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BOY SCOUTS OF PHILIPPINES v. NLRC

FACTS:

The case involves a Petition for Certiorari filed by petitioner Boy Scouts of the Philippines (BSP) against the Decision and Resolution of the NLRC. The private respondents in the case were former employees of BSP who were issued transfer orders. The private respondents opposed the transfer orders and filed a complaint for illegal transfer. BSP imposed a five-day suspension on the private respondents and later terminated their services. The private respondents filed a complaint for illegal dismissal and unfair labor practice. The Labor Arbiter dismissed the complaint, but the NLRC reversed the decision and ordered BSP to reinstate the private respondents and pay backwages. The case also involves a question of whether or not BSP is a government-owned or controlled corporation.

The central issue in this case is whether or not BSP is considered part of the Civil Service. Both the BSP and the private respondents argue that BSP is a purely private organization, while the Office of the Solicitor General and the Office of the Government Corporate Counsel take the position that BSP is a public or quasi-public corporation and a government-controlled corporation. The BSP emphasizes that it is an independent, voluntary, non-political, non-sectarian, and non-governmental organization with no financial subsidy from the government. Private respondents claim that BSP lost its status as a public corporation and is registered as a private employer. They argue that BSP officers' and staff appointments were not approved or confirmed by the Civil Service Commission. The Solicitor General's Office supports this argument and emphasizes that the BSP was created as a public corporation.

ISSUES:

  1. Whether the Boy Scouts of the Philippines (BSP) is a government-owned or controlled corporation.

  2. Whether or not the Boy Scouts of the Philippines (BSP) is a government-controlled corporation within the meaning of Article IX (B) (2) (1) of the Constitution.

  3. Whether or not the employees of the BSP are embraced within the Civil Service.

  4. Whether government-owned or controlled corporations are covered by the civil service system

  5. Whether the Labor Arbiter and the NLRC had jurisdiction over the complaint

RULING:

  1. The Court found that BSP is a government-owned or controlled corporation. The functions of BSP, as stated in its statutory charter, have a public aspect as they relate to the fostering of public virtues, citizenship, and patriotism. The Court also noted that the composition of the governing body of BSP includes government officials. Therefore, BSP falls within the definition of a government-owned or controlled corporation as defined in PD No. 2029.

  2. The BSP is a government-controlled corporation within the meaning of Article IX (B) (2) (1) of the Constitution. The composition of the National Executive Board of the BSP includes Secretaries of Executive Departments, and the appointments to the Board are subject to ratification and confirmation by the President of the Philippines. The substantial participation or intervention of the government in the choice of the members of the National Executive Board indicates that the BSP is government-controlled.

  3. The employees of the BSP are embraced within the Civil Service and are governed by the Civil Service Law and Regulations. The BSP is considered both a "government controlled corporation with an original charter" and an "instrumentality" of the Government under the 1987 Administrative Code. Therefore, the employees of the BSP fall within the scope of the Civil Service.

  4. Yes, government-owned or controlled corporations are covered by the civil service system. The inclusion of 'government-owned or controlled corporations' within the embrace of the civil service system shows a deliberate effort to plug an earlier loophole that allowed these corporations to avoid the full consequences of civil service coverage. The amendments introduced in 1973 clearly indicated the intent of broad and all-embracing civil service coverage.

  5. No, both the Labor Arbiter and the NLRC had no jurisdiction over the complaint. The complaint was filed when the 1973 Constitution was still in force, and the ruling in a previous case applies. The appealed Decision and Resolution were rendered without jurisdiction, and therefore, vested no rights and imposed no liabilities. The Court may motu proprio take cognizance of the issue of jurisdiction.

PRINCIPLES:

  • Functions of a government-owned or controlled corporation must have a public aspect.

  • Public corporations are created for a political purpose and exercise governmental powers for the public good or public welfare.

  • Proprietary functions refer to business-like activities.

  • The public character of functions and activities is determined by their relation to the educational, civic, and social development of the public.

  • The substantial participation or intervention of the government in the choice of the members of the National Executive Board indicates that an entity is government-controlled.

  • An entity may be regarded as both a "government controlled corporation with an original charter" and an "instrumentality" of the Government within the meaning of Article IX (B) (2) (1) of the Constitution.

  • Employees of government-owned or controlled corporations are governed by the Civil Service Law and Regulations.

  • Government-owned or controlled corporations are covered by the civil service system.

  • The court may motu proprio take cognizance of the issue of jurisdiction.