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PHILIPPINE NATIONAL CONSTRUCTION CORPORATION v. NLRC

FACTS:

The private respondents, Rolando S. Angeles and Ricardo P. Pablo, Jr., were tollway guards employed by the petitioner corporation. Their services were terminated on June 15, 1994, due to serious misconduct. This was in relation to an entrapment operation conducted by an investigating team formed by the Tollway General Manager, Mr. Ibarra G. Paulino. The team marked money and handed it to a complainant, who then handed it to the private respondents. The investigating team witnessed the private respondents accepting the money and a dog from the complainant. After the investigation, Mr. Ibarra issued a Notice of Termination to the private respondents. The private respondents filed a complaint for illegal dismissal and the Labor Arbiter ruled in their favor, ordering the payment of separation pay, backwages, and mid-year bonus. On appeal, the NLRC modified the decision, ruling that the dismissal was legal but ordered the payment of separation pay and mid-year bonus to the private respondents. Petitioner filed a motion for reconsideration but was denied. Petitioner then filed a petition for certiorari to annul the NLRC decision.

ISSUES:

  1. Whether the private respondents are entitled to separation pay despite being dismissed for serious misconduct.

  2. Whether the private respondents are entitled to a mid-year bonus.

RULING:

  1. Separation Pay: The Supreme Court ruled that private respondents are not entitled to separation pay. An employee dismissed for serious misconduct is not entitled to separation pay, even on the grounds of equity and social justice, as it would be improper to reward an erring employee.

  2. Mid-Year Bonus: The Supreme Court ruled that private respondents are also not entitled to the mid-year bonus. A bonus is a gift or act of liberality from the employer and can only become a demandable obligation if it is made part of the regular wage or compensation, which was not established in this case.

PRINCIPLES:

  • Separation Pay for Serious Misconduct: Employees dismissed for serious misconduct or offenses reflecting on their moral character are generally not entitled to separation pay.

  • Mid-Year Bonus: A bonus is a gratuity and a management prerogative. It is not demandable as a matter of right unless it is proven to be a regular benefit forming part of the wage.