Philippine National Oil Company-Energy Development Corporation v. National Labor Relations Commission
NEW DOCTRINEFacts
1. The Antecedents: Manuel S. Pineda was employed by PNOC-EDC, a government-owned or controlled corporation, from September 17, 1981, until his termination on January 26, 1989. In November 1987, while holding the position of Geothermal Construction Secretary, Pineda filed a certificate of candidacy to run for councilor in the Municipality of Kananga, Leyte. Despite objections regarding his continued employment, Pineda was elected and proclaimed councilor in January 1988, taking his oath of office in June 1988, and continued to work for PNOC-EDC concurrently. 2. Procedural History: PNOC-EDC's Legal Department opined that Pineda was ipso facto resigned upon filing his certificate of candidacy, citing Section 66 of the Omnibus Election Code. Pineda appealed this ruling, citing a court ruling that subsidiaries of government-owned corporations were not covered by Civil Service Law. He also sought a legal opinion from the Department of Local Government, which advised that there was no impediment to his holding both positions. Nevertheless, PNOC-EDC terminated Pineda's employment on January 26, 1989. Pineda filed a complaint for illegal dismissal with the National Labor Relations Commission (NLRC). The Labor Arbiter ruled in favor of Pineda, declaring his dismissal illegal. The NLRC affirmed this decision on appeal, and denied PNOC-EDC's motion for reconsideration. 3. The Petition: PNOC-EDC filed a special civil action for certiorari with the Supreme Court, seeking to annul the NLRC's decision and resolution. Petitioners argued that the NLRC gravely abused its discretion by ruling that Pineda was not covered by Civil Service Rules or the Omnibus Election Code when he filed his candidacy, that his dismissal was illegal despite being considered automatically resigned, and that he could simultaneously hold a local government position and employment in a government-owned or controlled corporation, violating the constitutional prohibition on additional compensation. The core of PNOC-EDC's argument was that prior to the 1987 Constitution, case law held that PNOC subsidiaries were governed by Civil Service Law, and this doctrine was not automatically reversed by the new Constitution.
Issue(s)
Whether Manuel S. Pineda, an employee of PNOC-EDC, a government-owned or controlled corporation not organized under a special charter, was covered by Section 66 of the Omnibus Election Code upon filing his certificate of candidacy. Whether Pineda's dismissal from PNOC-EDC was illegal. Whether Pineda could simultaneously hold the elective position of municipal councilor and his employment with PNOC-EDC.
Ruling
The petition is GRANTED. The decision of the National Labor Relations Commission dated April 24, 1991, and its Resolution dated June 21, 1991, are NULLIFIED AND SET ASIDE. The complaint of Manuel S. Pineda is DISMISSED.
Ratio Decidendi
On the applicability of Section 66 of the Omnibus Election Code to employees of GOCCs not organized under a special charter: The Court held that Section 66 of the Omnibus Election Code applies to officers and employees in government-owned or controlled corporations (GOCCs), even those organized under the general laws on incorporation and therefore not having an original or legislative charter. The Court reasoned that a GOCC does not lose its character as such simply because it is organized under the Corporation Code rather than a special statute. If its capital stock is owned by the Government and it is operated to fulfill public objectives, it remains a GOCC. Therefore, employees thereof, even if not covered by the Civil Service but by the Labor Code, are still considered "employees in government-owned or controlled corporations" and fall within the purview of Section 66, which declares them "ipso facto resigned from . . . office upon the filing of . . . (their) certificate of candidacy." This provision constitutes an additional just cause for termination of employment beyond those listed in the Labor Code. On whether Pineda was illegally dismissed: The Court found that Pineda was not illegally dismissed. Based on the preceding reasoning, his filing of a certificate of candidacy triggered the ipso facto resignation provision under Section 66 of the Omnibus Election Code. Therefore, his termination from employment was a consequence of this legal provision, not an illegal dismissal. The Court noted that the PNOC-EDC had given him ample time to make adjustments before his separation. On whether Pineda could simultaneously hold the elective position and employment: While the Court acknowledged the constitutional provision and the opinion from the Department of Local Government suggesting no impediment, the primary issue revolved around the ipso facto resignation under the Omnibus Election Code. The Court's decision to dismiss Pineda's complaint was based on the application of Section 66, which effectively terminated his employment upon filing his certificate of candidacy, thus rendering the question of simultaneous holding of positions moot in the context of his employment status with PNOC-EDC.
Main Doctrine
Employees of government-owned or controlled corporations (GOCCs) organized under the Corporation Code, and not under a special charter, are not covered by Civil Service Law but by the Labor Code. However, Section 66 of the Omnibus Election Code, which provides that any person holding an appointive office or position in government-owned or controlled corporations shall be considered ipso facto resigned upon filing a certificate of candidacy, applies to employees of GOCCs regardless of whether they have an original charter or are organized under the general law.