II. The Labor Code of the Philippines >f) Applicability: Art 6, 276; Cons Art I !

"The Ci#il $er#ice Co%%ission& $ec 2'()

PNOC Energy Development Corp. v NLRC July 5, 1989 MELENCIO-HERRER, J.!

"#$t%!
Petitioner Philippine )ational *il Co%pany+,ner-y .e#elop%ent Corporation 'P)*C+,.C), a s/bsidiary of the
Philippine )ational *il Co%pany 'P)*C) filed 0ith the 1inistry of Labor and ,%ploy%ent '1*L,), a clearance
application to dis%iss2ter%inate the ser#ices of pri#ate respondent, 3icente .. ,llelina, a contract/al e%ployee.

o ,llelina alle-edly co%%itted a cri%e 'Alar% or P/blic $candal) d/rin- a Christ%as party at petitioner4s ca%p:
he tried to -rab the ar%alite rifle of the PC *fficer o/tside the b/ildin- beca/se of the ref/sal of the raffle
co%%ittee to -i#e hi% the pri5e correspondin- to his lost 0innin- tic6et.

1*L, initially -a#e clearance to dis%iss b/t clearance 0as re#o6ed; petitioner 0as ordered to reinstate ,llelina to
his for%er position, 0itho/t loss of seniority ri-hts, and 0ith bac60a-es

1inister of Labor affir%ed /pon appeal, hence this petition. "Petitioner %ainly contends that /nder Article 277 of
the Labor Code, the 1inistry of Labor and ,%ploy%ent has no 7/risdiction o#er it beca/se it is a 8*CC&

I%%ue%&Hel'!
(. 92) petitioner is -o#erned by the Labor Code. (e%
2. 92) ,llelina4s dis%issal 0as 7/stified. No

:einstate%ent ordered by p/blic respondent, 0itho/t loss of seniority ri-hts, is proper. Petition dis%issed.

R#t)o!

(. ;nder the la0s then in force, e%ployees of 8*CCs 0ere -o#erned by the Ci#il $er#ice La0 and not by the Labor
Code. Th/s, Article 277 of the Labor Code 'P. <<2) then pro#ided:

The terms and conditions of employment of all government employees, including employees of
government- owned and controlled corporations shall be governed by the Civil Service Law, rules and
regulations

In t/rn, the (=7> Constit/tion pro#ided:

The Civil Service embraces every branch, agency, subdivision and instrumentality of the government,
including government-owned or controlled corporations.

Also, in National Housing Corporation vs. uco '(=?@), $C laid do0n the doctrine that e%ployees of 8*CCs,
0hether created by special la0 or for%ed as s/bsidiaries /nder the -eneral Corporation La0, are -o#erned by the
Ci#il $er#ice La0 and not by the Labor Code. However, this doctrine has been supplanted by the present
Constitution, 0hich pro#ides:

The Civil Service embraces all branches, subdivisions, instrumentalities and agencies of the !overnment,
including government-owned or controlled corporations with original charters. "#rticle $%-&, Section ' ()*+

Th/s, /nder the present state of the la0, the te%t )n 'eterm)n)ng *+et+er # ,OCC )% %u-.e$t to t+e C)v)l
/erv)$e L#* )% t+e m#nner o0 )t% $re#t)on s/ch that -o#ern%ent corporations $re#te' -y %pe$)#l $+#rter #re
%u-.e$t to )t% prov)%)on% 0hile those incorporated /nder the -eneral Corporation La0 are not 0ithin its
co#era-e.

PNOC-EDC having been incorporated under the general Corporation Law, is a GOCC whose employees
are subect to the provisions o! the Labor Code"

2. The dis%issal ordered by petitioner 0as a bit too harsh considerin- the nat/re of the act 0hich he had co%%itted
and that it 0as his first offense.