Facts:

The case involves Luz Lumanta and fifty-four (54) other retrenched employees as petitioners against the National Labor Relations Commission (NLRC) and Food Terminal, Inc. (FTI) as respondents. The events leading to the case began on March 20, 1987, when the petitioners filed a complaint for unpaid retrenchment or separation pay against FTI with the Department of Labor and Employment (DOLE). The complaint was later amended to include allegations of underpayment of wages and non-payment of emergency cost of living allowances (ECOLA). FTI, a government-owned and controlled corporation, filed a motion to dismiss the complaint, arguing that the DOLE lacked jurisdiction over the case. FTI contended that its employees were governed by the Civil Service Law, and thus, any claims arising from employment should fall under the jurisdiction of the Civil Service Commission (CSC). The petitioners opposed this motion, asserting that despite being a government entity, FTI operated similarly ...

Facts:

1. Filing of the Complaint: On 20 March 1987, petitioner Luz Lumanta, along with 54 other retrenched employees, filed a complaint against private respondent Food Terminal, Inc. (FTI) with the Department of Labor and Employment (DOLE). The complaint sought unpaid retrenchment or separation pay and was later amended to include claims of underpayment of wages and non-payment of emergency cost of living allowances (ECOLA).

2. Motion to Dismiss: FTI moved to dismiss the complaint, arguing that as a government-owned and controlled corporation, its employees are governed by the Civil Service Law, not the Labor Code. FTI contended that the Civil Service Commission (CSC), not DOLE, has jurisdiction over employment-related claims.

3. Petitioners' Opposition: The petitioners opposed the motion, asserting that FTI operates like a private corporation. They highlighted that FTI directly hires employees without CSC approval and that its personnel are covered by the Social Security System (SSS), not the Government Service Insurance System (GSIS). They also argued that FTI, being a government-owned and controlled corporation without an original charter, falls outside the scope of the civil service under the 1987 Constitution.

4. Labor Arbiter's Decision: On 31 August 1987, Labor Arbiter Isabel P. Oritiguerra dismissed the complaint for lack of jurisdiction, ruling that the case is governed by the Civil Service Law.

5. NLRC Decision: On 18 March 1988, the National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's decision, prompting the petitioners to file a Petition for Certiorari before the Supreme Court.

6. Constitutional Context: The case involves the interpretation of Article IX-B, Section 2(1) of the 1987 Constitution, which states that the civil service includes government-owned or controlled corporations with original charters.

7. FTI's Background: FTI was previously a privately owned enterprise organized under the general incorporation law. It was later classified as a government-owned or controlled corporation under Letter of Instruction No. 1013. However, it is not 100% government-owned and has private shareholders.

Issue:

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Ruling:

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Ratio:

1. Jurisdiction Determined by the Constitution: The Court held that jurisdiction is determined as of the time the complaint is filed. At the time the complaint was filed (20 March 1987), the 1987 Constitution was already in effect.

2. Government-Owned Corporations Without Original Charter: Under Article IX-B, Section 2(1) of the 1987 Constitution, only government-owned or controlled corporations with original charters are included in the civil service. FTI, being organized under the general incorporation law and lacking an original charter, is excluded from the civil service.

3. Applicability of the Labor Code: Since FTI is not covered by the Civil Service Law, its employees are governed by the Labor Code, and employment-related disputes fall under the jurisdiction of DOLE.

4. Overruling of Juco: The Court clarified that its earlier ruling in National Housing Authority v. Juco, which applied the 1973 Constitution, is no longer controlling. The 1987 Constitution introduced a significant change by limiting the scope of the civil service to government-owned or controlled corporations with original charters.

5. Remand to Labor Arbiter: The case was remanded to the Labor Arbiter for further proceedings, as the dismissal by the NLRC and Labor Arbiter was based on an erroneous interpretation of the applicable law.