such a connection with the other claims can the claim for damages be considered as arising from
F. JURISDICTION OF THE LABOR ARBITER
1. Tolosa vs. NLRC, G.R. No. 149578, April 10, 2003
Facts: Evelyn Tolosa is the widow of Captain Virgilio Tolosa who was hired by Qwana-Kaiun,
through its manning agent, Asia Bulk Transport Phils. Inc., to be the master of the vessel named
M/V Lady Dona.Capt. Tolosa died while performing his duties during their voyage from Japan to
Long Beach California. Because of her husband’s death, Evelyn filed a complaint before the POEA
against Qwana-Kaiun, through its resident-agent, Mr. Fumio Nakagawa, Asia Bulk, Pedro Garate
and Mario Asis (Lady Dona’s Chief Mate and Second mate in-charge of the primary medical care of
the crew and who took care of Capt. Tolosa while he was sick). The case was transferred to the
NLRC and the Labor Arbiter held the respondents solidarily liable and granted all the damages as
prayed for by petitioner including lost income, moral and exemplary damages, attorney’s fees plus
interest. On appeal, NLRC dismissed the case for lack of jurisdiction over the subject matter of the
action pursuant to the provision of the Labor Code. Sustaining the NLRC, the CA ruled that the
labor commission had no jurisdiction over the subject matter of the action filed by petitioner. Her
cause did not arise from an employer-employee relation, but from a quasi delict or tort. Further,
there is no reasonable causal connection between her suit for damages and her claim under Article
217 (a)(4) of the Labor Code, which allows an award of damages incident to an employer-
employee relation. Hence, this petition.
Issue: Whether the labor arbiter and the NLRC had jurisdiction over petitioner's action
Ruling: The NLRC and the labor arbiter had no jurisdiction over petitioner's claim for damages,
because that ruling was based on a quasi delict or tort per Article 2176 of the Civil Code. The
allegations in her complaint are in the nature of an action based on a quasi delict or tort. It is
evident that she sued Pedro Garate and Mario Asis for gross negligence. Petitioner's
complaint/position paper refers to and extensively discusses the negligent acts of shipmates
Garate and Asis, who had no employer-employee relation with Captain Tolosa.
The pivotal question is whether the Labor Code has any relevance to the relief sought by petitioner.
From her paper, it is evident that the primary reliefs she seeks are as follows: (a) loss of earning
capacity denominated therein as "actual damages" or "lost income" and (b) blacklisting. The loss
she claims does not refer to the actual earnings of the deceased, but to his earning capacity based
on a life expectancy of 65 years. This amount is recoverable if the action is based on a quasi delict
as provided for in Article 2206 of the Civil Code, but not in the Labor Code.
While it is true that labor arbiters and the NLRC have jurisdiction to award not only reliefs provided
by labor laws, but also damages governed by the Civil Code, these reliefs must still he based on an
action that has a reasonable causal connection with the Labor Code, other labor statutes, or
collective bargaining agreements. It must be noted that a worker's loss of earning capacity and
blacklisting are not to be equated with wages, overtime compensation or separation pay, and other
labor benefits that are generally cognized in labor disputes. The loss of earning capacity is a relief
or claim resulting from a quasi delict or a similar cause within the realm of civil law. Claims for
damages under paragraph 4 of Article 217 must have a reasonable causal connection with any of
the claims provided for in the article in order to be cognizable by the labor arbiter. Only if there is
employer-employee relations." In the present case, petitioner's claim for damages is not related to
any other claim under Article 217, other labor statutes, or collective bargaining agreements.
Petitioner cannot anchor her claim for damages to Article 161 of the Labor Code, which does not
grant or specify a claim or relief. This provision is only a safety and health standard under Book IV
of the same Code. The enforcement of this labor standard rests with the labor secretary. Thus,
claims for an employer's violation thereof are beyond the jurisdiction of the labor arbiter. In other
words, petitioner cannot enforce the labor standard provided for in Article 161 by suing for
damages before the labor arbiter.
It is not the NLRC but the regular courts that have jurisdiction over actions for damages, in which
the employer-employee relation is merely incidental, and in which the cause of action proceeds
from a different source of obligation such as a tort. Since petitioner's claim for damages is
predicated on a quasi delict or tort that has no reasonable causal connection with any of the claims
provided for in Article 217, other labor statutes, or collective bargaining agreements, jurisdiction
over the action lies with the regular courts -- not with the NLRC or the labor arbiters.
PETITION DENIED, DECISION OF THE COURT OF APPEALS AFFIRMED.
2. Austria vs. NLRC, 312 SCRA 413
FACTS: Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day
Adventists (SDA) is a religious corporation and is represented in this case by officers of the SDA.
Petitioner Pastor Dionisio V. Austria worked with the SDA for twenty eight (28) years. He began his
work with the SDA as a literature evangelist, selling literature of the SDA over the island of Negros.
From then on, he worked his way up the ladder and got promoted several times. He became the
Assistant Publishing Director in the West Visayan Mission of the SDA, then was elevated to the
position of Pastor in the West Visayan Mission covering the island of Panay, and the provinces of
Romblon and Guimaras. He held the same position up to 1988. Finally, in 1989, he was promoted
as District Pastor of the Negros Mission of the SDA and was assigned in Negros Occidental, with
twelve (12) churches under his jurisdiction.In 1991, he was transferred to Bacolod City. He held the
position of district pastor until his services were terminated on October 1991.
On various occasions from August up to October, 1991, petitioner received several
communications from the treasurer of the Negros Mission asking him to admit accountability and
responsibility for the church tithes and offerings collected by his wife, in his district which amounted
to P15,078.10, and to remit the same to the Negros Mission.
Petitioner reasoned in his written explanation that he should not be made accountable for the
unremitted collections since it was private respondents Pastor Gideon Buhat and Mr. Eufronio
Ibesate who authorized his wife to collect the tithes and offerings since he was very sick to do the
collecting at that time.
Thereafter, petitioner went to the office of Pastor Buhat, president of the Negros Mission, and
asked for a convention to settle the dispute between petitioner and Pastor Rodrigo. Pastor Buhat
denied the request of petitioner because there was no quorum. The two exchanged heated
arguments until petitioner left the office. However, while on his way out, he heard Pastor Buhat
saying, "Pastor daw inisog na ina iya (Pador you are talking tough)” which prompted him to go back
and overturn Pastor Buhat’s table, scatter books in the office, bang Buhat’s attaché case and throw
the phone.
Petitioner received a letter inviting him and his wife to attend the meeting to discuss the non-
remittance of church collection and the events that transpired between him and Pastor Buhat. A
fact-finding committee was created to investigate petitioner. Subsequently, petitioner received a
letter of dismissal citing misappropriation of denominational funds, willful breach of trust, serious
misconduct, gross and habitual neglect of duties, and commission of an offense against the person
of employer's duly authorized representative, as grounds for the termination of his services.
ISSUES:
1) Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed by
petitioner against the SDA;
2) Whether or not the termination of the services of petitioner is an ecclesiastical affair, and, as
such, involves the separation of church and state;
RULINGS:
1) YES.
2) NO.
The principle of separation of church and state finds no application in this case. The rationale of the
principle of the separation of church and state is summed up in the familiar saying, "Strong fences
make good-neighbors." The idea advocated by this principle is to delineate the boundaries
between the two institutions and thus avoid encroachments by one against the other
because of a misunderstanding of the limits of their respective exclusive jurisdictions.
The case at bar does not concern an ecclesiastical or purely religious affair as to bar the State from
taking cognizance of the same. An ecclesiastical affair is "one that concerns doctrine, creed, or
form of worship of the church, or the adoption and enforcement within a religious association of
needful laws and regulations for the government of the membership, and the power of excluding
from such associations those deemed unworthy of membership. Examples of this so-called
ecclesiastical affairs are proceedings for excommunication, ordinations of religious ministers,
administration of sacraments and other activities with attached religious significance. The case at
bar does not even remotely concern any of the given examples. What is involved here is the
relationship of the church as an employer and the minister as an employee. It is purely secular and
has no relation whatsoever with the practice of faith, worship or doctrines of the church. The matter
of terminating an employee, which is purely secular in nature, is different from the ecclesiastical act
of expelling a member from the religious congregation.
3. Eviota vs. Court of Appeals, 407 SCRA 394
Facts: Standard Chartered Bank and petitioner Eduardo G. Eviota executed a contract of
employment under which the petitioner was employed by the respondent bank as Compensation
and Benefits Manager, VP (M21). However, the petitioner abruptly resigned from the respondent
bank barely a month after his employment and rejoined his former employer.
Standard Charter Bank filed with the Regional Trial court of Makati a complaint against Eviota’s
acts which it claimed constitute a clear violation of Articles 19, 20 and 21 of Republic Act No. 386,
as amended (the "Civil Code") and that Eviota not only violated Presidential Decree No. 442, as
amended (the Labor Code), wherein it states that an employee may terminate without just cause
the employer-employee relationship by serving written notice on the employer at least one (1)
month in advance But he also violated, Section 13 of the his Employment Contract specifically
provides that: "Your [i.e., Eviota's] employment may be terminated by either party giving notice of at
least one month.
According to the bank Eviota is liable for damages. For in good faith the Bank has complied with its
part of the agreement, among them were the purchase of a CRV for Evita’s use, making traveling
arrangement for him to join a Conference in Singapore for the bank, and furnishing him with a new
office. Aside form Eviota’s sudden resignation he also took a diskette with him containing and other
papers and documents containing confidential information on employee compensation and other
Bank matters
Although Eviota has already returned his singing bonus and he has paid for the expenses of the
CRV but he had induced the Bank to believe that he was committed to fulfilling his obligations
under the Employment Contract. As a result, the Bank incurred expenses in carrying out its part of
the contract. Thus the bank is asking not only for actual damages, but also moral and exemplary
damages.
The petitioner filed a motion to dismiss the complaint on the ground that the action for damages of
the respondent bank was within the exclusive jurisdiction of the Labor Arbiter under paragraph 4,
Article 217 of the Labor Code of the Philippines, as amended, which states that the Labor Arbiter
and Commission has jurisdiction over claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations.
The petitioner averred that the respondent bank's claim for damages arose out of or were in
connection with his employer-employee relationship with the respondent bank or some aspect or
incident of such relationship.
Issue: Whether or not the Regional Trial Court has jurisdiction?
Ruling: The action was for breach of a contractual obligation, which is intrinsically a civil dispute.
While seemingly the cause of action arose from employer-employee relations, the employer's claim
for damages is grounded on "wanton failure and refusal" without just cause to report to duty
coupled with the averment that the employee "maliciously and with bad faith" violated the terms
and conditions of the contract to the damage of the employer. Such averments removed the
controversy from the coverage of the Labor Code of the Philippines and brought it within the
purview of the Civil Law.
Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to be
cognizable by the Labor Arbiter, must have a reasonable causal connection with any of the claims
provided for in that article. Only if there is such a connection with the other claims can the claim for
damages be considered as arising from employer-employee relations.
Petitioner does not ask for any relief under the Labor Code of the Philippines. It seeks to recover
damages agreed upon in the contract as redress for private respondent's breach of his contractual
obligation to its "damage and prejudice". Such cause of action is within the realm of Civil Law, and
jurisdiction over the controversy belongs to the regular courts. More so when we consider that the
stipulation refers to the post-employment relations of the parties.
In this case, the private respondent's first cause of action for damages is anchored on the
petitioner's employment of deceit and of making the private respondent believe that he would fulfill
his obligation under the employment contract with assiduousness and earnestness. The petitioner
volte face when, without the requisite thirty-day notice under the contract and the Labor Code of the
Philippines, as amended, he abandoned his office and rejoined his former employer; thus, forcing
the private respondent to hire a replacement. The private respondent was left in a lurch, and its
corporate plans and program in jeopardy and disarray. Moreover, the petitioner took off with the
private respondent's computer diskette, papers and documents containing confidential information
on employee compensation and other bank matters. On its second cause of action, the petitioner
simply walked away from his employment with the private respondent sans any written notice, to
the prejudice of the private respondent, its banking operations and the conduct of its business.
Anent its third cause of action, the petitioner made false and derogatory statements that the private
respondent reneged on its obligations under their contract of employment; thus, depicting the
private respondent as unworthy of trust.
It is evident that the causes of action of the private respondent against the petitioner do not involve
the provisions of the Labor Code of the Philippines and other labor laws but the New Civil Code.
Thus, the said causes of action are intrinsically civil. There is no causal relationship between the
causes of action of the private respondent's causes of action against the petitioner and their
employer-employee relationship. The fact that the private respondent was the erstwhile employer of
the petitioner under an existing employment contract before the latter abandoned his employment
is merely incidental. In fact, the petitioner had already been replaced by the private respondent
before the action was filed against the petitioner. The Petition is DENIED.
4. Dynamic Signmaker Outdoor Advertising Services vs. Potongan, G.R. No. 156589, June
27, 2005
FACTS: In 1987, respondent Potongan started working for the petitioner Dynamic Signmaker
Outdoor Advertising Services, Inc. as Production Supervisor. In 1996, its union declared a strike
on account that all of respondent’s supervisors were replaced. As a result of the replacement,
respondent Potongan salary was withheld and was advised to take a leave of absence until further
notice. Subsequently, Potongan was also invited to answer the charges against him on account of
his infractions during the strike. Potongan denied the charges against him insisting that they were
fabricated to justify his termination due to suspicions that he was a strike sympathizer. Later,
Potongan filed a complaint for illegal dismissal, reinstatement, backwages and damages with the
Regional Arbitration Branch of the NLRC.
Labor Arbiter dismissed the complaint of Potongan on the ground that his cause of action was
barred by prior judgment of two consolidated cases of which Potongan was among those who are
found guilty of committing prohibited acts and whose employment was consequently declared lost.
On appeal to the NLRC, Potongan argued that the LA did not acquire jurisdiction over his person in
the said consolidated cases because he is not a member of respondents of the two cases. NLRC
therefore decided to set aside the LA’s resolution of dismissal of Potongan’s complaint on the
ground that jurisdiction over the person of Potongan in the consolidated cases was not acquired,
hence the judgement of the said case with respect to Potongan is null and void. As a result,
Potongan was directed by respondent to go back to work. The LA eventually dismissed
Potongan’s complaint.
ISSUE: Whether or not Potongan was constructively dismissed.
RULING: YES. Potongan was effectively terminated from employment by respondent when he
was replaced and instructed to take an indefinite leave. Petitioner was neither transferred nor
reassigned to another office of position contrary to what public respondent seems to allude. There
was no showing that there exists valid and just cause to terminate the petitioner. In fact, during the
pendency of the complaint for illegal dismissal, the letter ordering Potongan to report back to work
was a proof that there exists no valid and just cause to terminate him.
--ON THE ISSUE of the petitioners faulting the appellate court for failure to recognize the final and
executory nature of the decision rendered in the consolidated case and affirming the nullification of
the said decision.
HELD: The validity of the judgment or order of a court or quasi-judicial tribunal which has become
final and executory may be attacked when the records show that it lacked jurisdiction to render the
judgment. Rule III, Sections 3 and 6 of the Rules of Procedure of the NLRC, as amended by
Resolution No. 01-02, Series of 2002 states:
SEC. 3. Issuance of Summons. Within two (2) days from receipt of a case, the Labor Arbiter shall
issue the required summons, attaching thereto a copy of the complaint/petition and supporting
documents, if any. The summons, together with a copy of the complaint, shall specify the date, time
and place of the conciliation and mediation conference in two (2) settings.
xxx
SEC. 6. Service of Notices and Resolutions. a) Notices or summonses and copies of orders, shall
be served on the parties to the case personally by the bailiff or duly authorized public officer within
three (3) days from receipt thereof or by registered mail, provided that in special circumstances,
service of summons may be effected in accordance with the pertinent provisions of the Rules of
Court; xxx
Supplementary or applied by analogy to these provisions are the provisions and prevailing
jurisprudence in Civil Procedure. Where there is then no service of summons on or a voluntary
general appearance by the defendant, the court acquires no jurisdiction to pronounce a judgment in
the cause.
5. Metromedia Times Corp., vs. Pastorin, G.R. No. 154295, July 29, 2005
Facts: Pastorin (Respondent) was employed by Metromedia Times Corporation (Petitioner) as a
Field Representative/Collector. His task entailed the periodic collection of receivables from dealers
of petitioner's newspapers. Prior to the subject incident, respondent claimed to have received a
termination letter dated 7 May 1998 from management terminating his services for tardiness
effective 16 June 1988. Respondent, member of Metro Media Times Employees Union, was not
dismissed due to the intervention of the labor union, the collective bargaining agent in the
company.
In May 1998, he obtained a loan from one of the dealers whom he dealt with, De Manuel,
amounting to P9,000.00. After paying P1,125.00, respondent reneged on the balance of his loan.
De Manuel wrote a letter to petitioner, and seeking assistance for collection on the remainder of the
loan. She claimed that when respondent became remissed on his personal obligation, he stopped
collecting periodically the outstanding dues of De Manuel.
Petitioner sent a letter addressed to respondent, requiring an explanation for the transaction with
De Manuel, as well as for his failure to pay back the loan according to the conditions agreed
upon. In his reply letter, respondent admitted having incurred the loan, but offered no definitive
explanation for his failure to repay the same.
Petitioner, through a Memorandum, imposed the penalty of suspension on respondent for 4 days
for violating Company Policy and ordered his transfer to the Administration Department.
Respondent wrote a letter to petitioner, stating that he wanted to sign a transfer memo before
assuming his new position.
Later, he was handed the Payroll Change Advice indicating his new assignment to the Traffic and
Order Department of Metromedia. Nonetheless, respondent stopped reporting for work.
Respondent sent a letter to petitioner communicating his refusal to accept the transfer. Respondent
duly filed a complaint for constructive dismissal, non-payment of back wages and other money
claims with the Labor Arbiter.
Issue: Whether or not Metromedia is estopped from questioning the jurisdiction of the Labor
Arbiter over the subject matter of the casefor the first time only in their appeal before the NLRC.
Ruling: Applying the general rule that estoppel does not confer jurisdiction, petitioner is not
estopped from assailing the jurisdiction of the labor arbiter before the NLRC on appeal.
Respondent relied solely on estoppel to oppose petitioner’s claim of lack of jurisdiction on the part
of the labor arbiter. He adduced no other legal ground in support of his contention that the Labor
Arbiter had jurisdiction over the case. Thus, his claim falls flat in light of our pronouncement, and
more so considering the NLRC’s correct observation that jurisdiction over grievance Issue, such as
the propriety of the reassignment of a union member falls under the jurisdiction of the voluntary
arbitrator.
6. Yusen Air & Sea Service Phils vs. Villamor, G.R. No. 154060, August 16, 2005
FACTS: Petitioner hired respondent Villamor as branch manager in its Cebu Office. Later,
petitioner reclassified respondent’s position to that of Division Manager, which position respondent
held until his resignation on February 1, 2002. Immediately after his resignation, respondent started
working for Aspac International, a corporation engaged in the same line of business as that of
petitioner.
Thereafter, petitioner Yusen Air filed against respondent a complaint for injunction and damages
with prayer for a temporary restraining order in the RTC of Parañaque City, on the ground that
respondent violated the provision in his contract that he should not affiliate himself with competitors
for a period of two years from his resignation or separation from petitioner company.
Respondent also filed against petitioner a case for illegal dismissal before the NLRC. Instead of
filing an answer to the case in the RTC, respondent moved for the dismissal of said case, arguing
that the RTC has no jurisdiction over the subject matter of said case because an employer-
employee relationship is involved.
Petitioner contends that its cause of action did not arise from employer-employee relations even if
the claim therein is based on a provision in its handbook.
ISSUE: Whether or not the RTC has jurisdiction over the present controversy.
RULING: Yes the SC held that the RTC has jurisdiction over the case.
Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to be
cognizable by the Labor Arbiter, must have a reasonable causal connection with any of the claims
provided for in that article. Only if there is such a connection with the other claims can a claim for
damages be considered as arising from employer-employee relations.
Article 217, as amended by Section 9 of RA 6715, provides:
Art. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided
under this Code, the Labor 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:
xxx xxx xxx
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;"
While paragraph 3 above refers to “all money claims of workers,” it is not necessary to suppose
that the entire universe of money claims that might be asserted by workers against their employers
has been absorbed into the original and exclusive jurisdiction of Labor Arbiters. In the first place,
paragraph 3 should be read not in isolation from but rather within the context formed by paragraph
1 (relating to unfair labor practices), paragraph 2 (relating to claims concerning terms and
conditions of employment), paragraph 4 (claims relating to household services, a particular species
of employer-employee relations), and paragraph 5 (relating to certain activities prohibited to
employees or employers).
It is evident that there is a unifying element which runs through paragraph 1 to 5 and that is, that
they all refer to cases or disputes arising out of or in connection with an employer-employee
relationship. This is, in other words, a situation where the rule of noscitur a sociis may be usefully
invoked in clarifying the scope of paragraph 3, and any other paragraph of Article 217 of the Labor
Code, as amended.
We reach the above conclusion from an examination of the terms themselves of Article 217, as last
amended by B.P. Blg 227, and even though earlier versions of Article 217 of the Labor Code
expressly brought within the jurisdiction of the Labor Arbiters and the NLRC “cases arising from
employer-employee relations,” which clause was not expressly carried over, in printer’s ink, in
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 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”
referred to in paragraph 3 of Article 217 embraces money claims which arise out of or in connection
with the employer-employee relationship, or some aspect or incident of such relationship. Put a
little differently, that money claims of workers which now fall within the original and exclusive
jurisdiction of Labor Arbiters are those money claims which have some reasonable causal
connection with the employer-employee relationship.
When, as here, the cause of action is based on a quasi-delict or tort, which has no reasonable
causal connection with any of the claims provided for in Article 217, jurisdiction over the action is
with the regular courts.
As it is, petitioner does not ask for any relief under the Labor Code. It merely seeks to recover
damages based on the parties’ contract of employment as redress for respondent's breach thereof.
Such cause of action is within the realm of Civil Law, and jurisdiction over the controversy belongs
to the regular courts. More so must this be in the present case, what with the reality that the
stipulation refers to the post-employment relations of the parties.
For sure, a plain and cursory reading of the complaint will readily reveal that the subject matter is
one of claim for damages arising from a breach of contract, which is within the ambit of the regular
court’s jurisdiction.
It is basic that jurisdiction over the subject matter is determined upon the allegations made in the
complaint, irrespective of whether or not the plaintiff is entitled to recover upon the claim asserted
therein, which is a matter resolved only after and as a result of a trial. Neither can jurisdiction of a
court be made to depend upon the defenses made by a defendant in his answer or motion to
dismiss. If such were the rule, the question of jurisdiction would depend almost entirely upon the
defendant.
The orders of the lower courts are set aside.
7. Duty Free Phils., vs. Mojica, G.R. No. 166365, September 30, 2005
This petition for review on certiorari [1] under Rule 45 of the Rules of Court seeks to annul and set
aside the August 31, 2004 Decision [2] of the Court of Appeals in CA-G.R. SP No. 76995, and its
December 13, 2004 Resolution [3] denying the motion for reconsideration.
FACTS: On November 28, 1997, the Discipline Committee of Duty Free Philippines (DFP) rendered
a decision [4] in DISCOM Case No. 97-027 finding Stock Clerk Rossano A. Mojica guilty of Neglect
of Duty by causing considerable damage to or loss of materials, assets and property of DFP. Thus,
Mojica was considered forcibly resigned from the service with forfeiture of all benefits except his
salary and the monetary value of the accrued leave credits. [5]
Mojica was formally informed of his forced resignation on January 14, 1998. Thereupon, he filed a
complaint for illegal dismissal with prayer for reinstatement, payment of full back wages, damages,
and attorney’s fees, against DFP before the National Labor Relations Commission (NLRC).
On February 2, 2000, labor Arbiter Facundo L. Leda rendered a Decision finding that Mojica was
illegally dismissed. The dispositive portion of the Decision reads:
WHEREFORE, decision is hereby rendered declaring the dismissal of complainant Rossano J.
Mojica to be illegal such that respondent Duty Free Philippines is directed to reinstate him to his
former or substantially equivalent position without loss of seniority rights and other privileges and to
pay him the amount of TWO HUNDRED FIFTY NINE THOUSAND SEVENTEEN PESOS & 08/100
n(P259,017.08) representing his backwages and attorney’s fees, both awards being subject to
further computation until actual reinstatement.
The NLRC reversed the ruling of the arbiter and found that the dismissal was valid and with just
cause.
Mojica’s motion for reconsideration was denied, hence he filed a Petition for Certiorari under Rule
65 of the Rules of Court before the Court of Appeals.
The appellate court agreed with the arbiter that Mojica was not guilty of gross or habitual
negligence that would warrant his dismissal. It found that there was no convincing evidence to
prove that Mojica connived with other personnel in pilfering the stocks of DFP.
Respondent Mojica is a civil service employee; therefore, jurisdiction is lodged not with the NLRC,
but with the Civil Service Commission.
ISSUE: Whether or not, the NLRC has jurisdiction over the complaint for illegal dismissal.
HELD: No. The jurisdiction of Civil Service Authorities, as against that of the labor authorities, in
controversies involving the terms of employment, and other related issues, of the Civil Service
official and employees.
EO No. 292 provided that civil service employees have the right to present their complaints or
grievances to management and have them adjudicated as expeditiously as possible in the best
interest of the agency, the government as a whole, and the employee concerned. Such complaint
or grievances shall be resolved at the lowest possible level in the department or agency, as the
case may be, and the employee shall have the right to appeal such decision to higher authorities.
In case any dispute remains unresolved after exhausting all the available remedies under existing
laws and procedure, the parties may jointly refer the dispute in the Public Sector Labor
Management Council for appropriate action.
In sum, the labor arbiter and the NLRC erred in taking cognizance of the complaint as jurisdiction
over the complaint for illegal dismissal is lodged with the Civil Service Commission. The Court of
Appeals likewise erred in sustaining the labor arbiter.
8. Easycall Communication Phils., vs. King, G.R. No. 145901, December 15, 2005
FACTS: Petitioner was a domestic corporation primarily engaged in the business of message
handling. On May 20, 1992, petitioner, through its general manager, Roberto B. Malonzo, hired the
services of respondent as assistant to the general manager. Respondent's immediate superior,
recommended his promotion to assistant vice president, however, he was appointed to the even
higher position of vice president for nationwide expansion. Respondent's promotion was based on
his performance during the six months preceding his appointment. As vice president for nationwide
expansion, he became responsible for the sales and rentals of pager units in petitioner's expansion
areas.
Sometime in March 1993, Malonzo reviewed the sales performance of respondent. He found that
respondent's actual sales for the period October 1992March 1993 was 78% of his sales
commitment and 70% of his sales target.
On April 19, 1993, respondent received a notice of termination signed by Malonzo, the respondent
filed a complaint for illegal dismissal with the NLRC. The labor arbiter found that the termination of
respondent's employment on the ground of loss of confidence was valid.
On appeal, the NLRC affirmed the decision of the labor arbiter in its November 27, 1998 decision,
with the modification that petitioner was ordered to indemnify respondent in the amount of P10,000
for violating respondent's right to due process.
The CA granted the petition and ruled that the NLRC erred in holding that it lacked jurisdiction over
the case. The CA also ruled that the dismissal of respondent was illegal for having been done
without cause and in violation of his right to due process.ISSUE: Whether or not that respondent
being a corporate officer, NLRC has no jurisdiction under PD 902-A.
HELD: Under Section 5 of PD 902-A, the law applicable at the time this controversy arose, the
SEC, not the NLRC, had original and exclusive jurisdiction over cases involving the removal of
corporate officers.
Corporate officers' in the context of PD 902-A are those officers of a corporation who are given that
character either by the Corporation Code or by the corporation's by-laws. Under Section 25 of the
Corporation Code, the 'corporate officers' are the president, secretary, treasurer and such other
officers as may be provided for in the by-laws.
The burden of proof is on the party who makes the allegation. Here, petitioner merely alleged that
respondent was a corporate officer. However, it failed to prove that its by-laws provided for the
office of 'vice president for nationwide expansion. Since petitioner failed to satisfy the burden of
proof that was required of it, we cannot sanction its claim that respondent was a 'corporate officer
whose removal was cognizable by the SEC under PD 902-A and not by the NLRC under the Labor
Code.
In this case, respondent was appointed vice president for nationwide expansion by Malonzo,
petitioner's general manager, not by the board of directors of petitioner. It was also Malonzo who
determined the compensation package of respondent. Thus, respondent was an employee, not a
'corporate officer. 'The CA was therefore correct in ruling that jurisdiction over the case was
properly with the NLRC, not the SEC.
9. San Miguel Foods Inc., vs. San Miguel Corp Employees Union-PTGWO, G.R. No.
168569, October 5, 2007
Facts: At the time material to the case, respondent, San Miguel Corporation Employees Union –
PTWGO (the Union), was the sole bargaining agent of all the monthly paid employees of petitioner
San Miguel Foods, Incorporated (SMFI). On November 9, 1992, some employees of SMFI’s
Finance Department, through the Union represented by Edgar Moraleda, brought a grievance
against Finance Manager Gideon Montesa (Montesa), for “discrimination, favoritism, unfair labor
practices, not flexible [sic], harassment, promoting divisiveness and sectarianism, etc.,”before SMFI
Plant Operations Manager George Nava in accordance with Step 1 of the grievance machinery
adopted in the Collective Bargaining Agreement (CBA) forged by SMFI and the Union.
The Union sought the “1. review, evaluat[ion] & upgrad[ing of] all Finance staff and 2. promot[ion
of] G.Q. Montesa to other SMC affiliate[s] & subsidiaries.” At the grievance meeting held on
January 14, 1993, SMFI informed the Union that it planned to address the grievance through a
“work management review” which would be completed by March 1993, hence, it asked the finance
personnel to give it their attention and cooperation.
The “work management review” was not completed by March 1993, however, prompting the Union
to, on March 26, 1993, elevate the grievance to Step 2。
Almost nine months after the grievance meeting was held or on October 6, 1993, SMFI rendered a
“Decision on Step 1 Grievance” stating that it was still in the process of completing the “work
management review,”[4] hence, the Union’s requests could not be granted.
The Union thereupon filed a complaint on October 20, 1993 before the National Labor Relations
Commission (NLRC), Arbitration Branch, against SMFI,[5] its President Amadeo P. Veloso, and its
Finance Manager Montesa for “unfair labor practice, [and] unjust discrimination in matters of
promotion . . . ” It prayed that SMFI et al. be ordered to promote the therein named employees “with
the corresponding pay increases or adjustment including payment of salary differentials plus
attorney’s fees[,] and to cease and desist from committing the same unjust discrimination in matters
of promotion.”
Instead of filing a position paper as required by the Labor Arbiter, SMFI et al. filed a motion to
dismiss,[8] contending that the Issue raised in the complaint were grievance Issue and, therefore,
“should be resolved in the grievance machinery provided in [the] collective bargaining agreements
[sic] of the parties or in the mandated provision of voluntary arbitration which is also provided in the
CBA.”[9] The Union opposed the motion to dismiss.
In its Position Paper, the Union specified acts of ULP of SMFI et al. under Article 248, paragraphs
(e) and (i) of the Labor Code[10] which Article reads:
Art. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of
the following unfair labor practices:
(e) To discriminate in regard to wages, hours of work, and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization. x x x
xxxx
(i) To violate a collective bargaining agreement.
xxxx
By Order of February 18, 1994, the Labor Arbiter granted SMFI et al.’s motion to dismiss and
ordered the remand of the case to the grievance machinery for completion of the proceedings. The
Union appealed the said order to the NLRC by “Motion for Reconsideration/Appeal” which its
Second Division granted and accordingly ordered the Labor Arbiter to continue the proceedings on
the Union’s complaint. SMFI et al. filed a Motion for Reconsideration of the NLRC order but it was
denied, hence, they filed a petition for certiorari with this Court. After the parties and the Solicitor
General had filed their respective pleadings, this Court, by Resolution of January 25, 1999, referred
the case to the Court of Appeals pursuant to St. Martin Funeral Homes v. NLRC. By Decision of
July 31, 2002, the Court of Appeals denied SMFI et al.’s petition for certiorari, it holding that the
Labor Arbiter has jurisdiction over the complaint of the Union, they having violated the seniority rule
under the CBA by appointing and promoting certain employees which amounted to a ULP.
Issue: whether respondent' s complaint is one for unfair labor practice (ULP) over which a
Labor Arbiter has jurisdiction.
Ruling: The jurisdiction of Labor Arbiters, enumerated in Article 217 of the Labor Code, includes
complaints for ULP.
SMFI argues that the allegations in the Union’s complaint filed before the Labor Arbiter do not
establish a cause of action for ULP, the Union having merely contended that SMFI was guilty
thereof without specifying the ultimate facts upon which it was based. It cites Section 1 of Rule 8 of
the Rules of Court as applying suppletorily to the proceedings before the Labor Arbiter, which
Section reads:
Section 1. In general. – Every pleading shall contain in a methodical and logical form, a plain
concise and direct statement of the ultimate facts on which the party pleading relies for his claim . .
.
Alleging that the Union failed to comply with this Rule, SMFI concludes that the Labor Arbiter has
no jurisdiction over its complaint.
A perusal of the complaint shows that, indeed, the particular acts of ULP alleged to have been
committed by SMFI were not specified; neither were the ultimate facts in support thereof. In its
Position Paper, however, the Union detailed the particular acts of ULP attributed to SMFI and the
ultimate facts in support thereof.
Section 7, Rule V of the New Rules of Procedure of the NLRC provides:
Nature of Proceedings. – The proceedings before the Labor Arbiter shall be non-litigious in
nature. Subject to the requirements of due process, the technicalities of law and procedure and the
rules obtaining in the courts of law shall not strictly apply thereto. The Labor Arbiter may avail
himself of all reasonable means to ascertain the facts of the controversy speedily, including ocular
inspection and examination of well-informed persons. (Emphasis and underscoring supplied)
Section 1 of Rule 8 of the Rules of Court should thus not be strictly applied to a case filed before a
Labor Arbiter. In determining jurisdiction over a case, allegations made in the complaint, as well as
those in the position paper, may thus be considered.
As stated above, the Union, in its Position Paper, mentioned the particular acts of ULP and the
ultimate facts in support thereof.
1. large scale and wanton unjust discrimination in matters of promotion, particularly upon the
following members of complainant: Ellen Ventura, Julie Geronimo, Ronnie Cruz, Rita Calasin,
Romy de Peralta, Malou Alano, And E. M. Moraleda, all assigned with the Finance Department or
respondent SMFI.
2. gross and blatant violations by respondent SMFI of Section 5, Article III (Job Security) and
Section 4, Article VIII (Grievance Machinery) of the current collective bargaining agreement (CBA)
between complainant and respondent SMFI, which provisions of said CBA are hereunder quoted
for easy reference. (Emphasis and underscoring supplied)
On the questioned promotions, the Union did not allege that they were done to encourage or
discourage membership in a labor organization. In fact, those promoted were members of the
complaining Union. The promotions do not thus amount to ULP under Article 248(e) of the Labor
Code.
As for the alleged ULP committed under Article 248(i), for violation of a CBA, this Article is qualified
by Article 261 of the Labor Code, the pertinent portion of which latter Article reads:
x x x violations of a Collective Bargaining Agreement, except those which are gross in character,
shall no longer be treated as unfair labor practice and shall be resolved as grievances under the
Collective Bargaining Agreement. For purposes of this article, gross violations of Collective
Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic
provisions of such agreement. (Emphasis and underscoring supplied)
Silva v. NLRC instructs that for a ULP case to be cognizable by the Labor Arbiter, and the NLRC
to exercise its appellate jurisdiction, the allegations in the complaint should show prima facie the
concurrence of two things, namely: (1) gross violation of the CBA; AND (2) the violation pertains to
the economic provisions of the CBA.[17] (Emphasis and underscoring supplied)
As reflected in the above-quoted allegations of the Union in its Position Paper, the Union charges
SMFI to have violated the grievance machinery provision in the CBA. The grievance machinery
provision in the CBA is not an economic provision, however, hence, the second requirement for a
Labor Arbiter to exercise jurisdiction of a ULP is not present.
The Union likewise charges SMFI, however, to have violated the Job Security provision in the CBA,
specifically the seniority rule, in that SMFI “appointed less senior employees to positions at its
Finance Department, consequently intentionally by-passing more senior employees who are
deserving of said appointment.”
Article 4 of the Labor Code provides that “All doubts in the implementation and interpretation of the
provisions of this Code, including implementing rules and regulations, shall be resolved in favor of
labor.” Since the seniority rule in the promotion of employees has a bearing on salary and benefits,
it may, following a liberal construction of Article 261 of the Labor Code, be considered an
“economic provision” of the CBA.
As above-stated, the Union charges SMFI to have promoted less senior employees, thus
bypassing others who were more senior and equally or more qualified. It may not be seriously
disputed that this charge is a gross or flagrant violation of the seniority rule under the CBA, a ULP
over which the Labor Arbiter has jurisdiction.
SMFI, at all events, questions why the Court of Appeals came out with a finding that it (SMFI)
disregarded the seniority rule under the CBA when its petition before said court merely raised a
question of jurisdiction. The Court of Appeals having affirmed the NLRC decision finding that the
Labor Arbiter has jurisdiction over the Union’s complaint and thus remanding it to the Labor Arbiter
for continuation of proceedings thereon, the appellate court’s said finding may be taken to have
been made only for the purpose of determining jurisdiction.
10. Leyte IV Electric Cooperative Inc vs. LEYECO IV Employees Union-ALU, G.R. No. 1577745,
October 19, 2007
FACTS: Leyte IV Electric Cooperative, Inc. (petitioner) and Leyeco IV Employees Union-ALU
(respondent) entered into a CBA covering petitioner rank-and-file employees, for a period of five (5)
years. On June 2000, respondent, through its Regional Vice-President sent a letter to petitioner
demanding holiday pay for all employees, as provided for in the CBA. Petitioner, through its legal
counsel, sent a letter-reply, explaining that after perusing all available pay slips, it found that it had
paid all employees all the holiday pays enumerated in the CBA.
After exhausting the procedures of the grievance machinery, the parties agreed to submit the
issues of the interpretation and implementation of Section 2, Article VIII of the CBA on the payment
of holiday pay, for arbitration of the National Conciliation and Mediation Board (NCMB), Regional
Office No. VIII in Tacloban City. The parties were required to submit their respective position
papers, after which the dispute was submitted for decision.
While admitting in its Position Paper that the employees were paid all of the days of the month
even if there was no work, respondent alleged that it is not prevented from making separate
demands for the payment of regular holidays concomitant with the provisions of the CBA, with its
supporting documents consisting of a letter demanding payment of holiday pay, petitioner's reply
thereto and respondent's rejoinder, a computation in the amount of ₱1,054,393.07 for the unpaid
legal holidays, and several pay slips. Petitioner, on the other hand, insisted payment of the holiday
pay in compliance with the CBA provisions, stating that payment was presumed since the formula
used in determining the daily rate of pay of the covered employees is Basic Monthly Salary divided
by 30 days or Basic Monthly Salary multiplied by 12 divided by 360 days, thus with said formula,
the employees are already paid their regular and special days, the days when no work is done, the
51 un-worked Sundays and the 51 un-worked Saturdays.
The Voluntary Arbitrator them rendered a Decision in favor of respondent, holding petitioner liable
for payment of unpaid holidays from 1998 to 2000 reasoning that petitioner miserably failed to show
that it complied with the CBA mandate that holiday pay be "reflected during any payroll period of
occurrence" since the payroll slips did not reflect any payment of the paid holidays. He found
unacceptable not only petitioner's presumption of payment of holiday pay based on a formula used
in determining and computing the daily rate of each covered employee, but also petitioner's further
submission that the rate of its employees is not less than the statutory minimum wage multiplied by
365 days and divided by twelve.
ISSUE: Whether or not judgments of the Voluntary Arbitrator are appealable to the CA.
RULING: Yes. It has long been settled in the landmark case Luzon Development Bank that a
voluntary arbitrator, whether acting solely or in a panel, enjoys in law the status of a quasi-judicial
agency; hence, his decisions and awards are appealable to the CA. This is so because the awards
of voluntary arbitrators become final and executory upon the lapse of the period to appeal; and
since their awards determine the rights of parties, their decisions have the same effect as
judgments of a court. Therefore, the proper remedy from an award of a voluntary arbitrator is a
petition for review to the CA, following Revised Administrative Circular No. 1-95, which provided for
a uniform procedure for appellate review of all adjudications of quasi-judicial entities, which is now
embodied in Section 1, Rule 43 of the 1997 Rules of Civil Procedure.
As provided for in Section 9, Batas Pambansa Blg. 129, as amended by Republic Act No. 7902: (3)
Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions,
including the Securities and Exchange Commission, the Employees’ Compensation Commission
and the Civil Service Commission, except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of this Act and of subparagraph (1) of the
third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.

The Court took into account this exception in Luzon Development Bank but, nevertheless, held that
the decisions of voluntary arbitrators issued pursuant to the Labor Code do not come within its
ambit, thus:
x x x. The fact that [the voluntary arbitrator’s] functions and powers are provided for in the Labor
Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein. It will be noted that, although the Employees’
Compensation Commission is also provided for in the Labor Code, Circular No. 1-91, which is the
forerunner of the present Revised Administrative Circular No. 1-95, laid down the procedure for the
appealability of its decisions to the Court of Appeals under the foregoing rationalization, and this
was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.
The decision or award of the voluntary arbitrator or panel of arbitrators should likewise be
appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative
Circular No. 1-95, just like those of the quasi-judicial agencies, boards and commissions
enumerated therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to
provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities not
expressly excepted from the coverage of Sec. 9 of B.P. 129 by either the Constitution or another
statute. Nor will it run counter to the legislative intendment that decisions of the NLRC be
reviewable directly by the Supreme Court since, precisely, the cases within the adjudicative
competence of the voluntary arbitrator are excluded from the jurisdiction of the NLRC or the labor
arbiter. This ruling has been repeatedly reiterated in subsequent cases and continues to be the
controlling doctrine. Thus, the general rule is that the proper remedy from decisions of voluntary
arbitrators is a petition for review under Rule 43 of the Rules of Court.
11. Atty Garcia vs. Eastern Telecommunications Phils., et al., GR No. 173115 & 173163-64, April
16, 2009
Facts: Atty. Virgilio R. Garcia was the Vice President and Head of Business Support Services and
Human Resource Departments of the Eastern Telecommunications Philippines, Inc. (ETPI). Atty.
Salvador C. Hizon is the President/Chief Executive Officer of ETPI. Atty. Garcia was placed
under preventive suspension based on 3 complaints for sexual harassment. In response to
the complaints, the Human Resources Department constituted a Committee on Decorum to
investigate the complaints.
The committee conducted an investigation where Atty. Garcia was given copies of affidavits of the
witnesses against him and a chance to defend himself and to submit affidavits of his witnesses.
The Committee submitted a report which recommended his dismissal. A complaint-affidavit
for illegal dismissal with prayer for full backwages and recovery of moral and exemplary damages
was filed by Garcia against ETPI and Hizon.
Garcia filed a motion to inhibit praying that the LA Libo-on inhibit himself from further proceeding
with the case on the ground that he was a fraternity brother of Atty. Hizon but said motion was
denied. Garcia appealed said order before NLRC via memorandum which the NLRC set aside the
order of the LA and order the re-raffling of the case. (Re-raffled) LA found the preventive
suspension and subsequent dismissal of Atty. Garcia illegal. Atty. Garcia filed an Ex-Parte Motion
for the Issuance of a Writ of Execution which the LA isseud a writ of execution insofar as the
reinstatement aspect was concerned. Hizon filed a Very Urgent Motion to Lift/Quash Writ of
Execution. Per Sheriff’s Return on the Writ of Execution, said writ remained unsatisfied
because ETPI and Atty. Hizon refused to reinstate Atty. Garcia to his former position.
Atty. Garcia filed an Ex-Parte Motion for the Issuance of an Alias Writ of Execution praying that said
writ be issued ordering the sheriff to enforce the decision by garnishing the amount of ₱450,000.00
representing his monthly salaries for two months and 13th month pay from any of ETPI’s bank
accounts. LA denied the Very Urgent Motion to Lift/Quash Writ of Execution, explaining that
it still had jurisdiction over the reinstatement aspect of the decision, notwithstanding the
appeal taken, and that the grounds relied upon for the lifting or quashing of the writ were
not valid grounds.
ETPI and Atty. Hizon, without waiving their right to continue to question the jurisdiction of the Labor
Arbiter over the case. NLRC issues a TRO enjoining LA from executing pending appeal. Also it
reversed the LA’s decision of illegal dismissal and dismissed the case for lack of jurisdiction. CA
dismissed the consolidated petitions for lack of merit.
Issue: is the termination or removal of an officer of a corporation an intra-corporate controversy that
falls under the original exclusive jurisdiction of the RTC?
Ruling: YES. The Supreme Court, in a long line of cases, has decreed that a corporate officer’s
dismissal or removal is always a corporate act and/or an intra-corporate controversy, over which is
under the jursidiction of the Regional Trial Court.
We have ruled that an intra-corporate controversy is one which pertains to any of the following
relationships:
(1) between the corporation, partnership or association and the public;
(2) between the corporation, partnership or association and the State insofar as the former’s
franchise, permit or license to operate is concerned;
(3) between the corporation, partnership or association and its stockholders, partners, members or
officers; and
(4) among the stockholders, partners or associates themselves.
In Lozon v. National Labor Relations Commission, we declared that Presidential Decree No. 902-A
confers on the SEC original and exclusive jurisdiction to hear and decide controversies and cases
involving intra-corporate and partnership relations between or among the corporation, officers and
stockholders and partners, including their elections or appointments x x x.
Before a dismissal or removal could properly fall within the jurisdiction of the SEC, it has to be first
established that the person removed or dismissed was a corporate officer. "Corporate officers" in
the context of Presidential Decree No. 902-A are those officers of the corporation who are given
that character by the Corporation Code or by the corporation’s by-laws. There are three specific
officers whom a corporation must have under Section 25 of the Corporation Code. These are the
president, secretary and the treasurer. The number of officers is not limited to these three. A
corporation may have such other officers as may be provided for by its by-laws like, but not limited
to, the vice-president, cashier, auditor or general manager. The number of corporate officers is thus
limited by law and by the corporation’s by-laws.
Atty. Garcia tries to deny he is an officer of ETPI. Not being a corporate officer, he argues that the
Labor Arbiter has jurisdiction over the case. One of the corporate officers provided for in the by-
laws of ETPI is the Vice-President. It can be gathered from Atty. Garcia’s complaint-affidavit that he
was Vice President for Business Support Services and Human Resource Departments of ETPI
when his employment was terminated effective 16 April 2000. It is therefore clear from the by-laws
and from Atty. Garcia himself that he is a corporate officer. One who is included in the by-laws of a
corporation in its roster of corporate officers is an officer of said corporation and not a mere
employee.Being a corporate officer, his removal is deemed to be an intra-corporate dispute
cognizable by the SEC and not by the Labor Arbiter.
SC agrees with both the NLRC and the Court of Appeals that Atty. Garcia’s ouster as Vice-
President, who is a corporate officer of ETPI, partakes of the nature of an intra-corporate
controversy, jurisdiction over which is vested in the SEC (now the RTC). The Labor Arbiter thus
erred in assuming jurisdiction over the case filed by Atty. Garcia, because he had no
jurisdiction over the subject matter of the controversy.
12. Halaguena et al., vs. Phil Airlines GR No. 172013, Oct 2, 2009
Facts: Petitioners, Patricia Halagueña, et.al(Halagueña) are flight attendants employed by
Philippine Airlines Inc. (PAL) as well as members of Flight Attendants and Stewards Association of
the Philippines (FASAP), the exclusive bargaining agent of flight attendants, flight stewards and
purses of PAL.
Halagueña assails Sec. 144, Part A of the CBA entered into by PAL and FASAP which provides for
a younger retirement age for female cabin attendants than those of their male counterparts, to be
unconstitutional under the equal protection clause and which appears to be discriminatory.
Due to Halagueña’s claim, Robert D. Anduza, President of FASAP, submitted their 2004-2005 CBA
proposals and manifested their willingness to commence the collective bargaining negotiations
between the management and the association, at the soonest possible time.
Halagueña eventually filed before the RTC of Makati a Special Civil Action for Declaratory Relief
with Prayer for the Issuance of a Temporary Restraining Order (TRO) and Writ of Preliminary
Injunction against PAL for the invalidity of the assailed provision of the PAL-FASAP CBA. The RTC
granted such petition.
Aggrieved, PAL filed a Petition for Certiorari and Prohibition with Prayer for a TRO and Writ of
Preliminary Injunction with the Court of Appeals (CA) praying that the order of RTC, which denied
its objection to its jurisdiction, be annulled and set aside for having been issued without and/or with
grave abuse of discretion amounting to lack of jurisdiction.
The CA granted PAL’s petition on the ground that the RTC has no jurisdiction over a labor
dispute. Hence, the case at bar.
Issue: Whether the RTC has jurisdiction over the petitioner’s action challenging the validity or
constitutionality of the provisions on compulsory retirement age contained in the PAL-FASAP CBA.
Ruling: YES. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable
by the RTC. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals.
Not every controversy or money claim by an employee against the employer or vice-versa is within
the exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the
employer-employee relationship is merely incidental and the cause of action proceeds from a
different source of obligation is within the exclusive jurisdiction of the regular court.
Here, the employer-employee relationship between the parties is merely incidental and the cause
of action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW.
If we divest the regular courts of jurisdiction over the case, then which tribunal or forum shall
determine the constitutionality or legality of the assailed CBA provision?
This Court holds that the grievance machinery and voluntary arbitrators do not have the power to
determine and settle the issues at hand. They have no jurisdiction and competence to decide
constitutional issues relative to the questioned compulsory retirement age. Their exercise of
jurisdiction is futile, as it is like vesting power to someone who cannot wield it.
13. Okol vs. Slimmer’s World International, et al., G.R. No. 160146, December 11, 2009
FACTS: Respondent Slimmers World International employed petitioner Leslie Okol as a
management trainee on 15 June 1992. She rose up the ranks to become Head Office Manager
and then Director and Vice President from 1996 until her dismissal on 22 September 1999. Prior to
Okol's dismissal, Slimmers World preventively suspended Okol. The suspension arose from the
seizure by the Bureau of Customs of seven Precor elliptical machines and seven Precor treadmills
belonging to or consigned to Slimmers World.
Okol filed a complaint with the NLRC against Slimmers World, Behavior Modifications, Inc. and
Slimmers World president Ronald Joseph Moy for illegal suspension, illegal dismissal, unpaid
commissions, damages and attorney's fees. Respondents filed a Motion to Dismiss asserting that
the NLRC had no jurisdiction over the subject matter of the complaint.
The Labor Arbiter granted the motion to dismiss. The LA ruled that Okol was the vice-president of
Slimmers World at the time of her dismissal. Since it involved a corporate officer, the dispute was
an intra-corporate controversy falling outside the jurisdiction of the Arbitration branch.
The NLRC reversed and set aside the LA's order, with the order to reinstate complainant Leslie
Okol to her former position with full back wages. However, should reinstatement be not feasible,
separation pay would be awarded.
The Cour of Appeals set aside the NLRC's Resolution and affirmed the labor arbiter's Order, stating
that, being an intra-corporate dispute, falls within the jurisdiction of the regular court.
ISSUE: WON the NLRC has jurisdiction over the illegal dismissal case filed by petitioner.
RULING: No, the Supreme Court held that the case falls within the jurisdiction of the regular courts
since petitioner was a director and officer of Slimmers World. The charges of illegal suspension,
illegal dismissal, unpaid commissions, reinstatement and back wages imputed by petitioner against
respondents fall squarely within the ambit of intra-corporate disputes.

14. Hugo et al., vs. Light Rail Transit Authority, G.R. No. 181866, March 18, 2010
Facts: LRTA (Light rail transit authority, GOCC) constructed a light rail transit system pursuant to its
mandate under its charter, (EO 603). LRTA then entered into a 10 year agreement for the
Management and Operation of the Metro Manila Light Rail Transit System with METRO.
One of the stipulations is that METRO shall be free to employ such employees in order to carry out
the agreement. METRO hired the petitioners here in. LRTA later purchased the shares of stocks of
METRO, the two entities however continued with their distinct and separate juridical
personalities. When the agreement expired, they renewed the same (expired on June 8, 1994)
In July 25, 2000, the petitioners filed a notice of strike on account of deadlock in the negotiation for
the new collective bargaining agreement between METRO and the union. The agreement between
METRO AND LRTA expired on July 31, and did not renew it, it took over the management of the
LRT system, hiring new employees. METRO thus considered their employees terminated
(petitioners herein). Petitioners filed for illegal dismissal and unfair labor practice against METRO
AND LRTA, contending that the non-renewal of the agreement is a scheme to terminate them who
they (METRO) perceived as activists and troublemakers. LRTA averred that the labor arbiter and
NLRC had no jurisdiction over it and that there is no employer-employee relationship between it
and the petitioners. On appeal, counterclaimed that LRTA is an indirect employer and that it is a
necessary party.
Issue: W/N labor arbiter and NLRC has jurisdiction and if LRTA is an indirect employer of the
petitioners
Held: Labor Arbiter and NLRC do not have jurisdiction over LRTA.
“In Light rail transit authority vs venus, which has a similar backdrop, holds that LRTA, being a
government owned or controlled corporation created by original charter, is beyond the reach of the
DOLE, which has jurisdiction over workers in the private sector. “
Employees of petitioner METRO cannot be considered as employees of LRTA. The employees
hired by METRO are covered by Labor Code and are under the jurisdiction of the DOLE , whereas
the employees of petitioner LRTA, a GOCC with original charter are covered by civil service rules.
Even if petitioner LRTA eventually purchased METRO in 1989, both parties maintained their
separate and distinct juridical personality and allowed the agreement to proceed. METRO’s distinct
corporate personality continued quiescently, separate and apart from the juridical personality of
petitioner LRTA.
15. Matling Industrial and Commercial Corp et al., vs. Coros, GR No. 157802, Oct. 13, 2010
FACTS: After his dismissal by Matling as its Vice President forFinance and Administration, the
respondent filed on August 10, 2000 a complaint for illegal suspension andillegal dismissal against
Matling and some of itscorporate officers (petitioners) in the NLRC, Sub-Regional Arbitration
Branch XII, Iligan City. Thepetitioners moved to dismiss the complaint, raising theground, among
others, that the complaint pertained tothe jurisdiction of the Securities and ExchangeCommission
(SEC) due to the controversy beingintracorporate inasmuch as the respondent was amember of
Matlings Board of Directors aside from beingits Vice-President for Finance and Administration prior
tohis termination. The respondent opposed the petitionersmotion to dismiss, insisting that his status
as a memberof Matlings Board of Directors was doubtful, consideringthat he had not been formally
elected as such; that hedid not own a single share of stock in Matling,considering that he had been
made to sign in blank anundated indorsement of the certificate of stock he hadbeen given in 1992;
that Matling had taken back andretained the certificate of stock in its custody; and thateven
assuming that he had been a Director of Matling,he had been removed as the Vice President for
Financeand Administration, not as a Director, a fact that thenotice of his termination dated April 10,
2000 showed.On October 16, 2000, the LA granted the petitionersmotion to dismiss, ruling that the
respondent was acorporate officer because he was occupying the positionof Vice President for
Finance and Administration and atthe same time was a Member of the Board of Directorsof
Matling; and that, consequently, his removal was acorporate act of Matling and the controversy
resultingfrom such removal was under the jurisdiction of the SEC,pursuant to Section 5, paragraph
(c) of PresidentialDecree No. 902.
Issue: Whether or not the respondent is a corporate officer within the jurisdiction of the regular
courts.
Held: No. As a rule, the illegal dismissal of an officer or otheremployee of a private employer is
properly cognizableby the LA. This is pursuant to Article 217 (a) 2 of theLabor Code, as amended,
which provides as follows:
Article 217. Jurisdiction of the Labor Arbiters andthe Commission.
(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, within thirty(30) calendar days after the submission of the
case bythe parties for decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or non-agricultural:1. Unfair labor practice
cases;2. Termination disputes;3. If accompanied with a claim for reinstatement, those cases that
workers may file involving wages, rates ofpay, hours of work and other terms and conditions of
employment;4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;5. Cases arising from any violation of Article 264 of thisCode,
including questions involving the legality of strikes and lockouts; and6. Except claims for
Employees Compensation, SocialSecurity, Medicare and maternity benefits, all otherclaims arising
from employer-employee relations,including those of persons in domestic or householdservice,
involving an amount exceeding five thousandpesos (P 5,000.00) regardless of whether
accompaniedwith a claim for reinstatement.(b) The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor Arbiters. (c)Cases arising from the interpretation or
implementationof collective bargaining agreements and those arisingfrom the interpretation or
enforcement of companypersonnel policies shall be disposed of by the Labor Arbiter by referring
the same to the grievance machineryand voluntary arbitration as may be provided in
saidagreements.Where the complaint for illegal dismissal concerns acorporate officer, however, the
 controversy falls underthe jurisdiction of the Securities and ExchangeCommission (SEC), because
the controversy arises outof intra-corporate or partnership relations between andamong
stockholders, members, or associates, orbetween any or all of them and the
corporation,partnership, or association of which they arestockholders, members, or associates,
respectively; andbetween such corporation, partnership, or associationand the State insofar as the
controversy concerns theirindividual franchise or right to exist as such entity; orbecause the
controversy involves the election orappointment of a director, trustee, officer, or manager ofsuch
corporation, partnership, or election orappointment of a director, trustee, officer, or manager ofsuch
corporation, partnership, or association. Such controversy, among others, is known as an intra-
corporate dispute.Effective on August 8, 2000, upon the passage ofRepublic Act No. 8799,
otherwise known as TheSecurities Regulation Code, the SECs jurisdiction overall intra-corporate
disputes was transferred to the RTC, pursuant to sec. 5.2 of RA 8799.
16. Manila Electric Co. et al., vs. Lim, GR No. 184769, Oct. 5, 2010
Rosario G. Lim (respondent), also known as Cherry Lim, an administrative clerk at the Manila
Electric Company (MERALCO), learned of an anonymous letter that was posted at the door of the
Metering Office of the Administration building of MERALCO Plaridel, Bulacan Sector, at which
respondent is assigned, denouncing respondent. The letter reads:
“Cherry Lim:
MATAPOS MONG LAMUNIN LAHAT NG BIYAYA NG MERALCO, NGAYON NAMAN AY GUSTO
MONG PALAMON ANG BUONG KUMPANYA SA MGA BUWAYA NG GOBYERNO. KAPAL NG
MUKHA MO, LUMAYAS KA RITO, WALANG UTANG NA LOOB…”
By Memorandum, petitioner Alexander Deyto, Head of MERALCO’s Human Resource Staffing,
directed the transfer of respondent to MERALCO’s Alabang Sector in Muntinlupa as “A/F OTMS
Clerk,” in light of the receipt of “… reports that there were accusations and threats directed against
[her] from unknown individuals and which could possibly compromise [her] safety and security.”
Respondent questions the propriety of MERALCO’s action in a letter as “highly suspicious…” and
being “punitive”, but the latter never responded. Respondent filed a petition for the issuance of a
writ of habeas data against petitioners before the Regional Trial Court (RTC) of Bulacan.
Additionally, respondent prayed for the issuance of a Temporary Restraining Order (TRO)
enjoining petitioners from effecting her transfer to the MERALCO Alabang Sector.
The trial court granted the prayers of respondent including the issuance of a writ of preliminary
injunction directing petitioners to desist from implementing respondent’s transfer until such time
that petitioners comply with the disclosures required.
ISSUES:
1. Whether the RTC lacked jurisdiction to over the case and cannot restrain MERALCO’s
prerogative as employer to transfer the place of work of its employees.
2. Is the issuance of the writ outside the parameters expressly set forth in the Rule on the
Writ of Habeas Data?
RULING:
1. Yes. The habeas data rule, in general, is designed to protect by means of judicial complaint the
image, privacy, honor, information, and freedom of information of an individual. It is meant to
provide a forum to enforce one’s right to the truth and to informational privacy, thus safeguarding
the constitutional guarantees of a person’s right to life, liberty and security against abuse in this
age of information technology. It bears reiteration that like the writ of amparo, habeas data was
conceived as a response, given the lack of effective and available remedies, to address the
extraordinary rise in the number of killings and enforced disappearances. Its intent is to address
violations of or threats to the rights to life, liberty or security as a remedy independently from those
provided under prevailing Rules.
[W]rits of …habeas data will NOT issue to protect purely property or commercial concerns nor
when the grounds invoked in support of the petitions therefor are vague or doubtful. Employment
constitutes a property right under the context of the due process clause of the Constitution. It is
evident that respondent’s reservations on the real reasons for her transfer – a legitimate concern
respecting the terms and conditions of one’s employment – are what prompted her to adopt the
extraordinary remedy of habeas data. Jurisdiction over such concerns is inarguably lodged by law
with the NLRC and the Labor Arbiters.
2. Yes. There is no showing from the facts presented that petitioners committed any unjustifiable
or unlawful violation of respondent’s right to privacy vis-a-vis the right to life, liberty or security. To
argue that petitioners’ refusal to disclose the contents of reports allegedly received on the threats
to respondent’s safety amounts to a violation of her right to privacy is at best speculative.
Respondent in fact trivializes these threats and accusations from unknown individuals in her
earlier-quoted portion of her letter as “highly suspicious, doubtful or are just mere jokes if they
existed at all.” And she even suspects that her transfer to another place of work “betray[s] the real
intent of management]” and could be a “punitive move.” Her posture unwittingly concedes that the
issue is labor-related.
17. Hongkong and Shanghai Banking Corp., vs. Sps. Broqueza, GR No. 178610, Nov. 17, 2010
FACTS: Editha Broqueza was an employee of HSBC and member of its retirement plan called
HSBCL-SRP. Subsequently, Broqueza obtained a car loan and later on an appliance loan. These
loans were paid through automatic salary deduction.
Meanwhile, a labor dispute arose between HSBC and its employees terminated majority of its
employees. Among those terminated was Broqueza. The employees filed an illegal dismissal case
before the NLRC against HSBC. Because of such dismissal, Broqueza was not able to pay her
loan’s monthly amortization prompting HSBCL-SRP to file a civil case for recovery and collections
of sums of money.
The MeTC ruled in favor of HSBCL-SRP saying that the nature of HSBCL-SRPs demands for
payment in civil case has no connection to the ongoing labor dispute. Thus the loans secured by
their future retirement benefits to which they are no longer entitled are reduced to unsecured and
pure civil obligations which are immediately demandable. The RTC affirmed the decision of the
MeTC.
The CA reversed the decision of the MeTC and RTC saying the HSBCL-SRPs complaints for
recovery of sum of money is premature thus no cause of action accrued in favor of HSBCL-SRP.
ISSUE: Whether or not the collection of the sum of money is due and demandable.
RULING: The Court answered in the positive. Art. 1179, NCC reads: “Every obligation whose
performance does not depend upon a future or uncertain event, or upon a past event unknown to
the parties, is demandable at once.” The payroll deduction is merely a convenient mode of
payment and not the sole source of payment for the loans. And, the enforcement of the loan
agreement involves debtor-creditor relations founded on a contract and does not in any way
concern employee relations. As such it should be enforced through a separate civil action in the
regular courts and not before the Labor Arbiter.
18. Real vs. Sangu Phils., Inc., et al., G.R. No. 168757, January 19, 2011
FACTS: Petitioner was employed as Manager of Sangu Philippines Inc which is a manpower
company for general services like like janitors and other maintenance personnel. Petitioner was
removed from his position as a Manager through through Board Resolution adopted by the Board
of Directors of the respondent corporation. He was neither notified of the Board Meeting nor
charged with any infraction. He just received a letter dated March 26, 2001 that he was terminated
effective March 25, 2001 for the following reasons:
(1) continuous absences at his post at Ogino Philippines, Inc. for several months which was
detrimental to the corporation's operation; (2) loss of trust and confidence; and, (3) to cut down
operational expenses to reduce further losses being experienced by respondent corporation.
The respondent alleged that petitioner would always absent himself without informing the
corporation and he would only come to the office to collect his salaries. That in one instance he
went to one their client’s premises and engaged in a heated argument. Further petitioner also acted
in retaliation when he encouraged employees to file a complaint for illegal dismissal against
respondents and barricaded the premises of respondent corporation. Respondent claimed that
such acts constitute just cause for petitioner’s dismissal that was validly effected. Because of this,
petitioner filed a complaint for illegal dismissal.
LA declared that petitioner and his co-complainants were illegally dismissed.
NLRC opined that there was no dismissal because it was clearly established that petitioner is a
stockholder and as a corporate officer his action is an intra-corporate controversy in which the LA
has no jurisdiction. CA affirmed the decision of the NLRC hence this petition.
ISSUE: Whether petitioner's complaint for illegal dismissal constitutes an intra-corporate
controversy and thus, beyond the jurisdiction of the Labor Arbiter
RULING: No, the fact alone that petitioner is a stockholder and director of the corporation does not
automatically classify this case as intra corporate controversy because there are other factors to
consider in determining whether the dispute involves corporate matters as to consider them as
intra-corporate controversies.
The Court used Two-tier test --relationship test and controversy test in determining the
existence of intra-corporate controversy and provided in Mainland Construction Co., Inc. v. Movilla
the "better policy" in determining which between SEC and LA has jurisdiction over termination
disputes or similarly, whether they are intra-corporate not not.
The better policy to be followed in determining jurisdiction over a case should be to
consider concurrent factors such as the status or relationship of the parties or the
nature of the question that is subject of their controversy. In the absence of any one
of these factors, the SEC will not have jurisdiction. Furthermore, it does not necessarily
follow that every conflict between the corporation and its stockholders would involve such
corporate matters as only SEC can resolve in the exercise of its adjudicatory or quasi-
judicial powers.
In relationship test, the existence of any of the following intra-corporate relations is sufficient to
confer jurisdiction to the SEC (now the RTC), regardless of the subject matter of the dispute.
a) between the corporation, partnership or association and the public;
b) between the corporation, partnership or association and its stockholders, partners,
members or officers;
c) between the corporation, partnership or association and the State as far as its
franchise, permit or license to operate is concerned; and
d) among the stockholders, partners or associates themselves.
In controversy test, the incidents of that relationship must also be considered for the purpose of
ascertaining whether the controversy itself is intra-corporate. The controversy must not only be
rooted in the existence of an intra-corporate relationship, but must as well pertain to the
enforcement of the parties' correlative rights and obligations under the Corporation Code and the
internal and intra-corporate regulatory rules of the corporation. If the relationship and its incidents
are merely incidental to the controversy or if there will still be conflict even if the relationship does
not exist, then no intra-corporate controversy exists.
In this case, root of the controversy is petitioner's dismissal as Manager of respondent corporation.
In applying the relationship test, the determination whether he is a corporate officer is not the main
issue to be resolved in this case but is merely collateral to the core issue earlier mentioned. In
addition, the SC ruled that what we have here is a case of termination of employment which is a
labor controversy and not an intra-corporate dispute. In sum, we hold that petitioner's complaint
likewise does not satisfy the nature of controversy test. Therefore,the present controversy does not
relate to intra-corporate dispute and petitioner’s dismissal was effected without due process of law,
petitioner's dismissal not in accordance with law and entitled him to backwages and reinstatement.
19. Portillo vs. Rudolf Lietz, Inc. et al., G.R. No. 196539, October 10, 2012
FACTS: Rudolf Lietz was hired by Portillo, in an agreement which states, among others, the
conditions that Portillo “will not engage in any other gainful employment by himself or with any other
company either directly or indirectly without written consent of Lietz Inc.” and “a breach of which will
render Portillo liable for liquidated damages.”
On Portillo’s 10th year of service with Lietz Inc., he was promoted to Sales Representative.
Pursuant to such, Portillo signed another letter agreement containing a "Goodwill Clause” which
stated: “It remains understood and you agreed that, on the termination of your employment by act
of either you or [Lietz Inc.], and for a period of three (3) years thereafter, you shall not engage
directly or indirectly as employee, manager, proprietor, or solicitor for yourself or others in a similar
or competitive business or the same character of work which you were employed by [Lietz Inc.] to
do and perform. Should you breach this good will clause of this Contract, you shall pay [Lietz Inc.]
as liquidated damages the amount of 100% of your gross compensation over the last 12 months, it
being agreed that this sum is reasonable and just.”
Three (3) years thereafter Portillo resigned from Lietz Inc. During the exit interview, Portillo
declared that she intended to engage in a business—a rice dealership, selling rice in wholesale.
Lietz Inc. accepted Portillo’s resignation and reminded her of the "Goodwill Clause" in the last letter
agreement she had signed. Subsequently, Lietz Inc. learned that Portillo had been hired by Ed
Keller Philippines, Limited to head its Pharma Raw Material Department. Ed Keller Limited is
purportedly a direct competitor of Lietz Inc. Meanwhile, Portillo’s demands from Lietz Inc. for the
payment of her remaining salaries and commissions went unheeded.
On 14 September 2005, Portillo filed a complaint with the NLRC for non-payment of 1½ months’
salary, two (2) months’ commission, 13th month pay, plus moral, exemplary and actual damages
and attorney’s fees.
Lietz Inc. in its position paper admitted liability for Portillo’s money claims in the total amount of
P110,662.16. However, Lietz Inc. raised the defense of legal compensation: Portillo’s money claims
should be offset against her liability to Lietz Inc. for liquidated damages in the amount of
₱869,633.097 for Portillo’s alleged breach of the "Goodwill Clause" in the employment contract
when she became employed with Ed Keller Philippines, Limited.
The Labor Arbiter granted Portillo’s complaint, ordering Lietz, Inc. to pay Portillo the amount of
Php110,662.16, representing her salary and commissions, including 13th month pay.
On appeal by respondents Lietz Inc., the NLRC affirmed the ruling of the Labor Arbiter. The motion
for reconsideration was denied by NLRC.
Lietz Inc. filed a petition for certiorari before the Court of Appeals, alleging grave abuse of
discretion in the labor tribunals’ rulings. The CA initially affirmed the labor tribunals, but on motion
for reconsideration, modified its previous decision. While upholding the monetary award in favor of
Portillo in the aggregate sum of ₱110,662.16, the CA allowed legal compensation or set-off of such
award of monetary claims by her liability to Lietz Inc. for liquidated damages arising from her
violation of the "Goodwill Clause" in her employment contract with them.10 Portillo’s motion for
reconsideration was denied.
Thus, this petition in the SC.
ISSUE: Whether Portillo’s money claims for unpaid salaries may be offset against Lietz Inc.’s claim
for liquidated damages.
RULING: Paragraph 4 of Article 217 of the Labor Code appears to have caused the reliance by the
CA on the "causal connection between Portillo’s monetary claims against respondents and the
latter’s claim from liquidated damages against the former."
Art. 217. Jurisdiction of Labor Arbiters and the Commission. – (a) Except as otherwise provided
under this code, the 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 case involving all workers,
whether agricultural or nonagricultural:
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
Evidently, the CA is convinced that the claim for liquidated damages emanates from the "Goodwill
Clause of the employment contract and, therefore, is a claim for damages arising from the
employer-employee relations."
As early as Singapore Airlines Limited v. Paño, we established that not all disputes between an
employer and his employee(s) fall within the jurisdiction of the labor tribunals. We differentiated
between abandonment per se and the manner and consequent effects of such abandonment and
ruled that the first, is a labor case, while the second, is a civil law case.
Stated differently, petitioner seeks protection under the civil laws and claims no benefits under the
Labor Code. The primary relief sought is for liquidated damages for breach of a contractual
obligation. The other items demanded are not labor benefits demanded by workers generally taken
cognizance of in labor disputes, such as payment of wages, overtime compensation or separation
pay. The items claimed are the natural consequences flowing from breach of an obligation,
intrinsically a civil dispute
Subsequent rulings amplified the teaching in Singapore Airlines. The reasonable causal connection
rule was discussed.
Thus, in San Miguel Corporation v. National Labor Relations Commission, we held: The Court,
therefore, believes and so holds that the "money claims of workers" referred to in paragraph 3 of
Article 217 embraces money claims which arise out of or in connection with the employer-employee
relationship, or some aspect or incident of such relationship. Put a little differently, that money
claims of workers which now fall within the original and exclusive jurisdiction of Labor Arbiters are
those money claims which have some reasonable causal connection with the employer-employee
relationship.
We thereafter ruled that the "reasonable causal connection with the employer-employee
relationship" is a requirement not only in employees’ money claims against the employer but is,
likewise, a condition when the claimant is the employer.
20. Ace Navigation Co. Inc. et al., vs. Fernandez, G.R. No. 197309, October 10, 2012
In Dai-Chi Electronics Manufacturing Corporation v. Villarama, Jr.,which reiterated the San Miguel
ruling and allied jurisprudence, we pronounced that a non-compete clause, as in the "Goodwill
Clause" referred to in the present case, with a stipulation that a violation thereof makes the
employee liable to his former employer for liquidated damages, refers to postemployment relations
of the parties. We iterated that Article 217, paragraph 4 does not automatically cover all disputes
between an employer and its employee(s). We noted that the cause of action was within the realm
of Civil Law, thus, jurisdiction over the controversy belongs to the regular courts. At bottom, we
considered that the stipulation referred to postemployment relations of the parties.
That the "Goodwill Clause" in this case is likewise a postemployment issue should brook no
argument. There is no dispute as to the cessation of Portillo’s employment with Lietz Inc.23 She
simply claims her unpaid salaries and commissions, which Lietz Inc. does not contest. At that
juncture, Portillo was no longer an employee of Lietz Inc. The "Goodwill Clause" or the "Non-
Compete Clause" is a contractual undertaking effective after the cessation of the employment
relationship between the parties. In accordance with jurisprudence, breach of the undertaking is a
civil law dispute, not a labor law case.
It is clear, therefore, that while Portillo’s claim for unpaid salaries is a money claim that arises out of
or in connection with an employer-employee relationship, Lietz Inc.’s claim against Portillo for
violation of the goodwill clause is a money claim based on an act done after the cessation of the
employment relationship. And, while the jurisdiction over Portillo’s claim is vested in the labor
arbiter, the jurisdiction over Lietz Inc.’s claim rests on the regular courts.
In the case at bar, the difference in the nature of the credits that one has against the other,
conversely, the nature of the debt one owes another, which difference in turn results in the
difference of the forum where the different credits can be enforced, prevents the application of
compensation. Simply, the labor tribunal in an employee’s claim for unpaid wages is without
authority to allow the compensation of such claims against the post employment claim of the former
employer for breach of a post employment condition. The labor tribunal does not have jurisdiction
over the civil case of breach of contract.
Indeed, the application of compensation in this case is effectively barred by Article 113 of the Labor
Code which prohibits wage deductions except in three circumstances:
ART. 113. Wage Deduction. – No employer, in his own behalf or in behalf of any person,
shall make any deduction from wages of his employees, except:
(a) In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium on
the insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off
has been recognized by the employer or authorized in writing by the individual worker
concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the
Secretary of Labor.
FACTS: Seaman Teodorico Fernandez (Fernandez) filed with the NLRC a complaint for disability
benefits with moral and exemplary damages plus attorney’s fees, against Ace Navigation Co., Inc.,
Vela International Marine Ltd., and/or Rodolfo Pamintuan (petitioners)
Petitioners moved to dismiss contending that the labor arbiter had no jurisdiction over the dispute.
That the exclusive original jurisdiction is with the voluntary arbitrator, pursuant to Section 29 of the
POEA Standard Employment Contract (POEA-SEC), since the parties are covered by the
AMOSUP-TCC or AMOSUP-VELA collective bargaining agreement (CBA).
Under Section 14 of the CBA, a dispute between a seafarer and the company shall be settled
through the grievance machinery and mandatory voluntary arbitration.
Fernandez opposed, that inasmuch as his complaint involves a money claim, original and exclusive
jurisdiction over the case is vested with the labor arbiter.
The Compulsory Arbitration Rulings
Under Section 10 of Republic Act (R.A.) No. 8042, the Migrant Workers and Overseas Filipinos Act
of 1995, the labor arbiter has original and exclusive jurisdiction over money claims arising out of an
employer-employee relationship or by virtue of any law or contract, notwithstanding any provision of
law to the contrary.
Appeal to NLRC but denied appeal and agreed with LA that the case involves a money claim and is
within the jurisdiction of the LA under RA 8042.
Elevate to CA thru petition for certiorari (Rule 65).
The CA Decision CA denied the petition.
Procedural ground: petitioners have availed of the wrong remedy when they challenged the labor
arbiter's denial of their motion to dismiss by way of an appeal to the NLRC. Pursuant to the NLRC
rules, an order denying a motion to dismiss is interlocutory and is not subject to appeal.
Substantive ground: while the law allows parties to submit to voluntary arbitration other labor
disputes, including matters falling within the original and exclusive jurisdiction of the labor arbiters
under Article 217 of the Labor Code as this Court recognized in Vivero v. Court of Appeals, the
parties' submission agreement must be expressed in unequivocal language. No such unequivocal
language in the CBA.
Regarding POEA-SEC Sec 29, the provisions should likewise be qualified by the ruling in the
Vivero case, the Labor Code, and other applicable laws and jurisprudence.
 ISSUE: Who has the original and exclusive jurisdiction over the disability claim? The labor arbiter dismiss, or suspending its resolution until the final determination of the case, is not
under Section 10 of R.A. No. 8042, or the voluntary arbitration mechanism as prescribed in the appealable.
parties' CBA and the POEA-SEC?
Section 10, Rule VI of the same Rules
RULING: The Voluntary Arbitrator or Panel of Voluntary Arbitrators has original and exclusive
jurisdiction over Fernandez's disability claim. Frivolous or Dilatory Appeals. No appeal from an interlocutory order shall be entertained.

The CBA provides for a grievance procedure for the resolution of grievances or disputes which
occur during the employment relationship
21. Cosare vs. Broadcom Asia, Inc. GR No. 201298, February 5, 2014, citing 2010
There is unequivocal or unmistakable language in the agreement which mandatorily requires the Matling Industrial and Commercial Corp et al., vs. Coros, GR No. 157802 and 2011
parties to submit to the grievance procedure any dispute or cause of action they may have against Real vs. Sangu Phils., Inc., et al., G.R. No. 168757
each other.
FACTS: Cosare was a salesman and became incorporator of Broadcom. He
The CBA's Article 14 (Grievance Procedure) unmistakably reflects the parties' agreement to submit subsequently became AVP for Sales. Sometime later, Cosare sent a confidential
any unresolved dispute at the grievance resolution stage to mandatory voluntary arbitration under letter to the President of Broadcom (Arevalo) about the anomalies of the VP for Sales
Article 14.7(h) of the CBA. (Abiog). However, Arevalo failed to act on Cosares’ accusations and instead asked
Cosare to resign in exchange for financial assistance. Cosare refused. Thereafter,
POEA SEC Sec 29 In cases of claims and disputes arising from this employment, the parties Cosare received a memo charging him of serious misconduct and willful breach of
covered by a collective bargaining agreement shall submit the claim or dispute to the original and trust for allegedly committing several company infractions. He was then barred from
exclusive jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators. entering company premises and was instructed to wait at the receiving section for
further instruction. Because of this, Cosare reported the incident to the barangay
Substantive ground: legal bases blotter. Thereafter, Cosare filed for constructive dismissal and illegal suspension
before the labor arbiter.
1. Section 3, Article XIII 1987 Constitution
The LA dismissed the complaint for failure of Cosare to establish that he was
The State shall promote the principle of shared responsibility between workers constructively dismissed. On appeal, the NLRC reversed the LA decision finding that
and employers and the preferential use of voluntary modes in settling disputes, there was constructive dismissal when Cosare was asked to resign from
including conciliation, and shall enforce their mutual compliance therewith to employment. On appeal to the CA, respondent Broadcom raised a new argument
foster industrial peace. citing the the case involved intra-corporate controversy which is within the jurisdiction
of the RTC. Thus, the CA reversed the NLRC decision and resolution and entered a
new one dismissing the labor complaint on the ground of lack of jurisdiction.
2. Article 260 of the Labor Code (Grievance machinery and voluntary arbitration)
ISSUE: Whether or not the case instituted by Cosare is an intra-corporate dispute that is
3. Article 261 of the Labor Code (Jurisdiction of Voluntary Arbitrators or panel of Voluntary
within the original jurisdiction of the RTC, and not of the LA.
Arbitrators)
RULING: No. The LA had the original jurisdiction over the complaint for illegal dismissal
4. Article 262 of the Labor Code (Jurisdiction over other labor disputes)
because Cosare, although an officer of Broadcom for being its AVP for Sales, was not
a "corporate officer" as the term is defined by law. There are two circumstances
5. POEA-SEC Section 29 on Dispute Settlement Procedures which must concur in order for an individual to be considered a corporate officer, as
against an ordinary employee or officer, namely: (1) the creation of the position is
Procedural ground: under the corporation’s charter or by-laws; and (2) the election of the officer is by the
directors or stockholders. respondents failed to sufficiently establish that the position
Section 6, Rule V of The 2005 Revised Rules of Procedure of the NLRC of AVP for Sales was created by virtue of an act of Broadcom’s board, and that
Cosare was specifically elected or appointed to such position by the directors.
... Any motion to dismiss on the ground of lack of jurisdiction,... shall be immediately
resolved by the Labor Arbiter through a written order. An order denying the motion to
22. Amecos Innovators Inc. vs. Lopez, GR no. 178055, July 2, 2014
Facts:
Petitioner Amecos Innovations, Inc. (Amecos) is a corporation duly incorporated under Philippine
laws engaged in the business of selling assorted products created by its President and herein co-
petitioner, Antonio F. Mateo (Mateo). On May 30, 2003, Amecos received a Subpoena 7 from the
Office of the City Prosecutor of Quezon City in connection with a complaint filed by the Social
Security System (SSS) for alleged delinquency in the remittance of SSS contributions and penalty
liabilities in violation of Section 22(a) and 22(d) in relation to Section 28(e) of the SSS law, as
amended.
By way of explanation, Amecos attributed its failure to remit the SSS contributions to herein
respondent Eliza R. Lopez (respondent). Amecos claimed that it hired respondent on January 15,
2001 as Marketing Assistant to promote its products; that upon hiring, respondent refused to
provide Amecos with her SSS Number and to be deducted her contributions; that on the basis of
the foregoing, Amecos no longer enrolled respondent with the SSS and did not deduct her
corresponding contributions up to the time of her termination in February 2002.
Amecos eventually settled its obligations with the SSS; consequently, SSS filed a Motion to
Withdraw Complaint8 which was approved by the Office of the City Prosecutor.9
Thereafter, petitioners sent a demand letter10 to respondent for ₱27,791.65 representing her share
in the SSS contributions and expenses for processing, but to no avail.
Respondent filed her Answer with Motion to Dismiss 12 claiming that she was formerly an employee
of Amecos until her illegal dismissal in February 2002; that Amecos deliberately failed to deduct
and remit her SSS contributions; and that petitioners filed the instant Complaint in retaliation to her
filing of an illegal dismissal case. Respondent also averred that the regular courts do not have
jurisdiction over the instant case as it arose out of their employer-employee relationship.
Issue:
Whether the regular civil court and not the Labor Arbiter or the NLRC has jurisdiction over claims
arising from employee-employer relationships
Ruling;
No. This Court holds that as between the parties, Article 217(a)(4) of the Labor Code is applicable.
Said provision bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for
damages arising from employer-employee relations. The observation that the matter of SSS
contributions necessarily flowed from the employer-employee relationship between the parties –
shared by the lower courts and the CA – is correct; thus, petitioners’ claims should have been
referred to the labor tribunals. In this connection, it is noteworthy to state that "the Labor Arbiter has
jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the
Civil Code."
23. Indophil Textile Mills Inc. vs. Engr. Adviento, GR No. 171212, August 4, 2014
Facts: Petitioner Indophil Textile Mills, Inc. is a domestic corporation engaged in the business of
manufacturing thread for weaving.
On August 21, 1990, petitioner hired respondent Engr. Salvador Adviento as Civil Engineer.
On August 7, 2002, respondent consulted a physician due to recurring weakness and dizziness.
Few days later, he was diagnosed with chronic polysinusitis, and thereafter, with moderate, severe
and persistent allergic rhinitis. Accordingly, respondent was advised by his doctor to totally avoid
house dust mite and textile dust as it will transmute into health problems.
Distressed, respondent filed a complaint against petitioner with the NLRC for alleged illegal
dismissal and for the payment of backwages, separation pay, actual damages and attorney’s fees.
Respondent filed another Complaint with the RTC alleging that he contracted such occupational
disease by reason of the gross negligence of petitioner to provide him with a safe, healthy and
workable environment.
In his Complaint, respondent alleged that as part of his job description, he conducts regular
maintenance check on petitioner’s facilities including its dye house area, which is very hot and
emits foul chemical odor with no adequate safety measures introduced by petitioner. Concerned,
respondent recommended to management to place roof insulation to minimize, if not, eradicate the
health hazards attendant in the work place. However, said recommendation was turned down by
management due to high cost.
Respondent averred that, being the only breadwinner in the family, he made several attempts to
apply for a new job, but to his dismay and frustration, employers who knew of his present health
condition discriminated against him and turned down his application. By reason thereof, respondent
suffered intense moral suffering, mental anguish, serious anxiety and wounded feelings, and
prayed for damages.
RTC held that petitioner’s alleged failure to provide its employees with a safe, healthy and workable
environment is an act of negligence, a case of quasi-delict.
Issue: WON the RTC has jurisdiction over the subject matter of respondent’s complaint praying for
moral damages, exemplary damages, compensatory damages, anchored on petitioner’s alleged
gross negligence in failing to provide a safe and healthy working environment for respondent.
Ruling: YES.
Not all claims involving employees can be resolved solely by our labor courts, specifically when the
law provides otherwise.
We have formulated the “reasonable causal connection rule,” wherein if there is a reasonable
causal connection between the claim asserted and the employer-employee relations, then the case
is within the jurisdiction of the labor courts; and in the absence thereof, it is the regular courts that
have jurisdiction.
Such distinction is apt since 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 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.
Jurisprudence has evolved the rule that claims for damages under Article 217(a)(4) of the Labor
Code, to be cognizable by the LA, must have a reasonable causal connection with any of the
claims provided for in that article. Only if there is such a connection with the other claims can a
claim for damages be considered as arising from employer-employee relations.
In the case at bench, we find that such connection is nil.
True, the maintenance of a safe and healthy workplace is ordinarily a subject of labor cases. More,
the acts complained of appear to constitute matters involving employee-employer relations since
respondent used to be the Civil Engineer of petitioner. However, it should be stressed that
respondent’s claim for damages is specifically grounded on petitioner’s gross negligence to
provide a safe, healthy and workable environment for its employees — a case of quasi-
delict. This is easily ascertained from a plain and cursory reading of the Complaint, which
enumerates the acts and/or omissions of petitioner relative to the conditions in the workplace, to
wit:
1. Petitioner’s textile mills have excessive flying textile dust and waste in its operations
and no effort was exerted by petitioner to minimize or totally eradicate it;
2. Petitioner failed to provide adequate and sufficient dust suction facilities;
3. Textile machines are cleaned with air compressors aggravating the dusty workplace;
4. Petitioner has no physician specializing in respiratory-related illness considering it is a
textile company;
5. Petitioner has no device to detect the presence or density of dust which is airborne;
6. The chemical and color room are not equipped with proper safety chemical nose mask;
and
7. The power and boiler plant emit too much smoke with solid particles blown to the air
from the smoke stack of the power plant emitting a brown rust color which engulfs the
entire compound.
In this case, a perusal of the complaint would reveal that the subject matter is one of claim for
damages arising from quasi-delict.
It also bears stressing that respondent is not praying for any relief under the Labor Code. He
neither claims for reinstatement nor backwages or separation pay resulting from an illegal
termination. The cause of action herein pertains to the consequence of petitioner’s omission which
led to a work-related disease suffered by respondent, causing harm or damage to his person,
which jurisdiction belongs to the regular courts.
Notes: We ruled in the recent case of Portillo v. Rudolf Lietz, Inc. that not all disputes between an
employer and his employees fall within the jurisdiction of the labor tribunals such that when the
claim for damages is grounded on the “wanton failure and refusal” without just cause of an
employee to report for duty despite repeated notices served upon him of the disapproval of his
application for leave of absence, the same falls within the purview of Civil Law
24. Honda Car Phils vs. Honda cars Technical Specialist & Supervisors Union GR No. 204142,
Nov. 19 2014
FACTS: On December 8, 2006, petitioner Honda Cars Philippines, Inc., (company) and respondent
Honda Cars Technical Specialists and Supervisory Union (union), the exclusive collective
bargaining representative of the company’s supervisors and technical specialists, entered into a
collective bargaining agreement (CBA) effective April 1, 2006 to March 31, 2011.
Prior to April 1, 2005, the union members were receiving a transportation allowance of P3,300.00 a
month. On September 3, 2005, the company and the union entered into a Memorandum of
Agreement (MOA) converting the transportation allowance into a monthly gasoline allowance
starting at 125 liters effective April 1, 2005. The allowance answers for the gasoline consumed by
the union members for official business purposes and for home to office travel and vice-versa.
The company claimed that the grant of the gasoline allowance is tied up to a similar company
policy for managers and assistant vice-presidents (AVPs), which provides that in the event the
amount of gasoline is not fully consumed, the gasoline not used may be converted into cash,
subject to whatever tax may be applicable. Since the cash conversion is paid in the monthly payroll
as an excess gas allowance, the company considers the amount as part of the managers’ and
AVPs’ compensation that is subject to income tax on compensation.
The union, on the other hand, argued that the gasoline allowance for its members is a “negotiated
item” under Article XV, Section 15 of the new CBA on fringe benefits. It thus opposed the
company’s practice of treating the gasoline allowances that, when converted into cash, is
considered as compensation income that is subject to withholding tax.
The disagreement between the company and the union on the matter resulted in a grievance which
they referred to the CBA grievance procedure for resolution. As it remained unsettled there, they
submitted the issue to a panel of voluntary arbitrators as required by the CBA.
ISSUE: Whether or not, Voluntary Arbitrator has jurisdiction to settle tax matters.
HELD: No. The Voluntary Arbitrator has no competence to rule on the taxability of the gas
allowance and on the propriety of the withholding of tax. These issues are clearly tax matters, and
do not involve labor disputes. To be exact, they involve tax issues within a labor relations setting as
they pertain to questions of law on the application of the Labor Code or the interpretation of the
MOA and/or company personnel policies. Furthermore, the company and the union cannot agree or
compromise on the taxability of the gas allowance. Taxation is the State’s inherent power; its
imposition cannot be subject to the will of the parties.
Under paragraph 1, Section 4 of the NLRC, the CIR shall have the exclusive and original
jurisdiction to interpret the provisions of the NLRC and other tax laws, subject to review by the
Secretary of Finance. Consequently, if the company and/or the union desire/s to seek clarification
of these issues, it/they should have requested for a tax ruling from the Bureau of Internal Revenue
(BIR). Any revocation, modification or reversal of the CIR’s ruling shall not be given retroactive
application if the revocation, modification or reversal will be prejudicial to the taxpayers, except in
the following cases:
Where the taxpayer deliberately misstates or omits
(a)Material facts from his return or any document required of him by the BIR;
Where the facts subsequently gathered by the BIR are
(b) Materially different from the facts on which the ruling is based; or
(c) Where the taxpayer acted in bad faith.
On the other hand, if the union disputes the withholding of tax and desires a refund of the withheld
tax, it should have filed an administrative claim for refund with the CIR. Paragraph 2, Section 4 of
the NLRC expressly vests the CIR original jurisdiction over refunds of internal revenue taxes, fees
or other charges, penalties imposed in relation thereto, or other tax matters.
Sec. 229 (NLRC) Recovery of Tax Erroneously or Illegally Collected. No suit or proceeding shall be
maintained in any court for the recovery of any national internal revenue tax hereafter alleged to
have been erroneously or illegally assessed or collected, or of any penalty claimed to have been
collected without authority, or of any sum alleged to have been excessively or in any manner
wrongfully collected, until a claim for refund or credit has been duly files with the
Commissioner; but such suit or proceeding may be maintained, whether or not such tax penalty,
or sum has been paid under protest or duress.
The SC declared NULL AND VOID the February 6, 2009 decision and June 3, 2009 resolution of
the Panel of Voluntary Arbitrators.
25. Montero vs. Times Transportation GR No. 1980828, March 16, 2020
FACTS: Respondent Times Transportation Co., Inc., (TTCI) is a company engaged in the business
of land transportation for passengers and goods serving the Ilocos Region to Metro Manila route.
TTCI employed the herein 21 petitioners as bus drivers, conductors, mechanics, welders, security
guards and utility personnel.
Sometime in 1995, the rank-and-file employees of TTCI formed a union named as Times
Employees Union (TEU) which was later certified as the sole and exclusive bargaining unit within
TTCI.
In March 1997, members of TEU went on strike; but when former Labor Secretary Leonardo A.
Quisimbing assumed jurisdiction over the labor dispute and certified the same for compulsory
arbitration, a return-to-work Order dated March 10, 1997 was issued which ended the strike and
enjoined the parties from committing any other act that may intensify the situation
For a second time, on October 17, 1997, TEU declared a strike against TTCI, but the latter merely
reiterated the earlier return-to-work order of the Labor Secretary. For disregarding the said return-
to-work order, Santiago issued two notices of termination dated October 26, 199712 terminating
some 106 workers and a revised list dated November 24, 199713 increasing the number of
dismissed employees to 119, for participating in the illegal strike.
Four years later, several complaints for unfair labor practice, illegal dismissal with money claims,
damages and attorney’s fees were filed against TTCI, Santiago, MENCORP and its General
Manager Virginia Mendoza, including the latter’s husband Reynaldo Mendoza (collectively called
the respondents), before the LA from June to July 2002.18 Accordingly, these complaints were
consolidated.
LA rendered a Decision dismissing the petitioners’ claim for unfair labor practice and money claims
on the ground of prescription. The NLRC vacated and set aside the findings of the LA, upon finding
that the petitioners’ complaints had already been barred by prescription.
The CA Decision dismissed the petition.29 In sustaining the NLRC decision, the appellate court
ratiocinated:chanRoblesvirtualLawlibrary
Here, the illegal dismissal case was filed only in June 2002 or for more than four (4) years and
seven (7) months from the time petitioners received the notices of their dismissal in November and
October 1997. Clearly, the four-year prescriptive period has already elapsed.
ISSUE: Whether or not the petitioners’ complaints for illegal dismissal have already prescribed.
HELD: Yes.
In the case at bar, October 26, 1997 and November 24, 1997 appear on record to be the dates
when the petitioners’ employment were terminated by TTCI.
Settled is the rule that when one is arbitrarily and unjustly deprived of his job or means of livelihood,
the action instituted to contest the legality of one’s dismissal from employment constitutes, in
essence, an action predicated upon an injury to the rights of the plaintiff, as contemplated under
Article 114635 of the New Civil Code, which must be brought within four years.
The petitioners contend that the period when they filed a labor case on May 14, 1998 but withdrawn
on March 22, 1999 should be excluded from the computation of the four-year prescriptive period for
illegal dismissal cases. However, the Court had already ruled that the prescriptive period continues
even after the withdrawal of the case as though no action has been filed at all. The applicability of
Article 115537of the Civil Code in labor cases was upheld in the case of Intercontinental
Broadcasting Corporation v. Panganiban where the Court held that “although the commencement
of a civil action stops the running of the statute of prescription or limitations, its dismissal or
voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no
action had been commenced at all.”
In like manner, while the filing of the complaint for illegal dismissal before the LA interrupted the
running of the prescriptive period, its voluntary withdrawal left the petitioners in exactly the same
position as though no complaint had been filed at all. The withdrawal of their complaint effectively
erased the tolling of the reglementary period.
26. Norma Cacho, et. al. vs. Virginia Balagtas, GR No. 202974, February 7, 2018
FACTS: Respondent Virginia D. Balagtas filed a complaint of constructive dismissal against
petitioners North Star International Travel, Inc. (North Star) and its President Norma D. Cacho
before the Labor Arbiter. Balagtas after 14 years of service in the said corporation, was placed
under 30 days preventive suspension pursuant to a Board Resolution passed by the Board of
Directors of the respondent Corporation due to her alleged questionable transactions.
While under preventive suspension, she wrote a letter to Norma Cacho informing the latter that she
was assuming her position as Executive Vice-President/Chief Executive Officer effective on that
date. however, she was prevented from re-assuming her position. Consequently, she filed a
complaint claiming that she was constructively and illegally dismissed effective on April 12, 2004.
In their defense, Cacho and North Star averred that preventive suspension was meant to prevent
Balagtas from influencing potential witnesses and to protect the respondent corporation's property.
Subsequently, the Board of Directors constituted an investigation committee tasked with the duty to
impartially assess the charges against petitioner. Cacho alleged that Balagtas violated her
suspension when, on several occasions, she went to the corporation's office and insisted on
working despite respondent Norma Cacho's protestation. They asserted that petitioner was not
illegally dismissed but was merely placed under preventive suspension.
DECISION OF THE LABOR ARBITER:
The Labor Arbiter found that Balagtas was illegally dismissed from North Star but the latter
appealed to the NLRC for lack of jurisdiction. They contend that Balagtas was never dismissed and
alleged that she was a corporate officer, incorporator, and member of the North Star's Board of
Directors. Thus, the NLRC cannot take cognizance of her illegal dismissal case, the same being an
intra-corporate controversy, which properly falls within the original and exclusive jurisdiction of the
ordinary courts.
RULING OF NLRC:
The NLRC ruled in favor of the petitioners. The Decision of the Labor Arbiter is REVERSED and
SET ASIDE and the complaint is DISMISSED for lack of jurisdiction. NLRC ruled that Balagtas was
a corporate officer of North Star at the time of her dismissal and not a mere employee. NLRC also
held that the petitioners North Star and Cacho were not estopped from raising the issue of lack of
jurisdiction. Labor Arbiter’s jurisdiction may be raised as an issue on appeal.
RULING OF COURT OF APPEALS:
The CA affirmed the Labor Arbiter’s Decision and set aside the Decision of the NLRC.
ISSUE: Whether or not the present case is an intra-corporate controversy within the jurisdiction of
the regular courts or an ordinary labor dispute that the Labor Arbiter may properly take cognizance
of.
RULING:
1. Respondent Balagtas's dismissal is an intra-corporate controversy.
A two-tier test must be employed to determine whether an intra-corporate controversy exists in the
present case, (a) the relationship test, and (b) the nature of the controversy test.
A dispute is considered an intra-corporate controversy under the relationship test when the
relationship between or among the disagreeing parties is any one of the following: (a) between the
corporation, partnership, or association and the public; (b) between the corporation, partnership, or
association and its stockholders, partners, members, or officers; (c) between the corporation,
partnership, or association and the State as far as its franchise, permit or license to operate is
concerned; and ( d) among the stockholders, partners, or associates themselves. We must now
determine whether or not the Executive Vice President position is a corporate office so as to
establish the intra-corporate relationship between the parties. One shall be considered a corporate
officer only if two conditions are met, (1) the position occupied was created by charter/by-laws, and
(2) the officer was elected (or appointed) by the corporation's board of directors to occupy said
position.
The Executive Vice President position is one of the corporate offices provided in petitioner North
Star's By-laws. Section 25 of the Corporation Code explicitly provides for the election of the
corporation's president, treasurer, secretary, and such other officers as may be provided for in the
by-laws. In interpreting this provision, the Court has ruled that if the position is other than the
corporate president, treasurer, or secretary, it must be expressly mentioned in the bylaws in order
to be considered as a corporate office. North Star’s by-laws provides that there may be one or
more vice president positions in petitioner North Star and, by virtue of its by-laws, all such positions
shall be corporate offices. The next question is whether or not the phrase "one or more vice
president" in the above-cited provision of the by-laws includes the Executive Vice President
position held by respondent Balagtas.
The use of the phrase "one or more" in relation to the establishment of vice president positions
without particular exception indicates an intention to give petitioner North Star's Board ample
freedom to make several vice president positions available as it may deem fit and in consonance
with sound business practice. To require that particular designation/variation of each vice-president
(i.e., executive vice president) be specified and enumerated is to invalidate the by-laws' true
intention and to encroach upon petitioner North Star's inherent right and authority to adopt its own
set of rules and regulations to govern its internal affairs. By name, the Executive Vice President
position is embraced by the phrase "one or more vice president" in North Star's by-laws.
2. Respondent Balagtas was appointed by the Board as petitioner North Star's Executive Vice
President
While a corporate office is created by an express provision either in the Corporation Code or the
By-laws, what makes one a corporate officer is his election or appointment thereto by the board of
directors. Thus, there must be documentary evidence to prove that the person alleged to be a
corporate officer was appointed by action or with approval of the board. Petitioners Cacho and
North Star assert that respondent Balagtas was elected as Executive Vice President by the Board
as evidenced by the Secretary's Certificate dated April 22, 2003. The above-cited Secretary's
Certificate overcomes respondent Balagtas's contention that she was merely the Executive Vice
President by name and was never empowered to exercise the functions of a corporate officer.
Notably, she did not offer any proof to show that her duties, functions, and compensation were all
determined by petitioner Cacho as petitioner North Star's President.
Respondent Balagtas also denies her status as one of petitioner North Star's corporate officers
because she was not listed as such in petitioner North Star's 2003 General Information Sheet
(GIS). But the GIS neither governs nor establishes whether or not a position is an ordinary or
corporate office. At best, if one is listed in the GIS as an officer of a corporation, his/her position as
indicated therein could only be deemed a regular office, and not a corporate office as it is defined
under the Corporation Code. To be considered an intra-corporate controversy, the dismissal of a
corporate officer must have something to do with the duties and responsibilities attached to his/her
corporate office or performed in his/her official capacity.
The termination complained of is intimately and inevitably linked to respondent Balagtas's role as
petitioner North Star's Executive Vice President: first, the alleged misappropriations were
committed by respondent Balagtas in her capacity as vice president, one of the officers responsible
for approving the disbursements and signing the checks. And, second, these alleged
misappropriations breached petitioners Cacho's and North Star's trust and confidence specifically
reposed m respondent Balagtas as vice president. That all these incidents are adjuncts of her
corporate office lead the Court to conclude that respondent Balagtas's dismissal is an intra-
corporate controversy, not a mere labor dispute.
All told, the issue in the present case is an intra-corporate controversy, a matter outside the Labor
Arbiter's jurisdiction.
RULING OF THE SUPREME COURT:
The decision of the Court of Appeals are set aside. The case is dismissed for lack of jurisdiction,
without prejudice to the filing of an appropriate case before the proper tribunal.
27. Nicanor Macalba vs. Pro Health Pharma Phils., GR No. 209085, June 6, 2018
28. PAL vs. Airline Pilots Assoc., GR No. 200088, March 27, 2018
FACTS: ALPAP, a duly registered labor organization and the exclusive bargaining agent of all
commercial pilots of PAL, filed with the DOLE a notice of strike alleging that PAL committed unfair
labor practice where thereafter the Secretary prohibited ALPAP from staging a strike and
committing any act that could exacerbate the dispute.
Despite the prohibition, ALPAP staged a strike. A return-to-work order was issued by the Secretary
but ALPAP defied the same and went on with their strike. Consequently, the Secretary issued a
resolution which declared the illegality of the strike staged and the loss of employment status of the
officers who participated in the strike. The resolution was upheld by the CA and when it reached
the SC it dismissed ALPAP's petition for failure to show that the CA committed grave abuse of
discretion or a reversible error. And thereafter, the resolution attained finality.
However, almost eight months after the finality of the Court's Resolution, PAL filed before the LA a
complaint for damages against ALPAP, as well as some of its officers and members. PAL alleged
that on the second day of the illegal strike, its striking pilots abandoned three (3) PAL aircraft, its
passengers were stranded, and rendered PAL liable for violation of its contract of carriage. Thus,
PAL was compelled to incur expenses by way of hotel accommodations, meals for the stranded
passengers, airport parking fees, and other operational expenses. PAL further alleged that its
operation was crippled by the illegal strike resulting in several losses from ticket refunds,
extraordinary expenses to cope with the shutdown situation, and lost income from the cancelled
domestic and international flights. PAL claimed that, as a result of the illegal strike, it suffered
actual damages in the amount of ₱73l,078,988.59. PAL further prayed that it be awarded
₱300,000,000.00 and ₱3,000,000.00 as exemplary damages and attorney's fees, respectively.
ISSUE: Whether the NLRC and the LA have jurisdiction over PAL’s claims against the respondents
for damages incurred as a consequence of the latter’s actions during the illegal strike.
RULING: Yes.
Under Article 21 7 [now Article 224] of the Labor Code, as amended by Section 9 of R.A. No. 6715,
the LA and the NLRC have jurisdiction to resolve cases involving claims for damages arising from
employer-employee relationship. However, not every controversy or money claim by an employee
against the employer or vice-versa falls within the jurisdiction of the labor arbiter. Intrinsically, civil
disputes, although involving the claim of an employer against its employees, are cognizable by
regular courts.
To determine whether a claim for damages under paragraph 4 of Article 217 is properly cognizable
by the labor arbiter, jurisprudence has evolved the "reasonable connection rule" which essentially
states that the claim for damages must have reasonable causal connection with any of the claims
provided for in that article. A money claim by a worker against the employer or vice-versa is within
the exclusive jurisdiction of the labor arbiter only if there is a "reasonable causal connection"
between the claim asserted and employee-employer relations. Only if there is such a connection
with the other claims can the claim for damages be considered as arising from employer-employee
relations. Absent such a link, the complaint will be cognizable by the regular courts.
In this case, PAL that its claim for damages has reasonable connection with its employer-employee
relationship with the respondents and its cause of action is not grounded on mere acts of quasi-
delict. The claimed damages arose from the illegal strike and acts committed during the same
which were in turn closely related and intertwined with the respondents' allegations of unfair labor
practices against PAL. Since the loss and injury from which PAL seeks compensation have
reasonable causal connection with the alleged acts of unfair labor practice, a claim provided for in
Article 217 of the Labor Code, the question of damages becomes a labor controversy and is
therefore an employment relationship dispute.