San Beda University College of Law

CONSTI I | MHPR
Case Name Hagonoy Water District vs. NLRC
Topic Prospective vs Retroactive
Case No. | Date G.R. No. | 81490
Ponente Feliciano,J.
Case Summary
Doctrine Prospective application of the Constitution

RELEVANT FACTS
 Private respondent, Dante Villanueva was employed as service foreman by petitioner Hagonoy Water District, when he
was indefinitely suspended and thereafter dismissed on July 12, 1985 for work and conflict of interest. Private
respondent filed a complaint for illegal dismissal against petitioner Hagonoy with the then Ministry of Labor and
Employment, Regional Arbitration Branch III, San Fernando, Pampanga.

 Petitioner's argument:
o Petitioner moved for the outright dismissal of the complaint on the ground of lack of jurisdiction.
Petitioner argued that, being a government entity, its personnel are governed by the provisions of the Civil
Service Law, not by the Labor Code, and protests concerning the lawfulness of dismissals from the service
fall within the jurisdiction of the Civil Service Commission, not the Ministry of Labor and Employment.
 Respondent's argument:
o Private respondent Villanueva, contended that local water districts like petitioner Hagonoy, though quasi-
public corporations, are in the nature of private corporations since they perform propriety functions for
the government.
 Lower court resolution:
o (DECISION OF DOLE IS IRRELEVANT TO THE OUR TOPIC IN CONSTI)
o Labor Arbiter ruled in favor of private respondent.
 Appellate court resolution:
o NLRC affirmed the decision of the Labor Arbiter.
RATIO DECIDENDI
Issue Ratio
Whether or not local The Labor Arbiter, in asserting that it has jurisdiction over the employees of Hagonoy, relied on
water districts are P.D. No. 198, known as “Provincial Water Utilities Act of 1973” which exempts employees of
government owned or water districts from the application of the Civil Service Law. However, the Labor Arbiter failed to
controlled corporations take into account that P.D. 1479 repealed the said exemption. Moreover, the NLRC relied upon
whose employees are Article 9, Section 2, of the 1987 Constitution which provides that:
subject to the Civil Service
Law. “[T]he Civil Service embraces ... government owned or controlled corporations with original
charters.”

At the time the dispute in the case at bar arose, and at the time the Labor Arbiter rendered its
decision (which was on March 17, 1986), the applicable law is that the Labor Arbiter has no
jurisdiction to render a decision that he in fact rendered. By the time the NLRC rendered its
decision (August 20, 1987), the 1987 Constitution has already come into effect. The SC believes
that the 1987 Constitution does not operate retroactively as to confer jurisdiction upon the
Labor Arbiter to render a decision, which was before, outside the scope of its competence.
Therefore, a decision rendered by the Labor Arbiter without jurisdiction over the case is a
complete nullity, vesting no rights and imposing no liabilities. Villanueva, if he so wishes, may
refile this complaint in an appropriate forum.
 San Beda University College of Law
CONSTI I | MHPR

RULING
Yes. The decision rendered by the Labor arbiter without jurisdiction over the case is null. The 1987 Constitution shall be
followed.

NOTES