LUZ LUMANTA VS NLRC
FELICIANO,J
FACTS
Luz Lumanta with 54 other retrenched employees, filed Whether or not Labor Arbiter
a complaint for unpaid retrenchment or separation pay
against private Food Terminal, Inc. (“FTI”) with the
Department of Labor and Employment.
The complaint was later amended to include charges of
underpayment of wages and non-payment of emergency corporation,
cost of living allowances (ECOLA).
FTI moved to dismiss The petitioners opposed
the complaint on the the Motion to Dismiss
ground of lack of contending that:
jurisdiction.
Although FTI is a
It argued that being a corporation owned and
government-owned and controlled by the
controlled corporation, its government, it has still the
employees are governed marks of a private
by the Civil Service Law corporation:
not by the Labor Code,
and that claims arising it directly hires its
from employment fall employees without seeking
within the jurisdiction of approval from the Civil
the Civil Service Service Commission and its
Commission and not the personnel are covered by
Department of Labor and the Social Security System
Employment. and not the Government
Service Insurance System.
Petitioners also argued that
being a government-owned
and controlled corporation
without original charter,
private respondent FTI
clearly falls outside the
scope of the civil service as
marked out in Section 2 (1),
Article IX of the 1987
Constitution.
ISSUE RULING
NLRC: SC:
a labor law Isabel P. affirmed on The Court, in National Service
claim against a Oritiguerra appeal the Corporation (NASECO) v.
government- issued an order of the National Labor Relations
owned and Order, the Labor Arbiter Commission, quoting
controlled dispositive and dismissed extensively from the
part of which the petitioners’ deliberations of the 1986
such as read: appeal for lack Constitutional Commission in
private of merit. respect of the intent and
respondent “On account of meaning of the new phrase
FTI, falls within the above “with original charter,” in
the jurisdiction findings the effect held that government-
of the instant case is owned and controlled
Department of governed by corporations with original
Labor and the Civil charter refer to corporations
Employment. Service Law. chartered by special law as
The case at distinguished from
bar lies corporations organized under
outside the our general incorporation
jurisdictional statute—the Corporation
competence of Code. In NASECO, the
this Office. company involved had been
organized under the general
DISMISSED incorporation statute and was
for lack of a subsidiary of the National
jurisdiction of Investment Development
this Office to Corporation (NIDC) which in
hear and turn was a subsidiary of the
decide the Philippine National Bank, a
case. bank chartered by a special
statute. Thus, government-
owned or controlled
corporations like NASECO are
effectively excluded from the
scope of the Civil Service.
Letter of Instruction No.
1013, included Food Terminal,
Inc. in the category of
“government-owned or
controlled corporations.” Since
then, FTI served as the
marketing arm of the National
Grains Authority (now known
as the National Food
Authority). The pleadings
show that FTI was previously
a privately owned enterprise,
created and organized under
the general incorporation law,
with the corporate name
“Greater Manila Food
Terminal Market, Inc.”

The record does not indicate

the precise amount of the
capital stock of FTI that is
owned by the government; the
petitioners’ claim, and this has
not been disputed, that FTI is
not hundred percent (100%)
government-owned and that
shareholders.

We conclude that because

respondent FTI is
government-owned and
controlled corporation without
original charter, it is the
Department of Labor and
Employment, and not the Civil
Service Commission, which
has jurisdiction over the
dispute arising from
employment of the petitioners
with private respondent FTI,
and that consequently, the
terms and conditions of such
employment are governed by
the Labor Code and not by the
Civil Service Rules and
Regulations.