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1. The Light Rail Transit Authority (LRTA) entered into a 10-year agreement with Metro Manila Transit Corporation (METRO) for METRO to manage and operate the rail transit system.
2. Private respondents were hired as employees by METRO. A dispute arose and respondents were dismissed. They filed for illegal dismissal against LRTA and METRO.
3. The Supreme Court ruled that LRTA, being a government-owned corporation with an original charter, falls under the jurisdiction of the Civil Service Commission, not the Department of Labor. However, METRO, without an original charter, is subject to the Labor Code. Respondents were deemed employees of METRO.
1. The Light Rail Transit Authority (LRTA) entered into a 10-year agreement with Metro Manila Transit Corporation (METRO) for METRO to manage and operate the rail transit system.
2. Private respondents were hired as employees by METRO. A dispute arose and respondents were dismissed. They filed for illegal dismissal against LRTA and METRO.
3. The Supreme Court ruled that LRTA, being a government-owned corporation with an original charter, falls under the jurisdiction of the Civil Service Commission, not the Department of Labor. However, METRO, without an original charter, is subject to the Labor Code. Respondents were deemed employees of METRO.
1. The Light Rail Transit Authority (LRTA) entered into a 10-year agreement with Metro Manila Transit Corporation (METRO) for METRO to manage and operate the rail transit system.
2. Private respondents were hired as employees by METRO. A dispute arose and respondents were dismissed. They filed for illegal dismissal against LRTA and METRO.
3. The Supreme Court ruled that LRTA, being a government-owned corporation with an original charter, falls under the jurisdiction of the Civil Service Commission, not the Department of Labor. However, METRO, without an original charter, is subject to the Labor Code. Respondents were deemed employees of METRO.
Facts: LRTA (Light Rail Transit Authority) entered into a 10-year agreement with METRO which states that METRO shall manage and operate the rail way transit system in Metro Manila. Pursuant to this agreement, METRO hired employees which included the private respondents. Metro, then, entered into a collective bargaining agreement with PIGLAS-METRO. METRO also executed a Deed of Sale for the shares of stocks in favor of LRTA. However, despite the execution of such Deed of Sale, METRO and LRTA still proceeded with their original agreement- METRO acting as a manager and operator of LRTA.
The Union, due to a deadlock, then filed a Notice of Strike where the employees picketed in various substations which caused the operations of the rail way transit to be paralyzed. Despite the assumption of jurisdiction of the Secretary of the Department of Labor and the various notices posted and published, the employees still failed to report and return to their work. Hence, they were considered dismissed from employment.
The respondents then filed a complaint for illegal dismissal against petitioner LRTA and METRO. The Labor Arbiter rendered a decision in favor of the respondent adjudging that the said respondents are entitled to money claims against both LRTA and METRO and was also illegally dismissed. The NLRC reversed and set aside the decision of the labor arbiter. The Court of Appeals, however, reinstated the decision of the Labor Arbiter. Hence the current petition.
The petitioner LRTA contends that there exists no employer-employee relationship between it and the respondents for it is METRO that hired them pursuant to the 10-year agreement METRO and LRTA entered into. It also argues that since it is a government-owned and controlled corporation with an original charter, the provisions of the Labor Code is not applicable upon them and that by being a GOCC, it is the Civil Service Commission that has jurisdiction over them not DOLE.
On the other hand, respondents contend that although METRO is not fully-owned by LRTA, the fact that METRO is a mere conduit of LRTA is sufficient enough to warrant the piercing of the veil of corporate personality of LRTA.
Issue: Whether or not LRTA is subject to the jurisdiction of the Department of Labor and the provisions of the Labor Code thereby allowing the respondents to collect money claims from the petitioner.
Ruling: The Supreme Court ruled that LRTA is a government-owned and controlled corporation which means that it is not to be subjected under the jurisdiction of the DOLE and the provisions of the Labor Code. It is the Civil Service Commission that has jurisdiction over LRTA. As expressly stated in Section 2 (1) of Article 9-B of the 1987 Constitution, civil service embraces all branches, subdivisions, instrumentalities and agencies of the government, including government-owned and controlled corporations with original charters. It is submitted that a GOCC with an original charter is a GOCC that is created by a special law and not by the general corporation law. And, as a rule, GOCCs with an original charter (created by a special law) is under the jurisdiction of the Civil Service Commission and GOCCs created under the general corporation law is under the jurisdiction of the Department of Labor. Since LRTA is a government-owned and controlled corporation created by a special law, EO 603, jurisdiction falls with the Civil Service Commission.
However, in the case of METRO, it is a government- owned and controlled corporation without an original charter and which is created under the general corporation law and is therefore, subject to the jurisdiction of the Department of Labor and the provisions of the Labor Code.
The Supreme Court deemed the respondents as employees of METRO and therefore they are subject to the rights and privileges granted by the Labor Code. This is because despite the acquisition of the shares of stock of METRO by LRTA, the respondents remained to be employees of METRO for there was never an intention to make them employees of LRTA.