PNB vs Cruz

Case 2: PNB v. Teresita Cruz Facts: Art 110: workers shall enjoy first preference with regard to wages due them and other monetary claimesm any provision of law to the contrary notwithstanding, in case of bankruptcy or liquidation of an employer’s business History  AMEX laid off 70% of its employees because of business reverses  30% retained employees were not paid of their wages from 1980-1982 when AMEX completely ceased operations and entered into an opearating agreement with T.M. San Andres Dev Corp for leasing of equipment and machineries of AMEX  Unpaid employees file a complaint wth the Labor Arbiter, ordered AMEX to pay the total amout of more than 200k  Necessary arrangement was made between respondents- AMEX, T.M. San Andres Dev Corp and PNB; if AMEX cannot pay, will pay thru the proceeds of the machineries and equipement operated by T.M. Amd thru lease of the same from PNB  AMEX did not appeal the decision but PNB, as mortgagee-creditor of AMEX file an appeal with NLRC because workers’ lien covers unpaid wages only and not the termination or severence pay which the latter also claims they are entitled to  NLRC denied appeal of PNB Petitioner Grounds: 1. Art 110 of the Labor Code must be read in relation to Art 2241, 2242, 2243, 2244, and 2255 of Civil Code concerning the classificationm concurrence and preference of credits? 2. Should apply on the workers’ unpaid wages and not included termination or severence pay cited in Sec 7, Rule 1, Book VI of Rules and Regulations of Labor Code, Art 283 of the Labor Code which states that he separation from work of an employees for a just cause does not entitle him to termination pay. ISSUE: 1. WON Art 110 should apply and workers’ lien should take precedence over any other claim? 2. WON even if workers’ lien apply to the instant case, the same should only cover the unpaid wages excluding termination or severnce pay? SC Ruling Petition is dismissed and affirmed decision of NLRC For Issue Number 1:

 Petitioner barred from claiming that the workers’ lien applies only to the products of their labor and not to the other properties of the employer which are encumbered by mortgage contracts or otherwise due to failure of petitioner to question the same on appeal  In regards to Art 110, phrase “any provision of law to the contrary” indicates that such preference shall prevail despite the order set forth in Arts 2241 to 2245 of the Civil Code because no exceptions were provided under Art 110 so none shall be considered  Labor Code was signed into law after Civil code took effect; when two statutes of different dates and of contrary tenor are of theoretical application to a particular case the statute od later date must prevail being a later expression of legislative will  Reliance of petitioner on Republic v. Peralta is without basis; case involved tax claims of the State which is of highest importance of the sovereign; Art 110 as amended, unpaid wages and monetary claims of workers should be paid in full before the claims of the government and other creditors  Art 110 of the Labor Code shall prevail because the purpose by which it was intended is for the protection of the working class For Issue Number 2:  AMEX failed to convince Court that the financial reverses were indeed serious  “wages” shouls also include all benefits under CBA like severence pay, educ allowance, accrued vac leave earned but not enjoyed, as well as compensation awards and unpaid salaries for services rendered  Termination pay forms part of the money benefits accruing to wprkers by reason of their having previously rendered services