Tuesday, July 13, 2010

National Housing Corp. v. Juco

Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

National Housing Corp. v. Juco
134 SCRA 172 (1985)

Applicability of Article 6


Juco was an employee of the NHA. He filed a complaint for illegal dismissal w/ MOLE but his case was dismissed by the labor arbiter on the ground that the NHA is a govt-owned corp. and jurisdiction over its employees is vested in the CSC. On appeal, the NLRC reversed the decision and remanded the case to the labor arbiter for further proceedings. NHA in turn appealed to the SC.


Are employees of the National Housing Corporation, a GOCC without original charter, covered by the Labor Code or by laws and regulations governing the civil service.


Sec. 11, Art XII-B of the Constitution specifically provides: "The Civil Service embraces every branch, agency, subdivision and instrumentality of the Government, including every government owned and controlled corporation.The inclusion of GOCC within the embrace of the civil serv¬ice shows a deliberate effort at the framers to plug an earlier loophole which allowed GOCC to avoid the full consequences of the civil service system. All offices and firms of the government are covered.

This consti provision has been implemented by statute PD 807 is unequivocal that personnel of GOCC belong to the civil service and subject to civil service requirements."Every" means each one of a group, without exception. This case refers to a GOCC. It does not cover cases involving private firms taken over by the government in foreclosure or similar proceedings.

For purposes of coverage in the Civil Service, employees of govt- owned or controlled corps. whether created by special law or formed as subsidiaries are covered by the Civil Service Law, not the Labor Code, and the fact that pvt. corps. owned or controlled by the govt may be created by special charter does not mean that such corps. not created by special law are not covered by the Civil Service.

The infirmity of the resp's position lies in its permitting the circumvention or emasculation of Sec. 1, Art. XII-B [now Art IX, B, Sec. 2 (1)] of the Consti. It would be possible for a regular ministry of govt to create a host of subsidiary corps. under the Corp. Code funded by a willing legislature. A govt-owned corp. could create several subsidiary corps. These subsidiary corps. would enjoy the best of two worlds. Their officials and employees would be privileged individuals, free from the strict accountability required by the Civil Service Dec. and the regulations of the COA. Their incomes would not be subject to the competitive restraint in the open market nor to the terms and conditions of civil service employment.

Conceivably, all govt-owned or controlled corps. could be created, no longer by special charters, but through incorp. under the general law. The Constitutional amendment including such corps. in the embrace of the civil service would cease to have application. Certainly, such a situation cannot be allowed.

Acknowledgement: Louie Torno

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