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PNOC ENERGY DEVELOPMENT CORPORATION v. NLRC

FACTS:

Manuel S. Pineda was employed with the Philippine National Oil Co. - Energy Development Corp. (PNOC-EDC) from September 17, 1981, until January 26, 1989, when his employment was terminated. In November 1987, while holding a position at PNOC-EDC, Pineda decided to run for councilor of the Municipality of Kananga, Leyte. He filed his certificate of candidacy and was objected by the mayor of Kananga, Leyte. The local elections were held on February 1, 1988, and Pineda was proclaimed elected as councilor. Pineda expressed his desire to withdraw from the political contest but still took his oath of office in June 1988 and continued working for PNOC-EDC. The PNOC-EDC Legal Department ruled that Pineda should be considered ipso facto resigned upon the filing of his Certificate of Candidacy based on Section 66 of the Omnibus Election Code. Pineda appealed the ruling but was subsequently terminated from his employment. He filed a complaint for illegal dismissal, and the Labor Arbiter declared his dismissal illegal. The decision was affirmed by the National Labor Relations Commission. PNOC-EDC filed a petition for certiorari seeking to annul the decision and resolution of the Commission.

ISSUES:

  1. Whether or not Manuel S. Pineda was covered by the Civil Service Rules when he filed his candidacy for the 1988 local government elections.

  2. Whether or not Pineda was covered by the Omnibus Election Code at the time he filed his certificate of candidacy for the 1988 local elections.

  3. Whether or not Pineda was illegally dismissed despite being considered automatically resigned pursuant to Section 66 of the Omnibus Election Code.

  4. Whether or not Pineda could occupy a local government position and be simultaneously employed in a government-owned or controlled corporation, in violation of the constitutional prohibition on additional compensation.

    • Whether or not employees of government-owned or controlled corporations without original charters fall within the scope of Section 66 of the Omnibus Election Code
    • Whether or not Section 66 of the Omnibus Election Code constitutes just cause for termination of employment in addition to those set forth in the Labor Code

RULING:

  1. Manuel S. Pineda was not covered by the Civil Service Rules when he filed his candidacy for the 1988 local government elections.

  2. Pineda was not covered by the Omnibus Election Code at the time he filed his certificate of candidacy for the 1988 local elections.

  3. Pineda was illegally dismissed. His running for public office and his election thereto had no effect on his employment with the PNOC-EDC, a corporation not embraced within the Civil Service.

  4. Pineda could not occupy a local government position and be simultaneously employed in a government-owned or controlled corporation, as it would be a violation of the constitutional prohibition on additional compensation.

    • Employees of government-owned or controlled corporations without original charters are considered ipso facto resigned from their office upon the filing of their certificate of candidacy, as stated in Section 66 of the Omnibus Election Code.
    • Section 66 of the Omnibus Election Code applies to officers and employees in government-owned or controlled corporations, even those organized under the general laws of incorporation and not possessing an original or legislative charter.
    • Section 66 of the Omnibus Election Code constitutes just cause for termination of employment in addition to those set forth in the Labor Code.

PRINCIPLES:

  • Government-owned or controlled corporations without original charters, organized under the general law (Corporation Code), are not covered by the Civil Service Law. Their employees are subject to the provisions of the Labor Code. (Section 2 (1), Article IX of the 1987 Constitution; National Service Commission (NASECO), et al. v. NLRC, et al., etc.)

  • The Juco doctrine, which held that government-owned or controlled corporations were part of the Civil Service and its employees subject to Civil Service laws and regulations regardless of their mode of organization or incorporation, is no longer valid under the 1987 Constitution. (PNOC-EDC v. Leogardo, etc., et al.)

  • Government-owned or controlled corporations do not lose their character as such because they are organized under a general law and not under a special statute.

  • Employees in government-owned or controlled corporations, even if not covered by the Civil Service Law but by the Labor Code, are still considered as "employees in government-owned or controlled corporations" as found in Section 66 of the Omnibus Election Code.