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ACCFA v CUGCO Digest as to the governmental character of its functions

disappears.

G.R. No. L-21484 November 29, 1969


The growing complexities of modern society, however,
Facts:
have rendered this traditional classification of the
1. ACCFA, a government agency created under functions of government quite unrealistic, not to say
RA 821, as amended was reorganized and its name obsolete. The areas which used to be left to private
changed to Agricultural Credit Administration (ACA) enterprise and initiative and which the government was
under the RA 3844 or Land Reform Code. While called upon to enter optionally, and only "because it
ACCFA Supervisors' Association (ASA) and the was better equipped to administer for the public
ACCFA Workers' Association (AWA), are labor welfare than is any private individual or group of
organizations (the Unions) composed of the individuals,"5continue to lose their well-defined
supervisors and the rank-and-file employees in the boundaries and to be absorbed within activities that
ACCFA. the government must undertake in its sovereign
capacity if it is to meet the increasing social challenges
2. A CBA was agreed upon by labor unions (ASA of the times. Here as almost everywhere else the
and AWA) and ACCFA. The said CBA was supposed tendency is undoubtedly towards a greater
to be effective on 1 July 1962. Due to non- socialization of economic forces. Here of course this
implementation of the CBA the unions held a strike. development was envisioned, indeed adopted as a
And 5 days later, the Unions, with its mother union, the national policy, by the Constitution itself in its
Confederation of Unions in Government Corporations declaration of principle concerning the promotion of
and Offices (CUGCO), filed a complaint against social justice.
ACCFA before the CIR on ground of alleged acts of
unfair labor practices; violation of the collective
bargaining agreement in order to discourage the
The Unions have no bargaining rights with ACA. EO
members of the Unions in the exercise of their right to
75 placed ACA under the LRPA and by virtue of RA
self-organization, discrimination against said members
3844 the implementation of the Land Reform Program
in the matter of promotions and refusal to bargain.
of the government is a governmental function NOT a
3. ACCFA moved for a reconsideration but while proprietary function. Being such, ACA can no longer
the appeal was pending, RA 3844 was passed which step down to deal privately with said unions as it may
effectively turned ACCFA to ACA. Then, ASA and have been doing when it was still ACCFA. However,
AWA petitioned that they obtain sole bargaining rights the growing complexities of modern society have
with ACA. While this petition was not yet decided rendered the classification of the governmental
upon, EO 75 was also passed which placed ACA functions as unrealistic, if not obsolete. Ministerial and
under the Land Reform Project Administration. governmental functions continue to lose their well-
Notwithstanding the latest legislation passed, the trial defined boundaries and are absorbed within the
court and the appellate court ruled in favor of ASA and activities that the government must undertake in its
AWA.  sovereign capacity if it to meet the increasing social
challenges of the times and move towards a greater
ISSUE: W/N ACA is a government entity socialization of economic forces.

YES.

It was in furtherance of such policy that the Land


Reform Code was enacted and the various agencies,
the ACA among them, established to carry out its
purposes. There can be no dispute as to the fact that
the land reform program contemplated in the said
Code is beyond the capabilities of any private
enterprise to translate into reality. It is a purely
governmental function, no less than, the establishment
and maintenance of public schools and public
hospitals. And when, aside from the governmental
objectives of the ACA, geared as they are to the
implementation of the land reform program of the
State, the law itself declares that the ACA is a
government office, with the formulation of policies,
plans and programs vested no longer in a Board of
Governors, as in the case of the ACCFA, but in the
National Land Reform Council, itself a government
instrumentality; and that its personnel are subject to
Civil Service laws and to rules of standardization with
respect to positions and salaries, any vestige of doubt

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