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3H SBC LAW 2016-17 - Labor Relations Atty. Golangco Compiled by Rent XV

CITIBANK, N. A. v. CA (Third Division), AND CITIBANK


INTEGRATED GUARDS LABOR ALLIANCE (CIGLA)
SEGATUPAS/FSM LOCAL CHAPTER No. 1394
G.R. No. 108961 November 27, 1998 PARDO, J.:
DOCTRINE: Non-renewal of Security Guard Service
agreement is a civil dispute and not a labor dispute.
FACTS: Citibank and El Toro Security Agency, Inc.
(hereafter El Toro) entered into a contract for the latter to
provide security and protective services. In 1990, the
contract between Citibank and El Toro expired. Integrated
Guards Labor Alliance-SEGA-TUPAS/FSM (hereafter
CIGLA) filed with the National Conciliation and Mediation
Board (NCMB) a request for preventive mediation citing
Citibank as respondent therein giving as issues for
preventive mediation the following: (1) Unfair labor
practice (2) Dismissal of union officers/members; and (3)
Union busting.
Three days after, Citibank served on El Toro a written
notice that the bank would not renew anymore the service
agreement with the latter. Simultaneously, Citibank hired
another security agency, the Golden Pyramid Security
Agency, to render security services at Citibank's premises.
Hence, CIGLA filed a manifestation with the NCMB that it
was converting its request for preventive mediation into a
notice of strike for failure of the parties to reach a mutually
acceptable settlement of the issues, which it followed with
a supplemental notice of strike alleging as supplemental
issue the mass dismissal of all union officers and
members.
The following day the guards of El Toro were replaced by
guards of the Golden Pyramid Security Agency. They
threatened to go on strike against Citibank and picket its
premises. CIGLA filed a notice of strike directed at the
premises of the Citibank main office.
Citibank filed with the Regional Trial Court, Makati, a
complaint for injunction and damages to which respondent
CIGLA filed with the trial court a motion to dismiss the
complaint. The motion alleged that the Court had no
jurisdiction, this being labor dispute.
RTC RULING: The trial court denied respondent CIGLA's
motion to dismiss because plaintiff's complaint there are
allegations, which negate any employer-employee
relationship between it and the CIGLA members.
Respondent CIGLA filed with the Court of Appeals a
petition for certiorari with preliminary injunction assailing
the validity of the proceedings had before the regional trial
court.
CA RULING: It declared the proceedings before the RTC
null and void.
ISSUE: (1) The basic issue involved is 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.

(2) Is there a labor dispute between Citibank and the


security guards, members of respondent CIGLA,
regardless of whether they stand in the relation of
employer and employees?
SC RULING:
(1) Yes.
The Court sustained the petitioner's contention. This Court
has held in many cases that "in determining the existence
of an employer-employee relationship, the following
elements are generally considered: 1) the selection and
engagement of the employee; 2) the payment of wages; 3)
the power of dismissal; and 4) the employer's power to
control the employee with respect to the means and
methods by which the work is to be accomplished".6 It has
been decided also that the Labor Arbiter has no
jurisdiction over a claim filed where no employer-employee
relationship existed between a company and the security
guards assigned to it by a security service contractor.7 In
this case, it was the security agency El Toro that recruited,
hired and assigned the watchmen to their place of work. It
was the security agency that was answerable to Citibank
for the conduct of its guards.
(2) No. It is a civil dispute.
Article 212, paragraph l of the Labor Code provides the
definition of a "labor dispute". It "includes any controversy
or matter concerning terms or 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 the
disputants stand in the proximate relation of employer and
employee."
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 civil dispute8. El Toro
was an independent contractor. Thus, no employeremployee relationship existed between Citibank and the
security guard members of the union in the security
agency who were assigned to secure the bank's premises
and property. Hence, there was no labor dispute and no
right to strike against the bank.
It is a basic rule of procedure that "jurisdiction of the court
over the subject matter of the action is determined by the
allegations of the complaint, irrespective of whether or not
the plaintiff is entitled to recover upon all or some of the
claims asserted therein. The jurisdiction of the court can
not be made to depend upon the defenses set up in the
answer or upon the motion to dismiss, for otherwise, the
question of jurisdiction would almost entirely depend upon
the defendant."9 "What determines the jurisdiction of the
court is the nature of the action pleaded as appearing from
the allegations in the complaint. The averments therein
and the character of the relief sought are the ones to be
consulted."

3H SBC LAW 2016-17 - Labor Relations Atty. Golangco Compiled by Rent XV

In the complaint filed with the trial court, petitioner alleged


that in 1983, it entered into a contract with El Toro, a
security agency, for security and protection service. The
parties renewed the contract yearly until April 22, 1990.
Petitioner further alleged that from June 11, 1990, until the
filing of the complaint, El Toro security guards formerly
assigned to guard Citibank premises loitered around the
bank's premises in large groups and threatened to stage a
strike, which would hamper its operations and the normal
conduct of its business and that the bank would suffer
damages should a strike push through.
On the basis of the allegations of the complaint, it is safe
to conclude that the dispute involved is a civil one, not a
labor dispute. Consequently, we rule that jurisdiction over
the subject matter of the complaint lies with the regional
trial court.

PHILIPPINE AIRLINES, INC. vs. NATIONAL LABOR


RELATIONS COMMISSION, FERDINAND PINEDA and
GODOFREDO CABLING
G.R. No. 120567 20 March 1998
Martinez, J.:
DEFINITION OF A LABOR DISPUTE
DOCTRINE:
The power of the NLRC to issue an injunctive writ
originates from "any labor dispute. 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. There is no labor dispute when there has
yet been no complaint for illegal dismissal filed with the
labor arbiter.
FACTS:
Ferdinand Pineda and Godofredo Cabling, flight stewards
of PAL, were dismissed by the latter from the service for
their alleged involvement in the currency smuggling in
Hong Kong. Aggrieved by said dismissal, they went
directly to the NLRC and filed a petition for injunction with
the object of making PAL withhold its orders of dismissal
and reinstate them to work. The NLRC granted their
petition.
Displeased, PAL challenged the NLRC through a motion
for reconsideration questioning its jurisdiction to issue an
injunction or restraining order since this may be issued
only under Article 218 of the Labor Code if the case
involves or arises from labor disputes.
NLRC RULING: It denied PALs motion for
reconsideration and upheld its jurisdiction to issue the
mandatory injunctive writ ordering PAL to withhold the
enforcement of the orders of dismissal and reinstate
Pineda and Cabling.

ISSUE: Can the NLRC, even without a complaint for illegal


dismissal filed before the labor arbiter, entertain an action
for injunction and issue such writ?
SC RULING:
NO. Generally, injunction is not a cause of action in itself
but merely a provisional remedy, an adjunct to a main suit.
Relative to this, the power of the NLRC to issue an
injunctive writ originates from "any labor dispute.
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."
From the foregoing definitions, it is therefore 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 PAL
and respondents Pineda and Cabling as there has yet
been no complaint for illegal dismissal filed with the labor
arbiter by them against the PAL. 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 their reinstatement; award of full
backwages, moral and exemplary damages; and
attorney's fees. As such, the petition should have been
filed with the labor arbiter who has the original and
exclusive jurisdiction to hear and decide the following
cases involving all workers, whether agricultural or nonagricultural.

CHARLITO PEARANDA v. BAGANGA PLYWOOD


CORPORATION and HUDSON CHUA
G.R. No. 159577 3 May 2006
Panganiban, C.J.:
MEMBERS OF THE MANAGERIAL STAFF
DOCTRINE:
Members of the managerial staff are those who
customarily and regularly exercise discretion and
independent judgment. Members of the managerial staff
are exempted from the provisions of the Labor Code on
labor standards.

3H SBC LAW 2016-17 - Labor Relations Atty. Golangco Compiled by Rent XV

FACTS:
Charlito Pearanda was hired as an employee of Baganga
Plywood Corporation (BPC) to take charge of the
operations and maintenance of its steam plant boiler.
Subsequently, Pearanda filed a Complaint for illegal
dismissal with money claims against BPC and its general
manager, Hudson Chua, before the NLRC. Pearanda
claims, among others, that he was not a managerial
employee, and therefore, entitled to the award granted by
the labor arbiter.

Pearanda was employed as a Foreman/Boiler Head/Shift


Engineer tasked to do the following tasks among others:
1. To supply the required and continuous steam to all
consuming units at minimum cost.
2. To supervise, check and monitor manpower
workmanship as well as operation of boiler and
accessories.
3. To evaluate performance of machinery and manpower.

LA RULING: There was no illegal dismissal and that


petitioners Complaint was premature because he was still
employed by BPC. The temporary closure of BPCs plant
did not terminate his employment; hence, he need not
reapply when the plant reopened. Nevertheless, the labor
arbiter found Pearanda entitled to overtime pay, premium
pay for working on rest days

xxx
5. To train new employees for effective and safety while
working.
xxx

NLRC RULING: Deleted the award of overtime pay and


premium pay for working on rest days. According to the
Commission, petitioner was not entitled to these awards
because he was a managerial employee.

7. To recommend personnel actions such as: promotion,


or disciplinary action.

CA RULING: Denied Pearandas petition on purely


procedural grounds, which prompted him to seek recourse
with the SC.

In 2001, BPC shut down due to some repairs and


maintenance. BPC did not technically fire Pearanda but
due to the latters insistence, BPC gave him his separation
benefits.

xxx

ISSUE: Is Pearanda a managerial employee?


SC RULING:
NO. He was a member of the managerial staff. The
Implementing Rules of the Labor Code define members of
a managerial staff as those who customarily and regularly
exercise discretion and independent judgment.
As borne out by the facts, Pearanda supervised the
engineering section of the steam plant boiler. His work
involved overseeing the operation of the machines and the
performance of the workers in the engineering section.
This work necessarily required the use of discretion and
independent judgment to ensure the proper functioning of
the steam plant boiler. As supervisor, he is deemed a
member of the managerial staff.
Members of the managerial staff are exempted from the
provisions of the Labor Code on labor standards. Since
Pearanda belongs to this class of employees, he is not
entitled to overtime pay and premium pay for working on
rest days.

Charlito Pearanda vs Baganga Plywood Corporation


and Hudson Chua [UberDigest]
489 SCRA 94 Labor Law Labor Standards Overtime
Pay and Premium Pay of Managerial Employees
In June 1999, Pearanda was hired by Baganga Plywood
Corporation (owned by Hudson Chua) to take charge of
the operations and maintenance of its steam plant boiler.

BPC subsequently reopened but Pearanda did not


reapply.
Pearanda now claims that BPC still needed to pay him
his overtime pays and premium pays.
The NLRC ruled that Pearanda is a managerial
employee and as such he is not entitled to overtime and
premium pay as stated under the Labor Code. Pearanda
appealed. He said that he is not a managerial employee.
ISSUE: Whether or not Pearanda is entitled to overtime
and premium pay.
HELD: No. Though there is an error made by the NLRC in
finding Pearanda as a managerial employee, the
Supreme Court still ruled that Pearanda is not entitled to
overtime and premium pay.
Pearanda is not a managerial employee. Under the
Implementing Rules and Regulations of the Labor Code,
managerial employees are those that perform the
following:
(1) Their primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof;
(2) They customarily and regularly direct the work of two
or more employees therein;
(3) They have the authority to hire or fire other employees
of lower rank; or their suggestions and recommendations

3H SBC LAW 2016-17 - Labor Relations Atty. Golangco Compiled by Rent XV

as to the hiring and firing and as to the promotion or any


other change of status of other employees are given
particular weight.
Pearanda does not meet the above requirements.
Pearanda is instead considered as a managerial staff.
Under the Implementing Rules and Regulations of the
Labor Code, managerial staffs are those that perform the
following:
(1) The primary duty consists of the performance of work
directly related to management policies of the employer;
(2) Customarily and regularly exercise discretion and
independent judgment;
(3) (i) Regularly and directly assist a proprietor or a
managerial employee whose primary duty consists of the
management of the establishment in which he is employed
or subdivision thereof; or (ii) execute under general
supervision work along specialized or technical lines
requiring special training, experience, or knowledge; or (iii)
execute under general supervision special assignments
and tasks; and
(4) who do not devote more than 20 percent of their hours
worked in a workweek to activities which are not directly
and closely related to the performance of the work
described in paragraphs (1), (2), and (3) above.
Pearandas function as a shift engineer illustrates that he
was a member of the managerial staff. His duties and
responsibilities conform to the definition of a member of a
managerial staff under the Implementing Rules.
Pearanda supervised the engineering section of the
steam plant boiler. His work involved overseeing the
operation of the machines and the performance of the
workers in the engineering section. This work necessarily
required the use of discretion and independent judgment
to ensure the proper functioning of the steam plant boiler.
Further, Pearanda in his position paper admitted that he
was a supervisor for BPC. As supervisor, petitioner is
deemed a member of the managerial staff.

SAMAHANG MANGGAGAWA SA CHARTER


CHEMICAL SOLIDARITY OF UNIONS IN THE
PHILIPPINES FOR EMPOWERMENT AND REFORMS
(SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union
President v. CHARTER CHEMICAL and COATING
CORPORATION
G.R. No. 169717 16 March 2011
Del Castillo, J.:
MANAGERIAL EMPLOYEES
DOCTRINE:
After a labor organization has been registered, it may
exercise all the rights and privileges of a legitimate labor

organization. Any mingling between supervisory and rankand-file employees in its membership cannot affect its
legitimacy for that is not among the grounds for
cancellation of its registration, unless such mingling was
brought about by misrepresentation, false statement or
fraud under Article 239 of the Labor Code.
FACTS:
Samahang Manggagawa sa Charter Chemical Solidarity
of Unions in the Philippines for Empowerment and
Reforms (petitioner union) filed a petition for certification
election among the regular rank-and-file employees of
Charter Chemical and Coating Corporation (respondent
company) with the Mediation Arbitration Unit of the DOLE,
National Capital Region.
Respondent company filed an Answer with Motion to
Dismiss on the ground that petitioner union is not a
legitimate labor organization because of (1) failure to
comply with the documentation requirements set by law,
and (2) the inclusion of supervisory employees within
petitioner union.
MED-ARBITER RULING: Sided with the company.
DOLE RULING: Granted the unions petition for a
certification election.
CA RULING: Reversed the DOLE and upheld the MedArbiters Ruling.
ISSUE: Does the commingling of supervisory and rankand-file employees in a union divest it of its personality as
a legitimate labor organization?
SC RULING:
NO. After a labor organization has been registered, it may
exercise all the rights and privileges of a legitimate labor
organization. Any mingling between supervisory and rankand-file employees in its membership cannot affect its
legitimacy for that is not among the grounds for
cancellation of its registration, unless such mingling was
brought about by misrepresentation, false statement or
fraud under Article 239 of the Labor Code.
Applying this principle to the case at bar, petitioner union
was not divested of its status as a legitimate labor
organization even if some of its members were
supervisory employees. It had the right to file the subject
petition for certification election. Besides, the legal
personality of the union cannot be collaterally attacked by
the company in the certification election proceedings the
latter being in the eyes of the law a mere bystander in
such proceedings.

3H SBC LAW 2016-17 - Labor Relations Atty. Golangco Compiled by Rent XV

PAMELA FLORENTINA JUMUAD, Petitioner v. HIFLYER FOOD, INC. and/or JESUS R. MONTEMAYOR
G.R. No. 187877 September 2011
Mendoza, J.:
MANAGERIAL EMPLOYEES
DOCTRINE:
As long as there is some basis for loss of confidence, such
as when the employer has reasonable ground to believe
that the employee concerned is responsible for the
purported misconduct, and the nature of his participation
therein renders him unworthy of the trust and confidence
demanded of his position, a managerial employee may be
dismissed.
FACTS:
Pamela Florentina Jumuad was employed as Area
Manager in Visayas by Hi-Flyer, Inc., the company
managing Kentucky Fried Chicken stores throughout the
country. Later on, the company discovered lapses on the
part of Jumuad in doing her job. Jumuad was given the
opportunity to explain the reason these. Nonetheless, the
company still terminated her employment on the ground of
neglect of duty and breach of trust and confidence. This
prompted Jumuad to file a complaint against Hi-Flyer for
illegal dismissal.
LA RULING: After finding that no serious cause for
termination existed, the LA ruled that Jumuad was illegally
dismissed.
NLRC RULING: Affirmed the LA
CA RULING: Reversed the NLRC. CA was of the opinion
that the requirements of substantive and procedural due
process were complied with affording Jumuad an
opportunity to be heard first, when she submitted her
written explanation and then, when she was informed of
the decision and the basis of her termination.
ISSUE: Was Jumuad Illegally dismissed?
SC RULING:
NO. As long as there is some basis for loss of confidence,
such as when the employer has reasonable ground to
believe that the employee concerned is responsible for the
purported misconduct, and the nature of his participation
therein renders him unworthy of the trust and confidence
demanded of his position, a managerial employee may be
dismissed.
Here, there is ample evidence that Jumuad indeed
committed acts justifying loss of trust and confidence of
Hi-Flyer, which resulted to her dismissal from service. Her
mismanagement and negligence in supervising the
effective operation of KFC branches in the span of less
than a year, resulting in the closure of KFC-Gaisano due
to deplorable sanitary conditions, cash shortages in KFCBohol, in which the said branch, at the time of discovery,
was only several months into operation, and the poor
sanitation at KFC-Cocomall. The glaring fact that three (3)

out of the seven (7) branches under her area were


neglected cannot be glossed over by her explanation that
there was no negligence on her part as the sanitation
problem was structural, that she had been usually busy
conducting management team meetings in several
branches of KFC in her area or that she had no
participation whatsoever in the alleged cash shortages.
As the employer, Hi-Flyer has the right to regulate,
according to its discretion and best judgment, all aspects
of employment, including work assignment, working
methods, processes to be followed, working regulations,
transfer of employees, work supervision, lay-off of workers
and the discipline, dismissal and recall of workers.

PEOPLES BROADCASTING SERVICE (BOMBO


RADYO PHILS., INC.) v. THE SECRETARY OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII, and
JANDELEON JUEZAN
G.R. No. 179652 6 March 2012
Velasco, Jr., J.:
JURISDICTION OF THE LABOR ARBITER
DOCTRINE:
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 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 DOLE finds that there is no employer-employee
relationship, the 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 with
the Labor Arbiter, under Art. 217(3) of the Labor Code,
which provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving wages,
rates of pay, hours of work, and other terms and
conditions of employment, if accompanied by a claim for
reinstatement. If a complaint is filed with the NLRC, and
there is still an existing employer-employee relationship,
the jurisdiction is properly with the DOLE. The findings of
the DOLE, however, may still be questioned through a
petition for certiorari under Rule 65 of the Rules of Court.
FACTS:
Jandeleon Juezan filed a complaint against petitioner with
the Department of Labor and Employment (DOLE), for
illegal deduction, nonpayment of service incentive leave,
13th month pay, premium pay for holiday and rest day and
illegal diminution of benefits, delayed payment of wages
and noncoverage of SSS, PAG-IBIG and Philhealth. The
DOLE Regional Director found that private respondent
was an employee of petitioner, and was entitled to his
money claims.
When the matter was brought before the CA it was held
that PBS was accorded due process as it had been given
the opportunity to be heard, and that the DOLE Secretary
had jurisdiction over the matter, as the jurisdictional

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limitation imposed by Article 129 of the Labor Code on the


power of the DOLE Secretary under Art. 128(b) of the
Code had been repealed by Republic Act No. (RA) 7730.
However, the SC found that there was no employeremployee relationship between PBS and and private
respo. It was held that while the DOLE may make a
determination of the existence of an employer-employee
relationship, this function could not be co-extensive with
the visitorial and enforcement power provided in Art.
128(b) of the Labor Code, as amended by RA 7730. The
National Labor Relations Commission (NLRC) was held to
be the primary agency in determining the existence of an
employer-employee relationship. This was the
interpretation of the Court of the clause in cases where the
relationship of employer-employee still exists in Art.
128(b).
From this Decision, the Public Attorneys Office (PAO) filed
a Motion for Clarification of Decision. The PAO sought to
clarify as to when the visitorial and enforcement power of
the DOLE be not considered as co-extensive with the
power to determine the existence of an employeremployee relationship. The DOLE also sought the same
clarification.
ISSUE: Is the NLRC the sole body with jurisdiction to
determine the existence of an employer-employee
relationship?
SC RULING:
NO. No procedure was laid down where the DOLE would
only make a preliminary finding, that the power was
primarily held by the NLRC. The law did not say that the
DOLE would first seek the NLRCs determination of the
existence of an employer-employee relationship, or that
should the existence of the employer-employee
relationship be disputed, the DOLE would refer the matter
to the NLRC. The DOLE must have the power to
determine whether or not an employer-employee
relationship exists, and from there to decide whether or
not to issue compliance orders in accordance with Art.
128(b) of the Labor Code, as amended by RA 7730.
The determination of the existence of an employeremployee relationship by the DOLE must be respected.
The expanded visitorial and enforcement power of the
DOLE granted by RA 7730 would be rendered nugatory if
the alleged employer could, by the simple expedient of
disputing the employer-employee relationship, force the
referral of the matter to the NLRC.
If the DOLE makes a finding that there is an existing
employer-employee relationship, it takes cognizance of
the matter, to the exclusion of the NLRC. The DOLE would
have no jurisdiction only if the employer-employee
relationship has already been terminated, or it appears,
upon review, that no employer-employee relationship
existed in the first place.
It must also be remembered that the power of the DOLE to
determine the existence of an employer-employee

relationship need not necessarily result in an affirmative


finding. The DOLE may well make the determination that
no employer-employee relationship exists, thus divesting
itself of jurisdiction over the case. It must not be precluded
from being able to reach its own conclusions, not by the
parties, and certainly not by the SC.
To recapitulate, 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 a
finding by the DOLE that there is an existing employeremployee relationship, the DOLE exercises jurisdiction to
the exclusion of the NLRC. If the DOLE finds that there is
no employer-employee relationship, the 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 with the Labor Arbiter, under
Art. 217(3) of the Labor Code, which provides that the
Labor Arbiter has original and exclusive jurisdiction over
those cases involving wages, rates of pay, hours of work,
and other terms and conditions of employment, if
accompanied by a claim for reinstatement. If a complaint
is filed with the NLRC, and there is still an existing
employer-employee relationship, the jurisdiction is
properly with the DOLE. The findings of the DOLE,
however, may still be questioned through a petition for
certiorari under Rule 65 of the Rules of Court.

EX-BATAAN VETERANS SECURITY AGENCY, INC.,


(EBVSAI) v. THE SECRETARY OF LABOR
BIENVENIDO E. LAGUESMA
G.R. No. 152396 November 20, 2007 CARPIO, J.:
THE VISITORIAL AND ENFORCEMENT POWERS OF
THE DOLE REGIONAL DIRECTOR CAN BE
EXERCISED EVEN WHERE THE INDIVIDUAL CLAIM
EXCEEDS P5,000
DOCTRINE: While it is true that under Articles 129 and
217 of the Labor Code, the LA has jurisdiction to hear and
decide cases where the aggregate money claims of each
employee exceeds P5,000.00, said provisions of law do
not contemplate nor cover the visitorial and enforcement
powers of the Secretary of Labor or his duly authorized
representatives. Rather, said powers are defined and set
forth in Article 128 of the Labor Code.
FACTS: Private respondents are EBVSAI's employees
who instituted a complaint for underpayment of wages
against EBVSAI before the Regional Office (RO) of DOLE.
Consequently, RO conducted a complaint inspection of
EBVSAIs Plant where several labor law violations were
noted. On the same day, the RO issued a notice of
hearing requiring EBVSAI and private 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 motion for reconsideration and alleged that
under Articles 129 and 217(6) of the Labor Code, the
Labor Arbiter, not the Regional Director, has exclusive and

3H SBC LAW 2016-17 - Labor Relations Atty. Golangco Compiled by Rent XV

original jurisdiction over the case because the individual


monetary claim of private respondents exceeds P5,000.
RD denied the motion stating that, pursuant to RA 7730,
the limitations under Articles 129 and 217(6) of the Labor
Code no longer apply to the Secretary of Labor's visitorial
and enforcement powers under Article 128(b). The
Secretary of Labor or his duly authorized representatives
are now empowered to hear and decide, in a summary
proceeding, any matter involving the recovery of any
amount of wages and other monetary claims arising out of
employer-employee relations at the time of the inspection.
DOLE SECRETARY RULING: It affirmed the Directors
decision on the ground that pursuant to RA 7730, the
Court's decision in the Servando case is no longer
controlling insofar as the restrictive effect of Article 129 on
the visitorial and enforcement power of the Secretary of
Labor is concerned.
CA RULING: affirmed DOLE Secretary ruling
ISSUE: Whether the Secretary of Labor or his duly
authorized representatives have jurisdiction over the
money claims of private respondents which exceed
P5,000?
SC RULING: YES. In Allied Investigation Bureau, Inc. v.
Sec. of Labor, SC ruled that while it is true that under
Articles 129 and 217 of the Labor Code, the LA has
jurisdiction to hear and decide cases where the aggregate
money claims of each employee exceeds P5,000.00, said
provisions of law do not contemplate nor cover the
visitorial and enforcement powers of the Secretary of
Labor or his duly authorized representatives. Rather, said
powers are defined and set forth in Article 128 of the
Labor Code (as amended by R.A. 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-employee still exists, the
Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance
orders to give effect to [the labor standards provisions of
this Code and other] labor legislation based on the
findings of labor employment and enforcement officers or
industrial safety engineers made in the course of
inspection.
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 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: (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 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 shall
raise such objections during the hearing of the case or at
any time after receipt of the notice of inspection results.

In this case, the RD validly assumed jurisdiction over the


money claims of private respondents even if the claims
exceeded P5,000 because such 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 contest the findings of the labor regulations officer
during the hearing or after receipt of the notice of
inspection results. It was only in its supplemental motion
for reconsideration before the RD that EBVSAI questioned
the findings of the labor regulations officer and presented
documentary evidence 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 documentary evidence and found that such did
not warrant the reversal of the order.

ARSENIO LOCSIN v. NISSAN CAR LEASE PHILS., INC.


(NCLPI) and LUIS BANSON
G.R. No. 185567 October 20, 2010
BRION, J.:
LA HAS NO JURISDICTION OVER INTRACORPORATE CONTROVERSY
DOCTRINE:
Given Locsins status as a corporate officer, the RTC, not
the Labor Arbiter or the NLRC, has jurisdiction to hear the
legality of the termination of his relationship with Nissan. A
corporate officers dismissal is always a corporate act, or
an intra-corporate controversy which arises between a
stockholder and a corporation so that RTC should
exercise jurisdiction based on Section 5(c) of PD 902-A.
FACTS:
Locsin was elected Executive Vice President and
Treasurer (EVP/Treasurer) of NCLPI. Locsin held this
position for 13 years until he was nominated and elected
Chairman. A few months thereafter, an election was held
and Locsin was neither re-elected Chairman nor reinstated
to his previous position as EVP/Treasurer. Locsin filed a
complaint for illegal dismissal before the Labor Arbiter
against NCLPI. NCLPI filed a Motion to Dismiss on the
ground that the Labor Arbiter did not have jurisdiction over
the case since the issue of Locsins removal as
EVP/Treasurer involves an intra-corporate dispute. Locsin
maintained that he is an employee of NCPI.
LA RULING: LA denied the Motion to Dismiss, holding
that its office-acquired jurisdiction to arbitrate and/or
decide the instant complaint finding extant in the case an
employer-employee relationship. Article 280 of the Labor
Code, the receipt of salaries by Locsin, SSS deductions
on that salary, and the element of control in the
performance of work duties were used by LA to conclude
that Locsin was a regular employee.
CA RULING: NCLPI elevated the case to the CA through
a Petition for Certiorari under Rule 65 of the Rules of
Court. CA ruled that Locsin was a corporate officer; hence
the issue of his removal as EVP/Treasurer is an intracorporate dispute under the RTCs jurisdiction. The fact

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that the position of EVP/Treasurer is specifically


enumerated as an office in the corporations by-laws
makes him a corporate officer.
ISSUE: Whether Locsins position as EVP/Treasurer
makes him a corporate officer thereby excluding him from
the coverage of the Labor Code?
SC RULING:
YES. Locsin was undeniably Chairman and President, and
was elected to these positions by the Nissan board
pursuant to its By-laws. As such, he was a corporate
officer, not an employee. Section 25 of the Corporation
Code provides that corporate officers are the president,
secretary, treasurer and such other officers as may be
provided for in the by-laws.

with Anastacias estate, which included her shareholdings


in Zenith. Zenith and Rodrigo filed a derivative suit with
SEC (now RTC) against Oscar in order to obtain an
accounting of the funds and assets of Zenith which are
now in the possession of Oscar and to determine the
shares of stock of deceased spouses that were arbitrarily
and fraudulently appropriated by Oscar for himself and
which were not collated and taken into account in the
partition, distribution, and/or settlement of the estate.
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 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
Anastacia that is outside the jurisdiction of a RTC.

Even as EVP/Treasurer, Locsin already acted as a


corporate officer because such position is provided for in
Nissans By-Laws. An office is created by the charter of the
corporation and the officer is elected by the directors or
stockholders. On the other hand, an employee usually
occupies no office and generally is employed by the
managing officer of the corporation who also determines
the compensation to be paid to such employee. Locsin
was elected by the NCLPI Board, in accordance with the
Amended By-Laws of the corporation.

RTC RULING: RTC denied the motion as to the action for


determination of the shares of stock of deceased allegedly
taken by Oscar, its accounting and the corresponding
delivery of these shares since it is not a derivative suit and
should properly be threshed out in a petition for settlement
of estate. However, the action with respect to the
derivative suit for accounting of the funds and assets of
the corporation which are in the control, custody, and/or
possession of the Oscar was not dismissed and was taken
cognizance of by RTC.

Given Locsins status as a corporate officer, the RTC, not


the Labor Arbiter or the NLRC, has jurisdiction to hear the
legality of the termination of his relationship with Nissan. A
corporate officers dismissal is always a corporate act, or
an intra-corporate controversy which arises between a
stockholder and a corporation so that RTC should
exercise jurisdiction based on Section 5(c) of PD 902-A.

CA RULING: affirmed the RTC order

OSCAR C. REYES vs. HON. REGIONAL TRIAL COURT


OF MAKATI, Branch 142, ZENITH INSURANCE
CORPORATION, and RODRIGO C. REYES
G.R. No. 165744 August 11, 2008 BRION, J.:
JURISDICTION OF SPECIAL COMMERCIAL COURTS
DOCTRINE: Without the settlement of Anastacias estate,
there can be no definite partition and distribution of the
estate to the heirs. Without the partition and distribution,
there can be no registration of the transfer. And without
the registration, we cannot consider the transferee-heir a
stockholder who may invoke the existence of an intracorporate relationship as premise for an intra-corporate
controversy within the jurisdiction of a special commercial
court.
FACTS: Oscar and private respondent Rodrigo C. Reyes
(Rodrigo) are the children of the spouses Pedro and
Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo
each owned shares of stock of Zenith Insurance
Corporation (Zenith). Pedro died in 1964, while Anastacia
died in 1993. Although Pedros estate was judicially
partitioned among his heirs sometime in the 1970s, no
similar settlement and partition appear to have been made

ISSUE: Whether the special commercial court (RTC) have


jurisdiction over the subject matter of Rodrigos complaint?
SC RULING: NO. While Rodrigo holds shares of stock in
Zenith, he holds them in two capacities: in his own right
with respect to the 4,250 shares registered in his name,
and as one of the heirs of Anastacia Reyes with respect to
the 136,598 shares registered in her name. What is
material in resolving the issues of this case under the
allegations of the complaint is Rodrigos interest as an heir
since the subject matter of the present controversy centers
on the shares of stocks belonging to Anastacia, not on
Rodrigos personally-owned shares nor on his personality
as shareholder owning these shares.
Hence, Rodrigo must first prove that there are
shareholdings that will be left to him and his co-heirs, and
this can be determined only in a settlement of the
decedents estate. No such proceeding has been
commenced to date. Without the settlement of Anastacias
estate, there can be no definite partition and distribution of
the estate to the heirs. Without the partition and
distribution, there can be no registration of the transfer.
And without the registration, we cannot consider the
transferee-heir a stockholder who may invoke the
existence of an intra-corporate relationship as premise for
an intra-corporate controversy within the jurisdiction of a
special commercial court.

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LESLIE OKOL v. SLIMMERS WORLD


INTERNATIONAL, BEHAVIOR MODIFICATIONS, INC.,
and RONALD JOSEPH MOY
G.R. No. 160146 DECEMBER 11, 2009
CARPIO, J.:
LA HAS NO JURISDICTION OVER INTRACORPORATE CONTROVERSY
DOCTRINE:
In a number of cases, SC held that a corporate officers
dismissal is always a corporate act, or an intra-corporate
controversy which arises between a stockholder and a
corporation. The question of remuneration involving a
stockholder and officer, not a mere employee, is not a
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 Corporation
Code.
FACTS:
Respondent Slimmers World International operating under
the name Behavior Modifications, Inc. (Slimmers World)
employed petitioner Leslie Okol (Okol) as a management
trainee. Okol was promoted as Head Office Manager and
then Director and Vice President. Okols services was
terminated by Slimmers World due to the seizure by the
Bureau of Customs of machines and treadmills to or
consigned to Slimmers World but the shipment of the
equipment was placed under the name of Okol.
Okol filed an illegal dismissal complaint with the LA.
Respondents filed a Motion to Dismiss asserting that the
NLRC had no jurisdiction over the subject matter of the
complaint. Okol argued that even as vice-president, the
work that she performed conforms to that of an employee
rather than a corporate officer. Mere title or designation in
a corporation will not, by itself, determine the existence of
an employer-employee relationship.

the corporation who also determines the compensation to


be paid to such employee.
The Amended By-Laws of Slimmers World which
enumerate the power of the board of directors as well as
the officers of the corporation clearly shows that Okol was
a director and officer of Slimmers World. In a number of
cases, SC held that a corporate officers dismissal is
always a corporate act, or an intra-corporate controversy
which arises between a stockholder and a corporation.
The question of remuneration involving a stockholder and
officer, not a mere employee, is not a 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 Corporation Code.

RURAL BANK OF CORON (PALAWAN), INC., EMPIRE


COLD STORAGE AND DEVELOPMENT
CORPORATION, CITIZENS DEVELOPMENT
INCOPRORATED (CDI), CARIDAD B. GARCIA,
SANDRA G. ESCAT, LORNA GARCIA, and OLGA G.
ESCAT v. ANNALISA CORTES
G.R. No. 164888 December 6, 2006
CARPIO MORALES, J.:
JURISDICTION OF LA; POSTING A BOND IS A
REQUIREMENT FOR PERFECTION OF APPEAL TO
NLRC
DOCTRINE:
(1) While respondent was the Corporate Secretary of the
Rural Bank of Coron, she was also its Financial Assistant
and the Personnel Officer of the two other petitioner
corporations. A corporation can engage its corporate
officers to perform services under a circumstance which
would make them employees. The Labor Arbiter has thus
jurisdiction over respondents complaint.

LA RULING: LA granted the motion to dismiss ruling that


Okol was the vice-president of Slimmers World at the time
of her dismissal. Since it involved a corporate officer, the
dispute was an intra-corporate controversy falling outside
the jurisdiction of the Arbitration branch.

(2) All that is required to perfect the appeal is the posting


of a bond to ensure that the award is eventually paid
should the appeal be dismissed. Petitioners should thus
have posted a bond, even if it were only partial, but they
did not.

NLRC RULING: It reversed the LA decision

FACTS:
Respondent was the Financial Assistant, Personnel
Officer and Corporate Secretary of The Rural Bank of
Coron, Personnel Officer of CDI, and also Personnel
Officer and Disbursing Officer of The Empire Cold Storage
Development Corporation (ECSDC). She simultaneously
received salaries from these corporations. On examination
of the financial books of the corporations, it was
discovered that respondent was involved in several
anomalies, drawing petitioners to terminate respondents
services. Respondent filed a complaint5 for illegal
dismissal and non-payment of salaries and other benefits
before the LA. Petitioners moved for the dismissal of the
complaint on the ground of lack of jurisdiction, contending
that the case was an intra-corporate controversy involving
the removal of a corporate officer, respondent being the
Corporate Secretary of the Rural Bank of Coron, Inc.,

CA RULING: It affirmed LAs ruling holding that being an


intra-corporate dispute, the case falls within the jurisdiction
of the regular courts pursuant to Republic Act No. 8799.
ISSUE: Does NLRC have jurisdiction over the illegal
dismissal case filed by petitioner?
SC RULING:
NO. Section 25 of the Corporation Code enumerates
corporate officers as the president, secretary, treasurer
and such other officers as may be provided for in the bylaws. An office is created by the charter of the corporation
and the officer is elected by the directors or stockholders.
On the other hand, an employee usually occupies no
office and generally is employed not by action of the
directors or stockholders but by the managing officer of

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hence, cognizable by the Securities and Exchange


Commission (SEC) (now RTC) pursuant to Section 5 of
PD 902-A.

HALGUENA v. PAL
G.R. No. 172013 October 2, 2009
PERALTA, J.:

LA RULING: LA assumed jurisdiction ruling that aside


from her being Corporate Secretary of Rural Bank of
Coron, complainant was likewise appointed as Financial
Assistant & Personnel Officer, which is not a corporate
officer of petitioners. LA ordered petitioners to pay
respondent P1,168,090.00.

JURISDICTION OF LABOR ARBITER

NLRC RULING: On the tenth or last day of the period of


appeal, petitioners filed a Notice of Appeal and Motion for
Reduction of Bond to which they attached a Memorandum
on Appeal. In their Motion for Reduction of Bond,
petitioners alleged that the corporations were under
financial distress and the Rural Bank of Coron was under
receivership. NLRC, while noting that petitioners timely
filed the appeal, held that the same was not accompanied
by an appeal bond, a mandatory requirement under Article
223 of the Labor Code and Section 6, Rule VI of the NLRC
New Rules of Procedure. It also noted that the Motion for
Reduction of Bond was "premised on self-serving
allegations." It accordingly dismissed the appeal.
ISSUES:
1. Whether LA has jurisdiction over the case?
2. Whether petitioners appeal before NLRC was
perfected?
SC RULING:
1. YES. While respondent was the Corporate Secretary of
the Rural Bank of Coron, she was also its Financial
Assistant and the Personnel Officer of the two other
petitioner corporations. Mainland Construction Co., Inc. v.
Movilla instructs that a corporation can engage its
corporate officers to perform services under a
circumstance which would make them employees. The
Labor Arbiter has thus jurisdiction over respondents
complaint.
2. NO. All that is required to perfect the appeal is the
posting of a bond to ensure that the award is eventually
paid should the appeal be dismissed. Petitioners should
thus have posted a bond, even if it were only partial, but
they did not. In the case at bar, petitioner did not post a full
or partial appeal bond within the prescribed period, thus,
no appeal was perfected from the decision of the LA. For
this reason, the decision sought to be appealed to the
NLRC had become final and executory and therefore
immutable. No relaxation of the Rule may thus be
considered. Clearly then, the NLRC has no authority to
entertain the appeal, much less to reverse the decision of
the LA.

DOCTRINE:
Not every controversy or money claim by an employee
against the employer or vice-versa is within the exclusive
jurisdiction of the labor arbiter. Actions between
employees and employer where the employer-employee
relationship is merely incidental and the cause of action
precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court.
FACTS:
Petitioners were employed as female flight attendants of
PAL. They are members of the Flight Attendants and
Stewards Association of the Philippines (FASAP), the
exclusive exclusive bargaining representative of the flight
attendants.Section 144, Part A of the PAL-FASAP CBA,
provides that: 3. Compulsory Retirement. Subject to the
grooming standards provisions of this Agreement,
compulsory retirement shall be fifty-five (55) for females
and sixty (60) for males. x x x. petitioners and several
female cabin crews manifested that the aforementioned
CBA provision on compulsory retirement is discriminatory,
and demanded for an equal treatment with their male
counterparts. This demand was reiterated in a letter. On
July 12, 2004, Robert D. Anduiza, President of FASAP
submitted their 2004-2005 CBA proposals[6] and
manifested their willingness to commence the collective
bargaining negotiations between the management and the
association, at the soonest possible time.
In 2004, petitioners filed a Special Civil Action for
Declaratory Relief with Prayer for the Issuance of TRO
and Writ of Preliminary Injunction with the Regional Trial
Court (RTC) of Makati Cityagainst respondent for the
invalidity of Section 144, Part A of the PAL-FASAP CBA.
RTC RULING: The RTC issued an Order upholding its
jurisdiction over the present case. The RTC reasoned that:
The allegations in the Petition do not make out a labor
dispute arising from employer-employee relationship as
none is shown to exist. This case is not directed
specifically against respondent arising from any act of the
latter, nor does it involve a claim against the respondent.
Rather, this case seeks a declaration of the nullity of the
questioned provision of the CBA, which is within the
Court's competence, with the allegations in the Petition
constituting the bases for such relief sought.
The RTC issued a TRO on August 10, 2004, enjoining the
respondent for implementing Section 144, Part A of the
PAL-FASAP CBA.
CA RULING: declared RTC to have NO JURISDICTION
OVER THE CASE
ISSUE: Does the RTC have jurisdiction over the
petitioners' action challenging the legality or

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constitutionality of the provisions on the compulsory


retirement age contained in the CBA between respondent
PAL and FASAP?

SANTIAGO v. CF SHARP CREW MANAGEMENT


G.R. No. 162419 July 10, 2007
TINGA, J.:

SC RULING:
YES. 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.

JURISDICTION OF LABOR ARBITER

The said issue cannot be resolved solely by applying the


Labor Code. Rather, it requires the application of the
Constitution, labor statutes, law on contracts and the
Convention on the Elimination of All Forms of
Discrimination Against Women, and the power to apply
and interpret the constitution and CEDAW is within the
jurisdiction of trial courts, a court of general jurisdiction. In
Georg Grotjahn GMBH & Co. v. Isnani, this Court 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 quasijudicial 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.
Not every controversy or money claim by an employee
against the employer or vice-versa is within the exclusive
jurisdiction of the labor arbiter. Actions between
employees and employer where the employer-employee
relationship is merely incidental and the cause of action
precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court. Here, the
employer-employee relationship between the parties is
merely incidental and the cause of action ultimately arose
from different sources of obligation, i.e., the Constitution
and CEDAW.
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.

DOCTRINE:
The jurisdiction of labor arbiters is not limited to claims
arising from employer-employee relationships.
FACTS:
In 1998, Paul Santiago signed a new contract of
employment with CF Sharp Crew Mgmt., Inc., with the
duration of nine (9) months. He was assured of a monthly
salary of US$515.00, overtime pay and other benefits.
Santiago was to be deployed on board the "MSV
Seaspread". A week before the scheduled date of
departure, Capt. Pacifico Fernandez, CF Sharps Vice
President, sent a fax to the captain of "MSV Seaspread
telling the latter that he received calls from various
individuals about the possibility that Santiago may jump
ship in Canada like his brother did before him. Santiago
was thus told that he would not be leaving for Canada
anymore, but he was reassured that he might be
considered for deployment at some future date.
Consequently, Santiago filed a complaint for illegal
dismissal, damages, and attorney's fees against CF Sharp
and its foreign principal. In defense, CF Sharp contends
that there is no employer-employee relationship between
petitioner and respondent because under the POEA
Standard Contract, the employment contract shall
commence upon actual departure of the seafarer from the
airport or seaport at the point of hire. In the absence of an
employer-employee relationship between the parties, the
claims for illegal dismissal, actual damages, and attorneys
fees should be dismissed as the NLRC does not have
jurisdiction over the same.
LA RULING: The labor arbiter held respondent liable
NLRC RULING: (NLRC) ruled that there is no employeremployee relationship between petitioner and respondent
because under the Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board
Ocean Going Vessels (POEA Standard Contract), 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. In the
absence of an employer-employee relationship between
the parties, the claims for illegal dismissal, actual
damages, and attorneys fees should be dismissed.
CA RULING: It agreed with the NLRCs finding that
petitioners non-deployment was a valid exercise of
respondents management prerogative.
ISSUE: Does the NLRC have jurisdiction over the case?
SC RULING:
YES. The jurisdiction of labor arbiters is not limited to
claims arising from employer-employee relationships.

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Section 10 of R.A. No. 8042 (Migrant Workers Act),


provides that:

acknowledged receipt of a written notice of dismissal, with


his separation pay.

Sec. 10. Money Claims. Notwithstanding any provision of


law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after the filing of the
complaint, the 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.
xxx

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 managementdominated union.

Since the present petition involves the employment


contract entered into by petitioner for overseas
employment, his claims are cognizable by the labor
arbiters of the NLRC.

LA RULING: The labor arbiter dismissed their complaints


on the ground that the grievance machinery in the
collective bargaining agreement (CBA) had not 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 of sympathy on petitioners
part to engage in conciliation proceedings.
NLRC RULING: NLRC reversed the labor arbiters
decision.

ATLAS FARMS, INC. v. NLRC


G.R. No. 142244 November 18, 2002
QUISUMBING, J.:
JURISDICTION OF LABOR ARBITER
DOCTRINE:
Where the dispute is just in the interpretation,
implementation or enforcement stage, it may be referred
to the grievance machinery set up in the CBA, or brought
to voluntary arbitration. But, where there was already
actual termination, with alleged violation of the employees
rights, it is already cognizable by the labor arbiter.
FACTS:
Private respondent Jaime O. dela Pea was employed as a
veterinary aide by petitioner. He was among several
employees terminated in July 1989. On 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 feedmill.
In 1993, Pea was allegedly caught urinating and
defecating on company premises not intended for the
purpose. The farm manager of petitioner issued a formal
notice directing him to explain within 24 hours why
disciplinary action should not be taken against him. Pea
refused, however, to receive the formal notice. He never
bothered to explain. Thus, a notice of termination with
payment of his monetary benefits was sent to him.
Co-respondent Marcial I. Abion was a carpenter/mason
and a maintenance man whose employment by petitioner.
Allegedly, he caused the clogging of the fishpond drainage
resulting in damages worth several hundred thousand
pesos when he improperly disposed of the cut grass and
other waste materials into the ponds drainage system.
Petitioner sent a written notice to Abion, requiring him to
explain what happened, otherwise, disciplinary action
would be taken against him. He refused to receive the
notice and give an explanation, according to petitioner.
Consequently, the company terminated his services. He

CA RULING: The appellate court denied the petition and


affirmed the NLRC resolution with some modifications,
thus: 1) The private respondents can not be reinstated,
due to their acceptance of the separation pay offered by
the petitioner; 2) The private respondents are entitled to
their full back wages; and, 3) The amount of the
separation pay received by private respondents from
petitioner shall not be deducted from their full back wages.
ISSUE: Does the LA and NLRC have jurisdiction over the
case?
SC RULING:
YES. Coming to the merits of the petition, the NLRC found
that petitioner did not 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, 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 receive the
notices requiring them to show cause why no disciplinary
action should be taken against them. Without proof of
notice, private respondents who were subsequently
dismissed without hearing were also deprived of a chance
to air their side at the level of the grievance machinery.
Given the fact of dismissal, it can be said that the cases
were effectively removed from the jurisdiction of the
voluntary arbitrator, thus placing them within the
jurisdiction of the labor arbiter. Where the dispute is just in
the interpretation, implementation or enforcement stage, it
may be referred to the grievance machinery set up in the
CBA, or brought to voluntary arbitration. But, where there
was already actual termination, with alleged violation of
the employees rights, it is already cognizable by the labor
arbiter.

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PERPETUAL HELP CREDIT COOPERATIVE, INC.


(PHCCI) v. BENEDICTO FABURADA
G.R. No. 121948. October 8, 2001
SANDOVAL-GUTIERREZ, J.:
JURISDICTION OF LABOR ARBITER
DOCTRINE:
The dispute is about payment of wages, overtime pay, rest
day and termination of employment. Under Art. 217 of the
Labor Code, these disputes are within the original and
exclusive jurisdiction of the Labor Arbiter.
FACTS:
Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and
Harold Catipay, private respondents, filed a complaint
against petitioner, with the Arbitration Branch, DOLE for
illegal dismissal, premium pay on holidays and rest days,
separation pay, wage differential, moral damages, and
attorneys fees.
Petitioner PHCCI filed a motion to dismiss the complaint
on the ground that there is no employer-employee
relationship between them as private respondents are all
members and co-owners of the cooperative and they have
not exhausted the remedies provided in the cooperative
by-laws. Petitioner filed a supplemental motion to dismiss
alleging that Article 121 of R.A. No. 6939 or the
Cooperative Development Authority Law which took effect
on March 26, 1990, requires conciliation or mediation
within the cooperative before a resort to judicial
proceeding.
LA RULING: The Labor Arbiter denied petitioner's motion
to dismiss, holding that the case is impressed with
employer-employee relationship and that the law on
cooperatives is subservient to the Labor Code.
NLRC RULING: NLRC affirmed the Labor Arbiter's
decision
CA RULING: The appellate court denied the petition and
affirmed the NLRC resolution with some modifications,
thus: 1) The private respondents cannot be reinstated, due
to their acceptance of the separation pay offered by the
petitioner; 2) The private respondents are entitled to their
full back wages; and, 3) The amount of the separation pay
received by private respondents from petitioner shall not
be deducted from their full back wages.
ISSUE: Does the LA have jurisdiction over the case?
SC RULING:
YES. As aptly stated by the Solicitor General in his
comment, P.D. 175 (strengthening the Cooperative
Movement) does not provide for a grievance machinery
where a dispute or claim may first be submitted. LOI 23
refers to instructions to the Secretary of Public Works and
Communications to implement immediately the
recommendation of the Postmaster General for the
dismissal of some employees of the Bureau of Post.
Obviously, this LOI has no relevance to the instant case.

Article 121 of Republic Act No. 6938 (Cooperative Code of


the Philippines) provides the procedure how cooperative
disputes are to be resolved, thus:
ART. 121. Settlement of Disputes.- Disputes among
members, officers, directors, and committee members,
and intra-cooperative disputes shall, as far as practicable,
be settled amicably in accordance with the conciliation or
mediation mechanisms embodied in the bylaws of the
cooperative, and in applicable laws.
Should such a conciliation/mediation proceeding fail, the
matter shall be settled in a court of competent jurisdiction.
Complementing this Article is Section 8 of R.A. No. 6939
(Cooperative Development Authority Law) which reads:
SEC. 8 Mediation and Conciliation.- Upon request of either
or both parties, the Authority shall mediate and conciliate
disputes within a cooperative or between cooperatives:
Provided, That if no mediation or conciliation succeeds
within three (3) months from request thereof, a certificate
of non-resolution shall be issued by the Commission prior
to the filing of appropriate action before the proper courts.
The above provisions apply to members, officers and
directors of the cooperative involved in disputes within a
cooperative or between cooperatives.
There is no evidence that private respondents are
members of petitioner PHCCI and even if they are, the
dispute is about payment of wages, overtime pay, rest day
and termination of employment. Under Art. 217 of the
Labor Code, these disputes are within the original and
exclusive jurisdiction of the Labor Arbiter.

AUSTRIA v. NLRC
G.R. No. 124382 August 16, 1999
KAPUNAN, J.:
JURISDICTION OF LABOR ARBITER
DOCTRINE:
Under the Labor Code, the provision which governs the
dismissal of employees, is comprehensive enough to
include religious corporations, such as the SDA, in its
coverage.
The active participation of a party against whom the action
was brought, coupled with his failure to object to the
jurisdiction of the court or quasi-judicial body where the
action is pending, is tantamount to an invocation of that
jurisdiction and a willingness to abide by the resolution of
the case and will bar said party from later on impugning
the court or bodys jurisdiction.
FACTS:
Private Respondent Central Philippine Union Mission
Corporation of the Seventh-Day Adventists (SDA) is a
religious corporation. Petitioner, on the other hand, was a

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Pastor of the SDA until 31 October 1991, when his


services were terminated.
Petitioner received several communications from Mr.
Eufronio Ibesate, the treasurer of the Negros Mission
asking him to admit accountability and responsibility for
the church tithes and offerings collected by his wife, Mrs.
Thelma Austria, in his district which amounted to
P15,078.10, and to remit the same to the Negros Mission.
Petitioner reasoned out that he should not be made
accountable since it was private respondents Pastor
Gideon Buhat and Mr. Eufronio Ibesate who authorized his
wife to collect the tithes and offerings since he was very
sick to do the collecting at that time.
On 16 October 1991,Petitioner went to the office of Pastor
Buhat, the president of the Negros Mission. During said
call, petitioner tried to persuade Pastor Buhat to convene
the Executive Committee for the purpose of settling the
dispute between him and the private respondent, Pastor
David Rodrigo. The dispute between Pastor Rodrigo and
petitioner arose from an incident in which petitioner
assisted his friend, Danny Diamada, to collect from Pastor
Rodrigo the unpaid balance for the repair of the latters
motor vehicle which he failed to pay to Diamada. Due to
the assistance of petitioner in collecting Pastor Rodrigos
debt, the latter harbored ill-feelings against petitioner.
When news reached petitioner that Pastor Rodrigo was
about to file a complaint against him with the Negros
Mission, he immediately proceeded to the office of Pastor
Buhat on the date abovementioned and asked the latter to
convene the Executive Committee. Pastor Buhat denied
the request of petitioner since some committee members
were out of town and there was no quorum. Thereafter,
the two exchanged heated arguments.
A fact-finding committee was created to investigate
petitioner. Subsequently, petitioner received a letter of
dismissal citing misappropriation of denominational funds,
willful breach of trust, serious misconduct, gross and
habitual neglect of duties, and commission of an offense
against the person of employers duly authorized
representative, as grounds for the termination of his
services.
Reacting against the adverse decision of the SDA,
petitioner filed a complaint before the Labor Arbiter for
illegal dismissal against the SDA and its officers and
prayed for reinstatement with backwages and benefits,
moral and exemplary damages and other labor law
benefits.
Private respondents contend that by virtue of the doctrine
of separation of church and state, the Labor Arbiter and
the NLRC have no jurisdiction to entertain the complaint
filed by petitioner. Since the matter at bar allegedly
involves the discipline of a religious minister, it is to be
considered a purely ecclesiastical affair to which the State
has no right to interfere.
LA RULING: The Labor Arbiter RENDERED DECISION
IN FAVOR OF PETITIONER.

NLRC RULING: sustained the argument posed by private


respondents and, accordingly, dismissed the complaint of
petitioner.
ISSUE: Does the LA have jurisdiction over the case?
SC RULING:
YES. Under the Labor Code, the provision which governs
the dismissal of employees, is comprehensive enough to
include religious corporations, such as the SDA, in its
coverage. Article 278 of the Labor Code on postemployment states that the provisions of this Title shall
apply to all establishments or undertakings, whether for
profit or not. Obviously, the cited article does not make
any exception in favor of a religious corporation. This is
made more evident by the fact that the Rules
Implementing the Labor Code, particularly, Section 1, Rule
1, Book VI on the Termination of Employment and
Retirement, categorically includes religious institutions in
the coverage of the law, to wit:
Section 1. Coverage. This Rule shall apply to all
establishments and undertakings, whether operated for
profit or not, including educational, medical, charitable and
religious institutions and organizations, in cases of regular
employment with the exception of the Government and its
political subdivisions including government-owned or
controlled corporations.
With this clear mandate, the SDA cannot hide behind the
mantle of protection of the doctrine of separation of church
and state to avoid its responsibilities as an employer under
the Labor Code.
Finally, as correctly pointed out by petitioner, private
respondents are estopped from raising the issue of lack of
jurisdiction for the first time on appeal. It is already too late
in the day for private respondents to question the
jurisdiction of the NLRC and the Labor Arbiter since the
SDA had fully participated in the trials and hearings of the
case from start to finish. The Court has already ruled that
the active participation of a party against whom the action
was brought, coupled with his failure to object to the
jurisdiction of the court or quasi-judicial body where the
action is pending, is tantamount to an invocation of that
jurisdiction and a willingness to abide by the resolution of
the case and will bar said party from later on impugning
the court or bodys jurisdiction. Thus, the active
participation of private respondents in the proceedings
before the Labor Arbiter and the NLRC mooted the
question on jurisdiction.

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DEPARTMENT OF FOREIGN AFFAIRS v. NATIONAL


LABOR RELATIONS COMMISSION, HON. LABOR
ARBITER NIEVES V. DE CASTRO and JOSE C.
MAGNAYI
G.R. No. 113191 September 18, 1996
VITUG, J.:
ART. 217
DOCTRINE:
The stipulations of both the Charter and Headquarters
Agreement should be able, may well enough, to establish
that, except in the specified cases of borrowing and
guarantee operations, as well as the purchase, sale and
underwriting of securities, the ADB enjoys immunity from
legal process of every form. Thus, the decision of the
Labor Arbiter is rendered vacant for being null and void.
FACTS:
Jose Magnayi initiated case for his alleged illegal
dismissal by ADB and the latter's violation of the "laboronly" contracting law. Two summonses were served, one
sent directly to the ADB and the other through DFA, both
with a copy of the complaint. Forthwith, the ADB and the
DFA notified respondent Labor Arbiter that the ADB, as
well as its President and Officers, were covered by an
immunity from legal process except for borrowings,
guaranties or the sale of securities pursuant to its Charter
in relation to Headquarters Agreement of ADB and the
Government.
LA RULING: The Labor Arbiter took cognizance of the
complaint on the impression that the ADB had waived its
diplomatic immunity from suit. Labor Arbiter concluded
(that there Magnayi is illegally dismissed): The ADB did
not appeal. Instead, the DFA sought a "formal vacation of
the void judgment from NLRC.
NLRC CHAIRMAN: The defense of immunity could have
been raised before the Labor Arbiter by a special
appearance which, naturally, may NOT be considered as
a waiver of the very defense being raised. Except where
an appeal is seasonably and properly made, neither the
Commission nor the NLRC Chairman may review, or even
question, the propriety of any decision by a Labor Arbiter.
Incidentally, the Commission sits en banc (all fifteen
Commissioners) only to promulgate rules of procedure or
to formulate policies (Art. 213, Labor Code).
"If the Department of Foreign Affairs feels that the action
of Labor Arbiter Nieves de Castro constitutes misconduct,
malfeasance or misfeasance, it is suggested that an
appropriate complaint be lodged with the Office of the
Ombudsman.
Dissatisfied, the DFA lodged the instant petition for
certiorari.
OSG in its comment initially assailed the claim of immunity
by the ADB. Subsequently, however, it submitted a
Manifestation stating, that ADB, indeed, was correct in

invoking its immunity from suit under the Charter and the
Headquarters Agreement.
ISSUE: Is ADB covered by immunity rendering NLRC
without jurisdiction?
SC RULING:
YES. The stipulations of both the Charter and
Headquarters Agreement should be able, may well
enough, to establish that, except in the specified cases of
borrowing and guarantee operations, as well as the
purchase, sale and underwriting of securities, the ADB
enjoys immunity from legal process of every form. The
Banks officers, on their part, enjoy immunity in respect of
all acts performed by them in their official capacity.
Diplomatic immunity is essentially a political question and
courts should refuse to look beyond a determination by the
executive branch of the government, and where the plea
of diplomatic immunity is recognized and affirmed by the
executive branch of the government x x x it is then the
duty of the courts to accept the claim of immunity upon
appropriate suggestion by the principal law officer of the
government, x x x or other officer acting under his
direction.
Being an international organization that has been
extended a diplomatic status, the ADB is independent of
the municipal law.
The Office of the President, likewise, has issued a letter to
the Secretary of Labor
"Despite information from DFA, the labor arbiter in
question persisted to send summons. Courts should
respect diplomatic immunities of foreign officials
recognized by the Philippine government.
There are two conflicting concepts of sovereign immunity,
each widely held and firmly established. According to the
classical or absolute theory, a sovereign cannot, without
its consent, be made a respondent in the Courts of
another sovereign. According to the newer or restrictive
theory, the immunity of the sovereign is recognized only
with regard to public acts or acts jure imperii of a state, but
not with regard to private act or acts jure gestionis.
The service contracts referred to by private respondent
have not been intended by the ADB for profit or gain but
are official acts over which a waiver of immunity would not
attach.
The DFA must be allowed to plead its case whenever
necessary or advisable to enable it to help keep the
credibility of the Philippine government before the
international community.
"In the United States, the procedure followed is the
process of 'suggestion,' where the foreign state or the
international organization sued in an American court
requests the Secretary of State to make a determination
as to whether it is entitled to immunity.

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"In the Philippines, the practice is for the foreign


government or the international organization to first secure
an executive endorsement of its claim of sovereign or
diplomatic immunity.
Decision of the Labor Arbiter is VACATED for being NULL
AND VOID.

PHILIPPINE NATIONAL BANK v. FLORENCE O.


CABANSAG
G.R. No. 157010 June 21, 2005
PANGANIBAN, J.:
DOCTRINE:
Philippine government requires non-Filipinos working in
the country to first obtain a local work permit in order to be
legally employed here. That permit, however, does not
automatically mean that the non-citizen is thereby bound
by local laws only, as averred by petitioner. It does not at
all imply a waiver of ones national laws on labor. Absent
any clear and convincing evidence to the contrary, such
permit simply means that its holder has a legal status as a
worker in the issuing country.
All Filipino workers, whether employed locally or overseas,
enjoy the protective mantle of Philippine labor and social
legislations. Our labor statutes may not be rendered
ineffective by laws or judgments promulgated, or
stipulations agreed upon, in a foreign country.
FACTS:
Florence Cabansag] arrived in Singapore as a tourist. She
applied for employment, with the Singapore Branch of the
Philippine National Bank. At the time, too, the Branch
Office had two (2) types of employees: (a) expatriates or
the regular employees, hired in Manila and assigned
abroad including Singapore, and (b) locally (direct) hired.
Tobias, General Manager found her eminently qualified
recommending the appointment of Florence O. Cabansag,
for the position which was approved.
She then filed an Application, with the Ministry of
Manpower of the Government of Singapore, for the
issuance of an Employment Pass as an employee of the
Singapore PNB Branch. Her application was approved for
a period of two (2) years.
Cabansag submitted to Ruben C. Tobias, her initial
Performance Report. Ruben C. Tobias was so impressed
with the Report that he made a notation and, on said
Report: GOOD WORK. However, in the evening, she was
told by two (2) co-employees that Ruben C. Tobias has
asked them to tell Florence O. Cabansag to resign from
her job. Tobias confirmed the veracity of the information,
with the explanation that her resignation was imperative as
a cost-cutting measure of the Bank. She then asked
Ruben C. Tobias that she be furnished with a Formal
Advice from the PNB Head Office in Manila. However,
Tobias flatly refused. Florence O. Cabansag did not
submit any letter of resignation.

Tobias again summoned Florence O. Cabansag to his


office and demanded that she submit her letter of
resignation. For failure thereof, she received a letter from
Ruben C. Tobias terminating her employment with the
Bank.
LA RULING: rendered finding respondents guilty of Illegal
dismissal.
NLRC RULING: the NLRC affirmed that Decision.
CA RULING: CA noted that petitioner bank had failed to
adduce in evidence the Singaporean law supposedly
governing the latters employment Contract with
respondent. CA found that the Contract had actually been
processed by the Philippine Embassy in Singapore and
approved by POEA, which then used that Contract as a
basis for issuing an Overseas Employment Certificate in
favor of respondent.
Even though respondent secured an employment pass
from the Singapore Ministry of Employment, she did not
thereby waive Philippine labor laws, or the jurisdiction of
the labor arbiter or the NLRC over her Complaint for illegal
dismissal. Finally, the CA held that PNB had failed to
establish a just cause for the dismissal of respondent.
ISSUE: Whether or not the arbitration branch of the NLRC
in the National Capital Region has jurisdiction over the
instant controversy;
SC RULING:
YES. The jurisdiction of labor arbiters and the NLRC is
specified in Article 217.
More specifically, Section 10 of RA 8042 reads in part:
SECTION 10. Money Claims. Notwithstanding any
provision of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have
the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after the filing of the
complaint, the 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.
Based on the foregoing provisions, labor arbiters clearly
have original and exclusive jurisdiction over claims arising
from employer-employee relations, including termination
disputes involving all workers, among whom are overseas
Filipino workers (OFW).
Prior to employing respondent, petitioner had to obtain an
employment pass for her from the Singapore Ministry of
Manpower.
Similarly, the Philippine government requires non-Filipinos
working in the country to first obtain a local work permit in
order to be legally employed here. That permit, however,
does not automatically mean that the non-citizen is

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thereby bound by local laws only, as averred by petitioner.


It does not at all imply a waiver of ones national laws on
labor. Absent any clear and convincing evidence to the
contrary, such permit simply means that its holder has a
legal status as a worker in the issuing country.
Under Philippine law, this document authorized her
working status in a foreign country and entitled her to all
benefits and processes under our statutes. Thus, even
assuming arguendo that she was considered at the start of
her employment as a direct hire governed by and subject
to the laws, common practices and customs prevailing in
Singapore[17] she subsequently became a contract
worker or an OFW who was covered by Philippine labor
laws and policies upon certification by the POEA.
Undeniably, respondent was employed by petitioner in its
branch office in Singapore. Admittedly, she is a Filipino
and not a legal resident of that state. She thus falls within
the category of migrant worker or overseas Filipino
worker.
As such, it is her option to choose the venue of her
Complaint against petitioner for illegal dismissal. The law
gives her two choices: (1) at the Regional Arbitration
Branch (RAB) where she resides or (2) at the RAB where
the principal office of her employer is situated. Since her
dismissal by petitioner, respondent has returned to the
Philippines -- specifically to her residence at Filinvest II,
Quezon City. Thus, in filing her Complaint before the RAB
office in Quezon City, she has made a valid choice of
proper venue.
Notice and Hearing Not Complied With; No Valid Cause
for Dismissal. Cabansag was Illegally Dismissed.

BEBIANO M. BAEZ v. HON. DOWNEY C.


VALDEVILLA and ORO MARKETING, INC.
G.R. No. 128024 May 9, 2000 GONZAGA-REYES, J.:
DOCTRINE:
By the designating clause "arising from the employeremployee relations" Article 217 should apply with equal
force to the claim of an employer for actual damages
against its dismissed employee, where the basis for the
claim arises from or is necessarily connected with the fact
of termination, and should be entered as a counterclaim in
the illegal dismissal case.
This is, of course, to distinguish from cases of actions for
damages where the employer-employee relationship is
merely incidental and the cause of action proceeds from a
different source of obligation. Thus, the jurisdiction of
regular courts was upheld where the damages, claimed for
were based on tort, malicious prosecution, or breach of
contract, as when the claimant seeks to recover a debt
from a former employee or seeks liquidated damages in
enforcement of a prior employment contract.
FACTS: Bebiano Baez was the sales operations manager
of Oro Marketing in its branch in Iligan City Oro

"indefinitely suspended" petitioner and the latter filed a


complaint for illegal dismissal with NLRC.
Baez alleged a modus operandi used by Oro Marketing.
herein: Defendant canvassed customers personally or
through salesmen of plaintiff which were hired or recruited
by him. If said customer decided to buy items from plaintiff
on installment basis, defendant, without the knowledge of
said customer and plaintiff, would buy the items on cash
basis at ex-factory price, a privilege not given to
customers, and thereafter required the customer to sign
promissory notes and other documents using the name
and property of plaintiff, purporting that said customer
purchased the items from plaintiff on installment basis.
Thereafter, defendant collected the installment payments
either personally or through Venus Lozano, a Group Sales
Manager of plaintiff but also utilized by him as secretary in
his own business for collecting and receiving of
installments, purportedly for the plaintiff but in reality on
his own account or business. The collection and receipt of
payments were made inside the Iligan City branch using
plaintiffs facilities, property and manpower. That
accordingly plaintiffs sales decreased and reduced to a
considerable extent the profits which it would have earned.
LA RULING: Labor Arbiter found petitioner to have been
illegally dismissed.
NLRC RULING: dismissed the same for having been filed
out of time.
Elevated by petition for certiorari before the Supreme
Court, the case was dismissed on technical grounds[3];
and that even if all the procedural requirements for the
filing of the petition were met, it would still be dismissed for
failure to show grave abuse of discretion on the part of the
NLRC.
Oro filed a complaint for damages before RTC Misamis
Oriental which prayed for the payment of loss of profit
and/or unearned income and expenses of litigation.
Baez filed a motion to dismiss the above complaint. He
interposed in the court below that the action for damages,
having arisen from an employer-employee relationship,
was squarely under the exclusive original jurisdiction of
the NLRC. He accused Oro Marketing of splitting causes
of action, stating that the latter could very well have
included the instant claim for damages in its counterclaim
before the Labor Arbiter. He also pointed out that the civil
action of private respondent is an act of forum-shopping.
RTC RULING: A perusal of the complaint which is for
damages does not ask for any relief under the Labor
Code. The Court believes such cause of action is within
the realm of civil law, and jurisdiction over the controversy
belongs to the regular courts.
ISSUE: Whether RTC has jurisdiction over the case.
SC RULING: NO. Article 217(a), paragraph 4 of the Labor
Code,

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ART. 217. Jurisdiction of Labor Arbiters and the


Commission.
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
The above provisions are a result of the amendment by
Section 9 of R.A. No. 6715, which put to rest the earlier
confusion as to who between Labor Arbiters and regular
courts had jurisdiction over claims for damages as
between employers and employees.
By the designating clause "arising from the employeremployee relations" Article 217 should apply with equal
force to the claim of an employer for actual damages
against its dismissed employee, where the basis for the
claim arises from or is necessarily connected with the fact
of termination, and should be entered as a counterclaim in
the illegal dismissal case.
In the case before us, private respondent's claim against
petitioner for actual damages arose from a prior employeremployee relationship. In the first place, private
respondent would not have taken issue with petitioner's
"doing business of his own" had the latter not been
concurrently its employee.
Second, and more importantly, to allow respondent court
to proceed with the instant action for damages would be to
open anew the factual issue of whether petitioner's
installment sale scheme resulted in business losses and
the dissipation of private respondent's property. This issue
has been duly raised and ruled upon in the illegal
dismissal case. The Labor Arbiter, however, found to the
contrary ---that no business losses may be attributed to
petitioner as in fact, it was by reason of petitioner's
installment plan that the sales of the Iligan branch reached
its highest record level.
Evidently, the lawmaking authority had second thoughts
about depriving the Labor Arbiters and the NLRC of the
jurisdiction to award damages in labor cases because that
setup would mean duplicity of suits, splitting the cause of
action and possible conflicting findings and conclusions by
two tribunals on one and the same claim.
This is, of course, to distinguish from cases of actions for
damages where the employer-employee relationship is
merely incidental and the cause of action proceeds from a
different source of obligation. Thus, the jurisdiction of
regular courts was upheld where the damages, claimed for
were based on tort, malicious prosecution, or breach of
contract, as when the claimant seeks to recover a debt
from a former employee or seeks liquidated damages in
enforcement of a prior employment contract.
Furthermore, the Labor Arbiter has jurisdiction to award
not only the reliefs provided by labor laws, but also
damages governed by the Civil Code.

MA. ISABEL T. SANTOS, represented by ANTONIO P.


SANTOS, v. SERVIER PHILIPPINES, INC. and
NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 166377 November 28, 2008
NACHURA, J.:
DOCTRINE:
The issue of deduction for tax purposes is intertwined with
the main issue of whether or not petitioners benefits have
been fully given her. It is, therefore, a money claim arising
from the employer-employee relationship, which clearly
falls within the jurisdiction of the Labor Arbiter and the
NLRC.
FACTS:
Ma. Isabel T. Santos was the Human Resource Manager
of respondent Servier Philippines, Inc., Isabel attended a
meeting of all human resource managers of respondent,
held in Paris, France. Since the last day of the meeting
coincided with the graduation of Santos only child, she
arranged for a European vacation with her family right
after the meeting.
Isabel together with her husband Antonio P. Santos, her
son, and some friends, had dinner at Leon des Bruxelles,
a Paris restaurant known for mussels as their specialty.
While having dinner, petitioner complained of stomach
pain, then vomited. Eventually, she was brought to the
hospital where she fell into coma for 21 days; and later
stayed at the Intensive Care Unit (ICU) for 52 days.
During the time that petitioner was confined at the
hospital, her husband and son stayed with her in Paris.
Petitioners hospitalization expenses, as well as those of
her husband and son, were paid by respondent.
She went back to the Philippines and was then confined at
the St. Lukes Medical Center for rehabilitation. During the
period of petitioners rehabilitation, respondent continued
to pay the formers salaries; and to assist her in paying her
hospital bills.
Petitioners physician concluded that the Santos had not
fully recovered mentally and physically. Hence,
respondent was constrained to terminate petitioners
services.
Respondent offered a retirement package.
Of the promised retirement benefits amounting to
P1,063,841.76, only P701,454.89 was released to
petitioners husband, the balance thereof was withheld
allegedly for taxation purposes. Respondent also failed to
give the other benefits. Petitioner, represented by her
husband, instituted the instant case for unpaid amounts.
LA RULING: Labor Arbiter dismissed petitioners
complaint. The Labor Arbiter stressed that respondent had
been generous in giving financial assistance to the
petitioner. The arbiter refused to rule on the legality of the
deductions made by respondent from petitioners total

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retirement benefits for taxation purposes, as the issue was


beyond the jurisdiction of the NLRC.
NLRC RULING: NLRC set aside the Labor Arbiters
decision.
The NLRC emphasized that petitioner was not retired from
the service pursuant to law, collective bargaining
agreement (CBA) or other employment contract; rather,
she was dismissed from employment due to a
disease/disability under Article 284. The NLRC therefore
ordered the payment of the other benefits promised by the
respondent.
CA RULING: affirmed the NLRC decision.
ISSUE: Whether the benefits are taxable and thus, it was
proper for Servier to deduct P362,386.87 for taxation
benefits. (Court ruled that petitioners belatedly claimed
entitlement to retirement benefits which issues are not
raised in the pleading, thus deemed abandoned.)
SC RULING:
YES. As she was dismissed on the ground of Disease, the
law gives the petitioner the right to demand separation
pay. However, respondent established a retirement plan in
favor of all its employees. The receipt of retirement
benefits does not bar the retiree from receiving separation
pay. 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. On
the other hand, 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. Hence, they are not mutually
exclusive. However, this is only true if there is no specific
prohibition against the payment of both benefits in the
retirement plan and/or in the Collective Bargaining
Agreement (CBA).
In the instant case, the Retirement Plan bars the petitioner
from claiming additional benefits on top of that provided.
Section 2, Article XII of the Retirement Plan provides:
Section 2. NO DUPLICATION OF BENEFITS
Petitioners claim for illegal deduction (for tax purposes)
falls within the tribunals jurisdiction. It is noteworthy that
petitioner demanded the completion of her retirement
benefits, including the amount withheld by respondent for
taxation purposes. The issue of deduction for tax purposes
is intertwined with the main issue of whether or not
petitioners benefits have been fully given her. It is,
therefore, a money claim arising from the employeremployee relationship, which clearly falls within the
jurisdiction of the Labor Arbiter and the NLRC.
Section 32 (B) (6) (a) of the New National Internal
Revenue Code (NIRC) provides for the exclusion of
retirement benefits from gross income.

Thus, for the retirement benefits to be exempt from the


withholding tax, the taxpayer is burdened to prove the
concurrence of the following elements: (1) a reasonable
private benefit plan is maintained by the employer; (2) the
retiring official or employee has been in the service of the
same employer for at least ten (10) years; (3) the retiring
official or employee is not less than fifty (50) years of age
at the time of his retirement; and (4) the benefit had been
availed of only once.
Petitioner was qualified for disability retirement. At the time
of such retirement, petitioner was only 41 years of age;
and had been in the service for more or less eight (8)
years. As such, the above provision is not applicable for
failure to comply with the age and length of service
requirements. Therefore, respondent cannot be faulted for
deducting from petitioners total retirement benefits the
amount of P362,386.87, for taxation purposes.

PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES,


INC., represented by its Plant General Manager
ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO
BALTAZAR & JORGE HERAYA v. HON. LOLITA O.
GAL-LANG, SALVADOR NOVILLA, ALEJANDRO
OLIVA, WILFREDO CABAAS & FULGENCIO LEGO
G.R. No. 89621 September 24, 1991 CRUZ, J.:
DOCTRINE:
Not every controversy involving workers and their
employers can be resolved only by the labor arbiters. This
will be so only if there is a "reasonable causal connection"
between the claim asserted and employee-employer
relations to put the case under the provisions of Article
217. Absent such a link, the complaint will be cognizable
by the regular courts of justice in the exercise of their civil
and criminal jurisdiction.
FACTS: The private respondents were employees of the
Pepsi who were suspected of complicity in the irregular
disposition of empty Pepsi Cola bottles. Pepsi filed a
criminal complaint for theft against them but this was later
withdrawn and substituted with a criminal complaint for
falsification of private documents. After a preliminary
investigation, the complaint was dismissed. The dismissal
was affirmed by the Office of the Provincial Prosecutor.
Meantime, allegedly after an administrative investigation,
the private respondents were dismissed by the petitioner
company As a result, they lodged a complaint for illegal
dismissal with NLRC in Tacloban City.
NLRC RULING: mandated reinstatement with damages.
In addition, they instituted in the Regional Trial Court of
Leyte, a separate civil complaint against the petitioners for
damages arising from what they claimed to be their
malicious prosecution. Pepsi moved to dismiss the civil
complaint on the ground that the trial court had no
jurisdiction over the case because it involved employeeemployer relations.

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RTC RULING: the respondent judge, acting on the motion


for reconsideration, reinstated the complaint, saying it was
"distinct from the labor case for damages now pending
before the labor courts.
Pepsi invoke Article 217 of the Labor Code and a number
of decisions of this Court to support their position that the
private respondents civil complaint for damages falls
under the jurisdiction of the labor arbiter.
ISSUE: Whether the RTC has jurisdiction over the case?
SC RULING: YES. Not every controversy involving
workers and their employers can be resolved only by the
labor arbiters. This will be so only if there is a "reasonable
causal connection" between the claim asserted and
employee-employer relations to put the case under the
provisions of Article 217. Absent such a link, the complaint
will be cognizable by the regular courts of justice in the
exercise of their civil and criminal jurisdiction.
EXAMPLES OF CASES:
1) In Medina v. Castro-Bartolome, 3 two employees
filed in the Court of First Instance of Rizal a civil
complaint for damages against their employer for
slanderous remarks made against them by the
company president. Theirs is a simple action for
damages for tortious acts allegedly committed by
the defendants. Such being the case, the
governing statute is the Civil Code and not the
Labor Code. It results that the orders under
review are based on a wrong premise.
2)

3)

4)

In Singapore Airlines Ltd. v. Pao, 4 where the


plaintiff was suing for damages for alleged
violation by the defendant of an "Agreement for a
Course of Conversion Training at the Expense of
Singapore Airlines Limited. Petitioner seeks
protection under the civil laws and claims no
benefits under the Labor Code. The primary relief
sought is for liquidated damages for breach of a
contractual obligation.
In Molave Sales, Inc. v. Laron, 6 the same
Justice held for the Court that the claim of the
plaintiff against its sales manager for payment of
certain accounts pertaining to his purchase of
vehicles and automotive parts, repairs of such
vehicles, and cash advances from the
corporation was properly cognizable by the
Regional Trial Court because "although a
controversy is between an employer and an
employee, the Labor Arbiters have no jurisdiction
if the Labor Code is not involved."
The latest ruling on this issue is found in San
Miguel Corporation v. NLRC. That case involved
a claim of an employee for a P60,000.00 prize for
a proposal made by him which he alleged had
been accepted and implemented by the
defendant corporation.

Where the claim to 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. While paragraph 3 above
refers to "all money claims of workers," it is not necessary
to suppose that the entire universe of money claims that
might be asserted by workers against their employers has
been absorbed into the original and exclusive jurisdiction
of Labor Arbiters.
The case now before the Court involves a complaint for
damages for malicious prosecution which was filed with
the Regional Trial Court of Leyte by the employees of the
defendant company. It does not appear that there is a
"reasonable causal connection" between the complaint
and the relations of the parties as employer and
employees. The complaint did not arise from such
relations and in fact could have arisen independently of an
employment relationship between the parties. No such
relationship or any unfair labor practice is asserted. What
the employees are alleging is that the petitioners acted
with bad faith when they filed the criminal complaint which
the Municipal Trial Court said was intended "to harass the
poor employees" and the dismissal of which was affirmed
by the Provincial Prosecutor "for lack of evidence to
establish even a slightest probability that all the
respondents herein have committed the crime imputed
against them." This 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.

7K CORPORATION v. EDDIE ALBARICO


G.R. No. 182295 June 26, 2013
SERENO, CJ.:
JURISDICTION OF THE VOLUNTARY ARBITRATOR
DOCTRINES:
A voluntary arbitrator may, by agreement of the parties,
assume jurisdiction over any of the labor disputes
enumerated under Article 223 of the Labor Code or those
which could fall under the jurisdiction of the Labor Arbiter.
He has plenary jurisdiction and authority to interpret an
agreement to arbitrate and to determine the scope of his
own authority when the said agreement is vague
subject only, in a proper case, to the certiorari jurisdiction
of this Court.
In deciding a case, the voluntary arbitrator may award
backwages upon a finding of illegal dismissal, even though
the issue of entitlement thereto is not explicitly claimed in
the Submission Agreement. Backwages, in general, are
awarded on the ground of equity as a form of relief that
restores the income lost by the terminated employee by
reason of his illegal dismissal.
Aside from illegal dismissal cases, separation pay may
also be awarded in the following instances:

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a)

b)

c)

d)

when employees have been terminated for


authorized causes, such as redundancy,
retrenchment or installation of labor-saving
devices;
when employees have been terminated for a just
cause other than serious misconduct or an act
reflecting on moral character and social justice
calls for the awarding of separation pay;
when it has become an established practice of
the company to pay the said benefit to voluntarily
resigning employees; or
when an employee has been validly dismissed
for non-membership in a union as required in a
closed-shop agreement

FACTS:
When he was dismissed on 5 April 1993, Albarico was a
regular employee of 7K Corporation, a company selling
water purifiers. He started working for the company in
1990 as a salesman. Because of his good performance,
his employment was regularized. He was also promoted
several times: from salesman, he was promoted to senior
sales representative and then to acting team field
supervisor. In 1992, he was awarded the Presidents
Trophy for being one of the companys top water purifier
specialist distributors.
In April of 1993, the chief operating officer of 7K
Corporation terminated Albaricos employment allegedly
for his poor sales performance. Albarico had to stop
reporting for work, and he subsequently submitted his
money claims against 7K Corporation for arbitration before
the National Conciliation and Mediation Board (NCMB).
The issue for voluntary arbitration before the NCMB,
according to the parties Submission Agreement was
whether Albarico was entitled to the payment of separation
pay and the sales commission reserved for him by the
corporation.
As for its defense, 7K Corporation claimed Albarico had
voluntarily stopped reporting for work after receiving a
verbal reprimand for his sales performance; hence, it was
he who was guilty of abandonment of employment
While the case was pending before the NCMB, Albarico
filed a complaint for illegal dismissal before the LA. The
latter ruled in favor of Albarico. However, the NLRC, on
appeal, vacated the decision of the LA on the ground of
forum-shopping, without prejudice to the pending NCMB
arbitration case. The decision of the NLRC became final.
NCMB RULING: Albarico was ILLEGALLY DISMISSED
The arbitrator explained that the promotions, increases in
salary, and awards received by respondent belied the
claim that the latter was performing poorly. It was also
found that Albarico could not have abandoned his job, as
the abandonment should have been clearly shown. The
VA also found that Albarico was dismissed from his work
without due process.

However, it was found that reinstatement was no longer


possible because of the strained relationship of the
parties. Thus, in lieu of reinstatement, the VA ordered 7K
Corporation to pay separation pay for two years at P4,456
for each year, or a total amount of P8,912. The VA also
ordered 7K Corporation to pay backwages in the amount
of P90,804.19, plus attorneys fees since Albarico had
been compelled to file an action for illegal dismissal.
7K Corporation appealed to the CA, imputing grave abuse
of discretion on the part of VA for ruling on the issue of
illegal dismissal and for awarding payment of backwages
and attorneys fees. 7K Corporation contended that the
issue of the legality of dismissal was not explicitly included
in the Submission Agreement.
CA RULING: AFFIRMED VA; Deleted Attorneys Fees for
lack of factual basis.
ISSUE: Did the VA properly assume jurisdiction to decide
the issue of the legality of the dismissal of Albarico as well
as the latters entitlement to backwages?
SC RULING:
YES. The circumstances of the instant case lead to no
other conclusion than that the claim of Albarico for
separation pay was premised on his allegation of illegal
dismissal. Thus, the VA properly assumed jurisdiction over
the issue of the legality of his dismissal
Moreover, it should be noted 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
Albarico. In fact, the identity of the issue of the legality of
his dismissal, which was previously submitted to the
NCMB, and later submitted to the NLRC, was the basis of
the latters finding of forum shopping and the consequent
dismissal of the case before it. In fact, 7K Corporation also
implicitly acknowledged this when it filed before the NLRC
its Motion to Dismiss Albaricos Complaint on the ground
of forum shopping. Thus, it is now estopped from claiming
that the issue before the NCMB does not include the issue
of the legality of the dismissal of respondent. Besides,
there has to be a reason for deciding the issue of
respondents entitlement to separation pay. To think
otherwise would lead to absurdity, because the voluntary
arbitrator would then be deciding that issue in a vacuum.
The arbitrator would have no basis whatsoever for saying
that Albarico was entitled to separation pay or not if the
issue of the legality of Albaricos dismissal was not resolve
first.

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VIRGILIO KAWACHI, et al. v. DOMINIE DEL QUERO


GR No. 163768 March 27, 2007
TINGA, J.:
LA STILL HAS JURISDICTION OVER CLAIMS FOR
DAMAGES ARISING FROM INCIDENTS WITH
REASONABLE CAUSAL CONNECTION WITH
EMPLOYEE-EMPLOYER RELATIONSHIP
FACTS:
Kawachi hired Del Quero as a clerk of A/J Raymundo
Pawnshop, Inc. On August 10, 2002, Kawachi scolded Del
Quero in front of many people about the way she treated
the customers of the pawnshop and afterwards terminated
Del Quero from employment without affording her due
process. Del Quero charged Virgilio Kawachi, Julius
Kawachi and A/J Raymundo Pawnshop, Inc., with illegal
dismissal, non-execution of a contract of employment,
violation of minimum wage law, and non-payment of
overtime pay. A few months after, Del Quero filed an
action for damages against Virgilio and Julius Kawachi
before the MeTC of Quezon City. Del Quero claimed that
the August 10, 2002 incident had caused her to suffer
serious embarrassment and shame so that she could not
do anything but cry because of the shameless way by
which she was terminated from the service. The Kawachis
then moved for the dismissal of the complaint on the
grounds of lack of jurisdiction and forum-shopping or
splitting causes of action.
MeTC RULING: DENIED the Motion for Dismissal
It ruled that no causal connection appeared between Del
Queros cause of action and the employer-employee
relations between the parties.
The Kawachis filed a petition for certiorari.
RTC RULING: AFFIRMED the MeTC
It upheld the jurisdiction of the MeTC over Del Queros
complaint for damages. The employees action for
damages based on slanderous remarks uttered by the
employer was within the regular courts jurisdiction since
the complaint did not allege any unfair labor practice on
the part of the employer.
ISSUE: Do the regular courts have jurisdiction over the
claim for damages?
SC RULING:
NO. The NLRC has jurisdiction over Del Queros
complaint for illegal dismissal and damages arising
therefrom. She cannot be allowed to file separate or
independent civil action for damages where the alleged
injury has a reasonable connection to her termination from
employment. Consequently, the action for damages filed
before the MeTC must be dismissed.
Jurisprudence has developed the reasonable causal
connection rule. Under this rule, if there is a reasonable
causal connection between the claim asserted and the
employer-employee relations, then the case is within the
jurisdiction of the labor courts; in the absence of such

nexus, it is the regular courts that have jurisdiction. In the


instant case, the allegations of Del Quero in her complaint
for damages show that her injury was the offshoot of
Kawachis immediate harsh reaction as her administrative
superior to the supposedly sloppy manner by which she
had discharged her duties. The allegations in Del Queros
complaint unmistakably relate to the manner of her alleged
illegal dismissal.
The Court further notes that for a single cause of action,
the dismissed employee cannot be allowed to sue in two
forums: one, before the labor arbiter for reinstatement and
recovery of back wages; and two, before a court of justice
for recovery of damages. Suing in the manner described is
known as splitting a cause of action, a practice
engendering multiplicity of actions.

GILDA G. LUNZAGA v. ALBAR SHIPPING AND


TRADING CORP. AND/OR AKIRA KATO, AND
DARWIN, VENUS, ROMEO ULYSSES, MARIKIT
ODESSA, ALL SURNAMED LUNZAGA (Lunzaga
Siblings)
G.R. No. 200476 April 18, 2012
RELAXATION OF THE TECHNICAL RULES (1-DAY
LATE IN FILING AN APPEAL)
DOCTRINE:
It has been said this time and again that the perfection of
an 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 except a particular
case from its operation, whenever the purposes of justice
require it. Strong compelling reasons such as serving the
ends of justice and preventing a grave miscarriage thereof
warrant the suspension of the rules.
FACTS:
Romeo Lunzaga was a seaman working for Albar
Shipping. On June 11, 2008, Romeo was assigned as
Chief Engineer on board Albar's Philippine vessel MV
Lake Aru. One month later, Romeo suffered a heart attack
and was repatriated to the Philippines only to die on
September 5, 2008.
Sometime in early 2009, Gilda, claiming to be the
surviving spouse of Romeo, filed with the NLRC a
complaint against Albar Shipping for payment of death
benefits, damages and attorney's fees. It should be noted
that Gilda was the designated heir in Romeo's Overseas
Filipino Worker Verification Sheet and PhilHealth
Information Sheet. The Lunzaga sibling, children of
Romeo from his first marriage that was judicially declared
null and void, opposed the complaint through a complaintin-intervention. The Lunzaga siblings claimed that Gilda is
not entitled to the death benefits of Romeo, as she had a
subsisting marriage when she married him. They claim
that her marriage with Romeo was, therefore, bigamous. .
During the mandatory conferences of the parties before
the Labor Arbiter, Albar Shipping signified its willingness to
pay Romeo's death benefits in the amount of USD

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55,547.44. However, Gilda and the Lunzaga siblings could


not agree as to the sharing of the benefits.
LA RULING:
The Labor Arbiter issued an Order temporarily dismissing
the complaint and directing the parties to file their case
with the regular courts.
Gilda appealed to the NLRC, however, the same was
made one day past the 10-day period for filing an appeal
from the decision of the Labor Arbiter
NLRC RULING: DISMISSED for filing beyond the
regalamentary period.
CA RULING: AFFIRMED the decision of the NLRC
The CA ruled that despite the fact that the appeal to the
NLRC was filed only one day beyond the reglementary
period, Gilda failed to present any reason for the liberal
application of the rule on filing of appeals.
ISSUE: Did the NLRC and the CA err in not giving due
course to the appeal due to a one (1)-day delay of its
filing?
SC RULING:
YES. Considering that the issue on whether the heirs of
Romeo are entitled to receive his death benefits from
Albar Shipping properly falls under the jurisdiction of the
LA, the NLRC and the CA should have had relaxed the
rigid application of the rules of procedure to afford the
parties the opportunity to fully ventilate their cases on the
merits. This is in line with the time honored principle that
cases should be decided only after giving all parties the
chance to argue their causes and defenses. Technicality
and procedural imperfections should thus not serve as
bases of decisions. In that way, the ends of justice would
be better served. For indeed, the general objective of
procedure is to facilitate the application of justice to the
rival claims of contending parties, bearing always in mind
that procedure is not to hinder but to promote the
administration of justice.
Verily, Albar Shipping 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 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 appropriate action with a
trial court.