Boy Scouts of the Philippines vs NLRC

G.R. No. 80767. April 22, 1991.

BOY SCOUTS OF THE PHILIPPINES, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, FORTUNATO ESGUERRA, ROBERTO
MALABORBOR, ESTANISLAO MISA, VICENTE EVANGELISTA, and
MARCELINO GARCIA, respondents.

Facts
Private respondents Fortunato C. Esquerra, Roberto O. Malaborbor,
Estanislao M. Misa, Vicente N. Evangelista and Mar-celino P. Garcia, had all
been rank-and-file employees of petitioner Boy Scouts of the Philippines
(“BSP”). At the time of termination of their services in February 1985, private
respondents were stationed at the BSP Camp in Makiling, Los Baños, Laguna.
On 19 October 1984, the Secretary-General of petitionerBSP issued
Special Orders Nos. 80, 81, 83, 84 and 85 addressed separately to the five (5)
private respondents, informing them that on 20 November 1984, they were to
be transferred from the BSP Camp in Makiling to the BSP Land Grant in
Asuncion, Davao del Norte. These Orders were opposed by private respondents
who, on 4 November 1984, appealed the matter to the BSP National President.
On a pre-transfer briefing at its National Headquarters in Manila, private
respondents were assured that their transfer to Davao del Norte would not
involve any diminution in salary, and that each of them would receive a
relocation allowance equivalent to one (1) month’s basic pay. This assurance,
however, failed to persuade private respondents to abandon their opposition to
the transfer orders issued by the BSP Secretary-General.
On 13 November 1984, a complaint for illegal transfer was filed with the
then Ministry of Labor and Employment. The private respondents sought to
enjoin the implementation of the said orders.
Private respondents continued to disobey the disputed transfer orders
despite warning that their refusal could result in the termination of their
employment. Petitioner BSP consequently imposed a five-day suspension on
the five (5) private respondents, in the latter part of January 1985.
Subsequently, by Special Order dated 12 February 1985 issued by the BSP
Secretary General, private respondents’ services were ordered terminated
effective 15 February 1985.
Private respondents amended their original complaint to include charges
of illegal dismissal and unfair labor practice against petitioner BSP. Petitioner
BSP alleged before the Labor Arbiter that petitioner is a "civic service, non-
stock and non-profit organization, relying mostly on government and public
support, existing under and by virtue of Commonwealth Act No. 111, as
amended, by Presidential Decree No. 460. The Labor Arbiter ordered the
dismissal of private respondents’ complaint for lack of merit.
Private respondents stated in their Appeal Memorandum with the NLRC
that petitioner BSP is "by mandate of law a Public Corporation. NLRC reversed
the ruling of the labor arbiter and held that private respondents had been
illegally dismissed by petitioner BSP.
In a Resolution, the Supreme Court required the parties and the Office of
the Government Corporate Counsel to file a comment on the question of
whether or not petitioner BSP is in fact a government owned or controlled
corporation.
The central issue is whether or not BSP is embraced within the Civil
Service. The answer to the central issue will determine private respondent
NLRC had jurisdiction to render the decision.

Issue
1. Whether or not petitioner BSP is in a government owned or controlled
corporation.

2. Whether or not BSP’s employees are subject of Civil Service Law.

Ruling
1. Yes. The Court considers that the following need to be considered in
arriving at the appropriate legal characterization of the BSP for purposes
of determining whether its officials and staff members are embraced in
the Civil Service. Firstly, BSP’s functions as set out in its statutory
charter do have a public aspect. BSP’s functions do relate to the fostering
of the public virtues of citizenship and patriotism and the general
improvement of the moral spirit and fiber of our youth. The social value
of activities like those to which the BSP dedicates itself by statutory
mandate have in fact, been accorded constitutional recognition. Article II
of the 1987 Constitution includes in the “Declaration of Principles and
State Policies,” the following: “Sec. 13. The State recognizes the vital role
of the youth in nation building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-being. It shall
inculcate in the youth patriotism and nationalism, and encourage their
involvement in public and civic affairs.” At the same time, BSP’s
functions do not relate to the governance of any part of territory of the
Philippines; BSP is not a public corporation in the same sense that
municipal corporations or local governments are public corporations.
BSP’s functions cannot also be described as proprietary functions in the
 same sense that the functions or activities of government-owned or
controlled corporations like the National Development Company or the
National Steel Corporation can be described as proprietary or “business-
like” in character. Nevertheless, the public character of BSP’s functions
and activities must be conceded, for they pertain to the educational, civic
and social development of the youth which constitutes a very substantial
and important part of the nation.
The Administrative Code of 1987 designates the BSP as one of the
attached agencies of the Department of Education, Culture and Sports
(“DECS”). An “agency of the Government” is defined as referring to any of
the various units of the Government including a department, bureau,
office, instrumentality, government-owned or-controlled corporation, or
local government or distinct unit therein. “Government instrumentality”
is in turn defined in the 1987 Administrative Code in the following
manner: “Instrumentality—refers to any agency of the National
Government, not integrated within the department framework, vested
with special functions or jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, and enjoying operational
autonomy, usually through a charter. This term includes regulatory
agencies, chartered institutions and government-owned or controlled
corporations.” (Italics supplied) The same Code describes a “chartered
institution” in the following terms: “Chartered institution—refers to any
agency organized or operating under a special charter, and vested by law
with functions relating to specific constitutional policies or objectives.
This term includes the state universities and colleges, and the monetary
authority of the State.” (Italics supplied) We believe that the BSP is
appropriately regarded as “a government instrumentality” under the
1987 Administrative Code.

2. Since BSP is held as a government instrumentality, it follows that the

employees of petitioner BSP are embraced within the Civil Service and
are accordingly governed by the Civil Service Law and Regulations.
The Labor Arbiter and public respondent NLRC had no jurisdiction over
the complaint filed by private respondents; neither labor agency had
before it any matter which could validly have been passed upon by it in
the exercise of original or appellate jurisdiction.