NASECO vs. NLRC, Et - Al. G.R. No. L-69870 November 29, 1988

5.
NASECO vs. NLRC, et.al.

G.R. No. L-69870
November 29 ,1988
FACTS:
Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a

domestic corporation which provides security guards as well as messengerial, janitorial
and other similar manpower services to the Philippine National Bank (PNB) and its
agencies.
She was administratively charged by Sisinio S. Lloren, Manager of
Finance and Special Project and Evaluation Department of
NASECO, stemming from her non-compliance with Llorens memorandum, regarding
certain entry procedures in the companyÊs Statement of Billings Adjustment. Credo
showed resentment and behaved in a scandalous manner
by shouting and uttering remarks of disrespect in the presence of her co-employees. A
meeting was conducted by NASECO’s Committee on Personal Affairs and Credo was placed
on a Forced Leave status for 15 days. Before the leave expires, Credo filed a complaint, with
the Arbitration Branch, National
Capital Region, Ministry of Labor and Employment, Manila, against NASECO for placing her
on forced leave, without due process. The committee recommended Credo’s termination,
with forfeiture of benefits. Credo was called again to the
office of Perez to be informed that she was being charged with
certain offenses. Credo was made to explain her side in connection with the charges filed
against her; however, due to her failure to do so, she was handed a Notice of Termination.
Credo filed a supplemental complaint for illegal dismissal in Case No. 11-4944-83,
alleging absence of just or authorized cause for her dismissal and lack of opportunity to be
heard.
Both parties appealed to respondent National Labor Relations Commission (NLRC)
which, on 28 November 1984, rendered a decision: 1) directing NASECO to reinstate Credo
to her former position, or substantially equivalent position, with six (6) months’ backwages
and without loss of seniority rights and other privileges appertaining thereto, and 2)
dismissing Credo’s claim for attorney’s fees, moral and exemplary damages. As a
consequence, both parties filed their respective motions for reconsideration, which the
NLRC denied in a resolution of 16 January 1985.
In G.R. No. 68970, petitioners challenge as grave abuse
of discretion the dispositive portion of the decision which ordered Credo’s Reinstatement
withbackwages. But, NASECO was found that it did comply with the guidelines in effecting
Credo’s dismissal. That Credo was not given ample opportunity to be heard and to defend
herself . A reprimand would have sufficed for the infraction, but certainly not termination
from services.
In NASECO’s comment in G.R. No. 70295, it is belatedly argued that the NLRC has no
jurisdiction to order Credo’s reinstatement. NASECO claims that, as a government
corporation (by virtue of its being a subsidiary
of the National Investment and Development Corporation
(NIDC), a subsidiary wholly owned by the Philippine National Bank (PNB), which in turn is
a government owned corporation), the terms and condition of
employment of its employees are governed by the Civil Service Law, rules and regulations.
In support of this argument, NASECO cites National Housing Corporation vs. Juco, where
this Court held that „There should nolonger be any question at this time that employees of
government-owned or controlled corporations are governed by the civil service law and
civil service rules and
regulations.
Issue: Whether or not the case is covered by CSC and not NLRC?
Held:
No. The intent of the 1986 Constitutional Commission on the Constitutional

provision that the Civil Service embraces Government owned or controlled corporations
with original charter does not include government-owned or controlled corporations
which are organized as subsidiaries of government owned or controlled corporations
under the general corporation law. The holding in NHA vs. Juco should not be given
retroactive effect, that is, to cases that arose before its promulgation on 17 January 1985.
To do otherwise would be oppressive to Credo and other employees similarly situated,
because under the same 1973 Constitution but prior to the ruling in National Housing
Corporation vs. Juco. This Court had recognized the applicability of the Labor Code to, and
the authority of the NLRC to exercise jurisdiction over, disputes involving terms and
conditions of employment in government-owned or controlled corporations, among them,
the National Service Corporation (NASECO).
On the premise that it is the 1987 Constitution that governs the instant case because it is
the Constitution in place at the time of decision thereof, the NLRC has jurisdiction to the
case. As an admitted subsidiary of the NIDC, in turn a subsidiary of the PNB, the NASECO is
a government-owned or controlled corporation without original charter. Therfore, not
covered by CSC.
WHEREFORE, in view of the foregoing, the challenged decision of the NLRC is AFFIRMED.
6.
EDUARDO DE LOS SANTOS vs. GIL R. MALLARE

G.R. No. L-3881
August 31, 1950
FACTS
EDUARDO DE LOS SANTOS vs. GIL R. MALLARE
G.R. No. L-3881
August 31, 1950
FACTS:
On July 16, 1946 - Eduardo de los Santos was appointed City Engineer of Baguio by
the President. COA confirmed him. De Los Santos began to exercise the duties and functions
of the position. On June 1, 1950 - Gil R. Mallare was extended an ad interim appointment by
the President to the same position. On June 3 - The Undersecretary of the Department of
Public Works and Communications directed Santos to report to the Bureau of Public Works
for another assignment. Santos refused to vacate the office and filed an original action of
quo warranto questioning the legality of the appointment of respondent Gil R. Mallare to
the office of city engineer for the City of Baguio which the petitioner occupied and claims to
be still occupying.
Petitioner contends that under the Constitution, he cannot be removed against his
will and without cause Article XII of the Constitution, Sec. 4: "No officer or employee in the
Civil Service shall be removed or suspended except for cause as provided by law." Mallare
answered that the City Engineer of Baguio "belongs to the unclassified service” and the SC,
in an exhaustive opinion by Mr. Justice Montemayor in the case of Lacson vs. Romero, 47
Off. Gaz., 1778, ruled that officers or employees in the unclassified as well as those in the
classified service are protected by the abovecited provision of the organic law. But there is
this difference between the Lacson case and the case at bar: Section 2545 of the Revised
Administrative Code, which falls under Chapter 61 entitled "City of Baguio," authorizes the
Governor General (now the President) to remove at pleasure any of the officers enumerated
therein, one of whom is the city engineer.
ISSUE:
Whether or not the removal of De los Santos legal.

HELD:
No.
Section 2545 of the Revised Administrative Code, giving the Chief Executive power
to remove officers at pleasure is incompatible with the constitutional inhibition that "No
officer or employee in the Civil Service shall be removed or suspended except for cause as
provided by law." The two provisions are mutually repugnant and absolutely
irreconcilable. One in express terms permits what the other in similar terms prohibits.
Pursuant to section 2 of Article XVI of the Constitution, we declare that this particular
provision has been repealed and has ceased to be operative from the time the Constitution
went into effect.
The phrase "for cause" (sec. 4, Art. XII, Constitution) in connection with removals of
public officers has means-- for reasons which the law and sound public policy recognized
as sufficient warrant for removal, that is, legal cause, and not merely causes which the
appointing power in the exercise of discretion may deem sufficient. It is implied that
officers may not be removed at the mere will of those vested with the power of removal, or
without any cause. Moreover, the cause must relate to and affect the administration of
office, and must be restricted to something of a substantial nature directly affecting the
rights and interests of the public." (43 Am. Jur., 47, 48.)
Three specified classes of positions·policy determining, primarily confidential and

highly technical· are excluded from the merit system, and dismissal at pleasure of officers
and employees appointed therein is allowed by the Constitution. These positions involve
the highest degree of confidence, or are closely bound up with and dependent on other
positions to which they are subordinate, or are temporary in nature. It may truly be said
that the good of the service itself demands that appointments coming under this category
be terminable at the will of the officers who makes them them.
The office of city engineer is neither primarily confidential, policy determining, nor
highly technical De Los Santos was adjudged to be entitled to remain in office and Mallare’s
appointment was declared ineffective.

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5.

NASECO vs. NLRC, et.al.

Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a

No. The intent of the 1986 Constitutional Commission on the Constitutional

EDUARDO DE LOS SANTOS vs. GIL R. MALLARE

Whether or not the removal of De los Santos legal.

Three specified classes of positions·policy determining, primarily confidential and

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