Photo from Pexels | Drew Rae
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
The Supreme Court has emphasized that contract of service or job order workers hired by the Philippine Amusement Gaming Corporation (PAGCOR) are not considered employees under the Civil Service Commission’s (CSC) jurisdiction.
Mark Abadilla, et. al. (Abadilla et al.) were hired by PAGCOR in various positions such as cook, waiter, purchaser, pantry aide, food attendant, steward dishwasher, kitchen supervisor, and busboy, among others. They signed a contract with PAGCOR for a fixed term, but they were occasionally renewed. They worked for PAGCOR for a total period ranging from one (1) to seventeen (17) years.
Records show that Abadilla et al. were engaged on a “no work, no pay” basis, and performed works which were necessary and desirable in the business of PAGCOR. However, despite performing work for PAGCOR, Abadilla et al. averred that they were unduly deprived of the benefits extended to the regular employees of PAGCOR, including overtime pay, service incentive leave, and vacation leave.
Prior to the filing of the initial complaint, PAGCOR announced its decision to close down its hotel business located at Goldenfield Complex and transfer to another location at L’Fisher Hotel, both Bacolod City. PAGCOR also announced its decision not to renew Abadilla et al.’s individual contracts. This prompted some of the workers to file an illegal dismissal complaint before the Civil Service Commission – Regional Office (CSCRO-VI).
On March 7, 2014, the CSCRO-VI promulgated its Decision dismissing the complaint for lack of jurisdiction.
Undaunted, Abadilla et al. filed a complaint before the Regional Trial Court of Bacolod City on June 4, 2014. On November 12, 2014, the trial court dismissed the complaint for lack of jurisdiction and remanded the case to the CSC.
Thus, Abadilla et al. refiled the case with the CSCRO-VI, but it was elevated motu proprio as a petition for review/appeal to the CSC in Quezon City. The CSC issued an order requiring Abadilla et al. to pay the appeal fee, which the latter complied with.
During the pendency of the case, PAGCOR issued a Memorandum dated December 15, 2016 with the subject “End of Contract” effectively terminating Abadilla et al.’ s services.
The CSC required Abadilla et al. to comply with the requisites of a valid complaint under Sec. 11 of the Revised Rules on Administrative Cases in the Civil Service. Abadilla et al. complied with the CSC’s mandate and re-filed their complaint. The CSC promulgated its assailed Order and found that Abadilla et al. did not comply with the requisites of a valid complaint.
Therefore, Abadilla et al. filed their motion for reconsideration, which was denied by the CSC. Dissatisfied, Abadilla et al. filed their Petition for Review under Rule 43 of the Rules of Court before the Court of Appeals (CA).
The CA denied the petition for review for lack of merit.
The appellate court ruled that the civil service laws and rules do not apply to Abadilla et al.
Abadilla et al. sought reconsideration, but to no avail for their motion for reconsideration was denied due to lack of merit. The CA found that the motion for reconsideration merely reiterated, repeated, and rehashed arguments from its appeal.
Dissatisfied, Abadilla et al. filed the instant Petition ascribing two errors on the part of the appellate court: (1) they are not confidential employees; and (2) they are regular employees of PAGCOR entitled to security of tenure.
The Supreme Court’s Decision:
The Court finds that Abadilla et al. are contract of service and job order workers. Consequently, the CA did not gravely abuse its discretion in ruling that Abadilla et al. are not regular employees under the civil service, and are thus not under the jurisdiction of the CSC.
PAGCOR has the power to hire its own employees, as well as contract of service or job order workers
An employer-employee relationship in the public sector is primarily determined by special laws, civil service laws, rules, and regulations.
It is undisputed that PAGCOR is a GOCC created under the PAGCOR Charter. Under its charter, PAGCOR was created for two main purposes: (1) to centralize and integrate the right and authority to operate and conduct games of chance into one corporate entity to be controlled, administered, and supervised by the Government; and (2) to establish and operate clubs and casinos, for amusement and recreation, including sports gaming pools (basketball, football, lotteries, etc.) and such other forms of amusement and recreation including games of chance, which may be allowed by law within the territorial jurisdiction of the Philippines, among others.
One of PAGCOR’s corporate powers is the employment of such officers and personnel as may be necessary or proper to carry on its business.
The PAGCOR Charter explicitly states that PAGCOR is exempted from Civil Service Law and is governed by its own personnel management policies. Accordingly, PAGCOR Charter, Sec. 16 states:
SECTION 16. Exemption. – All positions in the Corporation, whether technical, administrative, professional, or managerial are exempt from the provisions of the Civil Service Law, rules and regulations, and shall be governed only by the personnel management policies set by the Board of Directors. All employees of the casinos and related services shall be classified as “Confidential” appointees.
However, the same cannot be said with respect to the last portion of Section 16 which provides that “all employees of the casino and related services shall be classified as ‘confidential appointees’” While such executive declaration emanated merely from the provisions of the Civil Service Act of 1959, the power to declare a position as policy-determining, primarily confidential or highly technical as defined therein has subsequently been codified and incorporated in the Administrative Code of 1987. This later enactment only serves to bolster the validity of the categorization made under Presidential Decree No. 1869. Be that as it may, such [a] classification is not absolute and all-encompassing.
Applying the foregoing, the PAGCOR Charter, Sec. 16 thereof, applies to government employees hired by PAGCOR.
In particular, the first sentence of Sec. 16, insofar as it exempts PAGCOR positions from the provisions of Civil Service Law and Rules, has been amended, modified, or deemed repealed by the 1987 Constitution and the Administrative Code of 1987.
On the other hand, the second sentence of Sec. 16 referring to “confidential employees” should not be liberally applied to all other PAGCOR employees. Instead, confidential employees of PAGCOR are determined by the nature of the position, and such a classification is not absolutely binding on the courts.
However, not all personnel hired by PAGCOR are considered government employees governed by applicable civil service laws and rules as discussed above. Other personnel hired by PAGCOR are considered contract of service or job order workers who are not government employees and are not under the jurisdiction of the CSC.
Abadilla et al. are not regular employees, but contract of service and job order workers of PAGCOR
Abadilla et al. are neither confidential employees nor regular employees of PAGCOR. Instead, they are contract of service and job order workers. The provisions of the CSC Memorandum Circular No. 40-98 and CSC Resolution No. 020790, and CSC, COA, and Department of Budget and Management (DBM) Joint Circular No. 1, series of 201773 dated June 15, 2007 (CSC-COA-DBM Joint Circular No. 1) apply to contract of service and job order workers.
Workers under contracts of services and job orders are not considered to have rendered service for the government, covers lump sum work or services where no employee-employer relationship exists for a period of short duration not exceeding six months on a daily basis, are not covered by Civil Service Law, Rules, and Regulations, but by the Commission on Audit (COA) rules, and do not enjoy the benefits enjoyed by government employees.
Furthermore, as expressly stated by the CSC, there are specific provisions that must not be incorporated in contract of services or job orders. Thus, Sec. 3 of CSC Resolution No. 020790 reads:
SECTION 3. The contract of services, MOA or job order shall not contain the following provisions:
- The employee performs work or a regular function that is necessary and essential to the agency concerned or work also performed by the regular personnel of the hiring agency;
- The employee is required to report to the office and render service during the agency’s prescribed office hours from 8:00 am to 5:00 pm or for forty (40) hours per week;
- The employee is entitled to benefits enjoyed by government employees such as ACA, PERA and RATA and other benefits given by the agency such as mid-year bonus, productivity incentive, Christmas bonus and cash gifts.
- The employee’s conduct and performance shall be under the direct control and supervision of the government agency concerned.
- The employee’s performance shall be evaluated by the government agency.
The employment status is therefore clear. In jurisprudence, the Court ruled that [a] plain reading of the foregoing provisions of CSC Resolution No. 020790 shows that workers hired under job orders are not government employees. They do not enjoy the same benefits as government employees and their services rendered are not considered government service.
In 2017, the CSC, COA, and DBM noted the proliferation of individual job order and contract of service workers in the government, and issued a joint circular to address the issues on lack of social protection for the workers and inequality in benefits, as well as the obscure accountability of job order and contract of services workers due to lack of employee-employer relationship with the hiring agency.
In CSC-COA-DBM Joint Circular No. 1, it was expressly stated that contract of services or job order workers are not covered by Civil Service laws and rules. Accordingly, Section 7.4 of the CSC-COA-DBM Joint Circular No. 1 states:
7.4 The services of the contract of service and job order workers are not covered by Civil Service law and rules thus, not creditable as government service. They do not enjoy the benefits enjoyed by government employees, such as leave, PERA, RATA and thirteenth month pay.
In jurisprudence, the Court emphasized that CSC-COA-DBM Joint Circular No. 1 clarified the earlier guidelines set forth by the CSC. The Court likewise reiterated that there is no employer-employee relationship between the government and job order workers, and that the latter’s services are not considered government service. For these reasons, job order employees are not covered by Civil Service law, rules, and regulations.
Applying the foregoing to the case at bar, the Court finds that Abadilla et al. are contract of service and job order workers in the government who are not government employees, and are not covered by Civil Service law, rules, and regulations.
The fact that the employment contracts of the complainants with PAGCOR contain provisions and items such as “eight (8) working hours a day,” “strict observance of civil service laws, rules and regulations,” (sic) and “contractual employment,” does not automatically make the complainants government employees.
Thus, complainants’ employment contract with PAGCOR, satiated with provisions prohibited by [CSC Memorandum Circular No. 40-98 and CSC Resolution No. 020790], did not convert them into government employees over which this office can exercise its jurisdiction.
The confluence of the above-mentioned circumstances creates a reasonable conclusion that complainants rendered work at PAGCOR under contract of services. As such, complainants are not considered government employees; hence, outside the mantle of Civil Service laws, rules and regulations.
It is clear from the records that the nature of Abadilla et al’s. functions, their organizational ranking, compensation level, and employment contracts, do not classify them as either confidential employees nor regular employees of PAGCOR.
Consequently, the CA did not gravely abuse its discretion in ruling that Abadilla et al. are job order workers, and are thus not under the jurisdiction of the CSC.
In summary, the Court held that PAGCOR has the power to hire its own employees, as well as contract the service of job order workers. While it is recognized that the petitioners are contract of service or job order workers, the Court finds that they are neither confidential employees nor regular employees of PAGCOR.
Source:
Macario S. Padilla vs. Airborne Security Service, Inc. and/or Catalina Solis
G.R. No. 210080, November 22, 2017
Click here to subscribe to our newsletter
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
All rights reserved.