GSIS Family Bank Employees Union vs. Villanueva

G.R. No. 210773
GSIS Family Bank, a non-chartered GOCC, faced disputes over CBA negotiations and compensation under RA 10149. Its closure rendered the case moot, with SC ruling improper remedy and no authority to negotiate economic terms.
collective bargaining agreement private sector government workers

Case Summary (G.R. No. 210773)

Factual Background

Royal Savings Bank was incorporated as a private thrift bank and began operations in 1971. It experienced regulatory intervention by the Central Bank in 1984, underwent rehabilitation arrangements that led to ownership transfers involving Commercial Bank of Manila and Boston Bank, and thereafter came under effective control of the Government Service Insurance System, which by agreement acquired 99.55% of outstanding shares following a P2.5 billion capital infusion in 1993. The bank changed its corporate name to GSIS Family Bank in 2001. Prior advisory opinions from Bangko Sentral ng Pilipinas in 2004 characterized the bank as originally private, but subsequent Government action and legislation culminated in classification questions under Republic Act No. 10149.

Procedural History

The GSIS Family Bank Employees Union sent demand letters and pursued enforcement of an extant Collective Bargaining Agreement (CBA) in late 2013 after the bank declined to pay contractual benefits citing the Governance Commission’s view that it lacked authority to negotiate economic terms. The Union filed complaints with the National Conciliation and Mediation Board and notices of strike, while some employees litigated before the National Labor Relations Commission and the Department of Labor and Employment. Petitioner then filed a Petition for Certiorari, Prohibition, and Mandamus in the Supreme Court on January 30, 2014 challenging the applicability of Republic Act No. 10149 to GSIS Family Bank and seeking to compel negotiation of a new CBA. Respondents filed comments contesting remedy, joinder, and the bank’s classification under Republic Act No. 10149. The Monetary Board closed GSIS Family Bank in 2016, and the Court resolved the Petition in 2019.

The Parties’ Contentions

Petitioner maintained that GSIS Family Bank remained a private bank organized under the Corporation Code, that its employees were covered by the Labor Code and not the Civil Service Law, and that majority government ownership did not automatically convert the bank into a GOCC or strip management of authority to negotiate economic terms under a CBA. Petitioner relied on Phil. National Oil Company-Energy Dev’t. Corp. v. Hon. Leogardo as support for non-chartered GOCCs remaining within Labor Code coverage. Respondents Benitez and Atty. Berberabe-Martinez admitted GSIS’s majority ownership but asserted that Republic Act No. 10149 revoked authority to negotiate economic terms and that they followed the Governance Commission’s advisory. Respondent Villanueva argued that the Governance Commission lacked judicial or quasi-judicial powers so Rule 65 was not proper to assail an advisory, that the petition improperly failed to implead all Governance Commission members and certain corporate officers, and that Republic Act No. 10149 applied to both chartered and non-chartered GOCCs and mandated a Compensation and Position Classification System (CPCS) applicable to all GOCCs.

Issues Presented

The Court framed three principal issues: (1) whether the Petition for Certiorari was the correct remedy under Rule 65 and the Court’s expanded judicial review power; (2) whether the closure of GSIS Family Bank rendered the Petition moot; and (3) whether a non-chartered government-owned or controlled corporation such as GSIS Family Bank could legally enter into a collective bargaining agreement that includes economic terms.

Jurisdiction and Proper Remedy

The Court observed that traditional certiorari under Rule 65 is limited to review of acts by tribunals, boards, or officers exercising judicial or quasi-judicial functions and may issue only where there is no plain, speedy, and adequate remedy in the ordinary course of law. The Governance Commission is an attached agency of the Office of the President with advisory, monitoring, and oversight functions and lacks judicial or quasi-judicial powers under Republic Act No. 10149. The Court held that the Governance Commission’s February and March 2013 letters were advisory in nature, not judicial or quasi-judicial acts subject to certiorari. The Court further found that petitioner failed to show absence of an adequate remedy because petitioner could have elevated the advisories to the Office of the President or pursued available administrative and labor remedies. The Court also emphasized petitioner’s failure to implead all five members of the Governance Commission as indispensable parties and held that omission was debilitating to the petition.

Mootness and Justiciability

The Court determined that the Monetary Board’s May 13, 2016 designation of the Philippine Deposit and Insurance Corporation as receiver and prohibition on GSIS Family Bank doing business rendered the Petition largely moot because the prayer sought affirmative orders directing the bank’s management to negotiate and to perform specific obligations under a CBA. The Court explained that the absence of an actual, justiciable controversy ordinarily requires dismissal for mootness. Nevertheless, the Court exercised restraint and addressed the substantive legal questions for their guiding value to the bench and bar, citing exceptions to dismissal where a case presents an opportunity to guide or is capable of repetition yet evading review.

Legal Basis for GOCC Classification and Coverage

The Court reviewed relevant definitions and precedents, noting that Presidential Decree No. 2029, Executive Order No. 292, and Republic Act No. 10149 consistently define a government-owned or controlled corporation as an entity (1) established by original charter or under the general corporation law, (2) vested with functions relating to public needs whether governmental or proprietary, and (3) owned or controlled by the government directly or through its instrumentalities to the extent of a majority of outstanding capital stock. The Court held that all three attributes must be present. Applying these criteria, the Court found no doubt that GSIS Family Bank was a GOCC because the Government Service Insurance System owned 99.55% of its outstanding capital stock.

Compensation and Collective Bargaining under RA 10149 and Executive Orders

The Court explained that Republic Act No. 10149 required the Governance Commission to develop a Compensation and Position Classification System applicable to all GOCCs, chartered or non-chartered, and that Section 9 plainly prohibited exemptions from the CPCS. The Court recounted that Executive Order No. 7 and subsequent Presidential actions imposed moratoria and required presidential approval for salary and benefit changes pending development and approval of the CPCS. The Court further noted that Executive Order No. 203 approved the CPCS and stated that governing boards of covered GOCCs, whether chartered or non-chartered, may not negotiate the economic terms of CBAs. The Court relied on prior decisions such as PCSO v. Chairperson Pulido-Tan, et al. to reaffirm that GOCCs’ p

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