G.R. No. 107487 & G.R. No. 107902, September 29, 1997.
THE MANILA BANKING CORPORATION (“Manilabank”) and ARNULFO B. AURELLANO 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 19 other Senior Officers similarly situated; HORACE REYES and 14 other Senior Managers similarly situated; AURORA VILLACERAN and 34 others Assistant Managers similarly situated; CONSUELO RIZARRI, EMERENCIANA SAMSON, BRENDA C. BERMUDEZ, FLORYPEE ABRIGO, EMMA BALDERAMA, and 211 other Junior Officers similarly situated, respondents.

FACTS

On June 5, 1984, petitioner Manila Banking Corporation (Manilabank) was placed under comptrollership by the Central Bank due to financial distress and liquidity problems. On May 22, 1987, the Monetary Board issued Resolution No. 505 prohibiting Manilabank from doing business and placing it under receivership due to insolvency. The receiver terminated the employment of about 343 officers and managers (private respondents), who were paid their separation/retirement benefits. On November 11, 1988, the Monetary Board issued Resolution No. 1003 ordering the liquidation of Manilabank. Private respondents filed a complaint with the NLRC claiming entitlement to various additional benefits (wage increases, Christmas bonuses, mid-year bonuses, profit sharing, car/travel plans, etc.) from 1984 until their termination, alleging these were based on the bank’s practice, policy, and tradition which ripened into vested rights. Manilabank argued the benefits were management prerogatives and could not be granted due to its financial distress. The Labor Arbiter awarded the claims totaling P193,338,212.33 plus interest and attorney’s fees. The NLRC affirmed with modifications. Petitioners filed these certiorari petitions challenging the NLRC’s orders and resolutions.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the Labor Arbiter’s decision awarding private respondents’ claims for various benefits.

RULING

The Supreme Court partially granted G.R. No. 107902 and dismissed G.R. No. 107487 . The Court held that the grant of bonuses is a management prerogative, not a demandable and enforceable obligation, unless it is given as an additional compensation which the employer agreed to give without conditions. The Court found that the benefits claimed (wage increases, Christmas bonus, mid-year bonus, profit sharing) were not part of the employees’ salary or part of a collective bargaining agreement, and their grant depended on the company’s financial capability. Given Manilabank’s financial distress and eventual insolvency, it was not in a position to grant these benefits. However, the Court ruled that the claims for longevity pay, loyalty bonus, medical/dental/optical benefits, uniform allowance, and the deducted 1/2 month 1987 Christmas bonus from retirement benefits should be granted as these were benefits promised by the bank and had become part of the employees’ regular compensation. The claims for travel plan, car plan, and gasoline allowance for senior officers and managers were denied as these were given only to certain officials as privileges. The case was remanded to the Labor Arbiter for proper computation of the monetary awards for the granted benefits. G.R. No. 107487 was dismissed as moot.