Philippine National Construction Corporation v. Felix Erece, Jr.

 

Philippine National Construction Corporation v. Felix Erece, Jr.

G.R. No. 235673

July 22, 2024

 

FACTS:

                The respondents filed their complaint with the Labor Arbiter for payment of the subject allowance, moral and exemplary damages, and attorney’s fees. Respondents averred that PNCC is not a government-owned and controlled corporation but a private corporation organized under the Corporation Code; hence, their claims for the allowance, which have supposedly ripened into company policy, are subject to Article 100 of the Labor Code on non-diminution of benefits. Meanwhile, PNCC asserted that it is a GOCC; hence, it is subject to COA audit. It explained that the subject allowance referred to a fixed monthly cash consumption subsidy which may be used either for the hiring of a personal driver or for fuel consumption. The LA granted the complaint. The NLRC reversed the LA ruling. The CA remanded the case to the NLRC for resolution of the appeal.

ISSUE:

1.       Whether or not the CA correctly determined that the LA has jurisdiction over respondent’s money claims;

2.       Whether or not the grant of the subject allowance has ripened into company policy and thus, cannot be diminished or withdrawn by PNCC under Article 100 of the Labor Code.

HELD:

1.       Yes. The COA's jurisdiction over money claims against the government is provided in Section 26 of the Government Auditing Code, which states that the COA has general jurisdiction over the settlement of all debts and claims of any sort due from or owing to the Government, including GOCCs. Likewise, under the 2009 COA Rules of Procedure, Rule II, Section l(b) the COA has general jurisdiction over the settlement of money claims due from or owing to any government agency, while Rule VIII, Section 1 states that the Commission Proper has original jurisdiction over money claims against the Government.

 

Relevantly, in Taisei Shimizu Joint Venture v. Commission on Audit, the Court stated that "there is nothing in the Constitution, laws, or even the COA rules expressly granting the COA original and exclusive jurisdiction over money claims due from or owing to the government. "Instead, when it comes to money claims against the government, several laws provide that the COA has concurrent jurisdiction with other tribunals. Further, when a special law, such as Executive Order No. 1008, grants to another tribunal the exclusive and original jurisdiction over a money claim against the government, the special law must prevail over the Government Auditing Code and the 2009 COA Rules of Procedure. Similar to Taisei Shimizu Joint Venture, exclusive jurisdiction over the money claims of PNCC's employees for unpaid wages and benefits is expressly vested in the Labor Arbiter. Indeed, the Court has ruled that

pursuant to the 1987 Constitution, Article IX-B, Section 2(1), only GOCCs with original charters are governed by the civil service, while GOCCs without original charters are governed by the Labor Code. Certainly, as a non-chartered GOCC, PNCC is governed by the Labor Code.  In tum, the Labor Code, Article 217 categorically states that the Labor Arbiter has the exclusive and original jurisdiction over an employee's money claims exceeding PHP 5,000.00 against his or her employer.

 

2.       No. A mistaken grant of benefits cannot ripen into a company policy; instead, it may be diminished or eliminated for correction and conformity with the law. The grant of the subject allowance cannot ripen into company policy because it violates the rules promulgated by the COA on the grant of transportation allowance. Thus, PNCC may withdraw the subject allowance at any time. Although the employees of a GOCC without an original charter and organized under the Corporation Code are covered by the Labor Code, they remain subject to other applicable laws on compensation and benefits for government employees. Otherwise said, the application of the Labor Code to employees of GOCCs without original charters, such as PNCC, is further qualified by other laws in connection with the terms and conditions of their employment. Certainly, GOCCs, such as PNCC, are subject to State regulation on income and the amount of money available for their operating expenses, including labor costs, because when it comes to government employees, it is the legislature that fixes the terms and conditions of their employment. Thus, the exercise of management prerogative by government corporations are limited by the provisions of law applicable to them. In fact, RA 10149 has removed the authority of all GOCCs, with or without original charters, to determine their own compensation system.