ART.

6 PRELIMINARY TITLE

The government-owned and controlled corporations “with original

charter” refer to corporations chartered by special law from Congress as
distinguished from corporations organized under our general incorporation
statute, the Corporation Code. Thus, under the present state of the law, the test
in determining whether a government-owned or controlled corporation is subject
to the Civil Service Law is the manner of its creation. Government corporations
created by Congress are subject to Civil Service rules, while those incorporated
under the general Corporation Law are covered by the Labor Code.1
1.1 PNOC-EDC, FTI, NHA
The PNOC-EDC, (Philippine National Oil Corp. Energy Development
Corp.) having been incorporated under the general Corporation Law, is a
government-owned or controlled corporation. Its employees are subject to the
provisions of the Labor Code, among which are those on the rights to unionize
and to strike.
Similarly, the Food Terminal, Inc. is a government-owned and controlled
corporation without original charter. The Department of Labor and Employment,
and not the Civil Service Commission has jurisdiction over the dispute arising
from employment with FTI. The terms and conditions of such employment are
governed by the Labor Code and not by the Civil Service Rules and Regulations.
Finally, considering that the NHA (National Housing Corp.) was
incorporated under Act 1459, the former corporation law, it is a government-
owned or controlled corporation whose employees are subject to the provisions of
the Labor Code. The NHA is within the jurisdiction of the Department of Labor
and Employment, it being a government-owned and/or controlled corporation
without an original charter. The workers or employees of the NHC (now NHA)
have the right to form unions or employees’ organizations.2
2. NON-APPLICABILITY TO GOVERNMENT AGENCIES
The terms governmental “agency” or “instrumentality” are synonymous in
the sense that either of them is a means by which a government acts, or by which
a certain government act or function is performed. The word “instrumentality,”
with respect to the state, contemplates an authority to which the state delegates
government power for the performance of a state function.3

1
See National Service Corp. vs. NLRC, No. L-69870, November 29, 1988.
2
Juco vs. NLRC and National Housing Corp., G.R. No. 98107, August 18,
1997.
3
Luzon Development Bank vs. Association of Luzon Development Bank
Employees, et al., G.R. No. 120319, October 6, 1995, 64 SCAD 918.

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