G.R. No. 235673 - Philippine National Construction Corporation vs. Felix M. Erece, Jr. et al.

On November 22, 1966, Philippine National Construction Corporation (PNCC) was incorporated as Construction Development Corporation of the Philippines (CDCP) under the Corporation Code.
Engaged in construction, planning, engineering, and urban development.
CDCP incurred debts to private and government financial institutions (GFIs) and failed to pay them upon maturity.
By President Marcos' Letter of Instruction No. 1295, GFIs converted their loans into equity shares, becoming majority stockholders; CDCP turned into a government-acquired asset corporation.
Renamed PNCC to reflect government ownership; PNCC continued operations but suffered losses.

In 2011, PNCC implemented retrenchment and laid off respondents, who executed quitclaims.
Respondents were rehired in executive and managerial positions due to operational knowledge.
Positions:

Felix M. Erece, Jr.: Assistant Vice-President (AVP), Head, Personnel Services
Janice Day E. Alejandrino: Senior Vice-President, Head, Administration and Property Management
Miriam M. Pasetes: Vice-President (VP), Treasurer
Yolanda C. Mortel: VP, Head, Materials Management
Henry B. Salazar: AVP, Legal Officer

Starting 2011, respondents received a monthly "subject allowance" for either a personal driver or fuel consumption.
Allowance granted pursuant to Resolution No. BD-029-1996 issued May 28, 1996 by PNCC’s Board.

COA Resident Auditor issued Audit Observation Memoranda (AOM) Nos. 13-019 (2012) and 14-010 (2013).
Findings:

The allowance comprised a fixed monthly gasoline allowance (PHP 12,000–20,000) plus transportation reimbursements.
The allowance was disadvantageous amid PNCC’s financial losses.
Recommended review of car plan policies and return of PNCC service vehicles.
Recommended withdrawal of the allowance as disallowable in audit.

COA’s 2013 audit report reiterated these findings and warned of issuing notice of disallowance if allowance continued.
In September 2014, PNCC ceased granting the allowance without any notice of disallowance from COA.

Respondents filed a Complaint with the Labor Arbiter (LA) for payment of driver’s allowance, moral and exemplary damages, and attorney’s fees.
Respondents argued PNCC is a private corporation (citing Cuenca v. Atas and PNCC v. Pabion), so Labor Code Article 100 on non-diminution of benefits applies.
They maintained the allowance was for a driver and COA wrongly characterized it as gasoline allowance.
They claimed withdrawal was unilateral since no COA notice of disallowance was issued.
PNCC claimed it is a GOCC (citing Strategic Alliance Development Corp. v. Radstock Securities Ltd.) subject to COA audit.
PNCC argued the allowance was a monthly cash subsidy for fuel or driver, withdrawn due to COA audit findings.
PNCC contended COA had jurisdiction, not the Labor Arbiter.

LA ruled in favor of respondents, held allowance ripened into company policy, and ordered PNCC to pay allowance monthly.
PNCC appealed to NLRC.
NLRC reversed LA and dismissed complaint for lack of jurisdiction, holding PNCC is a GOCC subject to COA jurisdiction.
NLRC noted Article 100 does not apply as withdrawal was prompted by COA audit findings.

CA granted respondents’ Petition for Certiorari, set aside NLRC decision, and remanded case for resolution of the appeal.
CA ruled Labor Code governs respondents’ claims since PNCC is a GOCC without original charter organized under Corporation Code.
Held LA has original and exclusive jurisdiction per Article 224 of Labor Code.
PNCC’s motion for reconsideration was denied.

PNCC filed Petition for Review on Certiorari.
PNCC argued COA has jurisdiction as allowance withdrawal was prompted by COA audit findings.
PNCC insisted withdrawal was not unilateral.
Respondents argued PNCC is a private corporation; no COA notice of disallowance exists so withdrawal was unilateral and violates Article 100 of Labor Code.

Whether CA correctly ruled that Labor Arbiter has jurisdiction over respondents’ money claims.
Whether the grant of the subject allowance ripened into company policy which cannot be diminished or withdrawn by PNCC under Article 100 of the Labor Code.