G.R. No. 82819 - Lumanta vs. National Labor Relations Commission

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

Motion to dismiss and parties’ positions
Private respondent FTI moved to dismiss for lack of jurisdiction.
FTI’s theory was that, because it was a government-owned and controlled corporation, its employees were governed by the Civil Service Law rather than the Labor Code.
FTI’s theory further was that employment-related claims fell within the jurisdiction of the Civil Service Commission rather than the Department of Labor and Employment.
Petitioners opposed the motion to dismiss.
Petitioners asserted that, although FTI was owned and controlled by the government, it had the marks of a private corporation.
Petitioners asserted that FTI directly hired its employees without seeking approval from the Civil Service Commission.
Petitioners asserted that FTI’s personnel were covered by the Social Security System rather than the Government Service Insurance System.
Petitioners also argued that, as a government-owned and controlled corporation without original charter, FTI fell outside the scope of the civil service as marked out in Section 2(1), Article IX of the 1987 Constitution.

Labor Arbiter’s dismissal for lack of jurisdiction
On 31 August 1987, Labor Arbiter Isabel P. Oritiguerra issued an Order dismissing the complaint for lack of jurisdiction.
The Order stated that the case was governed by the Civil Service Law and lay outside the Labor Arbiter’s jurisdictional competence.
The Order dismissed the case “for lack of jurisdiction of this Office to hear and decide the case.”

NLRC affirmance
On 18 March 1988, the National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s dismissal.
The NLRC dismissed petitioners’ appeal for lack of merit.

Petition for certiorari and sole issue raised
Petitioners filed a Petition for Certiorari to annul the NLRC and Labor Arbiter decisions.
The only question raised was whether a labor law claim against a government-owned and controlled corporation, such as FTI, fell within the jurisdiction of the Department of Labor and Employment.

Legal framework invoked by the Labor Arbiter and NLRC
The Labor Arbiter and NLRC relied chiefly on National Housing Authority v. Juco, which held that employees of government-owned or controlled corporations were governed by the civil service law and civil service rules and regulations.
Juco was decided under the 1973 Constitution, whose text then stated that the civil service embraced “every branch, agency, subdivision, and instrumentality of the Government, including every government-owned or controlled corporation.”
The 1987 Constitution, effective 2 February 1987, changed the text by limiting civil service to “government-owned or controlled corporations with original charter.” (Article IX-B, Section 2(1)).

Subsequent ruling in NASECO and effect on the present controversy
The Court, in National Service Corporation (NASECO) v. National Labor Relations Commission, G.R. No. 69870, promulgated on 29 November 1988, quoted extensively from the 1986 Constitutional Commission deliberations on the intent behind the phrase “with original charter.”
In NASECO, the Court held that “government-owned or controlled corporations with original charter” referred to corporations chartered by special law, as distinguished from corporations organized under the general incorporation statute under the Corporation Code.
Under NASECO, government-owned or controlled corporations organized under the general incorporation statute were excluded from the scope of the Civil Service.
The Decision further stressed that the applicable law for determining jurisdiction was the Constitution in force at the time of filing, and that the issue of jurisdiction must be determined as of that time.
The Court stated that at the time the complaint against FTI was filed (20 March 1987) and at the time the Labor Arbiter and NLRC d...(Subscriber-Only)

Whether labor law claims against a government-owned and controlled corporation such as Food Terminal, Inc. fall within the jurisdiction of the Department of Labor and Employment.
Whether, under the 1987 Constitution and controlling jurisprudence, FTI—as a government-owned and controlled corporation without original charter—was within the civil service contemplated by Article IX-B, Section 2(1).
Whether the Labor Arbit...(Subscriber-Only)