The Supreme Court (SC) has ruled that contract of services (COS) or job order (JO) workers hired by the Philippine Amusement and Gaming Corporation (PAGCOR) are not considered government employees under Civil Service Commission (CSC) jurisdiction.
In a decision dated June 19, 2024 and published online on Monday, the Supreme Court First Division ruled that a group of workers who worked for PAGCOR in its hotel and restaurant business are COS and JO workers not covered by CSC law, rules, and regulations.
The workers were hired by PAGCOR in various positions such as cook, waiter, purchaser, pantry aide, food attendant, steward, dishwasher, kitchen supervisor and busboy.
They signed a contract with PAGCOR for a fixed term, but they were occasionally renewed.
They worked for PAGCOR between one and 17 years.
Their contracts included a provision that says, “strict observance of civil service laws, rules and regulations.”
When PAGCOR closed its hotel business in Goldenfield Complex and transferred to L’Fisher Hotel, both in Bacolod City, it did not renew the individual contracts of the workers.
The workers filed an illegal dismissal complaint before the CSC Regional Office (CSCRO-VI), arguing they were regular employees entitled to security of tenure.
However, CSCRO-VI dismissed their complaint for lack of jurisdiction, finding that they were contractual workers and not government employees based on their contracts.
The workers refiled the case with CSCRO-VI, which elevated it as an appeal to the CSC.
While the case was pending with the CSC, PAGCOR issued a memorandum that effectively terminated the services of the workers.
The CSC later issued an order dismissing the complaint, affirmed by the Court of Appeals (CA), which held that the workers are not regular employees in the civil service and thus are not under CSC jurisdiction.
In affirming the CA, the Supreme Court ruled there is no employer-employee relationship between the government and JO workers whose services are not considered government service.
“Thus, they are not covered by Civil Service law, rules, and regulations,” it said.
Under CSC Memorandum Circular No. 40-98, workers under contracts of services and job orders exist for a short duration not exceeding six months on a daily basis, and cover lump sum work or services where no employee-employer relationship exist.
While covered by the Commission on Audit (COA), these workers do not enjoy the benefits given to government employees.
CSC-COA-Department of Budget and Management Joint Circular No. 1 also expressly states that COS or JO workers are not covered by Civil Service laws and rules.
“Under its charter, PAGCOR has the power to hire necessary personnel. However, not all personnel hired by PAGCOR are considered government employees. Others are considered contract of services or job order workers,” the SC said.
While the workers’ individual contracts include a statement that they shall strictly observe “civil service laws, rules and regulations,” this does not automatically make them government employees, it said.
The SC added that based on the nature of their functions, their organizational ranking, compensation level, and employment contracts, the concerned workers are not regular employees of PAGCOR subject to the CSC’s jurisdiction.
The Court, however, 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.” (PNA)
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