Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 141707 May 7, 2002

CAYO G. GAMOGAMO, petitioner,

vs.
PNOC SHIPPING AND TRANSPORT CORP., respondent.

DAVIDE, JR., C.J.:

The pivotal issue raised in the petition in this case is whether, for the purpose of computing
an employees retirement pay, prior service rendered in a government agency can be tacked
in and added to the creditable service later acquired in a government-owned and controlled
corporation without original charter.

On 23 January 1963, Petitioner Cayo F. Gamogamo was first employed with the Department
of Health (DOH) as Dental Aide. On 22 February 1967, he was promoted to the position of
Dentist 1. He remained employed at the DOH for fourteen years until he resigned on 2
November 1977.1

On 9 November 1977, petitioner was hired as company dentist by Luzon Stevedoring

Corporation (LUSTEVECO), a private domestic corporation.2 Subsequently, respondent
PNOC Shipping and Transport Corporation (hereafter Respondent) acquired and took over
the shipping business of LUSTEVECO, and on 1 August 1979, petitioner was among those
who opted to be absorbed by the Respondent.3 Thus, he continued to work as company
dentist. In a letter dated 1 August 1979, Respondent assumed without interruption
petitioners service credits with LUSTEVECO,4 but it did not make reference to nor assumed
petitioners service credits with the DOH.

On 10 June 1993, then President Fidel V. Ramos issued a memorandum5 approving the
privatization of PNOC subsidiaries, including Respondent, pursuant to the provisions of
Section III(B) of the Guidelines and Regulations to implement Executive Order No.
37.6 Accordingly, Respondent implemented a Manpower Reduction Program to govern
employees whose respective positions have been classified as redundant as a result of
Respondents decrease in operations and the downsizing of the organization due to lay-up
and sale of its vessels pursuant to its direction towards privatization.7 Under this program,
retrenched employees shall receive a two-month pay for every year of service.

Sometime in 1995, petitioner requested to be included in the next retrenchment schedule.

However, his request was turned down for the following reasons:8

1. As a company dentist he was holding a permanent position;

2. He was already due for mandatory retirement in April 1995 under his retirement
plan (first day of the month following his 60th birthday which was on 7 March 1995).
Eventually, petitioner retired after serving the Respondent and LUSTEVECO for 17 years
and 4 months upon reaching his 60th birthday, on 1 April 1995. He received a retirement pay
of P512,524.15,9 which is equivalent to one month pay for every year of service and other
benefits.

On 30 August 1995, Admiral Carlito Y. Cunanan, Repondents president, died of Dengue

Fever and was forthwith replaced by Dr. Nemesio E. Prudente who assumed office in
December 1995. The new president implemented significant cost-saving measures. In 1996,
after petitioners retirement, the cases of Dr. Rogelio T. Buena (company doctor) and Mrs.
Luz C. Reyes (telephone operator), who were holding permanent/non-redundant positions
but were willing to be retrenched under the program were brought to the attention of the new
president who ordered that a study on the cost-effect of the retrenchment of these
employees be conducted. After a thorough study, Respondents Board of Directors
recommended the approval of the retrenchment. These two employees were retrenched and
paid a 2-month separation pay for every year of service under Respondents Manpower
Reduction Program.10

In view of the action taken by Respondent in the retrenchment of Dr. Buena and Mrs. Reyes,
petitioner filed a complaint at the National Labor Relations Commission (NLRC) for the full
payment of his retirement benefits. Petitioner argued that his service with the DOH should
have been included in the computation of his years of service. Hence, with an accumulated
service of 32 years he should have been paid a two-month pay for every year of service per
the retirement plan and thus should have received at least P1,833,920.00.

The Labor Arbiter dismissed petitioners complaint.11 On appeal, however, the NLRC
reversed the decision of the Labor Arbiter. In its decision12 of 28 November 1997, the NLRC
ruled:

WHEREFORE, the Decision of the Labor Arbiter dated May 30, 1997 is hereby SET
ASIDE and another judgment is hereby rendered to wit:

(1) the government service of the complainant with the Department of Health
numbering fourteen (14) years is hereby considered creditable service for
purposes of computing his retirement benefits;

(2) crediting his fourteen (14) years service with the Department of Health,
together with his nearly eighteen (18) years of service with the respondent,
complainant therefore has almost thirty-two (32) years service upon which his
retirement benefits would be computed or based on;

(3) complainant is entitled to the full payment of his retirement benefits

pursuant to the respondents Retirement Law or the retrenchment program
(Manpower Reduction Program). In any case, he is entitled to two (2) months
retirement/separation pay for every year of service.

(4) all other claims are DISMISSED.

SO ORDERED.

Respondent filed a motion for reconsideration but it was denied.13

Unsatisfied with the reversal, Respondent filed with the Court of Appeals a special civil action
for certiorari which was docketed as CA-G.R. SP No. 51152. In its decision14 of 8 November
1999, the Court of Appeals set aside the NLRC judgment and decreed:

WHEREFORE, the petition is hereby GIVEN DUE COURSE and the writ prayed for
GRANTED. Consequently, the Decision and Resolution of the National Labor
Relations Commission (Second Division) dated November 28, 1997 and May 15,
1998, respectively, are hereby SET ASIDE AND NULLIFIED, without prejudice to
private respondent Cayo F. Gamo-gamos recovery of whatever benefits he may
have been entitled to receive by reason of his fourteen (14) years of service with the
Department of Health.

No pronouncement as to costs.

His motion for reconsideration having been denied by the Court of Appeals,15 petitioner filed
with us the petition in the case at bar. Petitioner contends that: (1) his years of service with
the DOH must be considered as creditable service for the purpose of computing his
retirement pay; and (2) he was discriminated against in the application of the Manpower
Reduction Program.16

Petitioner maintains that his government service with the DOH should be recognized and
tacked in to his length of service with Respondent because LUSTEVECO, which was later
bought by Respondent, and Respondent itself, were government-owned and controlled
corporations and were, therefore, under the Civil Service Law. Prior to the separation of
Respondent from the Civil Service by virtue of the 1987 Constitution, petitioners length of
service was considered continuous. The effectivity of the 1987 Constitution did not interrupt
his continuity of service. He claims that he is supported by the opinion of 18 May 1993 of the
Civil Service Commission in the case of Petron Corporation, where the Commission
allegedly opined:

that all government services rendered by employees of the Petron prior to 1987
Constitution are considered creditable services for purposes of computation of
retirement benefits. This must necessarily be so considering that in the event that
Petron would consider only those services of an employee with Petron when it was
excluded from the civil service coverage (that is after the 1987 Constitution), it would
render nugatory his government agencies prior to his transfer to Petron. Hence,
Petron or any other PNOC subsidiary has to include in its retirement scheme or in its
Collective Bargaining Agreement a provision of the inclusion of the other government
services of its employees rendered outside Petron, otherwise, it would be prejudicial
to the interest of the retireable employee concerned.

Petitioner asserts that with the tacking in of his 14 years of service with the DOH to his 17
years and 4 months service with LUSTEVECO and Respondent, he had 31 years and 4
months creditable service as basis for the computation of his retirement benefits. Thus,
pursuant to Respondents Manpower Reduction Program, he should have been paid two
months pay for every year of his 31 years of service.

Petitioner likewise asserts that the principle of tacking is anchored on Republic Act No.
7699.17

Petitioner concludes that there was discrimination when his application for coverage under
the Manpower Reduction Program was disapproved. His application was denied because he
was holding a permanent position and that he was due for retirement. However, Respondent
granted the application of Dr. Rogelio Buena, who was likewise holding a permanent position
and was also about to retire. Petitioner was only given one-month pay for every year of
service under the regular retirement plan while Dr. Buena was given a 2-month pay for every
year of service under the Manpower Reduction Program.

In its Comment to the petition, Respondent maintains that although it is a government-owned

and controlled corporation, it has no original charter. Hence, it is not within the coverage of
the Civil Service Law. It cites the decision in PNOC-EDC v. Leogardo,18 wherein we held that
only corporations created by special charters are subject to the provisions of the Civil Service
Law. Those without original charters are covered by the Labor Code. Respondent also
asserts that R.A. No. 7699 is not applicable. Under this law an employee who has worked in
both the private and public sectors and has been covered by both the Government Service
Insurance System (GSIS) and the Social Security System (SSS), shall have his creditable
services or contributions in both Systems credited to his service or contribution record in
each of the Systems, which shall be summed up for purposes of old age, disability,
survivorship and other benefits in case the covered member does not qualify for such
benefits in either or both Systems without the totalization.

Respondent further contends that petitioner was not discriminated upon when his application
under the Manpower Reduction Program was denied. At the time of his retirement in 1995,
redundancy was the main consideration for qualification for the Manpower Reduction
Program. Petitioner was not qualified. However in 1996, in order to solve the companys
business reversals, the new president, Dr. Nemesio Prudente, found it necessary to
implement cost-saving strategies, among which was the retrenchment of willing employees.
Thus, the applications for retrenchment of Dr. Buena and Mrs. Reyes were approved.
Respondent had the prerogative to amend its policies to meet the contingencies of the
business for self-preservation.

We rule in the negative the issue of whether petitioners service with the DOH should be
included in the computation of his retirement benefits.

Respondents Retirement scheme19 pertinently provides:

ARTICLE IV

RETIREMENT BENEFITS

SEC 4.1. Normal Retirement Date/Eligibility. -- The normal retirement date of an

employee shall be the first day of the month next following the employees sixtieth
(60th) birthday. To be eligible for the retirement benefit described under Sec. 4.2, the
employee must have rendered at least ten (10) years of continuous service with the
Company. In case the retiring employee has rendered less than ten (10) years of
service with the Company, he shall be entitled to one (1) months final monthly basic
salary (12/12) for every year of service.

SEC. 4.2. Normal Retirement Benefit. -- The retirement benefit shall be payable in
lump sum upon retirement which shall be determined on the basis of the retirees
final monthly basic salary (14/12) as follows:
 (a) One (1) months pay for every year of service for those who have
completed at least twenty (20) years of continuous service with the
Company.

(b) One and one-half (1 1/2) months pay for every year of service for those
who have completed twenty-one (21) to thirty (30) continuous years of
service with the Company.

(c) Two (2) months pay for every year of service for those who have
completed at least thirty-one (31) years of service with the Company.

It is clear therefrom that the creditable service referred to in the Retirement Plan is the
retirees continuous years of service with Respondent.

Retirement results from a voluntary agreement between the employer and the employee
whereby the latter after reaching a certain age agrees to sever his employment with the
former.20

Since the retirement pay solely comes from Respondents funds, it is but natural that
Respondent shall disregard petitioners length of service in another company for the
computation of his retirement benefits.

Petitioner was absorbed by Respondent from LUSTEVECO on 1 August 1979. Ordinarily, his
creditable service shall be reckoned from such date. However, since Respondent took over
the shipping business of LUSTEVECO and agreed to assume without interruption all the
service credits of petitioner with LUSTEVECO,21 petitioners creditable service must start
from 9 November 1977 when he started working with LUSTEVECO22 until his day of
retirement on 1 April 1995. Thus, petitioners creditable service is 17.3333 years.

We cannot uphold petitioners contention that his fourteen years of service with the DOH
should be considered because his last two employers were government-owned and
controlled corporations, and fall under the Civil Service Law. Article IX(B), Section 2
paragraph 1 of the 1987 Constitution states --

Sec. 2. (1) The civil service embraces all branches, subdivisions, instrumentalities,
and agencies of the Government, including government-owned or controlled
corporations with original charters.

It is not at all disputed that while Respondent and LUSTEVECO are government-owned and
controlled corporations, they have no original charters; hence they are not under the Civil
Service Law. In Philippine National Oil Company-Energy Development Corporation v.
National Labor Relations Commission,23 we ruled:

xxx "Thus under the present state of the law, the test in determining whether a
government-owned or controlled corporation is subject to the Civil Service Law are
[sic] the manner of its creation, such that government corporations created by special
charter(s) are subject to its provisions while those incorporated under the General
Corporation Law are not within its coverage."

Consequently, Respondent was not bound by the opinion of the Civil Service Commission of
18 May 1993.
Petitioners contention that the principle of tacking of creditable service is mandated by
Republic Act No. 7699 is baseless. Section 3 of Republic Act No. 7699 reads:

SEC 3. Provisions of any general or special law or rules and regulations to the
contrary notwithstanding, a covered worker who transfer(s) employment from one
sector to another or is employed in both sectors, shall have his creditable services or
contributions in both systems credited to his service or contribution record in each of
the Systems and shall be totalized for purposes of old-age, disability, survivorship,
and other benefitsin case the covered employee does not qualify for such benefits in
either or both Systems without totalization:Provided, however, That overlapping
periods of membership shall be credited only once for purposes of totalization
(underscoring, ours).

Obviously, totalization of service credits is only resorted to when the retiree does not qualify
for benefits in either or both of the Systems. Here, petitioner is qualified to receive benefits
granted by the Government Security Insurance System (GSIS), if such right has not yet been
exercised. The pertinent provisions of law are:

SEC. 12 Old Age Pension. -- (a) xxx

(b) A member who has rendered at least three years but less than fifteen years of
service at the time of separation shall, upon reaching sixty years of age or upon
separation after age sixty, receive a cash payment equivalent to one hundred
percent of his average monthly compensation for every year of service with an
employer (Presidential Decree No, 1146, as amended, otherwise known as the
Government Service Insurance Act of 1977).

SEC. 4. All contributions paid by such member personally, and those that were paid
by his employers to both Systems shall be considered in the processing of benefits
which he can claim from either or both Systems:Provided, however, That the amount
of benefits to be paid by one System shall be in proportion to the number of
contributions actually remitted to that System (Republic Act No. 7699).

In any case, petitioners fourteen years of service with the DOH may not remain
uncompensated because it may be recognized by the GSIS pursuant to the aforequoted
Section 12, as may be determined by the GSIS. Since petitioner may be entitled to some
benefits from the GSIS, he cannot avail of the benefits under R.A. No. 7699.

It may also be pointed out that upon his receipt of the amount of P512,524.15 from
Respondent as retirement benefit pursuant to its retirement scheme, petitioner signed and
delivered to Respondent a Release and Undertaking wherein he waives all actions, causes
of actions, debts, dues, monies and accounts in connection with his employment with
Respondent.24 This quitclaim releases Respondent from any other obligation in favor of
petitioner. While quitclaims executed by employees are commonly frowned upon as contrary
to public policy and are ineffective to bar claims for the full measure of the employees legal
rights, there are legitimate waivers that represent a voluntary and reasonable settlement of
laborers claims which should be respected by the courts as the law between the
parties.25 Settled is the rule that not all quitclaims are per se invalid or against public policy,
except (1) where there is clear proof that the waiver was wangled from an unsuspecting or
gullible person; and (2) where the terms of settlement are unconscionable on their face.26 We
discern nothing from the record that would suggest that petitioner was coerced, intimidated
or deceived into signing the Release and Undertaking. Neither are we convinced that the
consideration for the quitclaim is unconscionable because it is actually the full amount of the
retirement benefit provided for in the companys retirement plan.

In light of the foregoing, we need not discuss any further the issue of whether petitioner was
discriminated by Respondent in the implementation of the Manpower Reduction Program. In
any event, that issue is factual and petitioner has failed to demonstrate that, indeed, he was
discriminated upon.

WHEREFORE, no reversible error on the part of the Respondent Court of Appeals having
been shown, the petition in this case is DENIED and the appealed decision in CA-G.R. SP
No. 51152 is hereby AFFIRMED.

Costs against petitioner.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 134990 April 27, 2000

MANUEL M. LEYSON JR., petitioner,

vs.
OFFICE OF THE OMBUDSMAN, TIRSO ANTIPORDA, Chairman, UCPB and CIIF Oil
Mills, and OSCAR A. TORRALBA, President, CIIF Oil Mills, respondents.

BELLOSILLO, J.:

On 7 February 1996 International Towage and Transport Corporation (ITTC), a domestic

corporation engaged in the lighterage or shipping business, entered into a one (1)-year
contract with Legaspi Oil Company, Inc. (LEGASPI OIL), Granexport Manufacturing
Corporation (GRANEXPORT) and United Coconut Chemicals, Inc. (UNITED COCONUT),
comprising the Coconut Industry Investment Fund (CIIF) companies, for the transport of
coconut oil in bulk through MT Transasia. The majority shareholdings of these CIIF
companies are owned by the United Coconut Planters Bank (UCPB) as administrator of the
CIIF. Under the terms of the contract, either party could terminate the agreement provided a
three (3)-month advance notice was given to the other party. However, in August 1996, or
prior to the expiration of the contract, the CIIF companies with their new President,
respondent Oscar A. Torralba, terminated the contract without the requisite advance notice.
The CIIF companies engaged the services of another vessel, MT Marilag, operated by
Southwest Maritime Corporation.

On 11 March 1997 petitioner Manuel M. Leyson Jr., Executive Vice President of ITTC, filed
with public respondent Office of the Ombudsman a grievance case against respondent
Oscar A. Torralba. The following is a summary of the irregularities and corrupt practices
allegedly committed by respondent Torralba: (a) breach of contract - unilateral cancellation of
valid and existing contract; (b) bad faith - falsification of documents and reports to stop the
operation of MT Transasia; (c) manipulation - influenced their insurance to disqualify MT
Transasia; (d) unreasonable denial of requirement imposed; (e) double standards and
inconsistent in favor of MT Marilag; (f) engaged and entered into a contract with Southwest
Maritime Corp. which is not the owner of MT Marilag, where liabilities were waived and
whose paid-up capital is only P250,000.00; and, (g) overpricing in the freight rate causing
losses of millions of pesos to Cocochem.1

On 2 January 1998 petitioner charged respondent Tirso Antiporda, Chairman of UCPB and
CIIF Oil Mills, and respondent Oscar A. Torralba with violation of The Anti-Graft and Corrupt
Practices Act also before the Ombudsman anchored on the aforementioned alleged
irregularities and corrupt practices.

On 30 January 1998 public respondent dismissed the complaint based on its finding that

The case is a simple case of breach of contract with damages which should have
been filed in the regular court. This Office has no jurisdiction to determine the legality
 or validity of the termination of the contract entered into by CIIF and ITTC. Besides
the entities involved are private corporations (over) which this Office has no
jurisdiction.2

On 4 June 1998 reconsideration of the dismissal of the complaint was denied. The
Ombudsman was unswayed in his finding that the present controversy involved breach of
contract as he also took into account the circumstance that petitioner had already filed a
collection case before the Regional Trial Court of Manila-Br. 15, docketed as Civil Case No.
97-83354. Moreover, the Ombudsman found that the filing of the motion for reconsideration
on 31 March 1998 was beyond the inextendible period of five (5) days from notice of the
assailed resolution on 19 March 1998. 3

Petitioner now imputes grave abuse of discretion on public respondent in dismissing his
complaint. He submits that inasmuch as Philippine Coconut Producers
Federation, Inc. (COCOFED) v. PCGG4 and Republic v.Sandiganbayan5 have declared that
the coconut levy funds are public funds then, conformably with Quimpo v.
Tanodbayan,6 corporations formed and organized from those funds or whose controlling
stocks are from those funds should be regarded as government owned and/or controlled
corporations. As in the present case, since the funding or controlling interest of the
companies being headed by private respondents was given or owned by the CIIF as shown
in the certification of their Corporate Secretary,7 it follows that they are government owned
and/or controlled corporations. Corollarily, petitioner asserts that respondents Antiporda and
Torralba are public officers subject to the jurisdiction of the Ombudsman.

Petitioner alleges next that public respondent's conclusion that his complaint refers to a
breach of contract is whimsical, capricious and irresponsible amounting to a total disregard
of its main point, i. e., whether private respondents violated The Anti-Graft and Corrupt
Practices Act when they entered into a contract with Southwest Maritime Corporation which
was grossly disadvantageous to the government in general and to the CIIF in particular.
Petitioner admits that his motion for reconsideration was filed out of time. Nonetheless, he
advances that public respondent should have relaxed its rules in the paramount interest of
justice; after all, the delay was just a matter of days and he, a layman not aware of
technicalities, personally filed the complaint.

Private respondents counter that the CIIF companies were duly organized and are existing
by virtue of the Corporation Code. Their stockholders are private individuals and entities. In
addition, private respondents contend that they are not public officers as defined under The
Anti-Graft and Corrupt Practices Act but are private executives appointed by the Boards of
Directors of the CIIF companies. They asseverate that petitioner's motion for reconsideration
was filed through the expert assistance of a learned counsel. They then charge petitioner
with forum shopping since he had similarly filed a case for collection of a sum of money plus
damages before the trial court.

The Office of the Solicitor General maintains that the Ombudsman approved the
recommendation of the investigating officer to dismiss the complaint because he sincerely
believed there was no sufficient basis for the criminal indictment of private respondents.

We find no grave abuse of discretion committed by the Ombudsman. COCOFED

v. PCGG referred to in Republic v.Sandiganbayan reviewed the history of the coconut levy
funds. These funds actually have four (4) general classes: (a) the Coconut Investment Fund
created under R. A. No. 6260;8 (b) the Coconut Consumers Stabilization Fund created under
P. D. No. 276;9 (c) the Coconut Industry Development Fund created under P. D. No.
582; 10 and, (d) the Coconut Industry Stabilization Fund created under P. D. No. 1841. 11

The various laws relating to the coconut industry were codified in 1976. On 21 October of
that year, P. D. No. 961 12was promulgated. On 11 June 1978 it was amended by P. D. No.
1468 13 by inserting a new provision authorizing the use of the balance of the Coconut
Industry Development Fund for the acquisition of "shares of stocks in corporations organized
for the purpose of engaging in the establishment and operation of industries . . . commercial
activities and other allied business undertakings relating to coconut and other palm oil
indust(ries)." 14 From this fund thus created, or the CIIF, shares of stock in what have come
to be known as the "CIIF companies" were purchased.

We then stated in COCOFED that the coconut levy funds were raised by the State's police
and taxing powers such that the utilization and proper management thereof were certainly
the concern of the Government. These funds have a public character and are clearly affected
with public interest.

Quimpo v. Tanodbayan involved the issue as to whether PETROPHIL was a government

owned or controlled corporation the employees of which fell within the jurisdictional purview
of the Tanodbayan for purposes of The Anti-Graft and Corrupt Practices Act. We upheld the
jurisdiction of the Tanodbayan on the ratiocination that

While it may be that PETROPHIL was not originally "created" as a government-

owned or controlled corporation, after it was acquired by PNOC, which is a
government-owned or controlled corporation, PETROPHIL became a subsidiary of
PNOC and thus shed-off its private status. It is now funded and owned by the
government as, in fact, it was acquired to perform functions related to government
programs and policies on oil, a vital commodity in the economic life of the nation. It
was acquired not temporarily but as a permanent adjunct to perform essential
government or government-related functions, as the marketing arm of the PNOC to
assist the latter in selling and distributing oil and petroleum products to assure and
maintain an adequate and stable domestic supply.

But these jurisprudential rules invoked by petitioner in support of his claim that the CIIF
companies are government owned and/or controlled corporations are incomplete without
resorting to the definition of "government owned or controlled corporation" contained in par.
(13), Sec. 2, Introductory Provisions of the Administrative Code of 1987, i.e., any agency
organized as a stock or non-stock corporation vested with functions relating to public needs
whether governmental or proprietary in nature, and owned by the Government directly or
through its instrumentalities either wholly, or, where applicable as in the case of stock
corporations, to the extent of at least fifty-one (51) percent of its capital stock. The definition
mentions three (3) requisites, namely, first, any agency organized as a stock or non-stock
corporation; second, vested with functions relating to public needs whether governmental or
proprietary in nature; and, third, owned by the Government directly or through its
instrumentalities either wholly, or, where applicable as in the case of stock corporations, to
the extent of at least fifty-one (51) percent of its capital stock.

In the present case, all three (3) corporations comprising the CIIF companies were organized
as stock corporations. The UCPB-CIIF owns 44.10% of the shares of LEGASPI OIL, 91.24%
1wphi1

of the shares of GRANEXPORT, and 92.85% of the shares of UNITED

COCONUT. 15 Obviously, the below 51% shares of stock in LEGASPI OIL removes this firm
from the definition of a government owned or controlled corporation. Our concern has thus
been limited to GRANEXPORT and UNITED COCONUT as we go back to the second
requisite. Unfortunately, it is in this regard that petitioner failed to substantiate his
contentions. There is no showing that GRANEXPORT and/or UNITED COCONUT was
vested with functions relating to public needs whether governmental or proprietary in nature
unlike PETROPHIL in Quimpo. The Court thus concludes that the CIIF companies are, as
found by public respondent, private corporations not within the scope of its jurisdiction.

With the foregoing conclusion, we find it unnecessary to resolve the other issues raised by
petitioner.

A brief note on private respondents' charge of forum shopping. Executive Secretary

v. Gordon 16 is instructive that forum shopping consists of filing multiple suits involving the
same parties for the same cause of action, either simultaneously or successively, for the
purpose of obtaining a favorable judgment. It is readily apparent that the present charge will
not prosper because the cause of action herein, i. e., violation of The Anti-Graft and Corrupt
Practices Act, is different from the cause of action in the case pending before the trial court
which is collection of a sum of money plus damages.

WHEREFORE, the petition is DISMISSED. The Resolution of public respondent Office of the
Ombudsman of 30 January 1998 which dismissed the complaint of petitioner Manuel M.
Leyson Jr., as well as its Order of 4 June 1998 denying his motion for reconsideration, is
AFFIRMED. Costs against petitioner. 1w phi 1.nt

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-58494 July 5, 1989

PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT

CORPORATION, petitioner,
vs.
HON. VICENTE T. LEOGARDO, DEPUTY MINISTER OF LABOR AND VICENTE D.
ELLELINA, respondents.

MELENCIO-HERRERA, J.:

Through this Petition for Certiorari, Philippine National Oil Company-Energy Development
Corporation (PNOC-EDC) seeks to declare null and void, for lack of jurisdiction, the Order of
public respondent, the Deputy Minister of Labor, sustaining his jurisdiction over the instant
controversy.

Petitioner PNOC-EDC is a subsidiary of the Philippine National Oil Company (PNOC). On 20

January 1978, it filed with the Ministry of Labor and Employment, Regional Office No. VII,
Cebu City (MOLE), a clearance application to dismiss/ terminate the services of private
respondent, Vicente D. Ellelina, a contractual employee.

The application for clearance was premised on Ellelina's alleged commission of a crime
(Alarm or Public Scandal) during a Christmas party on 19 December 1977 at petitioner's
camp in Uling, Cebu, when, because of the refusal of the raffle committee to give him the
prize corresponding to his lost winning ticket, he tried to grab the armalite rifle of the PC
Officer outside the building despite the warning shots fired by the latter.

Clearance to dismiss was initially granted by MOLE but was subsequently revoked and
petitioner was ordered to reinstate Ellelina to his former position, without loss of seniority
rights, and with backwages from I February 1978 up to his actual reinstatement.

Petitioner appealed to the Minister of Labor who, acting through public respondent, affirmed,
on 14 August 1981, the appealed Order. Hence, this Petition predicated substantially on the
following grounds:

1. Under Article 277 of the Labor Code, the Ministry of Labor and Employment has no
jurisdiction over petitioner because it is a government-owned or controlled corporation;

2. Ellelina's dismissal is valid and just because it is based upon the commission of a crime.

On the other hand, public respondent contends:

(a) While the petitioner is a subsidiary of the PNOC, it is still covered by the Labor Code and,
therefore, within the jurisdiction of the Ministry of Labor inasmuch as petitioner was
organized as a private corporation under the Corporation Law and registered with the
Securities and Exchange Commission;

(b) Petitioner is estopped from assailing the Labor Department's jurisdiction, having
subjected itself to the latter when it filed the application for clearance to terminate Ellelina's
services; and

(c) Dismissal is too harsh a penalty.

The issues that confront us, therefore, are (1) whether or not public respondent committed
grave abuse of discretion in holding that petitioner is governed by the Labor Code; and (2)
whether or not Ellelina's dismissal was justified.

Under the laws then in force, employees of government-owned and/or controlled

corporations were governed by the Civil Service Law and not by the Labor Code. Thus,
Article 277 of the Labor Code (PD 442) then provided:

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 turn, the 1973 Constitution provided:

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

In National Housing Corporation vs. Juco (L-64313, January 17, 1985, 134 SCRA 172), we
laid down the doctrine that employees of government-owned and/or controlled corporations,
whether created by special law or formed as subsidiaries under the general Corporation Law,
are governed by the Civil Service Law and not by the Labor Code.

However, the above doctrine has been supplanted by the present Constitution, which
provides:

The Civil Service embraces all branches, subdivisions, instrumentalities and agencies of the
Government, including government-owned or controlled corporations with original charters.
(Article IX-B, Section 2 [1])

Thus, under the present state of the law, the test in determining whether a government-
owned or controlled corporation is subject to the Civil Service Law is the manner of its
creation such that government corporations created by special charter are subject to its
provisions while those incorporated under the general Corporation Law are not within its
coverage.

In NASECO vs. NLRC (G.R. No. 69870, November 29,1988), we had occasion to apply the
present Constitution in deciding whether or not the employees of NASECO (a subsidiary of
the NIDC, which is in turn a subsidiary wholly-owned by the PNB, a government-owned
corporation) are covered by the Civil Service Law or the Labor Code notwithstanding that the
case arose at the time when the 1973 Constitution was still in effect. We held that the NLRC
has jurisdiction over the employees of NASECO "on the premise that it is the 1987
Constitution that governs because it is the Constitution in place at the time of decision;" and
that being a corporation without an original charter, the employees of NASECO are subject
to the provisions of the Labor Code.

We see no reason to depart from the ruling in the aforesaid case.

We hold, therefore, that the PNOC-EDC having been incorporated under the general
Corporation Law, is a government-owned or controlled corporation whose employees are
subject to the provisions of the Labor Code. This is apparently the intendment in the
NASECO case notwithstanding the fact that the NASECO therein was a subsidiary of the
PNB, a government-owned corporation.

In so far as Ellelina is concerned, we hold that the reinstatement ordered by public

respondent, without loss of seniority rights, is proper. However, consistent with the rulings of
the Court, backwages should be limited to three years from 1 February 1978. The dismissal
ordered by petitioner was a bit too harsh considering the nature of the act which he had
committed and that it was his first offense.

WHEREFORE, the Petition is DISMISSED, and the judgment of respondent public official is
hereby AFFIRMED. No costs.

SO ORDERED.