NLRC

HAWAIIAN-PHILIPPINE COMPANY vs. REYNALDO J. GULMATICO G.R. No. 106231, November

16, 1994
FACTS:

The National Federation of Sugar Workers-Food and General Trades (NFSW-FGT) claimed that
the sugar farm workers within petitioner’s milling district have never availed of the benefits due
them under the law.

Petitioner contends that the complaint filed against it cannot be categorized under any of the
cases falling within the jurisdiction of the Labor Arbiter as enumerated in Article 217 of the
Labor Code, as amended, considering that no employer-employee relationship exists between
petitioner milling company and the farm workers represented by respondent union.

ISSUE:

Whether or not the Labor Arbiter has jurisdiction over a case wherein no employer-employee
relationship exists between the company and the farm workers.

HELD:

While the jurisdiction over controversies involving agricultural workers has been transferred
from the Court of Agrarian Relations to the Labor Arbiters under the Labor Code as amended,
the said transferred jurisdiction is however, not without limitations. The dispute or controversy
must still fall under one of the cases enumerated under Article 217 of the Labor Code, which
cases, arise out of or are in connection with an employer-employee relationship.

In the case at bar, it is clear that there is no employer-employee relationship between

petitioner milling company and respondent union and/or its members-workers, a fact which,
the Solicitor General notes, public respondent did not dispute or was silent about. Absent the
jurisdictional requisite of an employer-employee relationship between petitioner and private
respondent, the inevitable conclusion is that public respondent is without jurisdiction to hear
and decide the case with respect to petitioner.
Sulpicio vs NLRC

KAPUNAN, J.:

Petitioner Sulpicio Lines, Inc., owner of MV Cotabato Princess, on January 15, 1992 dismissed
private respondent Jaime Cagatan, a messman of the said vessel, allegedly for being absent
without leave for a "prolonged" period of six (6) months.

As a result of his dismissal, the private respondent filed a complaint for illegal dismissal before
the National Labor Relations Commission (NLRC) through its National Capital Region Arbitration
Branch in Manila, docketed as NLRC-NCR Case No. 00-06-3163-92.[1]

Responding to the said complaint, petitioner, on June 25, 1992, filed a Motion to Dismiss on the
ground of improper venue, stating, among other things, that the case for illegal dismissal should
have been lodged with the NLRC's Regional Branch No. VII (Cebu), as its main office was located
in Cebu City.[2]

In an Order dated August 21, 1992 Labor Arbiter Arthur L. Amansec of the NLRC-NCR denied
petitioner's Motion to Dismiss, holding that:
Considering that the complainant is a ship steward, traveled on board respondent's ship along
the Manila-Enstancia-Iloilo-Zamboanga-Cotabato vice-versa route, Manila can be said to be
part of the complainant's territorial workplace.[3]
The aforequoted Order was seasonably appealed to the NLRC by petitioner. On February 28,
1994, respondent NLRC found petitioner's appeal unmeritorious and sustained the Labor
Arbiter's August 21, 1992 ruling, explaining that "under the New NLRC Rules, the Commission or
the Labor Arbiter before whom the case is pending may order a change of venue."[4] Finding no
grave abuse of discretion in the Labor Arbiter's assailed Order, respondent NLRC emphasized
that:
[T]he complainant instituted the Action in Manila where he resides. Hence, we see no grave
abuse of discretion on the part of the labor arbiter in denying the respondent's Motion to
Dismiss as We find support in the basic principle that the State shall afford protection to labor
and that the NLRC is not bound by strict technical rules of procedure.[5]
Undaunted, petitioner sought a reconsideration of the above Order, which the public
respondent denied in its Resolution dated July 22, 1994.[6] Consequently, petitioner comes to
this Court for relief, in the form of a Special Civil Action for Certiorari under Rule 65 of the Rules
of Court, contending that public respondent NLRC acted with grave abuse of discretion
amounting to lack or excess of jurisdiction when it issued its assailed rulings.[7]

It is petitioner's principal contention that a ship or vessel as workplace is an extension of its

homeport or principal place of business, and that "being part of the territory of the homeport,
(such) vessel is governed to a large extent by the laws and is under the jurisdiction of the
homeport.[8] Based on this submission, petitioner avers that its vessel-as-workplace is "under
the territorial jurisdiction of the Regional Arbitration branch where (its) . . . principal office is
located," which is Branch VII, located in Cebu City.[9]
We disagree.

As early as 1911, this Court held that the question of venue essentially relates to the trial and
touches more upon the convenience of the parties, rather than upon the substance and merits
of the case.[10] Our permissive rules underlying provisions on venue are intended to assure
convenience for the plaintiff and his witnesses and to promote the ends of justice. This axiom
all the more finds applicability in cases involving labor and management because of the
principle, paramount in our jurisdiction, that the State shall afford full protection to labor.[11]

Even in cases where venue has been stipulated by the parties by contract, this Court has not
hesitated to set aside agreements on venue if the same would lead to a situation so grossly
inconvenient to one party as to virtually negate his claim. In Sweet Lines vs. Teves,[12] involving
a contract of adhesion, we held that:
An agreement will not be held valid where it practically negates the action of the claimants,
such as the private respondents herein. The philosophy underlying the provisions on transfer of
venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote the
ends of justice. Considering the expense and trouble a passenger residing outside Cebu City
would incur to prosecute a claim in the City of Cebu, he would most probably decide not to file
the action at all. The condition will thus defeat, instead of enhance, the ends of justice. Upon
the other hand, petitioner had branches or offices in the respective ports of call of the vessels
and can afford to litigate in any of these places. Hence, the filing of the suit in the CFI of
Misamis Oriental, as was done in the instant case will not cause inconvenience to, much less
prejudice petitioner.[13]
In the case at bench, it is not denied that while petitioner maintains its principal office in Cebu
City, it retains a major booking and shipping office in Manila from which it earns considerable
revenue, and from which it hires and trains a significant number of its workforce. Its virulent
insistence on holding the proceedings in the NLRC's regional arbitration branch in Cebu City is
obviously a ploy to inconvenience the private respondent, a mere steward who resides in
Metro Manila, who would obviously not be able to afford the frequent trips to Cebu City in
order to follow up his case.

Even the provisions cited by petitioner in support of its contention that venue of the illegal
dismissal case lodged by private respondent is improperly laid, would not absolutely support his
claim that respondent NLRC acted with grave abuse of discretion in allowing the private
respondent to file his case with the NCR arbitration branch.
Section 1, Rule IV of the NLRC Rules of Procedure on Venue, provides that:

Section 1. Venue - (a) All cases in which Labor Arbiters have authority to hear and decide may
be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the
complainant/petitioner.
This provision is obviously permissive, for the said section uses the word "may," allowing a
different venue when the interests of substantial justice demand a different one. In any case,
as stated earlier, the Constitutional protection accorded to labor is a paramount and compelling
factor, provided the venue chosen is not altogether oppressive to the employer.

Moreover, Section 1, Rule IV of the 1990 NLRC Rules additionally provides that, "for purposes of
venue, workplace shall be understood as the place or locality where the employee is regularly
assigned when the cause of action arose." Since the private respondent's regular place of
assignment is the vessel MV Cotabato Princess which plies the Manila-Estancia-Iloilo-
Zamboanga-Cotabato route, we are of the opinion that Labor Arbiter Arthur L. Amansec was
correct in concluding that Manila could be considered part of the complainant's territorial
workplace. Respondent NLRC, therefore, committed no grave abuse of discretion in sustaining
the labor arbiter's denial of herein petitioner's Motion to Dismiss.

WHEREFORE, premises considered, the instant petition is hereby DISMISSED for lack of merit.

SO ORDERED.
NATIONAL UNION OF BANK EMPLOYEES v. JUDGE ALFREDO M. LAZARO, GR No. 56431, 1988-
01-19

Facts:

the Commercial Bank and Trust Company, a Philippine banking institution, entered into a
collective bargaining agreement with the Commercial Bank and Trust Company Union

The agreement was... ith an automatic renewal clause until the parties execute a new
agreement.

the union, together with the National Union of Bank Employees, submitted to the bank
management proposals for the renegotiation of a new collective bargaining agreement. The
following day, however, the bank suspended negotiations with the union. The bank had...
meanwhile entered into a merger with the Bank of the Philippine Islands,... the union went to
the then Court of First Instance of Manila, presided over by the respondent Judge, on a
complaint for specific performance,... the private respondents moved for the dismissal of the
case on the ground, essentially, of lack of jurisdiction of the court.

the respondent Judge issued an order, dismissing the case for lack of jurisdiction. According to
the court, the complaint partook of an unfair labor practice dispute notwithstanding the
incidental claim for damages, jurisdiction over which is vested in the... labor arbiter. This order,
as well as a subsequent one denying reconsideration, is now alleged as having been issued "in
excess of his jurisdiction amounting to a grave abuse of discretion."

Issues:

whether or not the courts may take cognizance of claims for damages arising from a labor
controversy.

Ruling:

We sustain the dismissal of the case, which is, as correctly held by the respondent court, an
unfair labor practice controversy within the original and exclusive jurisdiction of the labor
arbiters and the exclusive appellate jurisdiction of the National Labor Relations

Commission. The claim against the Bank of Philippine Islands the principal respondent
according to the petitioners for allegedly inducing the Commercial Bank and Trust Company to
violate the existing collective bargaining agreement in the process of re-negotiation, consists...
mainly of the civil aspect of the unfair labor practice charge referred to under Article 2472 of
the Labor Code.

The act complained of is broad enough to embrace either provision. Since it involves collective
bargaining whether or not it involved an accompanying violation of the Civil Code it may rightly
be categorized as an unfair labor practice. The civil implications thereof do not... defeat its
nature as a fundamental labor offense.

As we stated, the damages (allegedly) suffered by the petitioners only form part of the civil
component of the injury arising from the unfair labor practice. Under Article 247 of the Code,
"the civil aspects of all cases involving unfair labor practices, which may include claims... for
damages and other affirmative relief, shall be under the jurisdiction of the labor arbiters."

The petitioners' claimed injury as a consequence of the tort allegedly committed by the private
respondents, specifically, the Bank of the Philippine Islands, under Article 1314 of the Civil
Code,5 does not necessarily give the courts jurisdiction to try the damage suit.

Jurisdiction is conferred by law6 and not necessarily by the nature of the action. Civil
controversies are not the exclusive domain of the courts. In the case at bar, Presidential Decree
No. 442, as amended by Batas Big. 70, has vested such a jurisdiction upon the labor... arbiters, a
jurisdiction the courts may not assume.

Jurisdiction over unfair labor practice cases, moreover, belongs generally to the labor
department of the government, never the courts

The fact that the Bank of the Philippine Islands is not a party to the collective bargaining
agreement, for which it "cannot be sued for unfair labor practice at the time of the action,"[8]
cannot bestow on the respondent court the jurisdiction it does not... have... it is not filing of an
unfair labor case in the

Industrial Court that divests the court of first instance jurisdiction over actions properly
belonging to the former. It is the existence of a controversy that properly falls within the
exclusive jurisdiction of the Industrial Court and to which the civil action is linked or...
connected that removes said civil case from the competence of the regular courts.

Neither does the fact that the Bank of the Philippine Islands "was not an employer at the time
the act was committed" abate a recourse to the labor arbiter. It should be noted indeed that
the Bank of the Philippine Islands assumed "all the assets and... liabilities"[16] of the
Commercial Bank and Trust Company.
SILVA ET AL vs. NLRC

[G.R. No. 110226, June 19, 1997]

Facts:
Petitioners, then rank-and-file employees and members of Philtread Workers Union (PWU),
volunteered for, and availed of, the retrenchment program instituted by Philtread with the
understanding that they would have priority in re-employment in the event that the company
recovers from its financial crisis, in accordance with their CBA. Philtread, apparently having
recovered from its financial reverses, expanded its operations and hired new personnel. Upon
discovery of this development, petitioners filed their respective applications for employment
with Philtread, which however, merely agreed to consider them for future vacancies.
Subsequent demands for re-employment made by petitioners were ignored. Even the request
of the incumbent union for Philtread to stop hiring new personnel until petitioners were first
hired failed to elicit any favorable response. Thus, petitioners lodged a complaint with the NCR
Arbitration Branch of the NLRC for unfair labor practice, damages and attorney’s fees against
Philtread.
LA dismissed the complaint but directing Philtread to give petitioners priority in hiring, as well
as those former employees similarly situated for available positions provided they meet the
necessary current qualifications. Petitioners duly appealed the decision of the Labor Arbiter to
the NLRC. Philtread opted not to interpose an appeal despite the Labor Arbiter’s failure to rule
squarely on the question of jurisdiction. NLRC revered the decision of the LA. It directed
Philtread to re-employ petitioners and other employees similarly situated, regardless of age
qualifications and other pre-employment conditions, subject only to existing vacancies and a
finding of good physical condition.
Atty. Borreta filed with the NLRCVan ex parte manifestation explaining that he was returning
the copy of the resolution rendered on April 15, 1992, which, according to him, was
erroneously served on him by the process server of the NLRC. NLRC, acting on a motion for
reconsideration filed by Atty. Gutierrez, promulgated one of its challenged resolutions
dismissing the complaint of petitioners. It ruled that while petitioners had standing to sue, the
complaint should have been filed with the voluntary arbitrator, pursuant to Article 261 of the
Labor Code, since the primary issue was the implementation and interpretation of the CBA.
Petitioners moved for reconsideration. NLRC affirmed its earlier resolution, ruling that even
before the amendatory law took effect, matters involving bargaining agreements were already
within the exclusive jurisdiction of the voluntary arbitrator, as set forth in Article 262 of the
Labor Code. Hence, this petition.
Issues:
1. Whether or not NLRC acted with grave abuse of discretion for issuing 2 resolutions which
reconsidered a resolution it rendered on April 15, 1992, despite that the latter became final and
executory when Philtread failed to seasonably file a motion for reconsideration within the ten-
day reglementary period required by Article 223 of the Labor Code.
2. Who has jurisdiction, the voluntary arbitrator or LA and NLRC? Can RA 6715 be applied
retroactively?
Ruling:
1. YES, NLRC acted with grave abuse of discretion.
191
The seasonable filing of a motion for reconsideration within the 10-day reglementary period
following the receipt by a party of any order, resolution or decision of the NLRC, is a mandatory
requirement to forestall the finality of such order, resolution or decision. The statutory bases
for this are found in Article 223 of the Labor Code and Section 14, Rule VII of the New Rules of
Procedure of the NLRC. Philtread’s counsel filed a motion for reconsideration 31 days after
receipt of said resolution. It was thus incumbent upon the NLRC to have dismissed outright
Philtread’s late motion for reconsideration. By doing exactly the opposite, its actuation was not
only whimsical and capricious but also a demonstration of its utter disregard for its very own
rules. Certiorari, therefore, lies.
NLRC, as an administrative and quasi-judicial body, is not bound by the rigid application of
technical rules of procedure in the conduct of its proceedings. However, the filing of a motion
for reconsideration and filing it ON TIME are not mere technicalities of procedure. These are
jurisdictional and mandatory requirements which must be strictly complied with. Although
there are exceptions to said rule, the case at bar presents no peculiar circumstances warranting
a departure therefrom.
According to PhilTread, jurisdiction lies instead with the voluntary arbitrator so that when the
Labor Arbiter and the NLRC took cognizance of the case, their decisions thereon were null and
void and, therefore, incapable of attaining finality. In short, Philtread maintains that the ten-day
reglementary period could not have started running and, therefore, its motion could not be
considered late.
The argument is not tenable. While we agree with the dictum that a void judgment cannot
attain finality, said rule, however, is only relevant if the tribunal or body which takes cognizance
of a particular subject matter indeed lacks jurisdiction over the same. In this case, the rule
adverted to is misapplied for it is actually the Labor Arbiter and the NLRC which possess
jurisdiction over petitioners’ complaint and NOT the voluntary arbitrator, as erroneously
contended by Philtread.
There is confusion in the minds of both Philtread and the NLRC with respect to the proper
jurisdiction of the voluntary arbitrator. When the issue concerns an interpretation or
implementation of the CBA, one cannot immediately jump to the conclusion that jurisdiction is
with the voluntary arbitrator. There is an equally important need to inquire further if the
disputants involved are the union and the employer; otherwise, the voluntary arbitrator cannot
assume jurisdiction.
In Sanyo Philippines Workers Union - PSSLU v. Canizares, we clarified the jurisdiction of the
voluntary arbitrator:
We hold that the Labor Arbiter and not the Grievance Machinery provided for in the CBA has
the jurisdiction to hear and decide the complaints of the private respondents. While it appears
that the dismissal of the private respondents was made upon the recommendation of PSSLU
pursuant to the union security clause provided in the CBA, We are of the opinion that these
facts do not come within the phrase ’grievances arising from the interpretation or
implementation of (their) CBA and those arising from the interpretation or enforcement of
company personnel policies,’ the jurisdiction of which pertains to the Grievance Machinery or
thereafter, to a voluntary arbitrator or panel of voluntary arbitrators.
Article 260 of the Labor Code on grievance machinery and voluntary arbitrator states that ‘(t)he
parties to a CBA shall include therein provisions that will ensure the mutual observance of its
terms and conditions. They shall establish a machinery for the adjustment and resolution of
grievances arising from the interpretation or implementation of their CBA and those arising
from the interpretation or enforcement of company personnel policies.’ The parties to a CBA
shall name or designate their respective representatives to the grievance machinery and if the
grievance is not settled in that level, it shall automatically be referred to voluntary arbitrators
(or panel of voluntary arbitrators) designated in advance by the parties. It need not be
mentioned that the parties to a CBA are the union and the company. Hence, only disputes
involving the union and the company shall be referred to the grievance machinery or voluntary
arbitrators.”
In the case at bar, since the contending parties in the instant case are not the union and
Philtread, then pursuant to the Sanyo doctrine, it is not the voluntary arbitrator who can take
cognizance of the complaint, notwithstanding Philtread’s claim that the real issue is the
interpretation of the CBA provision on re- employment.
192

If the voluntary arbitrator could not have assumed jurisdiction over the case, did the Labor
Arbiter and the NLRC validly acquire jurisdiction when both of them entertained the complaint?
At the time petitioners filed their complaint for unfair labor practice, damages and attorney’s
fees, the governing provision of the Labor Code with respect to the jurisdiction of the Labor
Arbiter and the NLRC was Article 217:
“ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters shall have
the original and exclusive jurisdiction to hear and decide within thirty (30) working days after
submission of the case by the parties for decision, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms and conditions
of employment;
3. All money claims of workers, including those based on non-payment or underpayment of
wages, overtime compensation, separation pay and other benefits provided by law or
appropriate agreement, except claims for employees’ compensation, social security, medicare
and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including questions involving the
legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.” Articles 261 and 262, on the other hand, defined the jurisdiction of the voluntary
arbitrator, viz.:
“ART. 261. Grievance machinery. - Whenever a grievance arises from the interpretation or
implementation of a collective agreement, including disciplinary actions imposed on members
of the bargaining unit, the employer and the bargaining representative shall meet to adjust the
grievance. Where there is no collective agreement and in cases where the grievance procedure
as provided herein does not apply, grievances shall be subject to negotiation, conciliation or
arbitration as provided elsewhere in this Code.
ART. 262. Voluntary arbitration. - All grievances referred to in the immediately preceding Article
which are not settled through the grievance procedure provided in the collective agreement
shall be referred to voluntary arbitration prescribed in said agreement: Provided, That
termination disputes shall be governed by Article 278 of this Code, as amended, unless the
parties agree to submit them to voluntary arbitration.”
Under the above provisions then prevailing, one can understand why petitioners lodged their
complaint for ULP with the Labor Arbiter. To their mind, Philtread’s refusal to re-employ them
was tantamount to a violation of the re-employment clause in the 1983 CBA which was also
substantially reproduced in the 1986 CBA. At the time, any violation of the CBA was
unqualifiedly treated as ULP of the employer falling within the competence of the Labor Arbiter
to hear and decide.
“ART. 248. Unfair labor practices of employers. - It shall be unlawful for an employer to commit
any of the following unfair labor practice:
xxx xxx
(i) To violate a collective bargaining agreement.”
On March 21, 1989, however, Republic Act 6715, or the so-called “Herrera-Veloso
Amendments,” took effect, amending several provisions of the Labor Code, including the
respective jurisdictions of the Labor Arbiter, the NLRC and the voluntary arbitrator.
“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)
193

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:
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 of pay, 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 this Code, including questions involving the
legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims, arising from employer-employee relations, including those of persons
in domestic or household service, involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with 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 implementation of collective bargaining agreements
and those arising from the interpretation or enforcement of company personnel policies shall
be disposed of by the Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitration as may be provided in said agreements.”
“ART. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. - The
Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies referred to in the immediately
preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those
which are gross in character, shall no longer be treated as unfair labor practice 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. x x x.” (Underscoring supplied)
“ART. 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks.”
With the amendments introduced by RA 6715, it can be gleaned that the Labor Arbiter still
retains jurisdiction over ULP cases. There is, however, a significant change: The unqualified
jurisdiction conferred upon the Labor Arbiter prior to the amendment by RA 6715 has been
narrowed down so that “violations of a Collective Bargaining Agreement, except those which
are gross in character, shall no longer be treated as unfair labor practice but as grievances
under the Collective Bargaining Agreement. It is further stated that “gross violations of
Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with
the economic provisions of such agreement.”
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.
194

RA 6715 is in the nature of a curative statute. Thus, it can be applied retroactively to pending
cases.
Briad Agro Development Corporation v. Dela Cerna - Republic Act No. 6715 has retroactive
application. Thus, when this new law divested Regional Directors of the power to hear money
claims, the divestment affected pending litigations. (Note that under par. 6, where the claim
does not exceed P5,000.00, regional directors have jurisdiction)
Garcia v. Martinez - The lack of jurisdiction was cured by the issuance of the amendatory decree
which is in the nature of a curative statute with retrospective application to a pending
proceeding, like Civil Case No. 9657.
With the Briad ruling in place, the implication is that the qualified jurisdiction of the Labor
Arbiter and the NLRC should have been applied when the ULP complaint was still pending. This
means that petitioners should have been required to show in their complaint the gross nature
of the CBA violation, as well as the economic provision violated, without which the complaint
would be dismissible.
Thus, given the foregoing considerations, may the Briad doctrine be applied to the instant case
and cause its dismissal for want of jurisdiction of the Labor Arbiter and the NLRC?
NO, it cannot be applied.
We adopt instead the more recent case of Erectors, Inc. v. National Labor Relations
Commission, where we refused to give retroactive application to Executive Order No. 797 which
created the Philippine Overseas Employment Administration (POEA). Under said law, POEA was
vested with “original and exclusive jurisdiction over all cases, including money claims, involving
employer-employee relations arising out of or by virtue of any law or contract involving Filipino
workers for overseas employment,” which jurisdiction was originally conferred upon the Labor
Arbiter. As in the instant case, the Labor Arbiter’s assumption of jurisdiction therein was
likewise questioned in view of the subsequent enactment of E.O. 797.
“The rule is that jurisdiction over the subject matter is determined by the law in force at the
time of the commencement of the action. On March 31, 1982, at the time private respondent
filed his complaint against the petitioner, the prevailing laws were Presidential Decree No. 1691
and Presidential Decree No. 1391 which vested the Regional Offices of the Ministry of Labor
and the Labor Arbiters with ‘original and exclusive jurisdiction over all cases involving employer-
employee relations including money claims arising out of any law or contracts involving Filipino
workers for overseas employment.’ At the time of the filing of the complaint, the Labor Arbiter
had clear jurisdiction over the same.
E.O. No. 797 did not divest the Labor Arbiter’s authority to hear and decide the case filed by
private respondent prior to its effectivity. Laws should only be applied prospectively unless the
legislative intent to give them retroactive effect is expressly declared or is necessarily implied
from the language used. We fail to perceive in the language of E.O. No. 797 an intention to give
it retroactive effect.
E.O. No. 111, amended Article 217 of the Labor Code to widen the worker’s access to the
government for redress of grievances by giving the Regional Directors and Labor Arbiters
concurrent jurisdiction over cases involving money claims. This amendment, however, created
a situation where the jurisdiction of the Regional Directors and the Labor Arbiters overlapped.
As a remedy, R.A. 6715 further amended Article 217 by delineating their respective
jurisdictions. Under R.A. 6715, the Regional Director has exclusive original jurisdiction over
cases involving money claims provided: (1) the claim is presented by an employer or person
employed in domestic or household service, or househelper under the Code; (2) the claimant,
no longer being employed, does not seek reinstatement; and (3) the aggregate money claim of
the employee or househelper does not exceed P5,000.00. All other cases within the exclusive
and original jurisdiction of the Labor Arbiter. E.O. No. 111 and R.A. 6715 are therefore curative
statutes. A curative statute is enacted to cure defects in a prior law or to validate legal
proceedings, instruments or acts of public authorities which would otherwise be void for want
of conformity with certain existing legal requirements.
The law at bar, E.O. No. 797, is not a curative statute. x x x.” Hence, RA 6715 cannot be applied
retroactively.
195

In Briad, the underlying reason for applying RA 6715 retroactively was the fact that prior to its
amendment, Article 217 of the Labor Code, as amended by then E.O. 111, created a scenario
where the Labor Arbiters and the Regional Directors of the (DOLE) had overlapping jurisdiction
over money claims. This situation was viewed as a defect in the law so that when RA No. 6715
was passed and delineated the jurisdiction of the Labor Arbiters and Regional Directors, the
Court deemed it a rectification of such defect; hence, the conclusion that it was curative in
nature and, therefore, must be applied retroactively.
The same thing cannot be said of the case at bar. Like in Erectors, the instant case presents no
defect in the law requiring a remedy insofar as the jurisdiction of the Labor Arbiter and the
Voluntary Arbitrator is concerned. There is here no overlapping of jurisdiction to speak of
because matters involving interpretation and implementation of CBA provisions, as well as
interpretation and enforcement of company personnel policies, have always been determined
by the Voluntary Arbitrator even prior to RA 6715. Similarly, all ULP cases were exclusively
within the jurisdiction of the Labor Arbiter. What RA 6715 merely did was to re- apportion the
jurisdiction over ULP cases by conferring exclusive jurisdiction over such ULP cases that do not
involve gross violation of a CBA’s economic provision upon the voluntary arbitrator. We do not
see anything in the act of re-apportioning jurisdiction curative of any defect in the law as it
stood prior to the enactment of RA 6715. The Court view it as merely a matter of change in
policy of the lawmakers, especially since the 1987 Constitution adheres to the preferential use
of voluntary modes of dispute settlement. This, instead of the inherent defect in the law, must
be the rationale that prompted the amendment. Hence, we uphold the jurisdiction of the Labor
Arbiter which attached to this case at the time of its filing on December 5, 1988.
WHEREFORE, the instant petition is hereby GRANTED.
Pioneer Concrete Philippines Inc v. Antonio D. Todaro (G.R. No. 154830)
Facts:

Pioneer International Limited (PIL), an Australian company engaged in the ready-mix concrete
business, established herein petitioner PCPI to undertake its business in the Philippines. PIL
contacted respondent Todaro and asked if the latter is available to join them in their intention
to establish plant operations in the country to which the latter agreed. Subsequently, PIL and
Todaro came to an agreement wherein the former consented to engage the services of the
latter as consultant for 2-3 months, after which he would be employed as manager of concrete
operations should PIL decide to invest in the Philippines. PIL started its operation however it
refused to comply with its undertaking to employ Todaro on a permanent basis. Respondent
thus filed a complaint for sum of money and damages against petitioner. Petitioner meanwhile
contends that the case should fall with the NLRC as the damages arose from an alleged breach
of employment contract. Both the trial court and CA ruled in favor of respondent.

Issue:

Whether or not there is employer-employee relationship between PIL and respondent.

Ruling: NO.

In the present case, no employer-employee relationship exists between petitioners and

respondent. In fact, in his complaint, private respondent is not seeking any relief under the
Labor Code, but seeks payment of damages on account of petitioners’ alleged breach of their
obligation under their agreement to employ him. It is settled that an action for breach of
contractual obligation is intrinsically a civil dispute. In the alternative, respondent seeks redress
on the basis of the provisions of Articles 19 and 21 of the Civil Code. Hence, it is clear that the
present action is within the realm of civil law, and jurisdiction over it belongs to the regular
courts.

This Court has consistently held that where no employer-employee relationship exists between
the parties and no issue is involved which may be resolved by reference to the Labor Code,
other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that
has jurisdiction.
Kawachi v. Del Quero
GR No. 163768
Labor Relations: Jurisdiction

Facts:

On August 10, 2002, petitioners scolded private respondent in front of many people about the
way she treated the customers of the pawnshop and afterwards terminated private
respondent’s employment as a pawnshop clerk. Thereafter, private respondent, in an affidavit-
complaint,charged the petitioner with illegal dismissal, non-execution of a contract of
employment, violation of the minimum wage law, and non-payment of overtime pay. The
complaint was filed before the NLRC. The private respondent also filed an action for damages
against the petitioners before the MeTC.

Petitioners moved for the dismissal of the complaint on the grounds of lack of jurisdiction and
forum-shopping or splitting causes of action. At first, the MeTC granted petitioners’ motion and
ordered the dismissal of the complaint for lack of jurisdiction. Upon private respondent’s
motion, the MeTC reconsidered and set aside the order of dismissal. It ruled that no causal
connection appeared between private respondent’s cause of action and the employer-
employee relations between the parties.

The RTC held that private respondent’s action for damages was based on the alleged tortuous
acts committed by her employers and did not seek any relief under the Labor Code.

Issue:

Whether the regular courts lack jurisdiction in the case at bar.

Held:

Yes. The regular courts lack jurisdiction in the case at bar.

In the instant case, the allegations in private respondent’s complaint for damages show that her
injury was the offshoot of petitioners’ immediate harsh reaction as her administrative superiors
to the supposedly sloppy manner by which she had discharged her duties. Petitioners’ reaction
culminated in private respondent’s dismissal from work in the very same incident. The incident
on 10 August 2002 alleged in the complaint for damages was similarly narrated in private
respondent’s Affidavit-Complaint supporting her action for illegal dismissal before the NLRC.
Clearly, the alleged injury is directly related to the employer-employee relations of the parties.

Where the employer-employee relationship is merely incidental and the cause of action
proceeds from a different source of obligation, the Court has not hesitated to uphold the
jurisdiction of the regular courts. Where the damages claimed for were based on tort, malicious
prosecution, or breach of contract, as when the claimant seeks to recover a debt from a former
employee or seeks liquidated damages in the enforcement of a prior employment contract, the
jurisdiction of regular courts was upheld. The scenario that obtains in this case is obviously
different. The allegations in private respondent’s complaint unmistakably relate to the manner
of her alleged illegal dismissal.
MANILA ELECTRIC COMPANY, Petitioner, v. JAN CARLO GALA, Respondent.

BRION, J.:

FACTS:

On March 2, 2006, respondent Jan Carlo Gala commenced employment with the petitioner
Meralco Electric Company (Meralco) as a probationary lineman. Barely four months on the job,
Gala was dismissed for alleged complicity in pilferages of Meralcos electrical supplies. Gala
responded by filing an illegal dismissal complaint against Meralco. The LA dismissed the
complaint. On appeal, the NLRC reversed the LAs decision since there is no concrete showing of
complicity with the alleged misconduct but did not order for the reinstatement of Gala. Both
parties appealed to the CA and the latter denied Meralcos petition and ordered the
reinstatement of Gala.

ISSUE: Whether or not Gala was illegally dismissed.

HELD: Court of Appeals decision is set aside.

LABOR LAW

Contrary to the conclusions of the CA and the NLRC, there is substantial evidence supporting
Meralcos position that Gala had become unfit to continue his employment with the company.
Gala was found, after an administrative investigation, to have failed to meet the standards
expected of him to become a regular employee and this failure was mainly due to his
undeniable knowledge, if not participation, in the pilferage activities done by their group, all to
the prejudice of the Companys interests. Gala forgets that as a probationary employee, his
overall job performance and his behavior were being monitored and measured in accordance
with the standards (i.e., the terms and conditions) laid down in his probationary employment
agreement. Under paragraph 8 of the agreement, he was subject to strict compliance with, and
non-violation of the Company Code on Employee Discipline, Safety Code, rules and regulations
and existing policies. Par. 10 required him to observe at all times the highest degree of
transparency, selflessness and integrity in the performance of his duties and responsibilities,
free from any form of conflict or contradicting with his own personal interest.

GRANTED
Islriz Trading v Capada et. al.
GR No: 168501 January 31, 2011

FACTS:
Respondents were drivers and helpers of Islriz Trading, a gravel and sand business owned and
operated by petitioner Victor Hugo Lu. Claiming that they were illegally dismissed, respondents
filed a Complaint for illegal dismissal and non-payment of overtime pay, holiday pay, rest day
pay, allowances and separation pay against petitioner on August 9, 2000 before the Labor
Arbiter. On his part, petitioner imputed abandonment of work against respondents.

LA ruled that ISLRIZ TRADING was guilty of illegal dismissal and ordered the reinstatement of
complainants to their former positions without loss of seniority rights and the payment of full
backwages from date of dismissal to actual reinstatement.

Upon appeal, the NLRC ordered respondents reinstatement but without backwages because
respondents failure to continue working for petitioner was neither caused by termination nor
abandonment of work.

Upon refusal of petitioner to reinstate the respondents, respondents prayed for computation of
award of backwages and that an Alias Writ of Execution for its enforcement be issued.
Thereafter, the personal properties of petitioner were levied to satisfy the writ of execution
issued.

Petitioner contends that the assailed Decision and Resolution of the CA are contrary to law and
jurisprudence. This is because in upholding the issuance of the questioned Writ of Execution for
the enforcement of respondents accrued salaries, said Decision and Resolution, in effect,
altered the NLRC Resolution which only decreed respondents reinstatement without
backwages. Moreover, he posits that Article 223(now 229) of the Labor Code only applies when
an employee has been illegally dismissed from work. And since in this case the NLRC ruled that
respondents failure to continue working for petitioner was not occasioned by termination,
there is no illegal dismissal to speak of, hence, said provision of the Labor Code does not apply.
Lastly, petitioner claims that the computation of respondents accrued salaries in the total
amount of P1,110,665.60 has no legal and factual bases since as repeatedly pointed out by him,
the NLRC Resolution reversing the Labor Arbiters Decision has already ordered respondents
reinstatement without backwages after it found that there was no illegal termination.

ISSUE:
Whether respondents may collect their wages during the period between the Labor Arbiters
order of reinstatement pending appeal and the NLRC Resolution overturning that of the Labor
Arbiter.

RULING:
Yes, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is
obligatory on the part of the employer to reinstate and pay the wages of the dismissed
employee during the period of appeal until reversal by the higher court or tribunal. It likewise
settled the view that the Labor Arbiters order of reinstatement is immediately executory and
the employer has to either re-admit them to work under the same terms and conditions
prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise
the options in the alternative, employer must pay the employees salaries.

It then provided for the two-fold test in determining whether an employee is barred from
recovering his accrued wages, to wit: (1) there must be actual delay or that the order of
reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not
be due to the employers unjustified act or omission. If the delay is due to the employers
unjustified refusal, the employer may still be required to pay the salaries notwithstanding the
reversal of the Labor Arbiters Decision.

Now, the next question is: Was the delay not due to the employers unjustified act or omission?
Islriz Trading did not undergo rehabilitation or was under any analogous situation which would
justify petitioners non-exercise of the options provided under Article 223(now 229) of the Labor
Code. Notably, what petitioner gave as reason in not immediately effecting reinstatement after
he was served with the Writ of Execution dated April 22, 2002 was that he would first refer the
matter to his counsel as he could not effectively act on the order of execution without the
latter’s advice. Petitioner, however, without any satisfactory reason, failed to fulfill this promise
and respondents remained to be not reinstated until the NLRC resolved petitioners appeal.
Evidently, the delay in the execution of respondents reinstatement was due to petitioner’s
unjustified refusal to effect the same.

Hence, the conclusion is that respondents have the right to collect their accrued salaries during
the period between the Labor Arbiters Decision ordering their reinstatement pending appeal
and the NLRC Resolution overturning the same because petitioner’s failure to reinstate them
either actually or through payroll was due to petitioners unjustified refusal to effect
reinstatement.
SANTOS V. SERVIER (G.R. NO. 166377; NOVEMBER 28, 2008)

TAXABILITY OF RETIREMENT BENEFITS: MA. ISABEL T. SANTOS, represented by ANTONIO P.

SANTOS, Petitioner, - versus - SERVIER PHILIPPINES, INC. and NATIONAL LABOR RELATIONS
COMMISSION, Respondents.

In holding that the petitioner in Santos v. Servier Philippines, Inc. is not entitled to any tax
exemption from her retirement benefits, the Supreme Court cited the fact that at the time of
her retirement, petitioner was only 41 years of age and had been in the service for more or less
eight (8) years. As such, the above provision is not applicable for failure to comply with the age
and length of service requirements. Therefore, respondent employer cannot be faulted for
deducting from petitioner’s total retirement benefits the amount of P362,386.87 for taxation
purposes.

Justice Nachura wrote and is quoted below:

Clearly, the benefits received by petitioner from the respondent represent her retirement
benefits under the Plan. The question that now confronts us is whether these benefits are
taxable. If so, respondent correctly made the deduction for tax purposes. Otherwise, the
deduction was illegal and respondent is still liable for the completion of petitioners retirement
benefits.

This is not the first time that the labor tribunal is faced with the issue of illegal deduction. In
Intercontinental Broadcasting Corporation (IBC) v. Amarilla, IBC withheld the salary differentials
due its retired employees to offset the tax due on their retirement benefits. The retirees thus
lodged a complaint with the NLRC questioning said withholding. They averred that their
retirement benefits were exempt from income tax; and IBC had no authority to withhold their
salary differentials. The Labor Arbiter took cognizance of the case, and this Court made a
definitive ruling that retirement benefits are exempt from income tax, provided that certain
requirements are met. Nothing, therefore, prevents us from deciding this main issue of
whether the retirement benefits are taxable.

As discussed above, petitioner was qualified for disability retirement. At the time of such
retirement, petitioner was only 41 years of age; and had been in the service for more or less
eight (8) years. As such, the above provision is not applicable for failure to comply with the age
and length of service requirements. Therefore, respondent cannot be faulted for deducting
from petitioners total retirement benefits the amount of P362,386.87, for taxation purposes.
PFIZER V. VELASCO (G.R. NO. 177467; MARCH 9, 2011)

CASE DIGEST: PFIZER, INC. AND/OR REY GERARDO BACARRO, AND/OR FERDINAND CORTES,
AND/OR ALFRED MAGALLON, AND/OR ARISTOTLE ARCE, Petitioners, vs. GERALDINE VELASCO,
Respondent. (G.R. No. 177467; March 9, 2011).

FACTS: On 5 December 2003, the Labor Arbiter rendered its decision declaring the dismissal of
Velasco, an employee of Pfizer, illegal, ordering her reinstatement with backwages and further
awarding moral and exemplary damages with attorneys fees. On appeal, the NLRC affirmed the
same but deleted the award of moral and exemplary damages. Pfizer filed with the Court of
Appeals a special civil action for the issuance of a writ ofcertiorariunder Rule 65 to annul and
set aside the aforementioned NLRC issuances.In a Decision dated November 23, 2005, the
Court of Appeals upheld the validity of respondents dismissal from employment.

Velasco filed a Motion for Reconsideration which the Court of Appeals resolved in the assailed
Resolution dated October 23, 2006, wherein it affirmed the validity of Velasco's dismissal from
employment but modified its earlier ruling by directing Pfizer to pay respondent her wages
from the date of the Labor Arbiters Decision dated December 5, 2003 up to the Court of
Appeals Decision dated November 23, 2005.

Pfizer filed the instant petition assailing the CA decision. In PFIZER's view, it should no longer be
required to pay wages considering that it had already previously paid an enormous sum to
respondent under the writ of execution issued by the Labor Arbiter.

ISSUE: Did the CA committed a serious and reversible error when it ordered Pfizer to pay
Velasco wages from the date of the Labor Arbiters decision ordering her reinstatement until
November 23, 2005, when the Court of Appeals rendered its decision declaring Velascos
dismissal valid?

HELD: Pfizer's previous payment to respondent of the amount ofP1,963,855.00 (representing

her wages from December 5, 2003, or the date of the Labor Arbiter decision, until May 5, 2005)
that was successfully garnished under the Labor Arbiters Writ of Execution dated May 26, 2005
cannot be considered in its favor.Not only was this sum legally due to respondent under
prevailing jurisprudence but also this circumstance highlighted Pfizer's unreasonable delay in
complying with the reinstatement order of the Labor Arbiter. It only required respondent to
report for work on July 1, 2005, almost two years from the time the order of reinstatement was
handed down in the Labor Arbiters Decision dated December 5, 2003.

In the seminal case of Pioneer Texturizing Corporation v. National Labor Relations Commission,
the Court held that an award or order of reinstatement is immediately self-executory without
the need for the issuance of a writ of execution in accordance with the third paragraph of
Article 223 of the Labor Code. In the case at bar, Pfizer did not immediately admit respondent
back to work which, according to the law, should have been done as soon as an order or award
of reinstatement is handed down by the Labor Arbiter without need for the issuance of a writ of
execution.Thus, respondent was entitled to the wages paid to her under the aforementioned
writ of execution.

In any case, Pfizer implores the Court to annul the award of backwages and separation pay as
well as to require respondent to refund the amount that she was able to collect by way of
garnishment from Pfizer as her accrued salaries, considering the reversal of the decision of the
Labor Arbiter by the CA. However, this is without merit, since the prevailing principle is that
even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on
the part of the employer to reinstate and pay the wages of the dismissed employee during the
period of appeal until reversal by the higher court. DENIED.