Case Digest (G.R. No. 248401) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In G.R. No. 248401, decided on June 23, 2021, petitioners Philippine National Construction Corporation (PNCC) and Atty. Luis F. Sison sought to reverse the Court of Appeals’ July 12, 2018 Decision and July 15, 2019 Resolution. PNCC, originally incorporated in 1966 as the Construction Development Corporation of the Philippines (CDCP) under the Corporation Code, was granted tollway franchises by Presidential Decrees No. 1113 (1977) and No. 1894 (1983). In 1983, Letter of Instruction No. 1295 converted CDCP’s unpaid obligations to government financing institutions (GFIs) into equity, making the GFIs majority shareholders and prompting the renaming to PNCC. The 1986 privatization program placed PNCC equity under the Asset Privatization Trust, and Executive Order No. 331 (2004) attached PNCC to the Department of Trade and Industry. From 1992 to 2012 PNCC employees received a mid-year bonus under successive Collective Bargaining Agreements (CBAs). In 2013, PNCC’s counsel, the Office o Case Digest (G.R. No. 248401) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Incorporation and Evolution
- 1966: Construction Development Corporation of the Philippines (CDCP) incorporated under the Corporation Code.
- March 31, 1977: Presidential Decree No. 1113 granted CDCP a 30-year franchise to construct, operate, and maintain North and South Luzon Tollways.
- December 1983: Presidential Decree No. 1894 amended PD 1113 to include the Metro Manila Expressway.
- Government Equity and Name Change
- February 23, 1983: Letter of Instruction No. 1295 directed government financing institutions (GFIs) to convert CDCP’s unpaid obligations into equity, making GFIs majority stockholders.
- CDCP amended its Articles of Incorporation and By-Laws and changed its corporate name to Philippine National Construction Corporation (PNCC).
- 1986: Presidential Proclamation No. 50 created the Asset Privatization Trust (APT) as trustee of GFI equity; later renamed Privatization and Management Office (PMO).
- Executive Order No. 331 placed PNCC under the Department of Trade and Industry (DTI).
- Employee Bonus Practice
- 1992–2012: PNCC granted mid-year bonuses every May 15 pursuant to a Collective Bargaining Agreement (CBA) and continued the practice after CBA expiration.
- April 30, 2013: PNCC’s president sought OGCC opinion on releasing the 2013 mid-year bonus under PD 1597 and RA 10149.
- May 10, 2013: OGCC advised securing Governance Commission for GOCCs (GCG) approval per Section 8, RA 10149.
- June 20, 2013: GCG refused to forward PNCC’s request to the President, deeming the grant legally infirm; PNCC withheld the 2013 bonus.
- Labor Proceedings
- Employees filed before NLRC a complaint for non-payment of mid-year bonus and diminution of benefits.
- January 29, 2014: Labor Arbiter ordered PNCC to pay 2013 and future mid-year bonuses (one-month salary) for violating Article 100 non-diminution clause.
- June 6, 2014: NLRC affirmed, holding PNCC a private corporation covered by the Labor Code, not subject to PD 1597 or RA 10149.
- December 19, 2014: NLRC denied PNCC’s motion for reconsideration; employees obtained execution pending appeal.
- Appellate Proceedings
- CA-G.R. SP No. 139311 & No. 140997 consolidated; CA dismissed No. 140997 for lack of reconsideration motion.
- July 12, 2018: Court of Appeals Decision in No. 139311 affirmed PNCC as private corp, held Labor Code coverage, and ruled PNCC violated non-diminution clause.
- July 15, 2019: CA denied PNCC’s motion for reconsideration.
- Present Petition
- PNCC petitioned before the Supreme Court, arguing it is a GOCC under Sections 3(o),(p) RA 10149, not governed by Labor Code, and may lawfully withhold bonus.
- Respondents countered that PNCC remains private under PNCC v. Pabion (1999), covered by Labor Code; long-standing practice matured into non-diminishable benefit.
Issues:
- Corporate Status
- Is PNCC a private corporation or a government-owned and controlled corporation (GOCC)?
- Employment Law Coverage
- Are PNCC employees governed by the Labor Code or by Civil Service Law?
- Applicability of RA 10149
- Is PNCC subject to RA 10149’s national compensation and position classification plan and PD 1597?
- Non-Diminution Clause
- Did PNCC’s withholding of the 2013 mid-year bonus violate Article 100 of the Labor Code given the enactment of RA 10149?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)