San Miguel Corp. Employees Union vs.

Bersamira Petitioners take the position that 'it is beyond dispute that the controversy in
G.R. No. 87700 June 13, 1990 the court a quo involves or arose out of a labor dispute and is directly
connected or interwoven with the cases pending with the NCMB-DOLE. On
FACTS: the other hand, SanMig denies the existence of any employer-employee
relationship and consequently of any labor dispute between itself and the
Sometime in 1983 and 1984, SanMig entered into contracts for Union.
merchandising services with Lipercon and D'Rite. These companies are
independent contractors. In said contracts, it was expressly understood and Anchored on grave abuse of discretion, petitioners are now before us
agreed that the workers employed by the contractors were to be paid by the seeking nullification of the challenged Writ.
latter and that none of them were to be deemed employees or agents of
SanMig. There was to be no employer-employee relation between the ISSUE: whether or not respondent Court correctly assumed jurisdiction over
contractors and/or its workers, on the one hand, and SanMig on the other. the present controversy

Petitioner San Miguel Corporation Employees Union-PTWGO (the Union) is HELD: NO. While it is SanMig's submission that no employer-employee
the duly authorized representative of the monthly paid rank-and-file relationship exists between itself, on the one hand, and the contractual
employees of SanMig with whom the latter executed a CBA. Section 1 of workers of Lipercon and D'Rite on the other, a labor dispute can nevertheless
their CBA specifically provides that "temporary, probationary, or contract exist regardless of whether the disputants stand in the proximate relationship
employees and workers are excluded from the bargaining unit and, therefore, of employer and employee.
outside the scope of this Agreement.
That a labor dispute, as defined by the law, does exist herein is evident. At
In a letter, the Union advised SanMig that some Lipercon and D'Rite workers bottom, what the Union seeks is to regularize the status of the employees
had signed up for union membership and sought the regularization of their contracted by Lipercon and D'Rite in effect, that they be absorbed into the
employment with SMC. The Union alleged that this group of employees, working unit of SanMig. This matter definitely dwells on the working
while appearing to be contractual workers supposedly independent relationship between said employees vis-a-vis SanMig. Terms, tenure and
contractors, have been continuously working for SanMig for a period ranging conditions of their employment and the arrangement of those terms are thus
from six (6) months to fifteen (15) years and that their work is neither casual involved bringing the matter within the purview of a labor dispute. Further, the
nor seasonal as they are performing work or activities necessary or desirable Union also seeks to represent those workers, who have signed up for Union
in the usual business or trade of SanMig. Thus, it was contended that there membership, for the purpose of collective bargaining.
exists a "labor-only" contracting situation. It was then demanded that the
employment status of these workers be regularized. Whether or not the Union demands are valid; whether or not SanMig's
contracts with Lipercon and D'Rite constitute "labor-only" contracting and,
On the ground that it had failed to receive any favorable response from therefore, a regular employer-employee relationship may, in fact, be said to
SanMig, the Union filed a notice of strike for unfair labor practice, CBA exist; whether or not the Union can lawfully represent the workers of Lipercon
violations, and union busting. and D'Rite in their demands against SanMig in the light of the existing CBA
— those are issues the resolution of which call for the application of labor
SMC filed a verified Complaint for Injunction and Damages before laws, and SanMig's cause's of action in the Court below are inextricably
respondent Court to enjoin the Union from representing and/or acting for and linked with those issues.
in behalf of the employees of LIPERCON and/or D'RITE for the purposes of
collective bargaining.

The Union filed a Motion to Dismiss SanMig's Complaint on the ground of

lack of jurisdiction over the case/nature of the action. The Court held that the
absence of employer-employee relationship negates the existence of labor
dispute. Verily, this court has jurisdiction to take cognizance of plaintiff's
grievance.
CITIBANK v. CA
G.R. No. 108961, November 27, 1998 Pardo J. RTC RULING:

DOCTRINE: The trial court denied respondent CIGLA's motion to dismiss. CIGLA filed
with the trial court a motion for reconsideration of the above-mentioned order.
Article 212, Paragraph l of the Labor Code provides the definition of a "labor The trial court denied the motion. CIGLA filed with the trial court its answer to
dispute". It "includes any controversy or matter concerning terms or the complaint, and averred as special and affirmative defense lack of
conditions of employment or the association or representation of persons in jurisdiction of the court over the subject matter of the case.
negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether the disputants stand in the CA Ruling:
proximate relation of employer and employee."
On May 24, 1991, respondent CIGLA filed with the Court of Appeals a
FACTS: Citibank contracted El Toro Security Agency, Inc. to provide it with petition for certiorari with preliminary injunction assailing the validity of the
the services of security guards to safeguard and protect the premises and proceedings had before the regional trial court.
property of Citibank. On April 22, 1990, the contract between Citibank and El
Toro expired. The Court of Appeals ruled in CIGLA's favor. It also denied Citibank’s filed a
motion for reconsideration.
Citibank Integrated Guards Labor Alliance-SEGA-TUPAS/FSM (CIGLA) filed
with the NCMB a request for preventive mediation citing Citibank as ISSUE/S:
respondent. The issues involved were unfair labor practice, dismissal of
union officers/members, and union busting. Whether it is the labor tribunal or the regional trial court that has jurisdiction
over the subject matter of the complaint filed by Citibank with the trial court.
Citibank served on El Toro a written notice that the bank would not renew the
service agreement with the latter. Simultaneously, Citibank hired Golden HELD: It has been decided also that the Labor Arbiter has no jurisdiction
Pyramid Security Agency. over a claim filed where no employer-employee relationship existed between
a company and the security guards assigned to it by a security service
On the same date, CIGLA filed a manifestation with the NCMB that it was contractor. In this case, it was the security agency El Toro that recruited,
converting its request for preventive mediation into a notice of strike. hired and assigned the watchmen to their place of work. It was the security
Thereafter, security guards of El Toro who were replaced by guards of the agency that was answerable to Citibank for the conduct of its guards.
Golden Pyramid Security Agency.
The question arises. Is there a labor dispute between Citibank and the
CIGLA considered the non-renewal of El Toro's service agreement with security guards, members of respondent CIGLA, regardless of whether they
Citibank as a lockout and/or a mass dismissal. They threatened to go on stand in the relation of employer and employees? Article 212, Paragraph l of
strike against Citibank and picket its premises. In fact, security guards the Labor Code provides the definition of a "labor dispute". It "includes any
formerly assigned to Citibank under the expired agreement loitered around controversy or matter concerning terms or conditions of employment or the
and near the Citibank premises in large groups of from twenty (20) and at association or representation of persons in negotiating, fixing, maintaining,
times fifty (50) persons. changing or arranging the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation of employer and
On June 14, 1990, respondent CIGLA filed a notice of strike directed at the employee."
premises of the Citibank main office. If at all, the dispute between Citibank and El Toro security agency is one
regarding the termination or non-renewal of the contract of services. This is a
Petitioner Citibank filed with the RTC of Makati a complaint for injunction and civil dispute. El Toro was an independent contractor. Thus, no
damages. The complaint sought to enjoin CIGLA and any person claiming employeremployee relationship existed between Citibank and the security
membership therein from striking or otherwise disrupting the operations of guard members of the union in the security agency who were assigned to
the bank. CIGLA filed with the trial court a motion to dismiss the complaint. secure the bank's premises and property. Hence, there was no labor dispute
The motion alleging that the RTC had no jurisdiction, this being labor dispute. and no right to strike against the bank.
 Petitioner's Contention: NLRC it has no jurisdiction to issue an injunction or
PAL vs NLRC restraining order since this may be issued only under Article 218 of the Labor
GR No: 120567 Ponente: Martinez, J. Code if the case involves or arises from labor disputes

Doctrine: ISSUE/S:

The term "labor dispute" is defined as "any controversy or matter concerning Can the National Labor Relations Commission (NLRC), even without a
terms and conditions of employment or the association or representation of complaint for illegal dismissal filed before the labor arbiter, entertain an action
persons in negotiating, fixing, maintaining, changing, or arranging the terms for injunction and issue such writ enjoining petitioner Philippine Airlines, Inc.
and conditions of employment regardless of whether or not the disputants from enforcing its Orders of dismissal against private respondents, and
stand in the proximate relation of employers and employees." ordering petitioner to reinstate the private respondents to their previous
positions?
FACTS:
HELD: NO.
Private respondents are flight stewards of the petitioner. Both were dismissed
from the service for their alleged involvement in the April 3, 1993 currency In labor cases, Article 218 of the Labor Code empowers the NLRC"(e) To
smuggling in Hong Kong. Aggrieved by said dismissal, private respondents enjoin or restrain any actual or threatened commission of any or all prohibited
filed with the NLRC a petition for injunction. or unlawful acts or to require the performance of a particular act in any labor
dispute which, if not restrained or performed forthwith, may cause grave or
NLRC RULING: irreparable damage to any party or render ineffectual any decision in favor of
such party; x x x."
NLRC issued a temporary mandatory injunction enjoining petitioner to cease
and desist from enforcing its February 22, 1995 Memorandum of dismissal. Complementing the above-quoted provision, Sec. 1, Rule XI of the New
Rules of Procedure of the NLRC, pertinently provides as follows:
(1) private respondents cannot be validly dismissed on the strength of
petitioner's Code of Discipline which was declared illegal by this Court in the "Section 1. Injunction in Ordinary Labor Dispute.-A preliminary injunction or a
case of PAL, Inc. vs. NLRC, (G.R. No. 85985), promulgated August 13, 1993, restraining order may be granted by the Commission through its divisions
for the reason that it was formulated by the petitioner without the participation pursuant to the provisions of paragraph (e) of Article 218 of the Labor Code,
of its employees as required in R.A. 6715, amending Article 211 of the Labor as amended, when it is established on the bases of the sworn allegations in
Code; (2) the whimsical, baseless and premature dismissals of private the petition that the acts complained of, involving or arising from any labor
respondents which "caused them grave and irreparable injury" is enjoinable dispute before the Commission, which, if not restrained or performed
as private respondents are left "with no speedy and adequate remedy at forthwith, may cause grave or irreparable damage to any party or render
law'"except the issuance of a temporary mandatory injunction; (3) the NLRC ineffectual any decision in favor of such party.
is empowered under Article 218 (e) of the Labor Code not only to restrain any
actual or threatened commission of any or all prohibited or unlawful acts but xxx xxx xxx
also to require the performance of a particular act in any labor dispute, which,
if not restrained or performed forthwith, may cause grave or irreparable The foregoing ancillary power may be exercised by the Labor Arbiters only as
damage to any party; and (4) the temporary mandatory power of the NLRC an incident to the cases pending before them in order to preserve the rights
was recognized by this Court in the case of Chemo-Technicshe Mfg., Inc. of the parties during the pendency of the case, but excluding labor disputes
Employees Union,DFA, et.al. vs. Chemo-Technische Mfg., Inc. [G.R. No. involving strikes or lockout. [7] (Emphasis Ours)
107031, January 25,1993].
From the foregoing provisions of law, the power of the NLRC to issue an
APPEAL TO THE SC: injunctive writ originates from " any labor dispute" upon application by a party
thereof, which application if not granted "may cause grave or irreparable
damage to any party or render ineffectualany decision in favor of such party."
The term "labor dispute" is defined as "any controversy or matter concerning
terms and conditions of employment or the association or representation of
persons in negotiating, fixing, maintaining, changing, or arranging the terms
and conditions of employment regardless of whether or not the disputants
stand in the proximate relation of employers and employees."

The term "controversy" is likewise defined as "a litigated question; adversary

proceeding in a court of law; a civil action or suit, either at law or in equity; a
justiciable dispute."

A "justiciable controversy" is "one involving an active antagonistic assertion

of a legal right on one side and a denial thereof on the other concerning a
real, and not a mere theoretical question or issue."

Taking into account the foregoing definitions, it is an essential requirement

that there must first be a labor dispute between the contending parties before
the labor arbiter. In the present case, there is no labor dispute between the
petitioner and private respondents as there has yet been no complaint for
illegal dismissal filed with the labor arbiter by the private respondents against
the petitioner.

The petition for injunction directly filed before the NLRC is in reality an action
for illegal dismissal. This is clear from the allegations in the petition which
prays for: reinstatement of private respondents; award of full backwages,
moral and exemplary damages; and attorney's fees. As such, the petition
should have been filed with the labor arbiter.

On the other hand, the NLRC shall have exclusive appellate jurisdiction over
all cases decided by labor arbiters as provided in Article217(b) of the Labor
Code. In short, the jurisdiction of the NLRC in illegal dismissal cases is
appellate in nature and, therefore, it cannot entertain the private respondents'
petition for injunction which challenges the dismissal orders of petitioner.
Article 218(e) of the Labor Code does not provide blanket authority to the
NLRC or any of its divisions to issue writs of injunction, considering that
Section 1 of Rule XI of the New Rules of Procedure of the NLRC makes
injunction only an ancillary remedy in ordinary labor disputes"

Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order
granting private respondents' petition for injunction and ordering the
petitioner to reinstate private respondents.
 Petitioner filed motion for reconsideration of the judgment, the petitioner
instituted this special civil action for certiorari under Rule 65 of the Rules of
Court wherein she prays this Court annul the challenged decision of the
NATIVIDAD PONDOC, petitioner, vs. NATIONAL LABOR RELATIONS NLRC on the ground that the NLRC acted without or in excess of jurisdiction
COMMISSION (Fifth Division, Cagayan de Oro City) and EMILIO or with grave abuse of discretion when it proceeded to determine the alleged
PONDOC, respondents. indebtedness of the petitioner and set-off the same against the liabilities of
G.R. No. 116347 October 3, 1996 the private respondent. The petitioner asserts that the decision of the Labor
Arbiter in NLRC Case was already final and executory when the private
Facts: Petitioner Natividad Pondoc was the legitimate wife of Andres respondent tried to defeat the judgment by asserting an alleged indebtedness
Pondoc. Atter her death on 5 December 1994, she was substituted by of Andres Pondoc as a set-off, a claim not pleaded before the Labor Arbiter
Hipolito Pondoc, her only legitimate son. Private respondent Eulalio Pondoc at any time before judgment, hence deemed waived. Moreover the
is the owner-proprietor of Melleonor General Merchandise and Hardware indebtedness "did not evolve out [sic] employer-employee relationship,
Supply located at Poblacion, Sindangan, Zamboanga del Norte. Respondent hence, purely civil in aspect."
is engaged, among others, in the business of buying and selling copra, rice,
corn, "binangkol," junk iron and empty bottles. He has in his employ more Issue: WON the NLRC has jurisdiction
than twenty (20) regular workers. Records disclose that Andres Pondoc was
employed by Eulalio Pondoc as a laborer from October 1990 up to December Ruling: No. In the first place, the NLRC should not have entertained the
1991, receiving a wage rate of P20.00 per day. He was required to work private respondent's separate or independent petition for "Injunction and
twelve (12) hours a day from 7:00 AM to 8:00 PM, Monday to Sunday. Damages". It was obvious that the petition was a scheme to defeat or
Despite working on his rest days and holidays, he was not paid his premium obstruct the enforcement of the judgment in NLRC where, in fact, a writ of
pay as required by law. execution had been issued.

Consequently, on May 14, 1992, Natividad Pondoc, on behalf of her Article 218(e) of the Labor Code does not provide blanket authority to the
husband, filed a complaint for salary differential, overtime pay, 13th month NLRC or any of its divisions to issue writs of injunction, while Rule XI of the
pay, holiday pay and other money claims before the SubRegional Arbitration New Rules of Procedure of the NLRC makes injunction only an ancillary
Branch No. 9 of the NLRC. remedy in ordinary labor disputes such as the one brought by the petitioner.

Private respondent: There is no existence of [an] employer-employee This is clear from Section 1 of the said Rule which pertinently provides as
relationship between them. He further averred that Melleonor General follows:
Merchandise and Hardware Supply is a fictitious establishment.
Sec. 1. Injunction in Ordinary Labor Disputed. — A preliminary injunction or a
LA: There exists of [an] employer-employee relationship between the parties restraining order may be granted by the Commission through its divisions
pursuant to the provisions of paragraph (e) of Article 218 of the Labor Code,
On his last day to perfect an appeal, private respondent filed a Manifestation as amended, when it is established on the bases of the sworn allegations in
before the Labor Arbiter praying that his liabilities be set-off against the petition that the acts complained of, involving or arising from any labor
petitioner's alleged indebtedness to him. The Labor Arbiter denied, however, dispute before the Commission, which, if not restrained or performed
the compensation, and, instead, issued a writ of execution as prayed for by forthwith, may cause grave or irreparable damage to any party or render
petitioner. ineffectual any decision in favor of such party. X X X The foregoing ancillary
power may be exercised by the Labor Arbiters only as an incident to the
Before the execution order could be implemented, however, private cases pending before them in order to preserve the rights of the parties
respondent was able to obtain a restraining order from the NLRC, where he during the pendency of the case, but excluding labor disputes involving strike
filed a Petition for "Injunction and Damages," or lockout.

NLRC: It allowed the compensation between petitioner's monetary award and Hence, a petition or motion for preliminary injunction should have been filed
her alleged indebtedness to private respondent. in the appeal interposed by the private respondent, i.e., in NLRC Case No.
SRAB-09-05-10102-92. This matter, however, became academic when the
NLRC consolidated the two cases as shown by the captions in its challenged
decision of 28 February 1994 and resolution of 6 May 1994.

The Labor Arbiter, in denying the set-off, reasoned "[i]t could have been
considered if it was presented before the decision of this case." While this is
correct, there are stronger reasons why the set-off should, indeed, be denied.
As correctly contended by the Office of the Solicitor General, there is a
complete want of evidence that the indebtedness asserted by the private
respondent against Andres Pondoc arose out of or was incurred in
connection with the employer-employee relationship between them. The
Labor Arbiter did not then have jurisdiction over the claim as under paragraph
(a) of Article 217 of the Labor Code, Labor Arbiters have exclusive and
original jurisdiction only in the following cases:

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. Claim for actual, moral, exemplary and other forms of damages
arising from 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 accompanies with a claim
for reinstatement.

On the other hand, under paragraph (b) thereof, the NLRC has exclusive
appellate jurisdiction over all cases decided by the Labor Arbiters. This
simply means that the NLRC does not have original jurisdiction over the
cases enumerated in paragraph (a) and that if a claim does not fall within the
exclusive original jurisdiction of the Labor Arbiter, the NLRC cannot have
appellate jurisdiction thereon.

The conclusion then is inevitable that the NLRC was without jurisdiction,
either original or appellate, to receive evidence on the alleged indebtedness,
render judgment thereon, and direct that its award be set-off against the final
judgment of the Labor Arbiter.
 notify Villamaria Motors in case the vehicle was leased for two or more days
and was required to attend any meetings which may be called from time to
time. Aside from the boundary-hulog, Bustamante was also obliged to pay for
the annual registration fees of the vehicle and the premium for the vehicle’s
comprehensive insurance. Bustamante promised to strictly comply with the
rules and regulations imposed by Villamaria for the upkeep and maintenance
OSCAR VILLAMARIA, JR. Petitioner, vs. COURT OF APPEALS and of the jeepney.
JERRY V. BUSTAMANTE, Respondents
G.R. No. 165881 April 19, 2006 Bustamante failed to pay for the annual registration fees of the vehicle, but
Villamaria allowed him to continue driving the jeepney. In 1999, Bustamante
Facts: Petitioner Oscar Villamaria, Jr. was the owner of Villamaria Motors, a and other drivers who also had the same arrangement with Villamaria Motors
sole proprietorship engaged in assembling passenger jeepneys with a public failed to pay their respective boundary-hulog. On July 24, 2000, Villamaria
utility franchise to operate along the Baclaran-Sucat route. By 1995, took back the jeepney driven by Bustamante and barred the latter from
Villamaria stopped assembling jeepneys and retained only nine, four of which driving the vehicle.
he operated by employing drivers on a "boundary basis." One of those
drivers was respondent Bustamante who drove the jeepney with Plate No. On August 15, 2000, Bustamante filed a Complaint for Illegal Dismissal
PVU-660. Bustamante remitted P450.00 a day to Villamaria as boundary and against Villamaria and his wife Teresita. Bustamante alleged that he was
kept the residue of his daily earnings as compensation for driving the vehicle. employed by Villamaria in July 1996 under the boundary system, where he
In August 1997, Villamaria verbally agreed to sell the jeepney to Bustamante was required to remit P450.00 a day. He further narrated that in July 2000,
under the "boundary-hulog scheme," where Bustamante would remit to he informed the Villamaria spouses that the surplus engine of the jeepney
Villarama P550.00 a day for a period of four years; Bustamante would then needed to be replaced, and was assured that it would be done. However, he
become the owner of the vehicle and continue to drive the same under was later arrested and his driver’s license was confiscated because
Villamaria’s franchise. It was also agreed that Bustamante would make a apparently, the replacement engine that was installed was taken from a
downpayment of P10,000.00. stolen vehicle. Due to negotiations with the apprehending authorities, the
jeepney was not impounded. The Villamaria spouses took the jeepney from
On August 7, 1997, Villamaria executed a contract entitled "Kasunduan ng him on July 24, 2000, and he was no longer allowed to drive the vehicle since
Bilihan ng Sasakyan sa Pamamagitan ng Boundary-Hulog”. The parties then unless he paid them P70,000.00.
agreed that if Bustamante failed to pay the boundary-hulog for three days,
Villamaria Motors would hold on to the vehicle until Bustamante paid his Bustamante claimed that Villamaria exercised control and supervision over
arrears, including a penalty of P50.00 a day; in case Bustamante failed to the conduct of his employment. He maintained that the rulings of the Court in
remit the daily boundary-hulog for a period of one week, the Kasunduan National Labor Union v. Dinglasan, and Citizen's League of Free Workers v.
would cease to have legal effect and Bustamante would have to return the Abbas are germane to the issue as they define the nature of the
vehicle to Villamaria Motors. owner/operator-driver relationship under the boundary system.

Under the Kasunduan, Bustamante was prohibited from driving the vehicle The spouses Villamaria admitted the existence of the Kasunduan, but alleged
without prior authority from Villamaria Motors. Thus, Bustamante was that Bustamante failed to pay the P10,000.00 downpayment and the vehicle’s
authorized to operate the vehicle to transport passengers only and not for annual registration fees. They further alleged that Bustamante eventually
other purposes. He was also required to display an identification card in front failed to remit the requisite boundary-hulog of P550.00 a day, which
of the windshield of the vehicle; in case of failure to do so, any fine that may prompted them to issue the Paalaala. Instead of complying with his
be imposed by government authorities would be charged against his account. obligations, Bustamante stopped making his remittances despite his daily
Bustamante further obliged himself to pay for the cost of replacing any parts trips and even brought the jeepney to the province without permission.
of the vehicle that would be lost or damaged due to his negligence. In case Worse, the jeepney figured in an accident and its license plate was
the vehicle sustained serious damage, Bustamante was obliged to notify confiscated; Bustamante even abandoned the vehicle in a gasoline station in
Villamaria Motors before commencing repairs. Bustamante was not allowed Sucat, Parañaque City for two weeks. When the security guard at the
to wear slippers, short pants or undershirts while driving. He was required to gasoline station requested that the vehicle be retrieved and Teresita
be polite and respectful towards the passengers. He was also obliged to Villamaria asked Bustamante for the keys, Bustamante told her: "Di kunin
ninyo." When the vehicle was finally retrieved, the tires were worn, the better policy is to consider not only the status or relationship of the parties but
alternator was gone, and the battery was no longer working. also the nature of the action that is the subject of their controversy.

The spouses Villamaria argued that Bustamante was not illegally dismissed Article 217 of the Labor Code, as amended, vests on the Labor Arbiter
since the Kasunduan executed on August 7, 1997 transformed the employer- exclusive original jurisdiction only over the following:
employee relationship into that of vendor-vendee. Hence, the spouses
concluded, there was no legal basis to hold them liable for illegal dismissal. 1. Unfair labor practice cases;
2. Termination disputes;
LA: in favor of Villarama 3. If accompanied with a claim for reinstatement, those cases that
workers may file involving wage, rates of pay, hours of work, and
Before the NLRC on appeal, Bustamante insisted that the Kasunduan did not other terms and conditions of employment;
extinguish the employer-employee relationship between him and Villamaria. 4. Claims for actual, moral, exemplary and other forms of damages
While he did not receive fixed wages, he kept only the excess of the arising from the employer-employee relations;
boundary-hulog which he was required to remit daily to Villamaria under the 5. Cases arising from violation of Article 264 of this Code, including
agreement. Bustamante maintained that he remained an employee because questions involving the legality of strikes and lockouts; and
he was engaged to perform activities which were necessary or desirable to 6. Except claims for Employees Compensation, Social Security,
Villamaria’s trade or business. Medicare and maternity benefits, all other claims, arising from
employer-employee relationship, including those of persons in
NLRC: affirmed LA, that the relationship is that of vendor-vendee and not domestic or household service, involving an amount exceeding five
ER-EE thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
CA: The LA has jurisdiction over the issue. Under the Kasunduan, the
relationship between him and Villamaria was dual: that of vendor-vendee and (b) The Commission shall have exclusive appellate jurisdiction over
employer-employee. There was power of control and while the power to all cases decided by Labor Arbiters.
dismiss was not mentioned in the Kasunduan, it did not mean that Villamaria (c) Cases arising from the interpretation or implementation of
could not exercise it. It explained that the existence of an employment collective bargaining agreements, and those arising from the
relationship did not depend on how the worker was paid but on the presence interpretation or enforcement of company personnel policies shall be
or absence of control over the means and method of the employee’s work. In disposed of by the Labor Arbiter by referring the same to the
this case, Villamaria’s directives (to drive carefully, wear an identification grievance machinery and voluntary arbitration as may be provided in
card, don decent attire, park the vehicle in his garage, and to inform him said agreements.
about provincial trips, etc.) was a means to control the way in which
Bustamante was to go about his work. In view of Villamaria’s supervision and In the foregoing cases, an employer-employee relationship is an
control as employer, the fact that the "boundary" represented installment indispensable jurisdictional requisite. The jurisdiction of Labor Arbiters and
payments of the purchase price on the jeepney did not remove the parties’ the NLRC under Article 217 of the Labor Code is limited to disputes arising
employer - employee relationship. from an employer-employee relationship which can only be resolved by
reference to the Labor Code, other labor statutes or their collective
Issue: WON the LA has jurisdiction over the issue at bar bargaining agreement.

Ruling: Yes. The rule is that, the nature of an action and the subject matter Not every dispute between an employer and employee involves matters that
thereof, as well as, which court or agency of the government has jurisdiction only the Labor Arbiter and the NLRC can resolve in the exercise of their
over the same, are determined by the material allegations of the complaint in adjudicatory or quasi-judicial powers. Actions between employers and
relation to the law involved and the character of the reliefs prayed for, employees where the employer-employee relationship is merely incidental is
whether or not the complainant/plaintiff is entitled to any or all of such reliefs. within the exclusive original jurisdiction of the regular courts. When the
A prayer or demand for relief is not part of the petition of the cause of action; principal relief is to be granted under labor legislation or a collective
nor does it enlarge the cause of action stated or change the legal effect of bargaining agreement, the case falls within the exclusive jurisdiction of the
what is alleged. In determining which body has jurisdiction over a case, the
Labor Arbiter and the NLRC even though a claim for damages might be
asserted as an incident to such claim.

We agree with the ruling of the CA that, under the boundary-hulog scheme
incorporated in the Kasunduan, a dual juridical relationship was created
between petitioner and respondent: that of employer-employee and
vendorvendee. The Kasunduan did not extinguish the employer-employee
relationship of the parties extant before the execution of said deed.

As respondent’s employer, it was the burden of petitioner to prove that

respondent’s termination from employment was for a lawful or just cause, or,
at the very least, that respondent failed to make his daily remittances of
P550.00 as boundary. However, petitioner failed to do so.
 LA: The Complaint was decided by the labor arbiter in favor of respondent
Albarico, who was awarded separation pay in lieu of reinstatement,
backwages and attorney’s fees.

NLRC: The labor arbiter’s Decision was vacated by the NLRC for forum
shopping on the part of respondent Albarico, because the NCMB arbitration
case was still pending. The NLRC Decision, which explicitly stated that the
7K CORPORATION, Petitioner, vs. EDDIE ALBARICO, Respondent dismissal was without prejudice to the pending NCMB arbitration case,
GR No: 182295 Date: June 26, 2013 Ponente: SERENO, CJ. became final after no appeal was taken.

Doctrine: Although the general rule under the Labor Code gives the labor Petitioner corporation filed its Position Paper in the NCMB arbitration case. It
arbiter exclusive and original jurisdiction over termination disputes, it also denied that respondent was terminated from work, much less illegally
recognizes exceptions. One of the exceptions is provided in Article 262 of the dismissed. The corporation claimed that he had voluntarily stopped reporting
Labor Code. Voluntary arbitrators may, by agreement of the parties, assume for work after receiving a verbal reprimand for his sales performance; hence,
jurisdiction over a termination dispute such as the present case, contrary to it was he who was guilty of abandonment of employment.
the assertion of petitioner that they may not.
NCMB: NCMB voluntary arbitrator rendered a Decision finding petitioner
FACTS: corporation liable for illegal dismissal. The termination of respondent
Albarico, by reason of alleged poor performance, was found invalid. The
When he was dismissed on 5 April 1993, respondent Eddie Albarico arbitrator explained that the promotions, increases in salary, and awards
(Albarico) was a regular employee of petitioner 7K Corporation, a company received by respondent belied the claim that the latter was performing poorly.
selling water purifiers. It was also found that Albarico could not have abandoned his job, as the
abandonment should have been clearly shown.
Because of his good performance, his employment was regularized.
CA: The CA affirmed the Decision of the voluntary arbitrator, but eliminated
He was also promoted several times: from salesman, he was promoted to the award of attorney’s fees for having been made without factual, legal or
senior sales representative and then to acting team field supervisor. equitable justification. Petitioner’s Motion for Partial Reconsideration was
denied as well.
7K Corporation terminated Albarico’s employment allegedly for his poor sales
performance. Petitioner's Contentions:

Respondent had to stop reporting for work, and he subsequently submitted A. Claims that under Article 217 of the Labor Code, original and exclusive
his money claims against petitioner for arbitration before the National jurisdiction over termination disputes, such as the present case, is lodged
Conciliation and Mediation Board (NCMB). only with the labor arbiter of the NLRC.

The issue for voluntary arbitration before the NCMB, according to the parties’ B. Assuming that the voluntary arbitrator has jurisdiction over the present
Submission Agreement dated 19 April 1993, was whether respondent termination dispute, the latter should have limited his decision to the issue
Albarico was entitled to the payment of separation pay and the sales contained in the Submission Agreement of the parties – the issue of whether
commission reserved for him by the corporation. respondent Albarico was entitled to separation pay and to the sales
commission the latter earned before being terminated.
While the NCMB arbitration case was pending, respondent Albarico filed a
Complaint against petitioner corporation with the Arbitration Branch of the ISSUE/S:
National Labor Relations Commission (NLRC) for illegal dismissal with
money claims for overtime pay, holiday compensation, commission, and food Whether the CA committed reversible error in finding that the voluntary
and travelling allowances. arbitrator properly assumed jurisdiction to decide the issue of the legality of
the dismissal of respondent as well as the latter’s entitlement to backwages,
even if neither the legality nor the entitlement was expressly claimed in the NCMB, and later submitted to the NLRC, was the basis of the latter’s finding
Submission Agreement of the parties. of forum shopping and the consequent dismissal of the case before it. In fact,
petitioner also implicitly acknowledged this when it filed before the NLRC its
HELD: NO. Although the general rule under the Labor Code gives the labor Motion to Dismiss respondent’s Complaint on the ground of forum shopping.
arbiter exclusive and original jurisdiction over termination disputes, it also Thus, it is now estopped from claiming that the issue before the NCMB does
recognizes exceptions. One of the exceptions is provided in Article 262 of the not include the issue of the legality of the dismissal of respondent. Besides,
Labor Code. there has to be a reason for deciding the issue of respondent’s entitlement to
separation pay. To think otherwise would lead to absurdity, because the
Voluntary arbitrators may, by agreement of the parties, assume jurisdiction voluntary arbitrator would then be deciding that issue in a vacuum. The
over a termination dispute such as the present case, contrary to the assertion arbitrator would have no basis whatsoever for saying that Albarico was
of petitioner that they may not. entitled to separation pay or not if the issue of the legality of respondent’s
dismissal was not resolve first.
We rule that although petitioner correctly contends that separation pay may
in fact be awarded for reasons other than illegal dismissal, the circumstances Moreover, we have ruled in Sime Darby Pilipinas, Inc. v. Deputy
of the instant case lead to no other conclusion than that the claim of Administrator Magsalin that a voluntary arbitrator has plenary jurisdiction and
respondent Albarico for separation pay was premised on his allegation of authority to interpret an agreement to arbitrate and to determine the scope of
illegal dismissal. Thus, the voluntary arbitrator properly assumed jurisdiction his own authority when the said agreement is vague — subject only, in a
over the issue of the legality of his dismissal. proper case, to the certiorari jurisdiction of this Court. Having established that
the issue of the legality of dismissal of Albarico was in fact necessarily –
True, under the Labor Code, separation pay may be given not only when albeit not explicitly – included in the Submission Agreement signed by the
there is illegal dismissal. In fact, it is also given to employees who are parties, this Court rules that the voluntary arbitrator rightly assumed
terminated for authorized causes, such as redundancy, retrenchment or jurisdiction to decide the said issue.
installation of labor-saving devices under Article 283 of the Labor Code.
Additionally, jurisprudence holds that separation pay may also be awarded Consequently, we also rule that the voluntary arbitrator may award
for considerations of social justice, even if an employee has been terminated backwages upon a finding of illegal dismissal, even though the issue of
for a just cause other than serious misconduct or an act reflecting on moral entitlement thereto is not explicitly claimed in the Submission Agreement.
character. The Court has also ruled that separation pay may be awarded if it Backwages, in general, are awarded on the ground of equity as a form of
has become an established practice of the company to pay the said benefit to relief that restores the income lost by the terminated employee by reason of
voluntarily resigning employees or to those validly dismissed for non- his illegal dismissal.
membership in a union as required in a closed-shop agreement.

The above circumstances, however, do not obtain in the present case. In

fact, even in instances in which separation pay is awarded in consideration of
social justice, the issue of the validity of the dismissal still needs to be
resolved first. Only when there is already a finding of a valid dismissal for a
just cause does the court then award separation pay for reason of social
justice. The other circumstances when separation pay may be awarded are
not present in this case.

The foregoing findings indisputably prove that the issue of separation pay
emanates solely from respondent’s allegation of illegal dismissal. In fact,
petitioner itself acknowledged the issue of illegal dismissal in its position
paper submitted to the NCMB. Moreover, we note that even the NLRC was of
the understanding that the NCMB arbitration case sought to resolve the issue
of the legality of the dismissal of the respondent. In fact, the identity of the
issue of the legality of his dismissal, which was previously submitted to the
 In 2008, petitioner joined another union and was elected union President.
Other MWEU members were inclined to join this new union, but MWEU
director Torres threatened that they would not get benefits from the new
CBA. Petitioner then filed a Complaint against respondents for unfair labor
practices, damages, and attorney’s fees before the National Labor Relations
Commission (NLRC).

LABOR ARBITER RULING: The filing of the instant case is still premature.
ALLAN M. MENDOZA vs OFFICERS OF MANILA WATER EMPLOYEES Section 5, Article X-Investigation Procedures and Appeal Process of the
UNION (MWEU) Union Constitution and By-Laws provides that:
G.R. No. 201595; January 25, 2016 Del Castillo, J.
Section 5. Any dismissed and/or expelled member shall have the rights to
Doctrine: It is true that some of petitioner’s causes of action constitute intra- appeal to the Executive Board within seven (7) days from the date of notice
union cases cognizable by the BLR under Article 226 of the Labor Code. of the said dismissal and/or expulsion, which in [turn] shall be referred to the
However, petitioner’s charge of unfair labor practices falls within the original General Membership Assembly. In case of an appeal, a simple majority of
and exclusive jurisdiction of the Labor Arbiters, pursuant to Article 217 of the the decision of the Executive Board is imperative. The same shall be
Labor Code. In addition, Article 247 of the same Code provides that "the civil approved/disapproved by a majority vote of the general membership
aspects of all cases involving unfair labor practices, which may include assembly in a meeting duly called for the purpose.
claims for actual, moral, exemplary and other forms of damages, attorney’s
fees and other affirmative relief, shall be under the jurisdiction of the Labor Thus, instant case is referred back to the Union for the General Assembly to
Arbiters. act or deliberate complainant’s appeal on the decision of the Executive
Board.
FACTS: Petitioner was a member of the Manila Water Employees Union
(MWEU), a Department of Labor and Employment (DOLE)-registered labor Petitioner appealed before the NLRC.
organization consisting of rank-and-file employees within Manila Water
Company (MWC). The 24 private respondents herein were MWEU officers NLRC RULING: NLRC ruled that the Commission lacks the jurisdictional
during the period material to this Petition, with Borela as President. competence to act on this case. Article 217 of the Labor Code, as amended,
specifically enumerates the cases over which the Labor Arbiters and the
In an April 2007 letter, MWEU informed petitioner of his failure to pay the Commission have original and exclusive jurisdiction. That the disputes and
union dues (union dues is increased from P100 to P200, and the increased conflict fall under the jurisdiction of the Bureau of Labor Relations, as these
amount was not paid). By reason of such failure, petitioner and several are inter/intra-union disputes.
others violated Section 1(g), Article IX of the MWEU’s Constitution and By
-Laws. In turn, Borela referred the charge to the MWEU grievance committee Petitioner filed a Petition for Certiorari with the CA COURT OF APPEALS
for investigation. The grievance committee recommended that petitioner be RULING: The petition lacks merit. CA also held that Petitioner’s causes of
suspended for 30 days. action against MWEU are inter/intra-union disputes cognizable by the BLR
whose functions and jurisdiction are largely confined to union matters,
Petitioner indicated their intention to appeal the same to the General collective bargaining registry, and labor education.
Membership Assembly in accordance with Section 2(g), Article V of the
union’s Constitution and By-Laws. Petitioner’s appeal was denied, stating Petitioner’s Argument: Petitioner avers that the Labor Arbiter, the NLRC, and
that the prescribed period for appeal had expired. the CA failed to rule on his accusation of unfair labor practices and simply
dismissed his complaint on the ground that his causes of action are intra- or
Petitioner was again charged for non-payment of union dues for the second inter-union in nature; that admittedly, some of his causes of action involved
and third time and was eventually meted with penalty of expulsion from the intra- or inter-union disputes, but other acts of respondents constitute unfair
union. His pleas for an appeal to the General Membership Assembly were labor practices. Specifically, petitioner claims that he was suspended and
once more unheeded. expelled from MWEU illegally as a result of the denial of his right to appeal
his case to the general membership assembly in accordance with the union’s As members of the governing board of MWEU, respondents are presumed to
constitution and by-laws. know, observe, and apply the union’s constitution and by-laws. Thus, their
repeated violations thereof and their disregard of petitioner’s rights as a union
Respondent’s Arguments: That findings of fact of the CA are final and member – their inaction on his two appeals which resulted in his suspension,
conclusive; that the Labor Arbiter, NLRC, and CA are one in declaring that disqualification from running as MWEU officer, and subsequent expulsion
there is no unfair labor practices committed against petitioner; that without being accorded the full benefits of due process – connote willfulness
petitioner’s other allegations fall within the jurisdiction of the BLR, as they and bad faith, a gross disregard of his rights thus causing untold suffering,
refer to intra - or inter-union disputes between the parties. oppression and, ultimately, ostracism from MWEU. "Bad faith implies breach
of faith and willful failure to respond to plain and well understood obligation.
ISSUE/S:
1. WON the NLRC has jurisdiction over the complaint despite the fact that the
petition contains allegations referring to inter/intra-union conflicts
2. WON respondent committed of unfair labor practices

RULING:
1. YES. It is true that some of petitioner’s causes of action constitute intra-
union cases cognizable by the BLR under Article 226 of the Labor Code.
However, petitioner’s charge of unfair labor practices falls within the original
and exclusive jurisdiction of the Labor Arbiters, pursuant to Article 217 of the
Labor Code. In addition, Article 247 of the same Code provides that "the civil
aspects of all cases involving unfair labor practices, which may include
claims for actual, moral, exemplary and other forms of damages, attorney’s
fees and other affirmative relief, shall be under the jurisdiction of the Labor
Arbiters."

2. YES, the respondents are guilty of unfair labor practices.

The primary concept of unfair labor practices is stated in Article 247 of the
Labor Code, which states:

Article 247. Concept of unfair labor practice and procedure for prosecution
thereof. –– Unfair labor practices violate the constitutional right of workers
and employees to self-organization, are inimical to the legitimate interests of
both labor and management, including their right to bargain collectively and
otherwise deal with each other in an atmosphere of freedom and mutual
respect, disrupt industrial peace and hinder the promotion of healthy and
stable labor-management relations.

"In essence, [unfair labor practice] relates to the commission of acts that
transgress the workers’ right to organize." 50 "[A]ll the prohibited acts
constituting unfair labor practice in essence relate to the workers’ right to
selforganization." 51 "[T]he term unfair labor practice refers to that gamut of
offenses defined in the Labor Code which, at their core, violates the
constitutional right of workers and employees to self-organization."
 He acknowledged receipt of a written notice of dismissal, with his separation
pay.

Pea and Abion filed separate complaints for illegal dismissal that were later
consolidated. Both claimed that their termination from service was due to
petitioners suspicion that they were the leaders in a plan to form a union to
compete and replace the existing management-dominated union.

LA/RTC/NLRC RULING:

LA: The labor arbiter dismissed their complaints on the ground that the
Atlas Farms Inc. vs NLRC grievance machinery in the collective bargaining agreement (CBA) had not
GR No: 142244 Date: November 18, 2002 Ponente: Quisumbing, J. yet been exhausted. Private respondents availed of the grievance process,
but later on refiled the case before the NLRC in Region IV. They alleged lack
Doctrine: of sympathy on petitioners part to engage in conciliation proceedings.

Where the dispute is just in the interpretation, implementation or enforcement In a decision dated January 30, 1996, the labor arbiter dismissed the
stage, it may be referred to the grievance machinery set up in the CBA, or complaint for lack of merit, finding that the case was one of illegal dismissal
brought to voluntary arbitration. But, where there was already actual and did not involve the interpretation or implementation of any CBA provision.
termination, with alleged violation of the employees rights, it is already He stated that Article 217 (c) of the Labor Code was inapplicable to the case.
cognizable by the labor arbiter. Further, the labor arbiter found that although both complainants did not
substantiate their claims of illegal dismissal, there was proof that private
FACTS: respondents voluntarily accepted their separation pay and petitioners
financial assistance.
Private respondent Jaime O. dela Pea was employed as a veterinary aide by
petitioner. He was among several employees terminated in July 1989. On NLRC: Reversed the LA decision
July 8, 1989, he was re-hired by petitioner and given the additional job of
feedmill operator. He was instructed to train selected workers to operate the CA RULING:
feedmill. Corespondent Marcial I. Abion was a carpenter/mason and a
maintenance man whose employment by petitioner. The appellate court denied the petition and affirmed the NLRC resolution with
some modifications, thus: 1) The private respondents can not be reinstated,
In 1993, Pea was allegedly caught urinating and defecating on company due to their acceptance of the separation pay offered by the petitioner; 2) The
premises not intended for the purpose. The farm manager of petitioner private respondents are entitled to their full back wages; and, 3) The amount
issued a formal notice directing him to explain within 24 hours why of the separation pay received by private respondents from petitioner shall
disciplinary action should not be taken against him. Pea refused, however, to not be deducted from their full back wages.
receive the formal notice. He never bothered to explain. Thus, a notice of
termination with payment of his monetary benefits was sent to him. An MR was filed by herein petitioner but was denied by the CA hence the
current petition before the SC.
On the other hand Abion allegedly, caused the clogging of the fishpond
drainage resulting in damages worth several hundred thousand pesos when APPEAL TO THE SC:
he improperly disposed of the cut grass and other waste materials into the
ponds drainage system. Petitioner sent a written notice to Abion, requiring Petitioner's Contention:
him to explain what happened, otherwise, disciplinary action would be taken
against him. He refused to receive the notice and give an explanation, Petitioner contends that the dismissal of private respondents was for a just
according to petitioner. Consequently, the company terminated his services. and valid cause, pursuant to the provisions of the companys rules and
regulations. It also alleges lack of jurisdiction on the part of the labor arbiter,
claiming that the cases should have been resolved through the grievance Records show, that private respondents sought without success to avail of
machinery, and eventually referred to voluntary arbitration, as prescribed in the grievance procedure in their CBA.[16] On this point, petitioner maintains
the CBA. that by so doing, private respondents recognized that their cases still fell
under the grievance machinery. According to petitioner, without having
Respondent's Contention: exhausted said machinery, the private respondents filed their action before
the NLRC, in a clear act of forum-shopping. However, it is worth pointing out
For their part, private respondents contend that they were illegally dismissed that private respondents went to the NLRC only after the labor arbiter
from employment because management discovered that they intended to dismissed their original complaint for illegal dismissal. Under these
form another union, and because they were vocal in asserting their rights. In circumstances private respondents had to find another avenue for redress.
any case, according to private respondents, the petition involves factual We agree with the NLRC that it was petitioner who failed to show proof that it
issues that cannot be properly raised in a petition for review on certiorari took steps to convene the grievance machinery after the labor arbiter first
under Rule 45 of the Revised Rules of Court. dismissed the complaints for illegal dismissal and directed the parties to avail
of the grievance procedure under Article VII of the existing CBA. They could
ISSUE/S: not now be faulted for attempting to find an impartial forum, after petitioner
failed to listen to them and after the intercession of the labor arbiter proved
1. Whether private respondents were legally and validly dismissed futile. The NLRC had aptly concluded in part that private respondents had
already exhausted the remedies under the grievance procedure. It erred only
2. Whether the labor arbiter and the NLRC had jurisdiction to decide in finding that their cause of action was ripe for arbitration.
complaints for illegal dismissal
Coming to the merits of the petition, the NLRC found that petitioner did not
HELD: comply with the requirements of a valid dismissal. For a dismissal to be valid,
the employer must show that: (1) the employee was accorded due process,
1. NO. and (2) the dismissal must be for any of the valid causes provided for by law.
No evidence was shown that private respondents refused, as alleged, to
The first issue primarily involves questions of fact, which can serve as basis receive the notices requiring them to show cause why no disciplinary action
for the conclusion that private respondents were legally and validly should be taken against them. Without proof of notice, private respondents
dismissed. The burden of proving that the dismissal of private respondents who were subsequently dismissed without hearing were also deprived of a
was legal and valid falls upon petitioner. The NLRC found that petitioner chance to air their side at the level of the grievance machinery. Given the fact
failed to substantiate its claim that both private respondents committed of dismissal, it can be said that the cases were effectively removed from the
certain acts that violated company rules and regulations, hence we find no jurisdiction of the voluntary arbitrator, thus placing them within the jurisdiction
factual basis to say that private respondents dismissal was in order. We see of the labor arbiter. Where the dispute is just in the interpretation,
no compelling reason to deviate from the NLRC ruling that their dismissal implementation or enforcement stage, it may be referred to the grievance
was illegal, absent a showing that it reached its conclusion arbitrarily. machinery set up in the CBA, or brought to voluntary arbitration. But, where
Moreover, factual findings of agencies exercising quasi-judicial functions are there was already actual termination, with alleged violation of the employees
accorded not only respect but even finality, aside from the consideration here rights, it is already cognizable by the labor arbiter.
that this Court is not a trier of facts.

2. YES.

As held in Vivero vs. CA, petitioner cannot arrogate into the powers of
Voluntary Arbitrators the original and exclusive jurisdiction of Labor Arbiters
over unfair labor practices, termination disputes, and claims for damages, in
the absence of an express agreement between the parties in order for Article
262 of the Labor Code [Jurisdiction over other labor disputes] to apply in the
case at bar.
 Private Respondent Central Philippine Union Mission Corporation of the
Seventh-Day Adventists (SDA) is a religious corporation represented in this
case by the other private respondents, officers of the SDA. Petitioner Dionisio
V. Austria was a district pastor of the SDA until his services were terminated.

Petitioner was asked to admit accountability and responsibility for the church
tithes and offerings collected by his wife, Mrs. Thelma Austria. Petitioner
refused since it was private respondents Pastor Gideon Buhat and Mr.
Eufronio Ibesate who authorized his wife to collect.

Thereafter, petitioner went to the office of Pastor Buhat, the president of the
Negros Mission to persuade him to convene the Executive Committee to
settle his dispute with private respondent Pastor David Rodrigo. Pastor Buhat
denied the request since some committee members were out of town and
Pastor Dionisio V. Austria vs. National Labor Relations Commission there was no quorum. Thereafter, the two exchanged heated arguments.
(Fourth Division)
GR No: 124382 Date: August 16, 1999 Ponente: Kapunan, J. A fact-finding committee was created to investigate petitioner. Petitioner later
received a letter of dismissal citing misappropriation of denominational funds,
Doctrine: willful breach of trust, serious misconduct, gross and habitual neglect of
duties, and commission of an offense against the person of employers duly
An ecclesiastical affair is "one that concerns doctrine, creed, or form of authorized representative, as grounds for the termination of his services.
worship of the church, or the adoption and enforcement within a religious
association of needful laws and regulations for the government of the Petitioner then filed a complaint before the Labor Arbiter for illegal dismissal
membership, and the power of excluding from such associations those against the SDA and its officers and prayed for reinstatement with
deemed unworthy of membership." Based on this definition, an ecclesiastical backwages and benefits, moral and exemplary damages and other labor law
affair involves the relationship between the church and its members and benefits.
relate to matters of faith, religious doctrines, worship and governance of the
congregation. To be concrete, examples of this so-called ecclesiastical affairs LA/RTC/NLRC RULING:
to which the State cannot meddle are proceedings for excommunication,
ordinations of religious ministers, administration of sacraments and other Labor Arbiter Cesar D. Sideo rendered a decision in favor of petitioner
activities with attached religious significance. ordering respondents to immediately reinstate complainant Pastor Dionisio
Austria to his former position
The case at bar does not concern an ecclesiastical or purely religious affair
as to bar the State from taking cognizance of the same. While the matter at The NLRC initially vacated the findings of the Labor Arbiter and dismissed
hand relates to the church and its religious minister it does not ipso facto give the case for want of merit. However, upon a motion for reconsideration, the
the case a religious significance. Simply stated, what is involved here is the NLRC reinstated the decision of the Labor Arbiter. The NLRC, without ruling
relationship of the church as an employer and the minister as an employee. It on the merits of the case, reversed itself once again, sustained the argument
is purely secular and has no relation whatsoever with the practice of faith, posed by private respondents that the Labor Arbiter has no jurisdiction over
worship or doctrines of the church. In this case, petitioner was not the complaint filed by petitioner due to the constitutional provision on the
excommunicated or expelled from the membership of the SDA but was separation of church and state since the case allegedly involved and
terminated from employment. Indeed, the matter of terminating an employee, ecclesiastical affair to which the State cannot interfere. and, accordingly,
which is purely secular in nature, is different from the ecclesiastical act of dismissed the complaint of petitioner.
expelling a member from the religious congregation.
APPEAL TO THE SC:
FACTS:
Petition for certiorari under Rule 65 assailing the dismissal of the case for and the NLRC, has the right to take cognizance of the case and to determine
illegal dismissal filed by petitioner against private respondents for lack of whether the SDA, as employer, rightfully exercised its management
jurisdiction. prerogative to dismiss an employee. This is in consonance with the mandate
of the Constitution to afford full protection to labor.
Respondent's Contention:
Under the Labor Code, the provision which governs the dismissal of
Private respondents contend that by virtue of the doctrine of separation of employees, is comprehensive enough to include religious corporations, such
church and state, the Labor Arbiter and the NLRC have no jurisdiction to as the SDA, in its coverage. Article 278 of the Labor Code on
entertain the complaint filed by petitioner. Since the matter at bar allegedly postemployment states that "the provisions of this Title shall apply to all
involves the discipline of a religious minister, it is to be considered a purely establishments or undertakings, whether for profit or not." Obviously, the
ecclesiastical affair to which the State has no right to interfere. cited article does not make any exception in favor of a religious corporation.

ISSUE/S: 2. NO. Petitioner was terminated from service without just or lawful cause.

1. Whether or not the termination of the services of petitioner is an The requisites for a valid dismissal are: (a) the employee must be afforded
ecclesiastical affair, and, as such, involves the separation of church and due process, i.e., he must be given an opportunity to be heard and to defend
state. himself, and; (b) the dismissal must be for a valid cause as provided in Article
282 of the Labor Code. Without the concurrence of this twin requirements,
2. Whether or not such termination is valid. the termination would, in the eyes of the law, be illegal.

HELD: Before the services of an employee can be validly terminated, Article 277 (b)
of the Labor Code and Section 2, Rule XXIII, Book V of the Rules
1. No. The case at bar does not concern an ecclesiastical or purely religious Implementing the Labor Code further require the employer to furnish the
affair as to bar the State from taking cognizance of the same. employee with two (2) written notices, to wit: (a) a written notice served on
the employee specifying the ground or grounds for termination, and giving to
An ecclesiastical affair is one that concerns doctrine, creed, or form or said employee reasonable opportunity within which to explain his side; and,
worship of the church, or the adoption and enforcement within a religious (b) a written notice of termination served on the employee indicating that
association of needful laws and regulations for the government of the upon due consideration of all the circumstances, grounds have been
membership, and the power of excluding from such associations those established to justify his termination.
deemed unworthy of membership. Based on this definition, an ecclesiastical
affair involves the relationship between the church and its members and Private respondent failed to substantially comply with the above
relate to matters of faith, religious doctrines, worship and governance of the requirements. With regard to the first notice, the letter which notified
congregation. To be concrete, examples of this so-called ecclesiastical affairs petitioner and his wife to attend the meeting cannot be construed as the
to which the State cannot meddle are proceedings for excommunication, written charge required by law. The said letter never categorically stated the
ordinations of religious ministers, administration of sacraments and other particular acts or omissions on which petitioner's impending termination was
activities with which attached religious significance. The case at bar does not grounded. In fact, the letter never even mentioned that petitioner would be
even remotely concern any of the abovecited examples. While the matter at subject to investigation.
hand relates to the church and its religious minister it does not ipso facto give
the case a religious significance. Simply stated, what is involved here is the While admittedly, private respondents complied with the second requirement,
relationship of the church as an employer and the minister as an employee. It the notice of termination, this does not cure the initial defect of lack of the
is purely secular and has no relation whatsoever with the practice of faith, proper written charge required by law.
worship or doctrines of the church.
In the letter of termination, private respondents enumerated the following as
It is clear that when the SDA terminated the services of petitioner, it was grounds for the dismissal of petitioner, namely: misappropriation of
merely exercising its management prerogative to fire an employee which it denominational funds, willful breach of trust, serious misconduct, gross and
believes to be unfit for the job. As such, the State, through the Labor Arbiter
habitual neglect of duties, and commission of an offense against the person
of employer's duly authorized representative.

a. The validity of the dismissal based on the ground of willful breach of trust
cannot be sustained.

Settled is the rule that under Article 282 (c) of the Labor Code, the breach of
trust must be willful. A breach is willful if it is done intentionally, knowingly
and purposely, without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on
substantial grounds and not on the employer's arbitrariness, whims, caprices
or suspicion; otherwise, the employee would eternally remain at the mercy of
the employer.

The records show that there were only six (6) instances when petitioner
personally collected and received from the church treasurers the tithes,
collections, and donations for the church. The stenographic notes of the
Auditor and a witness for private respondents, show that Pastor Austria was
able to remit all his collections to the treasurer.

b. The grounds of serious misconduct and commission of an offense against

the person of the employer’s duly authorized representative are
unmeritorious and do not warrant petitioner’s dismissal from the service.

Misconduct has been defined as improper or wrong conduct. It is the

transgression of some established and definite rule of action, a forbidden act,
a dereliction of duty, willful in character, and implies wrongful intent and not
mere error in judgment. For misconduct to be considered serious it must be
of such grave and aggravated character and not merely trivial or unimportant.
Based on this standard, the act of petitioner in banging the attaché case on
the table, throwing the telephone and scattering the books in the office of
Pastor Buhat, although improper, cannot be considered as grave enough to
be considered as serious misconduct. After all, though petitioner committed
damage to property, he did not physically assault Pastor Buhat or any other
pastor.

c. Petitioner did not commit gross and habitual neglect of duties.

Private respondents failed to prove culpability on the part of petitioner.

Petitioner's rise from the ranks disclose that he was actually a hard-worker.
Private respondents' evidence, which consisted of petitioner's Worker's
Reports, revealed how petitioner travelled to different churches to attend to
the faithful under his care. Indeed, he labored hard for the SDA, but, in
return, he was rewarded with a dismissal from the service for a non-existent
cause.
 When Republic Act (R.A.) No. 8799P.D.) No. 902-A was transferred to the
RTC designated as a special commercial court. The records of Rodrigo's
SEC case were thus turned over to the RTC, Branch 142, Makati, and
docketed as Civil Case No. 00-1553. .) No. 902-A was transferred to the RTC
designated as a special commercial court. The records of Rodrigo's SEC
case were thus turned over to the RTC, Branch 142, Makati, and docketed as
Civil Case No. 00-1553.

Petitioner’s Contention: Oscar filed a Motion to Declare Complaint as

Nuisance or Harassment Suit. He claimed that the complaint is a mere
nuisance or harassment suit and should, according to the Interim Rules of
Procedure for Intra-Corporate Controversies, be dismissed; and that it is not
a bona fide derivative suit as it partakes of the nature of a petition for the
settlement of estate of the deceased Anastacia that is outside the jurisdiction
of a special commercial court.

OSCAR REYES vs. HON. REGIONAL TRIAL COURT OF MAKATI, RTC Ruling: The RTC denied Oscar’s motion. It ruled that it was not a
BRANCH 142, ZENITH INSURANCE CORPORATION and RODRIGO derivative suit and thus, the petition should be threshed out in a petition for
REYES settlement of estate.
GR No: 165744 Date: August 11, 2008 Ponente: Brion, J.
CA Ruling: Affirmed the RTC ruling.
Doctrine: To determine whether a case involves an intra-corporate
controversy, and is to be heard and decided by the branches of the RTC ISSUE: Whether or not the RTC has jurisdiction over Rodrigo’s complaint.
specifically designated by the Court to try and decide such cases, two
elements must concur: (a) the status or relationship of the parties; and (2) the HELD: NO. To determine whether a case involves an intra-corporate
nature of the question that is the subject of their controversy. controversy, and is to be heard and decided by the branches of the RTC
specifically designated by the Court to try and decide such cases, two
FACTS: Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two elements must concur: (a) the status or relationship of the parties; and (2) the
of the four children of the spouses Pedro and Anastacia Reyes. Pedro, nature of the question that is the subject of their controversy.
Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith
Insurance Corporation (Zenith), a domestic corporation established by their The first element requires that the controversy must arise out of intra-
family. Pedro died in 1964, while Anastacia died in 1993. Although Pedro's corporate or partnership relations between any or all of the parties and the
estate was judicially partitioned among his heirs sometime in the 1970s, no corporation, partnership, or association of which they are stockholders,
similar settlement and partition appear to have been made with Anastacia's members or associates; between any or all of them and the corporation,
estate, which included her shareholdings in Zenith. As of June 30, 1990, partnership, or association of which they are stockholders, members, or
Anastacia owned 136,598 shares of Zenith; Oscar and Rodrigo owned associates, respectively; and between such corporation, partnership, or
8,715,637 and 4,250 shares, respectively. Zenith and Rodrigo filed a association and the State insofar as it concerns their individual franchises.
complaint with the Securities and Exchange Commission (SEC) against The second element requires that the dispute among the parties be
Oscar. The complaint stated that it is "a derivative suit initiated and filed by intrinsically connected with the regulation of the corporation. If the nature of
the complainant Rodrigo C. Reyes to obtain an accounting of the funds and the controversy involves matters that are purely civil in character,
assets of ZENITH INSURANCE CORPORATIONwhich are now or formerly necessarily, the case does not involve an intra-corporate controversy.
in the control, custody, and/or possession of respondent [herein petitioner
Oscar] and to determine the stocks of deceased spouses Pedro and The transfer of title by means of succession, though effective and valid
Anastacia Reyes that were arbitrarily and fraudulently appropriated [by between the parties involved (i.e., between the decedent's estate and her
Oscar] for himself. heirs), does not bind the corporation and third parties. The transfer must be
registered in the books of the corporation to make the transferee-heir a LA RULING: Labor Arbiter denied the Motion to Dismiss, holding that the
stockholder entitled to recognition as such both by the corporation and by office acquired "jurisdiction to arbitrate and/or decide the instant complaint
third parties. Rodrigo must, therefore, hurdle two obstacles before he can be finding extant in the case an employer-employee relationship."
considered a stockholder of Zenith with respect to the shareholdings
originally belonging to Anastacia. First, he must prove that there are CA RULING: NCLPI elevated the case to the CA through a Petition for
shareholdings that will be left to him and his co-heirs, and this can be Certiorari under Rule 65 of the Rules of Court. The CA ruled that Locsin was
determined only in a settlement of the decedent's estate. No such proceeding a corporate officer; the issue of his removal as EVP/Treasurer is an
has been commenced to date. Second, he must register the transfer of the intracorporate dispute under the RTC’s jurisdiction. The CA defined
shares allotted to him to make it binding against the corporation. "corporate officers as those officers of a corporation who are given that
character either by the Corporation Code or by the corporations’ by-laws."
Whether as an individual or as a derivative suit, the RTC - sitting as special Petitioner’s contention: Locsin submits that he is a regular employee of
commercial court - has no jurisdiction to hear Rodrigo's complaint since what NCLPI since - as he argued before the Labor Arbiter and the CA - his
is involved is the determination and distribution of successional rights to the relationship with the company meets the "four-fold test." He concludes that
shareholdings of Anastacia Reyes. Rodrigo's proper remedy, under the the Labor Arbiter and the NLRC – not the RTC (as NCLPI posits) – has
circumstances, is to institute a special proceeding for the settlement of the jurisdiction to decide the controversy. Respondent’s contention: Nissan
estate of the deceased Anastacia Reyes, a move that is not foreclosed by the submits that the CA correctly ruled that the Labor Arbiter does not have
dismissal of his present complaint. jurisdiction over Locsin’s complaint for illegal dismissal. In support, Nissan
maintains that Locsin is a corporate officer and not an employee.
ARSENIO LOCSIN vs. NISSAN LEASE PHILS.
GR No: 185567 Date: October 20, 2010 Ponente: Brion, J. ISSUE: Whether or not Locsin is a corporate officer thereby excluding him
from the coverage of the Labor Code.
Doctrine: A corporate officer’s dismissal is always a corporate act, or an
intra-corporate controversy which arises between a stockholder and a HELD: YES. Locsin is a corporate officer.
corporation so that RTC should exercise jurisdiction based on Section 5(c) of
PD 902-A. He was undeniably Chairman and President, and was elected to these
positions by the Nissan board pursuant to its By-laws. Given Locsin’s status
FACTS: Locsin was elected Executive Vice President and Treasurer as a corporate officer, the RTC, not the Labor Arbiter or the NLRC, has
(EVP/Treasurer) of NCLPI. Locsin held this position for 13 years, having jurisdiction to hear the legality of the termination of his relationship with
been re-elected every year since 1992, until January 21, 2005, when he was Nissan. As previously held, a corporate officer’s dismissal from service is an
nominated and elected Chairman of NCLPI’s Board of Directors. A little over intra-corporate dispute. A corporate officer’s dismissal is always a corporate
seven (7) months after his election as Chairman of the Board, the NCLPI act, or an intra-corporate controversy which arises between a stockholder
Board held a special meeting at the Manila Polo Club. One of the items of the and a corporation so that the RTC should exercise jurisdiction over it.
agenda was the election of a new set of officers. Locsin was neither re- Furthermore, it is provided in , Section 5(c) of Presidential Decree No. 902-A,
elected Chairman nor reinstated to his previous position as EVP/Treasurer. Subsection 5.2 that the Security and Exchange Commission’s jurisdiction
over all cases enumerated under Section 5 of Presidential Decree No. 902-A
Locsin filed a complaint for illegal dismissal with prayer for reinstatement, is hereby transferred to the Courts of general jurisdiction or the appropriate
payment of backwages, damages and attorney’s fees before the Labor Regional Trial Court.
Arbiter against NCLPI and Banson, who was then President of NCLPI.

Instead of filing their position paper, NCLPI and Banson filed a Motion to
Dismiss, on the ground that the Labor Arbiter did not have jurisdiction over
the case since the issue of Locsin’s removal as EVP/Treasurer involves an
intra-corporate dispute.
 2004, respondent was elected as president for a five-year term followed by
his re-election as a trustee on May 25, 2007.

On a November 28, 2008 memorandum, the incumbent Bishops of the

United Methodist Church (Bishops) apprised all the corporate members of
the expiration of their terms on December 31, 2008, unless renewed by the
former. The members including respondent sought the renewal of their term.

Dr. Dominador Cabasal, Chairman of the Board, however, informed the

Bishops that some of the vacancies may only be filled by the Bishops upon
recommendation by the Board.

Respondent later on learned that the Bishops created an Ad Hoc committee

for the turnover of the administration of WUP and that incoming corporate
members and trustees were already appointed.

On April 24, 2009, the Bishops, through a formal notice introduced the new
corporate members, trustees, and officers. The said notice also indicated that
the new Board met, organized, and elected the new set of officers on April
Wesleyan Univ. Philippines v. Maglaya GR No: 212774 Date: January 23, 20, 2009. Manuel Palomo (Palomo), the new Chairman of the Board, then
2017 Ponente: Peralta, J. informed respondent Maglaya of the termination of his services and authority
as the President of the University on April 27, 2009.
Employer-Employee Relationship Doctrine:
Respondent subsequently filed a complaint for illegal dismissal with the
A corporate officer's dismissal is always a corporate act, or an intra-corporate Labor Arbiter. He alleged that he is an employee of WUP, presenting the
controversy which arises between a stockholder and a corporation, and the following evidence: copies of his appointment as President, his Identification
nature is not altered by the reason or wisdom with which the Board of Card, the WUP Administration and Personnel Policy Manual which specified
Directors may have in taking such action. The issue of the alleged the retirement of the university president, and the check disbursement in his
termination involving a corporate officer, not a mere employee, is not a favor evidencing his salary
simple labor problem but a matter that comes within the area of corporate
affairs and management and is a corporate controversy in contemplation of Petitioner WUP, on the other hand, alleged that respondent was a corporate
the Corporation Code. officer, and hence, the matter is an intra-corporate controversy not subject to
the Labor Arbiter’s jurisdiction but rather the RTC’s.
…the determination of the rights of a corporate officer dismissed from his
employment, as well as the corresponding liability of a corporation, if any, is LA RULING:
an intra-corporate dispute subject to the jurisdiction of the regular courts.
Labor Arbiter is without jurisdiction. It held that the action between employers
FACTS: and employees where the employeremployee relationship is merely
incidental is within the exclusive and original jurisdiction of the regular courts
Petitioner Wesleyan University Philippines (WUP) is a non-stock, non-profit, and that since respondent was appointed as a president, he was a corporate
non-sectarian educational corporation duly organized and existing under the officer and not an employee.
Philippine laws on April 28, 1948.
NLRC RULING:
Respondent Atty. Guilleno T. Maglaya, Sr., was appointed as a corporate
member of WUP on January 1, 2004, and elected as a member of the Board Reversed LA ruling. It held that respondent’s cause of dismissal was not
of Trustees on January 9, 2004, both for a term of 5 years. Then on May 5, among the just causes provided Article 282 (Now 297) of the Labor Code
hence the latter was illegally dismissed. In support of such conclusion, it but by the managing officer of the corporation who also determines the
pointed out that contrary to the by-laws, respondent was not elected but compensation to be paid to such employee.
rather appointed. Further, it ruled that although the position of the President
of the University is a corporate office, the manner of Maglaya's appointment, From the foregoing, that the creation of the position is under the corporation's
and his duties, salaries, and allowances point to his being an employee and charter or by-laws, and that the election of the officer is by the directors or
subordinate. The control test is the most important indicator of the presence stockholders must concur in order for an individual to be considered a
of employer-employee relationship. Such was present in the instant case as corporate officer, as against an ordinary employee or officer. It is only when
Maglaya had the duty to report to the Board, and it was the Board which the officer claiming to have been illegally dismissed is classified as such
terminated or dismissed him even before his term ends. corporate officer that the issue is deemed an intra-corporate dispute which
falls within the jurisdiction of the trial courts.
CA RULING:
It is apparent from the By-laws of WUP that the president was one of the
Denied appeal since the decision and resolution of the NLRC already officers of the corporation, and was an honorary member of the Board. He
became final and executory on March 16, 2013. was appointed by the Board and not by a managing officer of the corporation.
We held that one who is included in the by-laws of a corporation in its roster
ISSUES: of corporate officers is an officer of said corporation and not a mere
employee.
Is respondent a corporate officer?
The alleged "appointment" of Maglaya instead of "election" as provided by
HELD: the by-laws neither convert the president of university as a mere employee,
nor amend its nature as a corporate officer. With the office specifically
Yes. Respondent was a corporate officer whose office was created by virtue mentioned in the by-laws, the NLRC erred in taking cognizance of the case,
of WUP’s by-laws. Defining a corporate officer, the Court stated: and in concluding that Maglaya was a mere employee and subordinate
official because of the manner of his appointment, his duties and
"Corporate officers" in the context of Presidential Decree No. 902-A are those responsibilities, salaries and allowances, and considering the Identification
officers of the corporation who are given that character by the Corporation Card, the Administration and Personnel Policy Manual which specified the
Code or by the corporation's by-laws. There are three specific officers whom retirement of the university president, and the check disbursement as pieces
a corporation must have under Section 25 of the Corporation Code. These of evidence supporting such finding.
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 A corporate officer's dismissal is always a corporate act, or an intra-corporate
provided for by its by-laws like, but not limited to, the vice-president, cashier, controversy which arises between a stockholder and a corporation, and the
auditor or general manager. The number of corporate officers is thus limited nature is not altered by the reason or wisdom with which the Board of
by law and by the corporation's by-laws.” Directors may have in taking such action. 59 The issue of the alleged
termination involving a corporate officer, not a mere employee, is not a
It further held: simple labor problem but a matter that comes within the area of corporate
affairs and management and is a corporate controversy in contemplation of
The president, vice-president, secretary and treasurer are commonly the Corporation Code.
regarded as the principal or executive officers of a corporation, and they are
usually designated as the officers of the corporation. However, other officers To emphasize, the determination of the rights of a corporate officer dismissed
are sometimes created by the charter or by-laws of a corporation, or the from his employment, as well as the corresponding liability of a corporation, if
board of directors may be empowered under the by-laws of a corporation to any, is an intra-corporate dispute subject to the jurisdiction of the regular
create additional offices as may be necessary. This Court expounded that an courts.
"office" is created by the charter of the corporation and the officer is elected
by the directors or stockholders, while an "employee" usually occupies no Other Notes/ SC Pronouncements: Pertinent provisions of WUP’s by-
office and generally is employed not by action of the directors or stockholders laws:
ARTICLE VI. BOARD OF TRUSTEES

Section 2. Membership (a) The Board of Trustees shall be composed of Ten

(10) members of the corporation from among themselves provided, that six
(6) shall come from the Ministry and Laity of the United Methodist [C]hurch in
the Philippines, three (3) shall be non-Methodist, friends and sympathizers of
the Wesleyan UniversityPhilippines and of the United Methodist Church, and
one (1) representative of the Wesleyan Alumni Association, as provided in
section 1 (c), Article IV hereof, and (b) provided further that the incumbent
area bishop and the President of the Wesleyan University-Philippines shall
be honorary members of the Board.

ARTICLE VIII. OFFICERS

Section 1. Officers. The officers of the Board of Trustees shall be:

(a) Chairman
(b) Vice-Chairman
(c) Secretary
(d) Treasurer

Section 6. The President of Wesleyan University-Philippines. The President

of the University, who must be an active member of the United Methodist
Church in the Philippines at the time of his election shall be in-charge of and
be responsible for the administration of the University and other institutions of
learning that [m]ay hereafter be established by the corporation, and (a) May,
with the Board of Trustees
 on working despite respondent Norma Cacho's protestation. They asserted
that petitioner was not illegally dismissed but was merely placed under
preventive suspension.

LA/RTC/NLRC RULING: 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. 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.

CA RULING: However, the CA affirmed the Labor Arbiter’s Decision and set
aside the Decision of the NLRC.

ISSUE:

WON 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.
Case Title: Cacho vs. Balagtas
GR No: 202974 Date: February 7, 2018 Ponente: Del Castillo, J. HELD: Respondent Balagtas's dismissal is an intra-corporate controversy.

Facts: A two-tier test must be employed to determine whether an intra-corporate

controversy exists in the present case, viz.: (a) the relationship test, and (b)
Respondent Virginia D. Balagtas filed a complaint of constructive dismissal the nature of the controversy test.
against petitioners North Star International Travel, Inc. (North Star) and
itsPresident Norma D. Cacho (Cacho) before the Labor Arbiter. Balagtas A dispute is considered an intra-corporate controversy under the relationship
after 14 years of service in the said corporation, was placed under30 days test when the relationship between or among the disagreeing parties is
preventive suspension pursuant to a Board Resolution passed by the Board anyone of the following: (a) between the corporation, partnership, or
of Directors of the respondent Corporation due to her alleged questionable association and the public; (b) between the corporation, partnership, or
transactions. While under preventive suspension, she wrote a letter to Norma association and its stockholders, partners, members, or officers; ( c) between
Cacho informing the latter that she was assuming her position as Executive the corporation, partnership, or association and the State as far as its
Vice-President/Chief Executive Officer effective on that date; however, she franchise, permit or license to operate is concerned; and ( d) among the
was prevented from re-assuming her position. stockholders, partners, or associates themselves. We must now determine
whether or not the Executive Vice President position is a corporate office so
Consequently, she filed a complaint claiming that she was constructively and as to establish the intra-corporate relationship between the parties.
illegally dismissed effective on April 12, 2004. In their defense, Cacho and
North Star averred that preventive suspension was meant to prevent One shall be considered a corporate officer only if two conditions are met,
Balagtas from influencing potential witnesses and to protect the respondent viz.: ( 1) the position occupied was created by charter/by-laws, and (2) the
corporation's property. Subsequently, the Board of Directors constituted an officer was elected (or appointed) by the corporation's board of directors
investigation committeetasked with the duty to impartially assess the charges tooccupy said position.
against petitioner. Cacho, et al. alleged that Balagtas violated her suspension
when, on several occasions, she went to the corporation's office and insisted
The Executive Vice President position is one of the corporate offices corporate office. At best, if one is listed in the GIS as an officer of a
provided in petitioner North Star's By-laws. Section 25 of the Corporation corporation, his/her position as indicated therein could only be deemed a
Code explicitly provides for the election of the corporation's president, regular office, and not a corporate office as it is defined under the
treasurer, secretary, and such other officers as may be provided for in the by- Corporation Code.
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 To be considered an intra-corporate controversy, the dismissal of a corporate
expressly mentioned in the bylaws in order to be considered as a corporate officer must have something to do with the duties and responsibilities
office. North Star’s by-laws provides that there may be one or more vice attached to his/her corporate office or performed in his/her official capacity.
president positions in petitioner North Star and, by virtue of its by-laws, all The termination complained of is intimately and inevitably linked to
such positions shall be corporate offices. respondent Balagtas's role as petitioner North Star's Executive Vice
President: first, the alleged misappropriations were committed by respondent
The next question is whether or not the phrase "one or more vice president" Balagtas in her capacity as vice president, one of the officer sresponsible for
in the above-cited provision of the bylaws includes the Executive Vice approving the disbursements and signing the checks. And, second, these
President position held by respondent Balagtas. alleged misappropriations breached petitioners Cacho's and North Star's
trust and confidence specifically reposed m respondent Balagtas as vice
The use of the phrase "one or more" in relation to the establishment of vice president. That all these incidents are adjuncts of her corporate office lead
president positions without particular exception indicates an intention to give the Court to conclude that respondent Balagtas's dismissal is an intra-
petitioner North Star's Board ample freedom to make several vice president corporate controversy, not a mere labor dispute.
positions available as it may deem fit and in consonance with sound business
practice. To require that particular designation/variation of each vice- All told, the issue in the present case is an intra-corporate controversy, a
president (i.e., executive vice president) be specified and enumerated is to matter outside the Labor Arbiter's jurisdiction.
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
NorthStar'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 NorthStar's 2003 General Information Sheet (GIS). But the GIS
neither governs nor establishes whether or not a position is an ordinary or
 Petitioner Rosalinda Paredes was FTCP's National Director. Petitioner was
first hired by FTCP in 1999 as Country Director. Her contract was renewed
several times until her last contract for the period from October 1, 2004 to
September 30, 2007. Her initial salary was US$1000.00 and then later, she
was paid P70,000.00 aside from other benefits and allowances.

On August 12, 2005, forty-two FTCP employees signed a petition expressing

their complaints against alleged detestable practices of petitioner, to wit:
seeking exemption from policies which she herself had approved; withholding
organization funds despite approval of its release; procuring health insurance
for herself without paying her share of the premium; and receiving additional
fees contrary to the terms of her contract.

The next day, the staff of FTCP called a meeting to submit their petition. The
group demanded for outright solution. However, the Board members told
them that they should follow a process.

Petitioner learned that Program Manager Fostanes and his co-employees

prepared a petition questioning her leadership and management. She filed
an administrative complaint against Fostanes but it was not acted upon.

When the Board convened for a meeting on August 28, 2005, petitioner was
not allowed to participate.

Consequently, the Board decided that: Acting Board Chair Lao will issue a
PAREDES V. FEED THE CHILDREN PHILIPPINES back-to-work memorandum and status quo to ensure that all the scheduled
G.R. NO. 184397, SEPTEMBER 09, 2015 PERALTA J. tasks be accomplished; there will be a Supervisory Team, composing of Lao
and Escobia, that will draw a definite work plan and be compensated; the
DOCTRINE: Supervisory Team will not replace the functions of the National Director; and
FTCP will hire an independent professional management and financial
Case law holds that constructive dismissal occurs when there is cessation of auditor.
work because continued employment is rendered impossible, unreasonable
or unlikely; when there is a demotion in rank or diminution in pay or both; or Petitioner was later suspended because of her indifferent attitude and
when a clear discrimination, insensibility, or disdain by an employer becomes unjustified refusal to submit to an audit. Before it could be implemented,
unbearable to the employee. The test is whether a reasonable person in the respondent FTCP received her resignation letter.
employee's position would have felt compelled to give up his position under
the circumstances. On October 29, 2005, the Board accepted her resignation with the condition
that its effectivity be moved to November 30, 2005.
FACTS:
On November 2, 2005, petitioner filed a Complaint for illegal dismissal,
Respondent Feed the Children Philippines, Inc. (FTCP) is a non-stock, non- claiming that she was forced to resign, thus, was constructively dismissed,
profit, and non-government organization. Its objective is to provide food, and impleaded Lao, Paradiang and Escobia in their personal capacities.
clothing, educational supplies and other necessities of indigent children
worldwide. Respondents were members of the FTCP Board of Trustees and LA/NLRC RULING:
Executive Committee of FTCP.
The LA dismissed the case for lack of merit.
 employee's position would have felt compelled to give up his position under
Undaunted, petitioner appealed the decision to the NLRC. The NLRC the circumstances.
reversed and set aside the decision of the LA.
In this case, petitioner cannot be deemed constructively dismissed. She
CA RULING: failed to present clear and positive evidence that respondent FTCP, through
its Board of Trustees, committed acts of discrimination, insensibility, or
The CA ruled for the respondents declaring that private respondent to have disdain towards her which rendered her continued employment unbearable
voluntarily resigned from her employment/consultancy with FTCP. or forced her to terminate her employment from the respondent. As settled,
bare allegations of constructive dismissal, when uncorroborated by the
ISSUE: evidence on record, cannot be given credence.

WON there was a valid dismissal in the present case. It is highly unlikely and incredible for someone of petitioner's position and
educational attainment to so easily succumb to individual respondents'
HELD: It is settled that in a special civil action for certiorari under Rule 65, alleged harassment without defending herself. In fact, records reveal that she
the issues are limited to errors of jurisdiction or grave abuse of discretion. wrote directly to Jones when her contract was not to be renewed and
However, in labor cases elevated to it via petition for certiorari, the CA is whenever she felt threatened. She vehemently opposed the audit and openly
empowered to evaluate the materiality and significance of the evidence disobeyed the Board when she was not informed of the scope. She, along
alleged to have been capriciously, whimsically, or arbitrarily disregarded by with other management staff, questioned the meetings of the Execom that
the NLRC in relation to all other evidence on record. they were not informed. It is also noted that her husband is a lawyer and that
she employed lawyers who sent a series of demand letters to the Board to
The CA can grant this prerogative writ when the factual findings complained provide her the details of the audit and even ordered the Board to desist from
of are not supported by the evidence on record; when it is necessary to pursuing the audit.
prevent a substantial wrong or to do substantial justice; when the findings of
the NLRC contradict those of the LA; and when necessary to arrive at a just There was no urgency for petitioner to submit her resignation letter. In fact,
decision of the case. To make this finding, the CA necessarily has to view the the day before it was given, she and other management staff requested for a
evidence if only to determine if the NLRC ruling had basis in evidence. dialogue with the Board to address the issue regarding the management and
financial audit. 52 It is, therefore, improbable that her continued employment
Contrary to petitioner's contention, the CA, by express legal mandate and is rendered impossible or unreasonable.
pursuant to its equity jurisdiction, may review factual findings and evidence of
the parties to determine whether the NLRC gravely abused its discretion in its Records do not show any demotion in rank or a diminution in pay made
findings. Since this Court finds that the findings of the LA and NLRC against her. Petitioner claimed that the fact that the Supervisory Team
contradicting and that the findings of NLRC are not supported by the performed her functions and issued memorandum directly to her
evidence on record, we rule that it is within the CA's power to review the subordinates, and her being barred from subsequent Execom meetings
factual findings of the NLRC. Accordingly, this Court does not find erroneous constituted constructive dismissal. However, there was no evidence to
the course that the CA took in resolving that petitioner was not constructively corroborate her claim of usurpation. She did not present evidence of the
dismissed. supposed direct memorandum issued by the Supervisory Team to the staff.
Aside from the minutes of the September 29, 2005 meeting of the Execom,
Since petitioner admittedly resigned, it is incumbent upon her to prove that there was no other proof of petitioner's exclusion from other subsequent
her resignation was involuntary and that it was actually a case of constructive Execom meetings.
dismissal with clear, positive and convincing evidence.
We held that the act of the employer moving the effectivity of the resignation
Case law holds that constructive dismissal occurs when there is cessation of is not an act of harassment. The 30-day notice requirement for an
work because continued employment is rendered impossible, unreasonable employee's resignation is actually for the benefit of the employer who has the
or unlikely; when there is a demotion in rank or diminution in pay or both; or discretion to waive such period. Its purpose is to afford the employer enough
when a clear discrimination, insensibility, or disdain by an employer becomes time to hire another employee if needed and to see to it that there is proper
unbearable to the employee. The test is whether a reasonable person in the turn-over of the tasks which the resigning employee may be handling.
 damages and attorney's fees. She was the designated heir in Romeo's OFW
Such rule requiring an employee to stay or complete the 30-day period prior Verification Sheet and PhilHealth Information Sheet.
to the effectivity of his resignation becomes discretionary on the part of
management as an employee who intends to resign may be allowed a However, the Lunzaga siblings (the children of Romeo from his first marriage
shorter period before his resignation becomes effective. that was judicially declared null and void) opposed the claim and claimed that
Gilda is not entitled to the death benefits of Romeo, as she had a subsisting
Thus, the act of respondents moving the effectivity date of petitioner's marriage when she married him. They claim that her marriage with Romeo
resignation to a date earlier than what she had stated cannot be deemed was, therefore, bigamous. During the mandatory conferences of the parties
malicious. This cannot be viewed as an act of harassment but merely the before the LA, respondent Albar signified its willingness to pay Romeo's
exercise of respondent's management prerogative. We cannot expect death benefits in the amount of USD 55,547.44. However, Gilda and the
employers to maintain in their employ employees who intend to resign, just Lunzaga siblings could not agree as to the sharing of the benefits.
so the latter can have continuous work as they look for a new source of
income. LA RULING: The LA issued an Order temporarily dismissing the complaint
and directing the parties to file their case with the regular courts. Gilda
received a copy of the August 28, 2009 Order of the LA on September 28,
2009. Gilda's appeal to the NLRC was, however, filed only on October 9,
2009, one day past the 10-day period for filing an appeal from the decision of
the Labor Arbiter.

NLRC RULING: Thus, the NLRC dismissed the appeal for having been filed
beyond the reglementary period.

CA RULING: The CA affirmed the NLRC Decision which dismissed the

appeal of petitioner for having been filed out of time. It also affirmed the LA
Order which ruled that jurisdiction over the instant controversy is with the
regular courts and not with the NLRC. Gilds’s MR was denied. Hence, this
petition.
GILDA LUNZAGA vs. ALBAR SHIPPING AND TRADING CORP. et/. al.,
GR No: 200476 Date: April 18, 2012 Ponente:

Doctrine: It has been said this time and again that the perfection of an ISSUE/S:
appeal within the period fixed by the rules is mandatory and jurisdictional.
But, it is always in the power of this Court to suspend its own rules, or to 1. Does the LA have jurisdiction over the identification of the proper
except a particular case from its operation, whenever the purposes of justice beneficiary of the deceased? – NO. NLRC
require it. Strong compelling reasons such as serving the ends of justice and
preventing a grave miscarriage thereof warrant the suspension of the rules. 2. Does the LA have jurisdiction to determine whether the heirs of Romeo are
entitled to receive his death benefits from Albar. - YES
FACTS:
3. Is the NLRC correct in dismissing the appeal for having been filed one day
Romeo Lunzaga, a seaman assigned as a Chief Engineer for respondent late? – No.
Albar Shipping’s vessel (MV Lake Aru) suffered a heart attack while on board
and died when he was repatriated to the Philippines. HELD:

Petitioner Glda Lunzaga, claiming to be the surviving spouse of Romeo, filed 1. No. The LA and CA are correct in ruling that the issue of who is the proper
with the NLRC a complaint against Albar for payment of death benefits, beneficiary of Romeo is properly within the jurisdiction of the regular courts.
2. Yes.The LA has jurisdiction over this issue and the case itself, involving as the meeting, she dined with her family and friends at Leon des Bruxelles, a
it does a claim arising from an employer-employee relationship. And while restaurant known for mussels as specialty. During the dinner, she
the LA has no jurisdiction to determine who among the alleged heirs is complained of stomach pain, vomited, and fell into a coma for 21 days. The
entitled to receive Romeo's death benefits, it should have made a ruling Paris hospital found that the probable cause was her "alimentary allergy" to
holding Albar liable for the claim. mussels. During her continued medical treatment in the Philippines,
respondent paid all her hospitalization expenses and salaries, but since she
3. No. The SC ruled that the ends of justice would be best served with the had not mentally and physically recovered to resume her work, the latter was
admission of the appeal for the complete ventilation of the issues in the case. constrained to terminate her based on Article 284 of the Labor Code. As a
Considering that Albar admitted its liability to the heirs of Romeo for his death consequence of her termination, respondent offered her a retirement
benefits, the NLRC should have given due course to the meritorious appeal. package of P1,063,841.76 consisting of disability retirement benefits,
insurance, health care, and educational assistance (voluntary). The unpaid
Evidently, the NLRC and the CA erred in not giving due course to the appeal balance was withheld by respondent allegedly for taxation purposes.
due to a one-day delay of its filing, considering the apparent merit of the
appeal as shown by the admission of Albar. Petitioner filed with NLRC the case for unpaid separation pay, retirement
benefits, and damages under Article 284.
Verily, Albar is liable to the heirs of Romeo for the amount of USD 55,547.44.
Albar hereby is ordered to deposit this amount in an escrow account under LA RULING: dismissed the complaint:
the control of the NLRC in order to protect the interests of Romeo's heirs.
The parties claiming to be the beneficiaries of Romeo are directed to file the (a) Denied the separation pay – already been integrated in the retirement
appropriate action with a trial court to determine the true and legal heirs of plan; (b) Refused to rule on the legality of the deductions - the issue was
Romeo entitled to receive the disability benefits. The amount in the escrow beyond the jurisdiction of the NLRC.
account will only be released to the legal heirs per the decision of a trial
court. NLRC RULING: reversed LA, and ruled that petitioner was not retired from
the service pursuant to law, CBA, or other employment contract; rather, she
The Petition is granted. was dismissed from employment due to a disease/disability under Article
284. Hence, the amounts she received as retirement benefits shall be treated
as separation pay. On issue of illegal deduction, petitioner could file a tax
refund with the BIR.

CA RULING: affirmed the NLRC.

MA. ISABEL T. SANTOS, represented by ANTONIO P. SANTOS vs. APPEAL TO SC: Petitioner changed her position that she is not entitled to
SERVIER PHILIPPINES, INC. and NLRC separation pay but to retirement pay under to Section 4, Article 5 of the
GR No: 166377 Date: November 28, 2008 Ponente: NACHURA, J.: Retirement Plan, on disability retirement. She also demanded the payment of
the amount allegedly deducted for taxation purposes.
DOCTRINE:
Respondent’s contention: the legality of the deduction from the total benefits
Albeit designated as "unpaid balance of the retirement package," the tax cannot be taken cognizance of by this Court since the issue was not raised
deductions in petitioner’s benefits is a money claim arising from the during the early stage of the proceedings.
employer-employee relationship, which clearly falls within the jurisdiction of
the Labor Arbiter and the NLRC under Article 217 of the Labor Code. ISSUE/S:

FACTS: 1. Whether the LA and NLRC have jurisdiction over the alleged illegal
deductions on the retirement benefits? YES. (Main issue)
Petitioner Ma. Isabel Santos was the Human Resource Manager of
respondent Servier, she attended a company meeting in Paris, France. After
2. Whether petitioner is also entitled to her separation pay under the law years of age at the time of his retirement: Provided further, That the benefits
despite having partially claimed her disability retirement benefits under the granted under this
Retirement Plan of the company? NO.
subparagraph shall be availed of by an official or employee only once. x x x.
3. Whether the retirement benefits are subject to withholding tax? YES,
SUBJECT TO EXEMPTION. Elements for the retirement benefits to be exempt from the withholding tax:

HELD: (1) a reasonable private benefit plan is maintained by the employer; (2) the
retiring official or employee has been in the service of the same employer for
1. Contrary to the Labor Arbiter and NLRC’s conclusions, petitioner’s claim at least ten (10) years; (3) the retiring official or employee is not less than fifty
for illegal deduction falls within the tribunal’s jurisdiction. Records reveal that (50) years of age at the time of his retirement; and (4) the benefit had been
as early in the Labor Arbiter, she already raised the legality of said deduction, availed of only once.
albeit designated as "unpaid balance of the retirement package." The issue
of deduction for tax purposes is intertwined with the main issue of whether or APPLICATION – Petitioner was qualified for disability retirement. At the time
not petitioner’s benefits have been fully given her. It is a money claim arising of such retirement, petitioner was only 41 years of age; and had been in the
from the employer-employee relationship, which clearly falls within the service for more or less eight (8) years. The above provision is not applicable
jurisdiction of the Labor Arbiter and the NLRC under Article 217 of the Labor for failure to comply with the age and length of service requirements. Thus,
Code. respondent cannot be faulted for deducting from petitioner’s total retirement
benefits the amount for taxation purposes.
2. The rule in Aquino v. National Labor Relations Commission that “the
receipt of retirement benefits does not bar the retiree from receiving
separation pay” is only true if there is no specific prohibition against the
payment of both benefits in the retirement plan and/or in the CBA. The two
benefits are not mutually exclusive, as separation pay is a statutory right
designed to provide the employee with the wherewithal during the period that
he/she is looking for another employment; while the retirement benefits are
intended to help the employee enjoy the remaining years of his life, lessening
the burden of worrying about his financial support, and are a form of reward
for his loyalty and service to the employer.

APPLICATION – Section 2, Article 12 of the Retirement Plan bars the

petitioner from claiming additional benefits under the Labor Code; or under
any present or future legislation; under any other contract; or CBA with the
Company, on top of that provided for in the Plan. There being such a
provision, petitioner is entitled only to either the separation pay under the law
or retirement benefits under the Plan, and not both.

3. Section 32 (B) (6) (a) of the NIRC provides for the exclusion of retirement
benefits from gross income: (6) Retirement Benefits, Pensions, Gratuities,
etc. – (a) Retirement benefits received under Republic Act 7641 and those
received by officials and employees of private firms, whether individual or
corporate, in accordance with a reasonable private benefit plan maintained
by the employer: Provided, that the retiring official or employee has been in
the service of the same employer for at least ten (10) years AND is not less
than fifty (50)
 and Mrs. Vital) sourced LPG from WBGI and distributed the same through
ERJ Enterprises owned by them. The respondents have outstanding balance
with WBGI for unpaid LPG amounted to P923,843.59.Thereafter, Mr. Vital
was appointed as Internal Auditor and Personnel Manager.

Upon his mandatory retirement, WBGI computed his retirement benefits.

WBGI also agreed to acquire his shares of stocks.After offsetting his shares
of stocks against ERJ Enterprises’ P923,843.59 outstanding balance to
WBGI, Vital claimed that the unpaid salaries and separation pay due him
amounted to P845,000.00 and P250,000.00, respectively, leaving a net
amount of P671,156.41 payable to him. WBGI rejected his claim and
contended that after offsetting, Vital actually owed it P369,156.19.

Mr. Vital filed a complaint for non-payment of separation and retirement

benefits, underpayment of salaries/wages and 13th month pay, illegal
reduction of salary and benefits, and damages. WBGI averred that LA has no
jurisdiction over the complaint having no existing employer-employee
relationship between the parties, and that Mr. Vital is a mere incorporator and
stockholder.

The LA dismissed the case for lack of jurisdiction. The LA found that the
issues between Vital and WBGI are intracorporate in nature as they arose
between the relations of a stockholder and the corporation, and not from an
employee and employer relationship.

The RTC, acting as a special commercial court, oppositely found that Vital
was an employee of WBGI and thereby, upheld his claim of unpaid salaries
and separation pay.

The CA ruled that Mr. Vital is an employee of WBGI.

ISSUE/S: Whether RTC has jurisdiction over the case.

World’s Best Gas Inc. vs Vital HELD:

GR No.: 211588 Date: September 9, 2015 Ponente: Perlas-Bernabe, J.
The petition is partly meritorious.
DOCTRINE:
The Court pointed out that the case involves three distinct causes of action,
A cause of action from employer-employee relations, involving an amount namely,
exceeding P 5,000.00, fall under the jurisdiction of the Labor Arbiter pursuant
to Article 217 of the Labor Code. (1) Vital’s claim for P845,000.00 and P250,000.00 in unpaid salaries and
separation pay;
FACTS:
(2) the P923,843.59 in arrearages payable to WBGI from ERJ Enterprises,
Mr. Vital was one of the incorporators of WBGI, holding P500,000.00 worth of which was admitted by Vital but not claimed by WBGI; and
shares of stocks therein. As a separate business venture, respondents (Mr.
(3) Vital’s claim of P500,000.00 due from WBGI’s acquisition of Vital’s shares different source of obligation is within the exclusive jurisdiction of the regular
of stocks. court.

The RTC’s adjudication of the first cause of action was improper since the FACTS:
same is one which arose from Vital and WBGI’s employer-employee
relations, involving an amount exceeding P 5,000.00, hence, belonging to the Petitioner Patricia Halagueña and other petitioners are female flight
jurisdiction of the Labor Arbiters pursuant to Article 217 of the Labor Code On attendants of respondent Philippine Airlines, and members of the Flight
the contrary, RTC has: Attendants and Stewards Association of the Philippines (FASAP) which was
the exclusive bargaining representative of the flight attendants. They were all
(a) general jurisdiction to adjudicate on the P923,843.59 in arrearages employed on different dates prior to Nov. 22, 1996.
payable to WBGI from ERJ Enterprises, which was admitted by Vital but not
claimed by WBGI; and In July 2001, respondent and FASAP entered into a CBA incorporating into
its terms a provision providing for the compulsory retirement at the age of 55
(b) special jurisdiction, as a special commercial court, to adjudicate on Vital’s for females, and 60 for the males. July 2003, Petitioners and several others
claim of P500,000.00 from WBGI’s acquisition of his shares of stocks. wrote to respondent that the same was discriminatory and demanded equal
treatment with their male counterparts. July 2004, Dr. Andiuza, FASAP
President, submitted proposed changes and manifested the willingness to
renegotiate the same. Petitioners thus filed a Special Civil Action for
Declaratory Relief with a Prayer for the Issuance of a TRO and Preliminary
Injunction before the RTC of Makati to have Section 144 (Compulsory
Retirement Provision) declared invalid.

RTC RULING: The RTC upheld its jurisdiction ruling that the allegations in
the complaint do not make out a labor dispute as the said allegations do not
show that an employer-employee relationship exists. The RTC enjoined the
implementation of Sec. 144 via preliminary injunction. Respondent filed an
MR but the same was denied.

CA RULING: A Petition for Certiorari Relief with a Prayer for the Issuance of
a TRO and Preliminary Injunction was filed before the CA praying that the
decision of the court a quo upholding its own jurisdiction be annulled and set
aside. The CA sided with the petitioners and ruled that the RTC had no
jurisdiction over the matter.
Patricia Halagueña v. Philippine Airlines
G.R. No. 172013; Oct. 2, 2009 Peralta, J.: APPEAL TO THE SC:

DOCTRINE: Not every dispute between an employer and employee involves Petitioner’s Contention: that the RTC has jurisdiction in all civil actions in
matters that only labor arbiters and the NLRC can resolve in the exercise of which the subject of the litigation is incapable of pecuniary estimation and in
their adjudicatory or quasi -judicial powers. The jurisdiction of labor arbiters all cases not within the exclusive jurisdiction of any court, tribunal, person or
and the NLRC under Article 217 of the Labor Code is limited to disputes body exercising judicial or quasi-judicial functions.
arising from an employeremployee relationship which can only be resolved
by reference to the Labor Code, other labor statutes, or their collective Respondent’s Contention: that the labor tribunals have jurisdiction over the
bargaining agreement. present case, as the controversy partakes of a labor dispute. The dispute
concerns the terms and conditions of petitioners' employment in PAL,
Actions between employees and employer where the employer-employee specifically their retirement age.
relationship is merely incidental and the cause of action precedes from a
ISSUE: Whether the RTC jurisdiction. questioned compulsory retirement age. Their exercise of jurisdiction is futile,
as it is like vesting power to someone who cannot wield it.
RULING: YES. Jurisdiction of the court is determined on the basis of the
material allegations of the complaint and the character of the relief prayed for
irrespective of whether plaintiff is entitled to such relief. the allegations in the
petition for declaratory relief plainly show that petitioners' cause of action is
the annulment of Sec. 144, questioning among others: validity of the same
based on the Constitution, the Labor Code, Republic Act 6725 (An Act
Strengthening Prohibition on Discrimination Against Women), and the
Convention of the Elimination of All forms of Discrimination Against Women
(CEDAW).

The primary issue raised is whether Sec. 144 is unlawful and or

unconstitutional. The subject of litigation is incapable of pecuniary estimation,
exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas
Pambansa Blg. 129, as amended. Being an ordinary civil action, the same is
beyond the jurisdiction of labor tribunals. TIEHDC

The Court cited Gorg Grotjahn GMBH & Co. v. Isnani where it held that not
every dispute between an employer and employee involves matters that only
labor arbiters and the NLRC can resolve in the exercise of their adjudicatory
or quasi-judicial powers. The jurisdiction of labor arbiters and the NLRC
under Article 217 of the Labor Code is limited to disputes arising from an
employer-employee relationship which can only be resolved by reference to
the Labor Code, other labor statutes, or their collective bargaining
agreement.

Actions between employees and employer where the employer-employee

relationship is merely incidental and the cause of action precedes from a
different source of obligation is within the exclusive jurisdiction of the regular
court.

Thus, where the principal relief sought is to be resolved not by reference to

the Labor Code or other labor relations statute or a collective bargaining
agreement but by the general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to the labor arbiter and the
NLRC. In such situations, resolution of the dispute requires expertise, not in
labor management relations nor in wage structures and other terms and
conditions of employment, but rather in the application of the general civil
law. Clearly, such claims fall outside the area of competence or expertise
ordinarily ascribed to labor arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies disappears.

The Court held 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
 is a matter which the labor arbiter has no competence to resolve as the
applicable law is not the Labor Code but the Revised Penal Code.

FACTS: Private respondents were dismissed employees of petitioner

suspected of complicity in the irregular disposition of empty Pepsi Cola
bottles. The criminal complaints filed against them for theft and falsification
were dismissed by the MTC, ruling that they were intended "to harass the
poor employees." The dismissal was also affirmed by the Provincial
Prosecutor "for lack of evidence to establish even a slightest probability that
all the respondents have committed the crime imputed against them."

Respondents filed with RAB-NLRC a complaint for illegal dismissal, and with
RTC a civil action for damages for malicious prosecution. The civil action was
initially dismissed, but was later reinstated by the public respondent ruling
that it was "distinct from the labor case for damages now pending before the
labor courts."

Petitioner’s contention:

RTC had no jurisdiction over the civil action for damages because it involved
employee-employer relations that were exclusively cognizable by the labor
arbiter under Article 217 of the Labor Code and the ruling in *Getz
Corporation v. Court of Appeals.

ISSUE/S:

Whether it is the RTC, not the LA, that has jurisdiction over the civil action for
damages for malicious prosecution? YES.

HELD:

ART. 217. Jurisdiction of Labor Arbiters and the Commission. xxx (3) All
money claims of workers xxx

The “money claims of workers" referred to embraces money claims that arise
PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented out of or in connection with the employer-employee relationship, or some
by its Plant General Manager ANTHONY B. SIAN, et al vs. HON. LOLITA aspect or incident of such relationship. To put the case under the provisions
O. GAL-LANG, et al. of Article 217, there must be a "reasonable causal connection" between the
GR No: 89621 Date: September 24, 1991 Ponente: CRUZ, J. claim asserted and employee-employer relations. Absent such a link, the
complaint will be cognizable by the regular courts of justice in the exercise of
DOCTRINE: their civil and criminal jurisdiction.

Not every controversy involving workers and their employers can be resolved In San Miguel Corporation v. NLRC - It is the character of the principal relief
only by the labor arbiters. Absence of “reasonable causal connection" sought that appears essential. Where such principal relief is to be granted
between the civil action for damages for malicious prosecution and the under labor legislation or a collective bargaining agreement, the case should
relations of the parties as employer and employees; the action for damages fall within the jurisdiction of the Labor Arbiter and the NLRC, even though a
claim for damages might be asserted as an incident to such claim. Where the
claim to the principal relief sought is to be resolved not by reference to the LA found petitioner to have been illegally dismissed and ordered the payment
Labor Code or other labor relations statute or a collective bargaining of separation pay in lieu of reinstatement, and of backwages and attorney's
agreement but by the general civil law, the jurisdiction over the dispute fees.
belongs to the regular courts and not to the Labor Arbiter and the NLRC. In
such situations, resolution of the dispute requires expertise, not in labor Upon appeal, the NLRC dismissed the appeal for being filed out of time.
management relations nor in wage structures and other terms and conditions Elevated by petition for certiorari before this Court, the case was dismissed
of employment, but rather in the application of the general civil law. for failure to show grave abuse of discretion on the part of the NLRC.

APPLICATION – It does not appear that there is a "reasonable causal Private respondent filed a complaint for damages before the RTC. Petitioner
connection" between the complaint and the relations of the parties as filed a motion to dismiss on the ground that the action for damages, having
employer and employees. The complaint did not arise from such relations arisen from an employer-employee relationship, was squarely under the
and in fact could have arisen independently of an employment relationship exclusive original jurisdiction of the NLRC under Article 217(a)(now 224),
between the parties. No such relationship or any unfair labor practice is paragraph 4 of the Labor Code and is barred by reason of the final judgment
asserted. What the employees are alleging is that the petitioners acted with in the labor case.
bad faith when they filed the criminal complaints.
RTC RULING:
Other notes: *Getz Corporation v. Court of Appeals not applicable because
what was involved there was a claim arising from the alleged illegal dismissal RTC ruled that it has jurisdiction over the subject matter. While seemingly the
of an employee, who chose to complain to the regular court and not to the cause of action arose from employer-employee relations, the employer's
labor arbiter. claim for damages is grounded on the nefarious activities of defendant
causing damage and prejudice to plaintiff as alleged in paragraph 7 of the
complaint. The Court believes that there was a breach of a contractual
obligation, which is intrinsically a civil dispute.

APPEAL TO THE SC:

By way of assignment of errors, the petition reiterates the grounds raised in

the Motion to Dismiss namely, lack of jurisdiction over the subject matter of
the action, res judicata, splitting of causes of action, and forum-shopping.

ISSUE/S:

1. Whether or not the RTC has jurisdiction over the subject matter
Banez v. Hon. Valdevilla and Oro Marketing, Inc.
G.R. No. 128024 Date: May 9, 2000 Ponente: GONZAGA-REYES, J.: HELD:

Doctrine: The Labor Arbiter has jurisdiction to award not only the reliefs 1. No, the RTC has no jurisdiction over the subject matter. Art. 217(now 224)
provided by labor laws, but also damages governed by the Civil Code. of the LC provides that it has jurisdiction on cases, among others, for claims
for actual, moral, exemplary and other forms of damages arising from the
FACTS: employer-employee relations. This Court in a number of occasions had
applied the jurisdictional provisions of Article 217(now 224) to claims for
Petitioner was the sales operations manager of private respondent in its damages filed by employees, we hold that by the designating clause "arising
branch in Iligan City. In 1993, private respondent "indefinitely suspended" from the employer-employee relations" Article 217(now 224) should apply
petitioner and the latter filed a complaint for illegal dismissal with the National with equal force to the claim of an employer for actual damages against its
Labor Relations Commission ("NLRC") in Iligan City. dismissed employee, where the basis for the claim arises from or is
necessarily connected with the fact of termination, and should be entered as According to Solid Mills, this was out of liberality and for the convenience of
a counterclaim in the illegal dismissal case. In this case, private respondent its employees and on the condition that the employees would vacate the
would not have taken issue with petitioner's "doing business of his own" had premises anytime the Company deems it.
the latter not been concurrently its employee. Thus, the damages alleged in
the complaint below are: first, those amounting to lost profits and earnings Petitioners were informed that Solid Mills would cease its operations due to
due to petitioner's abandonment or neglect of his duties as sales manager, serious business losses. NAFLU recognized Solid Mills’ closure due to
having been otherwise preoccupied by his unauthorized installment sale serious business losses in the memorandum of agreement which provided
scheme; and second, those equivalent to the value of private respondent's for Solid Mills’ grant of separation pay less accountabilities, accrued sick
property and supplies which petitioner used in conducting his "business ". leave benefits, vacation leave benefits, and 13th month pay to the
Further, the issue of actual damages has been settled in the labor case, employees.
which is now final and executory.
Petitioners were required to sign a memorandum of agreement with release
Other Notes/ SC Pronouncements: and quitclaim before their vacation and sick leave benefits, 13th month pay,
and separation pay would be released. Employees who signed the
This is, of course, to distinguish from cases of actions for damages where the memorandum of agreement were considered to have agreed to vacate SMI
employer-employee relationship is merely incidental and the cause of action Village, and to the demolition of the constructed houses inside as condition
proceeds from a different source of obligation. Thus, the jurisdiction of for the release of their termination benefits and separation pay. Petitioners
regular courts was upheld where the damages, claimed for were based on refused to sign the documents and demanded to be paid their benefits and
tort, malicious prosecution, or breach of contract, as when the claimant seeks separation pay.
to recover a debt from a former employee or seeks liquidated damages in
enforcement of a prior employment contract. Petitioners filed complaints before the Labor Arbiter for alleged non-payment
of benefits. Solid Mills argue that petitioners’ complaint was premature
because they had not vacated its property.

LA/RTC/NLRC RULING: Petitioners’ possession is not by virtue of any

employer-employee relationship. It is a civil issue, which is outside the
jurisdiction of the Labor Arbiter.

NLRC: The termination of Solid Mills and petitioners employer-employee

relationship made it incumbent upon petitioners to turn over the property to
Solid Mills.

CA RULING: The Court of Appeals ruled that Solid Mills’ act of allowing its
employees to make temporary dwellings in its property was a liberality on its
Milan vs. NLRC part. It may be revoked any time at its discretion. As a consequence of Solid
GR No: 202961 Ponente: Leonen, J. Date: February 04, 2015 Mills’ closure and the resulting termination of petitioners, the employer-
employee relationship between them ceased to exist. There was no more
Doctrine: The National Labor Relations Commission has jurisdiction to reason for them to stay in Solid Mills’ property.
determine, preliminarily, the parties’ rights over a property, when it is
necessary to determine an issue related to rights or claims arising from an APPEAL TO THE SC:
employeremployee relationship.
Petitioner's Contention: Petitioners point out that the NLRC had no
FACTS: Petitioners are respondent Solid Mills, Inc.’s employees. They are jurisdiction to declare that petitioners act of withholding possession of
represented by the National Federation of Labor Unions (NAFLU), their respondent Solid Mills property is illegal. The regular courts have jurisdiction
collective bargaining agent. As Solid Mills’ employees, petitioners and their over this issue. It is independent from the issue of payment of petitioners’
families were allowed to occupy SMI Village, a property owned by Solid Mills. monetary benefits.
 FACTS: Amecos Innovations, Inc. (Amecos) was complained by the Social
Respondent's Contention: Security System (SSS) for alleged delinquency in the remittance of SSS
contributions. Amecos attributed its failure to remit the SSS contributions to
Respondents Solid Mills argue that petitioners’ failure to turn over respondent Eliza R. Lopez(Lopez) claiming that it hired Lopez but she refused to provide
Solid Mills’ property constituted an unsatisfied accountability for which reason Amecos with her SSS Number. Hence, Amecos no longer enrolled Lopez
petitioners’ benefits could rightfully be withheld. with the SSS and did not deduct her corresponding contributions up to the
time of her termination. The complaint was withdrawn upon settlement of the
ISSUE/S: Whether or not the LA and NLRC had jurisdiction over the issue on obligation by Amecos. Lopez did not heed the demands of Amecos, thus, the
possession of the properties latter filed a complaint for sum of money and damages against Lopez before
the Regional Trial Court (RTC).
HELD: YES. The National Labor Relations Commission has jurisdiction to
determine, preliminarily, the parties’ rights over a property, when it is Amecos claimed that because of Lopez’s misrepresentation, they suffered
necessary to determine an issue related to rights or claims arising from an actual damages by way of settlement and payment of its obligations with the
employer-employee relationship. SSS. Amecos’ contention is that the employer-employee relationship
between Amecos and Lopez is merely incidental, and does not necessarily
Claims arising from an employer-employee relationship are not limited to place their dispute within the exclusive jurisdiction of the labor tribunals but
claims by an employee. Employers may also have claims against the the true source of Lopez’s obligation is derived from Articles 19, 22, and 2154
employee, which arise from the same relationship. As a rule a claim only of the Civil Code.
needs to be sufficiently connected to the labor issue raised and must arise
from an employer-employee relationship for the labor tribunals to have LA/RTC/NLRC RULING:
jurisdiction.
MTC dismissed the case for lack of jurisdiction. RTC affirmed decision of
In this case, respondent Solid Mills claims that its properties are in MTC:
petitioners’ possession by virtue of their status as its employees. Respondent
Solid Mills allowed petitioners to use its property as an act of liberality. Put in “The RTC affirmed the view taken by the MeTC that under Article 217(a)(4)
other words, it would not have allowed petitioners to use its property had they of the Labor Code, claims for actual, moral, exemplary and other forms of
not been its employees. The return of its properties in petitioners’ possession damages arising from employer-employee relationship are under the
by virtue of their status as employees is an issue that must be resolved to jurisdiction of the Labor Arbiters or the National Labor Relations Commission
determine whether benefits can be released immediately. The issue raised (NLRC); that since petitioners and respondent were in an employer-
by the employer is, therefore, connected to petitioners’ claim for benefits and employee relationship at the time, the matter of SSS contributions was thus
is sufficiently intertwined with the parties’ employer-employee relationship. an integral part of that relationship; and as a result, petitioners’ cause of
action for recovery of damages from respondent falls under the jurisdiction of
the Labor Arbiters, pursuant to Article 217(a)(4) of the Labor Code.”

CA RULING:

CA affirmed decision of RTC and denied MR

Amecos Innovations vs. Lopez APPEAL TO THE SC:

GR No: 178055 Date: January 2, 2014 Ponente: Del Castillo, J.
Petitioner's Contention: petitioners argue that their Complaint is one for
Doctrine: Under Article 217(a)(4) of the Labor Code, claims for actual, moral, recovery of a sum of money and damages, thus, jurisdiction resides with the
exemplary and other forms of damages arising from employer-employee regular courts, that the employer-employee relationship between Amecos
relationship are under the jurisdiction of the Labor Arbiters or the National and respondent is merely incidental, and does not necessarily place their
Labor Relations Commission dispute within the exclusive jurisdiction of the labor tribunals.
Respondent’s Contention: jurisdiction over petitioners’ case lies with the consequence of strike or picketing of the union, such complaint for damages
Labor Arbiter, as their cause of action remains necessarily connected to and is deeply rooted in the labor dispute between the parties and within the
arose from their employer-employee relationship. At any rate, respondent exclusive jurisdiction of the labor arbiter.
insists that petitioners, as employers, have the legal duty to enroll her with
the SSS as their employee and to pay or remit the necessary contributions. FACTS: The present case arose from a labor dispute between petitioner
Philippine Airlines, Inc. (PAL) and respondent Airline Pilots' Association of
ISSUE/S: WON the the regular courts have jurisdiction over claims for the Philippines (ALPAP), a duly registered labor organization and the
reimbursement arising from an EE-ER relationship? exclusive bargaining agent of all commercial pilots of PAL. ALPAP filed with
the Department of Labor and Employment (DOLE) a notice of strike alleging
HELD: No. SSS contributions and recovery of damages arising from that PAL committed unfair labor practice. The Secretary of DOLE (SOLE)
employee-employer relationship is under the jurisdiction of the Labor assumed jurisdiction over the dispute and thereafter prohibited ALPAP from
Arbiters. This Court holds that as between the parties, Article 217(a)(4) of the staging a strike and committing any act that could exacerbate the dispute.
Labor Code is applicable. Said provision bestows upon the Labor Arbiter Despite the prohibition by the SOLE, ALPAP staged a strike on 5 June 1998.
original and exclusive jurisdiction over claims for damages arising from A return-to-work order was issued by the SOLE on 7 June 1998, but ALPAP
employer-employee relations. The observation that the matter of SSS defied the same and went on with their strike. Consequently, on 1 June 1999,
contributions necessarily flowed from the employer-employee relationship the SOLE issued a resolutionwhich declared the illegality of the strike staged
between the parties shared by the lower courts and the Court of Appeals by ALPAP and the loss of employment status of the officers who participated
(CA) is correct; thus, Amecos claims should have been referred to the labor in the strike.
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 The SOLE's resolution was upheld by the CA in CA-G.R. SP No. 54880. The
damages governed by the Civil Code. matter was eventually elevated to this Court in G.R. No. 152306. In a
Resolution, dated 10 April 2002, the Court dismissed ALPAP's petition for
At the same time, it cannot be assumed that since the dispute concerns the failure to show that the CA committed grave abuse of discretion or a
payment of SSS premiums, petitioners’ claim should be referred to the Social reversible error. The resolution attained finality on 29 August 2002. On 22
Security Commission (SSC) pursuant to Republic Act No. 1161, as amended April 2003, or almost eight (8) months :from the finality of the Court's 10 April
by Republic Act No. 8282. 35 As far as SSS is concerned, there is no longer 2002 Resolution, PAL filed before the LA a complaint for damages against
a dispute with respect to petitioners’ accountability to the System; petitioners ALPAP, as well as some of its officers and members.
already settled their pecuniary obligations to it. Since there is no longer any
dispute regarding coverage, benefits, contributions and penalties to speak of, PAL alleged, among others, that on 6 June 1998, the second day of the
the SSC need not be unnecessarily dragged into the picture. 36 Besides, it illegal strike conducted by ALPAP, its striking pilots abandoned three (3) PAL
cannot be made to act as a collecting agency for petitioners’ claims against aircraft, as follows: (i) PR 730 bound for Paris, France, at Bangkok, Thailand;
the respondent; the Social Security Law should not be so interpreted, lest the (ii) PR 741 bound for Manila, at Bangkok, Thailand; and (iii) PR 104 bound
SSC be swamped with cases of this sort. for Manila, at San Francisco, California, U.S.A. Because of the deliberate and
malicious abandonment of the said flights, 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
PAL vs ALPAP resulting in several losses from ticket refunds, extraordinary expenses to
GR No: 200088 Ponente: Martires, J. Date: February 26, 2018 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 P731,078,988.59. PAL
Doctrine: Where the plaintiff’s cause of action for damages arose out of or further prayed that it be awarded P300,000,000.00 and P3,000,000.00 as
was necessarily intertwined with an alleged unfair labor practice, the exemplary damages and attorney's fees, respectively.
jurisdiction is exclusively with the labor tribunal. Likewise, where the
damages separately claimed by the employer were allegedly incurred as a LA RULING:
 HELD: YES. Under Article 217 [now Article 224] of the Labor Code, as
LA dismissed PAL's complaint. It ruled that it had no jurisdiction to resolve amended by Section 9 of R.A. No. 6715, the LA and the NLRC have
the issue on damages. It noted that the SOLE did not certify the controversy jurisdiction to resolve cases involving claims for damages arising from
for compulsory arbitration to the NLRC nor in any occasion did the parties employer-employee relationship, to wit:
agree to refer the same to voluntary arbitration under Article 263(h) of the
Labor Code. Hence, jurisdiction to resolve all issues arising from the labor ART. 217. Jurisdiction of Labor Arbiters and the Commission-- (a) Except as
dispute, including the claim for damages arising from the illegal strike, was otherwise provided under this Code, the Labor Arbiters shall have original
left with the SOLE to the exclusion of all other fora. 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,
NLRC RULING: even in the absence of stenographic notes, the following cases involving all
workers, whether agricultural or nonagricultural:
NLRC affirmed with modification the LA's 22 April 2008 decision. It ruled that
labor tribunals have no jurisdiction over the claims interposed by PAL. It 1. Unfair labor practice cases;
opined that the reliefs prayed for by PAL should have been ventilated before
the regular courts considering that they are based on the tortuous acts 2. Termination disputes;
allegedly committed by the respondents. It explained that the airline pilots'
refusal to fly their assigned aircrafts constitutes breach of contractual 3. If accompanied with a claim for reinstatement, those cases that workers
obligation which is intrinsically a civil dispute. may file involving wages, rates of pay, hours of work and other terms and
conditions of employment
CA RULING:
4. Claims for actual, moral, exemplary and other forms of damages arising
CA partially granted PAL's petition. It ruled that while the NLRC correctly from employer-employee relations;
sustained the LA's dismissal of the complaint for lack of jurisdiction, it
declared that the NLRC gravely abused its discretion when it affirmed the 5. Cases arising from any violation of Article 264 of this Code including
LA's pronouncement that PAL's cause of action had already prescribed. questions involving the legality of strikes and lockouts; and

The appellate court concurred with the NLRC's opinion that exclusive 6. Except claims for Employees Compensation, Social Security, Medicare
jurisdiction over PAL's claim for damages lies with the regular courts and not and maternity benefits, all other claims, arising from employer-employee
with the SOLE. It ratiocinated that while Article 263(g) of the Labor Code relations, including those of persons in domestic or household service,
vests in the SOLE the authority to resolve all questions and controversies involving an amount exceeding five thousand pesos (P5,000.00) regardless
arising from a labor dispute over which it assumed jurisdiction, said authority of whether accompanied with a claim for reinstatement.
must be interpreted to cover only those causes of action which are based on
labor laws. Stated differently, causes of action based on an obligation or duty It is settled, however, that not every controversy or money claim by an
not provided under the labor laws are beyond the SOLE's jurisdiction. It employee against the employer or viceversa falls within the jurisdiction of the
continued that only those issues that arise from the assumed labor dispute, labor arbiter. Intrinsically, civil disputes, although involving the claim of an
which has a direct causal connection to the employer-employee relationship employer against its employees, are cognizable by regular courts.
between the parties, will fall under the jurisdiction of the SOLE. It pointed out
that the damages caused by the wilful acts of the striking pilots in abandoning To determine whether a claim for damages under paragraph 4 of Article 217
their aircraft are recoverable under civil law and are thus within the is properly cognizable by the labor arbiter, jurisprudence has evolved the
jurisdiction of the regular courts. "reasonable connection rule" which essentially states that the claim for
damages must have reasonable causal connection with any of the claims
ISSUE/S: Whether the NLRC and the Labor Arbiter have jurisdiction over provided for in that article. A money claim by a worker against the employer
PAL's claims against the respondents for damages incurred as a or vice-versa is within the exclusive jurisdiction of the labor arbiter only if
consequence of the latter's actions during the illegal strike 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 do not contemplate nor cover the visitorial and enforcement powers of the
cognizable by the regular courts. Secretary of Labor or his duly authorized representatives. Rather, said
powers are defined and set forth in Article 128 of the Labor Code.
The appellate court was of the opinion that, applying the reasonable
connection rule, PAL's claims for damages have no relevant connection FACTS: Private respondents are EBVSAI's employees who instituted a
whatsoever to the employer-employee relationship between the parties. complaint for underpayment of wages against EBVSAI before the Regional
Thus, the claim is within the exclusive jurisdiction of the regular courts. It Office (RO) of DOLE. Consequently, RO conducted a complaint inspection of
explained that Article 217 of the Labor Code does not include a claim for EBVSAI’s Plant where several labor law violations were noted. On the same
damages wherein the employer-employee relation is merely incidental, and day, the RO issued a notice of hearing requiring EBVSAI and private
where the claim is largely civil in character. respondents to attend. After the hearing, the Regional Director (RD) ordered
EBVSAI to pay Php 763,927.85 to the affected employees. EBVSAI filed a
The appellate court is mistaken. The Court agrees with PAL that its claim for motion for reconsideration and alleged that under Articles 129 and 217(6) of
damages has reasonable connection with its employer-employee relationship the Labor Code, the Labor Arbiter, not the Regional Director, has exclusive
with the respondents. Contrary to the pronouncements made by the appellate and original jurisdiction over the case because the individual monetary claim
court, PAL's cause of action is not grounded on mere acts of quasi-delict. of private respondents exceeds P5,000. RD denied the motion stating that,
The claimed damages arose from the illegal strike and acts committed during pursuant to RA 7730, the limitations under Articles 129 and 217(6) of the
the same which were in tum closely related and intertwined with the Labor Code no longer apply to the Secretary of Labor's visitorial and
respondents' allegations of unfair labor practices against PAL. This could not enforcement powers under Article 128(b). The Secretary of Labor or his duly
even be disputed as even the appellate court recognized this fact. Since the authorized representatives are now empowered to hear and decide, in a
loss and injury from which PAL seeks compensation have reasonable causal summary proceeding, any matter involving the recovery of any amount of
connection with the alleged acts of unfair labor practice, a claim provided for wages and other monetary claims arising out of employer-employee relations
in Article 217 of the Labor Code, the question of damages becomes a labor at the time of the inspection.
controversy and is therefore an employment relationship dispute.
DOLE SECRETARY RULING: It affirmed the Director’s decision on the
Jurisprudence dictates that where the plaintiffs cause of action for damages ground that pursuant to RA 7730, the Court's decision in the Servando case
arose out of or was necessarily intertwined with an alleged unfair labor is no longer controlling insofar as the restrictive effect of Article 129 on the
practice, the jurisdiction is exclusively with the labor tribunal. Likewise, where visitorial and enforcement power of the Secretary of Labor is concerned.
the damages separately claimed by the employer were allegedly incurred as
a consequence of strike or picketing of the union, such complaint for CA RULING: affirmed DOLE Secretary ruling
damages is deeply rooted in the labor dispute between the parties and within
the exclusive jurisdiction of the labor arbiter. Consequently, the same should ISSUE: Whether the Secretary of Labor or his duly authorized
be dismissed by ordinary courts for lack of jurisdiction. representatives have jurisdiction over the money claims of private
respondents which exceed P5,000?
From the foregoing, it is clear that the regular courts do not have jurisdiction
over PAL's claim of damages, the same being intertwined with its labor RULING: YES. In Allied Investigation Bureau, Inc. v. Sec. of Labor, SC ruled
dispute with the respondents over which the SOLE had assumed jurisdiction. that while it is true that under Articles 129 and 217 of the Labor Code, the LA
It is erroneous, therefore, for the CA to even suggest that PAL's complaint has jurisdiction to hear and decide cases where the aggregate money claims
should have been ventilated before the trial court. of each employee exceeds P5,000.00, said provisions of law do not
contemplate nor cover the visitorial and enforcement powers of the Secretary
EX-BATAAN VETERANS SECURITY AGENCY, INC., (EBVSAI) v. THE of Labor or his duly authorized representatives. Rather, said powers are
SECRETARY OF LABOR defined and set forth in Article 128 of the Labor Code (as amended by R.A.
GR 152396, 20 NOVEMBER 2007 No. 7730) thus: (b) Notwithstanding the provisions of Article[s] 129 and 217
of this Code to the contrary, and in cases where the relationship of employer-
DOCTRINE: While it is true that under Articles 129 and 217 of the Labor employee still exists, the Secretary of Labor and Employment or his duly
Code, the LA has jurisdiction to hear and decide cases where the aggregate authorized representatives shall have the power to issue compliance orders
money claims of each employee exceeds P5,000.00, said provisions of law to give effect to [the labor standards provisions of this Code and other] labor
legislation based on the findings of labor employment and enforcement courts themselves use. The elements to determine the existence of an
officers or industrial safety engineers made in the course of inspection. employment relationship are:
However, if the labor standards case is covered by the exception clause in
Article 128(b) of the Labor Code, then the RD will have to endorse the case (1) the selection and engagement of the employee;
to the appropriate Arbitration Branch of the NLRC. In order to divest the RD
or his representatives of jurisdiction, the following elements must be present: (2) the payment of wages;
(a) that the employer contests the findings of the labor regulations officer and
raises issues thereon; (b) that in order to resolve such issues, there is a need (3) the power of dismissal;
to examine evidentiary matters; and (c) that such matters are not verifiable in
the normal course of inspection. The rules also provide that the employer (4) the employer's power to control the employee's conduct.
shall raise such objections during the hearing of the case or at any time after
receipt of the notice of inspection results. The use of this test is not solely limited to the NLRC. The DOLE Secretary, or
his or her representatives, can utilize the same test, even in the course of
In this case, the RD validly assumed jurisdiction over the money claims of inspection, making use of the same evidence that would have been
private respondents even if the claims exceeded P5,000 because such presented before the NLRC.
jurisdiction was exercised in accordance with Article 128(b) of the Labor
Code and the case does not fall under the exception clause. EBVSAI did not (this case primarily tackles Article 128) Under Art. 128(b) of the Labor Code,
contest the findings of the labor regulations officer during the hearing or after as amended by RA 7730, the DOLE is fully empowered to make a
receipt of the notice of inspection results. It was only in its supplemental determination as to the existence of an employer-employee relationship in
motion for reconsideration before the RD that EBVSAI questioned the the exercise of its visitorial and enforcement power, subject to judicial review,
findings of the labor regulations officer and presented documentary evidence not review by the NLRC.
to controvert the claims of private respondents. But even if this was the case,
the RD and the Secretary of Labor still looked into and considered EBVSAI's DOLE has the full power to determine the existence of an employer-
documentary evidence and found that such did not warrant the reversal of employee relationship in cases brought to it under Article 128 (b) of the Labor
the order. Code.This power is parallel and not subordinate to that of the NLRC.|

FACTS: Private respondent Jandeleon Juezan filed a complaint against

petitioner with the Department of Labor and Employment (DOLE) Regional
Office No. VII, Cebu City, for illegal deduction, non- payment of service
incentive leave, 13th month pay, premium pay for holiday and rest day and
illegal diminution of benefits, delayed payment of wages and non coverage of
SSS, PAG-IBIG and Phil-health. (This is the only facts provided by this 2012
case, its background is in its 2009 case)

(background of 2009 case)

The case arose when the DOLE Regional Office No. VII conducted an
inspection of Bombo Radyo's premises in response to Juezan's money
claims against the broadcasting company, resulting in an order for Bombo
Radyo to rectify/restitute the labor standards violations discovered during the
People’s Broadcasting Service (Bombo Radyo) vs Sec. of Labor inspection. Bombo Radyo failed to make any rectification or restitution,
GR No: 179652 Date: October 6, 2012 Ponente: Velasco, Jr., J prompting the DOLE to conduct a summary investigation. Bombo Radyo
reiterated its position, made during the inspection, that Juezan was not its
Doctrine: the DOLE, in determining the existence of an employer-employee employee. Both parties submitted evidence to support their respective
relationship, has a ready set of guidelines to follow, the same guide the positions.
DOLE Director Rodolfo M. Sabulao found Juezan to be an employee of no employer-employee relationship between petitioner and private
Bombo Radyo. Consequently, Director Sabulao ordered Bombo Radyo to respondent. It was held that while the DOLE may make a determination of
pay Juezan P203,726.30 representing his demanded money claims. Bombo the existence of an employer-employee relationship, this function could not
Radyo moved for reconsideration and submitted additional evidence, but be coextensive with the visitorial and enforcement power provided in Art.
Director Sabulao denied the motion. Bombo Radyo then appealed to the 128(b) of the Labor Code, as amended by RA 7730. The NLRC is the
DOLE Secretary, insisting that Juezan was not its employee as he was a primary agency in determining the existence of an employer-employee
drama talent hired on a per drama basis. The Acting DOLE Secretary relationship.
dismissed the appeal for non-perfection due to Bombo Radyo's failure to put
a cash or surety bond, as required by Article 128 (b) of the Labor Code. The Public Attorney’s Office sought clarification as to when the visitorial and
enforcement power of the DOLE be not considered as co-extensive with the
Bombo Radyo went to the Court of Appeals (CA) through a petition for power to determine the existence of an employer-employee relationship. The
certiorari under Rule 65 of the Rules of Court. The CA dismissed the petition DOLE sought clarification as well, as to the extent of its visitorial and
for lack of merit. Bombo Radyo then sought relief from this Court, likewise enforcement power under the Labor Code, as amended.
through a Rule 65 petition, contending that the CA committed grave abuse of
discretion in dismissing the petition. It justified its recourse to a petition for ISSUE/S: Whether DOLE can make a determination of the existence of
certiorari instead of a Rule 45 appeal by claiming that there was no appeal or employer-employee relationship.
any plain and adequate remedy available to it in the ordinary course of law.
HELD: Yes. No limitation in the law was placed upon the power of the DOLE
On May 8, 2009, the Court's Second Division rendered a Decision reversing to determine the existence of an employeremployee relationship. No
the CA rulings and dismissing Juezan's complaint. It reviewed the evidence procedure was laid down where the DOLE would only make a preliminary
and found that there was no employer-employee relationship between finding, that the power was primarily held by the NLRC. The law did not say
Juezan and Bombo Radyo. The Court overruled the CA's recognition of the that the DOLE would first seek the NLRC’s determination of the existence of
DOLE's power to determine the existence of employer-employee relationship an employer-employee relationship, or that should the existence of the
in a labor standards case under Article 128 (b) of the Labor Code. It stressed employer-employee relationship be disputed, the DOLE would refer the
that the power to determine the existence of employer-employee relationship matter to the NLRC. The DOLE must have the power to determine whether
is primarily lodged with the National Labor Relations Commission (NLRC) or not an employer-employee relationship exists, and from there to decide
based on the clause "in cases where the relationship of employer-employee whether or not to issue compliance orders in accordance with Art. 128(b) of
still exists" in Article 128 (b). cSCADE the Labor Code, as amended by RA 7730.

LA/RTC/NLRC RULING: The determination of the existence of an employer-employee relationship by

the DOLE must be respected. The expanded visitorial and enforcement
The DOLE Regional Director found that private respondent was an employee power of the DOLE granted by RA 7730 would be rendered nugatory if the
of petitioner, and was entitled to his money claims. The Acting DOLE alleged employer could, by the simple expedient of disputing the employer-
Secretary dismissed petitioner’s appeal on technical grounds. employee relationship, force the referral of the matter to the NLRC. If the
DOLE makes a finding that there is an existing employer-employee
CA RULING: relationship, it takes cognizance of the matter, to the exclusion of the NLRC.
The DOLE would have no jurisdiction only if the employer-employee
The CA held that DOLE Secretary had jurisdiction over the matter, as the relationship has already been terminated, or it appears, upon review, that no
jurisdictional limitation imposed by Article 129 of the Labor Code on the employer-employee relationship existed in the first place.
power of the DOLE Secretary un-der Art. 128(b) had been repealed by R.A.
7730. If a complaint is brought before the DOLE to give effect to the labor
standards provisions of the Labor Code or other labor legislation, and there is
APPEAL TO THE SC: a finding by the DOLE that there is an existing employer-employee
relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If
The Supreme Court reversed and set aside the decision of CA, and the DOLE finds that there is no employer-employee relationship, the
dismissed the complaint against petitioner. The Court found that there was jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE,
and it is accompanied by a claim for reinstatement, the jurisdiction is properly G.R. No. 162419 July 10, 2007 Tinga, J.:
with the Labor Arbiter, under Art. 217(3) of the Labor Code. If a complaint is
filed with the NLRC, and there is still an existing employer-employee DOCTRINE: Thus, even before the start of any employer-employee
relationship, the jurisdiction is properly with the DOLE. The findings of the relationship, contemporaneous with the perfection of the employment
DOLE, however, may still be questioned through a petition for certiorari under contract was the birth of certain rights and obligations, the breach of which
Rule 65 of the Rules of Court. may give rise to a cause of action against the erring party. The jurisdiction of
labor arbiters is not limited to claims arising from employer-employee
relationships, but also includes those “by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for
actual, moral, exemplary and other forms of damages”

FACTS: Paul Santiago was a seafarer for Smith Bell Management for about
5 years. On Feb 3, 1998 he signed a new contract of employment for a
duration of 9 months. A week before his scheduled departure, Capt. Pacifico
Fernandez, respondent’s VP sent a facsimile to the captain MSV Seaspread
requesting that Santiago be denied boarding because of a call from his wife
and other anonymous callers saying that he would jump ship in Canada, like
his brother did in Japan.

Petitioner thus filed an action for illegal dismissal, with damages against
respondent and foreign principal Cable and Wireless Marine Ltd.

LA RULING: Ordered respondents to pay 7209USD plus 10% attorneys fees,

payable in PHP at the exchange rate prevailing at the time of payment, but
dismissed all other claims.

NLRC RULING: The NLRC vacated the monetary awards and ruled that
there was no valid employer-employee relationship as the Standard Terms
and Conditions Governing the Employment of Filipino Seafarers on Board
Ocean Going Vessels (POEA Standard Contract) provided the employment
contract shall commence upon actual departure of the seafarer from the
airport or seaport at the point of hire and with a POEA-approved contract.

CA RULING: According to the appellate court, petitioner is not entitled to

actual damages because damages are not recoverable by a worker who was
not deployed by his agency within the period prescribed in the POEA Rules.
It agreed with the NLRC's Finding that petitioner's non-deployment was a
valid exercise of respondent's management prerogative. It added that since
petitioner had not departed from the Port of Manila, no employeremployee
relationship between the parties arose and any claim for damages against
the so -called employer could have no leg to stand on.

APPEAL TO THE SC Petitioner’s Agrument: Hinged on the Migrant Worker’s

Act providing that claims or disputes of the Overseas Filipino Worker by
virtue of a contract fall within the jurisdiction of the Labor Arbiter of the NLRC.
Santiago v. CF Sharp Crew Management
Respondent’s Argument: No jurisdiction. INDUSTRIAL PERSONNEL & MANAGEMENT SERVICES, INC. (IPAMS),
SNC LAVALIN ENGINEERS & CONTRACTORS, INC. AND ANGELITO C.
ISSUE: Whether or not the Labor Arbiters have jurisdiction over the matter. HERNANDEZ v. JOSE G. DE VERA AND ALBERTO B. ARRIOLA
G.R. No. 205703 Date: March 07, 2016 Ponente: MENDOZA, J.
RULING: YES. There is no question that the parties entered into an
employment contract on 3 February 1998, whereby petitioner was contracted DOCTRINE: The general rule is that Philippine laws apply even to overseas
by respondent to render services on board "MSV Seaspread" for the employment contracts. As an exception, the parties may agree that a foreign
consideration of US$515.00 per month for nine (9) months, plus overtime law shall govern the employment contract.
pay.
FACTS:
At this junction a distinction must be made between the perfection of the
employment contract and the commencement of the employer-employee Petitioner Industrial Personnel & Management Services, Inc. (IPAMS) is a
relationship. The perfection of the contract, which in this case coincided with local placement agency duly organized and existing under Philippine laws,
the date of execution thereof, occurred when petitioner and respondent with petitioner Angelito C. Hernandez as its president and managing director.
agreed on the object and the cause, as well as the rest of the terms and Petitioner SNC Lavalin Engineers & Contractors, Inc. (SNC-Lavalin) is the
conditions therein. The commencement of the employer -employee principal of IPAMS, a Canadian company with business interests in several
relationship, as earlier discussed, would have taken place had petitioner countries.
been actually deployed from the point of hire. Thus, even before the start of
any employer-employee relationship, contemporaneous with the perfection of Respondent Alberto Arriola (Arriola) is a licensed general surgeon in the
the employment contract was the birth of certain rights and obligations, the Philippines. Arriola was offered by SNCLavalin, through its letter, dated May
breach of which may give rise to a cause of action against the erring party. 1, 2008, the position of Safety Officer in its Ambatovy Project site in
Thus, if the reverse had happened, that is the seafarer failed or refused to be Madagascar. It was for a period of nineteen (19) months starting from June 9,
deployed as agreed upon, he would be liable for damages. 2008 to December 31, 2009.

The jurisdiction of labor arbiters is not limited to claims arising from employer- Arriola was then hired by SNC-Lavalin, through its local manning agency,
employee relationships, but also includes those “by virtue of any law or IPAMS, and his overseas employment contract was processed with the
contract involving Filipino workers for overseas deployment including claims Philippine Overseas Employment Agency (POEA). According to Arriola, he
for actual, moral, exemplary and other forms of damages”. Thus, even before signed the contract of employment in the Philippines.
the start of any employer - employee relationship, contemporaneous with the
perfection of the employment contract was the birth of certain rights and Arriola received a notice of pre-termination of employment, dated September
obligations, the breach of which may give rise to a cause of action against 9, 2009, from SNC-Lavalin. It stated that his employment would be pre-
the erring party. terminated effective September 11, 2009 due to diminishing workload in the
area of his expertise and the unavailability of alternative assignments.
Aggrieved, Arriola filed a complaint against the petitioners for illegal dismissal
and non-payment of overtime pay, vacation leave and sick leave pay before
the Labor Arbiter (LA). He claimed that SNC-Lavalin still owed him unpaid
salaries equivalent to the three-month unexpired portion of his contract.
Arriola also insisted that the petitioners must prove the applicability of
Canadian law before the same could be applied to his employment contract.

Petitioners claimed that SNC-Lavalin was greatly affected by the global

financial crises during the latter part of 2008. The economy of Madagascar,
where SNC-Lavalin had business sites, also slowed down.

In the present case, as all of Arriola's employment documents were

processed in Canada, not to mention that SNC-Lavalin's office was in
Ontario, the principle of lex loci celebrationis was applicable. Thus, the As an exception, the parties may agree that a foreign law shall govern the
petitioners insisted that Canadian laws governed the contract. employment contract. A synthesis of the existing laws and jurisprudence
reveals that this exception is subject to the following requisites:
The said foreign law did not require any ground for early termination of
employment, and the only requirement was the written notice of termination.  That it is expressly stipulated in the overseas employment contract that a
Even assuming that Philippine laws should apply, Arriola would still be validly specific foreign law shall
dismissed because domestic law recognized retrenchment and redundancy
as legal grounds for termination. govern;  That the foreign law invoked must be proven before the courts
pursuant to the Philippine rules on
LA RULING:
evidence;  That the foreign law stipulated in the overseas employment
The LA ruled that the rights and obligations among and between the OFW, contract must not be contrary to law,
the local recruiter/agent, and the foreign employer/principal were governed
by the employment contract pursuant to the EDI-Staffbuilders case. LA morals, good customs, public order, or public policy of the Philippines; and 
opined that there was no other conclusion but to uphold the validity of That the overseas employment contract must be processed through the
Arriola's dismissal based on Canadian law. POEA.

NLRC RULING: The Court is of the view that these four (4) requisites must be complied with
before the employer could invoke the applicability of a foreign law to an
NLRC reversed the LA decision and ruled that Arriola was illegally dismissed overseas employment contract.
by the petitioners. Citing PNB v. Cabansag, the NLRC stated that whether
employed locally or overseas, all Filipino workers enjoyed the protective If the first requisite is absent, or that no foreign law was expressly stipulated
mantle of Philippine labor and social legislation, contract stipulations to the in the employment contract which was executed in the Philippines, then the
contrary notwithstanding. domestic labor laws shall apply in accordance with the principle of lex loci
contractus.
CA RULING:
If the second requisite is lacking, or that the foreign law was not proven
CA affirmed that Arriola was illegally dismissed by the petitioners. The pursuant to Sections 24 and 25 of Rule 132 of the Revised Rules of Court,
appellate court wrote that the ESA allowed an employer to disregard the then the international law doctrine of processual presumption operates. The
required notice of termination by simply giving the employee a severance said doctrine declares that "[w]here a foreign law is not pleaded or, even if
pay. The ESA could not be made to apply in this case for being contrary to pleaded, is not proved, the presumption is that foreign law is the same as
our Constitution, specifically on the right of due process. Thus, the CA opined ours."
that our labor laws should find application.
If the third requisite is not met, or that the foreign law stipulated is contrary to
ISSUE/S: law, morals, good customs, public order or public policy, then Philippine laws
govern.
Whether or not the foreign law should govern the present overseas
employment contract. Finally, if the fourth requisite is missing, or that the overseas employment
contract was not processed through the POEA, then Article 18 of the Labor
HELD: No. The general rule is that Philippine laws apply even to overseas Code is violated. Article 18 provides that no employer may hire a Filipino
employment contracts. This rule is rooted in the constitutional provision of worker for overseas employment except through the boards and entities
Section 3, Article XIII that the State shall afford full protection to labor, authorized by the Secretary of Labor.
whether local or overseas. Hence, even if the OFW has his employment
abroad, it does not strip him of his rights to security of tenure, humane A judicious scrutiny of the records of the case demonstrates that the
conditions of work and a living wage under our Constitution. petitioners were able to observe the second requisite, or that the foreign law
must be proven before the court pursuant to the Philippine rules on evidence.
The petitioners were able to present the ESA, duly authenticated by the
Canadian authorities and certified by the Philippine Embassy, before the LA. ESTATE OF NELSON R. DULAY, represented by his wife MERRIDY
The fourth requisite was also followed because Arriola's employment contract JANE P. DULAY vs. ABOITIZ JEBSEN MARITIME, INC. and GENERAL
was processed through the POEA. CHARTERERS, INC.
G.R. No. 172642 Date: June 13, 2012 Ponente: PERALTA, J.
Unfortunately for the petitioners, those were the only requisites that they
complied with. As correctly held by the CA, even though an authenticated DOCTRINE/S: Disputes involving claims of Filipino seafarers wherein the
copy of the ESA was submitted, it did not mean that said foreign law could be parties are covered by a CBA should be submitted to the jurisdiction of a
automatically applied to this case. The petitioners miserably failed to adhere voluntary arbitrator or panel of arbitrators. Only in the absence of a CBA that
to the two other requisites, which shall be discussed in seratim. parties may opt to submit the dispute to either the NLRC or to voluntary
arbitration.
The petitioners failed to comply with the first requisite because no foreign law
was expressly stipulated in the overseas employment contract with Arriola. FACTS: Nelson R. Dulay was hired as a seaman by General Charterers Inc.
They failed to show on the face of the contract that a foreign law was agreed (GCI), a subsidiary of Aboitiz, later he became a bosun (officer on merchant
upon by the parties. Rather, they simply asserted that the terms and ship in charge of the hull and related equipment) on a contractual basis. 25
conditions of Arriola's employment were embodied in the Expatriate Policy, days after the completion of his contract, Nelson died due to acute renal
Ambatovy Project - Site, Long Term. A better rule would be to obligate the failure secondary to septicemia. He was a bona fide member of GCI’s
foreign employer to expressly declare at the onset of the labor contract that a collective bargaining agent–Associated Marine Officers and Seamans Union
foreign law shall govern it. In that manner, the OFW would be informed of the of the Philippines (AMOSUP). Nelsons widow, Merridy Jane, claimed for
applicable law before signing the contract. death benefits through the grievance procedure of the CBA between
AMOSUP and GCI, but the procedure was declared deadlocked the denial of
A perusal of the ESA will show that some of its provisions are contrary to the her benefits. Thus, she filed a complaint for death and medical benefits and
Constitution and the labor laws of the Philippines. damages against GCI with NLRC. GCI was released form liability after
paying Nelson’s relatives P20K pursuant to Article 20(A)2 of the CBA.
First, the ESA does not require any ground for the early termination of Merridy Jane averred that the P20K should be considered advance payment
employment. of the total claim of $90K.

At its own pleasure, the foreign employer is endowed with the absolute power LA RULING:
to end the employment of an employee even on the most whimsical grounds.
It took cognizance of the case under Article 217 (a), par.6 of the Labor Code
Second, the ESA allows the employer to dispense with the prior notice of and the existence of a reasonable causal connection between the employer-
termination to an employee. The employee under the ESA could be employee relationship and the claim asserted. It ordered GCI to pay the
immediately dismissed without giving him the opportunity to explain and equivalent of $90K less P20K but ruled that the proximate cause of Nelsons
defend himself. death was not workrelated.

The provisions of the ESA are patently inconsistent with the right to security NLRC RULING:
of tenure. Not only do these provisions collide with the right to security of
tenure, but they also deprive the employee of his constitutional right to due Affirmed the LA decision as to the grant of death benefits under the CBA but
process by denying him of any notice of termination and the opportunity to be reversed the ruling as to the proximate cause of Nelsons death.
heard.
CA RULING:
In fine, as the petitioners failed to meet all the four (4) requisites on the
applicability of a foreign law, then the Philippine labor laws must govern the While the suit filed by Merridy Jane is a money claim, the same basically
overseas employment contract of Arriola. involves the interpretation and application of the provisions in the subject
CBA. Thus, jurisdiction belongs to the voluntary arbitrator and not the labor
arbiter.
 involves the interpretation or implementation of the said CBA. Thus, the
PETITIONER: specific or special provisions of the Labor Code govern.
Section 10 of R.A. 8042 (Migrant Workers and Overseas Filipinos Act of
1995) applies in this case. It vests jurisdiction on the appropriate branches of The SC also agrees with petitioner's contention that the CBA is the law or
the NLRC to entertain disputes regarding the interpretation of a CBA contract between the parties. Article 13.1 of the CBA between GCI and
involving migrant or overseas Filipino workers. The Section 10 amended AMOSUP provides that: “The Company and the Union agree that in case of
Article 217(c) of the Labor Code, which confers jurisdiction upon voluntary dispute or conflict in the interpretation or application of any of the provisions
arbitrators over interpretation or implementation of collective bargaining of this Agreement, or enforcement of Company policies, the same shall be
agreements and interpretation or enforcement of company personnel settled through negotiation, conciliation or voluntary arbitration.” It is clear
policies. that the parties, in the first place, really intended to bring to conciliation or
voluntary arbitration any dispute or conflict in the interpretation or application
RESPONDENTS: of the provisions of their CBA. It is settled that when the parties have validly
agreed on a procedure for resolving grievances and to submit a dispute to
1. NLRC had no jurisdiction over the action on account of the absence of voluntary arbitration then that procedure should be strictly observed.
employer-employee relationship
The quoted provision of the CBA is in consonance with Rule 7, Section 7 of
between GCI and Nelson at the time of his death. Nelson also had no claims the present Omnibus Rules and Regulations Implementing the Migrant
against petitioners for sick leave Workers and Overseas Filipinos Act of 1995, as amended by R.A. No.
10022, which states that: “For OFWs with collective bargaining agreements,
allowance/medical benefit by reason of the completion of his contract with the case shall be submitted for voluntary arbitration in accordance with
GCI. Articles 261 and 262 of the Labor Code.” Likewise, Section 29 of the
prevailing Standard Terms and Conditions Governing the Employment of
Article 217, par. (c) and Article 261 of the Labor Code apply in this case. Filipino Seafarers on Board Ocean Going Vessels, promulgated by the POEA
Under these provisions, the unresolved grievances arising from the provides that: “In cases of claims and disputes arising from this employment,
interpretation and implementation of collective bargaining agreements the parties covered by a collective bargaining agreement shall submit the
remains with voluntary arbitrators. claim or dispute to the original and exclusive jurisdiction of the voluntary
arbitrator or panel of arbitrators.”
ISSUE/S: Whether the Labor Arbiter has jurisdiction over the instant case.
It is clear from the above interpretation of the DOLE, DFA and POEA that
HELD: No. It is true that R.A. 8042 is a special law governing overseas with respect to disputes involving claims of Filipino seafarers wherein the
Filipino workers. However, a careful reading of this special law would readily parties are covered by a CBA, the dispute or claim should be submitted to
show that there is no specific provision thereunder which provides for the jurisdiction of a voluntary arbitrator or panel of arbitrators. Only in the
jurisdiction over disputes or unresolved grievances regarding the absence of a collective bargaining agreement that parties may opt to submit
interpretation or implementation of a CBA. Section 10 of R.A. 8042 speaks, in the dispute to either the NLRC or to voluntary arbitration.
general, of claims arising out of an employer-employee relationship or by
virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of
damages. On the other hand, Articles 217(c) and 261 of the Labor Code are
very specific in stating that voluntary arbitrators have jurisdiction over cases
arising from the interpretation or implementation of collective bargaining
agreements. The instant case involves a situation where the special statute
(R.A. 8042) refers to a subject in general, which the general statute (Labor
Code) treats in particular. In the present case, the basic issue raised by
Merridy Jane in her complaint filed with the NLRC is which provision of the
subject CBA applies insofar as death benefits due to the heirs of Nelson are
concerned. The SC agrees with the CA in holding that this issue clearly
LRTA vs Alvarez
GR No: 188047 Ponente: Jardeleza, J. November 28, 2016

Doctrine: (main doctrine under the article) For having conducted business
through a private corporation, GOCC must submit itself to the provisions
governing private corporations, including the Labor Code. Thus, the money
claim brought against it falls under the original and exclusive jurisdiction of
the LA.

FACTS: LRTA is a government-owned and controlled corporation created by

virtue of Executive Order No. 603, for the purpose of the construction,
operation, maintenance, and/or lease of light rail transit system in the
Philippines. Private respondents Bienvenido R. Alvarez, Carlos S. Velasco,
Ascencion A. Gargalicano, Marlon E. Aguinaldo, Petronilo T. Legaspi,
Bonifacio A. Estopia, Andre A. Dela Merced, Jose Novier D. Bayot, Rolando
C. Amazona and Marlino G. Herrera (private respondents) are former
employees of Meralco Transit Organization, Inc. (METRO).

On June 8, 1984, METRO and LRTA entered into an agreement called

"Agreement for the Management and Operation of the Light Rail Transit
System" (AMO-LRTS) for the operation and management of the light rail
transit system. LRTA shouldered and provided for all the operating expenses
of METRO. Also, METRO signed a Collective Bargaining Agreement (CBA)
with its employees wherein provisions on wage increases and benefits were
approved by LRTA's Board of Directors.

However, on April 7, 1989, the Commission on Audit (COA) nullified and

voided the AMO-LRTS. To resolve the issue, LRTA decided to acquire
METRO by purchasing all of its shares of stocks on June 8, 1989. METRO,
thus, became a wholly-owned subsidiary of LRTA. Since then, METRO has
been renamed to Metro Transit Organization, Inc. Also, by virtue of the
acquisition, LRTA appointed the new set of officers, from chairman to
members of the board, and top management of METRO. LRTA and METRO
declared and continued the implementation of the AMO-LRTS and the non-
interruption of employment relations of the employees of METRO. They
likewise continued the establishment and funding of the Metro, Inc.
Employees Retirement Plan which covers the past services of all METRO
regular employees from the date of their employment. They confirmed that all
CBAs remained in force and effect. LRTA then sanctioned the CBA's of the
union of rank and file employees and the union of supervisory employees.
On November 17, 1997, the METRO general manager (who was appointed
by LRTA) announced in a memorandum that its board of directors approved The CA denied LRTA's petition. First, the CA ruled that since LRTA failed to
the severance/resignation benefit of METRO employees at one and a half (1 comply with the mandatory appeal bond, it lost its right to appeal.
1/2) months salaries for every year of service. Consequently, the LA's ruling already became final and executory.

On July 25, 2000, the union of rank and file employees of METRO declared a On the merits of the case, the CA noted that the monetary claims emanated
strike over a retirement fund dispute. By virtue of its ownership of METRO, from the CBA; hence, the controversy must be settled in light of the CBA. As
LRTA assumed the obligation to update the Metro, Inc. Employees the CBA controls, it is clear that LRTA has to pay the remaining fifty percent
Retirement Fund with the Bureau of Treasury. (50%) of the retirement benefits due to the private respondents. The CA held
that whether the NLRC has jurisdiction to hear the case, the result would be
A few months later, or on September 30, 2000, LRTA stopped the operation the same: that LRTA has financial obligations to private respondents.
of METRO. On April 5, 2001, METRO's Board of Directors approved the
release and payment of the first fifty percent (50%) of the severance pay to Finally, on the issue of jurisdiction, the CA found that METRO, even if it is a
the displaced METRO employees, including private respondents, who were subsidiary of LRTA, remains a private corporation. This being the case, the
issued certifications of eligibility for severance pay along with the memoranda money claim brought against it falls under the original and exclusive
to receive the same. jurisdiction of the LA. Also, the CA agreed with the NLRC that the principle of
stare decisisapplies to this case. The NLRC applied the CA's Decision in
Upon the request of the COA corporate auditor assigned at LRTA, COA Malanao, ruling that LRTA is liable for the fifty percent (50%) balance of the
issued an Advisory Opinion through its Legal Department, and an Advise separation pay of the private respondents therein.
(sic) from Chairman Guillermo N. Carague, that LRTA is liable, as owner of
its wholly-owned subsidiary METRO, to pay the severance pay of the latter's APPEAL TO THE SC:
employees.
Petitioner's Contention:
LRTA earmarked an amount of P271,000,000.00 for the severance pay of
METRO employees in its approved corporate budget for the year 2002. LA and NLRC do not have jurisdiction over the case. LRTA cites Light Rail
However, METRO only paid the first fifty percent (50%) of the severance pay Transit Authority v. Venus, Jr. (Venus) to support its claim.
of private respondents.
ISSUE/S:
Private respondents repeatedly and formally asked LRTA, being the principal
owner of METRO, to pay the balance of their severance pay, but to no avail. Whether LRTA can be made liable by the labor tribunals for private
Thus, they filed a complaint before the Arbitration Branch of the NLRC, respondents' money claim despite the absence of an employer-employee
docketed as NLRC NCR Case No. 00-08-09472-04, praying for the payment relationship, and though LRTA is a government-owned and controlled
of 13th month pay, separation pay, and refund of salary deductions, against corporation
LRTA and METRO.
HELD: YES.
LA RULING:
In Mendoza, this Court upheld the jurisdiction of the labor tribunals over
Labor Arbiter ruled in favor of private respondents. LRTA, citing Philippine National Bank v. Pabalan:

NLRC RULING: x x x By engaging in a particular business thru the instrumentality of a

corporation, the government divests itself pro hac vice of its sovereign
NLRC dismissed METRO's appeal for failure to file the required appeal character, so as to render the corporation subject to the rules of law
bond:Therefore, the NLRC ruled that the appealed Decision of the LA (as governing private corporations.
regards METRO) is declared final and executory.

CA RULING:
This Court further ruled that LRTA must submit itself to the provisions
governing private corporations, including the Labor Code, for having
conducted business through a private corporation, in this case, METRO.

In this case, the NLRC accordingly declared, "[LRTA's] contractual

commitments with [METRO] and its employees arose out of its business
relations with [METRO] which is private in nature. Such private relation was
not changed notwithstanding the subsequent acquisition by [LRTA] of full GSIS vs NLRC
ownership of [METRO] and take-over of its business operations at LRT." G.R. No. 180045; November 17, 2010 PONENTE: Nachura, J.:

In view of the foregoing, we rule that the CA did not err when it upheld the DOCTRINE: In the event that the contractor or subcontractor fails to pay the
jurisdiction of the labor tribunals over private respondents' money claims wages of his employees in accordance with the LC, the employer shall be
against LRTA. jointly and severally liable with his contractor or subcontractor to such
employees to the extent of the work performed under the contract, in the
same manner and extent that he is liable to employees directly employed by
him.

FACTS: Respondents Dionisio Banlasan, et. al. were security guards under
DNL Security Agency (DNL Security) assigned to petitioner GSIS Tacloban
City office.

In February 1993, DNL Security informed respondents that its service

contract with petitioner was terminated. Despite this they were instructed by
DNL to continue reporting for work. Respondents worked until April 20, 1993,
but without receiving their wages; after which, they were terminated from
employment.

Respondent filed a complaint with the NLRC against DNL Security and
petitioner for illegal dismissal, separation pay, salary differential, 13 th month
pay, and payment of unpaid salary.

LA/NLRC Ruling:

LA found that there was no illegal dismissal because the employment of

security guards is dependent on the service contract between security
agency and its client. However, by reason of social juctice, LA ordered DNL
and GSIS to pay respondent separation pay, salary differential, and 13 th
month pay.

NLRC, dismissed DNL Securitys motion for reconsideration as it was not

legally perfected, and petitioner’s appeal, having been filed beyond the
reglementary period.

CA Ruling: CA affirmed NLRC ruling.

ISSUE:
 Furthermore, GSIS is granted the ancillary power to invest in business and
Whether or not GSIS, not having an actual and direct ER-EE relationship with other ventures for the benefit of the employees, by using its excess funds for
private respondents is absolved from liability to the latter. investment purposes. In the exercise of such function and power, the GSIS is
allowed to assume a character similar to a private corporation. Thus, it may
HELD: NO. The fact that there is no actual and direct employer-employee sue and be sued, as also, explicitly granted by its charter x x x.
relationship between petitioner and respondents does not absolve the former
from liability for the latters monetary claims. When petitioner contracted DNL *(The Court notes, however, while it agrees with the NLRC’s dismissal
Security’s services, petitioner became an indirect employer of respondents, petitioners appeal for being filed out of time, it nonetheless delved into the
pursuant to Article 107 of the Labor Code. merits of the case)

After DNL Security failed to pay respondents the correct wages and other
monetary benefits, petitioner, as principal, became jointly and severally liable,
as provided in Articles 106 and 109 of the Labor Code. PNB v Florence Cabansag
GR No: 157010 Ponente: PANGANIBAN, J.:
The contractor or subcontractor is made liable by virtue of his or her status as
a direct employer, and the principal as the indirect employer of the Doctrine: The Court reiterates the basic policy that all Filipino workers,
contractors employees. This liability facilitates, if not guarantees, payment of whether employed locally or overseas, enjoy the protective mantle of
the workers compensation, thus, giving the workers ample protection as Philippine labor and social legislations. Our labor statutes may not be
mandated by the 1987 Constitution. This is not unduly burdensome to the rendered ineffective by laws or judgments promulgated, or stipulations
employer. Should the indirect employer be constrained to pay the workers, it agreed upon, in a foreign country.
can recover whatever amount it had paid in accordance with the terms of the
service contract between itself and the contractor. FACTS:

Petitioners liability covers the payment of respondents salary differential and Florence Cabansag (Cabansag) arrived in Singapore as a tourist. She
13 th month pay during the time they worked for petitioner. In addition, applied for employment as Branch Credit Officer, with the Singapore Branch
petitioner is solidarily liable with DNL Security for respondent’s unpaid wages of the PNB, a private banking corporation organized and existing under the
from February 1993 until April 20, 1993. While it is true that respondents laws of the Philippines and was hired. Cabansag was issued an Employment
continued working for petitioner after the expiration of their contract, based Pass by the Ministry of manpower of Singapore and an overseas
on the instruction of DNL Security, petitioner did not object to such employment certificate issued by the POEA thru the Phil embassy in
assignment and allowed respondents to render service. Thus, petitioner Singapore. Barely 3 months in office, Cabansag was told several times to
impliedly approved the extension of respondents services. Petitioner cannot resign by the general manager of the bank for reasons such as cost-cutting
be allowed to deny its obligation to respondents after it had benefited from measure of the bank and that the bank needed a Chinese-speaking credit
their services. Petitioners liability, however, cannot extend to the payment of officer but Cabansag refuse to submit her letter of resignation. On April 20,
separation pay. 1999, she received a letter from the general manager terminating her
employment with the Bank.
Lastly, petitioner’s argument that the enforcement of the decision is
impossible because its charter unequivocally exempts it from execution is Cabansag filed with the LA of QC a case for illegal dismissal.
untenable.
LA/RTC/NLRC RULING:
The processual exemption of the GSIS funds and properties under Section
39 of the GSIS Charter should be read consistently with its avowed principal LA ruled that PNB was guilty of Illegal dismissal and devoid of due process.
purpose: to maintain actuarial solvency of the GSIS in the protection of Upon appeal, the NLRC affirmed the decision, but reduced the moral
assets which are to be used to finance the retirement, disability and life damages to P100,000 and the exemplary damages to P50,000.
insurance benefits of its members.
CA RULING:
The appellate court found that the Contract had actually been processed by privileges provided under our labor laws. One of her fundamental rights is
the Philippine Embassy in Singapore and approved by the Philippine that she may not be dismissed without due process of law. The twin
Overseas Employment Administration (POEA), which then used that Contract requirements of notice and hearing constitute the essential elements of
as a basis for issuing an Overseas Employment Certificate in favor of procedural due process, and neither of these elements can be eliminated
respondent. According to the CA, even though respondent secured an without running afoul of the constitutional guarantee. In this case, all that
employment pass from the Singapore Ministry of Employment, she did not petitioner tendered to respondent was a notice of her employment
thereby waive Philippine labor laws, or the jurisdiction of the labor arbiter or termination effective the very same day, together with the equivalent of a
the NLRC over her Complaint for illegal dismissal. Finally, the CA held that one-month pay. This Court has already held that nothing in the law gives an
petitioner had failed to establish a just cause for the dismissal of respondent. employer the option to substitute the required prior notice and opportunity to
The bank had also failed to give her sufficient notice and an opportunity to be be heard with the mere payment of 30 days salary
heard and to defend herself. The CA ruled that she was consequently entitled
to reinstatement and back wages, computed from the time of her dismissal
up to the time of her reinstatement.

APPEAL TO THE SC: Petitioner's Contention: Saudi Arabia Airlines vs. Rebesencio
GR No: 198587 Date: January 14, 2015 Ponente: Leonen, J.
Respondent's Contention:
Doctrine: Apart from the constitutional policy on the fundamental equality
(Only issues and pertinent rulings were discussed.) before the law of men and women, it is settled that contracts relating to labor
and employment are impressed with public interest. Article 1700 of the Civil
ISSUE/S: Code provides that "[t]he relation between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts
1. Whether or not the arbitration branch of the NLRC in the National Capital must yield to the common good."
Region has jurisdiction over the instant controversy
As the present dispute relates to (what the respondents allege to be) the
2. Whether or not the respondent was illegally dismissed illegal termination of respondents' employment, this case is immutably a
matter of public interest and public policy. Consistent with clear
HELD: pronouncements in law and jurisprudence, Philippine laws properly find
application in and govern this case.
1. Yes, the NLRC has jurisdiction over the controversy as provided under Art
217(now 224) of the Labor and Section 10 of RA 8042. Based on the FACTS: Saudi Arabian Airlines is a foreign corporation established and
foregoing provisions, labor arbiters clearly have original and exclusive existing under the laws of Jeddah, Kingdom of Saudi Arabia. Respondents
jurisdiction over claims arising from employer-employee relations, including (complainants before the Labor Arbiter) were recruited and hired by Saudia
termination disputes involving all workers, among whom are overseas as Permanent Flight Attendants.
Filipino workers (OFW). Whether employed locally or overseas, all Filipino
workers enjoy the protective mantle of Philippine labor and social legislation, Respondents continued their employment with Saudia until they were
contract stipulations to the contrary notwithstanding. This pronouncement is separated from service on various dates in 2006. Respondents contended
in keeping with the basic public policy of the State to afford protection to that the termination of their employment was illegal. They alleged that the
labor, promote full employment, ensure equal work opportunities regardless termination was made solely because they were pregnant.
of sex, race or creed, and regulate the relations between workers and
employers. Respondents filed a Complaint against Saudia and its officers for illegal
dismissal before the Labor Arbiter. Saudia assailed the jurisdiction of the
2.. Yes, respondent was illegally dismissed It must be noted that respondent Labor Arbiter. It claimed that all the determining points of contact referred to
was already a regular employee at the time of her dismissal, because her foreign law and insisted that the Complaint ought to be dismissed on the
three-month probationary period of employment had already ended. As a ground of forum non conveniens.
regular employee, respondent was entitled to all rights, benefits and
Saudia asserts that Philippine courts and/or tribunals are not in a position to
make an intelligent decision as to the law and the facts. This is because While a Philippine tribunal (acting as the forum court) is called upon to
respondents' Cabin Attendant contracts require the application of the laws of respect the parties' choice of governing law, such respect must not be so
Saudi Arabia, rather than those of the Philippines. permissive as to lose sight of considerations of law, morals, good customs,
public order, or public policy that underlie the contract central to the
LA/RTC/NLRC RULING: Executive Labor Arbiter Fatima Jambaro-Franco controversy.
rendered the Decision32 dismissing respondents' Complaint. The dispositive
portion of this Decision reads: Counter-balancing the principle of autonomy of contracting parties is the
equally general rule that provisions of applicable law, especially provisions
WHEREFORE, premises' considered, judgment is hereby rendered relating to matters affected with public policy, are deemed written inta the
DISMISSING the instant complaint for lack of jurisdiction/merit contract. Put a little differently, the governing principle is that parties may not
contract away applicable provisions of law especially peremptory provisions
On respondents' appeal, the National Labor Relations Commission's Sixth dealing with matters heavily impressed with public interest.
Division reversed the ruling of Executive Labor Arbiter Jambaro-Franco. It
explained that "[considering that complainants-appellants are OFWs, the This does not only mean that the Philippines shall not countenance nor lend
Labor Arbiters and the NLRC has [sic] jurisdiction to hear and decide their legal recognition and approbation to measures that discriminate on the basis
complaint for illegal termination. of one's being male or female. It imposes an obligation to actively engage in
securing the fundamental equality of men and women.
CA RULING:
So informed and animated, we emphasize the glaringly discriminatory nature
The CA upheld the ruling of the NLRC of Saudia's policy. As argued by respondents, Saudia's policy entails the
termination of employment of flight attendants who become pregnant. At the
ISSUE/S: Whether or not the Philippine tribunals have jurisdiction over the risk of stating the obvious, pregnancy is an occurrence that pertains
case specifically to women. Saudia's policy excludes from and restricts
employment on the basis of no other consideration but sex.
HELD: YES. A choice of law governing the validity of contracts or the
interpretation of its provisions does not necessarily imply forum non We do not lose sight of the reality that pregnancy does present physical
conveniens. Choice of law and forum non conveniens are entirely different limitations that may render difficult the performance of functions associated
matters. with being a flight attendant. Nevertheless, it would be the height of iniquity to
view pregnancy as a disability so permanent and immutable that, it must
Choice of law provisions are an offshoot of the fundamental principle of entail the termination of one's employment. It is clear to us that any
autonomy of contracts. In contrast, forum non conveniens is a device akin to individual, regardless of gender, may be subject to exigencies that limit the
the rule against forum shopping. It is designed to frustrate illicit means for performance of functions. However, we fail to appreciate how pregnancy
securing advantages and vexing litigants that would otherwise be possible if could be such an impairing occurrence that it leaves no other recourse but
the venue of litigation (or dispute resolution) were left entirely to the whim of the complete termination of the means through which a woman earns a
either party. living.

Likewise, contractual choice of law is not determinative of jurisdiction. Apart from the constitutional policy on the fundamental equality before the
Stipulating on the laws of a given jurisdiction as the governing law of a law of men and women, it is settled that contracts relating to labor and
contract does not preclude the exercise of jurisdiction by tribunals elsewhere. employment are impressed with public interest. Article 1700 of the Civil Code
The reverse is equally true: The assumption of jurisdiction by tribunals does provides that "[t]he relation between capital and labor are not merely
not ipso facto mean that it cannot apply and rule on the basis of the parties' contractual. They are so impressed with public interest that labor contracts
stipulation. must yield to the common good."

Forum non conveniens finds no application and does not operate to divest As the present dispute relates to (what the respondents allege to be) the
Philippine tribunals of jurisdiction and to require the application of foreign law. illegal termination of respondents' employment, this case is immutably a
matter of public interest and public policy. Consistent with clear
pronouncements in law and jurisprudence, Philippine laws properly find
application in and govern this case. 'Moreover, as this premise for Saudia's
insistence on the application forum non conveniens has been shattered, it
follows that Philippine tribunals may properly assume jurisdiction over the
present controversy.