THE Supreme Court (SC) has declared that contract of service (COS) or job order (JO) workers hired by the Philippine Amusement and Gaming Corporation (Pagcor) do not fall under the jurisdiction of the Civil Service Commission (CSC) and thus, are not considered government employees.
Pagcor is a government-owned or -controlled corporation governed by Presidential Decree No. 1869, as amended by Republic Act No. 9487, or the Pagcor Charter.
The June 19, 2024 ruling of the High Court’s First Division stemmed from a case filed by Mark Abadilla and several others who were hired by the state gaming corporation in various positions, such as cook, waiter, purchaser, pantry aide, food attendant, steward, dishwasher, kitchen supervisor, and busboy, among others.
Abadilla’s group said that they worked for the agency’s hotel business at the Goldenfield complex in Bacolod City for a period ranging from one to 17 years.
They said that each of them had a contract with Pagcor supposedly for a fixed term but which the agency occasionally renewed.
However, they said that when Pagcor closed its hotel business at the Goldenfield complex and transferred to L’Fisher Hotel, also in Bacolod City, the agency did not renew their individual contracts, prompting their group to lodge an illegal dismissal complaint before the CSC Regional Office-VI, arguing that they are regular employees entitled to security of tenure.
The CSCRO-VI dismissed their complaint for lack of jurisdiction, saying that they were job order workers and not government employees based on their contracts.
Abadilla’s group re-filed the case with CSCRO-VI, which elevated it as an appeal to the CSC main office.
While the case was pending with the CSC, Pagcor issued a memorandum that effectively terminated the services of Abadilla’s group.
The CSC later upheld the Pagcor order
The Court of Appeals subsequently affirmed the order, reiterating the CSCRO-VI finding that that Abadilla and his fellow workers were not regular Pagcor employees and thus, are not under CSC’s jurisdiction.
The SC upheld the appellate court’s ruling.
In affirming the CA’s decision, the SC, through Associate Justice Ramon Paul Hernando, held that COS or JO workers like Abadilla’s group are not considered as government employees covered by the CSC law, rules, and regulations.
It said that while the workers’ individual contracts included a statement that they shall strictly observe “civil service laws, rules and regulations,” this does not automatically make them government employees.
It noted the nature of their functions in Pagcor’s hotel and restaurant business, such as cooks, waiters, stewards, busboy, and their organizational ranking, compensation level, and employment contracts.
The magistrates explained that under CSC Memorandum Circular No. 40-98, COS and JO workers are hired for only a short duration not exceeding six months.
They said that such workers cover lump sum work or services where no employee-employer relationship exists and that, while covered by the Commission on Audit, these workers do not enjoy the benefits given to government employees.
It added that their exclusion is likewise stated under CSC-COA-Department of Budget and Management Joint Circular No. 1.
“The Court finds that Abadilla et al are contract of service and job order workers. Consequently, the CA did not gravely abuse its discretion in ruling that Abadilla et al are not regular employees under the civil service and are, thus, not under the jurisdiction of the CSC,” the SC said.
“In fact, the contract of employment issued by Pagcor to Abadilla et al is indeed a contract of service or job order that complied with CSC Memorandum Circular No.40-98 and CSC Resolution No. 020790,” it added.
In its decision, the SC also reminded Pagcor and all similar agencies that “while their authority to contract services is recognized under civil service rules, such hiring authority should not be used to mistreat or otherwise mismanage contract of service or job order workers.”
Concurring with the ruling are Associate Justices Rodil Zalameda, Jose Midas Marquez and Ricardo Rosario.
