Philippine National Oil Company-Exploration Corporation v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: Petitioner PNOC-EC was organized on April 14, 1976, to prospect, explore, and exploit petroleum products. Private respondent Oscar Salvador was employed as a driver mechanic on May 28, 1976, with a contract stipulating employment coterminous with the project's completion. On June 30, 1976, PNOC-EC became a subsidiary of the Philippine National Oil Company (PNOC), a government-owned and controlled corporation (GOCC). Salvador's first project employment ended on January 15, 1977, upon project completion. He was rehired on October 1, 1978, for another project under the same terms, and his employment was terminated again upon the completion of this second project in May 1979, and was not renewed for subsequent projects. Procedural History: Believing he was a regular employee and illegally dismissed, Salvador filed a complaint for illegal dismissal, backwages, and allowances before the Labor Arbiter. The Labor Arbiter ruled in favor of Salvador, ordering reinstatement with full backwages, seniority rights, and payment of differential cost of living allowance and incentive leave pay. The National Labor Relations Commission (NLRC) affirmed this decision. The Petition: PNOC-EC filed a petition to annul the NLRC decision, raising two issues: (1) whether matters affecting PNOC-EC, a GOCC, are within the jurisdiction of the Ministry of Labor and Employment (MOLE), and (2) if so, whether the MOLE was justified in ordering reinstatement and backwages.
Issue(s)
Whether the Ministry of Labor and Employment has jurisdiction over employment matters affecting PNOC-EC, a government-owned and controlled corporation. Whether the Ministry of Labor and Employment was justified in ordering the reinstatement of private respondent and payment of his full backwages without loss of seniority rights, and whether the private respondent was illegally dismissed.
Ruling
The petition is GRANTED. The assailed decision dated May 20, 1985, of respondent NLRC is SET ASIDE, and the complaint filed by private respondent for illegal dismissal is DISMISSED for lack of merit.
Ratio Decidendi
On the issue of jurisdiction: The Court held that government-owned and controlled corporations (GOCCs), including their subsidiaries like PNOC-EC, are governed by the Civil Service Law. This principle has been established in several cases, including National Housing Authority vs. Juco, Metropolitan Waterworks and Sewerage System vs. Hernandez, and Quimpo vs. Sandiganbayan. Therefore, PNOC-EC is unmistakably within the scope of the Civil Service Law, and consequently, beyond the jurisdiction of the Ministry of Labor or any of its agencies. The assailed decision of the Labor Arbiter, affirmed by the NLRC, was rendered without jurisdiction and is thus null and void. On the issue of illegal dismissal: Even if the Labor Arbiter had jurisdiction, the evidence on record shows that private respondent was not illegally dismissed. His employment contract clearly stipulated that his engagement was coterminous with the project's completion. Article 281 of the New Labor Code provides that employment is deemed regular unless it is fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement. In this case, Salvador was employed for specific projects, and his employment legally ended upon the completion of those projects in May 1979. His termination was in accordance with the terms of his contract and the law, and therefore, not illegal.
Main Doctrine
Government-owned and controlled corporations (GOCCs) and their subsidiaries, regardless of their original mode of creation, are governed by the Civil Service Law, placing them beyond the jurisdiction of the Ministry of Labor and Employment (now Department of Labor and Employment) and its agencies. Employment with such entities, when fixed for a specific project or undertaking whose completion or termination is determined at the time of engagement, is coterminous with the project and does not automatically confer regular employee status.