Case Summary (G.R. No. 248401)
Key Dates
1966: Incorporation as Construction Development Corporation of the Philippines (CDCP).
1977 & 1983: Grants of tollway franchises under PD 1113 and PD 1894.
1983: LOI 1295 debt-to-equity conversion makes government financing institutions majority shareholders.
1986: Creation of Asset Privatization Trust (later PMO) under PP 50.
1992–2012: PNCC grants annual mid-year bonus under a collective bargaining agreement (CBA).
May–June 2013: PNCC seeks and is denied approval from the Governance Commission for GOCCs (GCG) to grant the mid-year bonus.
January 2014: Labor Arbiter orders payment of 2013 mid-year bonus.
June & December 2014: NLRC affirms and denies reconsideration.
July 2018 & July 2019: Court of Appeals decisions affirming NLRC and denying PNCC’s motion for reconsideration.
June 23, 2021: Supreme Court decision date (applying the 1987 Constitution).
Applicable Law
1987 Philippine Constitution (Article IX-B, Section 2(1) on coverage of civil service).
Labor Code of the Philippines (Article 100, non-diminution of benefits).
Presidential Decree No. 1597 (further rationalizing national compensation and position classification system).
Republic Act No. 10149 (establishing Compensation and Position Classification System for all GOCCs).
Antecedents
PNCC began as CDCP under the Corporation Code. Subsequent government interventions—franchise grants, debt-to-equity conversions, privatization trust creation, and departmental supervision—led to majority government ownership. Despite CBA expiry, PNCC continued granting mid-year bonuses until 2012. In 2013, PNCC’s legal counsel (OGCC) and the GCG advised that grant of bonuses required presidential approval under PD 1597 and RA 10149 and could be abrogated without violating non-diminution, prompting PNCC to withhold the 2013 bonus.
Labor Arbiter’s Ruling
The Labor Arbiter found that the uninterrupted twenty-year practice solidified the mid-year bonus into a vested benefit under Article 100 of the Labor Code. PNCC was ordered to grant the 2013 bonus and to continue thereafter.
NLRC’s Ruling
The NLRC affirmed the Labor Arbiter and held that PNCC remained a private corporation despite majority government shareholding. It concluded that PNCC employees were covered by the Labor Code and that the bonus grant did not require presidential approval under PD 1597 and RA 10149.
Court of Appeals’ Ruling
In CA-G.R. SP No. 139311, the Court of Appeals:
- Affirmed PNCC’s private-corporation status under precedents (PNCC v. Pabion; Cuenca v. Altas).
- Applied Article 100’s non-diminution rule to compel payment of the 2013 bonus.
A separate petition (SP No. 140997) concerning execution pending appeal was dismissed for procedural lapse.
Issues
- Whether PNCC is a private corporation or a government-owned and controlled corporation (GOCC).
- Whether PNCC employees are covered by the Labor Code or by civil service laws.
- Whether PNCC is governed by RA 10149’s compensation and classification system.
Supreme Court Ruling
- PNCC is a non-chartered GOCC. Despite incorporation under the Corporation Code, majority government ownership and Executive Order 331 placing PNCC under the Department of Trade and Industry confirm GOCC status.
- Non-chartered GOCCs are exempt from civil service laws under the 1987 Constitution (Ar
Case Syllabus (G.R. No. 248401)
Case Background
- Petition for certiorari under G.R. No. 248401, June 23, 2021 seeks to reverse:
• CA Decision (July 12, 2018) affirming NLRC that PNCC is not a GOCC and ordering release of 2013 mid-year bonus.
• CA Resolution (July 15, 2019) denying reconsideration. - Core question: legality of PNCC’s refusal to grant the 2013 mid-year bonus and its corporate status.
Corporate and Franchise Antecedents
- 1966: Incorporated as Construction Development Corporation of the Philippines (CDCP) under the Corporation Code.
- 1977 (PD 1113): 30-year franchise for North and South Luzon Toll Expressways.
- 1983 (PD 1894): Inclusion of Metro Manila Expressway.
- 1983 (LOI 1295): GFIs convert CDCP’s unpaid obligations into equity—GFIs become majority shareholders.
- Post-conversion: CDCP renamed PNCC to reflect government equity.
- 1986 (PP 50): Creation of Asset Privatization Trust (now PMO) as trustee of GFI shares in PNCC.
- EO 331: PNCC placed under Department of Trade and Industry (DTI).
Granting of Mid-Year Bonus (1992–2012) and 2013 Opinion Request
- 1992: Mid-year bonuses began under a CBA, continued uninterrupted past expiration until 2012.
- April 30, 2013: PNCC CEO sought OGCC opinion on releasing 2013 bonus under PD 1597.
- May 10, 2013: OGCC advised to secure Governance Commission (GCG) approval per RA 10149 § 8.
- May 29, 2013: PNCC formally requested GCG approval.
- June 20, 2013: GCG declined to forward request to the President—citing legal infirmity and non-application of non-diminution rule.
- PNCC notified employees no bonus would be released; employees filed NLRC complaint for non-payment and diminution of benefits.
Labor Arbiter Decision
- January 29, 2014: Arbiter orders PNCC to pay 2013 mid-year bonus and every subsequent year—one month’s salary—citing Article 100