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Pepsi Cola v.

Gal-lang Alleging that DEFENDANT was a former employee, PLAINTIFF had sued him, on March 22, 1983, for payment of accounts
pleaded as follows:
Facts: The private respondents were employees of the petitioner who were suspected of complicity in the irregular disposition
of empty Pepsi Cola bottles. On July 16, 1987, the petitioners filed a criminal complaint for theft against them but this was later That during his incumbency as such the defendant caused and without authority from the plaintiff incurred accounts with the
withdrawn and substituted with a criminal complaint for falsification of private documents. On November 26, 1987, after a remaining balances in the total sum of P33,890.38 excluding interests, arising from the purchases of vehicles and parts, repair
preliminary investigation conducted by the Municipal Trial Court, the complaint was dismissed. The dismissal was affirmed by jobs of his personal cars and cash advances, faithful reproductions of the Vehicle Invoice, Debit Memos, Deed of Absolute Sale,
the Office of the Provincial Prosecutor. Repair Orders, Charge Invoices, Vouchers, Promissory Notes, Acknowledgement Letter and Statement of Account, hereto
attached and marked as Annexes "A", "B", "C", "D", "E", "F", "G", "H", "I", "J", "K", "L", "M", and "N" respectively and the
Meantime, allegedly after an administrative investigation, the private respondents were dismissed by the petitioner company contents of which being herein additionally pleaded and made integral parts hereof; (Emphasis supplied)
on November 23, 1987. As a result, they filed a complaint for illegal dismissal before the Labor Arbiter, and demanded
reinstatement with damages. They also filed a separate civil complaint against the petitioners for damages arising from what In his Answer, DEFENDANT denied
they claimed to be their malicious prosecution before the RTC.
... that he incurred any unpaid unauthorized accounts with the plaintiff in the total sum of P33,890.38 excluding interests
The petitioners moved to dismiss the civil complaint on the ground that the trial court had no jurisdiction over the case therefor, and,
because it involved employee-employer relations that were exclusively cognizable by the labor arbiter.
specifically denies under oath that the annexed Vehicle Invoice, Debits Memos Deed of Absolute Sale, Repair Orders, Charge
The motion was granted. However, the respondent judge, acting on the motion for reconsideration, reinstated the complaint, Invoices, Vouchers, Promissory Notes, Acknowledgement Letter and Statement of Account
saying it was “distinct from the labor case for damages now pending before the labor courts.”
have remained unpaid as in fact the truth of the matter is as follows, to wit: (Emphasis supplied)
Issue: Whether the trial court has jurisdiction over the case.
DEFENDANT further alleged in a counterclaim that he should still be considered an employee of PLAINTIFF inasmuch as there
Held: Yes. The trial court has jurisdiction over the case. has been no application for clearance in regards to his separation.

The petitioners invoke Article 217 of the Labor Code and a number of decisions of this Court to support their position that the At the pre-trial conference, the DEFENDANT raised the question of jurisdiction of the Court stating that PLAINTIFF's complaint
private respondents’ civil complaint for damages falls under the jurisdiction of the labor arbiter. The Court held at the outset arose out of employer-employee relationship, and he subsequently moved for dismissal. It was then when respondent Judge
that the case is not in point because what was involved there was a claim arising from the alleged illegal dismissal of an dismissed the case finding that the sum of money and damages sued upon arose from employer-employee relationship and
employee, who chose to complain to the regular court and not to the labor arbiter. that jurisdiction belonged to the Labor Arbiter and the NLRC.

It must be stressed that not every controversy involving workers and their employers can be resolved only by the labor Before the enactment of BP Blg. 227 on June 1, 1982, Labor Arbiters, under paragraph 5 of Article 217 of the Labor Code had
arbiters. This will be so only if there is a “reasonable causal connection” between the claim asserted and employee-employer jurisdiction over "all other cases arising from employer-employee relation, unless expressly excluded by this Code." Even then,
relations to put the case under the provisions of Article 217. Absent such a link, the complaint will be cognizable by the regular the principle followed by this Court was that, although a controversy is between an employer and an employee, the Labor
courts of justice in the exercise of their civil and criminal jurisdiction. Arbiters have no jurisdiction if the Labor Code is not involved. In Medina vs. Castro-Bartolome, 116 SCRA 597, 604, in negating
jurisdiction of the Labor Arbiter, although the parties were an employer and two employees, Mr. Justice Abad Santos stated:
The case at bar involves a complaint for damages for malicious prosecution which was filed with the Regional Trial Court by the
employees of the defendant company. It does not appear that there is a “reasonable causal connection” between the The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs. For
complaint and the relations of the parties as employer and employees. The complaint did not arise from such relations. What if the Labor Code has no relevance, any discussion concerning the statutes amending it and whether or not they have
the employees are alleging is that the petitioners acted with bad faith when they filed the criminal complaint. This is a matter retroactive effect is unnecessary.
which the labor arbiter has no competence to resolve as the applicable law is not the Labor Code but the Revised Penal Code.
It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs is a simple action for
Molave Motor Sales v. Laron damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil Code
and not the Labor Code. It results that the orders under review are based on a wrong premise.
Respondent Judge, presiding Branch XLIV of the Regional Trial Court in Dagupan City, had dismissed the case below for lack of
jurisdiction and had denied reconsideration for lack of merit. And in Singapore Airlines Limited vs. Paño, 122 SCRA 671, 677, the following was said:

Petitioner, PLAINTIFF in the case below, is a corporation engaged in the sale and repair of motor vehicles in Dagupan City. Stated differently, petitioner seeks protection under the civil laws and claims no benefits under the Labor Code. The primary
Private respondent, the DEFENDANT in the case below, was, or is, the sales manager of PLAINTIFF. Whether or not there was relief sought is for liquidated damages for breach of a contractual obligation. The other items demanded are not labor benefits
still a relationship of employer and employee between the parties when the complaint was filed is an unsettled question which demanded by workers generally taken cognizance of in labor disputes, such as payment of wages, overtime compensation or
need not be resolved in this instance. separation pay. The items claimed are the natural consequences flowing from breach of an obligation, intrinsically a civil
dispute.
In the case below, PLAINTIFF had sued for monies loaned to DEFENDANT, the cost of repair jobs made on his personal cars, and On August 30, 2000, the NTC issued a Memorandum to all cellular mobile telephone service (CMTS) operators which contained
for the purchase price of vehicles and parts sold to him. Those accounts have no relevance to the Labor Code. The cause of measures to minimize if not totally eliminate the incidence of stealing of cellular phone units. The Memorandum directed
action was one under the civil laws, and it does not breach any provision of the Labor Code or the contract of employment of CMTS operators to:
DEFENDANT. Hence, the civil courts, not the Labor Arbiters and the NLRC, should have jurisdiction.
a. strictly comply with Section B(1) of MC 13-6-2000 requiring the presentation and verification of the identity and addresses of
prepaid SIM card customers;
BP Blg. 227 has amended Article 217 of the Labor Code to read as follows: b. require all your respective prepaid SIM cards dealers to comply with Section B(1) of MC 13-6-2000;
c. deny acceptance to your respective networks prepaid and/or postpaid customers using stolen cellphone units or cellphone
ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall have the original and exclusive units registered to somebody other than the applicant when properly informed of all information relative to the stolen
jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision, the cellphone units;
following cases involving all workers, whether agricultural or non-agricultural: d. share all necessary information of stolen cellphone units to all other CMTS operators in order to prevent the use of stolen
cellphone units; and
1. Unfair labor practice cases; e. require all your existing prepaid SIM card customers to register and present valid identification cards.

Another Memorandum dated October 6, 2000 addressed to all public telecommunications entities, reads:
2. Those that ( involve) WORKERS MAY FILE INVOLVING wages, hours of work and other terms and conditions of
employment; This is to remind you that the validity of all prepaid cards sold on 07 October 2000 and beyond shall be valid for at least two (2)
years from date of first use pursuant to MC 13-6-2000.
3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime
compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees In addition, all CMTS operators are reminded that all SIM packs used by subscribers of prepaid cards sold on 07 October 2000
compensation, social security, and maternity benefits; and beyond shall be valid for at least two (2) years from date of first use. Also, the billing unit shall be on a six (6) seconds pulse
effective 07 October 2000.
4. Cases involving household services; and
Islacom and Piltel filed an an action for declaration of nullity of NTC Memorandum Circular No. 13-6-2000 (the Billing Circular)
and the NTC Memorandum dated October 6, 2000, with prayer for the issuance of a writ of preliminary injunction and
5. CASES ARISING FROM ANY VIOLATION OF ARTICLE 265 OF THIS CODE, INCLUDING QUESTIONS INVOLVING THE
temporary restraining order. Both alleged, inter alia, that the NTC has no jurisdiction to regulate the sale of consumer goods
LEGALITY OF STRIKES AND LOCKOUTS.
such as the prepaid call cards since such jurisdiction belongs to the Department of Trade and Industry under the Consumer Act
of the Philippines; that the Billing Circular is oppressive, confiscatory and violative of the constitutional prohibition against
6. All other claims arising from employer-employee relations, unless expressly excluded by this Code]. (Italics and deprivation of property without due process of law; that the Circular will result in the impairment of the viability of the prepaid
bracketed portions indicate the deletions, while the amendments introduced are capitalized) cellular service by unduly prolonging the validity and expiration of the prepaid SIM and call cards; and that the requirements of
identification of prepaid card buyers and call balance announcement are unreasonable. Hence, they prayed that the Billing
The dismissal of the case below on the ground that the sum of money and damages sued upon arose from employer-employee Circular be declared null and void ab initio. Petitioners Globe Telecom, Inc and Smart Communications, Inc. filed a joint Motion
relationship was erroneous. Claims arising from employer-employee relations are now limited to those mentioned in for Leave to Intervene and to Admit Complaint-in-Intervention which was granted. Court issued a temporary restraining order.
paragraphs 2 and 3 of Article 217. There is no difficulty on our part in stating that those in the case below should not be faulted Motion to dismiss and reconsideration were denied by the RTC. Respondent NTC thus filed a special civil action for certiorari
and prohibition with the Court of Appeals which was granted, hence this petition.
for not being aware of the last amendment to the frequently changing Labor Code.
ISSUE: Whether or not validity or constitutionality of a rule or regulation issued by the administrative agency in the
The claim of DEFENDANT that he should still be considered an employee of PLAINTIFF, because the latter has not sought performance of its quasi-legislative function is under the jurisdiction of regular courts.
clearance for his separation from the service, will not affect the jurisdiction of respondent Judge to resolve the complaint of
PLAINTIFF. DEFENDANT could still be liable to PLAINTIFF for payment of the accounts sued for even if he remains an employee HELD: CA reversed. Regional Trial Court has jurisdiction to hear and decide the case.
of PLAINTIFF.
Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative adjudicatory
WHEREFORE, the Petition is granted, and respondent Judge is hereby ordered to take cognizance of the case below and to powers. Quasi-legislative or rule-making power is the power to make rules and regulations which results in delegated
legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers.
render judgment therein accordingly.
The rules and regulations that administrative agencies promulgate, which are the product of a delegated legislative power to
create new and additional legal provisions that have the effect of law, should be within the scope of the statutory authority
236 SCRA 638 SMART VS. NATIONAL LABOR RELATIONS COMMISSION granted by the legislature to the administrative agency. It is required that the regulation be germane to the objects and
(G.R. No. 151908 August 12, 2003) purposes of the law, and be not in contradiction to, but in conformity with, the standards prescribed by law. They must
conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation to be valid.
Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by an
FACTS: Pursuant to its rule-making and regulatory powers, the National Telecommunications Commission (NTC) issued on June administrative body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations
16, 2000 Memorandum Circular No. 13-6-2000, promulgating rules and regulations on the billing of telecommunications which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which
services. created it, or which are in derogation of, or defeat, the purpose of a statute. In case of conflict between a statute and an
administrative order, the former must prevail.
Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its quasi-judicial or In the present case, there exists no employer-employee relationship between petitioner and Delta Milling. In its cross-claim,
administrative adjudicatory power. This is the power to hear and determine questions of fact to which the legislative policy is petitioner is not seeking any relief under the Labor Code but merely reimbursement of the monetary benefits claims awarded
to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same and to be paid to the guard employees. There is no labor dispute involved in the cross-claim against Delta Milling. Rather, the
law. The administrative body exercises its quasi-judicial power when it performs in a judicial manner an act which is essentially
cross-claim involves a civil dispute between petitioner and Delta Milling. Petitioner's cross-claim is within the realm of civil law,
of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably necessary for
the performance of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions, the and jurisdiction over it belongs to the regular courts.
administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh
evidence, and draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature. Moreover, the liability of Delta Milling to reimburse petitioner will only arise if and when petitioner actually pays its employees
the adjudged liabilities.
In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need not
exhaust administrative remedies before going to court. This principle applies only where the act of the administrative agency ESPINO v. NLRC
concerned was performed pursuant to its quasi-judicial function, and not when the assailed act pertained to its rule-making or
quasi-legislative power.
The controversy generated in the instant case once again calls for the resolution of the issue of whether or not the National
Labor Relations Commission (NLRC) has jurisdiction over a complaint filed by a corporate Executive Vice President-Chief
Operating Officer for illegal dismissal resulting from the termination of his services as such officer by virtue of four (4) separate
JAGUAR SECURITY v. SALES (J. Austria-Martinez) resolutions of the Board of Directors Air Lines (PAL).

Facts: Jaguar is a private corporation engaged in the business of providing security services; one of their clients is Delta Milling
The undisputed facts are as follows:
Industries, Inc. The respondents were hired as security guards by Jaguar and were assigned at the premises of Delta. Later on,
the security guards instituted an instant labor case before the labor arbiter alleging money claims for their services.
Petitioner Leslie W. Espino was the Executive Vice President-Chief Operating Officer of private respondent Philippine Airlines
(PAL) when his services were terminated sometime in December 1990 by the Board of Directors of PAL as a result of the
findings of the panels created by then President Corazon C. Aquino to investigate the administrative charges filed against him
and other senior officers for their purported involvement in four, denominated "Goldair," "Robelle," "Kasbah/La Primavera,"
On July 1, 1999, petitioner Jaguar filed a partial appeal questioning the failure of public respondent NLRC to resolve its cross- and "Middle East" which allegedly prejudiced the interests of both PAL and the Philippine Government.
claim against Delta as the party ultimately liable for payment of the monetary award to the security guards.
Petitioner started his employment with PAL on February 25, 1960 as a Traffic and Sales Trainee and, for 30 years, was
In its Resolution dated September 19, 2000, the NLRC dismissed the appeal, holding that it was not the proper forum to raise
successively promoted1 until he became, by virtue of an election in March 1988 conducted by the Board of Directors, Executive
the issue. It went on to say that Jaguar, being the direct employer of the security guards, is the one principally liable to the Vice President and Chief Operating Officer for a term of one (1) year and who holds said office until his successor is elected and
employees. Thus, it directed petitioner to file a separate civil action for recovery of the amount before the regular court having qualified, pursuant to Section 7, Article III in relation to Section 1, Article IV of the Amended By-Laws of PAL. The last time he
jurisdiction over the subject matter, for the purpose of proving the liability of Delta. Jaguar sought reconsideration of the was elected as such was on October 20, 1989.
dismissal, but the Commission denied the same.
Sometime on July 2, 1990, petitioner and several other senior officers of PAL were administratively charged by Romeo S. David,
Petitioner insists that its cross-claim should have been ruled upon in the labor case as the filing of a cross-claim is allowed Senior Vice President for Corporate Services and Logistics Group, for their purported involvement in four cases, labelled as
under Section 3 of the NLRC Rules of Procedure which provides for the suppletory application of the Rules of Court. Petitioner "Goldair," "Robelle," "Kasbah/Primavera" and "Middle East."
argues that the claim arose out of the transaction or occurrence that is the subject matter of the original action. Petitioner
further argues that as principal, Delta Milling Industries, Inc. (Delta Milling) is liable for the awarded wage increases. Except for the conflict of interest charges in the "Robelle" case, petitioner and several other senior officers of PAL were
uniformly charged in the three (3) other aforementioned cases of gross incompetence, mismanagement, inefficiency,
There is no question as regards the respective liabilities of petitioner and Delta Milling. Under Articles 106, 107 and 109 of the negligence, mismanagement, dereliction of duty, failure to observe and/or implement administrative and executive policies,
Labor Code, the joint and several liability of the contractor and the principal is mandated to assure compliance of the and related acts or omissions resulting in the concealment or coverup and prevention of the seasonable discovery of
provisions therein including the statutory minimum wage. The contractor, petitioner in this case, is made liable by virtue of his anomalous transactions which, as a consequence, caused prejudice to the best interest of PAL and the Government.
status as direct employer. On the other hand, Delta Milling, as principal, is made the indirect employer of the contractor's
employees for purposes of paying the employees their wages should the contractor be unable to pay them. This joint and Pending investigation by the panels created by then President Corazon C. Aquino, petitioner and other senior officers of PAL
several liability facilitates, if not guarantees, payment of the workers' performance of any work, task, job or project, thus giving were placed under suspension by the Board of Directors.
the workers ample protection as mandated by the 1987 Constitution.
On October 19, 1990, during the organizational meeting of the PAL Board of Directors, the election or appointment of some
Issue: whether petitioner may claim reimbursement from Delta Milling through a cross-claim filed with the labor court? senior officers of the company who, like petitioner, had been charged administratively with various offenses and accordingly
suspended, were deferred by the Board of Directors. During the said organizational meeting, Feliciano Belmonte was elected
Chairman of the Board while Dante Santos was elected as President and Chief Executive Officer.
Ruling: The jurisdiction of labor courts extends only to cases where an employer-employee relationship exists.
On the basis of the findings submitted by the presidential investigating panels, the Board issued separate resolutions dated Petitioner Espino filed a motion for reconsideration but the same was denied on January 8, 1993.4
January 19, 1991 in the "Goldair," "Robelle," and Kasbah/La Primavera," cases and another dated August 9, 1991 in the
"Middle East" case wherein petitioner was considered resigned from the service effective immediately for loss of confidence
Dissatisfied, petitioner filed the instant petition for certiorari contending mainly that it is the NLRC which has jurisdiction under
and for acts inimical to the interests of the company.
Article 217, par. (2) of the Labor Code, as amended, to hear the illegal dismissal case he filed against PAL as it involves the
termination of a regular and permanent employee and the issues in the dispute involved, not only his removal from office, but
As a result of his termination, petitioner Espino filed a complaint for illegal dismissal against PAL with the National Labor also his claim for backwages and other benefits and damages; that PAL is estopped from questioning the jurisdiction of the
Relations Commission, Arbitration Branch, NCR, praying, among others, for reinstatement with backwages, recovery of P50 NLRC.
Million as moral damages, P10 Million as exemplary damages and attorney's fees. The case was docketed as NLRC Case No. 00-
05-03210-91.
We rule that the petition lacks merit.

PAL justified the legality of petitioner Espino's dismissal from the service before the Labor Arbiter but questioned the
The Court, citing Presidential Decree No. 902-A, laid down the rule in the case of Philippine School of Business Administration
jurisdiction of the NLRC contending that, because the investigating panels were created by President Corazon C. Aquino, it
v. Leano,5 and consequently reiterated in three (3) other cases6 that it is the Securities and Exchange Commission (SEC) and not
became, together with the PAL Board of Directors, a "parallel arbitration unit" which substituted the NLRC. As such, PAL argued
the NLRC which has original and exclusive jurisdiction over cases involving the removal from employment of corporate officers.
that since the Board resolutions of the aforesaid cases; cannot be reviewed by the NLRC, the recourse of petitioner Espino
should have been addressed, by way of an appeal, to the Office of the President of the Republic of the Philippines.
Sec. 5. of Presidential Decree No. 902-A regarding the jurisdiction of the Securities and Exchange Commission provides, as
2
follows:
On February 20, 1992, Labor Arbiter Cresencio J. Ramos rendered a decision finding that petitioner Espino was dismissed just
and valid cause and accordingly ordered his reinstatement to his former position as Executive Vice-President-Chief Operating
Officer without loss of seniority rights plus full backwages and other benefits appurtenant thereto, without qualification or Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations,
deduction from the time of his illegal dismissal up to the date of his actual reinstatement. partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall
have original and exclusive jurisdiction to hear and decide cases involving:
From the said decision, PAL filed on March 5, 1992 an appeal with the NLRC and submitted on March 13, 1992 a supplemental
memorandum on appeal. PAL argued that the Labor Arbiter's decision is null and void for lack of jurisdiction over the subject (a) Devices or schemes employed by or any acts of the board of directors, business associates, its officers or partners,
matter as it is the Securities and Exchange Commission, and not the NLRC, which has original and exclusive jurisdiction over amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholders,
cases involving dismissal or removal of corporate officers. partners, members of associations or organizations registered with the Commission.

Earlier, or more specifically, on February 25, 1992, petitioner Espino filed a motion for issuance of writ of execution on the (b) Controversies arising out of intracorporate or partnership relations, between and among stockholders, members, or
ground that the decision of the Labor Arbiter ordering reinstatement is immediately executory even pending appeal pursuant associates; between any or all of them and the corporation, partnership or association of which they are stockholders,
to Article 223 of the Labor Code, as amended. members, or associates, respectively; and between such corporation, partnership or association and the state insofar as it
concerns their individual franchise or right to exist as such entity.
On February 28, 1992, the Labor Arbiter issued a writ of execution.
(c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships
or associations.
PAL, for its part, filed a motion to quash the writ of execution reiterating its argument that the Securities and Exchange
Commission (SEC) and not the NLRC has original and exclusive jurisdiction over the subject matter involving the dismissal or
removal of corporate officers. (d) Petitions of corporations, partnerships or associations to be declared in the state of suspension of payments in cases where
the corporation, partnership or association possesses sufficient property to cover all its debts but foresees the impossibility of
meeting them when they respectively fall due or in cases where the corporation, partnership or association has no sufficient
On March 31, 1992, after an exchange of pleadings, Labor Arbiter Ramos denied PAL's motion to quash the writ of execution.
assets to cover its liabilities, but is under the management of a Rehabilitation Receiver or Management Committee created
Thereafter, or on April 2, 1992, an alias writ of execution was issued.
pursuant to this Decree.

PAL then filed on April 23, 1992 with the NLRC a petition for injunction, later amended to implead the Labor Arbiter, praying
In intra-corporate concerning the election or appointment of officers of a corporation, Section 5, PD 902-A specifically
for the issuance of a temporary restraining order to enjoin the enforcement of said alias writ of execution.
provides:

On April 27, 1992, the NLRC issued a temporary restraining order enjoining Espino, Sheriff Anam Timbayan, their agents and all
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations,
persons acting under them, from implementing the alias writ of execution issued on April 2, 1992 upon PAL's posting of
partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall
P400,000.00 cash or surety bond. On May 5, 1992, PAL posted the P400,000.00 surety bond.
have original and exclusive jurisdiction to hear and decide cases involving:

On July 31, 1992, the NLRC promulgated a resolution3 dismissing the complaint for illegal dismissal for lack of jurisdiction and
(c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships
declaring the nullity of the alias writ of execution. Petitioner Espino, Labor Arbiter Cresencio Ramos and Sheriff Anam
or associations.
Timbayan were permanently enjoined from enforcing the said alias writ of execution.
Indisputably, the position of Executive Vice President-Chief Operating Officer from which petitioner Espino claims to have been into placing the case under the jurisdiction of the Labor Arbiter, a closer examination reveals that they are actually part of the
illegally dismissed, is an elective office under Section 7, Article III is an elective corporate office under Section 1, Article IV of perquisites of his elective position; hence, intimately linked with his relations with the corporation. In Dy v. NLRC, et al.,9 the
the Amended by-Laws of PAL. The said corporate office has a fixed term of one (1) year and the one elected shall hold office Court, confronted with the same issue ruled, thus:
until a successor shall have been elected and qualified. He lost that position when his appointment or election as Executive
Vice President-Chief Operating Officer, together with other senior officers who were similarly charged administratively, were
The question of remuneration, involving as it does, a person who is not a mere employee but a stockholder and officer, an
deferred by the Board of Directors in its organizational meeting on October 19, 1990. He was later considered by the Board as
integral part, it might be said, of the corporation, is not a simple labor problem but a matter that comes within the area of
resigned from the service, for reasons earlier stated, and the said position was later abolished.
corporate affairs and management, and is in fact a corporate controversy in contemplation of the Corporation Code.

The matter of petitioner's not being elected to the office of Executive


The Court has likewise ruled in the case of Andaya v. Abadia 10 that in
Vice-President-Chief Operating Officer thus falls squarely within the purview of Section 5 par. (c) of P.D. 902-A. In the case
intra-corporate matters, such as those affecting the corporation, its directors, trustees, officers and shareholders, the issue of
of PSBA v. Leano, supra, which involved an Executive Vice President who was not re-elected to the said position during the
consequential damages may just as well be resolved and adjudicated by the SEC. Undoubtedly, it is still within the competence
election of officers on September 5, 1981 by the PSBA's newly elected Board of Directors, the Court emphatically stated:
and expertise of the SEC to resolve all matters arising from or closely connected with all intra-corporate disputes.

This is not a case of dismissal. The situation is that of a corporate office having been declared vacant, and that of TAN's not
Petitioner's reliance on the principle of estoppel to justify the exercise or jurisdiction by the NLRC over the instant complaint is
having been elected thereafter. The matter of whom to elect is a prerogative that belongs to the Board, and involves the
misplaced. it is not accurate for petitioner to conclude that PAL did not raise the issue of jurisdiction at the initial stages of the
exercise of deliberate choice and the faculty of discriminative selection. Generally speaking, the relationship of a person to a
case, for, while it may be predicated on a different ground, i.e., that appeal from the resolution of the Board of Directors of PAL
corporation, whether as officer or as agent or employee, is not determined by the nature of the services performed, but by the
as regards termination of his services, is to the Office of the President, PAL did in fact question the jurisdiction of the Labor
incidents of the relationship as they actually exists.
Arbiter. An error of this nature, under the circumstances, could not justify petitioner's insistence that PAL did not raise the
issue of jurisdiction at the outset, but only before the NLRC.
A corporate officer's dismissal is always a corporate act and/or an intra-corporate controversy and that nature is not altered by
the reason or wisdom which the Board of Directors may have in taking such action.7
It is well-settled that jurisdiction over the subject matter is conferred by law and the question of lack of jurisdiction may be
raised at anytime even on appeal. 11 The principle of estoppel cannot be invoked to prevent this Court from taking up the
Furthermore, it must be noted that the reason behind the non-election of petitioner to the position of Executive Vice question, which has been apparent on the face of the pleadings since the start of the litigation before the Labor Arbiter. In the
President-Chief Operating Officer arose from, or is closely connected with, his involvement in the alleged irregularities in the case of Dy v. NLRC, supra, the Court, citing the case of Calimlim v. Ramirez 12 reiterated that the decision of a tribunal not
aforementioned cases which, upon investigation and recommendation, were resolved by the PAL Board of Directors against vested with appropriate jurisdiction is null and void. Again, the Court in Southeast Asian Fisheries Development Center-
him and other senior officers. Evidently, this intra-corporate ruling places the instant case under the specialized competence Aquaculture Department v. NLRC 13 restated the rule that the invocation of estoppel with respect to the issue of jurisdiction is
and expertise of the SEC. unavailing because estoppel does not apply to confer jurisdiction upon a tribunal that has none over the cause of action. The
instant case does not provide an exception to the said rule.
The jurisdiction of the SEC has likewise been clarified by this Court in the case of Union Glass and Container Corporation, et
al. v. SEC, et al.,8 thus: In fine, the issue of the SEC's jurisdiction is settled and the Court finds it unnecessary to dwell further on other questions raised
by petitioner. Thus, finding no grave abuse of discretion on the part of NLRC in dismissing the complaint for illegal dismissal,
the instant petition must be dismissed.
This grant of jurisdiction must be viewed in the light of the nature and function of the SEC under the law. Section 3 of PD No.
902-A confers upon the latter "absolute jurisdiction, supervision, and control over all corporations, partnerships or
associations, who are grantees of primary franchise and/or license or permit issued by the government to operate in the WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit. The resolution of the National Labor Relations
Philippines . . . ." The principal function of the SEC is the supervision and control over corporations, partnerships and Commission dated July 31, 1992 dismissing the complaint for illegal dismissal for lack of jurisdiction is AFFIRMED, without
associations with the end in view that investment in these entities may be encouraged and protected, and their activities prejudice to petitioner's seeking relief, if so minded, in the proper forum.
pursued for the promotion of economic development.
MANEJA v. NLRC
It is in aid of this office that the adjudicative power of the SEC must be exercised. Thus the law explicitly specified and delimited
its jurisdiction to matters intrinsically connected with the regulations of corporations, partnerships and associations and those Facts: Maneja worked for Manila Midtown Hotel as a telephone operator. She was also a member of the Union (NUWHRAIN)
dealing with the internal affairs of such corporations, partnerships or associations.
with a CBA. A fellow telephone operator named Lelong received a Request for Long Distance Call (RLDC) and a deposit from a
guest named Hiota Ieda.
Otherwise stated, in order that the SEC can take cognizance of a case, the controversy must pertain to any of the following
relationships: (a) between the corporation, partnership or association and the public; (b) between the corporation, partnership The call was unanswered and the P500 deposit was forwarded to the cashier. Ieda made a second call and second P500 deposit
or association and its stockholders, partners, members, or officers; (c) between the corporation, partnership or association and
but the call was also unanswered. Loleng passed on the RLDC to Maneja for follow up. Maneja monitored the call. A hotel
the state in so far as its franchise, permit or license to operate is concerned, and (d) among the stockholders, partners or
associates themselves. cashier after inquired about the P1000 deposit made by Ieda. After a search, Loleng found the first deposit in the guest folio
and the second in the folder for cancelled calls. Maneja saw that the second RLDC was tamped with the wrong date, she
changed it from Feb. 15 to Feb 13, 1990. Loleng then delivered the RLDC and money to the cashier. The chief telephone
The fact that petitioner sought payment of his backwages, other benefits, as well as moral and exemplary damages and
attorney's fees in his complaint for illegal dismissal will not operate to prevent the SEC from exercising its jurisdiction under PD operator issued a memorandum directing Maneja and Loleng to explain the February 15 incident.
902-A. While the affirmative reliefs and monetary claims sought by petitioner in his complaint may, at first glance, mislead one
The CTO recommended they be subject to disciplinary action for forging falsifying official documents and culpable carelessness company received no information on whether the said employees appealed to the PSSLE. Hence, it considered them dismissed.
for failure to follow specific instruction or established procedure. Maneja was served with a notice of dismissal, and wrote The dismissed employees file a complaint with the NLRC for illegal dismissal against respondents. PSSLU filed a motion to
instead “under protest”. dismiis on the ground that the Labor Arbiter was without jurisdiction over the case invoking the law which provides that it is
shall be the grievance machinery and voluntary arbitration that has jurisdiction for the interpretation or implementation of the
Petitioner filed for illegal dismissal before the labor arbiter, who held that petitioner was illegally dismissed, however he held CBA or the interpretation or enforcement of company personnel policies. Public respondent through the OSG alleged that the
that the complaint was on its face within the juridical ambit of the grievance procedure under the CBA and if unresolved one case involves the termination of employees which fall under the jurisdiction of the Labor Arbiter.
for proper voluntary arbitration.
ISSUE: Whether or not the Labor Arbiter has jurisdiction to decide the case.
The Hotel appealed on the ground of lack of jurisdiction as the case should have been filed with the proper grievance
procedure or voluntary arbitration. The NLRC affirmed the decision. HELD: Yes.The Labor Arbiter and not the Grievance Machinery provided for in the CBA has jurisdiction to hear and decide the
complaints of the private respondents. While it appears that the dismissal of the private respondents was made upon the
Maneja contended that Article 217(a)(2) and (c) relied upon by respondent NLRC in divesting the labor arbiter of jurisdiction recommendation of PSSLU pursuant to the union security clause provided in the CBA, itis held that the facts do not fall under
over the illegal dismissal case, should be read in conjunction with Article 261[14] of the Labor Code. It is the view of petitioner the meaning of “grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and
that termination cases arising from the interpretation or enforcement of company personnel policies pertaining to violations of those arising from the interpretation or enforcement of company personnel policies”, the jurisdiction of which pertains to the
Offenses Subject to Disciplinary Actions (OSDA), are under the jurisdiction of the voluntary arbitrator only if these are grievance machinery or thereafter, to a voluntary arbitrator or panel of arbitrators. The parties to a CBA are the union and the
unresolved in the plant-level grievance machinery. Petitioner insists that her termination is not an unresolved grievance as company. Hence, only disputes involving the union and the company shall be referred to the grievance machinery or voluntary
there has been no grievance meeting between the NUWHRAIN union and the management. The reason for this, petitioner arbitrators.
adds, is that it has been a company practice that termination cases are not anymore referred to the grievance machinery but
directly to the labor arbiter. In the present case, both the union and the company are united or have come to an agreement regarding the dismissal of
private respondents. No grievance between them exists which could be rough to a grievance machinery. The problem or
The Hotel argued that the LA should have dismissed the illegal dismissal ase outright after finding it was within the dispute in the present case is between the union and the company on the one hand and some union and non-union members
jurisdictional ambit of the grievance procedure. who were dismissed, on the other hand. The dispute shall be settled before an impartial body. The grievance machinery
designated by the members designated by the union and the company cannot be expected to be impartial against the
Issue: WON the LA had jurisdiction over the illegal dismissal case. dismissed employees.

Held: Termination cases fall under the original and exclusive jurisdiction of the Labor Arbiter (LC 217), but it should be read in
PANTRANCO NORTH EXPRESS v. NLRC
conjunction with LC 261 which grants to voluntary arbitrators original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation of CBA or of enforcement of personnel policies. In the Sanyo case, the Private respondent was hired by petitioner in 1964 as a bus conductor. He eventually joined the Pantranco Employees
SolGen argued that a distinction should be made between interpreting the CBA and enfocing personnel policies and a Association-PTGWO. He continued in petitioner's employ until August 12, 1989, when he was retired at the age of fifty-two
termination case. Dismissal does not involve CBA or personnel poliy. Where the dispute is just in interpretation, they could (52) after having rendered twenty five years' service. The basis of his retirement was the compulsory retirement provision of
resort to the grievance mechanism, but when there was actual termination, it was already cognizable by the Labor Arbiter. In the collective bargaining agreement between the petitioner and the aforenamed union. Private respondent received
this case, there has been an actual termination. The LA does have jurisdiction under LC 217, otherwise an employee who was P49,300.00 as retirement pay.
on AWOL or committed offenses would no longer be able to file illegal dismissal cases because the discharge would be On February 15, 1990, private respondent filed a complaint[4] for illegal dismissal against petitioner with the Sub-
premised on the interpretation enforcement of company policies. The Hotel also voluntarily submitted to the jurisdiction of the Regional Arbitration Branch of the respondent Commission in Dagupan City. The complaint was consolidated with two other
tribunal. cases of illegal dismissal[5] having similar facts and issues, filed by other employees, non-union members.

After hearings were held and position papers submitted, on March 26, 1990, Labor Arbiter Olairez rendered his decision,
Issue 2: Was there illegal dismissal? Held: Yes. Given the factual circumstances there was no dishonesty. The money was all
the dispositive portion of which reads:
eventually found and the date was a correction, not falsification. There was also no hearing, merely a request for written
explanation.
"WHEREFORE, with all the foregoing considerations, we find the three complainants illegally and unjustly dismissed and we
hereby order the respondent to reinstate them to their former or substantially equivalent positions without loss of seniority
SANYO PHIL. WORKERS UNION-PSSLU vs. CANIZARES rights with full backwages and other benefits.

FACTS: PSSLU had an existing CBA with Sanyo Philippines, Inc. The CBA contained a union security clause which provided that
Petitioner appealed to public respondent, which issued the questioned Resolution affirming the labor arbiter's
the union shall have the right to demand from the company the dismissal of the members of the union by reason of their
decision in toto. Hence, this petition.
voluntary resignation from membership or wilful refusal to pay the union dues or by joining another labor organization. PSSLU
through its national president informed the management of Sanyo the some of its members were removed for joining another
union, anti-union activities, economic sabotage, etc. PSSLU wrote another letter recommending for the dismissal of some of
The Issues
the company’s non-union workers for engaging in anti-union activities, violated the pledge of cooperation with PSSLU, and
threatened with bodily harm the officers of the union. The employees were under preventive suspension, however the
"I. The National Labor Relations Commission gravely abused its discretion in holding that the Labor Arbiter has jurisdiction over The Court agrees with the public respondent's affirmance of the arbiter's decision in respect of the question of
the case. jurisdiction.

In Sanyo Philippines Workers Union PSSLU vs. Caizares,[7] a case cited by the petitioner, this Court ruled:
II. Assuming that the Labor Arbiter has jurisdiction over the case, the National Labor Relations Commission gravely abused its
discretion in affirming the Labor Arbiter's decision that private respondent Urbano Zuiga (sic) was illegally dismissed."
x x x Hence, only disputes involving the union and the company shall be referred to the grievance machinery or voluntary
arbitrators.
Of course, it is obvious that the underlying and pivotal issue is whether the CBA stipulation on compulsory retirement
after twenty-five years of service is legal and enforceable. If it is, private respondent has been validly retired. Otherwise,
petitioner is guilty of illegal dismissal. The answer to said question will settle the issue of the validity of the questioned In the instant case, both the union and the company are united or have come to an agreement regarding the dismissal of
resolution of the public respondent. private respondents. No grievance between them exists which could be brought to a grievance machinery. The problem or
dispute in the present case is between the union and the company on the one hand and some union and non-union members
who were dismissed, on the other hand. The dispute has to be settled before an impartial body. The grievance machinery with
members designated by the union and the company cannot be expected to be impartial against the dismissed employees. Due
The Court's Ruling process demands that the dismissed workers grievances be ventilated before an impartial body. Since there has already been
an actual termination, the matter falls within the jurisdiction of the Labor Arbiter."
On the key issue, the Court finds the petition meritorious, thus warranting reversal of the questioned Resolution.

First Issue: Jurisdiction of Labor Arbiter Applying the same rationale to the case at bar, it cannot be said that the "dispute" is between the union and petitioner
company because both have previously agreed upon the provision on "compulsory retirement" as embodied in the CBA. Also,
Petitioner contends that the labor arbiter had no jurisdiction because the dispute concerns a provision of the CBA and
it was only private respondent on his own who questioned the compulsory retirement. Thus, the case is properly denominated
its interpretation. It claims that the case falls under the jurisdiction of the voluntary arbitrator or panel of arbitrators under
as a "termination dispute" which comes under the jurisdiction of labor arbiters.
Article 261 of the Labor Code, which provides:
Therefore, public respondent did not commit a grave abuse of discretion in upholding the jurisdiction of the labor
"Article 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators. -- The Voluntary Arbitrator or panel of arbiter over this case.
Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the
interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or 572 SCRA 487 SANTOS v SERVIER
enforcement of company personnel policies referred to in the immediately preceding Article. Accordingly, violations of a
Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice SANTOS VS. SERVIER
and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this Article, gross violations of PETITIONER: MA. ISABEL T. SANTOS represented by ANTONIO P. SANTOS
a Collective Bargaining agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such RESPONDENT: SERVIER PHILIPPINES, INC. and NLRC
agreement.
FACTS:
Petitioner Ma. Isabel T. Santos was the Human Resource Manager of respondent Servier Philippines, Inc. since 1991 until her
The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not termination from service in 1999. On March 26 and 27, 1998, petitioner attended a meeting of all human resource managers of
entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of respondent, held in Paris, France. Since the last day of the meeting coincided with the graduation of petitioners only child, she
Voluntary Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration arranged for a European vacation with her family right after the meeting. She, thus, filed a vacation leave effective March 30,
provided in the Collective Bargaining Agreement." 1998.

The Labor Arbiter believed otherwise. In his decision[6], he stated: On March 29, 1998, petitioner with her family had dinner at one restaurant known for mussels as their specialty. While having
dinner, petitioner complained of stomach pain, then vomited. Then, she was brought to the hospital and fell into coma for 21
days and later stayed at the ICU for 52 days. The hospital found that the probable cause of her sudden attack was alimentary
"In our honest opinion we have Jurisdiction over the complaint on the following grounds: allergy, as she had recently ingested a meal of mussels which resulted in a concomitant uticarial eruption. The hospital
expenses were paid by respondent.
First, this is a complaint of illegal dismissal of which original and exclusive jurisdiction under Article 217 has been conferred to
the Labor Arbiters. The interpretation of the CBA or enforcement of the company policy is only corollary to the complaint of On June 1998, the petitioner was allowed to go back to the Philippines for the continuation of her medical treatment. She was
illegal dismissal. Otherwise, an employee who was on AWOL, or who committed offenses contrary to the personnel polices then confined at the St. Lukes Medical Center for rehabilitation. The respondent continued to pay the petitioner’s salaries and
(sic) can no longer file a case of illegal dismissal because the discharge is premised on the interpretation or enforcement of the to assist her in paying her hospital bills. In a letter dated May 14, 1999, respondent informed the petitioner that the former
company polices (sic). had requested the latters physician to conduct a thorough physical and psychological evaluation of her condition, to determine
her fitness to resume her work at the company.Petitioners physician concluded that the former had not fully recovered
mentally and physically. Hence, respondent was constrained to terminate petitioners services effective August 31, 1999.
Second. Respondent voluntarily submitted the case to the jurisdiction of this labor tribunal. It adduced arguments to the
legality of its act, whether such act may be retirement and/or dismissal, and prayed for reliefs on the merits of the case. A
As a consequence of petitioners termination from employment, respondent offered a retirement package which consists of:
litigant cannot pray for reliefs on the merits and at the same time attacks (sic) the jurisdiction of the tribunal. A person cannot
Retirement Plan Benefits: P 1,063,841.76; Insurance Pension at P20,000.00/month for 60 months from company-sponsored
have one's cake and eat it too. x x x."
group life policy: P 1,200,000.00; Educational assistance: P 465,000.00; Medical and Health Care: P 200,000.00;
However, of the promised retirement benefits amounting to P1,063,841.76, only P701,454.89 was released to petitioners 1367 enacted May 1, 1978 and which removed from the exclusive jurisdiction of Labor Arbiters money claims arising from
husband, the balance thereof was withheld allegedly for taxation purposes. Respondent also failed to give the other benefits employer-employee relations, the jurisdiction of said Labor Arbiters over said cases being expressly limited to those which are
listed above. duly endorsed by the Regional Directors in accordance with the provisions of the Labor Code and which in no case shall include
claims for moral or other forms of damages. The Calderon case, however, is no longer controlling because the law upon which
Petitioner, represented by her husband, instituted the instant case for unpaid salaries; unpaid separation pay; unpaid balance said decision was based, Article 217 of the Labor Code as amended by PD No. 1367, has been superseded by PD NO. 1691
of retirement package plus interest; insurance pension for permanent disability; educational assistance for her son; medical which took effect May 1, 1980 and which restored to the Labor Arbiters original and exclusive jurisdiction over claims,
assistance; reimbursement of medical and rehabilitation expenses; moral, exemplary, and actual damages, plus attorneys fees. monetary or otherwise, provided by law or by appropriate agreement, arising from employer-employee relations, except those
expressly excluded therefrom. Although the cause of action arose when PD No. 1367 was then the prevailing law and upon
On September 28, 2001, Labor Arbiter Aliman D. Mangandog rendered a Decision dismissing petitioners complaint. The LA which the Calderon case was premised, said Decree was no longer applicable when the case was resolved by the National
stressed that respondent had been generous in giving financial assistance to the petitioner. In denying petitioners claim for Labor Relations Commission on August 29, 1980. The law then in force was PD No. 1691. Art. 217 as amended by PD No. 1367
separation pay, the Labor Arbiter ratiocinated that the same had already been integrated in the retirement plan established by and PD No. 1691 was again amended by Batas Pambansa Bilang 130 which took effect August 21, 1981. On June 1, 1982, said
respondent. Thus, petitioner could no longer collect separation pay over and above her retirement benefits. Art. 217 was amended anew by Batas Pambansa Bilang 227 vesting on Labor Arbiters jurisdiction over cases that workers may
file involving wages, hours of work and other terms and conditions of employment and all money claims of workers, except
The arbiter refused to rule on the legality of the deductions made by respondent from petitioners total retirement benefits claims for employees’ compensation, social security, medicare and maternity benefits.
for taxation purposes, as the issue was beyond the jurisdiction of the NLRC.
Petition for certiorari with writ of preliminary injunction seeking review of the resolution of the National Labor Relations
On appeal to the National Labor Relations Commission (NLRC), the tribunal set aside the Labor Arbiters decision, respondent Commission which affirmed the decision of the Labor Arbiter awarding to private respondent the sum of P84,587.58
was ordered to pay Complainants portion of her separation pay. The NLRC emphasized that petitioner was not retired from the representing unpaid legal fees.
service pursuant to law, collective bargaining agreement (CBA) or other employment contract; rather, she was dismissed Petitioner, Sentinel Insurance Company, was in accord with the portion of the decision dismissing the complaint of respondent,
from employment due to a disease/disability under Article 284 of the Labor Code. In view of her non-entitlement to retirement Porfirio Bautista; however, it disagreed with the portion which awarded P84,587.58 to Bautista because contending that the
benefits, the amounts received by petitioner should then be treated as her separation pay. Labor Arbiter was without jurisdiction to make such award, the same being within the exclusive jurisdiction of the civil
courts.chanrobles virtual lawlibrary
Unsatisfied, petitioner elevated the matter to the Court of Appeals which affirmed the NLRC decision. Hence, petitioner filed a
petition for certiorari. The factual background of the case is as follows:chanrob1es virtual 1aw library

Issue: (1) Whether or not the claim for illegal deduction of taxes falls within the jurisdiction of Porfirio M. Bautista was hired as Legal Officer by Sentinel and his letter of appointment provided, among others, the
the LA; (2) Whether or not the taxes were illegally deducted from petitioner’s retirement benefit. following:jgc:chanrobles.com.ph

HELD: (1) YES. petitioners claim for illegal deduction falls within the tribunals jurisdiction. It is noteworthy that petitioner "4. Should your duties permit, you may handle recovery cases for the company for which you will be entitled fifteen (15%) per
demanded the completion of her retirement benefits, including the amount withheld by respondent for taxation purposes. The cent legal fees for amount actually recovered." 2
issue of deduction for tax purposes is intertwined with the main issue of whether or not petitioners benefits have been fully
given her. It is, therefore, a money claim arising from the employer-employee relationship, which clearly falls within the In the course of his employment, Bautista handled a number of cases for which he was paid fifteen (15) per cent on amounts
jurisdiction of the Labor Arbiter and the NLRC. recovered except for the four cases in question which, according to Bautista, he deferred the billing and collection of his
percentage on said cases because of his awareness of the tight financial condition of the company.
(2) NO. for the retirement benefits to be exempt from the withholding tax, the taxpayer is burdened to prove the concurrence
of the following elements: (1) a reasonable private benefit plan is maintained by the employer; (2) the retiring official or Bautista also handled thirteen other cases which, according to petitioner, were defaulted and/or dismissed for reasons
employee has been in the service of the same employer for at least ten (10) years; (3) the retiring official or employee is not attributable to him. Believing that the defaults/dismissals of the thirteen cases were the results of the wanton connivance of
less than fifty (50) years of age at the time of his retirement; and (4) the benefit had been availed of only once. Bautista with the adverse parties and/or gross negligence sufficient to warrant his dismissal for loss of trust and confidence,
petitioner served private respondent notice of termination of his services on April 2, 1979 to take effect March 31, 1979. On
Moreover, petitioner was qualified for disability retirement. At the time of such retirement, petitioner was only 41 years of March 29, 1979, petitioner applied for clearance to terminate employment with the Ministry of Labor and Employment but
age; and had been in the service for more or less eight (8) years. As such, the above provision is not applicable for failure to which was opposed by Bautista on May 31, 1979. In his opposition, Bautista questioned the legality of his dismissal and at the
comply with the age and length of service requirements. Therefore, respondent cannot be faulted same time asserted his claim for unpaid legal fees in the sum of P87,800.00 pursuant to the terms and conditions of his
for deducting from petitioners total retirement benefits the amount of P362,386.87, for taxation purposes. employment, particularly the provision on legal fees.chanroblesvirtualawlibrary

No settlement having been arrived at in the conciliatory hearing, the case was referred to the National Capital Region of the
Ministry of Labor and Employment. In the position-paper submitted, petitioner presented its reasons for the application for
232 SCRA 592 clearance but remained silent on the matter of the money claim.

Sentinel Insurance Corp. v. Bautista On September 28, 1979, the Labor Arbiter rendered the questioned decision. Dissatisfied with the portion awarding the money
claim, petitioner appealed to the National Labor Relations Commission and argued that the Labor Arbiter erred in assuming
2. ID.; ID.; ID.; ID.; JURISDICTION OF LABOR ARBITER. — The main argument of petitioner is that the money claim is civil in that Bautista was entitled to the legal fees irrespective of the means by which he effected recoveries for the company.
character cognizable only by regular courts and therefore beyond the jurisdiction and competence of the Labor Arbiter.
Petitioner invoked the ruling in Jose D. Calderon, Sr. v. CA promulgated on October 28, 1980 where this Court held that an Considering that there was no dispute that the appointment of Bautista provided for the 15% legal fees on top of his basic
alleged oppressive act of non-payment of salaries, allowances and other reimbursable expenses is intrinsically a civil dispute salary and finding that there appeared to be no qualification for entitlement of the disputed fees and there being no denial
within the jurisdiction of regular courts to resolve and beyond that of Labor Arbiters. The Calderon case was based on PD No. that Bautista handled the four cases subjects of the controversy and succeeded in recovering for the company, the National
Labor Relations Commission on August 29, 1980 affirmed the decision of the Labor Arbiter and dismissed the appeal. sustained the dismissal because it was in its favor, but alleged that the Labor Arbiter did not have the authority to adjudicate
the claim for legal fees although part of the express terms of the contract of employment because it is to its disadvantage. 7
Sentinel Insurance sought reconsideration of the dismissal which was however denied on December 10, 1980. Hence this
petition for certiorari. On January 12, 1981, We issued a temporary restraining order enjoining the National Labor Relations Furthermore, to state that this case involves both a labor controversy and a civil dispute would be to sanction split jurisdiction
Commission from enforcing and/or carrying out any writ of execution issued or might be issued pursuant to its resolution and which is obnoxious to the orderly administration of justice. 8 In a number of cases this Court expounded on this holding that
to continue until otherwise ordered.chanrobles.com.ph : virtual law library evidently, the lawmaking authority had second thoughts about depriving Labor Arbiters and the National Labor Relations
Commission of the jurisdiction to award damages in labor cases because that setup means duplicity of suits, splitting the cause
It is alleged that at the time Bautista instituted his money claim by way of opposition, the employer-employee relationship has of action and possible conflicting findings and conclusions by two tribunals of one and the same claim. 9
ceased. The allegation is without basis. Bautista filed a timely opposition to the application for authority to terminate his
employment. The employer-employee tie certainly existed at that point of time. Although Bautista did not seek reinstatement, In view of the foregoing, We hold that the National Labor Relations Commission did not commit grave abuse of discretion in
he demanded compliance with one of the express terms of his employment, thus the dispute is one arising from employer- sustaining the money claim granted by the Labor Arbiter which arose out of an employer-employee relationship and which, as
employee relationship. we hereby hold, was within the exclusive jurisdiction of the Labor Arbiter.

The main argument of petitioner is that the money claim is civil in character cognizable only by regular courts and therefore WHEREFORE, the instant petition is hereby dismissed. The temporary restraining order heretofore issued is hereby lifted. No
beyond the jurisdiction and competence of the Labor Arbiter. Petitioner invoked the ruling in Jose D. Calderon, Sr. v. Court of costs.
Appeals 3 promulgated on October 28, 1980 where this Court held that an alleged oppressive act of non-payment of salaries,
allowances and other reimbursable expenses is intrinsically a civil dispute within the jurisdiction of regular courts to resolve PAL vs NLRC
and beyond that of Labor Arbiters. The Calderon case was based on PD No. 1367 enacted May 1, 1978 and which removed
from the exclusive jurisdiction of Labor Arbiters money claims arising from employer-employee relations, the jurisdiction of Private respondents (Ferdinand Pineda and Godofredo Cabling) are flight stewards of the petitioner. Both were dismissed from
said Labor Arbiters over said cases being expressly limited to those which are duly endorsed by the Regional Directors in the service for their alleged involvement in the April 3, 1993 currency smuggling in Hong Kong. One person in the name of
accordance with the provisions of the Labor Code and which in no case shall include claims for moral or other forms of Joseph Abaca was intercepted at the airport carrying a bag containing 2.5 million pesos who allegedly found said plastic bag
damages. 4 at the Skybed section of arrival flight PR300/03 where private respondents served as flight attendants. After having been
implicated by Abaca in the incident before the respondent’s disciplinary board, it was Abaca himself who gave exculpating
The Calderon case, however, is no longer controlling because the law upon which said decision was based, Article 217 of the statements to the same board and declared that the private respondents were not the owners of the said currencies. That just
Labor Code as amended by PD No. 1367, has been superseded by PD NO. 1691 which took effect May 1, 1980 and which as petitioners ‘thought that they were already fully cleared of the charges, as they no longer received any summons/notices on
restored to the Labor Arbiters original and exclusive jurisdiction over claims, monetary or otherwise, provided by law or by the intended ‘additional hearings’ mandated by the Disciplinary Board,’ that they were already fully cleared of the charges, as
appropriate agreement, arising from employer-employee relations, except those expressly excluded therefrom. 5 they no longer received any summons/notices on the intended ‘additional hearings’ mandated by the Disciplinary Board,’ they
were surprised to find out that they were terminated by PAL.
Although the cause of action arose when PD No. 1367 was then the prevailing law and upon which the Calderon case was
premised, said Decree was no longer applicable when the case was resolved by the National Labor Relations Commission on Aggrieved by said dismissal, private respondents filed with the NLRC a petition for injunction praying that:
August 29, 1980. The law then in force was PD No. 1691.
"I. Upon filing of this Petition, a temporary restraining order be issued, prohibiting respondents(petitioner herein)
Article 217 as amended by PD No. 1367 and PD No. 1691 was again amended by Batas Pambansa Bilang 130 which took effect from effecting or enforcing the Decision dated Feb. 22, 1995, or to reinstate petitioners temporarily while a hearing on the
August 21, 1981. On June 1, 1982, said Article 217 was amended anew by Batas Pambansa Bilang 227 vesting on Labor Arbiters propriety of the issuance of a writ of preliminary injunction is being undertaken;"
jurisdiction over cases that workers may file involving wages, hours of work and other terms and conditions of employment
and all money claims of workers, except claims for employees’ compensation, social security, medicare and maternity benefits. After hearing, a writ of preliminary mandatory injunction be issued ordering respondent to reinstate petitioners to their former
positions pending the hearing of this case, or, prohibiting respondent from enforcing its Decision dated February 22,1995 while
Undoubtedly, the claim of 15% legal fees arose out of employer-employee relationship and clearly falls within the coverage of this case is pending adjudication;"
Article 217 as amended by PD No. 1691 and Batas Pambansa Bilang. 227.
After hearing, that the writ of preliminary injunction as to the reliefs sought for be made permanent, that petitioners be
In Garcia v. Martinez, 6 promulgated May 28, 1979, PD No. 1367 was held to be an amendatory decree in the nature of a awarded full backwages, moral damages of PHP 500,000.00 each and exemplary damages of PHP 500,000.00 each, attorney’s
curative statute with retrospective application to a pending proceeding which cured the lack of jurisdiction of the Court of First fees equivalent to ten percent of whatever amount is awarded, and the costs of suit.
Instance of Davao City over a complaint for damages allegedly arising from the dismissal of a radio station manager which was
filed on August 2, 1976. PD No. 1691 and BP No. 227 are likewise curative statutes which cured the lack of jurisdiction of the "The NLRC issued the writ of injunction. PAL moved for reconsideration on the ground that has no jurisdiction to issue an
Labor Arbiter at the start of the proceeding and should be given retrospective application to this pending proceedings, as the injunction or restraining order since this may be issued only under Article 218 of the Labor Code if the case involves or arises
precise purpose of the amendments was to settle once and for all the conflict of jurisdiction between regular courts and labor from labor disputes and thereby divesting the labor arbiter of its original and exclusive jurisdiction over illegal dismissal cases .
agencies.chanrobles.com:cralaw:red
Issue: W/N the NLRC acted with grave abuse of discretion on issuing the writ of injunction
Moreover, petitioner is estopped from questioning the jurisdiction of the Labor Arbiter to award the money claim considering
that in the position paper it submitted to the Labor Arbiter, it never objected but in fact remained silent as to the claim which Held: Yes. In labor cases, Article 218 of the Labor Code empowers the NLRC-"(e) To enjoin or restrain any actual or threatened
was asserted not only in the opposition for termination of employment but also raised as an issue at the conciliation hearing. commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute
which, if not restrained orperformed forthwith, may cause grave or irreparable damage to any party or render ineffectual any
Also, as correctly argued by respondent Bautista, it was petitioner who commenced the action for dismissal, and he merely decision in favor of such party.
asserted a claim expressly provided by the terms of his employment so much so that petitioner cannot pretend that the Labor
Arbiter possessed jurisdiction over issues of illegal dismissal, as in fact, it did not question the portion of the decision which
Complementing the above-quoted provision, Sec. 1, Rule XI of the New Rules of Procedure of the NLRC, pertinently provides as (6) Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from
follows: employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five
"Section 1.Injunction in Ordinary Labor Dispute thousand pesos (P 5,000.00), whether or not accompanied with a claim for reinstatement.[11]

.-A preliminary injunction or a restraining order may begranted by the Commission through its divisions pursuant to the The jurisdiction conferred by the foregoing legal provision to the labor arbiter is both original and exclusive, meaning,
no other officer or tribunal can take cognizance of, hear and decide any of the cases therein enumerated. The only
provisions of paragraph (e) of Article 218 of the Labor Code, as amended, when it is established on the bases of the sworn
exceptions are where the Secretary of Labor and Employment or the NLRC exercises the power of compulsory arbitration, or
allegations in the petition that the acts complained of, involving or arising from any labor dispute before the the parties agree to submit the matter to voluntary arbitration pursuant to Article 263 (g) of the Labor Code, the pertinent
Commission, which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party or render portions of which reads:
ineffectual any decision in favor of such party.

"(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable
The foregoing ancillary power may be exercised by the Labor Arbiters only as an incident to the cases pending before
to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or
them in order to preserve the rights of the parties during the pendency of the case, but excluding labor disputes involving certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of
strikes or lockout. [7] (Emphasis Ours)
automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one
From the foregoing provisions of law, the power of the NLRC to issue an injunctive writ originates from "any labor has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately
dispute" upon application by a party thereof, which application if not granted "may cause grave or irreparable damage to any resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The
party or render ineffectual any decision in favor of such party." Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure
compliance with this provision as well as with such orders as he may issue to enforce the same.
The term "labor dispute" is defined as "any controversy or matter concerning terms and conditions of employment
or the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms and On the other hand, the NLRC shall have exclusive appellate jurisdiction over all cases decided by labor arbiters as
conditions of employment regardless of whether or not the disputants stand in the proximate relation of employers and provided in Article 217(b) of the Labor Code. In short, the jurisdiction of the NLRC in illegal dismissal cases is appellate in nature
employees."[8] and, therefore, it cannot entertain the private respondents' petition for injunction which challenges the dismissal orders of
The term "controversy" is likewise defined as "a litigated question; adversary proceeding in a court of law; a civil action petitioner. Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any of its divisions to issue writs
or suit, either at law or in equity; a justiciable dispute."[9] of injunction, considering that Section 1 of Rule XI of the New Rules of Procedure of the NLRC makes injunction only an
ancillary remedy in ordinary labor disputes"[12]
A "justiciable controversy" is "one involving an active antagonistic assertion of a legal right on one side and a denial
thereof on the other concerning a real, and not a mere theoretical question or issue."[10] Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order granting private respondents' petition for
injunction and ordering the petitioner to reinstate private respondents.
Taking into account the foregoing definitions, it is an essential requirement that there must first be a labor dispute
between the contending parties before the labor arbiter. In the present case, there is no labor dispute between the petitioner The argument of the NLRC in its assailed Order that to file an illegal dismissal suit with the labor arbiter is not an
and private respondents as there has yet been no complaint for illegal dismissal filed with the labor arbiter by the private "adequate" remedy since it takes three (3) years before it can be disposed of, is patently erroneous. An "adequate" remedy at
respondents against the petitioner. law has been defined as one "that affords relief with reference to the matter in controversy, and which is appropriate to the
particular circumstances of the case."[13] It is a remedy which is equally beneficial, speedy and sufficient which will
The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal. This is clear from the promptly relieve the petitioner from the injurious effects of the acts complained of.[14]
allegations in the petition which prays for: reinstatement of private respondents; award of full backwages, moral and
exemplary damages; and attorney's fees. As such, the petition should have been filed with the labor arbiter who has the Under the Labor Code, the ordinary and proper recourse of an illegally dismissed employee is to file a complaint for
original and exclusive jurisdiction to hear and decide the following cases involving all workers, whether agricultural or non- illegal dismissal with the labor arbiter.[15] In the case at bar, private respondents disregarded this rule and directly went to the
agricultural: NLRC through a petition for injunction praying that petitioner be enjoined from enforcing its dismissal orders. In Lamb vs.
Phipps,[16] we ruled that if the remedy is specifically provided by law, it is presumed to be adequate. Moreover, the preliminary
mandatory injunction prayed for by the private respondents in their petition before the NLRC can also be entertained by the
(1) Unfair labor practice; labor arbiter who, as shown earlier, has the ancillary power to issue preliminary injunctions or restraining orders as an incident
in the cases pending before him in order to preserve the rights of the parties during the pendency of the case.[17]
(2) Termination disputes;
Furthermore, an examination of private respondents' petition for injunction reveals that it has no basis since there is no
showing of any urgency or irreparable injury which the private respondents might suffer. An injury is considered irreparable
(3) If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of if it is of such constant and frequent recurrence that no fair and reasonable redress can be had therefor in a court of law,[18] or
work and other terms and conditions of employment; where there is no standard by which their amount can be measured with reasonable accuracy, that is, it is not susceptible of
mathematical computation. It is considered irreparable injury when it cannot be adequately compensated in damages due to
(4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; the nature of the injury itself or the nature of the right or property injured or when there exists no certain pecuniary standard
for the measurement of damages.[19]

(5) Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; In the case at bar, the alleged injury which private respondents stand to suffer by reason of their alleged illegal dismissal
and can be adequately compensated and therefore, there exists no "irreparable injury," as defined above which would necessitate
the issuance of the injunction sought for. Article 279 of the Labor Code provides that an employee who is unjustly dismissed
from employment shall be entitled to reinstatement, without loss of seniority rights and other privileges, and to the payment
of full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his On June 20, 1977, another complaint was filed by Angel Chaves with the same division of the Department of Labor against the
compensation was withheld from him up to the time of his actual reinstatement. corporation on the basis of the findings of said investigation. Two years later or on November 28, 1979, the labor arbiter
rendered a decision awarding Chaves P5,500.00 as salary from March 13, 1976 to February 14, 1977, P462.50 as 13th month
The ruling of the NLRC that the Supreme Court upheld its power to issue temporary mandatory injunction orders in the pay, P1,700 as monthly allowance from February 1976 to June 1977, and P3,100 as per diem compensation from February
case of Chemo-Technische Mfg., Inc. Employees Union-DFA, et.al. vs. Chemo-Technische Mfg., Inc. et.al., docketed as G.R. No. 1976 to June 19, 1977.[8]
107031, is misleading. As correctly argued by the petitioner, no such pronouncement was made by this Court in said case. On
January 25,1993, we issued a Minute Resolution in the subject case stating as follows: The corporation appealed to then Ministry of Labor and Employment (now Department of Labor and Employment) but in its
order dated December 24, 1982, the Ministry, through Deputy Minister Vicente Leogardo, Jr., affirmed the decision of the
"Considering the allegations contained, the issues raised and the arguments adduced in the petition for certiorari , as well as labor arbiter.[9] Its motion for reconsideration of said order having been denied, the corporation filed the instant petition
the comments of both public and private respondents thereon, and the reply of the petitioners to private respondent's motion which we find to be impressed with merit.
to dismiss the petition, the Court Resolved to DENY the same for being premature."
The crucial issue in this case is which of the two, the MOLE (now DOLE) and the SEC has jurisdiction over the present
controversy.
It is clear from the above resolution that we did not in anyway sustain the action of the NLRC in issuing such temporary
mandatory injunction but rather we dismissed the petition as the NLRC had yet to rule upon the motion for reconsideration An intracorporate controversy would call for the jurisdiction of the SEC while a labor dispute, that of the NLRC or the MOLE as
filed by peitioner. Thus, the minute resolution denying the petition for being prematurely filed. the case may be.[10] But when a case is between a stockholder and the corporation of which he holds stocks, the controversy
is intracorporate and well within the jurisdiction of the SEC.[11] These rulings are in consonance with the following provisions of
Finally, an injunction, as an extraordinary remedy, is not favored in labor law considering that it generally has not proved Presidential Decree No. 902-A which took effect, on March 11, 1976:
to be an effective means of settling labor disputes.[20] It has been the policy of the State to encourage the parties to use the
non-judicial process of negotiation and compromise, mediation and arbitration.[21] Thus, injunctions may be issued only in "Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations,
cases of extreme necessity based on legal grounds clearly established, after due consultations or hearing and when all efforts partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall
at conciliation are exhausted which factors, however, are clearly absent in the present case. have original and exclusive jurisdiction to hear and decide cases involving:

WHEREFORE, the petition is hereby GRANTED. The assailed Orders dated April 3,1995 and May 31,1995, issued by the "(b) Controversies arising out of intracorporate or partnership relations, between and among stockholders, members, or
National Labor Relations Commission (First Division), in NLRC NCR IC No. 000563-95, are hereby REVERSED and SET ASIDE. associates; between any or all of them and the corporation, partnership or association of which they are stockholders,
members or associates, respectively; and between such corporation, partnership or association and the State insofar as it
CAGAYAN DE ORO COLISEUM v. OFFICE OF THE MINISTER OF LABOR AND EMPLOYMENT concerns their individual franchise or right to exist as such entity."
Cagayan de Oro Coliseum, Inc. is a corporation duly organized and existing under Philippine laws having been issued a
Thus, in Abejo v. De la Cruz,[12] the Court held that "an intracorporate controversy is one which arises between a stockholder
certificate of registration by the Securities and Exchange Commission (SEC) on September 15, 1961.[1] Its principal line of
and the corporation. There is no distinction, qualification, nor any exemption whatsoever. The provision is broad and covers
business is the holding of cockfights and occasional boxing matches.[2] Angel Chaves, on the other hand, is an incorporator and
all kinds of controversies between stockholders and corporations." The SEC, being clothed with additional
major stockholder of the corporation who, for sometime, served as its director and officer.[3]
adjudicatory powers over intracorporateand kindred disputes to promote dispatch arising from expertise enhanced by
Since its incorporation until 1977, the compensation of the corporation's directors, as provided by Section 5 of Article IV of its specialization in the settlement of said controversies,[13] is the proper agency to settle the controversy in this case.
By-laws, was from time to time fixed by its Board of Directors. On December 17, 1963, a copy of said By-laws was returned by
Although the reliefs sought by Chaves appear to fall under the jurisdiction of the labor arbiter as they are claims for unpaid
the SEC to the corporation with a request that a correction be made on said Section 5 by changing the phrase "Board of
salaries and other remunerations for services rendered, a close scrutiny thereof shows that said claims are actually part of the
Directors" to the word "stockholders." The change, however, was effected only in 1978.[4]
perquisites of his position in, and therefore interlinked with his relations with the corporation. In Dy vs. NLRC,[14] the Court
At the stockholders' regular meeting on February 7, 1975, Chaves was elected member of the Board of Directors. For fiscal said: "(t)he question of remuneration involving as it does, a person who is not a mere employee but a stockholder and officer,
year 1975-1976, he was elected vice-president and on March 13, 1976, with the unanimous approval of the members of the an integral part, it might be said, of the corporation, is not a simple labor problem but a matter that comes within the area of
Board, he assumed the presidency following the resignation of the then incumbent president. Chaves held the position of corporate affairs and management, and is in fact a corporate controversy in contemplation of the Corporation Code."
president until the end of his term in February, 1977.[5]
Finding that the MOLE has no jurisdiction to take cognizance of the herein controversy, there is no need to resolve the other
Shortly after Chaves assumed the presidency, or on April 8, 1976, the Board of Directors passed a resolution fixing the monthly issues raisedin this petition.
compensation of the president at P500.00 and his monthly allowance at P100.00. The Board also provided a P100.00 per diem
WHEREFORE, the questioned decision of the labor arbiter and the order of the MOLE are set aside for having been rendered
for the president's attendance in board meetings.[6]
without jurisdiction, but without prejudice to private respondent's seeking recourse with the appropriate forum. SO ORDERED.
Claiming that he had not been paid for services rendered, Chaves filed on June 3, 1977 a letter complaint with the Field
Services Division of the then Department of Labor, Regional Office No. 10. Consequently, said office investigated the corpo- Mainland Constrution Company vs. Movilla GR 118088 November 23, 1995 Hermosisima, Jr., J.:
ration and found the following: (1) unpaid wages for officers and office personnel; (2) nonpayment of emergency cost of living
allowance (ECOLA) under P.D. No. 525; (3) nonpayment of 13th month pay under P.D. No. 851; and (4) nonpayment of
special/regular holiday pay. The investigation also disclosed that although Atty. Angel Quimpo, general manager of the Facts: Mainland Construction Co., Inc. is a domestic corporation, duly organized and existing under Philippine laws, having
corporation, had signified his intention to pay the corporation's obligation to its employees or officers in the amount of been issued a certificate of registration by the Securities and Exchange Commission (SEC) on July 26, 1977, under Registry
P79,773.72 for per diems, allowances, 13th month pay and others as duly certified to by the corporation's bookkeeper and Number 74691. Its principal line of business is the general construction of roads and bridges and the operation of a service
treasurer, no resolution was passed by its stockholders or the Board to implement said plan.[7] shop for the maintenance of equipment. Respondents on the other hand, are the surviving heirs of complainant, Ernesto
Movilla, who died during the pendency of the action with the Labor Arbiter.
Records show that Ernesto Movilla, who was a Certified Public Accountant during his lifetime, was hired as such by Mainland in ERNESTO M. APODACA, petitioner,vs. NLRC, JOSE M. MIRASOL and INTRANS PHILS., INC., respondents. G.R. No. 80039 April
1977. Thereafter, he was promoted to the position of Administrative Officer with a monthly salary of P4,700.00. Ernesto 18, 1989GANCAYCO, J.:
Movilla, recorded as receiving a fixed salary of P4,700.00 a month, was registered with the Social Security System (SSS) as an
employee of petitioner Corporation. His contributions to the SSS, Medicare and Employees Compensation Commission (ECC)
FACTS: Petitioner was employed in respondent corporation. He was persuaded by respondent Mirasol to subscribe to 1,500
were deducted from his monthly earnings by his said employer. 2 On April 12, 1987, during petitioner corporation's annual
shares or for a total of P150,000.00. He paid P37,500.00. On September 1, 1975, petitioner was appointed President and
meeting of stockholders, the following were elected members of the Board of Directors, viz.: Robert L. Carabuena, Ellen L.
General Manager of the respondent corporation. However, on January 2, 1986, here signed. petitioner instituted with the
Carabuena, Lucita Lu Carabuena, Martin G. Lu and Ernesto L. Movilla. On the same day, an organizational meeting was held
NLRC a complaint against private respondents for the payment of his unpaid wages, his cost of living allowance, the balance of
and the Board of Directors elected Ernesto Movilla as Administrative Manager. 3 He occupied the said position up to the time
his gasoline and representation expenses and his bonus compensation for 1986. Private respondents admitted that there is
of his death. On April 2, 1991, the Department of Labor and Employment (DOLE) conducted a routine inspection on petitioner
due to petitioner the amount of P17,060.07 but this was applied to the unpaid balance of his subscription in the amount of
corporation and found that it committed such irregularities in the conduct of its business as:
P95,439.93. Petitioner questioned the set-off alleging that there was no call or notice for the payment of the unpaid
subscription and that, accordingly, the alleged obligation is not enforceable.
1. Underpayment of wages under R.A. 6727 and RTWPB-XI-01; 2. Non-implementation of Wage Order No. RTWPB-XI-02; 3.
Unpaid wages for 1989 and 1990; 4. Non-payment of holiday pay and service incentive leave pay; and 5. Unpaid 13th month
ISSUES:
pay (remaining balance for 1990).

(1) Whether or not NLRC has jurisdiction to resolve a claim for non-payment of stock subscriptions to a corporation. (2) If so,
On the basis of this finding, petitioner corporation was ordered by DOLE to pay to its thirteen employees, which included
whether or not anobligation arising therefrom be offset against a money claim of an employee againstthe employer.
Movilla, the total amount of P309,435.89, representing their salaries, holiday pay, service incentive leave pay differentials,
unpaid wages and 13th month pay.
RULING:
All the employees listed in the DOLE's order were paid by petitioner corporation, except Ernesto Movilla.
NLRC has no jurisdiction to determine such intra-corporate dispute between the stockholder and the corporation as in the
matter of unpaid subscriptions. This controversy is within the exclusive jurisdiction of the Securities and Exchange
Issue: WON the NLRC or the SEC has jurisdiction over the controversy?
Commission.(2) No. the unpaid subscriptions are not due and payable until a call is made by the corporation for payment.
Private respondents have not presented a resolution of the board of directors of respondent corporation calling for the
Held: NLRC has jurisdiction. payment of the unpaid subscriptions. It does not even appear that a notice of such call has been sent to petitioner by the
respondent corporation. As there was no notice or call for the payment of unpaid subscriptions, the same is not yet due and
payable. Even if there was a call for payment, the NLRC cannot validly set it off against thewages and other benefits due
Ratio: In the case at bench, the claim for unpaid wages and separation pay filed by the complainant against petitioner
petitioner. Article 113 of the Labor Code allows such a deduction from the wages of the employees by the employer, only in
corporation involves a labor dispute. It does not involve an intra-corporate matter, even when it is between a stockholder and
three instances.
a corporation. It relates to an employer-employee relationship which is distinct from the corporate relationship of one with the
other. Moreover, there was no showing of any change in the duties being performed by complainant as an Administrative
DOROTEO OCHEDA v. CA
Officer and as an Administrative Manager after his election by the Board of Directors. What comes to the fore is whether there
was a change in the nature of his functions and not merely the nomenclature or title given to his job. The trial court's jurisdiction over an action for damages arising from a quasi-delict which resulted in the death of an employee
while in the performance of his duty is challenged in this case.
Indeed, Ernesto Movilla worked as an administrative officer of the company for several years and was given a fixed salary every
month. To further sustain this assertion Movilla also submitted a joint affidavit executed by Juanito S. Malubay and Delia S. The late Eduardo Santos was, at the time of his death, employed as a painter by the petitioner who was a sub-contractor for
Luciano, Project Engineer and Personnel-In-Charge, respectively, of petitioner corporation, attesting that they personally knew the painting job on M.J. Building then being constructed along Salcedo Street, Makati, Metro Manila. The C.E. Construction
Movilla and that he was employed in the company. A Premium Certification issued by an authorized representative of Corporation, Inc. (CECCI) was the principal contractor thereof by virtue of a contract it entered into with M.J. Development
petitioners was also presented to show his actual monthly earnings as well as his monthly contributions to the SSS, Medicare Corporation, the owner of the building. Another corporation, Fujitec Philippines Industrial Company, Inc. (FUJITEC), was
and ECC. Movilla's registration in the SSS by petitioner corporation added strength to the conclusion that he was petitioner contracted by M.J. Development Corporation to install two (2) standard scenic elevator units in the building.
corporation's employee as coverage by the said law is predicated on the existence of an employer-employee relationship. When the painting job was almost complete, i.e., all that remained to be painted was the wall of the shaft for the second
Furthermore, petitioner corporation failed to present evidence which showed that, after his election as Administrative elevator, the petitioner trimmed his work force to two (2) employees, Hernani Gozun and Eduardo Santos; these employees
Manager, he was excluded from the coverage of the SSS, Medicare and ECC. It is pertinent to note that petitioner corporation were tasked to finish the painting. On 5 February 1981, they started work on the inner wall of the elevator shaft; to paint the
is not prohibited from hiring its corporate officers to perform services under a circumstance which will make him an employee. same, they had to stand on top of the elevator which was then on the second floor of the building. After they finished, they
Moreover, although a director of a corporation is not, merely by virtue of his position, its employee, said director may act as an called on the boy operating the elevator to ask him to bring the same down to the first floor. Instead of lowering the elevator,
employee or accept duties that make him also an employee. however, the boy brought it up to the sixth floor. The sudden upward movement caused the elevator to jerk and the two (2)
painters to lose their balance. Hernani was able to cling to the cable but Eduardo fell off the top, found himself pinned
Since Ernesto Movilla's complaint involves a labor dispute, it is the NLRC, under Article 217 of the Labor Code of the between the shaft and the elevator as the latter was moving upward and then fell to the ground when the elevator finally
Philippines, which has jurisdiction over the case at bench. stopped on the sixth floor. Hernani rushed to Eduardo's aid upon hearing the latter's cry for help. The former lifted Eduardo in
his arms and, with the help of another man, brought him to the Makati Medical Center where he later died. While the elevator
Nestle Philippines v. NLRC boy was never identified, it is alleged that he worked for CECCI.

On 11 September 1981, the spouses Catalino and Ester Santos, together with Wilma Palabasan-Santos, parents and widow,
respectively, of Eduardo, filed a Complaint[1] for damages against Doroteo Ocheda and CECCI before the then Court of First
Instance (now Regional Trial Court) of Pampanga. The case was docketed as Civil Case No. 6263 and was assigned to Branch 42 SO ORDERED."[8]
thereof. The complaint alleges the foregoing facts and, in addition, specifically states that while Eduardo was employed by the
petitioner in 1979 and received a daily wage of P35.00, the petitioner did not place him within "any SSS, Medicare and This determination of liability is based on the trial court's findings that:
Workmen's Compensation coverage." It is further averred that the elevator boy was inexperienced for the work assigned to
him. They then asked for judgment ordering the defendants, jointly and severally, to pay P10,000.00 as burial expenses, "It has been sufficiently established that it was defendant Ocheda who caused the accident to happen. It was defendant
P30,000.00 as moral damages, attorney's fees and compensatory damages as may be proved at the trial and costs. Ocheda who ordered the late Eduardo Santos and Hernani Gozun to use the top of the elevator as stepping board while
painting the wall of the elevator shaft. And defendant Ocheda failed to exercise the diligence of a good father of a family in the
Petitioner filed an Answer with a Counterclaim against the plaintiff, and a Cross-Claim against CECCI.[2] He alleges therein that supervision of his employees.
Eduardo was employed by him only a week before the accident and purely on a casual basis for the particular painting job. As
affirmative defense, he avers that Eduardo's death was due to the negligence and carelessness of the elevator boy, an It has likewise been shown that C.E. Construction was, at the time of the incident in question, in full control of the building
employee of CECCI. Thus, the latter is solely liable for the said death and no cause of action exists against him. Moreover, it is since the same was not yet accepted by the owner thereof. C.E. Construction was the general contractor of the building, hence,
postulated that the trial court has no jurisdiction over claims involving SSS, Medicare, Workmen's Compensation and insurance it was in full management and control of the elevator because the same was already turned over to and accepted by the
benefits. Such jurisdiction is vested in other administrative or quasi-judicial bodies; furthermore, he avers that the allegation building owner from Fujitec. As such, C.E. Construction should have guarded against the unauthorized use of the elevator by
concerning such claims (paragraph 8 of the complaint) is not essential to the plaintiffs' cause of action which is the negligent people working in the building. At the time of the incident, the late Eduardo Santos was an employee of defendant Ocheda, a
operation of the elevator. In his counterclaim, petitioner asks for an award of attorney's fees in the amount of P10,000.00, and sub-contractor of C.E. Construction. In view of all these, C.E. Construction is equally liable with defendant Ocheda pursuant to
the expenses of litigation. Article 2180, in conjunction with Article 2176 of the Civil Code. The elevator which caused the injury and subsequent death of
Eduardo Santos was under the management and control of C.E. Construction. Consequently, had C.E. Construction used proper
In due course, CECCI likewise filed its Answer with a Third-Party Complaint[3] against FUJITEC which it alleged to be liable, being care in the management and operation of the elevator, and had it exercised the diligence of a good father of a family in the
the employer of the elevator boy. FUJITEC filed its Answer to the said Third-Party Complaint[4] denying the allegations made supervision of its employees, then the fatal incident would not have happened."[9]
therein and asserting that the operation of the elevator was turned over to the building owner long before the fatal accident.
Petitioner and CECCI appealed this adverse decision to the respondent Court of Appeals which docketed the case as C.A.-G.R.
Pre-trial was conducted on 23 September 1983. The pre-trial order issued by the trial court embodies the respective positions
CV No. 09574. In the Brief he submitted, petitioner made the following assignment of errors:
of the parties. As to herein petitioners, the Pre-trial order summarized his stand as follows:
"I
"2. Defendant Ocheda's Case:
THE LOWER COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL COURT HAD JURISDICTION OVER THE COMPLAINT FILED;
Defendant Doroteo Ocheda denies liability. He claims that the complaint states no cause of action against him; that the death
of the deceased Eduardo Santos resulted from the operation of the elevator at the construction site; that he had nothing to do
II
with the operation, or control, or management of the elevator in question, hence, the death of Eduardo Santos is not
attributable to him; that his participation in the construction of the building was limited solely to painting specific portions THE LOWER COURT ERRED IN HOLDING THAT OCHEDA WAS GUILTY OF NEGLIGENCE FOR THE DEATH OF SANTOS;
thereof; that he filed a cross-claim against defendant C.E. Construction Corp. because the said corporation was the general
contractor of the building, operator/maintainer of the elevator, and employer of the elevator boy."[5] III
[6]
During the trial of the case on the merits, petitioner presented two (2) witnesses -- Josefino Rivera and himself. THE LOWER COURT ERRED IN APPLYING ARTICLE 2180 OF THE NEW CIVIL CODE TO OCHEDA;
[7]
On 24 February 1986, the trial court rendered its decision finding both the petitioner and CECCI liable for the death of IV
Eduardo. The dispositive portion of the decision reads as follows:
THE LOWER COURT ERRED IN HOLDING OCHEDA JOINTLY AND SEVERALLY LIABLE WITH C.E. CONSTRUCTION CORP. TO THE
"WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered as follows: PLAINTIFFS FOR DAMAGES."[10]

1. The defendant (sic) Doroteo Ocheda and C.E. Construction Corporation, Inc. are ordered to pay jointly and severally the On the other hand, CECCI, in its Brief, contended that the trial court gravely erred in finding it solidarily liable with the herein
plaintiffs the following amounts: petitioner for the death of Eduardo, in awarding moral damages, in dismissing the third-party complaint and in not holding the
plaintiffs therein liable for damages, attorney's fees and costs of the suit.[11]
a) Seven Thousand Three Hundred Fifty Pesos (P7,350.00) as burial expenses;
On 1 September 1988, the respondent Court promulgated its decision[12] upholding the findings of the trial court but reducing
b) Thirty Thousand Pesos (P30,000.00) as moral damages; the amount of damages; it likewise eliminated the grant of attorney's fees in favor of FUJITEC. Thus:
c) Five Thousand Pesos (P5,000.00) as attorney's fees; and "WHEREFORE, the decision appealed from is hereby AFFIRMED in all respects, except as modified herein by reducing the award
for actual or compensatory damages to only P5,880.00; reducing the damage caused by death to only P24,000.00; and
d) Costs of suit.
eliminating the award of P15,000.00 attorney's fees to third party defendant Fujitec. No costs.
2. The third-party complaint is hereby dismissed and the third-party plaintiff C.E. Construction Corporation, Inc. is ordered to
pay the third-party defendant Fujitec the sum of Fifteen Thousand Pesos (P15,000.00) as attorney's fees, plus the cost of suit; SO ORDERED."[13]

3. The cross-claim and counterclaim of defendant Ocheda and the counterclaim of defendant C.E. Construction are hereby The reduction in the award of damages was based on the respondent Court's finding of contributory negligence on the part of
dismissed. Eduardo Santos when he failed to heed the order to tie a rope around his waist while working.
As to the issue of lack of jurisdiction on the part of the trial court, the respondent Court held: In the second place, during the pre-trial conference, petitioner failed to raise the issue of jurisdiction. He instead harped on the
lack of a cause of action -- his first affirmative defense -- which was based on the theory that the proximate cause of Eduardo's
"The case at bar is being prosecuted in behalf of a deceased, not dismissed, employee for damages arising from the death of death was the negligence of the elevator boy who was an employee of CECCI; in fact, it was against the latter that he filed a
the employee based on quasi-delict founded on an undoubted principle of justice recognized by all legislations that every cross-claim.
injury, loss or damage which a person receives in his right (sic), be it by act or by omission, creates a juridical relation from
which is derived the right which the aggrieved party has to be indemnified and the consequent obligation by the other party. In the third place, petitioner openly and unqualifiedly invoked and submitted to the jurisdiction of the trial court by setting up
a counterclaim, asking for relief in the concept of attorney's fees and expenses of litigation against the private respondents and
In the recent case of Floresca vs. Philex Mining Corporation, 136 SCRA 141, the Supreme Court ruled that recovery under the filing a cross-claim against CECCI, whom he alleged to be the employer of the elevator boy.
new Civil Code for damages arising from negligence is not barred by Article 173 of the New Labor Code. In this case, it was
further held that an ordinary court has jurisdiction over complaints for damages filed by heirs of mining employees against the Finally, he presented evidence to prove that the proximate cause of the accident and resulting death of Eduardo was the
mining corporation for the death the former allegedly caused by the negligence of their employer."[14] negligence of the elevator boy. He concludes that as employer of the said boy, CECCI is solely liable to the private respondents
for the damages claimed by the latter.
His motion to reconsider the decision having been denied in the resolution of the respondent Court dated 18 October
Petitioner was, therefore, effectively estopped from raising the issue of jurisdiction with respect to the damages arising from a
1988,[15] petitioner took this recourse under Rule 45 of the Rules of Court. He reiterates in the instant petition for review the
quasi-delict. While it is true that jurisdiction over the subject matter of a case may be raised at any stage of the proceedings as
assignment of errors submitted before the respondent Court.
the same is conferred by law,[22] it is nevertheless settled that a party may be barred from raising it on the ground of
This Court gave due course to the petition and required the parties to submit their respective Memoranda[16] after the estoppel.[23] The reason for this is that after voluntarily submitting a cause and encountering an adverse decision on the merits,
submission of the Comment to the petition by the private respondents, the Reply thereto by the petitioner and the Rejoinder it would be improper and too late, to say the least, for the loser to question the jurisdiction or power of the court. It is not
to the latter by the private respondents. correct for a party who has invoked the jurisdiction of a court in a particular matter to secure affirmative relief, to afterwards
deny that very jurisdiction to escape penalty.
We find no merit in the petition.
And even granting, for the sake of argument, that the issue of jurisdiction can still be raised in connection with its specific
Regarding the issue of the factual findings upon which the second, third and fourth assigned errors are based, We find no reference to the damages arising out of a quasi-delict, petitioner's thesis would still fail. Such damages may not be awarded in
cogent reason to disturb such findings of both the trial and respondent courts. Petitioner does not even attempt to show that accordance with Section 217 of the Labor Code, as amended, for there is no reasonable causal connection with the employer-
this case falls under any of the accepted exceptions to the well-settled and oft-repeated rule that findings of facts of the Court employee relationship. At the time the cause of action accrued, Article 217 of the Labor Code required that in order that the
of Appeals are binding upon this Court.[17] Labor Arbiter may adjudicate claims not included in the other paragraphs, the same must arise out of employer-employee
relations.
Anent the alleged lack of jurisdiction on the part of the trial court, petitioner admits that the private respondents' cause of
action, as expressed in the complaint, is based on a quasi-delict. The former submits, however, that since the monetary award In San Miguel Corporation vs. National Labor Relations Commission,[24] this Court ruled, with respect to Article 217, as amended
is sought in connection with the employer-employee relationship which existed between him and the late Eduardo Santos, by B.P. Blg. 227:
only Labor Arbiters, pursuant to Article 217 of the Labor Code of the Philippines as it was then worded, [18] have original and
exclusive jurisdiction over them. Under the said provision, "all money claims of workers" and "all other claims arising from "While paragraph 3 above refers to 'all money claims of workers,' it is not necessary to suppose that the entire universe of
employer-employee relations" are exclusively cognizable by Labor Arbiters. We ruled in Getz Corp. vs. Court of Appeals[19] that money claims that might be asserted by workers against their employers has been absorbed into the original and exclusive
pursuant to P.D. No. 1691, such claims include moral and exemplary damages. Petitioner further contends that Floresca vs. jurisdiction of Labor Arbiters. In the first place, paragraph 3 should be read not in isolation from but rather within the context
Philex Mining Corp.,[20] which the respondent Court relied upon, is not applicable because the cause of action involved therein formed by paragraph 1 (relating to unfair labor practices), paragraph 2 (relating to claims concerning terms and conditions of
accrued on 28 June 1967, or before the enactment of the Labor Code and P.D. No. 1691; he asserts that the decision therein employment), paragraph 4 (claims relating to household services, a particular species of employer-employee relations), and
constituted "judicial legislation". paragraph 5 (relating to certain activities prohibited to employees or to employers). It is evident that there is a unifying
element which runs through paragraphs 1 to 5 and that is, that they all refer to cases or disputes arising out of or in connection
Petitioner's unusual patience and tenacity on the first assigned error merits him no reward. In the first place, he did not raise in with an employer-employee relationship. This is, in other words, a situation where the rule of noscitur a sociis may be usefully
his answer that defense with respect to the claim for damages arising from a quasi-delict. His affirmative defense of lack of invoked in clarifying the scope of paragraph 3, and any other paragraph of Article 217 of the Labor Code, as amended. We
jurisdiction specifically refers to the allegation in paragraph 8 of the complaint concerning the SSS, Medicare, Workmen's reach the above conclusion from an examination of the terms themselves of Article 217, as last amended by B.P. Blg. 227, and
Compensation and insurance benefits the award of which, according to him, falls within the competence and jurisdiction of even though earlier versions of Article 217 of the Labor Code expressly brought within the jurisdiction of the Labor Arbiters and
other administrative or quasi-judicial bodies. In fact, he even considers such allegation to be non-essential to the complaint's the NLRC 'cases arising, from employer-employee relations,' which clause was not expressly carried over, in printer's ink, in
cause of action -- the negligent operation of the elevator. This is how he worded that particular affirmative defense: Article 217 as it exists today. For it cannot be presumed that money claims of workers which do not arise out of or in
connection with their employer-employee relationship, and which would therefore fall within the general jurisdiction of the
"SECOND AFFIRMATIVE DEFENSE regular courts of justice, were intended by the legislative authority to be taken away from the jurisdiction of the courts and
lodged with Labor Arbiters on an exclusive basis. The Court, therefore, believes and so holds that the 'money claims of workers'
12. He need not deny nor (sic) admit the allegations in paragraph 8 regarding the alleged SSS, Medicare, Workmen's referred to in paragraph 3 of Article 217 embraces money claims which arise out of or in connection with the employer-
Compensation, and insurance coverage since this Honorable Court has no jurisdiction over disputes involving cases of these employee relationship, or some aspect or incident of such relationship. Put a little differently, that money claims of workers
sorts, jurisdiction thereof being vested in other administrative or quasi-judicial bodies. Furthermore, the allegations in said which now fall within the original and exclusive jurisdiction of Labor Arbiters are those money claims which have some
paragraph 8 of the complaint is (sic) not essential to plaintiff's cause of action which is the negligent operation of the elevator reasonable causal connection with the employer-employee relationship."
resulting in the death of Eduado (sic) Santos."[21]
Said article presently reads as follows:[25]
Obviously, he did not even have Labor Arbiters in mind for such cases. He knew, or at least ought to have known, that
expressly excepted from the broad jurisdiction of Labor Arbiters in Section 217 of the Labor Code are "claims for employees "ART. 217. Jurisdiction of Labor Arbiters and the Commission. -- (a) Except as otherwise provided under this Code, the Labor
compensation, social security, medicare and maternity benefits." Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission
of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:
Ernesto Medina Et Al., V. Hon. Floreliana Castro-Bartolome
1. Unfair labor practice cases;

2. Termination of disputes; Cosme de Aboitiz, acting in his capacity as President and Chief Executive Officer of the defendant Pepsi-Cola Bottling
Company of the Philippines, Inc., went to the Pepsi-Cola Plant in Muntinlupa, Metro Manila and without any provocation,
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of shouted and maliciously humiliated Ernesto Medina and Jose G. Ong:
work and other terms and conditions of employment;  GOD DAMN IT. YOU FUCKED ME UP ... YOU SHUT UP! FUCK YOU! YOU ARE BOTH SHIT TO ME! YOU ARE FIRED (referring
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; to Ernesto Medina). YOU TOO ARE FIRED! '(referring to Jose Ong ) for having allegedly delayed the use of promotional
crowns
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strike and lockouts;  effected on the very day that plaintiffs were awarded rings of loyalty to the Company, 5 days before Christmas and on
and the day when the employees' Christmas party was held so that when Medina and Ong went home that day and found
their wives and children already dressed up for the party, they didn't know what to do and so they cried unashamedly
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from  A joint criminal complaint for oral defamation against Aboitiz
employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five  Provincial Fiscal: dismissed the complaint since uttered not to slander but to express anger and displeasure
thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.
 Petition for Review with the office of the Secretary of Justice (now Ministry of Justice): reversed
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.  Aboitiz filed a motion to dismiss on the ground of lack of jurisdiction but it was dismissed since the complaint for civil
damages is clearly not based on an employer-employee relationship but on the manner of plaintiffs' dismissal and the
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising from the effects flowing therefrom
interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to  This case was filed on May 10, 1979. The amendatory decree, P.D. 1367, which took effect on May 1, 1978 and which
the grievance machinery and voluntary arbitration as may be provided in said agreements." provides that Regional Directors shall not indorse and Labor Arbiters shall not entertain claims for moral or other forms
of damages, now expressly confers jurisdiction on the courts in these cases, specifically under the plaintiff's causes of
In the instant case, the source of the obligation upon which the private respondents' cause of action is based is a quasi-delict or action
tort which has no reasonable connection with any of the claims provided for in the aforesaid Article 217 of the Labor Code. It  alreadly settled by jurisprudence that mere asking for reinstatement does not remove from the CFI jurisdiction over the
would have been entirely different if the claim for damages arose out of, for instance, the illegal dismissal of Eduardo, in which damages
case the Labor Arbiter would have exclusive jurisdiction thereon.[26]  The case must involve unfair labor practices to bring it within the jurisdiction of the CIR (now NLRC)
It would have also been different if the petitioner had grounded his claim of lack of jurisdiction on the basis of the Workmen's
 A second motion to dismiss was filed because of the promulgation of P.D. No. 1691 amending Art. 217 of the Labor Code
of the Philippines and Batasan Pambansa Bldg. 70 which took effect on May 1, 1980, amending Art. 248 of the Labor
Compensation Law. Unfortunately, he adroitly avoided this issue from the very beginning not only because of his claim that the
allegation on this matter is irrelevant to the private respondents' theory but, and more importantly, he did not, as revealed by Code.
the latter, register Eduardo with the Social Security System pursuant to the Amended Rules on Employees Compensation in  jurisdiction over employee-employer relations and claims of workers have been removed from the Courts of First
relation to Chapter II, Title II, Book IV of the Labor Code of the Philippines (P.D. No. 442), as amended. To avoid possible liability Instance
thereunder, and more particularly the criminal and civil sanctions under Section 4, Rule II of said Rules which reads:
ISSUE: W/N the Labor Code has any relevance to the reliefs sought
"SEC. 4. Penalty. -- Any violation of this Rule shall be penalized as follows:

(1) In case of failure or refusal to register employees, the employer or responsible official who committed the violation shall be HELD: NO. petition is granted
punished with a fine of not less than P1,000 nor more than P10,000 and/or imprisonment for the duration of the violation or
noncompliance or until such time that rectification of the violation has been made, at the discretion of the court.  simple action for damages for tortuous acts is governed by the Civil Code and not the Labor Code
Separate Opinions
(2) In case a compensable contingency occurs after 30 days from employment and before the System receives any report for  AQUINO, J.,dissenting:
coverage about the employee or EC contribution on his behalf, his employer shall be liable to the System for the lump sum
equivalent to the benefits to which he or his dependents may be entitled."
 I dissent with due deference to the opinion penned by Mr. Justice Abad Santos
 The two signed on January 5, 1978 letters of resignation and quitclaims and were paid P93,063 and P84,386 as separation
petitioner unabashedly asserted in his Answer that the late Eduardo Santos was his employee for barely a week and that he pay, respectively
was hired on a casual basis only for the particular painting job on the M.J. Building. Having done so, he cannot now be heard to  More than a month after their dismissal, or on January 27, 1978, Medina and Ong filed with the Ministry of Labor, a
make a strained and tenuous analysis of Floresca vs. Philex Mining Corporation.[27] complaint for illegal dismissal - dismissed that complaint because of their resignation and quitclaim.
 17 days after that order of dismissal, or on May 10, 1979, filed for damages
WHEREFORE, for lack of merit, the instant petition is DENIED with costs against the petitioner. This decision is immediately  In my opinion the dismissal of the civil action for damages is correct because the claims of Medina and Ong were within
executory. SO ORDERED. the exclusive jurisdiction of the Labor Arbiter and the NLRC, as originally provided in article 217 of the Labor Code and as
reaffirmed in Presidential Decree No. 1691. Medina and Ong could not split their cause of action against Aboitiz and
Pepsi-Cola.
SINGAPORE AIRLINE v. HON. Pano 1. Art 217 s4 of the LC stipulated that Labor Arbiters have exclusive jurisdiction to hear and decide cases for workers with
claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations.
FACTS:
 August 21, 1974: Carlos E. Cruz was offered employment Engineer Officer with the opportunity to undergo a B-707 I The court held that the cuase of action was under Civil Law, not the labor code. Why?
conversion training course requiring him to enter into a bond with Singapore Airlines Limited for 5 years
The petitioner sought to recover damages agreed upon in the contract as redress for respondent’s breach of his contractual
 Claiming that Cruz had applied for "leave without pay" and had gone on leave without approval of the application during
obligation to its damage and prejudice. He also didn’t ask for relief under the Labor Code.
the second year, SIA filed suit for damages against Cruz and his surety, Villanueva, for violation of the terms and
conditions The applicable case law was Singapore airlines v Pano where the employer’s claim for damages was based on wanton failure
 RTC: dismissed the complaint, counterclaim and cross-claim for lack of jurisdiction and refusal without just cause to report to duty coupled with the averment that the employee maliciously and with bad faith
violated the contract. The employee didn’t report for duty as a course of convention training- quasi-delict diba!
ISSUE: W/N properly cognizable by Courts of justice and not by the Labor Arbiters of the National Labor Relations Commission
There must be a causal connection for claims provided in the RT217 S4 OF THE LC. Only when there is such a connection with
HELD: YES. records are hereby ordered remanded to the proper Branch of the Regional Trial Court other claims can damages be considered as arising from employer-employee relations.
 jurisdiction over the present controversy must be held to belong to the civil Courts
2. In SMC v NLRC, the interpretation of Art 217 then was focused on in the phrase “all money claims of workers” in par 3.
 Article 217 of the Labor Code under PD No. 1691 and BP Blg. 130 provides that all other claims arising from employer-
employee relationship are cognizable by Labor Arbiters There was no phrase “arising from employer-employee relations at that time” (art 217 amended by bp blg 227, not yet the
 petitioner's claim for damages is grounded on the "wanton failure and refusal" without just cause of private respondent present labor code)
Cruz to report for duty despite repeated notices served upon him of the disapproval of his application for leave of
absence without pay. This, coupled with the further averment that Cruz "maliciously and with bad faith" violated the
terms and conditions of the conversion training course agreement to the damage of petitioner removes the present
controversy from the coverage of the Labor Code and brings it within the purview of Civil Law DOCTRINE: The use of noscitur a sociis wherein the entire universe of family claims asserted by workers has been observed
 complaint was anchored not on the abandonment per se but on the manner and consequent effects of such into the exclusive jurisdiction of labor arbiters.
abandonment of work translated in terms of the damages which petitioner had to suffer
Nos a soc was also used to limit par 3 (par 4 in the present labor code) of art 217 wherein it was read in relation to par 1 (unfair
 The primary relief sought is for liquidated damages for breach of a contractual obligation. The other items demanded are labor practices), par 2 (terms and conditions of employment), par 4 (household services) and par 5 (restrictions on activities of
not labor benefits demanded by workers generally taken cognizance of in labor disputes, such as payment of wages, employees and employers)
overtime compensation or separation pay. The items claimed are the natural consequences flowing from breach of an
obligation, intrinsically a civil dispute. There was a unifying element which referred to cases out of employer-employee relations.
 Additionally, there is a secondary issue involved that is outside the pale of competence of Labor Arbiters. Is the liability of
Villanueva one of suretyship or one of guaranty? Unquestionably, this question is beyond the field of specialization of Money claims that didn’t arise out of such relations was to be taken in by regular courts. The claims should have a causal
Labor Arbiters. connection with employer-employee relations

In Ocheda, the action based on tort or quasi-delict with no such causal connection was in the juris of the regular courts.
Dai-Chi v Villarama (RTC judge) and Limjuco
In pepsi-cola, the action by employees against the malicious filing of the employer of a criminal complaint against them was
On July 29, 1993, the petitioner Daichi electronics filed a complaint for damages with RTC branch 156 for an employee’s
with the regular courts.
(Limjuco) violation of their contract in 1990 which stipulated that the termination of service of an employee restricted him
from working in a company which has a similar set of products or ventures for a span of 2 years following the termination of The rationale for the Dai-chi case was that the complaint for damages wasn’t anchored on term of employee’s service but the
service. effects of such term.
The petitioner claimed that respondent became an employee of such a company called Angel Sound with the same position as Cases decided under the earlier version of Art 217 was also consistent in allocating civil disputes bet employers and employes
head of material management control before the 2 years was up. to the realm of the regular courts. In Medina (1929), the civil complaint for damagaes against the employer for slanderous
remarks against the employtess were tried in the civil courts. In Laron (1984), the court held that the Labor Arbiters have no
The petitioner sought to claim 100k in damages and prevent the former employee from working in the rival business within the
jurisdiction if the labor code wasn’t involved.
1 year timespan.

The respondent court under villarama claimed that it had no jurisdiction because the complaint was for damages from labor- 122 SCRA 67
employee relations and should be adjudicated under the Labor Arbiter under Art 217 s 4 of the LC.

The petitioner asked for reversal because the case was recognizable under the regular courts and that the cause of action RUSTAN SUPERVISORY UNION v. MOISES DALISAY +
didn’t arise from employee-employer relationships even if the claim was in the employee’s contract.
TEEHANKEE, J.:
Issue: Is the petitioner’s claim for damages one arising from employee-employer relations?
An original action for certiorari and prohibition challenging the jurisdiction of the Court of First Instance of Lanao del Norte to
Decision: No, petition granted issue the injunction orders complained of.
Petitioner union is a legitimate labor organization and individual petitioners are the union's principal officers. On September herein have stationed themselves in front of the gates of plaintiff's plant" to prevent the entry and egress of the company's
23, 1970, the union wrote respondent company that a great number of the supervisory personnel of respondent's plant had trucks and heavy equipment and the delivery of goods and raw materials to its premises.
affiliated with it and presented a set of proposals for incorporation into a collective bargaining agreement. On October 25,
1970, after its ultimatum letter of October 12, 1970 for union recognition had been unheeded by respondent, the union 2. Respondent court should have placed itself on guard, therefore, in the face of the complaint's allegations strongly indicating
declared a strike and picketed the company premises. Several conferences were thereafter held at the Iligan City Labor Office the existence of a labor dispute beyond its jurisdiction, more so, when it was informed in petitioner's urgent motion for
between the parties' representatives to no avail. Petitioner alleges that the company refused to negotiate with it while dissolution of injunction that the union was on strike because of the company's alleged refusal to bargain collectively which
respondent claims in its answer that "it is petitioners who refused to negotiate in good faith."[1] constitutes unfair labor practice under section 4 (a) (6) of the Industrial Peace Act - and was made known to it precisely to
deter its hand from maintaining its injunction. For while in regular civil actions, the question of jurisdiction is determined by
On November 13, 1970, respondent company as plaintiff filed with respondent court a complaint for actual, moral and the allegations of the complaint, the rule differs in labor disputes in that the Court has set the criterion that "whether the acts
exemplary damages with preliminary injunction against the union and its principal officers as defendants (petitioners herein) complained of in the petition for injunction arose out of, or are connected or interwoven with, the unfair labor practice case
alleging inter alia that "defendant union, its officers, members and the defendants herein have stationed themselves in front of [presents] a question of fact that should be brought to the attention of the court a quo to enable it to pass upon the issue
the gates of plaintiff's plant in such a coercive, violent and intimidating manner as to prevent, as they have in fact, prevented, whether it has jurisdiction or not over the case,"[4] and "the court is duty bound to find out if there really is a labor dispute by
the incoming and outgoing of plaintiff's trucks and heavy equipment as well as the delivery of some 120 tons of abaca and trim reception of evidence."[5] And such ex-parte injunctions, even if proper, should be automatically vacated after five days under
waste paper at petitioner's plant. On the same date, respondent court issued ex parte and without hearing any witness in section 9 (d) of Republic Act 875, and the hearing for determination of the existence of a labor dispute that divests the lower
open court, upon a P5,000.00-bond, its order and writ of November 13, 1970, enjoining "defendants singly and collectively court of jurisdiction, as emphasized by Mr. Justice Reyes in his concurring opinion in the very case of ALU vs. Ramolete[5] cited
from stationing themselves in front of the gates of plaintiff's plant and preventing the incoming and outgoing of plaintiff's truck by respondent court, should not be deferred beyond the statutory five-day period thereby "maintaining an injunction beyond
and heavy equipment, and from preventing plaintiff from delivering to its plant in Baloi, Lanao del Norte, the goods or the maximum period authorized by law even if the court had jurisdiction to issue it x x x (and) nullifying a statutory provision
materials mentioned above, and such other goods and raw materials as may be necessary for plaintiff's business which may be expressly designed to protect labor."
delivered to plaintiff from time to time from the wharf at Iligan City to its plant in Baloi, Lanao del Norte, until further orders
from this Court." 3. The Court stressed the exclusive jurisdiction of the industrial court as against the regular courts over unfair labor practices
in Veterans Security Free Workers Union vs. Cloribel[6] thus: "(I)t has long been accepted as dogma that cases involving unfair
On November 16, 1970, petitioners filed with respondent court an urgent motion to dissolve or lift the writ of preliminary labor practice fall within the exclusive jurisdiction of the Court of Industrial Relations, by virtue of the explicit provisions of
injunction, informing respondent court that they were engaged in an industrial dispute with respondent company, which was Section 5(a) of the Industrial Peace Act that said Court 'shall have jurisdiction over the prevention of unfair labor practices and
guilty of unfair labor practice in refusing to negotiate with them as the duly selected bargaining unit, by virtue of which they is empowered to prevent any person from engaging in any unfair labor practice. This power shall be exclusive and shall not be
had struck and picketed the company's premises since October 25, 1970, and therefore impugning respondent court's affected by any other means of adjustment or prevention that has been or may be established by an agreement, code, law or
jurisdiction to issue the injunction which in effect enjoined their concerted strike and picketing activities. Petitioners further otherwise.' The strike and picketing restrained by the questioned orders of respondent judge arose out of unfair labor
assailed the validity of the ex-parte injunction issued without their having been given the benefit of due notice and hearing as practices of respondent company in allegedly refusing to bargain in good faith and dismissing for union activities the union
required by section 9 of the Industrial Peace Act (Rep. Act 875).[2] officials and members, which are the very subject-matter of the unfair labor charge filed by the union in the Industrial
Court. These were facts expressly alleged by petitioner in its Urgent Motion for Reconsideration, asking respondent judge to
Respondent court, in its order of November 20, 1970, however, denied dissolution of the injunction, ruling that "(T)he set aside the questioned orders and raising respondent Court's lack of jurisdiction. The very complaint of respondent in the
defendant movantmaintained that there is an alleged labor dispute existing between the defendant labor union and the case below, for all its artful wording, was sufficient on its face to apprise respondent Court that the matter presented before it
plaintiff corporation but the lawyer of the movant admitted that he has not filed a case in the Court of Industrial Relations and involved an unfair labor practice case falling within the Industrial Court's exclusive competence and jurisdiction. x x x."
neither has he filed a notice of strike in the Department of Labor regarding the matter." Respondent court further ruled out the
industrial court's jurisdiction notwithstanding the existence of picketing in the premises, stating that "(I)f this is so, then a mere 4. Respondent court's stated reasons for denying dissolution of the injunction, to wit, that petitioner union had not filed a case
allegation on the existence of a labor dispute is enough to base jurisdiction on the Court of Industrial Relations. This view is in the industrial court nor a strike notice with the Labor Department constituted grave error. As emphasized by the Court in
not shared by this Court for the reason that jurisdiction of the Court can not be made to depend upon the pleas or defenses by the Veterans Security Free Workers Union case, supra, "It is settled doctrine that labor disputes arising out of unfair labor
the defendant in his answer or motion to dismiss. If such were the rule, the question of jurisdiction will depend entirely upon practices committed by any of the parties do not present a question of concurrent jurisdiction between the Court of First
the defendant." Instance and the Industrial Court, but that jurisdiction over such matters is vested exclusively in the Court of Industrial
Relations. As succinctly restated by Mr. Justice Sanchez in Phil. Communications Workers vs. Nolasco, supra, 'CIR'sjurisdiction
Hence, this petition filed by the union. Respondent company filed its answer, seeking to sustain the jurisdiction of respondent stays even if no unfair labor practice case has been filed with CIR. It is enough that unfair labor practice is involved.'" As to the
court, on the principal grounds that its action was an ordinary complaint for damages with preliminary injunction and that lack of strike notice, it is equally settled doctrine that in strikes arising out of and against a company's unfair labor practice, a
petitioner union was "never engaged in legitimate labor activities." Upon the filing of a P200.00-bond by petitioners, the Court strike notice is not necessary in view of the strike being founded on urgent necessity and directed against practices condemned
issued its writ of preliminary injunction enjoining the enforcement of the order and writ of preliminary injunction of November by public policy, such notice being legally required only in cases of economic strikes.
13, 1970 issued by respondent court.
5. Even assuming for the nonce respondent court's jurisdiction over the case below, however, respondent court failed to heed
The Court finds merit in the petition. the controlling statute as embodied in section 9 of the Industrial Peace Act. The issuance of injunctions in connection with
labor disputes is governed by the statutory restrictions therein provided and not by the Rules of Court. [7] And injunctions in
1. On the very face of the complaint, for all its artful wording and meticulous avoidance of any reference to petitioner union's labor disputes are not favored and may issue only after a strict and rigorous compliance with the statutory requisites. [8] It will
strike and picketing activities, and carrying of union placards in front of the company's premises, it is quite clear, particularly be readily seen that the injunction order and writ of respondent court must be overturned for the same failure to comply with
from the fact that the union and its principal officers were impleaded as principal defendants, that there existed a labor the statutory restrictions as in the Philippine Communications Workers case, viz: "For one, there is the absence of a showing
dispute between the parties, which pertains to the exclusive jurisdiction of the Court of Industrial Relations rather than to that the court heard the testimony of witnesses required in Section 9(d) to support the allegations of the complaint and
respondent court. This is the teaching of Phil. Communications Workers Federation vs. Nolasco,[3] where the complaint in the testimony in opposition thereto. Then, the court did not make any 'finding of fact' as to the existence or non-existence of the
regular court of first instance alleged that the striking union's pickets "prevented non-striking employees from entering the facts required to be shown under the afore-quoted Section 9(d) and also under Section 9(f) of the Industrial Peace Act. Nor
compound and performing their work therein" - whereas here, respondent company, evading any reference to the union's was notice given 'to the chief of those public officials of the x x x city x x x charged with the duty to protect complainant's
pickets, alleged in its complaint below that "defendant union, its officers, members and defendants named property,' also a prerequisite in said Section 9(d) heretofore mentioned. And finally, the record is barren as to whether or not
complainant exerted 'every reasonable effort to settle such dispute by negotiation or with the aid of any available
governmental machinery of mediation or by voluntary arbitration,' another condition exacted by law - this time Section 9(e) of
the Industrial Peace Act - before a restraining order or injunction may be granted. Failure to comply with even one of these
requirements will suffice to deny the issuance of the writ."[9]

6. It has likewise long been settled that where the acts complained of by the company are directly interwoven with the unfair
labor practice charged against it by the union, "the main case does not come under the jurisdiction of the [regular] trial court,
even if it involves violence, intimidation and coercion as averred in the complaint," as in the case below, for the industrial
court's jurisdiction is exclusive.[10] If the purpose of the action is to obtain some injunctive relief against certain acts of the
union members, the same can be obtained from the Industrial court which is given ample powers to act thereon.[11]

7. The labor dispute between the parties must therefore be settled and any injunctive relief must be sought at the industrial
court, which has exclusive jurisdiction over the subject matter, and to which the case must properly be brought at the instance
of either party. This jurisdictional question has long received the Court's attention and Mr. Justice Castro, speaking for the
Court in Regal Mfg. Employees Ass'n. vs. Reyes[12] indicated that actions for damages brought by the company against the
union as a result of the union's concerted activities must await the prior resolution of the industrial court which is vested with
exclusive jurisdiction over the labor dispute. The proper course for regular courts to observe in such cases was thus
stated: "(U)nder the environmental circumstances obtaining, the respondent court should have dismissed the original petition
for injunction outright, or, later, dismissed the amended petition for injunction, without prejudice, or, in the very least,
suspended action thereon in so far as the question of damages is concerned, until the CIR shall have finally decided the two
labor disputes pending before it." The fact that in the case at bar, the labor dispute has not yet reached the industrial court at
the instance of either party does not affect the cited ruling. The company may well take the initiative, as already indicated, of
seeking injunctive relief as well as the damages claimed by it in the industrial court - as it must, if it has basis for its allegations
of violence, intimidation and coercion on the union's part.

ACCORDINGLY, the writ of certiorari and prohibition prayed for is hereby granted, and the preliminary injunction heretofore
issued by the Court is hereby made permanent. Respondent court is hereby directed to dismiss the case for damages with
preliminary injunction before it, Civil Case No. 1637, without prejudice. With costs against private respondent.

SO ORDERED.

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