1. G.R. No. L-21484, November 29, 1969 THE AGRICULTURAL CREDIT and COOPERATIVE FINANCING ADMINISTRATION vs.

ACCFA SUPERVISORS UNION Facts: On 4 September 1961 a collective bargaining agreement (CBA), which was to be effective for a period of 1 year from 1 July 1961, was entered into by and between the Unions and the Agricultural Credit and Cooperative Financing Administration (ACCFA). A few months thereafter, the Unions started protesting against alleged violations and non-implementation of said agreement. Finally, on 25 October 1962 the Unions declared a strike, which was ended when the strikers voluntarily returned to work on 26 November 1962. On 30 October 1962 the Unions, together with its mother union, the Confederation of Unions in Government Corporations and Offices (CUGCO), filed a complaint with the Court of Industrial Relations against the ACCFA (Case 3450-ULP) for having allegedly committed acts of unfair labor practice, namely: violation of the CBA in order to discourage the members of the Unions in the exercise of their right to selforganization, discrimination against said members in the matter of promotions, and refusal to bargain. The ACCFA denied the charges and interposed as affirmative and special defenses lack of jurisdiction of the CIR over the case, illegality of the bargaining contract, expiration of said Contract and lack of approval by the office of the President of the fringe benefits provided for therein. Brushing aside the foregoing defenses, the CIR in its decision dated 25 March 1963 ordered the ACCFA (1) to cease and desist from committing further acts tending to discourage the members of complainant unions in the exercise of their right to self organization; (2) to comply with and implement the provision of the collective bargaining contract executed on 4 September 1961, including the payment of P30.00 a month living allowance; and (3) to bargain in good faith and expeditiously with the herein complainants. ACCFA moved to reconsider but was turned down in a resolution dated 25 April 1963 of the CIR en banc. Thereupon it brought the appeal by certiorari to the Supreme Court (GR L-21484). During the pendency of the ACCFA's case, specifically on 8 August 1963, the President of the Philippines signed into law the Agricultural Land Reform Code (Republic Act 3844), which among other things required the reorganization of the administrative machinery of the Agricultural Credit and Cooperative Financing Administration (ACCFA) and changed its name to Agricultural Credit Administration (ACA). On 17 March 1964 the ACCFA Supervisors' Association and the ACCFA Workers' Association filed a petition for certification election with the Court of Industrial Relations (Case 1327-MC) praying that they be certified as the exclusive bargaining agents for the supervisors and rank-and-file employees, respectively, in the ACA. The trial Court in its order dated 30 March 1964 directed the Manager or Officer-in-Charge of the ACA to allow the posting of said order "for the information of all employees and workers thereof," and to answer the petition. In compliance therewith, the ACA, while admitting most of the allegations in the petition, denied that the Unions represented the majority of the supervisors and rank-and-file workers, respectively, in the ACA. It further alleged that the petition was premature, that the ACA was not the proper party to be notified and to answer the petition, and that the employees and supervisors could not lawfully become members of the Unions, nor be represented by them. However, in a joint manifestation of the Unions dated 7 May 1964, with the conformity of the ACA Administrator and of the Agrarian Counsel in his capacity as such and as counsel for the

National Land Reform Council, it was agreed "that the union in this case represent the majority of the employees in their respective bargaining units" and that only the legal issues raised would be submitted for the resolution of the trial Court. Finding the remaining grounds for ACA's opposition to the petition to be without merit, the trial Court in its order dated 21 May 1964 certified the ACCFA Workers' Association and the ACCFA Supervisors' Association as the sole and exclusive bargaining representatives of the rankand-file employees and supervisors, respectively, of ACA. Said order was affirmed by the CIR en banc in its resolution dated 24 August 1964. On 2 October 1964 the ACA filed in the Supreme Court a petition for certiorari with urgent motion to stay the CIR order (GR L-23605). In a resolution dated 6 October 1964, the Supreme Court dismissed the petition for 'lack of adequate allegations," but the dismissal was later reconsidered when the ACA complied with the formal requirement stated in said resolution. As prayed for, the Court ordered the CIR to stay the execution of its order of 21 May 1964. Issue: Whether the ACA is engaged in governmental or proprietary functions. Held: The ACA is a government office or agency engaged in governmental, not proprietary functions. These functions may not be strictly what President Wilson described as "constituent" (as distinguished from "ministrant"), such as those relating to the maintenance of peace and the prevention of crime, those regulating property and property rights, those relating to the administration of justice and the determination of political duties of citizens, and those relating to national defense and foreign relations. Under this traditional classification, such constituent functions are exercised by the State as attributes of sovereignty, and not merely to promote the welfare, progress and prosperity of the people these latter functions being ministrant, the exercise of which is optional on the part of the government. The growing complexities of modern society, however, have rendered this traditional classification of the functions of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and initiative and which the government was called upon to enter optionally, and only "because it was better equipped to administer for the public welfare than is any private individual or group of individuals" continue to lose their welldefined boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is to meet the increasing social challenges of the times. Here as almost everywhere else the tendency is undoubtedly towards a greater socialization of economic forces. Here of course this development was envisioned, indeed adopted as a national policy, by the Constitution itself in its declaration of principle concerning the promotion of social justice. It was in furtherance of such policy that the Land Reform Code was enacted and the various agencies, the ACA among them, established to carry out its purposes. There can be no dispute as to the fact that the land reform program contemplated in the said Code is beyond the capabilities of any private enterprise to translate into reality. It is a purely governmental function, no less than, say, the establishment and maintenance of public schools and public hospitals. And when, aside from the governmental objectives of the ACA, geared as they are to the implementation of the land reform program of the State, the law itself declares that the ACA is a

government office, with the formulation of policies, plans and programs vested no longer in a Board of Governors, as in the case of the ACCFA, but in the National Land Reform Council, itself a government instrumentality; and that its personnel are subject to Civil Service laws and to rules of standardization with respect to positions and salaries, any vestige of doubt as to the governmental character of its functions disappears. In view of the foregoing premises, the Unions are not entitled to the certification election sought in the lower Court. Such certification is admittedly for purposes of bargaining in behalf of the employees with respect to terms and conditions of employment, including the right to strike as a coercive economic weapon, as in fact the said unions did strike in 1962 against the ACCFA (GR L-21824). This is contrary to Section 11 of Republic Act 875. With the reorganization of the ACCFA and its conversion into the ACA under the Land Reform Code and in view of the Court's ruling as to the governmental character of the functions of the ACA, the decision of the lower Court, and the resolution en banc affirming it, in the unfair labor practice case filed by the ACCFA, which decision is the subject of the present review in GR L-21484, has become moot and academic, particularly insofar as the order to bargain collectively with the Unions is concerned.

2. G.R. No. L-31890, May 29, 1987 PEOPLE'S HOMESITE AND HOUSING CORPORATION vs. COURT OF INDUSTRIAL RELATIONS,

The Government Corporate counsel for petitioner. Armando V. Ampil for private respondents.

CORTES, J.: In this petition for certiorari, the People's Homesite and Housing Corporation (PHHC) seeks a reversal of the Resolution of the Court of Industrial Relations (CIR) en banc dated February 23, 1970 ordering the PHHC to pay private respondents * wage differentials for work rendered from July 25, 1967 to February, 1968. In 1967, the Philippine government and the World Food program WFP entered into an agreement which provided that xxx xxx xxx Until the efforts of the various Government Agencies concerned have been successful in developing and executing the overall plan for the Sapang Palay resettlement area, substantial employment must be found for the majority of the squatter families at present living there. The People's Homesite and Housing Corporation, hereafter referred to as PHHC is proposing a self-help project to be undertaken by the squatter families for the construction of two earth dams (which will involve the moving of 44,165 cu. meters of earth roads of 850 meters long . . . and 17 kilometers of associate drainage and irrigation channels; at the same time a number of existing roads in the area will be improved by the construction of 42 kilometers of dams and ditches which will involve the removal of 75,600 cu. meters of earth. The undertaking will provide water for the irrigation of more than 100 hectares of land to be used for additional food production, the reservoir will provide nondrinking water for domestic purposes and will be stocked with fish. WFP has been asked to supply the food for a basic ration for the 500 settlers participating in this scheme, and for their 2,000 dependents for a period of 560 days. The food ration will supplement a cash incentive of One Half Peso (0.50) per participant per day. (Exh. "1"). In recruiting participants to the program, application forms entitled WFP Self Help Community Project Information Sheet," (Exh. "2") were issued, mentioning the voluntary nature of the work to be rendered.

Although the participants were assigned to work on canals and roads, the projects agreed upon between the PHHC and the World Food Program were never fully implemented. The PHHC ordered the participants to accomplish a time sheet which formed the basis for the payment of P0.50 per day and the weekly food ration. A division chief was also assigned to administer and manage the Sapang Palay project. The agency provided the participants with work tools and equipment such as spades, rakes, shovels, picks and axes. A PHHC employee acted as "work supervisor:" he designated the area to be worked on by the participants pursuant to a predetermined program made by the PHHC; and he also conducted ocular inspection in the area. Complaining about their work and compensation, the participants went to the Department of Labor. After investigation, Secretary Ople sent to the PHHC General Manager the following message: FINDINGS ON WORKERS SAPANG PALAY PROJECT REVEAL VIOLATIONS OF LABOR LAWS STOP SUGGEST LABORERS BE PAID IN ACCORDANCE WITH MINIMUM WAGELAW PHHC thereafter suspended work. And the participants instituted the present action in the Court of Industrial Relations against the PHHC praying for the payment of the difference between the minimum wage (which was P6.00 at that time) and the P0.50 paid to them, overtime compensation, and also for reinstatement. In its answer, PHHC claimed, among others, that it was exercising governmental functions; that it did not employ private respondents herein; and that the CIR had no jurisdiction over PHHC, and over the subject matter of the action. After trial, the Court a quo ruled that since there was no evidence that private respondents rendered overtime work, their claim was reduced to a mere money claim over which the regular courts, not the CIR, had jurisdiction. It thus dismissed the action. On motion for reconsideration, the Court of Industrial Relations en banc reversed the order of dismissal and ordered the PHHC to pay wage differentials to the claimants; but denied the claims for reinstatement and overtime compensation. From that resolution, PHHC brought the case to Us on certiorari, raising the following issues: I WHETHER OR NOT THE CIR HAS JURISDICTION OVER PHHC, A GOVERNMENT OWNED AND/OR CONTROLLED CORPORATION PERFORMING GOVERNMENTAL FUNCTIONS II WHETHER OR NOT (THE) CIR HAS JURISDICTION OVER THOSE CASES WHERE THERE EXIST(S) NO EMPLOYER- EMPLOYEE RELATIONSHIP III WHETHER OR NOT (THE) CIR HAS JURISDICTION OVER CASES FOR MERE MONEY CLAIMS WHERE NO REINSTATEMENT IS SOUGHT

IV WHETHER OR NOT THERE EXISTS (AN) EMPLOYER EMPLOYEE (RELATIONSHIP) CONSIDERING THE FACTUAL CIRCUMSTANCES We vote to grant the petition. The jurisdiction of the then Court of Industrial Relations is set forth in Section I of Commonwealth Act No. 103, as amended. Construing this provision of law, We have ruled that the CIR has jurisdiction over labor disputes involving government-owned or controlled corporations performing basically proprietary functions, (GSIS v. Castillo, 98 Phil. 876 [1956]; GSIS v. GSIS Employees Assn., 119 Phil. 524 [1964]; SSS Employees Assn. v. Soriano, 117 Phil. 1038 [1963]) but not those performing governmental functions (University of the Philippines and Anonas v. CIR, 107 Phil. 848 [1960]). It has not always been easy determining which functions are governmental in nature and which are proprietary. The characterization of functions performed by the government has evolved from the traditional "constituent- administrant" classification (as enunciated in the case of Bacani v. National Coconut Corporation (100 Phil. 468 [1956]) to its disavowal in the case of ACCFA v. CUGCO et. al (No. L-221484, November 29, 1969, 30 SCRA 649) where, considering the social justice provision of the 1935 Constitution, We said that the "constituent-ministrant" classification had become unrealistic, if not obsolete. There, We gave our assent to a socio-political philosophy espousing a greater socialization of economic forces. We found nothing objectionable in government undertaking in its sovereign capacity activities which, by the constituent-ministrant test would have been considered as merely optional. We, thus, ruled in said case that the Agricultural Credit Administration, tasked as it was with the implementation of the land reform program of the government was an agency performing governmental functions. Coming now to the case at bar. We note that since 1941 when the National Housing Commission (predecessor of PHHC, which is now known as the National housing Authority [NHA]) was created, the Philippine government has pursued a mass housing and resettlement program to meet the needs of Filipinos for decent housing. The agency tasked with implementing such governmental program was the PHHC. These can be gleaned from the provisions of Commonwealth Act 648, the charter of said agency. We rule that the PHHC is a governmental institution performing governmental functions. This is not the first time We are ruling on the proper characterization of housing as an activity of government, In the 1985 case of National Housing Corporation v. Juco and the NLRC (No. L64313, January 17, 1985, 134 SCRA 172), We ruled that housing is a governmental function. A perusal of the functions of the PHHC and the NHC indicates that both perform substantially the same functions. Commonwealth Act No. 648, as amended, provides: Section 2. The purposes for which the (People's Homesite and Housing Corporation) is created are:

a) The acquisition, development, improvement, construction, leasing and selling of lands and buildings or any interest therein in the cities and populous towns of the Philippines, with the object of providing decent housing for those who may be found unable otherwise to provide themselves therewith; b) The promotion of the physical, social and economic betterment of the inhabitants of the cities and populous towns of the Philippines, by eliminating therefrom slums and dwelling places which are unhygienic or unsanitary and by providing homes at low cost to replace those which may be so eliminated; and, c) The provision of community and institutional housing for destitute individuals and families and for paupers. On the other hand, the articles of incorporation of the NHC provide: SECOND. That the purpose for which the corporation is organized is to assist and carry out the coordinated massive housing program of the government, principally but not limited to low-cost housing with the integration, cooperation and assistance of all governmental agencies concerned, through the carrying on of any or all the following activities: 1) The acquisition, development or reclamation of lands for the purpose of construction and building therein preferably low-cost housing so as to provide decent and durable dwelling for the greatest number of inhabitants in the country; 2) The promotion and development of physical social and economic community growth through the establishment of general physical plans for urban, suburban and metropolitan areas to be characterized by efficient land use patterns; 3) The coordination and implementation of an projects of the government for the establishment of nationwide and massive low-cost housing; 4) The undertaking and conducting of research and technical studies of the development and promotion of construction of houses and buildings of sound standards of design liability, durability, safety, comfort and size for improvement of the architectural and engineering designs and utility of houses and buildings with the utilization of new and) or native materials economics (sic) in material and construction, distribution, assembly and construction and of applying advanced housing and building technology. 5) Construction and installation in these projects of low-cost housing privately or cooperatively owned water and sewerage system or waste disposal facilities, and the formulation of a unified or officially coordinated urban transportation system as a part of a comprehensive development plan in these areas. In the Juco case, We ruled that the NHC, as it was established as an "instrumentality of government to accomplish governmental policies and objectives and extend essential services to the people," performs governmental and not proprietary functions. It thus comes under the jurisdiction of the Civil Service Commission and not the Ministry of Labor and Employment (supra, 134 SCRA 172, 180, 181). We see no reason for departing from that ruling now. The Court of Industrial Relations had no jurisdiction over the dispute involving the PHHC and the private respondents.

In view of the foregoing, We deem it unnecessary to pass upon the other issues raised. WHEREFORE, the petition is granted. The assailed resolution of the Court of Industrial Relations is SET ASIDE. Fernan (Chairman), Gutierrez, Jr., Paras, Padilla and Bidin JJ., concur.

3. G.R. Nos. L-55963 & 61045, February 27, 1991

FONTANILLA vs. MALIAMAN