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Article IX-B.


Section 2.
1. The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charters.
Metropolitan Waterworks and Sewerage System vs. Hernandez, 143 SCRA 602
Facts: A case was filed against the MWSS before an arbitration branch of the National Labor
Relations Commission (NLRC) on charges of failure to pay wage differentials, allowances and
other monetary benefits to its contractual employees numbering 2,500 or so. MWSS asserted:
1. it is a government-owned and controlled corporation (GOCC), and therefore the
NLRC has no jurisdiction over the case
2. assuming the contrary arguendo, the terms and conditions of the complainants who are
all contractual employees are governed by their respective contracts
Hernandez, the Labor Arbiter, ruled against MWSS, observing that:
1. If the complainants were regular employees, the NLRC would have no jurisdiction; but
since the complainants were non-regular or contractual employees, the NLRC has
2. The Civil Service Decree applies to employees in government corporations in all matters
except monetary claims, which is governed by the Labor Code.
MWSS filed a petition for certiorari and prohibition at the Supreme Court to invalidate the
decision of the Labor Arbiter.
Issue: Are contractual employees of the MWSS covered by the Labor Code or by laws and
regulations governing the civil service?
Decision: The decision and order of the Labor Arbiter, having been rendered without
jurisdiction, are declared void and set aside.
National Housing Corporation vs. Juco: employees of the GOCCs are governed by civil service
law, rules and regulations; the Labor Arbiter has no jurisdiction over them.
It is uncontested that MWSS is a GOCC; therefore, employment in the MWSS is governed by
the civil service law, rules and regulations; and controversies arising from or connected with that
employment are not cognizable by the NLRC.
There is no legal or logical justification for the distinction made by the Labor Arbiter between
regular and non-regular employees of the MWSS in order to justify its jurisdiction. Positions
in the civil service are classified into career and non-career service, the latter of which
includes contractual personnel.

Secondary notes: arguments rejected by the Supreme Court

1. Patently illogical and deserves no confutation: the Labor Arbiters claim that the Civil
Service Law governs employment in the MWSS in all aspects, except monetary claims,
which is governed by the Labor Code.
2. Contention that does not merit refutation: the claim of the contractual employees that
they are not employees of the MWSS, so the case is within the jurisdiction of NLRC
through Arbiter Hernandez.
3. Absurd and undeserving of response: the claim that Existence of employer-employee
relationship (between the MWSS and an individual) is not per se equivalent to being a
government employee.