GR 242827; (September, 2019) (Digest)
March 11, 2026GR L 5041; (January, 1953) (Digest)
March 11, 2026G.R. No. 117240 October 2, 1997
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and PNCC TOLL OPERATIONS EMPLOYEES AND WORKERS UNION (PNCC-TOEWU), respondents.
FACTS
Petitioner Philippine National Construction Corporation (PNCC) and respondent PNCC Toll Operations Employees and Workers Union (PNCC-TOEWU) entered into a Collective Bargaining Agreement (CBA) effective from February 1, 1990, to January 30, 1995. The CBA provided for the grant of a mid-year bonus of one month’s basic salary on or before June 1 each year to employees covered by the bargaining unit as of June 1 of the covered year. Due to financial difficulties, PNCC implemented a Voluntary Separation Program between April and May 1991. The individual complainants (employees) availed of this program, signed individual quitclaims, and received separation benefits equivalent to one-and-a-half month’s pay for every year of credited service plus a 30-day advance salary. Consequently, PNCC did not grant them the mid-year bonus for 1991, as they were no longer considered employees as of June 1, 1991. The aggrieved employees filed a claim for non-payment of the mid-year bonus. The Labor Arbiter ruled in their favor and ordered PNCC to pay the bonus. The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s decision. PNCC filed the instant petition.
ISSUE
Whether the complainants (employees who voluntarily resigned under the separation program) are entitled to the mid-year bonus provided in the CBA.
RULING
No. The Supreme Court granted the petition and set aside the decisions of the NLRC and the Labor Arbiter. The Court ruled that the complainants were not entitled to the mid-year bonus. By voluntarily resigning under the separation program and executing quitclaims, the employer-employee relationship between the complainants and PNCC ceased as of May 1991. Since the CBA required that an employee be “covered by the bargaining unit as of June 1” to be entitled to the bonus, the complainants no longer met this condition. The quitclaims executed were valid and binding compromise agreements, estopping the employees from filing further money claims, as the voluntariness of the quitclaims was never put in issue. Furthermore, a bonus is a gratuity or act of liberality, not a demandable right, and its grant is a management prerogative. The mid-year bonus could not be considered an established business practice of PNCC as it had been granted only once (in 1990). Given PNCC’s precarious financial situation and the fact that the separation benefits received were more valuable than the mid-year bonus, the complainants were not deprived of any entitlement.
