G.R. No. 107487 & 107902, September 29, 1997.
THE MANILA BANKING CORPORATION (“Manilabank”) and ARNULFO B. AURELLANO/AURELIANO in his capacity as Statutory Receiver of Manilabank, petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION, VICTOR L. MENDOZA, RODOLFO VE. TIMBOL, RUBEN G. ASEDILLO, FLORINDA S. DAYRIT, and other similarly situated officers and employees, respondents.

FACTS

The case involves consolidated petitions filed by The Manila Banking Corporation (“Manilabank”) and its Statutory Receiver against the National Labor Relations Commission and various groups of its former officers and employees. The bank has been under the controllership of the Central Bank since 1984 due to its precarious financial condition.

ISSUE

The primary issue addressed in the concurring opinion is the proper interpretation and application of Article 110 of the Labor Code, as amended by Republic Act No. 6715 , regarding worker preference in cases of bankruptcy or liquidation.

RULING

Justice Vitug, in his concurring opinion, agrees with the ponencia that it is unjust to order Manilabank to share profits where there are evidently no profits. He elaborates on Article 110 of the Labor Code, explaining that the amendment expanded worker preference to cover not only unpaid wages but also other monetary claims, which are to be paid in full before claims of the government and other creditors. However, he emphasizes that this right of preference does not constitute a lien on specific properties but is a preference of credit in application. The opinion clarifies that for an orderly settlement, all creditors must be convened, their claims ascertained and inventoried, and preferences determined in judicial proceedings. This ensures the legal scheme of classification, concurrence, and preference of credits under the Civil Code, Insolvency Law, and Labor Code is preserved in harmony. Furthermore, the right finds application only upon its presentation in distribution proceedings and should generally be given prospective effect to avoid constitutional issues on impairment of contracts.