DOJ Opinion No. 101, s. 1987

DOJ OPINION NO. 101 , s. 1987 October 1, 1987 Hon. Solita C. Monsod Director General National Economic and Development Authority (NEDA) Amber Avenue, Pasig, Metro manila Madame Monsod: This refers to your request for opinion on certain questions concerning the legal status of the Asian Productivity Organization (APO) Production Unit, Inc., which is presently attached to the NEDA. Specifically, you are requesting a categorical opinion on the following. "1. The APO Production Unit, Inc. is a government-owned corporation and that the government officials who are members of its Board of Trustees are sitting there in their official capacity; "2. The new Board of Trustees of APO was duly constituted in accordance with the election of the members thereof at the meeting of the Corporation held on January 8, 1987; "3. The terms and conditions of employment of its employees and workers are, pursuant to Art. 277 of the Labor Code (PD No. 442, as amended), governed by the Civil Service Law, rules and regulations, and therefore, they cannot go on strike or go on mass leaves of absence." Anent query No. 1, we reiterate our previous opinion/ruling that the APO Production Unit, Inc. is a government-owned or controlled corporation attached to the NEDA. Although organized as a private corporation, pursuant to LOI No. 197, it is not strictly speaking a private enterprise but a government instrumentality. Thus, the members of its Board of Trustees who are all government officials sit there in their respective official capacity, not private or personal (see Opinion. 52, 1975). prcd In this connection, we also wish to invite your attention to a ruling of the Commission on Audit (COA) contained in a 4th Indorsement dated July 29, 1981 stating that "APO is not a private entity but a government instrumentality that is of equal footing with the Government Printing Office (GPC) insofar as its printing jobs with the government are concerned." Moreover, the APO Production Unit, Inc. satisfies the definition of a government-owned and controlled corporation as provided in Section 2 of P.D. No. 2029 issued on February 4, 1981 which in part reads: "SECTION 2. Definition . A government-owned or controlled corporation is a stock or a non-stock corporation, whether performing governmental or proprietary functions, which is directly chartered by special law or if organized under the general corporation law is owned or controlled by the government directly or indirectly . . ." On the basis of the foregoing, query No. 2 is answered in the affirmative, i.e., we are of the view that the present Board of Trustees of the APO Production Unit, Inc., has been duly constituted in accordance with the election of the members thereof at the meeting of the Corporation held on January 8, 1987, as provided in Article II of the By-Laws of the Corporation, as amended. As to query No. 3, it will be recalled that the APO Production Unit, Inc. was incorporated thru the SEC as a non-stock and non-profit corporation pursuant to LOI No. 197 and in accordance with the terms of a Memorandum of Agreement entered into by and between the Government of the Philippines (GOP) and the Asian Productivity Organization (APO) dated 9 November 1972. Paragraph 7 of said Memorandum of Agreement provides that "the personnel of the Unit shall not be considered as government employees nor are their terms of employment nor working conditions to be controlled by such government regulations". In view hereof, notwithstanding the fact that APO Production Unit, Inc. is a government-owned corporation by reason of its funding and composition of its governing Board, the terms and conditions of employment of its employees and workers are governed, not by the Civil Service Law and Rules, but by existing provisions of the Labor Code, as amended, pertaining to employees and workers in the private sector, because it is a corporation created not under an original charter but pursuant to the Corporation Law. The 1987 Constitution is explicit in this regard when it states: prcd "The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters". (Emphasis supplied.) It is noted that the framers of the charter intended the phrase "government-owned or controlled corporations with original charters" as referring to those government corporations created by special law and not organized under the general corporation code (see Record of the 1986 Constitutional Commission, vol. 1, p. 585) and, as previously adverted to, APO Production Unit was organized under the general corporation law. Hence, the provisions of the Labor Code pertaining to the rights of employees and workers in the private sector, including the right of self organization, for the purpose of collective bargaining are applicable to them (See Book Five, Labor Relations, Labor Code, as amended). Please be guided accordingly. Very truly yours, (SGD.) SEDFREY A. ORDOEZ Secretary of Justice