civil service coverage, linking NPDC’s status as a government agency to its employees’ civil service status.
• “While NPDC employees are allowed under the 1987 Constitution to organize and join unions of their choice, there is as yet no law permitting them to strike.” — This passage defines the public-sector right to organize without a right to strike.
• “In case of a labor dispute between the employees and the government, Section 15 of Executive Order No. 180 dated June 1, 1987 provides that the Public Sector Labor- Management Council, not the Department of Labor and Employment, shall hear the dispute.” — This passage identifies the proper forum for public-sector labor disputes and is the basis for setting aside the lower courts’ jurisdiction rulings.

• Jesus P. Perlas, Jr. vs. People of the Philippines, G.R. Nos. 84637-39, August 2, 1989 — Controlling precedent relied on by the Court; it ruled that NPDC is an agency of the government, not a government-owned or controlled corporation, and that the Sandiganbayan had jurisdiction over its acting director who committed estafa. The Court adopted that characterization to hold NPDC employees covered by civil service rules.

• Section 2, Article IX, 1987 Constitution — Provides that the Civil Service Commission shall administer the civil service. The Court cited it to hold that NPDC employees are covered by civil service rules and regulations.
• Section 14, Executive Order No. 180 — Declares employees of government agencies to be civil service employees. The Court applied it to NPDC employees.
• Section 15, Executive Order No. 180 (June 1, 1987) — Provides that the Public Sector Labor-Management Council, not the Department of Labor and Employment, shall hear labor disputes between employees and the government. The Court applied it to vest jurisdiction over the NPDC dispute in the PSLC.
• Article 217, paragraph 5, Labor Code, in relation to Article 265 — Cited by the trial court as the basis for Department of Labor jurisdiction over the strike. The Supreme Court held that the lower courts erred in applying it because the dispute is a public-sector labor dispute governed by Section 15 of Executive Order No. 180.
• Executive Order No. 120 (January 30, 1989) — Attached NPDC to the Ministry (later Department) of Tourism and provided it with a separate budget subject to audit by the Commission on Audit. The Civil Service Commission also notified NPDC that appointments and personnel actions shall be submitted through the Commission.

Narvasa, Cruz, Gancayco, and Medialdea, JJ.