NASECO vs NLRC

FACTS:
1. Eugenia Credo was an employee of the National Service Corporation (NASECO).
2. She was charged with an administrative case for non-compliance with a company memo
issued by her superior and for her disrespect to the latter in the presence of other co-workers.
3. NASECO’s Committee on Personnel Affairs recommended her termination from work with
forfeiture of benefits and was later given a notice of termination. Hence Credo filed a complaint
for illegal dismissal.
4. The Labor Arbiter dismissed Credo’s complaint and directed NASECO to pay her separation
pay.
5. Both appealed to the NLRC to which rendered a decision ordering NASECO to reinstate
Credo and pay her back wages but not granting Credo’s claim for attorney’s fee, moral and
exemplary damages.
6. Hence, this appeal.
7. NASECO contends that, as a government corporation by virtue of its being a subsidiary of the
National Investment and Development Corporation , a subsidiary wholly owned by the
Philippine National Bank, which in turn is a government owned corporation), the terms and
conditions of employment of its employees are governed by the Civil Service Law, rules and
regulations.
ISSUE:
Does the Labor Code Apply to an illegal dismissal case between a government owned
and/or controlled corporation and it’s employee?
HELD:

1. Yes, the Labor Code applies to employees of government owned and/or controlled
corporation, provided that such corporation is without original charter such as NASECO in
the case at bar.
2. Therefore, the provisions of the Labor Code applies in this case and the NLRC has the
jurisdiction to decide over the case.
3. Unlike in the case of NCH vs. NLRC, which was governed by the 1973 Constitution, it is the
1987 constitution that governs the instant case.
4. The 1987 Constitution provides that “The civil service embraces all branches,
subdivisions, instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original charter”, hence, by clear
implication, the Civil Service does not include government-owned or controlled corporations
which are organized as subsidiaries of government-owned or controlled corporations under
the general corporation law.