Case Digest (G.R. No. 108031)
Facts:
Development Bank of the Philippines v. National Labor Relations Commission and Leonor A. Ang, G.R. No. 108031, March 01, 1995, First Division, Bellosillo, J., writing for the Court.
Petitioner Development Bank of the Philippines (DBP) was mortgagee of the plant facilities and equipment of Tropical Philippines Wood Industries, Inc. (TPWII). Private respondent Leonor A. Ang began working for TPWII on March 21, 1977 and later became Personnel Officer. In September 1983 DBP foreclosed TPWII’s plant properties; TPWII nevertheless continued operations intermittently until January 1986 when DBP took possession of the foreclosed properties and the company thereafter ceased operations. Ang was verbally terminated on April 15, 1986.
On December 14, 1987 Ang filed a complaint with the Labor Arbiter against TPWII, its General Manager, and DBP seeking separation pay, 13th month pay, vacation and sick leave pay, salaries and allowances. The Labor Arbiter found TPWII primarily liable for separation pay and vacation/sick leave pay (wage and 13th-month claims had been paid after filing) and absolved the General Manager. The Arbiter held DBP subsidiarily liable should TPWII fail to satisfy the judgment, reasoning that under Article 110 of the Labor Code workers enjoy preference over mortgagees; the Arbiter relied on earlier Supreme Court authority (e.g., PNB v. Delta Motor Workers Union).
On November 16, 1992 the National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s decision. DBP sought relief from the Supreme Court, alleging grave abuse of discretion by the NLRC in applying Article 110 despite the absence of any formal declaration of ban...(Pro-only)
Issues:
- Did the NLRC commit grave abuse of discretion in applying Article 110 of the Labor Code absent any formal declaration of bankruptcy or judicial liquidation of TPWII?
- Is a declaration of bankruptcy or judicial liquidation required before the worker’s preference under Article 110 of the Labor...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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