PVTA vs. CIR

PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, et al., respondents.

G.R. No L-32052
JULY 25, 1975

FACTS:

Private respondents filed with the CIR a petition, alleging their employment relationship, the overtime services in excess of the regular eight hours a day rendered by them, and the failure to pay them overtime compensation in accordance with Commonwealth Act No. 444. Their prayer was for the differential between the amount actually paid to them and the amount allegedly due them. Petitioner Philippine Virginia Tobacco Administration denied the allegations. The then Presiding Judge Arsenio T. Martinez of respondent Court sustained the claims of private respondents for overtime services from December 23, 1963 up to the date the decision was rendered on March 21, 1970, and directing petitioner to pay the same, minus what it had already paid. Petitioner claims that the matter is beyond the jurisdiction of the CIR as it is exercising governmental functions and that it is exempt from the operation of C.A. 444, invoking the doctrine announced in the leading Agricultural Credit and Cooperative Financing Administration decision, and the distinction between constituent and ministrant functions of governments as set forth in Bacani v. National Coconut Corporation.

ISSUE:

WON the traditional classification of function of government as ministrant and constituent applicable in the case at bar.

HELD:

No. The irrelevance of such a distinction considering the needs of the times was clearly pointed out by the present Chief Justice. 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.”

Nonetheless, as he explained so persuasively: “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 well-defined 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.”

Thus was laid to rest the doctrine in Bacani v. National Coconut Corporation, based on the Wilsonian classification of the tasks incumbent on government into constituent and ministrant in accordance with the laissez faire principle.

WHEREFORE, the appealed Order of March 21, 1970 and the Resolution of respondent Court, denying a motion for reconsideration are hereby affirmed.

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