Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-31890 May 29, 1987

PEOPLE'S HOMESITE AND HOUSING CORPORATION, petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS, FELICIDAD ALICE, BERGIDA
APOSTLE, LUZ ALCORAN, SOLICIDAD ANDRADE, AUREA ABAS,
GENEROSA ABONGAN, MACARIA ABERION, ARCADIA ABAJAC,
ANTONIA ARNIBAL, PACENCIA ACODESIN, ESPERANZA ALVAREZ,
DEMETRIA ALVAREZ, JUSTINA AQUINO, TRINIDAD AGUIRRE, FRANCIA
ABOGADO, CRETALINA AUDENCIAL, NAZARIA ANTARAN, LELIA
AGUIRRE, OLIMPIA ADONES, ELPIDIA AMOR, IREANA ANDA, ADIA
ABDOL, FLORA AMOLINO, RICARDO ALBA, CANOTO ARGUELLES,
FEDERICO AQUINO, RODOLFO AUDENCIAL, TEOFILO ABAWAG,
LORENZO ALMORPE, DENETRIO AMITA, JULIAN ADAR, EFREN
ANCHETA, ENIEGO ASPA, HENRY ABONG, GABRIEL ABALOS,
GENEROSO AMARA JR., FRANCISCO ANSELMO, DOMINGO ALVAREZ,
LEONARDO AGBAY, FRANCISCO AREDENCIAL, MACARIA ABERIO,
LEONILA ARAGON, FLORENCIO ABELLA, FAUSTINA ARGUELLES,
MAXIMA BALLOS, ANGELINA BONDOC, ADELA BAUTISTA, LEA
BAUTISTA, TERESITA BENITEZ, BENEDICTA BALINO, VICTORIA
BALUYA, VIOLETA BANANA, FELISA BOSE, FELISA BALDONADA,
CORAZON BAUTISTA, ANTONIA BACQUIAL, PLACIDA BADAL, NENITA
BELARMINO, MAXIMA BATOGAN, LEONORA BURGOS, AMADA
BERTOS, SOCORRO BENJAMIN, VIRGINIA BALUYA, MARCELA
BATASLAC, LORENZO BARTOLOME, ORLANDO LOITA, PAQUITO
BALDONADO, RAMOS BENIDO, ODAINO BALDOMER, SATURNINO
BALIBALOS, DIONISIO BALDONADO, ROLANDO BON, CRISANTO
BORBON, ANASTACIO BOLANTE, MERCEDES BUEN, ASUNCION
BACONAWA, CELSO BADOL, RODOLFO BAYRON, VICTORIA
CABOBOY, CLEMENTINA CAPUNGCOL, BONIFACIA CABOBOY, GLORIA
CABRALES, VICTORIA CARILLO, FLORENTINA CONDE, MARCIANA
CABUGAYAN, VEROMINCA CENON, FLORA CASTILLO, ASUZENA
COQUIA, ENES CATAYONG, CARMELITA CONDES, ADELA GACHARO,
SEMIONA COTEJAR, DIOSDADA CADORNA, REMEDIOS CATALAN,
MARIA CHUA, VIRGINIA CAJEPE, ROSITA CANGAS, ADORACION
CALMANTE, MARIVIC CHAVEZ, ENECITO CAPALARAN, RICARDO
COLLADO, VIRGILIO CAJEPE, ISIDRO COBER, MARCELINO CATARA,
ANECITO COMPIO, NECASIO CAPUNGGOL, MAXIMO CANALES,
CRESENCIO CASAUL, DOMINADOR CASAUL, CALIXTO CARDOVA,
BERNARDO CASIGURAN, JUANITO CAZATE, GIL CORDOVA, ROQUE
CONDE, JR., TONY CRUZ, ERNESTO CAPIZ, ERNESTO CANIZA,
DOMINADOR COQUIA, ELPIDIO CANONIGO, ISIDRO CASTILLO,
DOMINADOR CASTRO, ANDRES CARETO, VALENTINA CORDERO, BOY
CINEZA, ZENAIDA DIZON, AURORA DAEP, EUNES DE DIOS, PAULINA
DE PAZ, MILAGROS DEMATERA, LORNA DURAN, GIMINE DE LA CRUZ,
LOURDES DELANTAR, JUANITA DAZO, CRISTITA DERPO, MONSUERTA
DALISAY, TERESE DE LOS SANTOS, MARTA DELFIN, REMEDIOS DELA
ROSA, CONCEPCION DEL MONTE, LOURDES DELA CRUZ,
DOMINADOR DELA CRUZ, MARIA DE VERA, GREGORIA DIOLA, SILVINA
DE VERA, FLORENTINA DELA CRUZ, ELADIA DALMACIO, FLORENTINA
DAVID, REYMUNDO DE VERA, ELPIDIO DIACLES, RICARDO DELA
CRUZ, CERILO DADO, JERMINIAS DOBLE, DELFIN DIACLES, LAURA
DE LEON, JESUS DE VERA, MAXIMO DIOCSON, CESAR DE JESUS,
MIGUEL DE GUZMAN, PRUDENCIO DUCABO, TOMAS DESABELLE,
ILUMINADO DE VERA, NARCISO DANTES, MARGARITA DE GUZMAN,
REBECCA DECORO, JESUS DE LA TORRE, FILOMENA ENCENARES,
GREGORIA ESPALGO, SALVACION ESCOLIN, MAGDALENA
EVANGELISTA, ROBERTO ENCENARES, ENRICO ELLEN, ELBERTO
ESPATERO, SEMEON ESPERAME, SEMEON IGNACIO, ABRAHAM
ESPERITO, ALFONSO EVASCO DOROTEO ELIYAY, TERESITA EUGENIO,
JOSE ENRIQUEZ, FORTUNATA FURNES, JACINTA FLORES, NORMA
FRANCISCO, CARLITO FERNANDEZ, REYMUNDO FONTANILLA,
SANTIAGO FEGOROA, NAPOLEON FERNANDEZ, CRESTETA GOTEB,
LEONCIA GARCIA, AQUILINA GLORIOSO, ROBERTA GABRINO,
JULIANA GAGALANG, ANTONINA GALLETES, NELLY GELOGO
CORAZON, GILDOC ENCARNACION, GOJE CRUZ, ROBERTO
GALLARDO, LUCIO GONZALES, TARCILA GONZAGA, ROSALINA
GARCIA, VICTORIO GUBAT, CARLITO GADORES, MARCELINO
GREFIEL, CRISTINA HAWAC, JOSEFA IGLESIA, FELOMINA ISIDRO,
ELENITA INVETADO, ALICIA JAIME, RAFAEL JAIME, DOMINGO JADOC,
JESUS JINAYON, ELEUTERIO JADOC ,ANTERO JAMERO, CONSTANCIA
LERIOS, SAMUEL LERIOS, VICENTE LERIOS, PRICELA LAGIJNSAD,
CELERINA LACHEGA, FILOMENA LECHAUCO, EULALIA LEON,
ASUNCION LESABA, EXALTACION LUBA, NATIVIDAD LOTO, SEVERA
LEPATA, MARCIANA LOGARTO, CARIDAD LANIOHAN, FELISA
LABRADOR, ALBERTO LARENIO, DANILO LABRADOR, FE TRAQUINA,
NATIVIDAD LOLA, RICARDO LEGASPI, ASUNCION MAGBUHOS,
MAXIMA MOSCARE, MEDELINA KANDAL, LEONILA MERGAL,SILVERIA
MESIAS, LOURDES MURILLO, NATIVIDAD MANIANO SOLIDAD,
MELLANA, FELISIDAD MENDOZA, FRANCISCO MONTILLA, CORNELIO
MONTILLA, VICTORIA MALO, MARCIANA MEJENIO, ESTELITA MISLOS,
SUSANA MAGAYONES, CORAZON MEITALPIS, RODORA MANUEL,
VIRGINIA MENDOZA, ERLINDA MORALES, TERESITA MENDOZA,
CERELINA MINERVA, CONSOLACION MALLIO, GODOFREDO IABUHAY,
PERFECTO MARTINEZ, VICENTE MARAVILLA, MANUEL MARAVILLA,
ARTURO MERGAL, SEGUNDO MERLAPIS, VICTOR MENDEZ, RODOLFO
MIRANDA, GENEROSO MACALLA, FLORENDO MEDELO, JAIME
MANALAC, OLIMPIO MONTILLA, ESTEBAN MENDIOLA, ANTONIO
MENDOZA, RAMON MARALIT, DOMINGO MARQUEZ, ENGRACIA
MOLATO, VICTORIA MARALIT, INCINCIA MONTECLARO, WILLIE
MURCIA, LEONARDO MARIANO, AMELIA NABUA, AMELIA NATIVIDAD,
FILOMENA NOVILLA, EFIPANIA NOTARTE, ROLANDO NATALIO,
LEONARDO NABUA, VICTORIANO NAVAJAS, FLORENTINO
NAVARETTE, FEDERICO NOBLE, CARMELITA OMEGA, ANDREA OBIEN,
FARESTA OLAS, ARCADIA OMEGA, VICENTE OQRIENDO, MATEO
ORTEGA, CARMEN PARANAS, SOLEDAD PALOMARES, FELICIDAD
PENAFLOR, CERIACA PREMARIYAS, LADISLAO PERALTA, LUCRECIO
PECORRO, FRANCISCO PLAZA, ROBERTO PANGANOS, GONZALO
PORE, CALIXTO PAGARA, PAREDES PASCUAL, RAUL PACADAR,
ANICETO PACADOR, GUADALUPE PEREZ, RODRIGO, PANGANOD,
CRISANTO PRINCIPE, JUANITO PEGULAYAN, GALICANO QUIJADA,
BARTOLOME QUIJADA, JULILIE QUIZON, PEREMIA RESULTA,
SEGUNDINA REDONIA, JUANITA REGODOS, WAHINE ROLON,
SERVIDAD ROSA, RUFINA RECARTE, SUZANA REYNA, ANACORETA
REFORZADA, MARTE RANELLE, RODRIGO ROMA, ANTONIO ROCE
MACARIO REYES, ANTONIO RIVERA, HONORIO ROMAMALE,
MARCELINO REBOSO, MARIANITO RUMITMAN, CIPRIANO REGAJAL,
JOSE ROBESENCIO, JOSE SYCHANCO, ROSITA SANTOS, PELAGIA
SANTOS, MIGUELA SINGSON, JUANA SIMANES, LUX SUAREZ,
LEONARDO SALVADO, DEMETRIA SILVERIANO, DOMINGA SALAZAR,
EXELSA SAIMOREN, MARTA SAN ANDRES, MARINA SALCEDO, OFELIA
SANCHEZ, MARIA SEMON, LUZ SUMAYA, LOURDES SERRANO, YASOL
SOSTENES, BENJAMIN SAIMORIN, FILES SALVADO, EDGARDO
SALVADO, SOZIMO SALARDA, MARCELINO SATOL, RICARDO
SETOSIA, ANTONIO SAN JUAN, JACINTO SORIANO, LEONILA SELFA,
AMPARO SAN JUAN, AMADO SANTOS, GONZALO SALVO, REYNALDO
SIMBOLAN, MARTIN SAMSON, ZOSIMA TABONARES, SALVADORA
TABULOG, LEOCADIA TARCE, INCENCIA TIBOS, ADORACION TUGBE,
EMERGENCIA TIBOS, ULDARICA TANGOG, GLORIA TARQUATOR,
ROSA TORRES, ANGEL TALAGAY, MANOLITO TEVES, MEGUEL TALVO,
BASILIO TOBIAS, RAMON TURQUATOR, PACIFICO TALA, ISAGANI
TESORO, DONATO TRELIPAT, FEDERICO TIPANAO, ROLANDO TALBO,
MIGUEL TESORO, ROLANDO TIPANAO, ROBERTO TUPAS, VICTORIA
TIBOS, EUFRACIO TUBIAS, SOLIDAD URSULA, ROSENDA VELLAREAL,
ANASTACIA VILLANUEVA, TERESE VELLERUZ, PELLAR VILLEGAS,
AURELIA VILLAVER, ESTELITA VILLAFRANCIA, FELIPA VELASQUEZ,
GENEROSA VILLENA, GORGONIA VERSOSA, SATURNINO VARONA,
ROLANDO VILLANUEVA, CRISENCIA YAP, CECILIA YUMAG, AGAPITA
VENTOROSA, SOLIDAD ALBERTO, FE BANANA, REYNALDO CONDE,
FE DELA CRUZ, SEVERA DOMINGUEZ, JOSEF DONATO, JOVITA
EBANEZ DOLORES ENRIQUEZ, MARCELA ESTOPEREZ, SALVACION
FEGUROA, FLORANTE GUMATAY, EUDECIA JATICO, GUILLERMA
LAGUNSAD, TITA LADO, SALVACION MAQUIRANG, JUANITA MUTANEZ,
MEDINA NABUA, NINETA PUNDIDO, DIONISIO PARANAS, ROSA
ROMAGAS, BENEDICTO NAAGAS, PRIMITIVA ABAS, ROSA ABELLOS,
EDIZA ABADILLOS, JUANITA ABARECIO, ESTELITA ABRILLO,
GREGORIA ABADE, PROSERFINA ALBANO, FERNANDO ACAL,
CRESTETA ADONA, AGAPITA ANPON, SULFECIA ARES, ESPERANZA
ACRIESCADO, BELINA ALCANTARA, SUZANA ARENSOL, DEMETRIA
ANTONIO, FELOMINA AGANA, WILFREDO ANDICOY, JOSE ALBA, BETY
ARCELI, VALERIANA ABADIANO, ALBERT BANDOY, GREGORIA
BANDOY, CLEOTILDE BAAFDE, BABIANA BANGA, RICARDO BAARDE,
HERMOGENES BOCO, GREGORIO BAYAN, PABLO BATAN, MARTINA
BARTIDO, ROSARIO BAYADOG, T T MANUEL BOTE, ROSALIA
BULACAN, GUADALUPE BALALA, NORMA BAUMUNDO, ERLINDA
BUEZA, WILFREDO BALALA, RODOLFO BALITACION, VIRGILIO
BANES, AGUINALDO BERSAMINA, NENITA BANADO, LEONIDES
BACLO, LEONILA BENAVEDEZ, EVANGELINA BEROL, LUCIANA
BONQUA, MARCELINO BUEZA, RICARDO BALTAR, TRINIDAD
BELMONTE, ADELAIDA BAUTISTA, LUIS CABALLERO, SALVADOR
CABALES, PACIENSIA CAMELON, MELANIA CABALE, FELISA CABALE,
TERESITA CASINGAL, CESARIA CALASTE, ANTONIO CAMARA, JOSE
DELA CRUZ, NATIVIDAD CAMA, FELISIDAD CANBO, FELIO COLASTE,
FLORENTINO CRUZ, ONASIMA COLLANTES, IRIBERTA CANTEL,
MELCHOR CEBRIANO, OFELIZ CEPRIANO, DAMIANA DOMINGUEZ,
ROSALINA DIZON, FLORENCIA DOBLE, DIONICIA DULA, VIOLETA
DOMINGO, PILAR DOMINGO, RAMON DEMASUNID, PACENCIA
DECOTON, MARCELINO DIEGO, JR., VICTOR DOMINGO, RICARDO
DOMINGO, JUANITO ESTEBAN, ADORACION ESPINA, WILFREDO
ESPINA, DIOMICIA ENERES, ROMEO ESPINA, JUANITA ESTIPONA,
LEONA ELAYA, BENITO ELPA, ADILA FRANCISCO, BEATRIZ FLORES,
NENITA FELIZARDO, EMILIO FERNANDO, MARGARITA FLORES,
MAGDALENA DE GUZMAN, LOLITA GABOSA, CONDEDA GABON,
LOLITA GUADIANO, DAYLINDA GONZALES, PRECILA GABITAN,
ESPERANZA GARCIA, AVELINA GRIEGO, LAUREANO GABITAN,
EDUARDO GODOY, ESCA GAHE, SEVERINA GIPAGA, GERARDA
GARDUQUE, MONICO GILARDO, FLORENTINO GALINO, NORA
GATBONTON, DIONICIA GELLAMERA, BONIFACIO UBAN, SANTIAGO
HIBAQUE, CRESTETA HILARIO, JUELY HILARIO, ALFONSO
HERMANOS, REMEDIOS HERMIAS, WILMER INABORE, SUSANA
ISIDRO, JULIO JACOB, MELY LOBO, GODOFREDO LUSANTA, ROGELIO
LUSANTA, PACIFICO LIGO, LUIS LEON, DOMINGO LAO, LEONARDO
MARIANO, MATILDE MACALALAG, SEVERINA MANGUERA, CIFREANA
MADI, RONCLO MAMING, LEONARDO MUSADA, ANA MARCELO,
ESTELITA MERCAIDA, GAVINO MACABENTA, ANGELITA MAMENG,
ADELINA MARZAN, ALBINO MELGAR, MARTA MOLAR, PIO
MALAQUENO, HONORIO MOCONI, CEZAR NAVARRO, FRANCISCO
NAVALES, LETICIA NAVARRO, VITO NAVALES, FELISA OBIERNE,
ADORACION OCAMPO, FELISA ORAYANE, PEDRO ONTAYEN, EGRACIA
ODTTORAN, CONSTANCIA PILAPIL, APOLONIA PUDASAS, MARINA
PAQUET, ADRIANO PORTEZ, MARIA PALLE, DOLORES PARIENTE,
EUSTAQUIO PALLE, CARMELITA PELANO, GREGORIA PELANTE,
VICITACION PERDEZ, MARIO PASCUAL, AUREA PALMA, LUCILA DE LA
PEA, ERIBERTO PORTUGAL, ALFONSA QUIMADA, LIBERTAD RIVERO,
TOMAS RENYS, VICENTE RAPORNA, JOSEFINA RUES, CRESENCIO
RIVERO, SANTOS RELATA, FLORENCIA REBOSE, LUCIO ROSALIE,
EMERITA RESARDE, ELY DEL ROMO, GENEROSO RICARDE, DOUGLAS
REYES, CONCEPCION ROSALES, FELOMINA SEPANA, SALVADOR
SALAZAR, JOSEFINA SALEBIO, FEDILA SEVERINO, VALENTIN DE LOS
SANTOS, EDGARDO SARTORIO, FRANCISCO SOLIDOR, PURIFICACION
SONORA, ERLINDA SANEZ, ANICETA SEROY, OFELIA SUFINA, SELVINA
SIAPNO, FELOMINA SEDAN, VALENTINA SALIDA, GLORIA SARCILLA,
ERLINDA TIBULE, LEONIDES TRIYO, FELIPA TAYCO, ALFREDO
TAMBONG, IGNACIO TABOR, JOVITO TABORDA, FLORDELISA
TOMBOKON, DEMETRIO VIPINASO, MARIA YERRO, BENITO ELFA,
RODOLFO ARELLANO, TEOTIMO ADAY, ROBERTO ADAY, PATRICIA
BAUTISTA, PAULINA BOHOL, FELICISIMO BAUTISTA, RODRIGO
BANDOY, NATIVIDAD CABAOBAO, GERUNDIO CONAL, ADELA
CACHARO, ANGELINA DELFIN, LUCITA DELFIN, JOSE DAINO,
HAMPRELIO DOMINGO, VICTORIA ELMEDO, ADELA FRANCISCO, LEON
GALOSO, ARSENIO GUELAS, CONCHITA GUERERO, VICENTE
HANDOMON, ERNESTO LACINIA, GIL IBIT, RODRIGO MANAHAN,
RENATO GONZALO, ANGELA MUPAL, GLORIA MALIHAN, ALFONSO
MACALALAD, ALFONSO MONTALLA, JOSEFA MENCOTE, ESTELITA
MALIHAN, ASUNCION RAMONS, ALEJANDRO RESURRECCION,
AURORA ROEL, DAVID SAMOPEZ, ALEJANDRO SOLIS, JR.,
PANTALEON ABRANO, FELIPA PASCUAL, VERERO CRISTINA, TERESA
VELLAROS, NATIVIDAD ALBINA, MENECIA ARUTA, ROSARIO BUSA,
DOLORES BONDOY, ANGELINA BARRIENTOS, SEVERA BANICO,
SOFRONIA BACSAL, FELISA BELARMINO, FLORENTINA BANDOY,
ANACITA CANOSA, GLECERIA CANDOG, ABADISA COLANGOY,
PRIMITIVA CASTILLO, ANACLITA CANIJOS, MARIA DUINOG, GREGORIA
DIANAN, CARINA ESQUERA, MARIA FRANCISCO, REMEDIOS
FERNANDEZ, LOURDES FEGUEROA, FRANCISCO JIMENEZ, MARIA
ESPERAGOZA, DOLORES GALLARDO, MAMERTA LAZARO, MAURECIA
LINDAYA, LEONCIA LOPEZ, TERESA LACADANGDANG, LETECIA
MAGNO, FELISA PEDRO, CORAZON PABILLARE, TERESA QUINA,
NELIA QUIRINO, EMILDA REYES, ROSALICA SALAZAR, MARIETA
SOLIDOR, JUAN DELA PEA, MARIA TOLENTINO, VIOLETA TOLIBAS,
LEVITAS TOMAS, ELENA TABARNILLO, ADELAIDA TAYCO, SEGUNDINA
FACIAL, VIRGINIA VILLA, ERLINDA VELOSO, ISABEL PRESADO, ALICIA
VECINAS and VICITACION YAYAFRANCA.

The Government Corporate counsel for petitioner.

Armando V. Ampil for private respondents.

CORTES, J.:

In this petition for certiorari, the People's Homesite and Housing Corporation
(PHHC) seeks a reversal of the Resolution of the Court of Industrial Relations
(CIR) en banc dated February 23, 1970 ordering the PHHC to pay private
respondents * wage differentials for work rendered from July 25, 1967 to
February, 1968.

In 1967, the Philippine government and the World Food program WFP
entered into an agreement which provided that

xxx xxx xxx

Until the efforts of the various Government Agencies concerned have been
successful in developing and executing the overall plan for the Sapang Palay
resettlement area, substantial employment must be found for the majority of
the squatter families at present living there. The People's Homesite and
Housing Corporation, hereafter referred to as PHHC is proposing a self-help
project to be undertaken by the squatter families for the construction of two
earth dams (which will involve the moving of 44,165 cu. meters of earth roads
of 850 meters long . . . and 17 kilometers of associate drainage and irrigation
channels; at the same time a number of existing roads in the area will be
improved by the construction of 42 kilometers of dams and ditches which will
involve the removal of 75,600 cu. meters of earth.

The undertaking will provide water for the irrigation of more than 100 hectares
of land to be used for additional food production, the reservoir will provide
non-drinking water for domestic purposes and will be stocked with fish.

WFP has been asked to supply the food for a basic ration for the 500 settlers
participating in this scheme, and for their 2,000 dependents for a period of
560 days. The food ration will supplement a cash incentive of One Half Peso
(0.50) per participant per day. (Exh. "1").

In recruiting participants to the program, application forms entitled WFP Self

Help Community Project Information Sheet," (Exh. "2") were issued,
mentioning the voluntary nature of the work to be rendered.

Although the participants were assigned to work on canals and roads, the
projects agreed upon between the PHHC and the World Food Program were
never fully implemented.

The PHHC ordered the participants to accomplish a time sheet which formed
the basis for the payment of P0.50 per day and the weekly food ration. A
division chief was also assigned to administer and manage the Sapang Palay
project. The agency provided the participants with work tools and equipment
such as spades, rakes, shovels, picks and axes. A PHHC employee acted as
"work supervisor:" he designated the area to be worked on by the participants
pursuant to a predetermined program made by the PHHC; and he also
conducted ocular inspection in the area.

Complaining about their work and compensation, the participants went to the
Department of Labor. After investigation, Secretary Ople sent to the PHHC
General Manager the following message:

FINDINGS ON WORKERS SAPANG PALAY PROJECT REVEAL

VIOLATIONS OF LABOR LAWS STOP SUGGEST LABORERS BE PAID IN
ACCORDANCE WITH MINIMUM WAGELAW

PHHC thereafter suspended work. And the participants instituted the present
action in the Court of Industrial Relations against the PHHC praying for the
payment of the difference between the minimum wage (which was P6.00 at
that time) and the P0.50 paid to them, overtime compensation, and also for
reinstatement.

In its answer, PHHC claimed, among others, that it was exercising

governmental functions; that it did not employ private respondents herein; and
that the CIR had no jurisdiction over PHHC, and over the subject matter of the
action.

After trial, the Court a quo ruled that since there was no evidence that private
respondents rendered overtime work, their claim was reduced to a mere
money claim over which the regular courts, not the CIR, had jurisdiction. It
thus dismissed the action.

On motion for reconsideration, the Court of Industrial Relations en

banc reversed the order of dismissal and ordered the PHHC to pay wage
differentials to the claimants; but denied the claims for reinstatement and
overtime compensation. From that resolution, PHHC brought the case to Us
on certiorari, raising the following issues:

WHETHER OR NOT THE CIR HAS JURISDICTION OVER PHHC, A

GOVERNMENT OWNED AND/OR CONTROLLED CORPORATION
PERFORMING GOVERNMENTAL FUNCTIONS

II

WHETHER OR NOT (THE) CIR HAS JURISDICTION OVER THOSE CASES

WHERE THERE EXIST(S) NO EMPLOYER- EMPLOYEE RELATIONSHIP

III

WHETHER OR NOT (THE) CIR HAS JURISDICTION OVER CASES FOR

MERE MONEY CLAIMS WHERE NO REINSTATEMENT IS SOUGHT

IV

WHETHER OR NOT THERE EXISTS (AN) EMPLOYER EMPLOYEE

(RELATIONSHIP) CONSIDERING THE FACTUAL CIRCUMSTANCES

We vote to grant the petition.

The jurisdiction of the then Court of Industrial Relations is set forth in Section I
of Commonwealth Act No. 103, as amended. Construing this provision of law,
We have ruled that the CIR has jurisdiction over labor disputes involving
government-owned or controlled corporations performing basically proprietary
functions, (GSIS v. Castillo, 98 Phil. 876 [1956]; GSIS v. GSIS Employees
Assn., 119 Phil. 524 [1964]; SSS Employees Assn. v. Soriano, 117 Phil. 1038
[1963]) but not those performing governmental functions (University of the
Philippines and Anonas v. CIR, 107 Phil. 848 [1960]).
It has not always been easy determining which functions are governmental in
nature and which are proprietary. The characterization of functions performed
by the government has evolved from the traditional "constituent- administrant"
classification (as enunciated in the case of Bacani v. National Coconut
Corporation (100 Phil. 468 [1956]) to its disavowal in the case of ACCFA v.
CUGCO et. al (No. L-221484, November 29, 1969, 30 SCRA 649) where,
considering the social justice provision of the 1935 Constitution, We said that
the "constituent-ministrant" classification had become unrealistic, if not
obsolete. There, We gave our assent to a socio-political philosophy espousing
a greater socialization of economic forces. We found nothing objectionable in
government undertaking in its sovereign capacity activities which, by
the constituent-ministrant test would have been considered as merely
optional.

We, thus, ruled in said case that the Agricultural Credit Administration, tasked
as it was with the implementation of the land reform program of the
government was an agency performing governmental functions.

Coming now to the case at bar. We note that since 1941 when the National
Housing Commission (predecessor of PHHC, which is now known as the
National housing Authority [NHA]) was created, the Philippine government has
pursued a mass housing and resettlement program to meet the needs of
Filipinos for decent housing. The agency tasked with implementing such
governmental program was the PHHC. These can be gleaned from the
provisions of Commonwealth Act 648, the charter of said agency.

We rule that the PHHC is a governmental institution performing governmental

functions.

This is not the first time We are ruling on the proper characterization of
housing as an activity of government, In the 1985 case of National Housing
Corporation v. Juco and the NLRC (No. L-64313, January 17, 1985, 134
SCRA 172), We ruled that housing is a governmental function.

A perusal of the functions of the PHHC and the NHC indicates that both
perform substantially the same functions.

Commonwealth Act No. 648, as amended, provides:

Section 2. The purposes for which the (People's Homesite and Housing
Corporation) is created are:

a) The acquisition, development, improvement, construction, leasing and

selling of lands and buildings or any interest therein in the cities and populous
towns of the Philippines, with the object of providing decent housing for those
who may be found unable otherwise to provide themselves therewith;

b) The promotion of the physical, social and economic betterment of the

inhabitants of the cities and populous towns of the Philippines, by eliminating
therefrom slums and dwelling places which are unhygienic or unsanitary and
by providing homes at low cost to replace those which may be so eliminated;
and,

c) The provision of community and institutional housing for destitute

individuals and families and for paupers.

On the other hand, the articles of incorporation of the NHC provide:

SECOND. That the purpose for which the corporation is organized is to assist
and carry out the coordinated massive housing program of the government,
principally but not limited to low-cost housing with the integration, cooperation
and assistance of all governmental agencies concerned, through the carrying
on of any or all the following activities:

1) The acquisition, development or reclamation of lands for the purpose of

construction and building therein preferably low-cost housing so as to provide
decent and durable dwelling for the greatest number of inhabitants in the
country;

2) The promotion and development of physical social and economic

community growth through the establishment of general physical plans for
urban, suburban and metropolitan areas to be characterized by efficient land
use patterns;

3) The coordination and implementation of an projects of the government for

the establishment of nationwide and massive low-cost housing;

4) The undertaking and conducting of research and technical studies of the

development and promotion of construction of houses and buildings of sound
standards of design liability, durability, safety, comfort and size for
improvement of the architectural and engineering designs and utility of houses
and buildings with the utilization of new and) or native materials economics
(sic) in material and construction, distribution, assembly and construction and
of applying advanced housing and building technology.

5) Construction and installation in these projects of low-cost housing privately

or cooperatively owned water and sewerage system or waste disposal
facilities, and the formulation of a unified or officially coordinated urban
transportation system as a part of a comprehensive development plan in
these areas.

In the Juco case, We ruled that the NHC, as it was established as an

"instrumentality of government to accomplish governmental policies and
objectives and extend essential services to the people," performs
governmental and not proprietary functions. It thus comes under the
jurisdiction of the Civil Service Commission and not the Ministry of Labor and
Employment (supra, 134 SCRA 172, 180, 181). We see no reason for
departing from that ruling now. The Court of Industrial Relations had no
jurisdiction over the dispute involving the PHHC and the private respondents.
In view of the foregoing, We deem it unnecessary to pass upon the other
issues raised.

WHEREFORE, the petition is granted. The assailed resolution of the Court of

Industrial Relations is SET ASIDE.

Fernan (Chairman), Gutierrez, Jr., Paras, Padilla and Bidin JJ., concur.

Footnotes

* Private respondents, who number around 700, are settlers in the Sapang
Palay resettlement area.