Villafuerte vs. DISC Contractors

A non-chartered government-owned and controlled corporation governed by the Labor Code may not unilaterally grant fringe benefits such as midyear bonus without the President's prior approval pursuant to Presidential Decree No. 1597 and Republic Act No. 10149, and the nondiminution rule under Article 100 of the Labor Code does not compel continued grant of benefits whose original authorization was legally infirm. However, once employees are adjudged regular employees, benefits that the employer judicially admitted were reserved for regular employees automatically vest without need of further proof, and the employer cannot change its theory on appeal to require such proof.

Disc Contractors, Builders and General Services, Inc. originated as Dasmariñas Industrial and Steelworks Corporation, a wholly-owned subsidiary of the Philippine National Construction Corporation (PNCC), established in 1973 under the Systems Construction Group. After a series of corporate reorganizations and mergers culminating in a 2006 quasi-reorganization approved by the Securities and Exchange Commission, the entity was renamed Disc Contractors. The eleven individual petitioners—Susan B. Villafuerte, Elenita P. Eroy, Larraine L. Abellar, Aida S. Santos, Jocelyn D. Lino, Reggie Ley L. Dela Cruz, Cristian I. Perua, Arthur O. Pendilla, Antonio M. Cabrera, Dionisio C. Quino, and George B. Purugganan—were all former employees of Disc Contractors occupying various positions for several years, initially engaged as project or contractual employees and later as probationary and then regular employees, until their separation on September 30, 2015 due to the company's cessation of operations. The company had granted a midyear bonus patterned after PNCC's midyear bonus from 1999 until 2012, when it discontinued the practice upon the advice of the Governance Commission for Government-Owned and Controlled Corporations (GCG).

Disc Contractors, Builders and General Services, Inc. traces its corporate lineage to Dasmariñas Industrial and Steelworks Corporation, a wholly-owned subsidiary of the Philippine National Construction Corporation (PNCC) established in 1973 under the Systems Construction Group. Through successive reorganizations—including the 1979 separation of the Systems Construction Group as Dasmariñas Steelworks Corporation, the establishment of Dasmariñas Industrial Corporation in the same year, their 1981 merger into Dasmariñas Industrial and Steelworks Corporation, and a 2006 quasi-reorganization approved by the Securities and Exchange Commission—the entity was ultimately renamed Disc Contractors. Its main line of business was the manufacture of prefabricated steel structures and the manufacturing, assembly, and repowering of heavy construction equipment for PNCC's various projects.

The eleven individual petitioners—Villafuerte, Eroy, Abellar, Santos, Lino, Dela Cruz, Perua, Pendilla, Cabrera, Quino, and Purugganan—were all former employees of Disc Contractors, occupying positions such as materials engineer, accountant, bookkeeper, cost engineer, clerk, project engineer, supervising engineer, field engineer, and driver. Their certificates of employment document a consistent pattern: each was initially hired as a project or contractual employee, often across multiple successive contracts with no gap in service, and was later re-engaged as a probationary employee on May 21, 2013, eventually attaining regular status on November 21, 2013, until their separation on September 30, 2015 due to the cessation of the company's operations. Throughout their tenure as project or contractual employees, they performed services necessary and indispensable to the company's business, working from project to project or contract to contract and being rehired without interruption.

On May 28, 1999, the Board of Directors of Disc Contractors passed Resolution No. BD-007-1999 approving the grant of a midyear bonus to all entitled employees, officers, board members, and the secretariat, patterned after PNCC's midyear bonus and given every 15th day of May. This practice continued until 2012. Starting 2013, however, Disc Contractors discontinued the grant upon the advice of the Governance Commission for Government-Owned and Controlled Corporations, which informed the company that, as a government-owned and controlled corporation, the grant of the bonus was bereft of legal basis without the President's prior approval as mandated by Presidential Decree No. 1597 and Republic Act No. 10149. No midyear bonuses were given in 2013, 2014, or 2015.

On April 7, 2015, the employees wrote to Atty. Luis F. Sison, President of Disc Contractors, requesting the release of their 2013 midyear bonus. Atty. Sison denied the request by hand-written notation, stating that certain unspecified procedural requirements had to be fulfilled first. Aggrieved by the denial—which did not disclose what procedural requirements were necessary or who was charged with complying with them—the employees filed a complaint on September 29, 2015, later amended, for underpayment of separation pay, nonpayment of midyear bonus, vacation leave, sick leave, anniversary bonus, birthday leave, rice subsidy, uniform allowance, and health maintenance organization benefits, with a prayer for moral damages, exemplary damages, and attorney's fees. The labor arbiter found the employees to be regular employees from their initial hiring, awarded the claimed benefits, and held Disc Contractors liable for damages. The NLRC modified the awards, reducing the separation pay rate and deleting several benefits. The Court of Appeals affirmed the NLRC. Both parties elevated the matter to the Supreme Court.

• Separation Pay Rate (Employees): Villafuerte et al. argued that the Court of Appeals erred in affirming the NLRC's reduction of separation pay to 50% of basic salary per year of service, because Disc Contractors voluntarily paid separation pay at 100% for the period May 21, 2013 to September 30, 2015, and the NLRC and Court of Appeals cannot prohibit the employer from granting benefits more favorable than the statutory minimum; accordingly, the separation pay covering the period from initial hiring until May 20, 2013 must also be computed at 100%.

• Midyear Bonus Coverage (Employees): Villafuerte et al. claimed entitlement to midyear bonus from their initial hiring until separation, reasoning that because they are entitled to separation pay for the entire period of employment, they must likewise be entitled to the midyear bonus for the same period.

• Vacation and Sick Leave (Employees): Villafuerte et al. asserted that they were paid vacation and sick leave benefits only for the period May 21, 2013 to September 30, 2015, and that as adjudged regular employees, they are entitled to the regular 15 days vacation leave and 15 days sick leave from the date of initial hiring until separation.

• Anniversary Bonus, Birthday Leave, and Uniform Allowance (Employees): Villafuerte et al. contended that no evidence was necessary to prove entitlement to these benefits because the company itself claimed they were reserved for regular employees; since they were adjudged regular employees, the benefits should automatically vest, and in any event, a PNCC memorandum granted these benefits to all employees of its subsidiaries.

• Moral and Exemplary Damages (Employees): Villafuerte et al. argued that the company's total indifference, deliberate refusal to pay just claims, use of deceptive employment agreements to prevent regular status, and concealment of material documents justified the award of moral and exemplary damages.

• GOCC Status (Company): Disc Contractors contended that the Court of Appeals erred in not finding grave abuse of discretion in the NLRC's grant of midyear bonus, rice subsidy, HMO benefits, and attorney's fees, insisting that PNCC is a government-owned and controlled corporation by virtue of Letter of Instruction No. 1295 and Republic Act No. 10149, and that Disc Contractors, as its wholly-owned subsidiary, is likewise a GOCC bound by GCG issuances that did not recommend disbursement of midyear bonus absent presidential approval.

• Separation Pay Rate (Company): Disc Contractors maintained that the NLRC correctly computed separation pay at 50% and deducted amounts already received, arguing that while nothing prohibits employers from acting with benevolence, nothing compels benevolence absent a contractual agreement.

• Prescription of Midyear Bonus (Company): Disc Contractors argued that Villafuerte et al. never claimed midyear bonus prior to 2013 before the labor tribunals, their own position paper admitting the complaint arose from the 2013 discontinuance, and that any claim for midyear bonus prior to 2013 had already prescribed.

• Other Benefits (Company): Disc Contractors insisted that the employees never denied receiving vacation and sick leave pay, failed to show any contractual agreement binding the company to give anniversary bonus, birthday leave, and uniform allowance, and that no bad faith or malice was established to warrant moral and exemplary damages.

• Rice Subsidy and HMO (Company): Disc Contractors argued that the Certification of Benefits could not serve as basis for granting rice subsidy and HMO benefits prior to May 21, 2013 because the document pertained only to the period May 21, 2013 to September 30, 2015, and absent any document or agreement for the grant of these nonstatutory benefits before that date, the same could not be awarded.

• Attorney's Fees (Company): Disc Contractors contended that the grant of attorney's fees lacked factual and legal basis because there was no finding that it unlawfully withheld wages or acted with malice.

• GOCC Status (Employees' Counter): Villafuerte et al. countered that PNCC is not a government-owned and controlled corporation, citing Pasion, Cuenca vs. Hon. Atas and PNCC vs. Erece, Jr., and that as a wholly-owned subsidiary of PNCC, Disc Contractors is likewise a private corporation that cannot invoke Republic Act No. 10149 to avoid its obligation to grant midyear bonus.

• Nondiminution (Employees' Counter): Villafuerte et al. argued that having deliberately, continuously, and voluntarily granted and paid the annual midyear bonus for 14 years through board resolutions and memoranda, the same could not be peremptorily withdrawn without violating Article 100 of the Labor Code, and as regular employees, they were entitled to the bonus from initial hiring until separation in 2015.

• Rice Subsidy, HMO, and Attorney's Fees (Employees' Counter): Villafuerte et al. maintained that the grants of rice subsidy, HMO benefits, and attorney's fees were legally justified.

• Corporate Status: Whether Disc Contractors is a government-owned and controlled corporation or a private corporation, and what legal regime governs its employee benefits.

• Midyear Bonus (2013–2015): Whether Disc Contractors violated the nondiminution rule under Article 100 of the Labor Code when it discontinued the midyear bonus starting 2013.

• Midyear Bonus (Pre-2013): Whether Villafuerte et al. are entitled to midyear bonus for the period prior to 2013.

• Separation Pay Rate: Whether the separation pay covering the period from the employees' initial hiring until May 20, 2013 must be computed at 100% or 50% of their monthly salary per year of service.

• Vacation and Sick Leave: Whether Villafuerte et al. are entitled to vacation and sick leave benefits from the time of their initial hiring until May 20, 2013.

• Anniversary Bonus, Birthday Leave, and Uniform Allowance: Whether Villafuerte et al. are entitled to anniversary bonus, birthday leave pay, and uniform allowance.

• Rice Subsidy and HMO Benefits: Whether Villafuerte et al. are entitled to rice subsidy and HMO benefits for the period prior to May 21, 2013.

• Moral and Exemplary Damages: Whether Disc Contractors is liable for moral and exemplary damages.

• Attorney's Fees: Whether Villafuerte et al. are entitled to attorney's fees.

• Prescription: Whether the monetary claims of Villafuerte et al. are barred by prescription, and what prescriptive periods apply.

• Corporate Status: Disc Contractors is a non-chartered government-owned and controlled corporation, governed by the Labor Code but subject to presidential compensation standards under Presidential Decree No. 1597 and Republic Act No. 10149.

• Midyear Bonus (2013–2015): No. Disc Contractors did not violate the nondiminution rule when it discontinued the midyear bonus starting 2013, because the prior grants lacked the President's approval required by Section 5 of Presidential Decree No. 1597 and Section 10 of Republic Act No. 10149, and GOCC funds are public funds that cannot be disbursed without legal authorization.

• Midyear Bonus (Pre-2013): No. The employees' own position paper admitted receiving midyear bonus prior to 2013, and their complaint arose only from the 2013 discontinuance; any claim for pre-2013 midyear bonus has prescribed.

• Separation Pay Rate: One-half month pay per year of service for the period from initial hiring until May 20, 2013, and one month pay per year of service from May 21, 2013 until September 30, 2015, because Article 298 of the Labor Code sets the minimum rate and generosity cannot be compelled, but the employer's voluntary grant of one month pay for the latter period may not be reduced.

• Vacation and Sick Leave: Yes. The employees are entitled to 15 days vacation leave and 15 days sick leave from initial hiring until May 20, 2013, because the Certification of Benefits shows that regular employees received more than the statutory 5-day service incentive leave, and the employer failed to prove payment of these benefits for the earlier period.

• Anniversary Bonus, Birthday Leave, and Uniform Allowance: Yes. The employees are entitled to these benefits because Disc Contractors judicially admitted in its Supplemental Position Paper that these benefits were reserved for regular employees, and once the employees were declared regular, the benefits automatically vested without need of further proof.

• Rice Subsidy and HMO Benefits: Yes. The employees are entitled to rice subsidy and HMO benefits because Disc Contractors' own declaration that regular employees are entitled to these benefits provides sufficient basis for the grant.

• Moral and Exemplary Damages: No. The employees presented no substantial evidence of bad faith, fraud, or oppressive conduct; the mere deficiency in benefits resulting from the employees' reclassification as regular employees does not prove malice.

• Attorney's Fees: Yes. The withholding of wages need not be coupled with malice or bad faith in labor cases; all that is required is that lawful wages were not paid without justification, compelling the employees to litigate.

• Prescription: The three-year prescriptive period under Article 306 of the Labor Code applies to money claims arising from employer-employee relations, while the four-year period under Article 1146 of the Civil Code applies to claims for attorney's fees; separation pay and leave benefits are not barred because the cause of action accrued upon the company's cessation of operations, but anniversary bonus, birthday leave, uniform allowance, rice subsidy, and HMO benefits are limited to the years 2013 to 2015.

• Corporate Status: The status of Disc Contractors depends on that of its parent company, PNCC. In PNCC vs. NLRC, the Court declared with finality that PNCC is a government-owned and controlled corporation, being 90.3% government-owned and placed under the Department of Trade and Industry by Executive Order No. 331. As a wholly-owned subsidiary, Disc Contractors necessarily follows PNCC's status. However, as a non-chartered GOCC incorporated under the Corporation Code, it is governed by the Labor Code, though its employees cannot negotiate economic terms of employment freely and must conform to compensation standards laid down by applicable laws, including the National Position Classification and Compensation Plan and the Compensation and Position Classification System under Republic Act No. 10149.

• Midyear Bonus (2013–2015): The labor tribunals and the Court of Appeals granted midyear bonus citing Article 100 of the Labor Code, which precludes employers from unilaterally withdrawing benefits that have ripened into company practice. However, applying PNCC vs. NLRC, which ruled that PNCC did not violate the nondiminution rule when it desisted from granting midyear bonus starting 2013 because Republic Act No. 10149 required prior presidential approval, the same reasoning applies to Disc Contractors. As a GOCC, its funds are public funds, and Section 5 of Presidential Decree No. 1597 and Section 10 of Republic Act No. 10149 impose specific requirements for lawful spending, including presidential approval for fringe benefits. The NLRC thus committed grave abuse of discretion in awarding the midyear bonus, and the Court of Appeals erred in affirming that ruling.

• Midyear Bonus (Pre-2013): The employees' own position paper before the labor arbiter stated that the company "suddenly discontinued, eliminated and terminated unilaterally the granting of the annual Mid-Year Bonus" starting 2013, from which it can be reasonably inferred that they already received the bonus for years prior to 2013. Their complaint arose from the 2013 discontinuance, not from any nonpayment before that. In any event, any claim for pre-2013 midyear bonus has prescribed under the three-year prescriptive period.

• Separation Pay Rate: The employees' status as regular employees is beyond dispute, as Disc Contractors did not question the labor arbiter's ruling on that matter. Article 298 of the Labor Code provides that in cases of closure or cessation of operations not due to serious business losses, separation pay shall be equivalent to one month pay or at least one-half month pay per year of service, whichever is higher. For the period May 21, 2013 to September 30, 2015, Disc Contractors voluntarily paid separation pay at one month pay per year of service with full knowledge that it was giving more than the law required; the Court of Appeals gravely erred in allowing the NLRC to supplant the employer's desire to accord better benefits, since Article 298 does not prohibit grants exceeding the statutory minimum. For the period from initial hiring until May 20, 2013, however, the grant of separation pay was compelled by the labor arbiter's ruling on regular employment status, not by voluntary employer action; accordingly, the statutory minimum of one-half month pay per year of service applies, because generosity cannot be compelled. The contractual completion bonus the employees already received, plus the separation pay for the May 21, 2013 to September 30, 2015 period, must be deducted from the recomputed separation pay.

• Vacation and Sick Leave: Article 95 of the Labor Code guarantees service incentive leave of at least five days with pay for employees who have rendered at least one year of service, but does not mandate separate sick leave benefits. The employer bears the burden of proving payment of wages and benefits, since employment records are solely within its custody and control. The Certification of Benefits presented by Disc Contractors covers only the period May 21, 2013 to September 30, 2015, as shown by the "Date Hired" and "Date Separated" fields. For that period, the certifications show substantial leave credits—far exceeding the 5-day statutory minimum—demonstrating that regular employees received 15 days vacation leave and 15 days sick leave per year. In contrast, the certifications issued when the employees were still project or contractual employees show only service incentive leave (labeled "SIL") with zero sick leave. Since the employees are deemed regular employees from initial hiring, Disc Contractors is liable for the unpaid 15 days vacation leave and 15 days sick leave from initial hiring until May 20, 2013, with any service incentive leave already received deducted from the differential.

• Anniversary Bonus, Birthday Leave, and Uniform Allowance: Disc Contractors' primary argument before the labor arbiter was that these benefits were reserved only for regular employees, as stated in its Supplemental Position Paper. When the labor arbiter ruled the employees were regular employees, Disc Contractors changed its theory and claimed the employees had not proven entitlement. This the Court cannot allow, because a party cannot change its theory of the case on appeal—doing so would offend due process and fair play. Under Section 4, Rule 129 of the Rules of Court, judicial admissions need no proof and are conclusive against the pleader. Disc Contractors' statement that these benefits were reserved for regular employees constitutes a judicial admission; once the employees were declared regular, the benefits automatically vested without need of further evidence. The NLRC and Court of Appeals thus committed grave abuse of discretion in requiring the employees to prove entitlement.

• Rice Subsidy and HMO Benefits: The same principle of judicial admission applies. Disc Contractors declared that regular employees are entitled to rice subsidy and HMO benefits, providing sufficient basis for the grant. The Court of Appeals correctly found the NLRC's ruling on these benefits supported by substantial evidence.

• Moral and Exemplary Damages: Moral damages require proof that the employer acted in bad faith or fraudulently, in a manner oppressive to labor, or contrary to morals, good customs, or public policy. Exemplary damages are imposed by way of example or correction for the public good. Apart from allegations of wanton and oppressive conduct, the employees presented no substantial evidence. The mere fact that the benefits they received were found deficient upon their reclassification as regular employees does not prove bad faith or malice. The Court of Appeals correctly affirmed the deletion of moral and exemplary damages.

• Attorney's Fees: While the general rule requires proof of bad faith for attorney's fees, labor law takes a different approach: the withholding of wages need not be coupled with malice or bad faith under Article 111 of the Labor Code. All that is required is that lawful wages were not paid without justification, compelling the employee to litigate. Since the employees' monetary claims were withheld without justification, they are entitled to attorney's fees.

• Prescription: Article 306 of the Labor Code sets a three-year prescriptive period for all money claims arising from employer-employee relations, counted from the time the cause of action accrued. For separation pay, the cause of action accrues when the employer fails to pay upon separation; since the complaint was filed on October 27, 2015, just one month after separation, the claim is timely. For vacation and sick leave, the cause of action accrues when the employer refuses to pay the monetary equivalent of accumulated leaves upon separation; because the employees' employment is deemed continuous from initial hiring until cessation of operations, the prescriptive period commences from the refusal to pay upon closure, and the claim is timely. For anniversary bonus, birthday leave, uniform allowance, rice subsidy, and HMO benefits—benefits due and demandable each year—the three-year prescriptive period commences at the end of each year; since the complaint was filed on October 27, 2015, the employees are entitled only to benefits for 2013 to 2015, with pre-2013 claims barred. For attorney's fees, the four-year prescriptive period under Article 1146 of the Civil Code applies, counted from the unlawful withholding of benefits; the claim filed on October 27, 2015 is well within this period.

• Nondiminution of Benefits (Article 100, Labor Code) — The nondiminution rule precludes employers from unilaterally withdrawing benefits that have ripened into company practice. However, where the employer is a GOCC whose prior grants of fringe benefits lacked the presidential approval required by Presidential Decree No. 1597 and Republic Act No. 10149, the original grant was legally infirm and cannot ripen into a vested right; discontinuance of such a benefit does not violate the nondiminution rule.

• Non-Chartered GOCC and the Labor Code — A government-owned and controlled corporation incorporated under the Corporation Code (non-chartered) is governed by the Labor Code, but its employees are not free to negotiate economic terms of employment; salaries, emoluments, incentives, allowances, and other benefits must conform to the compensation and position classification standards laid down by applicable laws, including the National Position Classification and Compensation Plan approved by the President and the Compensation and Position Classification System under Republic Act No. 10149.

• Judicial Admissions in Labor Cases — A party who judicially admits a fact in pleadings cannot later challenge or contradict that fact, as judicial admissions are a waiver of proof and conclusive against the pleader. In labor proceedings, the Rules of Court supplement the NLRC Rules of Procedure; under Section 4, Rule 129, judicial admissions need no proof and may be contradicted only by showing palpable mistake or that no such admission was made. An employer who admits that certain benefits are reserved for regular employees cannot, after the employees are declared regular, change its theory and demand proof of entitlement.

• Prohibition Against Changing Theory on Appeal — A party cannot change its theory of the case or cause of action on appeal. Points of law, theories, issues, and arguments not brought to the attention of the lower court will not be considered by the reviewing court, as this would be unfair to the adverse party who had no opportunity to present evidence on the new theory.

• Employer's Burden of Proof in Monetary Claims — In cases involving nonpayment of monetary claims, the employer bears the burden of proving that employees received their wages and benefits and that the same were paid in accordance with law, because employment records, payrolls, and similar documents are solely within the employer's custody and control.

• Attorney's Fees in Labor Cases — The withholding of wages need not be coupled with malice or bad faith to justify the grant of attorney's fees under Article 111 of the Labor Code; all that is required is that lawful wages were not paid without justification, compelling the employee to litigate.

• Prescription of Labor Money Claims — Article 306 of the Labor Code imposes a three-year prescriptive period for all money claims arising from employer-employee relations, counted from the time the cause of action accrued. Claims for damages arising from withholding of benefits and claims for attorney's fees are governed by the four-year prescriptive period under Article 1146 of the Civil Code. For benefits due and demandable each year (e.g., anniversary bonus, rice subsidy), the prescriptive period commences at the end of each year. For separation pay and accumulated leave commutation, the cause of action accrues upon the employee's separation from employment.

• Voluntary Grants Exceeding Statutory Minimum — An employer may voluntarily grant benefits exceeding the statutory minimum, and such voluntary grants may not be reduced by labor tribunals; however, generosity cannot be compelled—where the grant is compelled by law or tribunal ruling rather than by the employer's own volition, the statutory minimum rate applies.

• "Consequently, therefore, PNCC did not violate the non-diminution rule when it desisted from granting mid-year bonus to its employees starting 2013. True, between 1992 and 2011, PNCC invariably granted this benefit to its employees and never before revoked this grant in strict adherence to the non-diminution rule under Article 100 of the Labor Code. Nonetheless, with the subsequent enactment of RA 10149 in 2011, PNCC may no longer grant this benefit without first securing the requisite authority from the President." — This passage, quoted from PNCC vs. NLRC and applied to Disc Contractors, articulates the controlling rule that the nondiminution principle yields to statutory requirements of presidential approval for GOCC fringe benefits.

• "Having made such statement in its Supplemental Position Paper, Disc Contractors cannot be allowed to take a stand contrary to what it had pleaded for the same are considered judicial admissions, not needing any proof, and are conclusive against the pleader." — This passage establishes the ratio decidendi for the award of anniversary bonus, birthday leave, and uniform allowance: the employer's judicial admission that these benefits were reserved for regular employees precluded it from demanding proof once the employees were declared regular.

• "It must be emphasized that as a government-owned and controlled corporation, Disc Contractors funds are considered public funds; hence it is not at liberty to disburse such as it saw fit especially so when there are laws imposing specific requirements for its lawful spending." — This passage defines the rationale for denying the midyear bonus: GOCC funds are public funds subject to statutory spending requirements.

• "The settled rule in labor law is that the withholding of wages need not be coupled with malice or bad faith to justify the grant of attorney's fees under Article 111 of the Labor Code. All that is required is that the lawful wages were not paid without justification thereby compelling the employee to litigate." — This passage states the canonical formulation of the doctrine on attorney's fees in labor cases, distinguishing it from the general civil law requirement of bad faith.

• PNCC vs. NLRC, G.R. No. 248401, June 23, 2021 — Controlling precedent. The Court held that PNCC is a non-chartered GOCC and that its discontinuance of the midyear bonus starting 2013 did not violate the nondiminution rule because Republic Act No. 10149 required prior presidential approval. This case was directly applied to Disc Contractors as a wholly-owned subsidiary of PNCC, and also established that non-chartered GOCCs are governed by the Labor Code but subject to presidential compensation standards.

• Strategic Alliance vs. Radstock Securities — Cited within PNCC vs. NLRC for the pronouncement that PNCC is indisputably a government-owned corporation, not a private corporation, and is under the Department of Trade and Industry.

• PNCC vs. Pabion, 377 Phil. 1019 (1999) — Distinguished. The labor arbiter and NLRC relied on this case to conclude that PNCC is a private corporation. The Supreme Court clarified that the characterization of PNCC as a non-GOCC in Pabion was for the limited purpose of determining SEC jurisdiction under Administrative Order 59, and that subsequent jurisprudence (PNCC vs. NLRC) has settled PNCC's status as a GOCC.

• FF Cruz & Co., Inc. vs. Galandez, G.R. No. 236496, July 8, 2019 — Cited for the standard of review in labor cases before the Court of Appeals: grave abuse of discretion may be ascribed to the NLRC when its findings are not supported by substantial evidence, as defined in Section 5, Rule 133 of the Rules of Court.

• Gonzales-Saldana vs. Spouses Niamatali, 843 Phil. 787 (2018) — Followed. Cited for the doctrine that a party who judicially admits a fact cannot later challenge it, as judicial admissions are a waiver of proof and conclusive against the pleader.

• Jose vs. Alfuerto, 699 Phil. 307 (2012) — Followed. Cited for the rule that a party cannot change its theory of the case or cause of action on appeal, as this would offend due process and fair play.

• Pasion, Cuenca vs. Hon. Atas, 561 Phil. 186 (2007) — Cited by the employees to support their claim that PNCC is a private corporation; rejected by the Court in favor of the more recent PNCC vs. NLRC.

• GSIS Family Bank Employees Union vs. Villanueva, G.R. No. 210773, January 23, 2019 — Cited for the proposition that a non-chartered GOCC incorporated under the Corporation Code is covered by the Labor Code.

• Article 100, Labor Code (Nondiminution of Benefits) — Precludes employers from eliminating or diminishing supplements or other employee benefits being enjoyed at the time of promulgation of the Code. Applied but held inapplicable to Disc Contractors' midyear bonus because the original grant lacked presidential approval and was thus legally infirm.

• Article 95, Labor Code (Service Incentive Leave) — Guarantees every employee who has rendered at least one year of service a yearly service incentive leave of five days with pay. Applied to determine that regular employees of Disc Contractors received more than the statutory minimum (15 days vacation leave and 15 days sick leave), entitling the reclassified regular employees to the higher benefit.

• Article 294 [279], Labor Code (Security of Tenure) — Provides that regular employees shall not be terminated except for just or authorized cause. Applied to confirm the employees' status as regular employees entitled to protection against illegal dismissal.

• Article 298 [283], Labor Code (Closure of Establishment and Reduction of Personnel) — Authorizes termination due to cessation of operations and sets separation pay at one month pay or one-half month pay per year of service, whichever is higher, for closures not due to serious business losses. Applied to determine the correct separation pay rate: one-half month pay per year for the compelled period (initial hiring to May 20, 2013) and one month pay per year for the voluntary period (May 21, 2013 to September 30, 2015).

• Article 306 [291], Labor Code (Money Claims) — Sets a three-year prescriptive period for all money claims arising from employer-employee relations, counted from the time the cause of action accrued. Applied to determine the timeliness of the employees' claims for separation pay, leave benefits, and annual benefits.

• Article 111, Labor Code (Attorney's Fees) — Governs the award of attorney's fees in labor cases. Applied to grant attorney's fees without requiring proof of bad faith, since the withholding of wages without justification suffices.

• Article 1146, Civil Code — Sets a four-year prescriptive period for actions upon an injury to the rights of a plaintiff or upon a quasi-delict. Applied to the claim for attorney's fees, which is premised on injury to the employees' right to receive their rightful benefits.

• Section 5, Presidential Decree No. 1597 — Requires that allowances, honoraria, and other fringe benefits granted to government employees be subject to the approval of the President upon recommendation of the Commissioner of the Budget. Applied to hold that Disc Contractors' midyear bonus grants required presidential approval.

• Section 10, Republic Act No. 10149 (GOCC Governance Act of 2011) — Provides that no incentives shall be granted by a GOCC unless recommended by the GCG to the President. Applied alongside Presidential Decree No. 1597 to hold that the midyear bonus could not be granted without presidential approval.

• Section 6, Presidential Decree No. 1597 — Provides that GOCCs exempted from OCPC coverage shall observe guidelines and policies issued by the President governing compensation and fringe benefits. Applied to confirm that GOCCs organized under the Corporation Code are not excluded from the decree's coverage.

• Section 4, Rule 129, Rules of Court — Provides that judicial admissions made by a party in the course of proceedings need no proof and may be contradicted only by showing palpable mistake or that no such admission was made. Applied to hold Disc Contractors' statement that certain benefits were reserved for regular employees as a conclusive judicial admission.

Leonen, SAJ. (Chairperson), Lazaro-Javier, M. Lopez, and Kho, Jr., JJ., concurred.