The Angat River Irrigation System vs. Angat River Workers' Union (PLUM)

A government agency performing governmental functions is immune from suit without its consent and cannot be subjected to the jurisdiction of the Court of Industrial Relations; its employees may organize only in a labor organization that does not impose the obligation to strike or to join a strike, and the Government cannot be compelled to enter into collective bargaining agreements with them.

The Angat River Irrigation System is a Division or Section of the Bureau of Public Works engaged in the maintenance and operation of irrigation systems in Bulacan and nearby provinces, created pursuant to Act No. 2152 (the Irrigation Act) and funded through yearly national appropriations. The Angat River Workers' Union (PLUM) is a labor organization whose members were actually employed in that project and which was permitted by the Department of Labor to operate under Permit No. 1424-IP. The dispute implicated Section 11 of Republic Act No. 875, the Industrial Peace Act, which governs strikes and self-organization by government employees.

The Angat River Irrigation System is a Division or Section of the Bureau of Public Works engaged in the maintenance and operation of irrigation systems in Bulacan and nearby provinces. Its appropriation is included in the yearly General Appropriations Act. It was created pursuant to Act No. 2152, the Irrigation Act approved on February 6, 1912, and its expenditures are borne by the National Government. The appropriation for the project appears in Act No. 1600 (Appropriations Act for fiscal year 1956-1957) under the Special Fund covering the National Irrigation System, and in Republic Act No. 1800 (1957-1958 Budget) as an itemized appropriation for salaries and wages of positions in the system, in the same manner as appropriations for officials and employees of the Bureau of Public Works. The employees working thereunder and receiving compensation from the amount appropriated by the Legislature for its operation are government employees.

The Angat River Workers' Union (PLUM) consisted of members actually employed in the project. On August 3, 1955, the union presented a statement of proposals consisting of 15 demands. When no action followed, the union president sent a letter to the supervising engineer and also saw him personally to inquire about the System's stand on the demands. According to the complaint, the official intimated that they would all be fired if they did not desist from their union activities because their organization was illegal. Feliciano Clemente was demoted from water master to collector, and on September 20, 1955, Ceferino Roque, Tomas Palileo, and Abelardo Crisostomo, officers and active members of the union, were dismissed from the service.

On January 5, 1956, the Acting Prosecutor of the Court of Industrial Relations filed, on behalf of the union, a complaint docketed as Case No. 814-ULP against the Angat River Irrigation System and its supervising engineer. The complaint alleged unfair labor practices: interfering with, restraining, or coercing employees in the exercise of their right to self-organization; practicing discrimination in hiring or tenure to discourage membership with the union; and refusing to bargain collectively with the employees' representatives. It prayed that respondents be ordered to refrain from the unfair labor practices and to reinstate Ceferino Roque, Tomas Palileo, Abelardo Crisostomo, and Feliciano Clemente to their former positions with back wages from dismissal or transfer to actual reinstatement.

On January 9, 1956, the union filed with the CIR a petition for certification as the majority union, docketed as Case No. 313-MC, under the Industrial Peace Act. It contended that it was a legitimate labor union duly permitted by the Department of Labor to operate under Permit No. 1424-IP; that it consisted of at least 95% of the total number of ordinary employees in the project; and that there was urgent need for immediate certification because the employer refused to bargain with the union and instead resorted to unfair labor practices. It prayed that the union be certified as the sole and exclusive collective bargaining representative of the employees of the unit.

When required by the Industrial Court to answer the complaint, respondents opposed by filing a motion to dismiss, arguing that the Angat River Irrigation System, being an entity under the Bureau of Public Works, which is an instrumentality of the Government, could not be drawn into the proceeding because the State cannot be sued by private persons without its consent. The CIR deferred action on the motion until after presentation of evidence and directed respondents to file their answer; after reconsideration was denied, the System and its supervising engineer instituted the present prohibition proceedings.

• Government Immunity from Suit: Petitioners asserted that the Angat River Irrigation System, as an entity under the Bureau of Public Works and an instrumentality of the Government, cannot be drawn into the CIR proceedings because the State cannot be sued by private persons without its consent.
• Lack of CIR Jurisdiction: Petitioners questioned the jurisdiction of the CIR to entertain the unfair labor practice complaint and the certification election petition and to require them to appear and answer.

• Unfair Labor Practices: The union alleged that respondents interfered with, restrained, or coerced employees in the exercise of their right to self-organization; practiced discrimination in hiring or tenure to discourage union membership; and refused to bargain collectively with the employees' representatives.
• Certification as Majority Union: The union contended that it was a legitimate labor organization permitted by the Department of Labor under Permit No. 1424-IP, that it consisted of at least 95% of the total ordinary employees in the project, and that immediate certification was urgent because the employer refused to bargain and resorted to unfair labor practices.
• Requested Relief: It prayed that respondents be ordered to refrain from unfair labor practices and to reinstate Ceferino Roque, Tomas Palileo, Abelardo Crisostomo, and Feliciano Clemente with back wages, and that the union be certified as sole and exclusive collective bargaining representative.

• Right to Self-Organization: Whether government employees may validly organize themselves into a union.
• Collective Bargaining: Whether, if so, the union may demand that the Government enter into collective bargaining agreements with it.
• CIR Jurisdiction: Whether the Court of Industrial Relations acquired jurisdiction over the persons of defendants in Cases Nos. 814-ULP and 313-MC.

• Right to Self-Organization: Yes, but limited. The law does not absolutely curtail the right of government employees to self-organization or affiliation; they may belong to any labor organization that does not impose the obligation to strike or to join a strike. The employees here are engaged in governmental functions and do not fall within the exception for proprietary functions.
• Collective Bargaining: No. Republic Act No. 875 exempts the Government from the operation of its collective bargaining provisions because terms and conditions of government employment are governed by law and cannot be the subject of agreements or contracts between employer and employed.
• CIR Jurisdiction: No. The Angat River Irrigation System is an agency of the Government and cannot be sued without its consent; it has no personality to sue or be sued, and the Republic, if at all, is the real party in interest. The CIR therefore did not acquire jurisdiction over the persons of petitioners.

• Right to Self-Organization: Section 11 of Republic Act No. 875 provides that terms and conditions of employment in the Government, including any political subdivision or instrumentality thereof, are governed by law; that employees therein shall not strike for the purpose of securing changes or modifications in their terms and conditions of employment; and that such employees may belong to any labor organization which does not impose the obligation to strike or to join in strike. The proviso applies only to employees employed in governmental functions and not to those employed in proprietary functions of the Government, including but not limited to government corporations. The Angat River Irrigation System was created under Act No. 2152, the Irrigation Act, under the supervision of the President through the Department of Public Works and Communications, with expenditures funded by the National Government through appropriations. Its functions involve the use and appropriation of public waters, arising from the State's duty to supervise the disposition and use of natural resources and the constitutional exhortation on conservation and utilization. It does not bring to the Government any special corporate benefit or pecuniary profit; it exists primarily for the general welfare. Thus it exercises governmental functions, and its employees do not fall within the exception. Even if they may associate and form part of a labor union, the union cannot demand that the Government negotiate and enter into agreements concerning wages, hours, and other conditions of employment.
• Collective Bargaining: Collective bargaining is a procedure looking toward collective agreements between employer and accredited representatives of employees concerning wages, hours, and other conditions of employment. Republic Act No. 875 imposes the duty to bargain on the employer. An employer is one who employs the services of others and pays their wages or salaries, and includes any person acting in the interest of an employer. In the United States, parallel legislation excludes the United States or any State or political subdivision thereof from the definition of employer, but our law contains no specific provision exempting the Government from the ordinary acceptation of the word "employer." Notwithstanding this omission, if it were the intent of the law to relegate the Government to the position of an ordinary employer and impose on it the duty to enter into collective bargaining agreements with its employees, there would be no reason for Section 11 to state that terms and conditions of employment in the Government are governed by law instead of leaving them to bargaining contracts. That declaration and the policy prohibiting strikes against the Government for the purpose of securing changes or modifications in terms and conditions of employment exempt the Government from the operation of the collective bargaining provisions because conditions of employment in the government service can no longer be the subject of agreements or contracts between employer and employed. Such matters are fixed by Congress; appointments and promotions in the government service are determined by merit and fitness subject to Civil Service regulations; and appropriations for the operation of the Government are prepared and disbursed not for profit or gain but in furtherance of government policies.
• CIR Jurisdiction: The Court cited Republic of the Philippines vs. Cesareo de Leon et al., which held that the Bureau of Public Works cannot be considered as the employer of those working thereunder under the Workmen's Compensation Act, and that the same may be said of the Industrial Peace Act, because it is merely a part of the machinery of the Government. In that case, the Workmen's Compensation Commission had no authority to adjudge the Bureau liable and to require it to pay a claim without notifying the Government through the Solicitor General, because the case necessarily involved a liability to national funds and the Republic was an indispensable party. Paraphrasing that doctrine, the Angat River Irrigation System, as an entity under the Bureau of Public Works, has no personality to sue or be sued; the Bureau of Public Works is likewise merely a part of the machinery of the Government. In lieu of those entities, it is the Republic of the Philippines, if at all, that should have been sued. The Government cannot be sued before courts of justice without its consent, a principle springing from the theory that there can be no legal right against the authority that makes the law on which that right depends. This immunity may be waived, and the Government can be brought in as a party defendant only in cases where it expressly consents to be sued, as in the case of a moneyed claim arising from contract under Section 1 of Act No. 3083. Although not the Government itself, this privilege of non-suability extends to the Angat River Irrigation System, it being an entity of the former, because any suit, action, or proceeding against an agency of the government would in practice be a suit, action, or proceeding against the Government itself, of which the agency is a mere office. As only natural or juridical persons may be parties in an action under Section 1, Rule 3 of the Rules of Court, and as the Angat River Irrigation System, as an agency of the Government, cannot be sued without its consent much less over its objection, the Court of Industrial Relations did not acquire jurisdiction over the persons of petitioners and was devoid of cognizance of the cases.

• Governmental vs. Proprietary Functions — Governmental functions are those conferred or imposed upon a local agency to be exercised not only in the interest of its inhabitants but also in the advancement of the public good or welfare as affecting the public generally; proprietary functions are those exercised for the private advantage of a distinct legal personality. The Court applied this distinction to hold that the Angat River Irrigation System unmistakably exercises governmental functions because it falls under the direct supervision of the President through the Department of Public Works and its duties do not reveal an intent to bring the Government any special corporate benefit or pecuniary profit.
• Government Employees' Right to Self-Organization — The law does not intend to curtail absolutely the right of government employees to self-organization or affiliation with any labor organization. The limitation is that such organization must not impose the obligation to strike or to join in strike if the employees are engaged in governmental functions. The Court applied this to the Angat River Irrigation System employees, who were held to be engaged in governmental functions and therefore outside the exception for proprietary functions.
• No Collective Bargaining in Government — Under Republic Act No. 875, terms and conditions of employment in the Government are governed by law, and the Government is exempt from the operation of the collective bargaining provisions because conditions of government employment cannot be the subject of agreements or contracts between employer and employed. The Court applied this to deny the union's demand that the Government negotiate and enter into collective bargaining agreements.
• State Immunity from Suit / Non-Suability — The Government cannot be sued before courts of justice without its consent, a principle that springs from the theory that there can be no legal right against the authority that makes the law on which that right depends. This immunity extends to agencies and instrumentalities of the Government, such as the Angat River Irrigation System, because any suit against such an agency is in practice a suit against the Government itself. Waiver requires express consent, as in the case of a moneyed claim arising from contract under Section 1 of Act No. 3083.
• Real Party in Interest / Juridical Personality of a Government Agency — Only natural or juridical persons may be parties in an action. The Angat River Irrigation System, as an entity under the Bureau of Public Works, has no personality to sue or be sued; the Republic of the Philippines, if at all, is the real party in interest. The Court applied this to hold that the CIR did not acquire jurisdiction over the persons of petitioners.

• "It is apparent from the foregoing provision that the law does not intend to curtail absolutely the right of government employees to self-organization or be affiliated with any labor organization, subject only to the limitation that such organization does not impose the obligation to strike or to join in strike if said employees are engaged in governmental functions." — This states the Court's ruling on the limited right of government employees to self-organization under Section 11 of Republic Act No. 875.
• "In the light of the authorities aforecited, the Angat River Irrigation System unmistakably exercises governmental functions, not only because it falls under the direct supervision of the President of the Philippines through the Department of Public Works in virtue of Commonwealth Act No. 87 giving the President authority to administer the irrigation systems constructed by the Government pursuant to Act 2152, as amended, but also because the nature of the duties imposed on said agency and performed by it does not reveal that it was intended to bring to the Government any special corporate benefit or pecuniary profit." — This is the Court's central application of the governmental-proprietary distinction to the Angat River Irrigation System.
• "Evidently, in making this declaration and the pronouncement that it would be the policy of said Act to prohibit strikes against the Government for the purpose of securing changes or modifications in their terms and conditions of employment, Republic Act No. 875 exempts the Government from the operation of its provision on collective bargaining because conditions of employment in the government service can no longer be the subject of agreements or contracts between the employer and the employed." — This articulates the ratio for denying collective bargaining to government employees.
• "There can be no argument on the point that although not the Government itself, this privilege of non-suability of the Government extends to the Angat River Irrigation System, it being an entity of the former. And this islogical, because any suit, action or proceeding against an agency of the government would in practice be a suit, action or proceeding against the Government itself, of which said agency is a mere office" — This states the Court's ruling that government immunity from suit extends to the Angat River Irrigation System as a government agency.

• Republic of the Philippines vs. Cesareo de Leon et al., 101 Phil. 773, 54 Off. Gaz. [3] 663 — The Court relied on this ruling that the Bureau of Public Works cannot be considered the employer of those working thereunder under the Workmen's Compensation Act, and that the same may be said of the Industrial Peace Act; the action necessarily involved a liability to national funds and the Republic was an indispensable party.
• Metropolitan Transportation Service (METRAN) vs. Paredes et al., 79 Phil. 819; 45 Off. Gaz., No. 7, p. 2835 — Cited for the rationale of government immunity from suit and for the rule that a suit against a government agency is in practice a suit against the Government itself, of which the agency is a mere office.
• Kawananakao vs. Polybank, 205 U.S. 349, 51 L. Ed. 834 — Cited for the basic principle that the Government cannot be sued before courts of justice without its consent, springing from the theory that there can be no legal right against the authority that makes the law.
• Pampanga Bus Co. vs. Pambusco Employees' Union, 68 Phil. 541 — Cited in defining collective bargaining as negotiations looking toward a collective agreement.
• Rapid Roller Co. vs. National Labor Relations Board, C.C.A. 71 126 F. 2d 452 — Cited for the definition of collective bargaining as a procedure looking toward collective agreements concerning wages, hours, and other conditions of employment.
• Isaac Peral Bowling Alley vs. United Employees Welfare Association et al., G.R. No. L-9831, Oct. 30, 1957 — Cited for the proposition that collective bargaining under the Industrial Peace Act is imposed as an obligation not only on the employer.
• Trenton vs. New Jersey, 262 US 182, 67 L ed 937, 29 ALR 1471 — Cited in distinguishing governmental or public functions from proprietary or private functions of municipal corporations.
• Loeb vs. Jacksonville, 101 Fla. 429, 69 ALR 459 — Cited for the distinction between governmental functions and corporate or proprietary functions.
• Levine vs. Farley, 107 F. 2d 186; 184 L. Ed. 519—1940 — Cited to note that parallel U.S. legislation excludes the United States or any State or political subdivision from the definition of employer, while our law contains no specific exemption.

• Section 11, Republic Act No. 875 (Industrial Peace Act) — Provides that terms and conditions of employment in the Government, including any political subdivision or instrumentality thereof, are governed by law; that employees therein shall not strike for the purpose of securing changes or modifications in their terms and conditions of employment; and that such employees may belong to any labor organization which does not impose the obligation to strike or to join in strike. The proviso applies only to employees employed in governmental functions and not to those employed in proprietary functions of the Government, including but not limited to government corporations. The Court applied this to hold that the Angat River Irrigation System employees are in governmental functions and may organize only in a union that does not impose strike obligations.
• Section 13, Republic Act No. 875 — Defines collective bargaining and imposes the duty to bargain. The Court applied this by holding that the Government is exempt from the operation of the collective bargaining provisions because conditions of government employment are governed by law and cannot be the subject of agreements or contracts.
• Section 2-c, Republic Act No. 875 — Defines an employer to include any person acting in the interest of an employer, directly or indirectly. The Court considered this definition in determining that the Government is not an ordinary employer for purposes of collective bargaining under the Act.
• Section 1, Act No. 3083 — Expressly allows the Government to be sued in cases of moneyed claims arising from contract. The Court cited this as an example of express consent to suit, noting that government immunity may be waived only in cases where it expressly consents.
• Section 1, Rule 3, Rules of Court — Provides that only natural or juridical persons may be parties in an action. The Court applied this to hold that the Angat River Irrigation System, as an agency of the Government, cannot be a party and that the CIR did not acquire jurisdiction over petitioners.
• Act No. 2152 (Irrigation Act) — Created the irrigation systems and governed the appropriation of public waters. The Court cited it to show that the Angat River Irrigation System was created under the Act and exercises governmental functions.
• Commonwealth Act No. 87 — Gives the President authority to administer the irrigation systems constructed by the Government pursuant to Act No. 2152, as amended. The Court cited it to show that the Angat River Irrigation System falls under the direct supervision of the President through the Department of Public Works.
• Republic Act No. 1600 and Republic Act No. 1800 — Appropriation acts for fiscal years 1956-1957 and 1957-1958, respectively, cited to show that the Angat River Irrigation System's salaries and wages were funded by national appropriations, supporting its classification as a government instrumentality and its employees as government employees.

Bengzon, Paras (C.J.), Reyes, A., Bautista Angelo, Labrador, and Endencia, JJ., concurred. Justice Felix wrote the majority opinion.

• Concepcion, J. — Dissented. He argued that the CIR did not act without or in excess of jurisdiction or with grave abuse of discretion in deferring the motion to dismiss until after presentation of evidence, because Rule 8, section 3 authorizes deferral when the ground is not indubitable. The status of the Angat River Irrigation System was not clear from the record; the term "entity" denotes a separate individuality, and being "under" the Bureau of Public Works does not necessarily make it part of the Bureau. Act No. 2152 authorizes the majority of appropriators to organize an association and incorporate it, so he was not prepared to say the CIR exceeded jurisdiction, that the Government was the real party in interest, or that the System had no judicial personality. On Section 11, if the System were engaged in proprietary functions, the CIR would have jurisdiction. He viewed the System's administration of public waters as proprietary, invoking section 1 of Article XIII of the Constitution, under which public waters belong to the State, and citing U.S. authorities on irrigation districts and municipal water supply as proprietary undertakings. The certification case was not a suit against anybody and was non-adversary; the System and its engineer were not named respondents in the certification petition. In the unfair labor practice case, if the System were part of the Government, the action should be against the responsible officers, not the Government. He also argued that Section 11's exclusion of employees in proprietary functions is not limited to government corporations, and that applying Republic Act No. 875 to government agencies implies consent to be sued insofar as necessary to enforce the Act. He voted to affirm the order. Reyes, J.B.L., J., concurred.